6MEETING DATE: 05 -19 -14
f
ITEM NO:
COUNCIL AGENDA REPORT
DATE: MAY 14, 2014
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
RECOMMENDATION:
1. Consider the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year
2014/15
2. Consider the Town Of Los Gatos Proposed Capital Improvement Program for Fiscal Years 2014-
2019
3. Provide direction regarding any changes to the Fiscal Year 2014 /15 Operating and Capital
Budget or the 2014 -2019 Capital Improvement Budget
BACKGROUND:
The Proposed Operating and Capital Budget for FY 2014/15 (Attachment 1, previously distributed)
represents the Town Manager's recommended comprehensive financial plan to provide services to the
Town of Los Gatos given limited resources. The Proposed FY 2014 -2019 Capital Improvement
Program (Attachment 2, previously distributed) is a comprehensive five -year capital improvement plan
identifying projects to construct and maintain the Town's infrastructure over an extended period.
PREPARED BY: PAMELA JACOBS
ASSISTANT TOWN MANAGER
Reviewed by: Assistant Town Manager
NAMGRWN g=wt Stati\Placobs \14 -15 Budget \14 -15
Attorney
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
MAY 15, 2014
Any changes to the proposed operating and/or capital budgets directed by Council at the May 19 budget
hearing will be incorporated into the implementing documents to be presented for Council approval on
June 2, 2014.
DISCUSSION:
Overview of Proposed Operating and Capital Budgets
The transmittal letter in the FY 2014/15 Proposed Operating Budget provides an executive summary of
the budget, including budget development principles and strategies, an overview of revenue and
expenditure assumptions, and proposed adjustments to the operating budget.
This staff report provides:
• summary of budget balancing actions recommended in the proposed budget;
• discussion of the updated Five -Year Financial Forecast;
• discussion of possible additions to the FY 2014/15 budget;
• discussions of issues with budget implications for the future;
• adopted 2014 — 2016 Strategic Goals;
• a summary of the proposed Capital Improvement Program;
• FY 2014/15 List of Town Needs for donation opportunities; and
• information regarding the budget presentation to be made on May 19, 2014
With the local economy showing continuing signs of improvement, the FY 2014/15 budget reflects
approximately $35.4 million in total revenue, a 7% increase compared to the prior year. This is
primarily due to forecasted increases in economically- sensitive revenues such as sales tax, property tax,
Vehicle License Fee (VLF) backfill property tax, Transient Occupancy tax, business license tax, licenses
and permits, and charges for Town building and development services. Sales and use tax is projected to
increase owing to the improving economy, although the increase isn't as robust as in past years due to
the continuing decline in Netflix sales tax revenue given the company's 2011 change in its business
model.
Expenditures are rising as well, primarily due to uncontrollable medical and Ca1PERS retirement rate
increases. A portion of the rise in expenditures is attributable to negotiated salary increases for non-
sworn staff, the first increases for these employees since FY 2009/10 (management employees last
received a raise in FY 2008/09). Even with these additional expenses, projected revenues exceeded
projected expenditures by $500,000 at the mid -year forecast. With these available funds, staff is
PAGE
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014115
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
MAY 15, 2014
recommending one -time and ongoing augmentations to address core service needs that have been
impacted by six years of recession and reductions.
As discussed in the Five -Year Forecast below, the outlook for years two and three (FY 2015/16 and
2016/17) remain guarded given anticipated increases in health and pension costs, which is also discussed
below. Nevertheless, the administration believes the modest ongoing augmentations recommended in
the budget are critical to maintaining core service levels and achieving the Council's strategic goals.
As has been demonstrated in the past, the Town's prudent and conservative fiscal approach and practices
will enable the Town to navigate through the potential shortfall in the following years without
compromising the delivery of municipal services that help Los Gatos to remain a highly desirable
community. The Town's strong downtown and neighborhood centers, high quality schools, lovely
hillside setting, proximity to Silicon Valley, and fundamentally robust real estate provide a solid
foundation for continued vitality. The proposed FY 2014/15 budget seeks to preserve these enviable
qualities.
Recommended Budget Balancing Actions
The proposed FY 2014/15 operating budget incorporates revenue and expenditure increases resulting in
a balanced budget. The major expense adjustments are summarized in the transmittal letter, and are
discussed in more detail in the departmental budget sections, as are proposed revenue increases.
Recommended budget balancing actions include:
• Revenues from previous fund balance, cost recovery fee increases, and internal service charge
reductions net approximately $550,000 above projected revenues
• Salary increases for non -sworn employees totaling $182,000, which is accommodated by
projected revenues
■ Staffing reorganizations and augmentations totaling $550,000
■ One -time adjustments totaling $311,000 covered by one -time Settlement Agreement funds and
FY 2013/14 year -end fund balance
The recommended budget does not include use of the Budget Stabilization Reserve, which currently has
approximately $2 million above the required 12.5% of the operating budget. Consequently, those funds
remain available to meet other Town priorities as discussed later in this report or to address potential
budget shortfalls in future years.
PAGE 4
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
MAY 15, 2014
Staffing Reorganizations and Adjustments
Expenditure increases include several adjustments to better align staff resources with work demands,
particularly those that have built up over the last six years of budget reductions. Staffing adjustments
are proposed in all departments - Administrative Services, Police, Community Development, Library,
and Parks and Public Works (PPW). In Administrative Services, Police, and Community Development,
the adjustments involve organizational restructuring and additions, while modest additions are proposed
in the remaining departments. One -time funding is provided in Police and PPW to alleviate workload
demands on a temporary basis.
As noted previously, expenditure adjustments also include a 2% salary increase for non -sworn staff, an
increase that affects all departments. Expense increases are also due to rising health care and pension
costs.
Revenue Enhancements
Proposed revenue increases are primarily due to the forecasted increases in economically- sensitive
revenues discussed above and the projected growth in private development activity, resulting in higher
levels of fees and charges for services requiring cost - recovery. It should be noted that Los Gatos
remains a relatively "low tax" city in Silicon Valley without either a utility users tax or a locally
increased sales tax rate. Further, sales tax has been highly dependent on Netflix in the past. With the
gradual decline in these revenues consistent with Netflix' changing business model, the Town will
continue to seek opportunities to diversify the sales tax base.
Five -Year Forecast
The Five -Year Financial Plan is an independent financial tool that is based on current and projected
costs and revenues. It is designed to be fluid in nature, allowing staff to build various funding scenarios
and test "what if' assumptions. Staff has updated the forecast last prepared for the Council Retreat
earlier this year to now incorporate the FY 2014/15 proposed budget changes and revised assumptions
regarding future revenues and expenditures.
The information presented in the following table includes conservative estimates of revenues, with the
current economic recovery in mind, assuming varying growth rates, both for tax revenues and for fees
for services, including overhead charges. Expenditures were projected using a database of prior year
actual costs adjusted for future known increases in employee benefit costs, and actuarial updates for
post - retirement benefits. The expenditure forecast includes permanent additions made in the proposed
PAGE 5
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
MAY I5, 2014 IMPROVEMENT PROGRAM BUDGET
FY 2014/15 budget and carries those forward in future years. The five -year forecast assumes the
negotiated 2% COLA increase for non -sworn staff for two years and no COLA increase for sworn staff.
For the first time in six years, the prior five -year forecast identified over $500,000 in additional general
fund monies in FY 2014/15 which are recommended to offset some of the workload pressures that have
built up over the last six years as discussed in the budget document. The updated forecast indicates
potential shortfalls in years two and three (FY 2015/16 and 2016/17); however, staff remains cautiously
optimistic that the ongoing economic recovery and prudent management of Town expenditures will
largely resolve conservatively forecasted shortfalls.
See Chart on Next Page
PAGE 6
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
MAY 15, 2014
Town of Los Gatos General Fund
Updated Five -Year Financial Plan
11 1
rr<
rre
FY4
FY5
Atpaet
Rereeve GfeSOry
2017/13
Acteele
2013114
Adopted
2013114
EiRmaud
2014 /15 Proposed
2015[16
Foremt
2016/1]
Foremt
2017118
Foremt
2018/19
Forepet
201920
Forepw
4100 Pmpedy Tax
4110 VLF Backfi0 Property Tax
4200 Sales &Use Tax
4250 Franchise Fees
4251 Transiev Omupancy Tax
4400 Busmps License Tax
4400 Licenses &Pennies
4500 Intergovernmental
4600 Charge for Services
4700 Fines & Forfeitures
4800 Interest
4850 Othc Sources
4900 Fund Transfers In
$ 83
2.4
8.8
2.0
13
1.2
3.1
0.9
3.1
0.6
(0.2)
3.6
0.6
$ 7.8
2.4
7.8
2.0
1.0
lA
2.6
0.7
25
0.7
OS
3.4
07
$ 8.1
2.7
7.9
2.0
12
1.4
29
0.7
2.7
0.6
02
35
0.6
S 83
2.7
83
2.1
13
IA
2.9
0.7
2.5
0.7
03
4.4
0.6
$ 8.4
2.7
85
2.1
13
IS
3.0
0.7
27
0.6
OS
43
03
$ 8.7
2.7
811
22
13
15
3.1
0.7
2.9
0.7
0.5
4.4
03
S 8.9
211
91
23
1.4
1.5
32
0.7
3.0
0.7
0.5
4.4
03
$ 91
27
9.6
23
I
1.5
33
0.7
3.1
0.7
OS
45
03
S 9.5
2.8
95
2.4
1.5
1.5
3.4
OA
3.1
0.7
OS
4.6
03
TOTALNBVF.NUFS
Use of R..,,s/DeposiO
35.7
L9
33.6
2.7
3d.4
2.7
36.1
7.0
36.4
0.8
375
0,1
38.6
39.6
403
,TOTALREVENUES & TRANSFERS
S 37.6 $ 363 $ 37.1 S 43.1 S 37.2 S 37.6 $ 38.6 S 39.6 S 403
Apeevt EcpevdI. Gregory
5110 Salary
5120 Fur1 ou .1r
2012113
Actvele
$ 12.6
0.0
2013/14
Pmpmed
S 13.0
2013/14
FedvuId
$ 131
2019/15 Preposed
$ 13.7
2015/16
Foremt
$ 13.8
2016h7
Foremt
S 13.8
2/117/18
Foremt
S 13.8
7018 /19
Foremt
$ 137
201920
Parapet
S 137
5130 Temporary Employees
5140 Ovm.m
5170 Other Salary
5200 Benefits
6000 Supplies, M atmals, &Services
6000 Pass Through Expenditures
7200 Grants & Awards
7400 Witt.
7700 Fixed Asada
0.9
0.6
03
63
5.6
0.2
0.4
0.6
0.4
0.4
6.7
53
0.2
0.4
0.6
0.4
0.4
6.7
55
0.2
OA
0.6
0A
0.4
7.7
5.2
0.8
0.2
0.4
07
0A
OA
85
52
02
05
07
0.4
0.4
92
SA
02
OS
07
0.4
OA
97
55
02
OS
07
0.4
OA
10.4
5.6
0.2
05
07
0.4
0.4
11.1
5.7
02
OS
8060 Internal Service Charges
8900 Debt Service
TOTAL EXPENDITURES
33
2.0
$ 32.2
3.4
1.9
$ 323
3.4
1.9
S 32.7
3.4
1.9
$ 34.7
3.6
2.0
$ 35A
3.7
2.0
$ 36.4
37
2.0
$ 372
3.9
2.0
$ 38.0
4.0
2.0
$ 38.9
9900 RDA Trust Fund
0.1
0.1
9900 Operating Transfers Out
_
-
9900 Capital Transfers Out to GFAR
9900 GASB 45 Rgtrce Medial Aduanal
EXPENDITURES
9900 Legally Requ6ed Reserve AH.wion
1.9
1.2
353
2.7
13
36A
2.7
13
367
7.0
13
43.0
0.8
IS
37.7
0.1
1.6
38.1
1.6
38.8
1.6
39.6
1.6
405
9900 Resme
9900 Transf to Stabilaation Reserve
-
01
-
TOTAL EXPFNDFrURES &ALLOCATIONS
$ 353
$ 36A
S 367
$ 43.1
$
$ 38.8
$ 39.6
$ 405
!REVENUES IFSS E VgDn'URFS
ONGOING SHORTFALL MITIGATION
NEE REVENUES IES$EXPENDITUR�
$ 23
S
S 23
$ 0.1
S (0.1)
$ 03
S 03
S
S
$ -
$
S
$
fi$38.1
S 0.2
S OS
S 03
$ 0.0
S OS
$ 05
$ 01
$ OS
S 03
PAGE 7
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
MAY 15, 2014 IMPROVEMENT PROGRAM BUDGET
State Budget Impacts
The May Revised Governor's budget was released on May 13. Based on a preliminary review, it
appears that there are no major impacts to cities. Some of the potential moderate opportunties include a
small allocation of Prop 30 realignment monies for local agencies, a change making Infrastructure
Financing Districts more flexible, and availability of transportation funds for sustainable transportation
projects. Staff will continue to monitor the State budget to identify any impacts or opportunities for Los
Gatos.
Budget Highlights and Issues for Consideration
Following are issues that have either been included in the FY 2014/15 budget and are highlighted due to
Council interest, or are presented for Council consideration for inclusion in the budget.
FY 2014115 Highlights and Consideration
Community Service Intern for the Library
The FY 2013/14 adopted budget included funding for a one -year collaborative pilot program between
the Library and the Police Department modeled after a successful Mountain View library program.
Permanent funding for this position is recommended in the proposed FY 2014/15 budget. The pilot
program involves a Community Service Officer (CSO) Intern assigned to work in the library during
peak hours (19 hours per week). The CSO Intern is trained by the Police Department, and addresses
problematic behavior, provides a security presence, and builds relationships with patrons, the teens in
particular. The role is similar to that of the School Resource Officer, but with a non -swom position.
In a typical week, the CSO Intern works in the Library weekdays from 2:00 to 5:00 p.m. and trains with
the Police Department Friday mornings, for a total of 19 hours per week. The CSO Intern interacts with
teens as well as other library patrons, providing information and facilitating positive communal use of
the library building. This staff member provides information and resources and responds to the varying
needs of the diverse library population. In addition, CSO Intern's direct link to the Police Department
allows for quick response in situations where officer support is needed. Having a designated staff
member with direct communication to and training from the Police Department has allowed library staff
to focus on library operations and customer service.
PAGE
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
MAY 15, 2014
The visible presence of the CSO Intern has had a positive effect on reducing the number and level of
disturbances and problems in the library, particularly in the teen area. Nevertheless, issues continue to
arise given the considerable rise in patronage of the library. Over the past year, the CSO Intern typically
dealt with incidents of inappropriate noise, misuse of furniture and unattended property on a daily basis.
On a weekly basis, she addresses blocked aisles, barefoot patrons, loud cell phone conversations, and
running. Monthly or infrequent incidents include unattended minors, obscene language, individuals on
the hill behind the library, adults and children in teen area, monopolizing staff rime, skateboarding,
horseplay, lost/found property, entering restricted areas, throwing objects, and vandalism. The CSO
Intern is well - trained and positioned to address these incidents in an effective manner.
Library staff does continue to address similar issues when the CSO Intern is present, if the incident is
minor or the CSO Intern is involved elsewhere, and when the CSO Intern is off duty. However, the
CSO Intern has been a valuable addition to the library and has positively impacted the library
environment for patrons. Staff recommends ongoing permanent funding of this position at a cost of
$30,000.
Chamber of Commerce Agreement
The proposed FY 2014/15 operating budget includes funding in the amount $50,000 for the Chamber of
Commerce for services related to the Town Information Center and coordination of Leadership Los
Gatos. At the FY 2013/14 budget hearing, Council members requested that additional information be
provided regarding the services provided by the Chamber of Commerce as part of this year's budget
deliberations.
Attachment 3 is a memorandum from the Chamber providing the history of the Town/Chamber
relationship and a detailed description of the services provided through the Information Center. The
memorandum does not address the services associated with Leadership Los Gatos, as the focus of
Council questions at last year's budget hearing regarded the Information Center.
From staff's perspective, the value of the services provided by the Chamber in both these areas exceeds
the cost to the Town. With regard to Leadership Los Gatos, the Town/Chamber partnership is a
common way to provide this type of program. The coordination cost of $5,000 is a modest charge
relative to the amount of work the Chamber undertakes to recruit and enlist candidates, assist with
program design, coordinate with non -Town agencies included in the program, maintain ongoing
communication with current and past participants, and manage all the logistics associated with program
sessions. Now in its 12s' year, Leadership Los Gatos has successfully engaged more than 250 Los Gatos
residents and business owners in learning about Town and partner services and activities.
PAGE
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
MAY 15, 2014 IMPROVEMENT PROGRAM BUDGET
Regarding the Town Information Center, staff believes that the $35,000 provided to the Chamber for
these services is less than the cost would be for the Town to provide these services in- house. It is
unlikely that the Town would ever replicate the Chamber's downtown location, as the cost would be
prohibitive. As to the services themselves, additional staff resources would be needed to respond to
more phone inquiries and walk -in customers, to develop and distribute the guides and other material
produced by the Chamber, and to maintain additional information on the Town website. The
community calendar maintained by the Chamber is an important complement to the Town's official
calendar. These services are important for both residents and visitors.
As stated in the Chamber memorandum, the Town previously contracted with the Chamber to provide
Town marketing services. In FY 2005 /06, the funds for marketing services were not included in the
agreement, as staff determined that it was more cost - effective for Town staff to coordinate any
marketing and business promotion undertaken by the Town. Staff continues to collaborate with the
Chamber on event promotions as a member of the Visitors' Bureau.
Staff recommends continuing the partnership with the Chamber through the agreement for services
related to the Information Center and Leadership Los Gatos. The Chamber is requesting a five -year
agreement, with cost of living increases beginning in FY 2015/16. Due to the Chamber's hiring of a
new Executive Director and to the potential budget shortfalls in the next two years, staff recommends
entering into a one -year agreement with the Chamber at this time. If the fiscal outlook for FY 2015/16
improves, staff would be open to recommending a multi -year agreement at that time.
Human Services Grants
With the FY 2012/13 change in CDBG funding policies, staff no longer needs to bring forward
recommendations for community grants prior to Council consideration of the proposed budget. Thus,
the funding recommendations from the Community and Senior Services Commission (CSSC) are
included as part of the proposed budget hearing. The recommendations are included on page D -34 of
the proposed budget.
The CSSC is recommending the allocation of approximately $91,800 in community grant funds, and
also recommends that the grants continue to be for one year rather than two years. A one -year funding
cycle will enable the CSSC to conduct needs assessments during the fiscal year to identify funding
priorities for the future.
PAGE 10
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
MAY 15, 2014
If the CSSC recommendations are approved by Council, many of the agencies will receive the same
grant amount as last year. However, there is a recommended increase to two agencies utilizing funding
allocated in FY 2013/14 for senior case management services which was not expended and is being
carried over to FY 2014/15.
The agencies receiving additional funding are Counseling and Support Services for Youth and West
Valley Community Services and West Valley Community Services is receiving a separate allocation to
provide senior case management services in FY 14115.
The CSSC has requested that the Council consider increasing funding for human services grants as most
of the agencies applying for these grants consistently request higher funding levels. This was
particularly the case this year, as many of the agencies serving Los Gatos are experiencing reduced
funding from various grant sources. In addition, the CSSC would like to be able to respond to the needs
expected to be identified in the needs assessment now underway. Staff recommends that additional
funding be considered for FY 2015/16 if the needs assessment demonstrates greater need and if the
fiscal outlook for the Town improves.
Art/Education Grants
The Arts Commission is recommending the allocation of approximately $19,800 in community grant
funds, and is also recommending a one -year funding cycle. The funds include $7,400 base funding and
an additional $12,430 that had been contributed annually to the Los Gatos Museum Association. During
the negotiations with the Museums to move operations to the former Town Library space, it was
negotiated that the Museums would no longer receive the $12,430 grant, but would be eligible to
compete for grants -based arts funding in FY 2014/15. If the recommendations reflected on page XX of
the proposed budget are approved by Council, four of the agencies will receive the same funding as last
year (Art Docents of Los Gatos, Festival Theater Ensemble, Los Gatos Community Concert and St.
Luke's Sunset Concert Series). The Photographic Guild of Los Gatos declined to apply for funding for
the FY 2014/15 year. The Lost Gatos Museum Association will receive $4,000.
Staff supports the ACC request to allocate $8,400 to fund public art projects identified in the Arts Plan.
Approximately $4,200 would be allocated to Phase 2 of the Cat Walk installation, and $4,200 would be
allocated to Phase 3 of the Forbes Mill Footbridge Revitalization Project. Depending on the Town's
future fiscal situation, staff may recommend a separate allocation for public arts projects at some level in
FY 2015/16 so that the full amount of the community art grant program can be allocated to local
agencies.
PAGE 11
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
MAY 15, 2014 IMPROVEMENT PROGRAM BUDGET
Code Compliance and Enforcement
For the past two years, the Town Council has authorized the use of part time contractual code
compliance staff since the elimination of the Town's prior full time Code Compliance position in early
2009. The proposed budget includes restoration of the prior full time Code Compliance position, as well
as limited overtime and other funds to be used for additional concentrated code enforcement activities as
described below.
The Council may direct one or more the following for implementation after the hiring of the new code
enforcement officer:
1. Implement a pilot real -time exterior noise monitoring program with a Central Business District
establishment;
3. Proactive enforcement of signage and seating restrictions for Central Business District businesses
after prior notice and collaboration through the Chamber of Commerce;
3. Annual Conditional Use Permit (C.U.P.) compliance reviews for restaurant, bar, and/or
entertainment establishments;
4. Enhanced online code enforcement reporting with implementation of Town website re- design in
June;
5. New code case tracking tools on Town website by December;
6. Noise monitors (calibrated decibel meters or apps) to be issued to Police Patrol, Park Service
Officers, Building and Public Works Inspectors, with training for meter use and response to
noise complaints;
7. Research and possibly pilot citizen provided noise data as documentation for code enforcement
violations;
8. Broadened use of coordinated Community Development, Police and Finance related enforcement
activities for problematic cases, as piloted this fiscal year for two challenging cases;
9. Coordinate with State Alcoholic Beverage Control regarding enforcement of alcohol service in
violation of local requirements, pending completion of Town Alcohol Beverage Policy
modifications;
10. Establish Code Compliance Performance Standards as follows:
a) All complainants contacted within 2 business days;
b) Compliance confirmed or achieved within 60 days of complaint for 95% of complaints
received (up from 90% in 2013);
c) Repeated similar violations of the same type will accrue to the first reported violation.
d) Progressive fines and penalties after 60 days, or earlier as warranted (e.g., refusal to comply);
PAGE 12
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
MAY 15, 2014
e) C.U.P. revocation hearings scheduled before the Planning Commission per Town Code due
to ongoing C.U.P non - compliance;
The enhanced code enforcement program detailed above can likely be achieved as recommended in the
proposed budget, noting that unknown cost items will be brought back to Council if so required. In
addition, if Planning Commission hearings or legal procedures are significantly increased, then
additional resources will be required for those as well.
Attached are the Code Enforcement performance measures that were inadvertently omitted from the
proposed budget (Attachment 4), as well as the most recent Code Compliance Program report for 2013
(Attachment 5).
Redevelopment and Housing Resources
Dissolution of Redevelopment Status
In June, 2011, the State retroactively dissolved redevelopment to January, 2011, which was them
implemented in January 2012 following legal challenges. Since then, the Town has undertaken
considerable efforts to comply with complex, changing and sometimes contradictory State and County
requirements regarding the use and redistribution of redevelopment assets and monies. The Town has
been issued a "Notice of Completion" by the State and the redevelopment dissolution efforts are winding
down. Future work will include continued payment and tracking of outstanding redevelopment debt and
final resolution of a long -term future debt liability, as well as two Oversight Board meetings per year.
Since the dissolution of redevelopment, the Town has provided the following funds to local partner
agencies:
Agency
One -Time
Ave. Annual
LG Elementary
$2.9 M
$331.3 K
LG Satatoga High
$2.2 M
$125.5 K.
Central Fire
$1.7 M
$600.3 K.
Santa Clara County
$1.5 M
$0 0 K
ERAF /State of CA
$1.4 M
$580.2 K
West Valley College
$1 M
$304.1 K
Santa Clara Valley Water
$1 M
$63.2 K.
County School Service
$.4 M
$111.3 K
Mid Pen Open Spac
$.2 M
$38.8 K
Other Smaller Agencies
$.0 M'!
$8.2 K
PAGE 13
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
MAY 15, 2014
* The annual payment vanes slightly each year based on both property tax growth and residual
redevelopment related expenses. These figures are the estimate for the current fiscal year, which should
continue to increase over time.
Housing Trust Requests
The Town has received two requests which are not included in the Proposed Budget, and approving
these requests would require a reallocation of funds from the capital budget, operating budget, or
reserves.
The first which the Town Council received in March is a request from the Silicon Valley Housing Trust,
the Silicon Valley Leadership Group, and the Cities Association of Santa Clara County to consider
reallocating all of the one -time and ongoing prior redevelopment 20% housing funds subsequently
received by the Town after the dissolution of redevelopment back to affordable housing. Any funds so
dedicated by the Town would be "matched" by the County's similar allocation of funds for affordable
housing projects in Los Gatos. The request from last March was updated in a letter received Wednesday
afternoon (Attachment 6) which focuses on the one -time funds received by the Town, although we
anticipate that the request for the ongoing funds will be renewed in the future.
The dissolution of redevelopment took $13.3 million of one -time redevelopment funds from the Town
of Los Gatos ($6.5 million of 20% affordable housing funds and $6.8 million of general redevelopment
funds). $1.2 million of those funds (9.5 %) were subsequently returned to the Town as General Fund
property tax revenues and the balance was redirected to schools, the County, the State and other
agencies as discussed above. There is no State or other requirement for any recipient agency to use any
of the redirected funds for affordable housing.
Per Council direction at the January 2013 Capital Projects Funding and Priorities Study Session, the
$1.2 million received by the Town has been allocated to the first phase of the $4 million Almond Grove
Streets Project and other project priorities. Note that the entire $4 million Phase 1 of the Almond Grove
Project was previously budgeted with redevelopment funds prior to the dissolution of redevelopment,
which has also led to delays of that project.
The request for increased one -time affordable housing funding totals $578,000. An alternative approach
would be to voluntarily maintain the prior State requirement of allocating 20% of redevelopment funds
to affordable housing which would result in the Town allocating 20% of the $1.2 million received, or
$237,000. Funding at either level would require reprioritizing capital projects or drawing from capital
PAGE 14
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
MAY 15, 2014
or operating reserves. Allocating the requested funds from the Town's existing $2.1 million affordable
housing BMP fund or from the proceeds of the sale of former redevelopment housing assets (i.e., 224
Main Street or Dittoes Lane) would not be eligible for the potential $754,000 match from the County.
The second request is from the Housing Trust of Silicon Valley alone for an operating grant of $100,000
(Attachment 7). The Town has previously supported the operations and projects of the Housing Trust
from the Town's affordable housing BMP fund and could do so again if directed by Council. The
balance of that fund is $2.1 million and is expected to grow due to potential affordable housing land
asset sales. There are no current affordable housing projects requesting these funds, but the use of the
funds may be required in the future to fulfill requirements of the next Housing Element.
Future Budget Considerations
Ca1PERS Side Fund
In 2003, PERS adopted a requirement that all pension plans with fewer than 100 active members be
assigned to risk sharing pools with other agencies having similar benefits. Since the Town's safety plan
had fewer than 100 members, PERS assigned the Town's safety plan to a risk pool. Because the various
plans joining these risk pools had different levels of unfunded liability at the time they joined, PERS
established a separate "Side Fund" for each plan to address its outstanding unfunded liability at the time
it joined the pool.
The Side Funds are distinct from the Town's other PERS plans and liabilities and are currently
scheduled to be retired over fixed terms under a fixed amortization schedule (as of June 30, 2014 there
are five years remaining for the Town's Safety Plan). The total current amount of the Town's Side Fund
obligations is approximately $4.5 million. PERS charges the Town an interest rate on the Side Fund
obligations at a rate equal to the PERS actuarial rate of return, which is currently 7.5% (approximately
$50,000).
Town staff plans to study alternatives to the currents side fund amortization method, which may include
paying off either all or a substantial portion of the side fund's outstanding balance. Staff expects to work
with the PERS actuaries this summer to determine the potential dollar savings that may be obtained by
such an action. Payment of the side fund is expected to reduce the employer contribution of the PERS
safety rates, leading to annual savings to the Town's operating budget. A recommendation on a side
fund payment and how it may be financed may be brought forward by staff for Town Council
consideration early in FY 2014/15.
PAGE 15
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
MAY 15, 2014 IMPROVEMENT PROGRAM BUDGET
Silicon Valley Regional Interoperability Authority ( SVRIA)
Staff has received updated information regarding the SVRIA discussed briefly in the Proposed Budget
transmittal letter. The costs included in the operating and capital budgets for ongoing maintenance and
radio purchase continue to be applicable for next year. At this week's Santa Clara County City
Managers Association, SVRIA presented a financing model to the cities to fund the upfront costs
associated with building the interoperability system. Options include an upfront cash payment or
participation in a potential bond financing. These costs are based on a per unit model related to the
number of radios in each jurisdiction. Staff will analyze the options, monitor other cities' actions which
will have an impact on the cost of participation for Los Gatos, and return to Council in June or August
with additional information and a recommendation.
Donation Opportunities - FY 2014/15 List of Town Needs
As part of the budget development process, the Donation and Solicitation Policy List of Town Needs is
updated to reflect goods, services, and other contributions that would help enhance Town services,
programs, and events. The proposed FY 2014/15 list (Attachment 8) has been updated to remove the
specific donation opportunities in last year's list related to the library Community Service Officer Intern
position and teen librarian, as these are proposed for ongoing funding through reorganizations. In
addition, a general category has been added related to technology.
FY 2014 -2019 Capital Improvement Program
The FY 2013 -2018 Capital Improvement Program will also be presented at the May 28 Town Council
meeting. The five -year plan sets forth the schedule for street - related, parks and public facility projects
to be completed during this period. In January 2013, the Town Council identified priorities for the
allocation of one -rime funds for capital projects. The five -year plan reflects the Council's priorities for
use of these funds, as well as other projects using other funding sources. Only the first year of the plan is
formally adopted with funds appropriated by the Town Council as part of the budget process.
The CIP transmittal letter includes a summary of the significant projects recommended for FY 2013/14.
Of those significant projects, staff would like to highlight the following:
Street Program Projects:
■ Almond Grove Street rehabilitation project, including the design and community outreach
PAGE 16
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
IMPROVEMENT PROGRAM BUDGET
MAY 15, 2014
regarding the reconstruction of neighborhood streets after funding has been allocated.
Highway 9/University Avenue intersection traffic system improvements, including dedicated left
turn lanes, new traffic signal and sidewalks, and ADA improvements.
Winchester Boulevard/Lark Avenue intersection improvement project to add a receiving lane
northbound on Winchester from Lark Avenue, in addition to traffic signal improvements
Winchester Boulevard and Knowles intersection improvement project with an additional turning
lane, new sidewalks and traffic signal improvements.
Parks Projects:
• Town Park lighting project, including installation of new outdoor lighting in three Town Parks —
Blossom Hill Park, Howe's Play Lost and Live Oak Manor Park.
• Pedestrian Bridge to the sports park, specifically the design and development phase for the
construction of a pedestrian bridge from Los Gatos Creek Trail to the Creekside Sports Park,
subject to public review and Council approval.
• Open space trail upgrades, with the design and development phase being initiated in FY 13/14 to
reconstruct a section of Los Gatos Creek Trail along Charter Oak Drive.
Public Facilities Project:
■ Civic Center Reuse project to replace the elevator and make ADA improvements to the
restrooms to support the repurposing of the former library for the Museums of Los Gatos and the
Friends of the Los Gatos Library.
Capital Improvement Program Highlights
Utility Undergrounding Fund
Council requested an update on the Town's Utility Undergrounding Fund. The Town's Capital
Improvement Program (CIP) includes a fund for undergrounding of utilities generally undertaken in
conjunction with street improvement projects. The funding is derived from a Town construction tax of
18 cents charged for each square foot of building addition or alteration, which typically generates
$15,000 annually. Total cash balance in this account is $2.6 million.
In addition, the Town may have access to funds generated through PG &E's Rule 20A program for the
undergrounding of electrical utilities. Rule 20a funds are collected over time from tariffs on rate payers
and allocated for use in the jurisdiction where the funds are collected. PG &E relies on the jurisdiction to
nominate projects for those funds. Once projects applications are submitted to PG &E, projects enter a
PAGE 17
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
MAY 15, 2014 IMPROVEMENT PROGRAM BUDGET
queue and are addressed as PG &E capacity allows. Currently, projects require an average seven -year
wait for construction, although PG &E is making efforts to reduce this wait to five years.
To date, the Town has accumulated funds in the Rule 20a program in the amount of approximately
$3.25 million with capacity to borrow an additional $600,000 on future tariff collections. Additional
funds will accumulate by the time any planned projects reach the construction phase.
Because of the historically small fund balance and the length of time it takes to advance a project, Town
staff has not prioritized programming these types of projects. With the accumulation of funds now at a
healthy level, staff will begin an assessment of locations where undergrounding will be most beneficial.
Additional considerations, such as extreme costs for undergrounding of higher voltage transmission
lines (compared to distribution lines) will affect project selection. Staff will bring additional
information to Council as potential projects develop.
Pedestrian Bridge to Creekside Park
Council will note in the proposed Capital Improvement Program that staff is recommending redirecting
Town capital funds ($500,000) in the Creekside Sports Park Pedestrian Bridge project to the Highway 9
- Los Gatos Creek Trail connection project. Staff is also recommending requesting redirection of the
Water District grant ($300,000) to the Trail project.
As a result of community objections to the proposed mid -field alignment for a pedestrian bridge
connecting the Sports Park to the Creek Trail, staff and consultants explored multiple alternative
alignments. The most promising alignment initially appeared to be the "top of dam" alignment, which
would have virtually no environmental impact on the creek habitat and would also provide the greatest
opportunity for connection to a future loop trail around Vasona Lake. However, this option is not
possible at this time due to a pending seismic analysis of the Vasona Dam by the Water District planned
for 2015 which may indicate a need for structural upgrades and/or reconstruction of the Vasona Dam.
Although the Water District's upcoming seismic analysis of the Vasona Dam does significantly restrict
bridge alignment options in the short term, the District has indicated an interest in working with the
Town and County Parks to incorporate pedestrian access across the top of the dam if modifications to
the dam are indicated. Since it will be two to four years before the District completes its evaluation of
the existing structure, with the earliest date of completion of a new structure incorporating pedestrian
access being 2022, staff is recommending redirecting the funds previously allocated for this project to
the Highway 9 connection to the Los Gatos Creek Trail. This project is currently included in the
Town's CIP with $80,000 in GFAR funds and $720,000 in unidentified Grant funds.
PAGE 18
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
MAY 15, 2014 IMPROVEMENT PROGRAM BUDGET
Preliminary discussions with the Water District indicate that it may be possible to reallocate the
$300,000 pedestrian bridge grant to the Highway 9 connection, which with a reallocation of the
$500,000 in GFAR assigned to the pedestrian bridge project, would fully fund the Highway 9
connection.
Budget Presentation
At the May 19, 2014 Town Council meeting, the Council will consider the proposed Operating and
Capital Improvement Program budgets. A Study Session focusing on the Police Department budget will
occur prior to the regular Council meeting. The review and discussion of the proposed budgets
will occur following the format outlined below:
• Operating Budget Overview
• Operating Budget Highlights
• Capital Budget Overview
• Public Comment
• Council Direction
Town Manager
Finance and Budget Manager
Parks & Public Works Director
Public
Town Council
Departmental staff will be available to respond to specific Council questions. Any changes to the
proposed operating and/or capital budget directed by Council and/or identified by staff as a "clean-up"
item will be included for Council consideration in the resolution formally adopting the budget to be
considered by Council in June.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
The fiscal impact is presented in summary form in the Financial Summaries chapter of the Proposed
Operating and Capital Budget for FY 2014/15.
Attachments:
1. FY 2014/15 Proposed Operating and Capital Budget (Previously Submitted)
2. FY 2013 — 2019 Proposed Capital Improvement Program Budget (Previously Submitted)
3. Memorandum from Los Gatos Chamber of Commerce dated May 1, 2014
PAGE 19
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2014/15
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMPROVEMENT PROGRAM FOR FISCAL YEARS 2014 -2019
C. PROVIDE DIRECTION REGARDING ANY CHANGES TO THE FISCAL YEAR
2014/15 OPERATING AND CAPITAL BUDGET OR THE 2014 -2019 CAPITAL
MAY 15, 2014 IMPROVEMENT PROGRAM BUDGET
4. Code Compliance Quarterly Report
5. Code Compliance Performance Measures
6. Letter from Silicon Valley Housing Trust, the Silicon Valley Leadership Group, and the Cities
Association of Santa Clara County Requesting Housing Funds
7. Letter from Housing Trust of Silicon Valley Requesting Housing Funds
8. FY 2014/15 List of Town Needs
THIS PAGE
INTENTIONALLY
LEFT BLANK
6 ORGATOS
OF COMMERC
10 Station way
Los Gatos, CA 95030
PH 408.354.9300
Fax 408.399.1594
www.losgatoschamber.com
Board of Directors
2013 -2014
Pat Wolfram
President
El Camino Hospital -Los Gatos
Dianne Anderson
Discover Los Gatos
Immediate Past President
Cleve Dayton
The Painting Pros
Peggy Gibbs
Camp BizSmart & BIISmart Global, Inc.
Butch Harris
PG &E
David Hernandez
Los Gatos Auto Service, Inc.
Rita Marcojohn
We've Got Your Back
Janice McCabe
Janice McCabe Interior Design & Build
Patti Rice
The Spa -Los Gatos
Trevor Schwartz
Raymond James & Associates
Joseph Sweeney
Sweeny, Mason, Wilson & Bosomworth
Marie Tallman
'Trowd¢nts
C RC LE
V El Camino Hospital Ws Gatos
® Sweeney, Mason,
Wilson & Bosomworth
A Pmf +rioml Lvv forryrtaiien
GROSVENOR
Alain Pine] Real Estate
California Cafe
Campo di Bocce
Discover Los Gatos
Halt's Restaurant
Los Gatos Auto Service, Inc.
Los Gatos Business Park, LLC
M Magazine
Oak Meadow Dental Center
Sereno Group
Testarossa Winery
The Spa -Los Gatos
Toll House Hotel
Date: May 1, 2014
To: Members of the Town Council; Greg Larson, Town Manager, Pamela Jacobs,
Assistant Town Manager
From: The Chamber of Commerce Board of Directors
Prepared by: Ronee Nassi, Executive Director
Recommendation:
I. Execute a five (5) year contract between the Town of Los Gatos and
the Los Gatos Chamber of Commerce.
2. Contract to remain at the current levels for FY2014 -2015: $35,000 for
the Information Center and $15,000 for Leadership Los Gatos.
3. Beginning in FY 2015 -2016 the contract for the Town Information
Center will include yearly review as well as cost of living increase to reflect the
rising cost of doing business.
Background:
The Los Gatos Chamber of Commerce and the Town of Los Gatos have engaged
in a contractual agreement for services since 1997.
• Originally, the contract included payment for the Chamber's website, a
professionally produced calendar distributed to the residents, as well as a
variety of marketing materials including event posters, brochures and
guides.
In 2001, a new agreement for services was executed to include: A Town
Information Center; Town Website Management including a calendar of
events, general Town Information, new resident and visitor information,
and a site map; Town Maps; Advertisements; Town Brochures; Town
Calendar; and the Leadership Los Gatos Program. The total for these
services was $100,527.
In 2004, the Chamber and Town again modified the Scope of Services to
include the Town Information Center, Town Marketing Efforts, and the
Leadership Los Gatos Program. At this point, the contract for services was
reduced to a not to exceed total of $58,800. (Town Information Center
$28,000, Town Marketing Efforts $15,800, Leadership Los Gatos making up
the balance.)
In 2005 -2006 the contract was reduced to $28,000 for the Information
Center and $15,000 for Leadership with no funding for Town Marketing.
10 Station Way, Los Gatos, CA 95030 408.354.9300 www.losgatoschamber.com
ATTACHMENT 3
• In 2007 -2008, the Scope of Services was again modified to more accurately reflect the
costs associated with the services being provided, and no longer funded marketing
efforts. At this time, an 18% increase was granted in the category of Town Information
Center to cover five years of CPI costs and increased facility lease rates ($33,000), and
funds were allocated for the Leadership Los Gatos Program for the coordination and a
share of the enrollment tuition. This contract was not to exceed $52,200. At this time,
the Chamber of Commerce proactively included the Chamber membership for the Town
to better reflect the partnership between the two organizations.
• In 2011, the funds were again adjusted to more accurately reflect the tuition being
received for Leadership Los Gatos, and the Town Information Center ($35,000). This
reflects the total that is still represented in the current contract of $50,000 for the
Chamber of Commerce to implement and manage a Town Information Center, and
coordinate the Leadership Los Gatos Program, as shown in Attachment A.
Discussion:
At the request of the Town Council, the Chamber of Commerce is providing historical
information regarding the evolution of the agreement for services between the Town and the
Chamber, and data collected throughout the majority of FY 2013 -14 to demonstrate the level of
service provided by the Chamber of Commerce in various aspects of the daily operations and
special events on behalf of the partnership between the Town and Chamber. The Chamber of
Commerce has made it a mission to represent the Town of Los Gatos with only the highest
standards through the Town and Information Center by consistently providing high quality
customer service that is personal, professional, and complete. By doing so, a lasting positive
impression is left on our visitors and residents.
Contract's Provisions and Supporting Material
The following information provides insight into the Chamber's level of performance as it relates
to the Scope of Services in Exhibit A.
The Town Information Center is open 40 hours a week, 52 weeks a year except for scheduled
holiday closures. The Center will also be open occasionally on Saturdays and will be coupled
with scheduled events to maximize the Center's visibility. Events will be posted at the
Chamber and advertised in event marketing materials.
• In June of 2012 the Chamber moved to its current location, 10 Station Way, at the
suggestion and with the support of the Town. This location has proven to be more
convenient for visitors and residents of Los Gatos, as it is within the core of the
downtown central business district and has an available parking lot. This office is
warm and welcoming in the heart of downtown, capturing the brand and spirit Los
Gatos is well known for. It is the perfect place to welcome and assist visitors and
residents alike. As a result of the prime, core location, the rent is comparable to
other rents in the vicinity. If the Chamber did not serve as the Town's Visitor and
Information Center, there would not be a need or the ability to sustain this current
location, and would be forced to relocate to an area with more affordable rental
rates. The Chamber is currently in year three of a ten year lease, with an additional
10 year option for renewal. This lease was purposefully chosen with longer terms to
create an established, well known location for the residents and visitors to access
Town information.
Additional signage was installed to create greater visibility for the Information
Center.
As requested in the Scope of Services, the Chamber office is open at least 40 hours
each week, 52 weeks a year, only closing for nine scheduled holidays (Christmas,
New Year's Day, President's Day, Memorial Day, July 4, Labor Day, Veteran's Day,
Thanksgiving Day and occasionally on the Friday following). In 2013, and planned
for 2014, the Chamber offices will be open on the Friday following Thanksgiving in
an effort to enhance the Downtown experience to shoppers and offer the first day
of Holiday Carriage Rides. The office is also open occasionally on Saturdays when
events warrant staff time.
• These hours of operation require a minimum staffing level of: two full -time
employees and one part-time employee at ten hours per week.
• The Chamber has installed holders outside of the office doors to make information
available when the office is closed, including: brochures; guides; maps; and,
shopping, dining and event information.
• One window display along Station Way is devoted to event and community
information, in an effort to engage visitors and residents as they pass by.
• The Chamber of Commerce website is a professionally developed site, available
24/7 with organized and well - presented information for residents and visitors alike.
Due to the relationship and partnership with the Town, the Chamber includes
information about shopping (Downtown Guide) and dining (Restaurant Guide) on
the website with non - member businesses included. There is also a link from the site
to the Town's site and vice versa, allowing more information accessibility to the
public.
• The website has a community calendar which is more inclusive than events listed on
the Town's event calendar and provides an avenue for visitors and residents to
explore the happenings of our community outside of those that are strictly Town
sponsored. Chamber staff manages a major portion of the website activity along
with a professional webmaster.
• The Chamber sends a weekly "eblast" to over 1,300 email addresses and includes
Town notifications such as Commission vacancies, Town events, Arbor Day
activities, etc. These items are added and disseminated to the subscribers by a staff
member.
During operating hours, the Chamber provides a public, ADA accessible restroom,
which was used by over 300 downtown shoppers and visitors between August, 2013
and February, 2014; this is in addition to the use by staff and meeting attendees
causing a significant amount of upkeep and wear on the infrastructure.
Town's membership in Chamber of Commerce
• The Chamber proactively invited the Town to become a member, as away to
enhance the partnership and show the Town's commitment to the vitality of the
business community
• Asa Chamber member, the Town is promoted by the Chamber of Commerce, and
receives advertisement for events and announcements.
• The Chamber of Commerce shares the photos from the Annual Photo Contest with
the Town so that they may be used in marketing and recruitment materials. Within
the last several years, Town staff has used these photos on items such as the Town's
Budget cover, key Town Employee recruitment brochures, flyers, information
sheets, website and other Town created materials.
• While this is offered in -kind, the actual cost of the Town's membership would be
$790.00 annually.
Responding to general questions about Los Gatos for residents and Town visitors
• Interaction with the public is through: phone calls; drop in visits; email; and, US
Mail.
• Between August 2013 and February 2014, the Chamber recorded a total of 1,628
interactions with the public, with nearly half of these as unscheduled, walk -in
interactions.
It is important to note that the duration of these interactions vary though the level
of customer service does not. For example, during a 17 day period in August, 2013,
2 staff members (1 full time and 1 part time) recorded that over 874 minutes were
spent addressing walk -ins, calls and emails. Averaging out to approximately one
hour per day answering visitor or town information requests.
Below is a sample of the questions received by the Chamber. Some take only
moments to address while others can become much more involved and require
hours of staff time to address.
o "When is Fiesta des Arts ?"
o "What restaurant do you recommend for a rehearsal dinner ?"
• "What is happening for Halloween ?"
• "We're bringing a group of people to Los Gatos for a meeting —what kinds of
materials do you have that we can give them to introduce them to the
town ?"
• "What time does the Holiday Parade begin and when do the streets close ?"
• "What's the phone number for.... ?"
• "How can I get from here to there ?"
• "Is there a store that sells...?"
• "my grandchild needs something for his class's Flat Stanley project."
• "What time is the tree lighting ?"
• "I left something on a bench in front of one of your businesses — can you go
over and see if it is still there ?"
• "I need a location for a business meeting for 10 people,"
• "What restaurants are open on Christmas Day ?"
• "I lost my credit card in Los Gatos, what should I do ?"
• "I have a doctor's appointment but can't remember the name of the doctor.
Can you help me ?"
Development and distribution of Los Gatos relocation packets.
• Due to varying scenarios of those relocating to Los Gatos, Chamber staff custom
makes relocation packets when one is requested by an individual thinking about Los
Gatos as a location for their family or their business. This is achieved by asking
specific, appropriate questions, then providing the correct type and amount of
information.
• Inquiries are often received from realtors both Chamber and non - Chamber
members. Regardless of their membership, the best and most complete
information is prepared so that it may be delivered to their client, and the Town's
potential new resident.
Additionally, the Los Gatos /Monte Sereno Police Department relies on the Chamber
to collect information for their new resident packets. We provide boxes of Chamber
directories, and other materials as requested. As recently as March, 2014, a
Volunteer in Policing officer came to our office twice within 2 weeks and took 150
Chamber Directories and Discovery Maps for newcomer packets.
Coordination and distribution of various Los Gatos marketing materials
• In the early years of the Chamber's contract with the Town of Los Gatos, printing and
design of brochures and guides was done professionally. This was expensive and the
materials produced could not be kept up to date without waste of product and money.
Given the current availability of in office programs and equipment, the Chamber now
does most of the publishing and printing of items within the Chamber office by
maintaining two models of Xerox printers for the bulk of printing needs. These
machines require a substantial amount of ink, and the paper of the printing is purchased
out of the Chamber budget.
• All of the brochures listed below are produced in the Chamber office with all updates
and preparation for delivery done by Chamber staff. Due to the partnership with the
Town and responsibility for the Town's Information Center, they brochures provide
information for all businesses, not exclusively chamber members. And, most are
represented on the Chamber's website inclusive of non - member businesses.
Restaurant Guide, Lodging Guide, Self- Guided Walking Tour
• 4 color, tri -fold or booklet type publications all printed and readied for
distribution and website upload by office staff
• The Restaurant Guide identifies restaurants in Los Gatos including those
beyond the downtown core. Restaurants are identified by type —
Breakfast /Lunch, Coffee/ Delicatessens /Dessert, Casual Dining, Traditional,
Asian, Mexican, Indian, Italian /Pizza, Caterers, Food Delivery and Wine
Tasting Sites. Addresses and phone numbers are included.
o By producing these publications in house, they are kept up to date,
and the printing is done on an as needed basis to meet demand.
This year we had Hobee's leave and Hult's open, Lexington
House opened in a space that didn't exist until recently,
Mmoon closed, Centonove opened, Mt. Charley's changed
their name to Charley's Los Gatos, Nick's on Main was
replaced by Spinello's.
By producing these in house, they are kept current
o The lodging guide was updated to reflect the name change for the
Motor Inn to the Inn of Los Gatos.
The Downtown Shopping Guide
• The Downtown Guide is an eight page publication including information
on shops, restaurants, spas, salons, and parking lots within the
downtown core district. It was created with the help of Town Staff and is
updated as needed by Chamber staff to reflect the most current
merchant list within the Downtown. Chamber staff updates, prints and
folds the publication. Additionally, this guide is inclusive of all businesses
regardless of their membership status with the Chamber of Commerce.
The information is provided upon request by walk -ins, phone, email, US
mail, uploaded to the Chamber website, and provided outside of the
Chamber offices during non - business hours.
o Changes within the last several months that have been reflected
in recent updates include: Four Boys and a Girl is now 5th Avenue
Consignment; Kiss'tique is now Wink and Willow; Serapi Rugs has
moved to the former Design and Interiors of Los Gatos; Haute
Bride moved into the former Los Gatos Beauty location; Prim
Boutique replaced Haute Bride's original space; Automobuild
moved from Main Street to N. Santa Cruz to replace
Purrsnicketty /Bowwowser; the French Cellar has closed; Icing on
the Cake has expanded into the former Indian Store; Chico's
moved to a part of the former Border's space along with Lucy;
Blue Illusion has opened in Old Town; and more.
• This guide is a popular tool used by shoppers visiting for the day, those
hosting weddings or other events in Los Gatos, and our residents. Most
people visiting the Chamber office leave with this publication in hand,
along with other items they may have requested. In addition, this guide
is included as a part of the relocation packet and is available in the
outside brochure holders for accessibility when the Chamber is closed.
• Since August of 2013, some examples of the requests for the
guide have been: more than 400 copies for corporate meetings;
50 for a social group coming from Lodi; 100 copies for El Camino
Hospital, 125 copies for local senior housing developments for
their current and new residents.
• These guides were printed, folded and stapled and sometimes
mailed by Chamber staff.
The following are a list of services not outlined in the Scope of Services. They are provided by
the Chamber through the Town's Visitor Information Center. Because the Chamber is well
known as the Town's Information Center, requests are often expressed beyond the scope of
services and the Chamber is amenable to these requests in an effort to provide residents,
businesses and visitors with the best Los Gatos experience possible.
• The office has trail maps, winery maps, bus schedules, Discover magazines (a publication
that gives area information beyond Los Gatos), Los Gatos Saratoga Recreation
Department guides, Los Gatos Magazine, a Los Gatos Weekly rack, copies of The Metro,
Bay Area Parent Magazine, senior living guides, and local telephone books for the public
and new residents.
• Chamber staff prints bus maps, schedules and directions to the public upon request.
• The Chamber offices provide a retail component including signature Los Gatos items,
historical books and postcards, community cookbooks, and more.
• Annually, the Chamber produces a Chamber Directory that is inclusive of Town
information such as government and community resources, Town Departmental
contacts, annual events, and more to best serve the Los Gatos community. It is
professionally produced and distributed, free of charge to residents, visitors and
businesses within Los Gatos. The Chamber provides copies to the Library, Police
Department, and Town Hall offices to distribute to anyone inquiring about services and
resources within their offices. Additionally, the 64 page directory magazine is mailed to
the residents in the 95030 and 95032 zip codes at considerable expense absorbed
through the Chamber of Commerce.
• Inquiries regarding Town services, such as business licenses, business permitting, parking
tickets or issues, library hours, are fielded regularly and when further information is
needed, inquiries are directed to the appropriate Town Department.
In conclusion, the Los Gatos Chamber of Commerce respectfully requests that the Council
consider the level of service that the Chamber provides through our contractual agreement as a
necessary part of the economic vitality of our community. We believe that our location and the
service we provide to residents and visitors, beyond the scope of our normal business mission,
is part of what makes Los Gatos special. On the practical side we also contend that contracting
with the Chamber is more cost efficient than were the Town having Staff take over the services
we provide. The 20 -25% of Chamber expenses to provide our center is less than the cost of a
full time public employee and less than our contract proposal by more than $6,000.
Additionally, Town Hall's location is not in the heart of our downtown business district.
Therefore, visitors would not seek out their answers (and restroom) but would continue to
come to our office putting the Chamber and its staff in an imbalanced position.
Again, our proposal is as follows:
1. Execute a five (5) year contract between the Town of Los Gatos and the Los Gatos
Chamber of Commerce.
2. Contract to remain at the current levels for FY2014 -2015: $35,000 for the
Information Center and $15,000 for Leadership Los Gatos.
3. Beginning in FY 2015 -2016 the contract for the Town Information Center will
include yearly review as well as cost of living increase to reflect the rising cost of doing
business.
Respectfully submitted by the Board of Directors of the Los Gatos Chamber of Commerce
Pat Wolfram, President
DATE: January 30, 2014
SUBJECT: CODE COMPLIANCE BI- ANNUAL REPORT FOR JULY THROUGH
DECEMBER 2013 AND YEAR END TOTAL VIOLATIONS STATUS
COMPARISON TO FISCAL YEAR 2011 -2012
DISCUSSION:
Table 1 indicates that overall complaints reported decreased by 305 for the Fiscal Year of this
year (2012 -2013) in comparison to the last Fiscal Year (2011- 2012). Table 1 also shows that of
the 395 total complaints reported for the Fiscal Year (2012/2013), 105 of those violations are
pending normal processing. This is a clear indication that staff has been able to abate the
majority of violations reported in a timely, effective, and efficient manner.
Table 1 also shows that the number of telephone calls received for the Fiscal Year of 2012/2013
increased by a total of 150 calls, in comparison to the last Fiscal Year. The complaints that were
received covered a wide variety of Town regulations, including, but not limited to, the following:
• Sign Violations — 85
• Building Code Violations — 33
• Rubbish/Dumping -18
There were also a wide variety of complaints that were classified in the miscellaneous category
for this Fiscal Year. Complaints that were classified as "Miscellaneous Complaints" covered a
wide variety of the Town Code regulations as well (i.e. lighting, property lines, encroachment,
health & safety issues, etc.).
In addition to complaint- driven phone calls, the Code Compliance Division responds to public
inquires which are not in the realm of Code Compliance. Non -Code Compliance complaints are
forwarded to the appropriate agencies or departments for follow -up. These calls are not
documented. Code Compliance receives an average of three non - compliance calls per day.
These calls are in addition to the YTD total shown in Table 3.
TABLE 1
VIOLATION STATUS
1st HALF
12/13 FY
2ND HALF
12/13 FY
TOTAL
12/13 FY
M55
Com Taints r orted
200
195
395
Violations abated
120
75
195
Violations pending normal processin
25
80
105
+34
Complaints determined not to be a
violation
55
40
95
-55
ATTACHMENT
TABLE 2
issued
41 91 No
Violations resulting in litigation 1 01 0 1 01 No
Referred to Town
TABLE 3
0
WMAM
5
2
7
0
Animal complaints
1 st HALF
2ND HALF
TOTAL
COMPARISON
VIOLATION STATUS
12/13 FY
12/13 FY
12/13 FY
TO 11/12 FY
issued
41 91 No
Violations resulting in litigation 1 01 0 1 01 No
Referred to Town
TABLE 3
0
WMAM
Unlawful accessory structures
5
2
7
0
Animal complaints
2
2ND HALF
TOTAL
COMPARISON
VIOLATION TYPE
HALF
12/13 FY
12/13 FY
TO 11/12 FY
Garbage and rubbish
]2/13 FY
12
16
-2
Unlawful accessory structures
5
2
7
0
Animal complaints
2
12
14
+4
Noise complaints
21
12
33
+3
Garbage and rubbish
4
12
16
-2
Building code violations
21
26
47
+14
Unlawful dwelling units
2
1
3
0
Overgrown weed, bushes, etc.
3
5
8
-9
Lighting complaints
1
1
1 2
-I1
Encroachment/Obstruction of right-of-
way
11
2
13
0
Inoperative vehicles (boats, trailers,
motor homes, etc...
5
21
26
+16
Sign violation (A- frames, banners, no
permits, etc...
29
56
85
+9
Home Occupation Permit - Violation
2
0
2
-1
Conditional Use Permit - Violation
0
5
5
+3
Miscellaneous Violations
40
36
77
-10
Total number of phone calls
450
400
850
+150
Total number of e- mails.
100
81
181
+31
N: \DEV\CODE COMPLIANCE\CC 2013 BI- ANNUAL REPORT, July -Dec 2013.dmx
80 COMMUNITY DEVELOPMENT DEPARTMENT co
Code Compliance Program
CODE COMPLIANCE PROGRAM STAFFING
Full Time Equivalent (FTE)
PROPOSED
2011/12
2010/11
Town Staff
Funded
Community Development Dir.
0.05
Asst. Community Dev. Dir.
-
Building Official
0.15
Executive Assistant
-
Administrative Secretary
0.05
PROPOSED
2011/12
2012/13
2013/14
2014/15,?
Funded
Funded
Funded
Funded., f
1. Ensure properties in Los Gatos are used safely
Actual
Estitnatcd
Budget
0.05
0.05
0.05
'I
0.15
0.15
0.15
I
0 15
a. Percentage of complaints abated within cycle
0.05
0.05
7 0 05
0.05
Code Compliance Officer _ _ _ - 1.00
Total Code Compliance FTEs 0.25 0.25 0.25 0.25 4",
2010/11 2011/12 2012/13 2013/14 2014/15
Temporary Staff Hours Funded Funded Funded Funded Funded
Code Compliance Officer 832
Total Annual Hours 832
2. Numberofcomplaints abated:
3. Total numberof Administrative Citations:
4. Numberof citations issued resulting in fines:
235
2010/11
2011/12
2012/13 2013/14 2014/15
Performance Objectives and Measures
Actu#j
'Actual
Actual Fsti °g;gat�et
1. Ensure properties in Los Gatos are used safely
Actual
Estitnatcd
Budget
and are consistent with the Town's zoning
311
295
395
regulations.
375
a. Percentage of complaints abated within cycle
90"/0
900/0
90;6 90% 90"/0
times:
2. Proactive enforcement activity to achieve timely
compliance.
a. Percentage ofcomplaints resulting in court
00/0
00/0
0% 0% 0%
2. Numberofcomplaints abated:
3. Total numberof Administrative Citations:
4. Numberof citations issued resulting in fines:
235
2010/11
2811/12
2012/13
2013/14
2014/I5
Activity and Workload hts
Actual
Actual
Actual
Estitnatcd
Budget
1. Number of complaints reported:
311
295
395
350
375
2. Numberofcomplaints abated:
3. Total numberof Administrative Citations:
4. Numberof citations issued resulting in fines:
235
236
290
280
330
3
3
9
10
12
3
3
9
10
12
A of rr
ATTACHMENT 5
PROPOSED
w COMMUNITY DEVELOPMENT DEPARTMENT Cli
Code Compliance Program
FY 2014 /15 KEY PROJECTS
Core Values
Key Projects
Process Improvements
• During FY 2013/14, staff will continue to work with the Police and Parks
and Public Works Departments, and the Town Attorney on code
Good Governance
compliance issues and the Administrative Citation Program. Staff will also
Ensure responsive,
evaluate the Town's sign regulations and make any necessary changes to
accountable, and
address compliance issues that have arisen with off - premise signs.
collaborative
• Processes improvements to and updates the Conditional Use Permit (CUP)
government
database and monitors CUP condition compliance.
KEY PROGRAM SERVICES
• Resolves complex Town code and zoning violations
• Enforces various Town codes, while focusing on obtaining voluntary compliance from the public
• Educates residents and business and property owners about Town regulations
• Reviews Home Occupation Permits for proper use in residential zones
• Conducts inspections /investigations of structures /residences concerning public health- related
issues
• Coordinates with the Finance Department's Business License Tax Division to ensure all
operating businesses have a business license
D -99
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Catholic Charities MidPen/ o Santa Clara County O U 5� N %REF�K
May 14, 2014
Mayor Steven Leonardis and Members of the Town Council
Town of Los Gatos
110 E Main St.
Los Gatos, CA 95030
Re:, Fiscal Year 2014 -15 - Housing Boomerang Funds
Dear Mayor Leonardis and Members of the Town Council:
On behalf of those who care about affordable housing, we are writing to enlist your
support in seeking a solution to the affordable housing funding that was lost due to the
elimination of redevelopment. We respectfully request that you set aside a portion of
former redevelopment agency funding for affordable housing, called "boomerang
funds."
As you are well aware, the lack of affordable housing continues to constrain our ability
to create, maintain and grow a healthy and sustainable community. A recently released
report by the National Low Income Housing Coalition says that the hourly wage
needed to rent a two- bedroom apartment in the region is $30. Hourly wages for food
service workers and office support workers is between $10- 20/hour making it
abundantly clear that together, we must continue to find ways to fund and build
affordable homes. Unfortunately, with the dissolution of Redevelopment Agencies
(RDA), the State of California has deprived our communities of a significant funding
source to support the creation of affordable housing. That funding source generated
approximately $1 billion across the State and approximately $64 million in Santa Clara
County.
ATTACHMENT
Cities in Santa Clara County have a long and admirable track record on affordable
housing issues. Policy makers, both present and past, have understood and continue to
recognize affordable housing needs and have responded through progressive housing
policies that provide incentives, advantages, and funding for affordable housing. Sadly,
the regulatory and fiscal environment has changed and we're all now working to cobble
together different methods of regaining the ground that has been lost.
Towards that end, the Cities Association, in partnership with several stakeholder
groups, has put forward the idea of setting aside former redevelopment money for
affordable housing. Of note, this same request was made of the County first and after a
concerted effort by housing advocates, the County agreed, contingent upon a match
from the cities.
There are two sources of funding from redevelopment:
1) Former Redevelopment Tax Increment: Under former redevelopment law,
redevelopment agencies were required to set aside 20% of redevelopment revenues for
affordable housing. We encourage your city to dedicate the equivalent share of former
redevelopment agency property tax revenues to affordable housing along with a factor
that incorporates property tax growth over time. The City of San Francisco, for
example, has already taken this step along with Los Angeles and Fremont. This source
of funds is called "residual" payments and for many cities with redevelopment debt,
does not amount to much in the near term. However, over the long term (10 years and
out) it can begin to add up and provide a significant source of funding for affordable
homes, especially when combined with other strategies already in place or under
consideration.
2) Unencumbered Housing Funds: When redevelopment was eliminated, many cities
had collected redevelopment housing funds that were intended to be spent on
housing. However, some cities had not yet encumbered those funds although they had
every intention of spending them to meet their affordable housing needs. As a one -time
action, a policy should be adopted that returns what were the unencumbered low and
moderate income housing funds. Of the cities that had redevelopment agencies, only 5
had unencumbered funds. Together, when coupled with the County's match, cities
could return almost $20 million to affordable housing, the vast majority of which would
be returned to the City of Santa Clara.
Cities have many critical needs, including affordable housing. The ability to meet these
needs has been made more difficult by the dissolution of redevelopment. We deeply
sympathize with cities that have built the affordable homes to serve the most needy in
our communities. The best way to move forward is for all local governments to commit
resources to this urgent task.
At the upcoming May 19t1, Town Council budget meeting, we hope you will move
forward with a proposal to use your boomerang funds, or a similar eligible source, for
affordable housing. If the Council agrees to dedicate your one time - boomerang funds or
another reserve fund or funding source not already dedicated to housing, in the amount
of $578,298 for affordable housing, this would enable affordable housing programs in
Los Gatos to access $754,322 in County matched one -time boomerang funds. We urge
you to make boomerang funds one of your priorities and add them to the FY14 -15
budget.
Once again, thank you for your ongoing commitment to affordable housing and we
look forward to working with you to recreate the funding streams and policy tools
needed to meet our housing needs.
Respectfully,
/s/
Shiloh Ballard, Silicon Valley Leadership Group
Kevin Zwick, Housing Trust Silicon Valley
Raania Mohsen, Cities Association of Santa Clara County
Darrell Evora, EMQ Families First
Bob Brownstein, Working Partnerships
Carole Leigh Hutton, United Way Silicon Valley
Patricia Gardner, Silicon Valley Council of Nonprofits
Jenny Niklaus, HomeFirst
Karae Lisle, Innvision Shelter Network
Greg Kepferle, Catholic Charities
Dan Wu, Charities Housing
Jennifer Loving, Destination: Home
Jeff Oberdorfer, First Community Housing
Matt Franklin, MidPen Housing
Dianne Spaulding, Nonprofit Housing of Northern California
Naomi Nakano - Matsumoto, West Valley Community Services
Melissa Morris, Law Foundation of Silicon Valley
Michele Beasley, Greenbelt Alliance
Chris Lepe, TransForm
Tom Myers, Community Service Agency — Mountain View
March 31, 2014
Greg Larson
Town Manager
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
Dear Mr. Larson,
RECEIVED
APR 0 8 2014
TOWN MANAGER
Housing Trust Silicon Valley greatly appreciates the Town of Los Gatos' support of and partnership with
the Housing Trust over the years, and thanks you for your investment in making our community a more
affordable place to live. The affordable housing opportunities we have created together over the years
have helped Los Gatos residents realize the dream of homeownership, find affordable rental units for
themselves and their families to call home, and helped move homeless families and individuals off of the
streets and into permanent housing. We consider our collaboration with the Town of Los Gatos to be
vitally important to accomplish our mission, and we hope you will continue to support our efforts as we
work to make even more much needed affordable housing opportunities for Los Gatos residents.
Housing Trust's partnership with the Town of Los Gatos is a valued and important one. We hope the
Town will consider continuing to support Housing Trust Silicon Valley at this vital time. Since Housing
Trust began serving our community in 2001, the Town of Los Gatos has contributed $850,000 to help us
create more affordable housing opportunities. In turn, Housing Trust has invested over half a million
dollars in creating homeownership opportunities for low- to moderate - income households in Los Gatos,
and investing in the creation of affordable rental homes for extremely low- to low- income individuals
with special needs.
At this time Housing Trust Silicon Valley respectfully requests $100,000 from the Town of Los Gatos to
support our general affordable housing programs. Much of these funds will be used to help us create
more affordable housing opportunities in Los Gatos for extremely low- to low- income individuals and
families, including the working poor, seniors, those with special needs, and the formerly homeless. This
contribution from the Town of Los Gatos comes at a crucial time. With the elimination of
redevelopment funds, Housing Trust's financing for affordable multifamily rentals will be critical to see
that projects move forward. As we have done in years past, we will do our best to maximize the impact
of your contribution. If this request is funded with Boomerang funds from former redevelopment
95 South Market Street, Suite 610, San Jose, CA 95113 ATTACHMENT 7
Tel: 408.436.3450 • Fax: 408.436.3454 • www.housingtrustsv.org
dollars, Housing trust will request a match from the County's Boomerang funds. Through this effort your
contribution will be matched 2:1, and those funds will be used to support affordable housing in Los
Gatos. Should we be successful with our pending request with the state for Local Housing Trust Fund
dollars, we will be able to match your contribution 3:1, allowing the Housing Trust to truly make in
impact in your community.
Housing Trust recognizes that a one size fits all solution does not accurately address the affordable
housing crisis of our unique community. In Silicon Valley, one of the most expensive areas in the entire
Country to live, it is imperative for residents to have safe and stable housing, affordable rental
opportunities, and affordable homeownership opportunities. Especially in some of the higher cost areas
of the Valley, homeownership is unattainable for low- to moderate - income households. Through Below
Market Rate programs and gap financing loan programs, working families are afforded the opportunity
to become homeowners in the communities they love, and to surround their children with good schools
and a diverse and healthy environment, such as the Town of Los Gatos. Julia Moreci lives in one such
BMR home in Los Gatos, and was the first recipient of the Guardino Affordable Housing Scholarship
Awards. The affordable home her parents were able to purchase in Los Gatos allowed her to attend
good schools, get involved with sports and community activities, and most recently, go off to college to
further her education.
Thank you and the Town of Los Gatos for your continued support and partnership. We admire and
appreciate your commitment to creating more affordable housing in our community. If you have any
questions or would like to discuss the request further, please do not hesitate to contact me. I thank you
for your consideration, and look forward to partnering with you this year to create more affordable
housing opportunities in Los Gatos for residents like young Julia.
Sincerely,
Kevin Zwick
Chief Executive Officer
Housing Trust Silicon Valley
95 South Market Street, Suite 610, San Jose, CA 95113
Tel: 408.436.3450 Fax: 408.436.3454 www,housingtrustsv.org
TOWN OF LOS GATOS DONATION OPPORTUNITIES
FY 2014115 LIST OF TOWN NEEDS
To ensure that all donations and contributions are sought and accepted in an ethical
manner, the Council established a Donation and Solicitation Policy. A list of Town
needs was developed to identify goods, services, and other contributions to enhance
Town services, programs, and events. The recommended needs for FY 2014/15 are:
PUBLIC SAFETY
• Volunteer Program Materials and Equipment
• Specialized Public Safety Equipment and Supplies, including Support for Canine
Program
• Training Support for Public Safety Staff and Volunteers
• Equipment, Supplies and Materials to support Police Operations
■ Community Outreach Program Supplies
LIBRARY SERVICES
■ Children, Youth, and Adult Program Collections, Supplies and Services
• Library Book and Audio/Visual Collections
• Funding to Support Technological Enhancements, including Digital Services
■ Equipment and Services to Support Historical Preservation Efforts
• Resource Support for Collection Development and Reference, Local History, and
Library Policy
SENIOR SERVICES
• Senior Program Supplies, Materials, and Services
• Cell Phone and other Telecommunications Equipment
COMMUNITY EVENTS /ART AND CULTURE
• Supplies, Materials, and Services for Special Community and Volunteer Events
and Activities
• Funding for or Donations of Public Art subject to Public Art Selection Policy
TOWN PARKS AND FACILITIES
Beautification Materials and Services for Town Parks, Open Space, and
Infrastructure; Land for Parks and Open Space
Contributions Supporting Recreation or Expansion of Athletic Fields
Contributions for Public Improvements for Civic Center Deck and Facilities
Housing Museums of Los Gatos and Friends of Los Gatos Library
SUSTAINABILITY
Contributions that Help Minimize Impacts on Local, Regional, and Global
Ecosystems Through Conservation, Reduced Pollution, Increased Efficiency, and
Protection of Wildlife, Vegetation, and Other Ecosystems
TECHNOLOGY
• Equipment, Software and Services to Enhance Communication with the Public
and Organizational Productivity
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