3 - Transmittal Letter
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TOWN OF LOS GATOS
CIVIC CENTER
110 E. MAIN STREET
LOS GATOS, CA 95030
May 28, 2013
Honorable Mayor and Town Council:
I am pleased to submit to you the Proposed FY 2013/14 – 2017/18 Five-Year Capital Improvement
Program (CIP) for the Town of Los Gatos. The CIP is a comprehensive five-year capital improvement
plan designed to identify projects to develop and maintain the Town’s infrastructure. Guidance for
developing priorities for capital improvement projects is derived from key plans the General Plan and
other Town documents.
In February 2013, the Town Council reaffirmed its Core Values and discussed the status of the 2012-2014
Strategic Goals. The Council provided direction to update the Strategic Goals, which will be presented as
part of the public hearing on the budget. One of the affirmed Core Values is to maintain the condition
and availability of public facilities, transportation systems, and other public facilities.
In January 2013, the Town Council identified priorities for the allocation of one-time funds for capital
projects. The Five-Year Capital Improvement Program (CIP) reflects the Council’s priorities for use of
these funds, as well as other projects using other funding sources. The first year of the five year plan, FY
2013/14, includes funding for basic infrastructure needs, including new public facilities and parks, street
repair and reconstruction, street safety projects, retaining walls, sidewalks, and park projects. Significant
projects recommended for FY 2013/14 by category include:
Street Program Projects:
Highway 9/University Avenue intersection traffic system improvements, including dedicated left
turn lanes, new traffic signal and sidewalks, and ADA improvements.
Almond Grove Street Rehabilitation Project, including the design and first phase of
reconstruction of neighborhood streets.
Winchester / Knowles Intersection Improvement project to add an additional turning lane, new
sidewalks and traffic signal improvements.
Winchester / Lark Intersection Improvement project to add a receiving lane northbound on
Winchester Boulevard from Lark Avenue in addition to traffic signal improvements.
Funding of approximately $1.7 million for residential street repair and rehabilitation.
Funding of $250,000 for curb, gutter, and sidewalk repairs throughout the Town.
Funding allocation of $100,000 for retaining wall repairs.
$25,000 additional funding for annual street restriping.
Parks Projects:
Blossom Hill Park Pathway Improvements
Planning for a Pedestrian Bridge connecting the Creekside Sports Park to the Los Gatos Creek
Trail
Open Space Trail Improvements
Tree Trimming – Various Town Parks
Town Park Lighting Replacement Project
Public Facilities Projects:
Civic Center Deck Repairs & Waterproofing
PPW Administration Building Safety Improvements
Old Library re-use project
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In addition to the projects highlighted above, the FY 2013/14 includes other infrastructure projects as
detailed in CIP summary documents and further described in the project detail pages by category.
CIP FINANCIAL SUMMARY
The proposed five-year plan totals $24.4 million. Approximately, $10.5 million is proposed in the first
year of the plan, which is comprised of $5 million in carryover funds from FY 2012/13 and $5.5 million
in funding for new projects and/or additions to existing projects.
The proposed five-year CIP reflects only $4 million in ongoing Gas Tax dedicated sources to help fund
the proposed $24.4 million of planned capital improvements. The balance of CIP funding of $20.4
million is funded by:
Grant Funds ($1.5 million)
Traffic Mitigation Funds ($1.5 million)
Storm Drain Funds ($479K)
Accumulated operating budget savings/excess revenues from the General Fund
The primary source of funding for the Town’s capital program is the Town’s General Fund Appropriated
Reserves (GFAR). By Council direction, this fund receives transfers from the General Fund’s designated
Reserve for Future and Special Projects (current balance projection for July 1, 2013 is approximately $7.8
million) which receives most of the Town’s annual revenues above operating expenditures after funding
all legally restricted reserves at their required levels, including receipt of one-time funds from grants,
property and other reserves.
Because of the availability of General Fund “one-time” funding sources identified and allocated at the
January 2013 Council study session on capital priorities, a General Fund transfer to the GFAR fund is
recommended in the amount of $2.7 million for FY 2013/14. An additional “one-time” source allocation
of $4.8 million is scheduled for FY 2014/15. After these allocations, sufficient balances are anticipated
for the remaining three years of the Plan to allocate approximately $750,000 from the General Fund
Reserve for Capital and Special Projects for FY 2015/16 through FY 2017/18.
The funding from this reserve greatly enhances the Town’s ability to implement the CIP; however, the
proposed new level of annual funding still falls short of the required funding necessary to support future
annual infrastructure maintenance or construct new facilities. Establishing a reliable, dedicated source of
funding for basic capital improvements beyond the use of accumulated reserves remains a long-term need
and important goal for the Town.
Another source of funding for infrastructure improvements is long-term debt. In FY 2009/10
approximately $14 million in Certificate of Participation (COPs) were issued. This financing was secured
by tax increment reimbursements via the Redevelopment Property Tax Trust Fund (RPTTF), which
funded most of the $17.8 million new library project. In July 2002, the Town issued approximately $10.7
million in COP’s to provide funding for eligible priority projects within the former Redevelopment
Agency project area. Notable improvements included the Town Plaza reconstruction, downtown
streetscape and street reconstruction, and alleyway projects.
The Town also receives funding from its Storm Drain Fund, which relies on a previously established
charge of $0.75 per square foot of impervious surface created by new development. Depending on
development activity, this fee produces approximately $100,000 in revenue annually. This fee has not
been adjusted for several years and will need to be evaluated in the future as part of the NPDES planning
process. A comprehensive presentation to Council on NPDES and other storm water requirements,
workloads and issues is scheduled for early 2014.
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The Utility Undergrounding Fund serves as a funding source for activities generally undertaken in
conjunction with street improvement projects. The Utility Undergrounding funding is derived from a
Town construction tax of 18 cents charged for each square foot of building addition or alteration within
the Town, and from Rule 20A funds allocated from a percentage of electric bills. The Town's allocation is
typically $15,000 annually. Total cash balances currently on hand from the utility undergrounding
construction tax are approximately $2.5 million at FY 2012/13 year-end. No projects are proposed in
2013/14 through 2017/18 given the long lead times required for use of the PG& E funding.
The remaining sources are primarily one-time funds from State or Federal government or from special
revenue funds that have often fluctuated in tandem with the economy and the state budget. Examples of
one-time funds include VTA/TFCA funds and State Proposition 42 Gas Tax funds.
PROPOSED FY 2013-18 CIP OVERVIEW
The Capital Improvement Program is broadly grouped into the following categories:
Streets Program, which maintains and ensures functional streets, pedestrian, and bike systems.
Parks Program, which repairs or improves parks, park buildings, and urban forestry.
Public Facilities Program, which constructs and repairs public buildings and purchases
equipment.
The proposed CIP projects include both carry-forward projects from the prior year as part of the multi-
year programming of projects and new projects not previously programmed. Of the total estimated five-
year CIP cost of $24.4 million, approximately $19.9 million (82%) is allocated to the streets, retaining
walls, sidewalks, and curbs category, $3.1 million (13%) is allocated to parks and trails projects and $1.4
million (5%) is allocated to public facility projects,. Allocations are summarized below by type of major
improvements within the program categories.
Carryfwd to
2013/142013/142014/152015/162016/172017/18
Total By
Category
Total By
Program
Streets
Reconstruct/Resurfacing309,550$ 2,259,000$ 4,885,000$ 1,385,000$ 1,385,000$ 1,385,000$ 11,608,550$
Maintenance & Safety1,155,865 575,000 465,000 435,000 435,000 435,000 3,500,865
Street Improvements2,829,920 1,035,000 254,299 565,000 - - 4,684,219
Bridges123,730 - - - - - 123,730 19,917,364$
Parks
Park Improvements 59,488 891,869 807,000 25,000 25,000 25,000 1,833,357
Trail Improvements- 250,000 1,050,000 - - - 1,300,000 3,133,357$
Public Facilities
Infrastructure Projects310,160 510,000 150,000 200,000 - - 1,170,160
Equipment Projects200,447 - - - - - 200,447 1,370,607$
TOTALS4,989,160$ 5,520,869$ 7,611,299$ 2,610,000$ 1,845,000$ 1,845,000$ 24,421,328$
Five Year CIP Summary
Total funding for street reconstruction and resurfacing for the next five years is planned at $11.6 million
with approximately $2.6 million allocated in FY 2013/14 including carryovers.
Over the five-year period, the CIP proposes $8.3 million for various other street-related infrastructure
improvements including street maintenance and resurfacing; curb, gutter and sidewalk maintenance; street
intersection improvements; retaining wall reconstruction; crosswalk ramps and safety devices; and storm
drain improvements.
Although the Proposed FY 2013/14 - 2017/18 CIP is a five-year plan, only the first year of the plan is
formally adopted with funds appropriated by the Town Council as part of the budget process.
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Future year projects are funded with designated cash reserves on hand, supplemented by estimated annual
revenues for capital funding purposes such as Gas Tax funds and state transportation bond funds. The
scope and funding estimates may change based on the fiscal situation and evolving priorities.
As discussed earlier, the proposed FY 2013/14 CIP appropriation totals $10.5 million. Of this amount,
$5.0 million represents carry forward funds available from the prior year. The following schedule lists
the carryforward and new projects by fund and by program for appropriation in FY 2013/14.
GFARGrants andGas TaxOtherTotal
CARRYFORWARD PROJECTSAwards
StreetsStreet Repair & Resurfacing792,098$ -$ 935,000$ -$ 1,727,098$ *
Almond Grove Street Rehabiltation Project500,000 - - 42,452 542,452 *
Pavement Rehabilitation - Crack Seal160,000 - - - 160,000 *
Traffic Calming Projects37,027 - - - 37,027 *
Curb, Gutter & Sidewalk Maintenance544,433 - - - 544,433 *
Retaining Wall Repairs863,527 - - - 863,527 *
Annual Street Restriping 55,878 - - - 55,878 *
Public Access Infrastructure Improvement Projects- - - -
Guardrail Replacement Projects230,000 - - - 230,000 *
Hwy 9/University Intersection- 889,127 - 243,244 1,132,370
224 W. Main Street Property Acquisition (Parking Lot 6)1,200,000 - - - 1,200,000
Winchester Blvd. / Knowles Intersection- - - 487,550 487,550
Winchester Blvd. / Lark Ave. Intersection- - - 810,000 810,000 *
Quito Road - Bridge Replacement123,730 - - - 123,730
Parks- - - - -
Public FacilitiesTown Beautification Projects10,160 - - - 10,160
Civic Center Reuse Project500,000 - - - 500,000 *
HVAC Upgrades - Old Library200,000 - - - 200,000
Information System Upgrade83,169 - - - 83,169
Town-Wide Document Imaging Project21,775 - - - 21,775
Audio / Video System Upgrade53,503 - - - 53,503
Tiburon CAD / RMS Upgrade42,000 - - - 42,000
TOTAL OF CARRYFORWARD PROJECTS (INCLUDES NEW ALLOCATIONS)5,417,300$ 889,127$ 935,000$ 1,583,246$ 8,824,672$
NEW PROJECTS
StreetsLos Gatos Blvd / Shannon Improvements - - - 10,000 10,000
Hillside Road Repair & Resurfacing Project- 139,000 - - 139,000
Downtown Parking Lots Seal Coat & Restriping100,000 - - - 100,000
Electrical Vehicle Charging Station Infrastructure100,000 - - - 100,000
Townwide Vehicle Speed Survey25,000 - - - 25,000
ParksBlossom Hill Park Pathway Improvements 89,000 157,357 - - 246,357
Pedestrian Bridge to Sports Park50,000 300,000 - - 350,000
Open Space Trail Upgrades250,000 - - - 250,000
Tree Trimming - Various Town Parks100,000 - - - 100,000
Parks Restroom Partition Upgrades55,000 - - - 55,000
Parks Playground Fibar Project25,000 - - - 25,000
Parks Reservation System Replacement25,000 - - - 25,000
Town Park Lighting Project150,000 - - - 150,000
Public FacilitiesCivic Center Deck Repairs & Waterproofing60,000 - - - 60,000
PPW Administration Building Improvements50,000 - - - 50,000
TOTAL OF NEW PROJECTS1,079,000$ 596,357$ -$ 10,000$ 1,685,357$
TOTAL OF CARRYFORWARD & NEW PROJECTS6,496,300$ 1,485,484$ 935,000$ 1,593,246$ 10,510,029$
* These carryforward projects include new money for FY 2013/14 in the amount of $3,895,000.
Carryforward & New FY 2013/14 CIP Projects
All physical assets, such as road surfaces and buildings, have a useful life and must be refurbished,
reconstructed, or replaced at some point. A regular program of preventive maintenance and repair can
extend the useful life of these assets. Despite the cyclical nature of some of the revenue sources outlined
above, the Town is committed to maintaining its infrastructure assets utilizing the resources available.
Approximately 82% of the proposed FY 2013/14 - 2017/18 CIP funding is allocated to street
reconstruction and maintenance projects. These projects include: street base repairs and resurfacing, curb,
gutter, and sidewalk replacement, retaining wall construction, and storm drain improvements. This
emphasis reflects the Town Council’s priority to address street maintenance needs. The goal is for Town
streets to be at an average Pavement Condition Index (PCI) of above 70 (100 being the highest rating
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possible). The Town’s cumulative investment in its streets resulted in raising the PCI from a low of 64 in
2002 to the level of 75 in 2006. The PCI value for all Town streets as of winter 2012 is 72. This value is
primarily driven by the condition of residential streets. The PCI for arterials and collector streets is 80
and 70 respectively.
Potential Funding Sources
As illustrated in the chart below, funding for street repair is based on revenue from two primary sources:
gas tax, and transfers from the General Fund Designated Reserve.
Potential Funding Source Annual Estimated Amount Per Five-Year CIP
Gas Tax Funds $700,000
Measure B Funding $160,000
Transfer from General Fund Designated
Reserve
$525,000
Five-Year CIP Estimated Annual Total $1,385,000
Gas tax revenues ($700,000) and funding from the General Fund Designated Reserves account for the
majority of the $1.4 million annual funds available for street maintenance. Other funds that help support
street repair and maintenance are subject to a year-to-year allocation as part of the State budget process.
The Town has historically received one time grants for various street projects and transportation
improvements coordinated or issued by ABAG, MTC, VTA and/or other regional authorities, which are
expected to become fewer in number or smaller in size due to grant funding criteria and priorities recently
established through Senate Bill 375 and the “One Bay Area Grant” process. Partially offsetting this
reduction is new annual funding for street repairs from a recently enacted vehicle license fee increase for
Santa Clara County registered vehicles.
Assuming that the proposed five-year CIP annual investment of $1.4 million in streets continues to be
available, options to achieve the Town’s investment target of $2 million include:
Reducing other capital or operating budget priorities to increase streets funding;
Increased budgeting of future year surpluses;
Explore new revenue sources, such as a voter-approved debt taxes, assessment districts or
increased traffic impact fees. The Council has already directed exploration of potential revenue
sources as part of the 2012-14 Strategic Goals.
Staff will continue to work within funding limitations to address the Town’s overall pavement conditions
while ensuring the continue use of best practices in materials, selection, and construction/project
management.
Aside from the significant street infrastructure projects, the Town is also moving forward with several
other major capital projects such as the Old Library Re-use Project.
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FY 2012/13 COMPLETED PROJECTS
Several high priority projects are expected to be completed by the end of FY 2012/13. The schedule
below outlines projects, corresponding funding source, and total expense of the completed projects, which
is estimated to be $25.5 million.
Prior YearsGFARGrant and TrafficOther *Total
AwardsMitigationEstimated
ExpExpExpExpExp
Street Program
Wedgewood Ave Improvements674,131$ -$ -$ 352,711$ -$ 1,026,842$
Univ Ave Resurfacing (Shelbourne to Vasona)22,470 81,546 500,000 - - 604,016
Blossom Hill Road Improvements 599,703 - - 707,870 - 1,307,572
University Avenue Sidewalk / Creekside Sports Park7,520 48,001 60,150 - - 115,671
Hicks & Philips Culvert Improvements440 - - - 241,845 242,286
Northside Parking Lot Improvements - 74,516 - - - 74,516
Shannon Road Annexation- - - 3,834 - 3,834
Park Program
Pageant Grounds Phase 3 Improvements530,750 482,064 - - - 1,012,814
Los Gatos Creekside Sports Park1,386,407 1,391,788 - - - 2,778,195
Howe's Playlot Pathway Upgrade- - 34,535 - - 34,535
Turf Conversion & Water Conservation- 33,000 - - - 33,000
Live Oak Manor Park Upgrades316 41,895 109,120 - - 151,331
Public Facilities Program
Library Facility17,796,794 16,098 - - - 17,812,892
Energy Efficient Lighting Project144,108 - 18,603 - - 162,712
Plaza Bus Shelter 2,210 5,820 - - - 8,030
DT Tree Light Replacement- 97,500 - - - 97,500
TOTAL OF COMPLETED PROJECTS21,164,849$ 2,272,228$ 722,408$ 1,064,415 241,845$ 25,465,746$
* Other Funds include Storm Drain Fund, Gas Tax Funds, Utility Underground Funds and SA RDA.
PROJECTS COMPLETED IN FY 2012/13
Prior year high priority and or highly visible completed projects include:
New Library
Police Operations Building
Los Gatos Creekside Sports Park
Pageant Grounds Phase 3 Improvements
Wedgewood Avenue Improvements
Roberts Road Bridge Replacement
Blossom Hill Road Improvements
Several Traffic Calming Projects
Renovation of Playlots
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CONCLUSION
The challenge of finding a reliable ongoing revenue stream available for capital projects continues to be a
Town priority. Recognizing the realties of funding challenges and uncertain local economic trends, the
Town’s FY 2013/14 – 2017/18 Capital Improvement Plan continues a strategy of funding the Town’s
most urgent capital needs.
I wish to thank all of the departments, in particular Department Directors and members of their
management and support staff, for their countless hours of work and tireless efforts to present this Capital
Improvement Program to the Town Council, as well as the following staff members:
Pamela Jacobs, Assistant Town Manager
Todd Capurso, Parks & Public Works Director
Kevin Rohani, Town Engineer
Stephen Conway, Finance and Administrative Services Director
Jennifer Callaway, Finance and Budget Manager
Linda Isherwood, Accountant / Administrative Analyst
Gitta Ungvari, Administrative Technician
Tim Kawasaki, Administrative Analyst
Respectfully submitted,
Larson
Town Manager
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FY 2013/14 – 2017/18
CAPITAL IMPROVEMENT PROGRAM
BUDGET ADDENDUM
The Council’s adoption of the Capital Improvement Program will appropriate the first year of budgeted
revenues, expenditures, and operating transfers as outlined in the budget document. The CIP’s out years
reflect the established plan at the time of adoption. As appropriate, out-year plans will be reviewed and
adjusted in following year’s Capital Improvement Programs.
This budget addendum section, which follows the proposed budget’s Transmittal Letter, conveys Council
directed revisions to the proposed budget as determined in the May 2013 public hearing on the proposed
CIP budget, as well as corrections and project revisions. Council did not direct any project changes,
additions, deletions, or funding revisions for the FY 2013/14 – 2017/18 Capital Improvement Program.
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BUDGET PROCESS OVERVIEW
he Town of Los Gatos adopts an annual
Operating and Capital Budget and an
annual budget update of the five-year
Capital Improvement Program (CIP) for the
Town of Los Gatos and the Successor Agency of
the Town of Los Gatos Redevelopment Agency
(RDA). The budgets contain summary level
information for revenue and expenditure
appropriations for the fiscal year beginning July
1st and ending June 30th. The budget documents
are prepared in accordance with generally
accepted accounting principles (GAAP).
Budget Purpose
The Operating and Capital Summary Budget and
the Capital Improvement Program serve as the
Town’s financial plan, as well as a policy
document, a communications tool, and an
operations guide. Developed with an emphasis
on long range planning, service delivery, and
program management, a fundamental purpose of
these documents is to provide a linkage between
the services and projects the Town and
Redevelopment Agency intends to accomplish,
and the resources committed to get the work
done.
The format of the budget facilitates this linkage
by clearly identifying program purpose, key
projects, and work plan goals, in relation to
revenue and expenditures appropriations.
CIP Purpose
In particular, the CIP is designed to identify
projects and funds required to adequately
develop and maintain the Town’s infrastructure,
which is consistent with the Town Council
strategic goal of maintaining the condition and
availability of public facilities. The following
plans provide additional guidance in developing
priorities for capital improvement projects:
General Plan
Street Improvement Program
Storm Drain Master Plan
In addition, project prioritization criteria such as
health and safety issues, infrastructure or system
condition, short-term versus long-term impacts
and availability of external funding sources are
assessed as part of the process that staff uses to
rank projects from high to low in preparing the
proposed CIP. As it develops and matures in its
application, the Town’s Infrastructure
Assessment Program will further support the
Town’s long-range Capital Improvement
Program, focusing attention on the current and
future infrastructure needs of the community and
balancing the community’s needs with funding
requirements and financial resources. Other
technology tools used in CIP development
include the use of the geographic information
system, the traffic monitoring system, electronic
files for tracking unfunded projects and
replacement schedules, and an asset
management program to track work requests.
The Town’s capital projects are categorized as
follows:
The Streets Program provides funding for
maintaining a functional street and pedestrian
system. Proposed projects are consistent with
the General Plan, provide for a safe and efficient
traffic flow through intersections while
minimizing unnecessary traffic movement and
noise through residential neighborhoods, and
provide street lighting for traffic safety at
intersections and on public streets. Also
included are sidewalk improvements.
The Public Facilities Program includes projects
for constructing and repairing public buildings
and purchasing equipment. Town buildings
include the Civic Center, the new library, Adult
Recreation Center, Service Center, Tait Avenue
and Forbes Mill Museums, and partial service to
the Recreation Center, which is a Town-owned
building leased to Los Gatos-Saratoga
Community Education and Recreation.
Although the Town owns the three fire stations
within town limits, the Santa Clara County Fire
District maintains them under contract.
The Parks Program includes projects for parks,
park buildings, urban forestry, and urban
beautification.
T
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Basis of Budgeting and Accounting
Developed on a program basis with fund level
authority, the operating and capital budgets
represent services and functions provided by the
Town in alignment with the resources allocated
during the fiscal year.
The Town’s Governmental Funds consist of the
General Fund, Special Revenue Funds, Debt
Service Funds, and Capital Project Funds for
both the Town and the Successor Agency of the
Town of Los Gatos Redevelopment Agency
(RDA). Basis of Accounting and Budget refers
to the timing factor concept in recognizing
transactions. This basis is a key component of
the overall financial system because the budget
determines the accounting system. For example,
if the budget anticipates revenues on a cash
basis, the accounting system must record only
cash revenues as receipts. If the budget uses an
accrual basis, accounting must do likewise. The
Town’s budgeting and accounting systems both
use a combination of modified accrual and full
accrual basis in the accounting and budget
systems.
Governmental Fund types and Successor
Agency fund budgets are developed using the
modified accrual basis of accounting. Under
this basis, revenues are estimated for the period
if they are susceptible to accrual, e.g. amounts
can be determined and will be collected within
the current period. Principal and interest on
general long-term debt are budgeted as
expenditures when due, whereas other
expenditures are budgeted for liabilities
expected to be incurred during the current
period.
Proprietary fund budgets are adopted using the
full accrual basis of accounting whereby revenue
budget projections are developed recognizing
revenues expected to be earned during the
period, and expenditures are developed for
expenses anticipated to be incurred in the fiscal
year. The Town maintains one type of
proprietary fund: Internal Service Funds.
The Town’s fiduciary funds are also budgeted
under the modified accrual basis. The Town
administers five trust funds and one agency
fund. Trust funds are subject to trust agreement
guidelines, and the Agency Fund is held in a
purely custodial capacity involving only the
receipt, temporary investment, and remittance of
resources.
Summary of Budget Development
The Town develops it budgets with a team-based
budgeting approach. Town management and the
Finance Department guide the process through
budget development; however, program budgets
and workplans are developed with each
department’s Director, Analyst, and Program
Manager’s oversight and expertise. This
approach allows for hands-on planning and
creates a clearer understanding for both
management and staff of a program’s goals and
functions to be accomplished in the next budget
year.
The Development Process
Typically both the Operating and Capital Budget
and Capital Improvement Program processes
begin in the fall with the Town Council and
Town Manager’s collaborative development and
refinement of initiatives and directives for the
upcoming budget year.
In January, the budget preparation process
begins officially for staff with a budget kickoff
meeting. Budget assumptions, directives, and
initiatives developed by Town Council and
management are provided to set the Town’s
overall objectives and goals. Department and
agency staff identify and analyze program
revenue and expenditure projections in
coordination with Finance/Budget staff and
Town management. Capital improvement
projects are assessed and refined, and CIP
funding and appropriation requirements are
finalized.
Through rounds of budget briefings and
revisions, staff’s final program budget and
workplans are developed by the end of April.
Operational and capital workplans are finalized,
and the Finance/Budget staff prepares financial
summary information for Town Council review
in addition to departmental budgets and
workplans.
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CIP Development Process
The long-term Capital Improvement Program
includes projects that have a value of $25,000 or
more with a minimum useful life of 5 years at a
fixed location. Equipment, operating, and
maintenance costs associated with the CIP
projects are identified where feasible, and will
be included in future operating budgets. Cost
estimates for new projects are based on 2013
dollars; however, engineering estimates for
carryover projects from the prior year are
updated to reflect current industry costs.
Under direction from the Town Manager’s
Office, the Parks and Public Works Department
took the lead in the preparation of the proposed
projects for consideration in the 2013-18 Capital
Improvement Program. In coordination with
other Town departments, projects were reviewed
to ensure that the Town’s priorities are
addressed within available resources. In some
cases, previously approved projects have been
deferred due to reallocation of funding to other
priorities and thus have been noted as unfunded
projects in each program section of the CIP.
The Town Manager’s Office reviews the
prioritized list of proposed capital improvement
projects and funding sources in conjunction with
the preparation of the FY 2013/14 Operating
Budget. The Proposed CIP is then presented by
the Town Manager to the Town Council. The
Proposed CIP is also submitted to the Planning
Commission for review to ensure that the
proposed projects are consistent with the Town’s
General Plan. The Planning Commission
reviewed the CIP on April 24, 2013.
The CIP is reviewed during this time to
determine funding capabilities and project
priorities, and to refine project work plans.
Although the CIP budget document is prepared
separately from the Operating and Capital
Budget, CIP program information is
incorporated into the Operating and Capital
Summary Budget document through the
resulting financial appropriations and service
level requirements.
Budget Adoption
During the month of May, the Town Council
reviews the proposed Operating and Capital
Summary Budget, and the Capital Improvement
Program for the five year period in a public
hearing. Notice of the hearing is published in a
local newspaper at least ten days prior to the
Council’s public hearing date. The public is
invited to participate and copies of the proposed
budgets are available for review in the Clerk
Department and at the budget hearing.
Under requirements established in Section
65401 of the State Government Code, the
Town’s Planning Commission also reviews the
proposed Capital Improvement Program and
reports back to the Town Council as to the
conformity of the plan with the Town’s Adopted
General Plan or part thereof.
Final Council-directed revisions to the proposed
budget are made and the budget documents are
resubmitted to the Town Council for adoption,
again in a publicized public hearing prior to the
beginning of the fiscal year.
Section 2.30.295(b) of the Los Gatos Town
Code requires the Town Manager to annually
prepare and submit a budget to the Town
Council. This is accomplished in June, when the
final proposed budget is formally submitted to
the Town Council in the subsequent public
hearing.
The approved resolutions to adopt the CIP and
operating budgets and the appropriation
limitation (Gann Limit) follow this section.
Budget Amendments
During the course of the fiscal year, workplan
changes and unanticipated needs will necessitate
adjustments to the adopted budgets. The Town
Manager is authorized to transfer appropriations
between categories, departments, projects, and
programs within a fund in the adopted budget,
whereas the Town Council holds the authority
for budget increases and decreases and transfers
between funds.