Attachment 2NPROPOSED REFERENCE SECTION
Glossary of Terms
F -1
Accrual Basis Accounting - Under this accounting method, transactions are recognized when they occur,
regardless of the timing of related cash receipts and disbursements.
Adoption - Formal action by the Town Council which sets the spending limits for the fiscal year. The
Town's budget is adopted by Council resolution.
Appropriation - An authorization made by the Town Council that permits officials to incur obligations
against and to make expenditures of government resources. Appropriations are typically granted for a
one-year period.
Audit - Prepared by an independent Certified Public Accountant (CPA), the primary objective of an audit
is to determine if the Town's Financial Statements present fairly the Town's financial position and results
of operations in conformity with generally accepted accounting principles. In conjunction with its
performance of an audit, it is customary for an independent auditor to issue a Management Letter stating
the adequacy of the Town's internal controls as well as recommending improvements to the Town's
financial management practices.
Bonds - A bond is a written promise to pay a specified sum of money (called the face value or principal
amount) at a specified date or dates in the future (called the maturity date) together with period interest at
a specified rate. Bonds are typically used to finance capital facilities.
Budget - As the Town's financial operating plan for the fiscal year, the budget displays the estimated
expenditures (costs) for providing services and the estimated sources of revenue (income) to pay for them.
Once the Town Council adopts the budget, the total becomes the maximum spending limit. Los Gatos'
budget encompasses a single fiscal year (July 1 through June 30).
Budget Amendment - The Council has the sole responsibility for adopting the Town's budget, and may
amend or supplement the budget at any time after adoption. The Town Manager has the authority to
approve administrative adjustments to the budget as outlined in the Financial and Administrative Policies
set by Council.
Budget Document - The official financial spending and resource plan submitted by the Town Manager
and adopted by the Town Council explaining the approved budget to the public and Town Council.
Budget Message - Included in the opening section of the budget, the Budget Message provides the
Council and the public with a general summary of the most important aspects of the budget, comparative
data from previous fiscal years, goals and objectives, and the views and recommendations of the Town
Manager.
Budget Overview - This section provides an overview of the changes adopted in the budget.
Additionally, the significant impacts of budgetary changes are outlined along with dollar amounts
(increase/decrease).
Budget Policies - General and specific guidelines adopted by the Council that govern the financial plan's
preparation and administration.
PROPOSED REFERENCE SECTION
Glossary of Terms
F -2
Capital or Community Improvements - Capital or community improvements are major construction,
acquisition, or maintenance/repair projects. Typical examples of major construction would include new
street improvements, park development, and public buildings. Acquisition includes land for parks and
open space. Major maintenance/repairs may include street resurfacing or modifications to public
buildings.
Capital Improvement Program (CIP) - The plan or schedule of expenditures for major construction of
roads, sidewalks, Town facilities, and/or park improvements and for the purchase of equipment. The
Town of Los Gatos' CIP follows a five-year schedule. Although the Town adopts the CIP budget in a
process which is separate from the adoption of the budget, the budget incorporates the first year of the
five-year CIP.
Capital Projects Fund - In governmental accounting, a fund that accounts for financial resources to be
used for the acquisition or construction of capital facilities. The total cost of a capital project is
accumulated in a single expenditures account which accumulates until the project is completed, at which
time the fund ceases to exist.
Capital Outlay - Expenditures which result in the acquisition of or additions to fixed assets. Examples
include land, buildings, machinery, equipment, and construction projects.
Capital Assets – See “Fixed Assets.”
Cash Basis Accounting - A basis of accounting under which transactions are recognized only when cash
is received or disbursed.
CDBG (Community Development Block Grant) - Federal grant funds distributed from the U.S.
Department of Housing and Urban Development that are passed through to the Town. The Town
primarily uses these funds for housing rehabilitation, public improvements, and local social programs.
Construction Tax - A construction tax is imposed upon the construction of any building, portion of a
building, or a mobile home lot. Construction by definition means either new construction or enlargement.
The taxes imposed are based upon a set rate per square foot as follows:
a) Capital Improvement Tax - $0.18 for each square foot of building addition or alteration
b) Underground Utility Tax - $0.18 for each square foot of building addition or alteration
c) Park Fund Tax - $0.04 for each square foot of building addition or alteration
Contingency - A budgetary reserve set aside for emergencies or unforeseen expenditures not otherwise
budgeted.
Contingent Liabilities - Items which may become liabilities of the Town but are undetermined at a given
date, such as pending lawsuits, unsettled disputed claims, unfilled purchase orders, and uncompleted
contracts.
Contract Services - Services provided to the Town from the private sector or other public agencies.
Contributed Capital - Resources which are extremely restricted for the acquisition or construction of
capital assets. This category includes, but is not limited to, capital grants, residual equity transfers in, and
contributions from developers.
PROPOSED REFERENCE SECTION
Glossary of Terms
F -3
Cost Allocation - A fair and equitable methodology for identifying and distributing direct and indirect
cost from a service provider to the service consumer. In the Town’s case, the general fund is the service
provider and the external funds are the service consumer.
Deficit - The excess of liabilities over assets.
Department - A major organizational unit of the Town that has been assigned overall management
responsibility for an operation or a group of related operations within a functional area.
Developer Fees and Permits - Fees that are charged for various development-related services or permits
based upon actual cost to the Town for providing the service or permit.
Documentary Transfer Tax - Imposed on the transfer of real property, exclusive of any lien or
encumbrance. The Town receives 50% of such revenue collected by Santa Clara County.
Encumbrance - Commitment against an approved budget for unperformed (executory) contract for goods
or services. Encumbrances cease when the obligation is paid or otherwise terminated. A purchase order is
a common encumbrance.
Expenditure - The outflow of funds paid or to be paid for an asset obtained or goods and services
obtained. An encumbrance is not an expenditure; an encumbrance reserves funds to be expended.
Fiscal Year - A 12-month period to which the annual operating budget applies and at the end of which
the Town determines its financial position and results of its operations. The Town’s fiscal year runs from
July 1 to June 30.
Five-Year Financial Forecast - Estimates of future revenues and expenditures to help predict the future
financial condition of the community.
Fixed Assets - Assets which are intended to be held or used for a long term, such as land, buildings,
improvements other than buildings, machinery and equipment.
Fund - An independent fiscal and accounting entity with a self-balancing set of accounts in which
financial transactions relating to revenues, expenditures, assets, and liabilities are recorded. Funds other
than the General Fund typically have a unique funding source and purpose. Establishing funds enables
the Town to account for the use of restricted revenue sources and carry on specific activities or pursue
specific objectives.
Fund Accounting - System used by non-profit organizations, particularly governments. Since there is no
profit motive, accountability is measured instead of profitability. The main purpose is stewardship of
financial resources received and expended in compliance with legal requirements.
Fund Balance - Also known as financial position, fund balance is the excess of current assets over
current liabilities, and represents the cumulative effect of revenues and other financing sources over
expenditure and other financing uses.
GAAP - (Generally Accepted Accounting Principles) - Uniform standards for financial accounting and
reporting. They govern the form and content of the basic financial statements of the Town.
PROPOSED REFERENCE SECTION
Glossary of Terms
F -4
Gas Tax Fund - The Gas Tax Fund is used to account for revenues and expenditures apportioned under
the Streets and Highways Code of the State of California. Expenditures may be made for any street-
related purpose in the Town’s system of streets.
General Fund - In governmental accounting, fund used to account for all assets and liabilities of a non-
profit entity, except those particularly assigned for other purposes in another more specialized fund. The
General Fund is the primary operating fund of the Town.
General Government – Includes offices and departments to support the Town Council, Town Clerk,
Town Manager, Town Attorney, Town Treasurer, Human Resoures, Finance, Community Development,
Police, Parks and Public Works, and Library functions.
General Liability Self Insurance Fund - The General Liability Self Insurance Fund is used to provide
the Town with liability and property insurance. Coverage is provided through the Town’s participation in
a joint powers agreement through the Association of Bay Area Governments (ABAG).
Grant - External contribution, and/or gift of cash, or other asset typically from another governmental
entity to be used or expended for a specific purpose, activity, or facility. An example is Community
Development Block grant funding from the federal government.
Housing Set-Aside Fund – This fund is used to account for the Redevelopment Agency’s 20% set-aside
property tax increment revenues and the associated expenditures to be used for increasing or improving
low and moderate income housing.
Improvements - Buildings, structures, or attachments to land such as sidewalks, trees, drives, tunnels,
drains, and sewers.
Intergovernmental Revenue - Revenue received from other governmental agencies and municipalities,
such as grants from the state or federal government.
Inter-Fund Transfers - When the Town moves money between its various funds, it makes an inter-fund
transfer, referred to as “transfers in” and “transfers-out.” In aggregate, transfers in and out offset each
other for the fiscal year.
Levy - (Verb) To impose taxes, special assessments, or service charges for the support of governmental
activities. (Noun) The total amount of taxes, special assessments, or service charges imposed by Santa
Clara County levying property taxes.
Licenses and Permits - Revenues earned by the issuance of licenses or permits levied in accordance with
the benefits conferred by the license or permit.
Lighting and Landscape Fund - The Town has formed six landscape and lighting district funds
established by written consent of the property owners owning all of the property within the boundaries of
the district.
Objective - A statement of specific direction, purpose, or intent based on the needs of the community and
the goals established for a specific program or service level.
PROPOSED REFERENCE SECTION
Glossary of Terms
F -5
Ordinance - A formal legislative enactment by the Town Council. It has the full force and effect of law
within Town boundaries unless pre-empted by a higher form of law. An Ordinance has a higher legal
standing than a Resolution and is typically codified in a Town's municipal code.
Operating Budget - The operating budget is the primary means by which most of the financing of
acquisition, spending, and service delivery activities of a government are controlled. The use of annual
operating budgets is required by law.
Personnel - Town staff.
Program - As subdivisions of departments, programs are budgetary or organizational units of
government with limited sets of work responsibilities within their respective departments. Programs also
serve to increase budgetary accountability. Los Gatos' budget is compiled on a program basis.
Property Tax – A tax Imposed on real property (land and permanently attached improvements). The tax
is based upon the assessed value of such property. The tax rate may not exceed 1% of assessed value.
Reserve - An account used to indicate that a portion of fund equity is designated, undesignated, or legally
restricted for a specific purpose.
Resolution - A special order of the Town Council, which has a lower legal standing than an ordinance.
Resources - Total amounts available for appropriation including estimated revenues, inter-fund transfers,
and beginning fund balances.
Revenue - Sources of income which the Town receives during a fiscal year. Examples of revenue include
taxes, intergovernmental grants, charges for services, resources forwarded from the prior year, operating
transfers for other funds, and other financing sources such as the proceeds derived from the sales of fixed
assets.
Revenue Estimate - A formal estimate of how much revenue will be earned from a specific revenue
source for some future period; typically, a fiscal year.
Road Impact Fees - Pursuant to Article III of Chapter 15 of the Town Code, the Town collects road
impact fees to finance road construction and maintenance projects throughout the town. Article IX of
Chapter 15 authorizes the establishment of special fund accounts known as Road Impact #1, Road Impact
#2, and Road Impact #3, into which all such fees are deposited. Because the road systems generally
follow drainage patterns, the existing drainage basin map boundaries are used to track and expend funds
for road construction and maintenance.
The amount of each fee collected is based on an estimate of the weight of the loads to be hauled to or
from the project and the weight of heavy vehicles to be used in connection with the project. The fee is
collected for Building Permits, Grading and Landscape Permits, Improvement Contracts, and
Encroachment Permits. Money collected from such fees is to be used solely for design, construction, and
repair of Town streets and installation of sidewalk curb cut ramps when such a requirement is triggered
by the level of work as provided by the Americans with Disabilities Act, within the prescribed area.
Projects will be brought forward on an as-needed basis.
PROPOSED REFERENCE SECTION
Glossary of Terms
F -6
SA Trust Fund – Fund used to account for the proceeds of notes, and other forms of indebtedness, and
the expenditure of these funds to pay the debt, administrative services and projects with the specified
boundaries of the Successor Agency of the Town of Los Gatos Redevelopment Agency.
Sales Tax – 1% of taxable sales is returned to the Town by the State Board of Equalization on a monthly
direct deposit basis. Under the “Triple Flip” agreement, 0.25% of the 1% is now received in association
with property tax, but remains sales tax in substance.
Special Revenue Fund - In governmental accounting, a fund used to account for the proceeds of a special
revenue source (other than special assessments, expandable trusts, or for major capital projects) that are
legally restricted to expenditure for a specified purpose.
Service Charge - Charges for specific services rendered.
Services and Supplies - Expenditures for services and supplies which are directly related to a
department's primary service activities.
State Gas Tax Funds - Portions of the tax rate per gallon levied by the State of California on all gasoline
purchases are allocated to cities throughout the state. These funds are restricted to expenditures for transit
and street-related purposes.
Supplemental Appropriation - An appropriation approved by the Council after the initial budget is
adopted.
Taxes - Compulsory charges levied by the Town, county, or state governments for the purpose of
financing services performed for the community’s benefit.
Town Code - A legal compilation of Town Council-approved ordinances currently in effect. The code
defines Town policy with respect to areas such as planning, etc.
Transfers In/Out - Money transferred from one Town fund to another. Differs from revenues and
expenses - see definition of these terms, above.
PROPOSED REFERENCE SECTION
Index
F -7
Financial Summaries – by Fund
Total CIP Fund Summary ................................................................................................................ B – 9
Fund 411 - GFAR Fund ...................................................................................................................B – 10
Fund 471 – Traffic Mitigation Fund ................................................................................................B – 12
Fund 421 – Grants Fund ..................................................................................................................B – 14
Fund 461/462/463 – Storm Basin Funds .........................................................................................B – 16
Fund 472 – Utility Underground Fund ............................................................................................B – 18
Fund 481 – Gas Tax Fund ...............................................................................................................B – 20
Financial Summaries – by Program
Streets Program ................................................................................................................................B – 5
Parks Program ..................................................................................................................................B – 6
Public Facilities Program .................................................................................................................B – 6
Glossary ................................................................................................................................................ F – 1
FY 2015/16 Completed CIP Projects ................................................................................................... A – 11
Parks Program - Park Improvement Projects
Blossom Hill Park Restroom Rehabilitation ................................................................................... D – 6
Oak Meadow Park Upgrades .......................................................................................................... D – 8
Parks Playground Fibar Project ...................................................................................................... D – 10
Plaza Park Improvements ............................................................................................................... D – 12
Park Rehabilitation – Bachman Park .............................................................................................. D – 14
Worcester Park................................................................................................................................ D – 16
Blossom Hill Park – Little League Backstop .................................................................................. D – 18
Tennis Courts Resurfacing Project ................................................................................................. D – 20
Parks Program – Trail Improvement Projects
Open Space Trail Upgrades ............................................................................................................ D – 26
Los Gatos Creek Trail Park Improvements at Charter Oaks .......................................................... D – 28
Public Facilities Program – Infrastructure Projects
Town Beautification Projects .......................................................................................................... E – 6
Old Library Re-use Project ............................................................................................................. E – 8
HVAC Upgrades – Old Library ....................................................................................................... E – 10
Building Replacement at Corporation Yard .................................................................................... E – 12
Civic Center Building Energy Efficiency Measures ........................................................................ E – 14
Fuel System Enhancements ............................................................................................................. E – 16
Former Library Building Roof Improvements ................................................................................. E – 18
Civic Center Improvements ............................................................................................................. E – 20
Energy Efficiency Upgrades Town-wide ........................................................................................ E – 22
HVAC System Upgrade – Civic Center .......................................................................................... E – 24
Civic Center – Exterior Light Replacements ................................................................................... E – 26
Civic Center – Fountain Modification ............................................................................................. E – 28
PROPOSED REFERENCE SECTION
Index
F -8
Public Facilities Program – Equipment Projects
Information System Upgrade ........................................................................................................... E – 34
Audio/Video System Upgrade ......................................................................................................... E – 36
Town-Wide Document Imaging Project ......................................................................................... E – 38
Tiburon CAD/RMS Upgrade ........................................................................................................... E – 40
Engineering Document Archiving ................................................................................................... E – 42
Police Interoperability Radio Project ............................................................................................... E – 44
PPW Interoperability Radio Project ................................................................................................ E – 46
Silicon Valley Radio Interoperability Project (SVRIP) Police System Infrastructure .................... E – 48
Streets Program - Bridge Projects
Quito Road - Bridge Replacement ................................................................................................... C – 90
Street Program - Street Improvement Projects
Winchester Boulevard/Lark Avenue Intersection Improvements ....................................................C – 40
Downtown Parking Sign Enhancements .......................................................................................... C – 42
Highway 9/University Avenue Intersection Improvements. ............................................................ C – 44
Los Gatos Boulevard/Shannon Road Improvements .......................................................................C – 46
Monument Control Network Update ............................................................................................... C – 48
Downtown Parking Lots Seal Coat & Restriping ............................................................................ C – 50
Hernandez Avenue Storm Drain Improvements ..............................................................................C – 52
Blossom Hill Road/Cherry Blossom Lane Intersection Improvements ........................................... C – 54
224 West Main Property Acquisition (Parking Lot 6) ..................................................................... C – 56
Parking Lot 4 Repair & Waterproofing ........................................................................................... C – 58
Sidewalk Improvements/Shannon Road/Los Gatos Boulevard/Cherry Blossom Lane ................... C – 60
Stonybrook Road & Kennedy Road Sidewalk Improvements ........................................................ C – 62
Intersection Safety & Traffic Flow Improvements .......................................................................... C – 64
Sidewalk Improvements – Multiple Locations ................................................................................ C – 66
Montebello Way Island Removal .................................................................................................... C – 68
LED Streetlights .............................................................................................................................. C – 70
Pageant Way Parking Lot Reconstruction ....................................................................................... C – 72
Utility Undergrounding Improvements ........................................................................................... C – 74
Bicycle & Pedestrian Master Plan ................................................................................................... C – 76
Traffic Around the Schools ............................................................................................................. C – 78
Intelligent Parking Infrastructure ..................................................................................................... C – 80
Cut-Through Traffic Mitigation....................................................................................................... C – 82
Traffic Signal Modernization .......................................................................................................... C – 84
Streets Program - Street Reconstruction & Resurfacing Projects
Street Repair & Resurfacing ............................................................................................................C – 6
Almond Grove Street Rehabilitation Project ..................................................................................C – 8
Pavement Rehabilitation – Crack Seal ............................................................................................. C – 10
Hillside Road Repair & Resurfacing Project ................................................................................... C – 12
PROPOSED REFERENCE SECTION
Index
F -9
Streets Program - Street Repairs, Maintenance & Safety Projects
Traffic Calming Projects ..................................................................................................................C – 18
Curb, Gutter & Sidewalk Maintenance ............................................................................................ C – 20
Retaining Wall Repairs .................................................................................................................... C – 22
Annual Street Restriping .................................................................................................................. C – 24
Public Access Infrastructure Improvement Projects ........................................................................ C – 26
Guardrail Replacement Projects ...................................................................................................... C – 28
Electrical Panel Replacement on Pageant Way ............................................................................... C – 30
Crosswalk Improvements at Santa Cruz Ave/Blossom Hill Rd ...................................................... C – 32
Crosswalk Lighting Upgrades ......................................................................................................... C – 34
Town Manager’s Message ................................................................................................................... A – 1
PROPOSED REFERENCE SECTION
Index
F -10