Budget
Reviewed by: Assistant Town Manager Town Attorney Finance
S:\COUNCIL REPORTS\2016\06-07-16\Budget\Staff Report - Budget FINAL.docx
MEETING DATE: 06/07/16
ITEM NO: 10
COUNCIL AGENDA REPORT
DATE: JUNE 2, 2016
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: ADOPT A RESOLUTION APPROVING THE TOWN OF LOS GATOS FISCAL
YEAR (FY) 2016/17 OPERATING BUDGET AND FY 2016/17 – FY 2020/21
CAPITAL IMPROVEMENT PROGRAM (CIP), NEW APPROPRIATIONS,
OTHER APPROVED ADJUSTMENTS, MINOR CORRECTIONS, AND
CARRY-FORWARD APPROPRIATIONS
RECOMMENDATIONS:
Adopt a resolution approving the FY 2016/17 Operating and Capital Summary Budget, the FY
2016/17 – FY 2020/21 Capital Improvement Program, new appropriations, other approved
adjustments, minor corrections, and carry-forward appropriations.
BACKGROUND:
On May 17, 2016, the Town Council conducted public hearings to discuss the proposed FY
2016/17 Operating and Capital Summary Budget and Proposed FY 2016/17 – FY 2020/21 Capital
Improvement Program. The Town Council considered both documents and directed staff to bring
back the documents for final approval with modifications to the Operating Budget to add back in
the nighttime Community Service Officer and with the following modifications to the Capital
Improvement Projects budget (CIP):
Determine safety versus non-safety projects as a source of funding for the additions
mentioned in the motion
Return with suggestions on how to implement the completion of the Forbes Mill
Footbridge art panels, and if possible, add lighting
Add a Green Bike Lane project as a place holder
Include funding to at least maintain, if not improve, the Pavement Condition Index (PCI)
Consider the addition of $33,000 for painting of light poles.
The draft resolution (Attachment 1) incorporates the direction given by the Council at the May 17,
2016 budget hearing. This report responds to the direction and provides information on the
Albright development payments. Any additional changes or corrections directed by Council upon
adoption of the budget can be incorporated into the final authorized budget with the adoption of
the attached resolution.
PAGE 2
JUNE 7, 2016
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT A RESOLUTION APPROVING THE TOWN OF LOS GATOS FISCAL
YEAR (FY) 2016/17 OPERATING BUDGET AND FY 2016/17 – FY 2020/21
CAPITAL IMPROVEMENT PROGRAM (CIP)
DISCUSSION:
Operating Budget
Continue Community Service Officer Pilot Program for Night Time Nuisances
At the May 17, 2016 FY 2016/17 budget hearing, Council authorized one-time funding to
continue the part-time temporary Community Services Officer (CSO) position within the
Community Development and Police Departments. The CSO position will be continued for one
year with funding for up to 780 hours at a cost of approximately $31,513. The cost of this position
will be split evenly between the Community Development and Police Departments in the
Operating Budget.
Albright Project
In response to questions, the table below shows the current balance from the Albright Project’s
settlement proceeds:
Pursuant to the Albright Specific Plan, staff received a community benefit payment of $241,865 at
the time of Building 1 and Building 2 occupancy at a rate of $1 per square foot. Staff anticipates
receiving an additional Specific Plan community benefit payment of approximately $240,000 for
Buildings 3 and 4 before the end of FY 2016/17. This is considered a community benefits
payment because the amount is larger than the typical fees payable upon building permit issuance.
Although the use of the Specific Plan community benefit payment is not restricted by Code or
contract to a specific geographic area or project, the payments to date and future payments are in a
separate account. Later in this report, staff recommends using the $241,865 to contribute partial
funding to improve the Pavement Condition Index.
Pursuant to the terms of the settlement agreement, the Albright development was required to pay
$350,000 as a community benefit payment. The settlement agreement stipulates that these monies
“shall be used by Los Gatos for purposes determined by Los Gatos, in its sole discretion, provided
that: (i) such uses shall be related to the project’s implementation, with high priority to traffic
congestion; (ii) such uses shall be for the benefit of the Los Gatos community; [and] (iii) such
funds shall be expended in proximity to the project.”
Source of Revenue Amount
Albright Buildings 1 & 2 - Community Benefit ($1/square foot)241,865$
Albright Settlement Agreement - Community Benefit 350,000$
Total Funding Received as of 6/1/2016 591,865$
PAGE 3
JUNE 7, 2016
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT A RESOLUTION APPROVING THE TOWN OF LOS GATOS FISCAL
YEAR (FY) 2016/17 OPERATING BUDGET AND FY 2016/17 – FY 2020/21
CAPITAL IMPROVEMENT PROGRAM (CIP)
DISCUSSION (cont’d):
The Council will be asked to approve the use of all the remaining monies paid by the Albright
development after the completion of construction and staff has identified potential investments for
Council consideration. At the current rate of construction, staff estimates that this discussion
could occur during FY 2017/18.
Capital Program Budget
The Town Council made several proposed changes to the Capital Budget at the May 17, 2016
budget hearing session.
Safety versus Non-Safety Projects
At the direction of Council, staff has identified projects that are currently funded or recommended
for funding where the monies can be redirected. Each of these projects is in the proposed Capital
Budget. The projects are in priority order based on the following criteria:
1. Projects utilizing restricted funds are not included.
2. Projects that are in progress are not included.
3. Higher priority is given to projects that provide long term financial benefit to the Town,
most notably energy efficiency projects.
4. The highest priority is given to projects that have a health and safety component.
Project Estimate
1 Safety Tennis Court Resurface 140,000$
2 Safety Blossom Hill Park Backstop 60,000$
3 Long Term
Benefit Civic Center Exterior Lighting 25,000$
4 Long Term
Benefit Townwide Energy Efficience Upgrades 25,000$
5 Long Term
Benefit Civic Center Building Energy Efficiency 25,000$
6 Non - Safety
Town Beutification Project
(possible funding source for the Forbes
Mill Footbridge Project)
10,160$
7 Non - Safety Bachmann Park 325,000$
8 Non - Safety Civic Center HVAC Upgrades 100,000$
9 Non - Safety Civic Center Fountain Modification 35,000$
10 Non - Safety Plaza Park Improvements 25,000$
Priority
PAGE 4
JUNE 7, 2016
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT A RESOLUTION APPROVING THE TOWN OF LOS GATOS FISCAL
YEAR (FY) 2016/17 OPERATING BUDGET AND FY 2016/17 – FY 2020/21
CAPITAL IMPROVEMENT PROGRAM (CIP)
DISCUSSION (cont’d):
Based on this analysis, staff recommends:
Retaining projects ranked one through five in the CIP;
Using the Town Beautification Project available funding toward the Forbes Mill
Footbridge Revitalization Project; and
Removing projects ranked seven through ten ($485,000) from the CIP and redirecting
these monies to fund the other Council priorities identified on May 17, 2016.
Forbes Mill Footbridge Revitalization Project
The Forbes Mill Footbridge Revitalization Project currently involves a partnership with Los
Gatos-Saratoga Community Education and Recreation (LGS Recreation) to program an annual
week-long youth summer art camps to create new murals to be placed on 156 panels. The
intention of the partnership, as envisioned by the Town’s Art and Culture Commission, is to
ensure the artwork appropriately represents the unique features of the Los Gatos community. To
date, approximately 31 new vinyl, graffiti proof panels have been installed on the Footbridge,
leaving 125 panels to be completed.
Due to the efforts of the Arts and Culture Commission to increase awareness of the Footbridge
Revitalization project and the available summer camps through LGS Recreation, 38 students have
been registered for the summer 2016 art camps. The camps are scheduled to take place beginning
the week of June 6 through July 1. The class size for each week of the summer camp is limited to
16 participants. Assuming that each week of the summer camp reaches capacity, there is a
potential for 48 of the available 125 panels to be completed this summer, leaving a remaining 77
panels for completion.
Based on the existing cost estimates staff received from the art instructor contracted by LGS
Recreation, the average fee to cover art supplies and materials is $15.00 per student which
includes two 12-inch by 12-inch stretched canvases, a brush set, and acrylic paints, large cups,
paper plates for palettes, sketch paper, foam core, plastic for covering surfaces, pencils, tape, etc.
Using this assumption, staff estimates that the approximate costs for art supplies for up to 77 youth
participants to create murals for the remaining panels would be $1,155.
The pricing schedule quoted by the existing vendor to replicate each mural on adhesive backed,
graffiti proof vinyl and installed on the Footbridge is approximately $328 per unit. The Town has
an existing agreement with the vendor to complete this work for up to 25 panels, of which 10
panels created in summer 2015 were recently installed, leaving 15 panels remaining for replication
and installation in the current agreement. Based on this, the estimated cost to replicate each mural
and complete the installation of the remaining 110 panels, including 33 of the potential 48 panels
created during the June 2016 summer camps, would be approximately $36,067.
PAGE 5
JUNE 7, 2016
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT A RESOLUTION APPROVING THE TOWN OF LOS GATOS FISCAL
YEAR (FY) 2016/17 OPERATING BUDGET AND FY 2016/17 – FY 2020/21
CAPITAL IMPROVEMENT PROGRAM (CIP)
DISCUSSION (cont’d):
These costs are estimates and are based on the current agreement between LGS Recreation, the
Arts and Culture Commission, and the Town of Los Gatos. The Town Council may direct staff
and the Arts and Culture Commission to look into alternative options for the completion of the
remaining 77 panels, including but not limited to exploring partnerships, sponsorship, or soliciting
volunteers or donations from other entities or organizations. For example, instead of working with
LGS Recreation, staff could explore partnership opportunities with local schools.
Staff recommends that the Council dedicate the Town Beautification project balance of $10,160
and an additional $25,907 from the reallocation of a portion of the previously identified non-safety
projects’ funding. This would increase the funding for the Footbridge Rehabilitation Footbridge
Project to a total of $36,067.
Staff has also explored the idea of providing lighting across the footbridge. Although evidence of
former lighting exists, there is currently no power on the bridge. In order to identify the cost for
lighting, additional work will need to be done to identify a power source. Staff also considered the
appropriate type of lighting. Strands of lights, such as used along the Main Street bridge, are the
most economical solution in the short term. Staff does have concerns specific to the potential
damage these types of lights would incur on the relatively secluded path. A solution that is
slightly more expensive upfront may be to provide more reliable pathway lighting over time. At
Council direction, staff will return with alternatives and costs in the fall.
Green Bike Lanes
Specific to the Green Bike Lane project, staff has identified a project to create an improved multi-
modal corridor along the Main Street frontage of the High School that will increase bicycle and
pedestrian safety, increase drop off areas, and decrease High School issued permit parking on
Town streets. This project could be implemented as soon as this summer to be in place for the
fall, with Council approval. Staff recommends $75,958 as a placeholder. The source of funding
would be the reallocation of a portion of the previously identified non-safety projects’ funding.
Maintain or Improve the Pavement Condition Index (PCI)
As discussed on May 17, staff estimates that an additional one million dollars is needed to
maintain the Town’s PCI at 67. The table below identifies a funding source with explanations for
each in the following paragraphs
PAGE 6
JUNE 7, 2016
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT A RESOLUTION APPROVING THE TOWN OF LOS GATOS FISCAL
YEAR (FY) 2016/17 OPERATING BUDGET AND FY 2016/17 – FY 2020/21
CAPITAL IMPROVEMENT PROGRAM (CIP)
DISCUSSION (cont’d):
The Town has received $241,865 to date in unrestricted Albright Occupancy funding from the first
two buildings at the site. Staff recommends dedicating these funds to street maintenance with a
focus on the northerly part of Town to bring the full community benefit to the area around
development. This does not affect future anticipated payments from the Albright development and
does not utilize the $350,000 restricted for improvements in the vicinity of the project.
This year the Town implemented a fee for permits issued to utility companies for work in the
right-of-way. This fee is structured to recover the costs for impacts of street work that disturbs
existing pavement, such as through trenches or service repairs. The revenue from these fees totals
$25,000 and the intended use aligns with street maintenance.
A separate item on this Council Agenda identifies the lease of a Town-owned conduit to a fiber
optic company. If approved, this will result in $350,000 one-time funding to the Town. These
revenues can be programmed at Council discretion.
Based on the staff safety categorization matrix, projects’ balance seven through ten totals
$485,000. Staff recommends utilizing $383,135 towards maintaining PCI to achieve the one
million dollar figure.
Painting Street Light Poles
Based on the analysis recommendations contained in this report, additional funds were not found
to support the painting of street light poles at this time. The Council may choose to invest in this
project at a particular dollar amount in lieu of the other priorities discussed in this report.
COORDINATION:
The preparation of the budget documents involved the participation of all Town Departments.
FISCAL IMPACT:
The fiscal impact is presented in summary form in the Financial Summaries chapter of the
Proposed Operating and Capital Budget for FY 2016/17.
Funding Source Amount Receipt Date
Albright Occupancy Funding Received $241,865 8/21/2015
Utility Permit Maintenance Fee $25,000 5/1/2016
New Contract – Conduit Use $350,000 Early FY 2016/17
Reallocation of Additional Projects $383,135 Currently in GFAR
Total $1,000,000
PAGE 7
JUNE 7, 2016
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT A RESOLUTION APPROVING THE TOWN OF LOS GATOS FISCAL
YEAR (FY) 2016/17 OPERATING BUDGET AND FY 2016/17 – FY 2020/21
CAPITAL IMPROVEMENT PROGRAM (CIP)
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required.
Attachments:
1. Resolution of the Town Council Approving FY 2016/17 Operating Budget and FY 2016/17
FY 2020/21 Capital Improvement Program (with Exhibit A)
2. Public Comments Received through Thursday, June 2, 2016 11.00 A.M.
1 of
Resolution 2016-XXX 6/7/2016
ATTACHMENT 1
DRAFT RESOLUTION
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
APPROVING THE FISCAL YEAR (FY) 2016/17 OPERATING BUDGET AND FY 2016/17 – FY
2020/21 CAPITAL BUDGET AND OTHER APPROVED APPROPRIATIONS
WHEREAS, Section 2.30.295(b) of the Los Gatos Town Code requires the Town Manager
to annually prepare and submit a budget to the Town Council and be responsible for its administration;
and
WHEREAS, the Town Manager submitted to the Town Council a proposed budget for the
FY 2016/17 on May 6, 2016; and
WHEREAS, the Town Manager submitted to the Town Council a proposed five-year
capital improvement plan for FY 2016/17 – FY 2020/21 on May 2016; and
WHEREAS, the Town Council has considered and reviewed said proposed budget and
capital improvement plan during public hearings on May 17, 2016 and the Town Council directed
modifications to the Operating and Capital Budgets, respectively; and
WHEREAS, on June 7, 2016, Town Council considered and reviewed the revised proposed
budget and capital improvement plan making final determinations; and
IT IS HEREBY RESOLVED, that the Town Council hereby adopts as the budget for the
Town of Los Gatos for the 2016/17 fiscal year as depicted in Exhibit A entitled “Total Town Revenues
By Fund and Total Town Expenditures By Fund including the first year (FY 2016/17) of the Town’s
Capital Improvement Program budget as contained in the Town’s FY’s 2016/17 – 2020/21 Capital
Improvement Plan.
BE IT FURTHER RESOLVED, that the final adopted budget includes approved
appropriations for unspent prior year allocations, and that they be carried forward from prior years in a
Reserve for Encumbrances whereby within each fund there is an amount sufficient to cover approved
outstanding encumbrances as of June 30, 2016;
2 of
Resolution 2016-XXX 6/7/2016
ATTACHMENT 1
RESOLVED, Town Council authorizes the Town Manager to continue the one-time pilot
program to fund a Community Services Officer to respond to evening/weekend noise complaints, and
capital improvements identified at its June7, 2016 meeting; and
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los
Gatos, California, held on the 7th day of June, 2016 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
DATE: __________________
TOTAL TOWN REVENUES BY FUND AND TOTAL TOWN EXPENDITURES BY FUND
2016/17 Estimated 2016/17
Proposed Budget Recommended
Budget Revision Budget
TOWN REVENUES & OTHER FUNDING SOURCES
General Fund 37,829,443$ -$ 37,829,443$
Special Revenue Funds 475,880 475,880
Internal Service Funds 5,029,254 5,029,254
Trust & Agency Funds 69,150 69,150
Capital Project Funds (does not include carryforwards)12,800,871 616,865 13,417,736
Successor Agnecy Funds 3,872,939 3,872,939
Use Reserves and Fund Balances 12,959,173 12,959,173
TOTAL TOWN REVENUES & OTHER FUNDING SOURCES 73,036,710$ 616,865$ 73,653,575$
TOTAL TOWN EXPENDITURES, TRANSFERS OUT & CARRYFORWARD APPROPRIATION
General Fund 46,922,242$ 31,513$ 46,953,755$
Special Revenue Funds 683,405 683,405
Internal Service Funds 5,761,470 5,761,470
Trust & Agency Funds 67,000 67,000
Capital Project Funds (does not include carryforwards)14,964,174 616,865 15,581,039
Successor Agnecy Funds 3,871,255 3,871,255
TOTAL TOWN EXPENDITURE & OTHER FUNDING USES 72,269,546$ 648,378$ 72,917,924$
EXHIBIT A