Agenda packet — Los Gatos City Council, February 15, 2022 (part 1 of 2)

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How to participate: The Town of Los Gatos strongly encourages your active participation in the public process, which is the cornerstone of democracy. If you wish to speak to an item on the agenda, please follow the participation instructions on page 2 of this agenda. If you wish to speak to an item NOT on the agenda, you may do so during the “Verbal Communications” period, by following the participation instructions on page 2 of this agenda. The time allocated to speakers may change to better facilitate the Town Council meeting.

Effective Proceedings: The purpose of the Town Council meeting is to conduct the business of the community in an effective and efficient manner. For the benefit of the community, the Town of Los Gatos asks that you follow the Town’s meeting guidelines while attending Town Council meetings and treat everyone with respect and dignity. This is done by following meeting guidelines set forth in State law and in the Town Code. Disruptive conduct is not tolerated, including but not limited to: addressing the Town Council without first being recognized; interrupting speakers, Town Council or Town staff; continuing to speak after the allotted time has expired; failing to relinquish the podium when directed to do so; and repetitiously addressing the same subject. Disruption of the meeting may result in a violation of Penal Code 403.

Deadlines for Public Comment and Presentations are as follows:
 Persons wishing to make an audio/visual presentation on any agenda item must submit the presentation electronically, either in person or via email, to the Clerk’s Office no later than 3:00 p.m. on the day of the Council meeting.
 Persons wishing to submit written comments to be included in the materials provided to Town Council must provide the comments as follows:
o For inclusion in the regular packet: by 11:00 a.m. the Thursday before the Council meeting
o For inclusion in any Addendum: by 11:00 a.m. the Monday before the Council meeting o For inclusion in any Desk Item: by 11:00 a.m. on the day of the Council Meeting

TOWN OF LOS GATOS

COUNCIL MEETING AGENDA
FEBRUARY 15, 2022

TELECONFERENCE
7:00 P.M.

Rob Rennie, Mayor
Maria Ristow, Vice Mayor
Mary Badame, Council Member
Matthew Hudes, Council Member
Marico Sayoc, Council Member

PARTICIPATION IN THE PUBLIC PROCESS
Town Council Meetings Broadcast Live on KCAT, Channel 15 (on Comcast) on the 1st and 3rd Tuesdays at 7:00 p.m.

Rebroadcast of Town Council Meetings on the 2nd and 4th Mondays at 7:00 p.m.

Live & Archived Council Meetings can be viewed by going to:
www.LosGatosCA.gov/TownYouTube

IN COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT, IF YOU NEED SPECIAL ASSISTANCE TO PARTICIPATE IN THIS MEETING, PLEASE CONTACT THE CLERK DEPARTMENT AT (408) 354-6834. NOTIFICATION 48 HOURS BEFORE THE MEETING WILL ENABLE THE TOWN TO MAKE REASONABLE ARRANGEMENTS TO ENSURE ACCESSIBILITY TO THIS MEETING [28 CFR §35.102-35.104]

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TOWN OF LOS GATOS

COUNCIL MEETING AGENDA
FEBRUARY 15, 2022

TELECONFERENCE
7:00 PM

IMPORTANT NOTICE
This meeting is being conducted utilizing teleconferencing and electronic means consistent with Government Code Section 54953, as Amended by Assembly Bill 361, in response to the state of emergency relating to COVID-19 and enabling teleconferencing accommodations by suspending or waiving specified provisions in the Ralph M. Brown Act (Government Code § 54950 et seq.). Consistent with AB 361 and Town of Los Gatos Resolution 2021-044, this meeting will not be physically open to the public and the Council will be teleconferencing from remote locations.

Members of the public can only participate in the meeting by joining the Zoom webinar (log in information provided below).

PARTICIPATION
To provide oral comments in real-time during the meeting:
 Zoom webinar: Join from a PC, Mac, iPad, iPhone or Android device: Please click this URL to join:
https://us06web.zoom.us/j/83388065934?pwd=eGoyRW5iL3JraENWYTJrRDR1aUNEZz0

9. Passcode: 652954. You can also type in 833 8806 5934 in the “Join a Meeting” page on the Zoom website at https://zoom.us/join.
 Join by telephone: Join by Telephone: Dial: USA 877 336 1839 US Toll-free or 636-651- 0008 US Toll. Conference code: 969184
When the Mayor announces the item for which you wish to speak, click the “raise hand” feature in Zoom. If you are participating by phone on the Zoom app, press *9 on your telephone keypad to raise your hand. If you are participating by calling in, press #2 on your telephone keypad to raise your hand.

When called to speak, you will be asked to provide your full name and your town/city of residence. This identifying information is optional and not a requirement for participation. Please limit your comments to three (3) minutes, or such other time as the Mayor may decide, consistent with the time limit for speakers at a Council meeting.

If you wish to speak to an item or items on the Consent Calendar, please state which item number(s) you are commenting on at the beginning of your time.

If you are unable to participate in real-time, you may email to [email protected] the subject line “Public Comment Item #__ ” (insert the item number relevant to your comment) or “Verbal Communications – Non-Agenda Item.” Comments received by 11:00 a.m. the day of the meeting will be reviewed and distributed before the meeting. All comments received will become part of the record.

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RULES OF DECORUM AND CIVILITY
To conduct the business of the community in an effective and efficient manner, please follow the meeting guidelines set forth in the Town Code and State law.

The Town does not tolerate disruptive conduct, which includes but is not limited to:
 addressing the town Council without first being recognized;  interrupting speakers, Town Council, or Town staff;
 continuing to speak after the allotted time has expired;  failing to relinquish the microphone when directed to do do;  repetitiously addressing the same subject.

Town Policy does not allow speakers to cede their commenting time to another speaker.

Disruption of the meeting may result in a violation of Penal Code 403.

REMOTE LOCATION PARTICIPANTS The following Council Members are listed to permit them to appear electronically or telephonically at the Town Council meeting: MAYOR ROB RENNIE, VICE

MAYOR MARIA RISTOW, COUNCIL MEMBER MARY BADAME, COUNCIL MEMBER MATTHEW HUDES, and COUNCIL MEMBER MARICO SAYOC. All votes during the teleconferencing session will be conducted by roll call vote.

MEETING CALL TO ORDER

ROLL CALL

PRESENTATIONS
i. Assemblymember Evan Low
ii. Supervisor Joe Simitian
iii. Recognition of Brian Becker, Katherine Becker, Sergeant Richard Campbell, and Officer Bryan Paul for Commendable Actions.

CLOSED SESSION REPORT

COUNCIL / MANAGER MATTERS
CONSENT ITEMS (Items appearing on the Consent Items are considered routine Town business and may be approved by one motion. Any member of the Council may request to have an item removed from the Consent Items for comment and action. Members of the public may provide input on any or multiple Consent Item(s) when the Mayor asks for public comments on the Consent Items. If you wish to comment, please follow the Participation Instructions contained on

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the item will be heard.)

1. Approve Draft Minutes of the January 25, 2022 Special Town Council Meeting - Strategic Priorities.

2. Approved Draft Closed Session Meeting Minutes of February 1, 2022.

3. Approved Draft Town Council Meeting Minutes of February 1, 2022.

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4. Adopt a Resolution Reaffirming Resolution 2021-044 Regarding Brown Act Compliance and Teleconferencing and Making Findings Pursuant to Government Code Section 54953, as Amended by Assembly Bill 361, During the COVID -19 Pandemic.

5. Adopt a Resolution to Set a Date for Consideration of the Reorganization of an Uninhabited Area Designated as Roseleaf Lane No. 1, Approximately 1.3534 Acres on Property Pre-Zoned R-1:8. APN 523-18-021.

Annexation Application AN21-004. Project Location: 16253 Roseleaf Lane. Property Owner/Applicant: Jindan Li.

6. Receive the Second Quarter Investment Report (October through December 2021) for Fiscal Year 2021/22.

7. Annual Street Repair and Resurfacing Project (CIP No. 811-9901):
a. Approve the Plans and Specifications; and
b. Authorize Advertising the Project for Bid; and
c. Authorize the Town Manager to Award and Execute a Construction Agreement in an Amount Not to Exceed $2,981,000, Including Contingencies; and d. Authorize Staff to Execute Future Change Orders in an Amount not to Exceed Ten Percent of the Contract Award Amount; and
e. Authorize Revenue and Expenditure Increase for the Project in the Amount of $45,844 to Recognize an Increase in Gas Tax Revenues Anticipated for the Fiscal Year 2021/22.

8. Annual Curb, Gutter, and Sidewalk Maintenance Project (CIP No. 813-9921):
a. Approve the Plans and Specifications;
b. Authorize Advertising the Project for Bid;
c. Authorize the Town Manager to Award and Execute a Construction Agreement in an Amount Not to Exceed $588,500, Including Contingencies; and d. Authorize Staff to Execute Future Change Orders in an Amount Not to Exceed Ten Percent of the Contract Award Amount.

9. Authorize the Town Manager to Execute a Certificate of Acceptance and Notice of Completion for the Engineering Building Tenant Improvement Project (20-821-2302), Completed by EMC Services Inc. DBA DesignTek Consulting Group LLC, and Authorize the Town Clerk to File for Recordation.

10. Review and Approve the Senior Services Committee Recommended Mission and Vision Statement and Accompanying Workplan.

VERBAL COMMUNICATIONS (Members of the public are welcome to address the Town Council on any matter that is not listed on the agenda. To ensure all agenda items are heard and unless additional time is authorized by the Mayor, this portion of the agenda is limited to 30 minutes and no more than three (3) minutes per speaker. In the event additional speakers were not able to be heard during the initial Verbal Communications portion of the agenda, an additional Verbal Communications will be opened prior to adjournment.)
OTHER BUSINESS (Up to three minutes may be allotted to each speaker on any of the following items.)

11. Mid-Year Budget Report - July 1 - December 31, 2021:
a. Receive FY 2021/22 Mid-Year Budget Report;

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b. Authorize Budget Adjustments as Recommended in the Mid-Year Budget Report; and
c. Adopt the Town Council and Management Classifications Salary Schedule Updated with the Urban Forest Manager Position.

12. Receive American Rescue Plan Act Update.

13. Discuss the Five-Year Forecast (Fiscal Years 2022/23 – 2026/27), Provide Direction on Budget Assumptions, and Provide any Specific Direction for the Preparation of the Town’s Fiscal Year 2022/23 Operating Budget.

ADJOURNMENT (Council policy is to adjourn no later than midnight unless a majority of Council votes for an extension of time).

Writings related to an item on the Town Council meeting agenda distributed to members of the Council within 72 hours of the meeting are available for public inspection at the front desk of the Los Gatos Town Library, located at 100 Villa Avenue, and are also available for review on the official Town of Los Gatos website.

Note: The Town of Los Gatos has adopted the provisions of Code of Civil Procedure §1094.6; litigation challenging a decision of the Town Council must be brought within 90 days after the decision is announced unless a shorter time is required by State or Federal law.

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110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 02/15/2022
ITEM NO: 1
DRAFT
Minutes of the Town Council Meeting – Strategic Priorities January 25, 2022
The Town Council of the Town of Los Gatos conducted a special meeting utilizing teleconference and electronic means consistent with Government Code Section 54953, as Amended by Assembly Bill 361, in response to the state of emergency relating to COVID-19 and enabling teleconferencing accommodations by suspending or waiving specified provisions in the Ralph M. Brown Act (Government Code § 54950 et seq.) and Town of Los Gatos Resolution 2021-044 on Tuesday, January 25, 2022, at 7:00 p.m.

MEETING CALLED TO ORDER AT 7:00 P.M.

ROLL CALL

Present: Mayor Rob Rennie, Vice Mayor Maria Ristow, Council Member Mary Badame, Council Member Matthew Hudes, Council Member Marico Sayoc (all participating remotely).

Absent: None.

VERBAL COMMUNICATIONS
Rob Moore
- Was asked to speak under the agenda item.

Lynley Hogan
- Inquired if Council would be addressing Critical Race Theory (CRT) and Diversity Equity and Inclusion (DEI) efforts.

OTHER BUSINESS

1. Approve the Following Strategic Priorities Actions:
a. Affirm the Town Goals of Community Character, Good Governance, Fiscal Stability, Civic Enrichment, Public Safety, and Quality Public Infrastructure, b. Affirm and/or Refine Ongoing Strategic Priorities for 2022-2024, c. For A New Strategic Priority, Identify an Existing Priority that Should Be Removed or Deemphasized; and d. Identify Ordinance Priorities.

Opened Public Comments.

Ali Miano, Los Gatos Anti-Racism Collation
- Requested the Council consider additional affordable housing and commented on the increased sightings of rats near construction sites and overbuilding in the Town.

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PAGE 2 OF 4
SUBJECT: Draft Minutes of the Special Town Council Meeting of January 25, 2022 DATE: January 28, 2022
Other Business Item #1 – continued
Jak Van Nada, Los Gatos Community Alliance
- Requested Council prioritize a fiscal analysis of the Draft 2040 General Plan.

Tom Picraux, Senior Services Committee Commissioner
- Commented in support of the senior items contained in the Strategic Priorities for 2022- 2024.

Kylie Clarke, West Valley Community Services Public Policy Officer - Requested Council include environmental sustainability as an ongoing priority and include housing as its own priority.

Rob Stump
- Requested Council include enhanced emergency communications and funding for roadside fire fuel reduction as ongoing priorities.

Jim Foley, Los Gatos Chamber of Commerce President-Elect - Commented in support of completing the General Plan 2040, implementing the Dixon Parking Study suggestions, streamlining the land use/building permitting process, and community vitality.

Rob Moore
- Commented in support of the 2022-2024 Priorities and requested Council prioritize affordable housing.

Jack Noymer, Youth Commissioner
- Commented in support of the proposed ordinance priority list, specifically the Single Use Disposable Foodware and Litter Reduction Ordinance.

Kamron Emami, Youth Commissioner
- Commented in support of the proposed ordinance priority list, specifically the Single Use Disposable Foodware and Litter Reduction Ordinance.

Jeffrey Suzuki, Los Gatos Anti-Racism Coalition President - Requested Council prioritize affordable housing.

Amy Nishide, Los Gatos Anti-Racism Coalition
- Requested Council prioritize Diversity, Equity, and Inclusion (DEI) efforts, fire protection, and affordable housing.

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SUBJECT: Draft Minutes of the Special Town Council Meeting of January 25, 2022 DATE: January 28, 2022
Other Business Item #1 – continued
Catherine Somers, Los Gatos Chamber of Commerce Executive Director - Requested Council prioritize a fiscal analysis of the Draft 2040 General Plan and continue prioritizing Economic Vitality and Senior Services.

Emily Thomas
- Requested the Core Goals definitions be updated to make it more valuable to the public; and commented in support of the tree protection ordinance.

The Council discussed the item.

MOTION: Motion by Council Member Badame to reaffirm the Town’s Core Goals of Community Character, Good Governance, Fiscal Sustainability, Civic Enrichment, Public Safety, and Quality Public Infrastructure. Seconded by Council Member Sayoc.

VOTE: Motion passed unanimously.

Council Member Badame and Council Member Hudes requested a financial impact analysis of the 2040 Draft General Plan be placed on a future agenda for discussion.

MOTION: Motion by Council Member Sayoc to affirm ongoing Strategic Priorities for 2022- 2024 as contained in Attachment 3, direct staff to utilize different communication methods to highlight the ongoing work of staff and Council, such as environmental sustainability and affordable housing efforts, that are imbedded in current workplans without creating a new strategic priority. AMENDMENT: Add Community Policing under the in-progress section, revise the subsection of the Community Vitality Strategic Priority to read “Help Seniors Thrive”. Seconded by Vice Mayor Ristow.

VOTE: Motion passed unanimously.

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SUBJECT: Draft Minutes of the Special Town Council Meeting of January 25, 2022 DATE: January 28, 2022
Other Business Item #1 – continued
MOTION: Motion by Vice Mayor Ristow to adopt the revised ordinance priorities list in the following order: 1. Amendments to Tree Protection Ordinance, 2. Single Use Disposable Foodware and Litter Reduction Ordinance, 3. Commercial Cannabis Operations and Facilities Ordinance, 4. Social Host Ordinance, 5. Ordinance Relating to Two Unit Residential Development and Urban Lot Splits in Single – Family Residential Zones pursuant to Senate Bill 9, 6. Accessory Dwelling Unit Ordinance, 7.

Lot Merger/Adjustment Ordinance, 8. Noise and Amplified Sound Ordinance, 9.

Shared Mobility Device Ordinance, 10. Public Nuisance/Blight/Administrative Abatement Hearing Ordinance, 11. Amendments to Sign Ordinance, 12. Wireless Facilities Ordinance. Seconded by Council Member Hudes.

VOTE: Motion passed unanimously.

ADJOURNMENT
The meeting adjourned at 9:33 p.m.

Respectfully submitted:
_____________________________________
Jenna De Long, Deputy Clerk

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110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 02/15/2022
ITEM NO: 2
DRAFT
Minutes of the Town Council Special Meeting - Closed Session Tuesday, February 1, 2022
The Town Council of the Town of Los Gatos conducted a special meeting utilizing teleconferencing and electronic means consistent with Government Code Section 54953, as amended by Assembly Bill 361 in response to the state of emergency relating to COVID-19 and enabling teleconferencing accommodations by suspending or waiving specified provisions in the Ralph M. Brown Act (Government Code § 65950 et seq.) and Town of Los Gatos Resolution 2021-044 on Tuesday, February 1, 2022, at 4:30 p.m. to hold a Closed Session.

MEETING CALLED TO ORDER AT 4:35 P.M.

ROLL CALL

Present: Mayor Marico Sayoc, Vice Mayor Rob Rennie, Council Member Mary Badame, Council Member Matthew Hudes Council Member Maria Ristow. (All participating remotely).

Absent: None

VERBAL COMMUNICATIONS
No one spoke.

1. Conference with Labor Negotiator (Government Code §54957.6) To meet with Town Negotiators listed below in closed session pursuant to Government Code §54957.6 regarding negotiations with the Employee Organizations listed below:

Town Negotiators:

Donna Williams, Liebert Cassidy Whitmore
Arn Andrews, Assistant Town Manager
Lisa Velasco, Human Resources Director
Employee Organizations: American Federation of State, County and Municipal Employees (AFSCME)
Town Employees Association (TEA)
Police Officers’ Association (POA)

2. Conference with Legal Counsel - Anticipated Litigation (Government Code§ 54956.9(d)(2):

Two matters- significant exposure to litigation against the Town.

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PAGE 2 OF 2
SUBJECT: Draft Minutes of the Town Council Special Meeting of February 1, 2022 DATE: February 1, 2022

ADJOURNMENT
Closed Session adjourned at 6:30 p.m.

Attest: Submitted by:
___________________________ ___________________________ Jenna De Long, Deputy Clerk Laurel Prevetti, Town Manager

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110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 02/15/2022
ITEM NO: 3
DRAFT
Minutes of the Town Council Meeting
February 1, 2022
The Town Council of the Town of Los Gatos conducted a regular meeting utilizing teleconference and electronic means consistent with Government Code Section 54953, as Amended by Assembly Bill 361, in response to the state of emergency relating to COVID-19 and enabling teleconferencing accommodations by suspending or waiving specified provisions in the Ralph M. Brown Act (Government Code § 54950 et seq.) and Town of Los Gatos Resolution 2021-044 on Tuesday, February 1, 2022, at 7:00 p.m.

MEETING CALLED TO ORDER AT 7:00 P.M.

ROLL CALL

Present: Mayor Rob Rennie, Vice Mayor Maria Ristow, Council Member Mary Badame, Council Member Matthew Hudes, Council Member Marico Sayoc. (All participating remotely).

Absent: None.

CLOSED SESSION REPORT
Robert Schultz, Town Attorney, stated Council met in closed session as duly noted on the agenda and that there is no reportable action.

COUNCIL/TOWN MANAGER REPORTS
Council Matters
- Council Member Sayoc stated she met with residents and is continuing work with Cities Association and Cal Cities.
- Vice Mayor Ristow stated she attended the Valley Transportation Authority (VTA) Winchester Station Transit Oriented Development community meeting; League of Women Voters California Housing webinar; Democracy Tent meeting; Silicon Valley Leadership Group Housing in Your City webinar; Santa Clara Valley Water Commission (SCVWD) quarterly meeting; participated with other volunteers in a planting and mulching day along Los Gatos-Almaden Road; attended the Youth Commission’s Welcome Luncheon for new residents with Council Member Sayoc; and met with residents. - Council Member Badame stated she attended the Council Policy Committee meeting with Council Member Sayoc; West Valley Clean Water Authority (WVCWA) and West Valley Solid Waste Management Authority (WVSWMA) Board meetings; and met with residents.

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PAGE 2 OF 5
SUBJECT: Draft Minutes of the Town Council Meeting of February 1, 2022 DATE: February 1, 2022
Council Matters – continued
- Council Member Hudes stated he attended the Senior Service Workplan Sub-committee and Senior Service Committee meetings; League of Women Voters California Housing in Your City webinar; Silicon Valley Interoperability Board meeting; Santa Clara Valley Water District quarterly meeting as an alternate; met with a NUMU representative; and attended the Rotary Wine Fest.
- Mayor Rennie stated he attended the Democracy Tent community meeting; Senior Service Commission meeting; Bay Area Air Quality Management District (BAAQMD) Board meeting; West Valley Mayors and Managers meeting; and met with residents.

Manager Matters
- Announced Adult Commissioner recruitment is underway for vacancies on Building Board of Appeals, Community Health and Senior Services Commission, Historic Preservation Committee, Parks Commission, and Personnel Board; the application period closes on March 25 at 4:00 p.m. and interviews are scheduled for April 5.

CONSENT ITEMS (TO BE ACTED UPON BY A SINGLE MOTION)

1. Approve Draft Minutes of the January 18, 2022 Town Council Meeting.

2. Adopt a Resolution Reaffirming Resolution 2021-044 Regarding Brown Act Compliance and Teleconferencing and Making Findings Pursuant to Government Code Section 54953, as Amended by Assembly Bill 361, During the COVID -19 Pandemic. RESOLUTION 2022-003

3. Authorize the Town Manager to Execute a Certificate of Acceptance and Notice of Completion for the Public Right-of-Way Improvements Completed by Cashmere Bouquet 1031, LLC, for 258 Union Avenue, and Authorize the Town Clerk to Submit for Recordation.

4. Approval of Cannabis Consultant Services Proposal Submitted by Hinderliter, deLlamas & Associates (HdL) Companies and Authorization for the Town Manager to Execute Agreement.

Opened public comment.

No one spoke.

Closed public comment.

MOTION: Motion by Vice Mayor Ristow to approve consent items 1-4. Seconded by Council Member Sayoc.

VOTE: Motion passed unanimously for items 1 through 3. Item 4 passed 4/1, Council Member Badame voting no.

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PAGE 3 OF 5
SUBJECT: Draft Minutes of the Town Council Meeting of February 1, 2022 DATE: February 1, 2022

VERBAL COMMUNICATIONS
David Weissman, Los Gatos Community Alliance
- Requested Council endorse an affordable housing Study Session in the February/March timeframe for Council, Planning Commission, and the Housing Element Advisory Board, and asked for staff to work with Los Gatos Community Alliance members to select panelists that include a market rate housing developer, an affordable housing developer, and a land use attorney to discuss achieving realistic affordable housing that preserves the character of the Town.

Lee Fagot, Los Gatos Community Alliance
- Requested Council endorse an affordable housing Study Session in the February/March timeframe for Council, Planning Commission, and the Housing Element Advisory Board, and asked for staff to work with Los Gatos Community Alliance members to select panelists that include a market rate housing developer, an affordable housing developer, and a land use attorney to discuss achieving realistic affordable housing that preserves the character of the Town.

Jak Van Nada, Los Gatos Community Alliance
- Requested Council endorse an affordable housing Study Session in the March/April timeframe for Council, Planning Commission, and the Housing Element Advisory Board, and asked for staff to work with Los Gatos Community Alliance members to select panelists that include a market rate housing developer, an affordable housing developer, and a land use attorney to discuss achieving realistic affordable housing that preserves the character of the Town.

Patrick Mock
- Based on his initial comments, he was asked to speak under agenda item, #5.

Mayor Rennie, Vice Mayor Ristow, Council Member Sayoc, and Council Member Hudes spoke in favor of an affordable housing Study Session and the Town Manager will work with the Community Alliance on panelists and with the Mayor to schedule it.

OTHER BUSINESS

5. Adopt an Extension of an Urgency Ordinance for a Period of Ten Months and 15 Days to Implement Senate Bill 9 to Allow for Two-Unit Housing Developments and Urban Lot Splits in All Single-Family Residential Zoning Districts. ORDINANCE 2327 Jennifer Armer, Planning Manager, presented the staff report.

Opened public comment.

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PAGE 4 OF 5
SUBJECT: Draft Minutes of the Town Council Meeting of February 1, 2022 DATE: February 1, 2022
Patrick Mock
- Requested Council amend the urgency ordinance to increase or eliminate the 1,200 square foot (SF) limit for dwelling units on Senate Bill (SB) 9 lot splits.

Other Business Item #5 – continued
Andrew Faber
- Requested Council amend the urgency ordinance to include Hillside Residential zones, eliminate the 1,200 SF limit for dwelling units, eliminate the 50 cubic yard (CY) grading limit, and eliminate the prohibition of accessory dwelling units (ADUs) on SB9 lot splits.

Terry Szewczyk
- Requested Council amend the urgency ordinance to eliminate the 1,200 SF limit and instead use Floor Area Ratio (FAR) for dwelling units and eliminate the 50 CY grading limit on SB9 lot splits.

Don Wimbley
- Thanked the Council for their work on this item; requested Council amend the urgency ordinance to include Hillside Residential zones, eliminate the 1,200 SF limit for dwelling units, and eliminate prohibiting Accessory Dwelling Units (ADUs) on SB9 lot split.

Tony Jeans
- Requested Council amend the urgency ordinance to include Hillside Residential zones in the definitions, require that dead-end roads in the high fire zone must meet Santa Clara County Fire access standards, remove the 50 CY grading limitation, change the 20-foot frontage requirement, and change the 1,200 SF dwelling unit limitation to only one unit on a SB9 lot split.

Arvin Khosravi
- Requested Council amend the urgency ordinance to include Hillside Residential zones, eliminate the 1,200 SF limit for dwelling units on SB9 lots, and commented on the current SP9 application for the parcel located at 15941 Quail Hill Road be split into two lots.

Closed public comment.

Council discussed the item.

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PAGE 5 OF 5
SUBJECT: Draft Minutes of the Town Council Meeting of February 1, 2022 DATE: February 1, 2022
Other Business Item #5 – continued
MOTION: Motion by Vice Mayor Ristow to adopt an extension of an urgency ordinance for a period of ten months and 15 days to implement Senate Bill 9 to allow for two-unit housing developments and urban lot splits in all single-family residential zoning districts with the following changes: 1) the first housing unit must not exceed 1,200 square feet and the second housing unit may utilize the remaining floor area ratio (FAR) with an additional 10% that may be added to the maximum FAR; and 2) all units must comply with Building Code definition of a living unit. Seconded by Council Member Sayoc.

VOTE: Motion passed 4/1. Council Member Hudes voting no.

Council Member Hudes read Section 4 of SB9 into the record.

The Town Clerk read the title of the ordinance.

ADJOURNMENT
The meeting adjourned at 9:07 p.m.

Respectfully submitted:
_____________________________________
Jenna De Long, Deputy Clerk

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PREPARED BY: Shelley Neis
Town Clerk
Reviewed by: Town Manager, Assistant Town Manager, and Town Attorney 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 02/15/2022
ITEM NO: 4
DATE: February 3, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Adopt a Resolution Reaffirming Resolution 2021-044 Regarding Brown Act Compliance and Teleconferencing and Making Findings Pursuant to Government Code Section 54953, as Amended by Assembly Bill 361, During the COVID -19 Pandemic
RECOMMENDATION:

Adopt a Resolution reaffirming Resolution 2021-044 and making findings pursuant to Government Code Section 54953, as amended by Assembly Bill 361, and authorizing the continued use of virtual meetings due to health and safety concerns for the public.

BACKGROUND:

On March 17, 2020, Governor Newsom issued Executive Order N-29-20, which allowed for relaxed provisions of the Ralph M. Brown Act (Brown Act) that allowed legislative bodies to conduct meetings through teleconferencing without having to meet the strict compliance of the Brown Act. All provisions of Executive Order N-29-20 concerning the conduct of public meetings expired on September 30, 2021.

DISCUSSION:

AB 361 was signed into law by the Governor on September 16, 2021, and went into effect immediately upon signing. It amends the Brown Act to allow local legislative bodies to continue using teleconferencing and virtual meeting technology after the September 30, 2021, expiration of the current Brown Act exemptions as long as there is a "proclaimed state of emergency" by the Governor. This allowance also depends on State or local officials imposing or recommending measures that promote social distancing or a legislative body finding that meeting in person would present an imminent safety risk to attendees.

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PAGE 2 OF 2
SUBJECT: Adopt a Resolution Regarding Brown Act Compliance and Teleconferencing DATE: February 3, 2022
DISCUSSION (Cont) :

AB 361 requires Public agencies to make findings by majority vote within 30 days of the first teleconferenced meeting under AB 361 and every 30 days thereafter that a state of emergency still exists and continues to directly impact the ability of the members to meet safely in person, or that officials continue to impose or recommend measures to promote social distancing.

Town Council adopted Resolution 2021-044 on October 5, 2021 regarding Brown Act compliance and teleconferencing pursuant to Government Code Section 54953, as amended by AB 361, and adopted resolutions on the following dates reaffirming Resolution 2021-044:
 November 2, 2021 adopted Resolution 2021-046
 November 16, 2021 adopted Resolution 2021-048
 December 7, 2021 adopted Resolution 2021-054
 December 21, 2021 adopted Resolution 2021-059
 January 18, 2022 adopted Resolution 2022-001
 February 1, 2022 adopted Resolution 2022-003
CONCLUSION:

Adopt a Resolution reaffirming Resolution 2021-044 making findings pursuant to Government Code Section 54953, as amended by Assembly Bill 361, and authorizing the continued use of virtual meetings. If adopted, virtual meetings may continue for all Town Boards, Commissions, and Committees.

COORDINATION:

This report was coordinated with the Town Attorney and Town Manager’s office.

FISCAL IMPACT:

There will be no fiscal impact to the Town at this time.

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

Attachment:

1. Draft Resolution

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1 of 3
Resolution 2022 - Council Meeting Date
RESOLUTION 2022-

RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS REAFFIRMING RESOLUTION 2021-044 REGARDING BROWN ACT COMPLIANCE AND TELECONFERENCING PURSUANT TO GOVERNMENT CODE SECTION 54953, AS AMENDED BY ASSEMBLY BILL 361, DURING THE COVID-19 PANDEMIC
WHEREAS, on March 4, 2020, the Governor of the State of California declared a state of emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare for broader spread of COVID-19; and
WHEREAS, on March 12, 2020, the Town Manager of Los Gatos acting in the capacity of Town of Director of Emergency Services, issued a Proclamation of Local Emergency; and WHEREAS, on March 17, 2020, Governor Newsom issued Executive Order N-29-20, which suspended and modified the teleconferencing requirements under the Brown Act (California Government Code Section 54950 et seq.) so that local legislative bodies can hold public meetings via teleconference (with audio or video communications, without a physical meeting location), as long as the meeting agenda identifies the teleconferencing procedures to be used; and
WHEREAS, on March 17, 2020, the Town Council of the Town of Los Gatos ratified the Proclamation of Local Emergency as set forth in Resolution 2020-008 and remains in full force and effect to date; and
WHEREAS, on June 4, 2021, the Governor clarified that the “reopening” of California on June 15, 2021 did not include any change to the proclaimed state of emergency or the powers exercised thereunder; and
WHEREAS, on June 11, 2021, the Governor issued Executive Order N-08-21, which extended the provision of N-29-20 concerning the conduct of public meetings through September 30, 2021, and the Governor subsequently signed legislation revising Brown Act requirements for teleconferenced public meetings (Assembly Bill 361, referred to hereinafter as “AB 361”); and
WHEREAS, on September 16, 2021 Governor Newsom signed AB 361, which added subsection (e) to Government Code section 54953 of the Brown Act, and makes provision for remote teleconferencing participation in meetings by members of a legislative body, without compliance with the requirements of Government Code section 54953(b)(3), subject to the existence of certain conditions; and
ATTACHMENT 1

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Resolution 2022 - Council Meeting Date
WHEREAS, the Town Council of the Town of Los Gatos approved Resolution No. 2021- 044 on October 5, 2021 declaring the need for the Town Council, Committees, and Commissions to continue to meet remotely in order to ensure the health and safety of the public; and
WHEREAS, the Town Council has considered all information related to this matter, including the associated staff report and other information relating to COVID-19 provided at prior public meetings of the Town Council; and
WHEREAS, the Town Council now desires to adopt a Resolution finding that the requisite conditions continue to exist for the legislative bodies of the Town of Los Gatos, as defined in the Brown Act, to conduct remote teleconference meetings without compliance with paragraph (3) of subdivision (b) of Government Code section 54953.

NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES HEREBY RESOLVE:

1. The Town Council hereby finds that the fact set forth in the above recitals and as contained in Resolution 2021-044 are true and correct, and establish the factual basis for the adoption of this Resolution;

2. There is an ongoing proclaimed state of emergency relating to the novel coronavirus causing the disease known as COVID-19 and as a result of that emergency, meeting inperson would present imminent risks to the health or safety of attendees of inperson meetings ofthis legislative body and all Town advisory bodies within the meaning of California Government Code section 54953(e)(1).

3. Under the present circumstances, including the risks mentioned in the preceding paragraph, the Town Council determines that authorizing teleconferenced public meetings consistent with Assembly Bill 361 is necessary and appropriate.

4. Staff are directed to take all actions necessary to implement this Resolution for all Town meetings in accordance with the foregoing provisions and the requirements of Government Code section 54953, as amended by Assembly Bill 361, including but not limited to returning for ratification of this Resolution every 30 days after teleconferencing for the first time pursuant to Assembly Bill 361 for so long as either of the following circumstances exists: (a) the state of emergency continues to directly impact the ability of this legislative body to meet in person; and/or (b) state or local officials, including but not limited to the County Health Officer, continue to impose or recommend measures to promote social distancing.

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Resolution 2022 - Council Meeting Date
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 15th day of February 2022, by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: ___________________
ATTEST:

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________

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PREPARED BY: Jocelyn Shoopman
Associate Planner
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Community Development Department Director, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 2/15/2022
ITEM NO: 5
DATE: February 10, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Adopt a Resolution to Set a Date for Consideration of the Reorganization of an Uninhabited Area Designated as Roseleaf Lane No. 1, Approximately

1.3534 Acres on Property Pre-Zoned R-1:8. APN 523-18-021.

Annexation Application AN21-004. Project Location: 16253 Roseleaf Lane.

Property Owner/Applicant: Jindan Li.

RECOMMENDATION:

Adopt a resolution (Attachment 1) to set a date for consideration of the reorganization of an uninhabited area designated as Roseleaf Lane No. 1, approximately 1.3534 acres, located at 16253 Roseleaf Lane (APN 523-18-021).

BACKGROUND:

The Town has an agreement with Santa Clara County that requires annexation of any property located within the Town's Urban Service Area boundary that is either contiguous to a Town boundary or within 300 feet of a Town maintained roadway if a use is proposed to intensify.

The subject property is within 300 feet of a Town boundary. Annexation has been requested in conjunction with a proposal for a modification to the existing single-family residence. The total annexation area (1.3534 acres) includes 1.1472 acres of County street right-of-way.

Section 56757 of the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 gives cities in Santa Clara County the authority to annex territory without application to and hearing by the Santa Clara County Local Agency Formation Commission (LAFCO).

The Town is required to hold a protest proceeding even if the area proposed for annexation is uninhabited (less than twelve registered voters) and all property owners have consented to the

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SUBJECT: Roseleaf Lane No. 1/AN21-004
DATE: February 10, 2022
BACKGROUND (continued):
annexation. This first meeting and resolution sets the date for the consideration of the annexation and the protest proceeding.

DISCUSSION:

The Town has received a petition requesting annexation to the Town of Los Gatos from Jindan Li, owner of the property at 16253 Roseleaf Lane. The property is located on the south side of Roseleaf Lane in an unincorporated County pocket.

The property is in the Town's Urban Service Area, is contiguous to a Town boundary, and is Prezoned R-1:8 (Single-Family Residential, 8,000 square foot minimum lot size). Annexation would allow Town services to be extended to the property and reduce an existing County pocket.

The Santa Clara County Planning, County Lighting Service Area, and the County Library Service Area have been notified in writing of the annexation request. This agenda item, if approved, would set the date for consideration of the annexation application for March 1, 2022.

COORDINATION:

The preparation of this report was coordinated with the Santa Clara County Library District, Santa Clara County Lighting Service Area, County of Santa Clara Infrastructure Development Division, LAFCO, County of Santa Clara Assessor, County of Santa Clara Surveyor, and the County of Santa Clara Planning Division.

FISCAL IMPACT:

Once the annexation is certified by the State Board of Equalization, the Town will receive approximately 9.3 percent of the property taxes.

ENVIRONMENTAL ASSESSMENT:

The project is exempt pursuant to the California Environmental Quality Act Guidelines under Section 15061(b)(3): Review for Exemption, in that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. A Notice of Exemption will not be filed.

Attachments:

1. Resolution, with Exhibits A and B

2. Location Map

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Resolution 2022- Council Meeting Date
RESOLUTION 2022-

RESOLUTION OF THE TOWN COUNCIL

OF THE TOWN OF LOS GATOS

TO SET A DATE FOR CONSIDERATION OF THE REORGANIZATION

OF AN UNINHABITED TERRITORY DESIGNATED AS
ROSELEAF LANE NO. 1
APN: 523-18-021
APPROXIMATELY 1.3534 ACRES
ANNEXATION APPLICATION: AN21-004
PROPERTY LOCATION: 16253 ROSELEAF LANE
PROPERTY OWNER/APPLICANT: JINDAN LI
WHEREAS, the Town Council of the Town of Los Gatos has received a request for annexation of territory designated Roseleaf Lane No. 1 from Jindan Li; and WHEREAS, the property, is approximately 0.2062 acres and includes 1.1472 acres of County street right-of-way for a total of 1.3534 acres located at 16253 Roseleaf Lane, APN: 523- 18-021, is contiguous to a Town boundary and within the Town’s Urban Service Area; and WHEREAS, the following special districts would be affected by the proposal: Santa Clara County Lighting Service Area; and Santa Clara County Library Service Area; and WHEREAS, the annexation would provide for use of Town services; and WHEREAS, the Town Council enacted Ordinance 1267 in 1975 pre-zoning the subject territory with an R-1:8 (single-family residential, 8,000 square foot minimum lot size) zoning designation; and
WHEREAS, the Town of Los Gatos, as Lead Agency for environmental review for the reorganization, has determined annexation of the subject property is exempt from the California Environmental Quality Act guidelines, pursuant to Section 15061(b)(3); and ATTACHMENT 1

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Resolution 2022- Council Meeting Date
WHEREAS, the County Surveyor of Santa Clara County has found the description and map (Exhibits A and B) to be in accordance with Government Code Section 56757, the boundaries to be definite and certain, and the proposal to be in compliance with LAFCO’s road annexation policies; and
WHEREAS, as provided in Government Code Section 56757, the Town Council of the Town of Los Gatos shall be the conducting authority for a reorganization including an annexation to the Town; and
WHEREAS, the territory is uninhabited and all owners of land included in the proposal have consented to this annexation; and
WHEREAS, Government Code Section 56663(a) provides that if a petition for annexation is signed by all owners of land within the affected territory the Town Council may approve or disapprove the annexation without a public hearing.

NOW, THEREFORE, BE IT RESOLVED, that the Town Council of the Town of Los Gatos hereby initiates annexation proceedings and will consider annexation of the territory designated as Roseleaf Lane No. 1 at its regular meeting on March 1, 2022.

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Resolution 2022- Council Meeting Date
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 15th day of February 2022, by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________

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EXHIBIT A

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Los
Gatos

GARDENIA WAY

CAMELLIA TER

LAVENDER LN

LOS GATOS ALMADEN RD

AZALEA WAY

ROSELEAF CT
GREEN
DALE
DR

HOLLYCREST
DR

ROSELEAF LN
¯ 0 100
Feet

SARATOGA

CAMPBELL
LOS
GATOS
SAN
JOSE
·|}þ17
·|}þ85
Prepared for the Office of the County Surveyor
December 27, 2021
August Hanks, County Surveyor

EXHIBIT A
Los Gatos - Roseleaf Lane No. 1

1.1472 acres +/-
County of Santa Clara Department of Planning and Development County Government Center, East Wing
70 West Hedding St., 7th Floor
San Jose, California 95110
Area of Annexation
CityLimits
Unincorporated Lands
Roseleaf Lane No. 1

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PREPARED BY: Stephen Conway
Finance Director
Reviewed by: Town Manager and Assistant Town Manager
110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE:02/15/2022
ITEM NO: 6
DATE: February 8, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Receive the Second Quarter Investment Report (October through December 2021) for Fiscal Year 2021/22
RECOMMENDATION:

Receive the Second Quarter Investment Report (October through December 2021) for Fiscal Year 2021/22
DISCUSSION:

The Finance Commission received this report on February 14, 2022.

As of December 31, 2021, the Town’s weighted portfolio yield was 1.20% which trended approximately 100 basis points above the Local Agency Investment Fund (LAIF) yield of 0.21%.

This favorable yield differential to LAIF was primarily due to the LAIF portfolio’s lower weighted average maturity (WAM) of 338 days versus the Town’s longer WAM of 471 days. The Town’s weighted average rate of return of 1.20% at the close of the second quarter was 42 basis points lower when compared to the second quarter return of 1.62% in 2020.

In the second quarter of fiscal year 2021/22, LAIF yields hovered at approximately 20 basis points (0.2%) through the end of the December. Staff in coordination with the Town’s investment advisor primarily replaced maturing investments in shorter term maturities in the two- to three-year maturity range. These investments capture current yields that exceed the rates expected to be earned in the State Local Agency Investment Fund (LAIF) pool during that same time period. The State LAIF pool typically lags the market when current market yields are either increasing or decreasing.

Interest rates rose across the board in the month of December, especially in the short term maturity range of six months to two years. The rise in short term rates was likely driven by the

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PAGE 2 OF 2
SUBJECT: Receive the Second Quarter Investment Report (October through December 2021) for Fiscal Year 2021/22
DATE: February 8, 2022
DISCUSSION (continued)
expectation that the Federal Reserve will start increasing its short-term Federal Funds rate sometime in 2022 or 2023. At its December Board meeting, the Fed signaled it would taper its asset purchase program more swiftly than previously reported. In addition, polling of individual Fed members indicate the possibility of three rate hikes during calendar year 2022.

CONCLUSION:

Staff recommends that the Finance Commission receive the Second Quarter Investment Report (October through December 2021) for Fiscal Year 2021/22.

Attachment:

1. Second Quarter Investment Report for FY 2021/22 (October through December 2021)

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Town of Los Gatos
Summary Investment Information
December 31, 2021
Weighted Average YTM Portfolio Yield: 1.20% Weighted Average Maturity (days) 471 This Month Last Month One year ago
Portfolio Balance $60,407,357 $61,676,907 $61,118,129
Benchmarks/ References:

Town's Average Yield 1.20% 1.21% 1.62%
LAIF Yield for month 0.21% 0.20% 0.62%
3 mo. Treasury 0.06% 0.05% 0.09%
6 mo. Treasury 0.19% 0.10% 0.09%
2 yr. Treasury 0.74% 0.52% 0.12%
5 yr. Treasury (most recent) 1.27% 1.15% 0.36%
10 Yr. Treasury 1.51% 1.45% 0.92%
0 - 1 year
30%
1 - 2 years
30%
2 - 3 years
25%
3 - 5 years
15%
Portfolio Maturity Profile
Compliance: The Town's investments are in compliance with the Town's investment policy dated September 21, 2021 and also in compliance with the requirements of Section 53601 of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months.

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Town of Los Gatos
Portfolio Allocation & Treasurer's Fund Balances
December 31, 2021
Month YTD
Fund Balances - Beginning of Month/Period $61,676,906.80 $67,951,235.09 Receipts 7,383,579.87 31,660,151.98
Disbursements (8,653,130.13) (39,204,030.53)
Fund Balances - End of Month/Period $60,407,356.54 $60,407,356.54 Portfolio Allocation: % of Portfolio Max. % 0r $ Allowed Per State Law or Policy BNY MM $247,510.43 0.45% 20% of Town Portfolio
US Treasury Notes $7,767,865.09 14.08% No Max. on US Treasuries Government Agency Debenture Notes $23,905,158.13 43.33% No Max. on Non-Mortgage Backed Corporate Medium Term Bonds $14,350,644.01 26.01% 30% of Town Portfolio Local Agency Investment Fund $8,895,275.07 16.12% $75 M per State Law Subtotal - Investments 55,166,452.73 100.00%
Reconciled Demand Deposit Balances 5,240,903.81
Total Treasurer's Fund $60,407,356.54
BNY MM

0.45% US Treasury Notes

14.08%
Government Agency Debenture Notes

43.33%
Corporate Medium Term Bonds

26.0%
Local Agency Investment Fund

16.1%
Portfolio Investment Allocation
54000000
56000000
58000000
60000000
62000000
64000000
66000000
68000000
70000000
Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Treasurer's Fund Balances
page 2 Page 37
Town of Los Gatos
Non-Treasury Restricted Fund Balances
December 31, 2021
DEC 21 DEC 21 DEC 21
Beginning Deposits Interest/ Ending
Balance Realized Gain/Adj. Earnings Withdrawals Balance Non-Treasury Funds:
`
Cert. of Participation 2002 Series A Reserve Fund 686,302.87 $ 5.70 $ 686,308.57 Note 1 Cert. Of Participation 2010 Ser A Lease Pymt Fund 21,141.41 0.25 $ 21,141.66 Note 1 Cert. of Participation 2002 Lease Payment Fund 22.41 0.00 $ 22.41 Note 1 Cert. of Participation 2010 Series Reserve Fund 1,277,105.66 10.47 1,277,116.13 Note 2 Total Restricted Funds: $ 1,984,572.35 $ - $ 16.42 $ - $ 1,984,588.77 CEPPT IRS Section 115 Trust 0.00 0.00 0.00 0.00 0.00
Grand Total COP's and CEPPT Trust $ 1,984,572.35 $ - $ 16.42 $ - $ 1,984,588.77 These accounts are not part of the Treasurer's fund balances reported elsewhere in this report, as they are for separate and distinct entities.

Note 1: The three original funds for the Certificates of Participation 2002 Series A consist of construction funds which will be expended over the next few years, reserve funds which will guarantee the payment of lease payments, and a third fund for the disbursement of lease payments and initial delivery costs.

Note 2: The 2010 COP Funds are all for the Library construction, reserves to guarantee lease payments, and a lease payment fund for the life of the COP issue. The COI fund was closed in September 2010.

Note 3: The CEPPT Section IRS Section 115 Trust was established as an irrevocable trust dedicated to accumulate resources to fund the Town's unfunded liabilities related to pension and other p

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Town of Los Gatos
Statement of Interest Earned
December 31, 2021
Interest by Month
July 2021 $57,076.80
August 2021 56,600.18
September 2021 54,523.00
October 2021 54,951.68
November 2021 51,445.84
December 2021 55,030.55
January 2022
February 2022
March 2022
April 20202
May 2022
June 2022
$329,628.05

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Town of Los Gatos Investment Schedule March
2021
Maturity Yield to Interest Interest Interest Days
Deposit Par Original Market Purchased Date or Maturity Received Earned Earned to Institution CUSIP # Security Date Value Cost Value Interest Call Date or Call to Date Prior Yrs. Current FY Maturity Treasury 91282CAP6 US Treasury Note 6/30/2021 1,000,000.00 995,390.63 990,117.19 10/15/2023 0.33% $ 365.44 $ - $ 1,643.43 653 Toyota Motor Credit 89236TDP7 Corporate Bond 05/20/19 1,100,000.00 1,102,596.00 1,100,464.30 1/11/2022 2.50% $ 61,251.67 $ 58,418.45 $ 13,923.57 11 Toyota Motor Credit 89236THA6 Corporate Bond 4/12/2021 500,000.00 510,580.00 504,471.98 8/25/2023 0.45% $ 2,493.75 $ 494.69 $ 1,152.20 602 American Express Credit Corp. 0258M0EG0 Corporate Bond 4/5/2021 1,000,000.00 1,020,330.00 1,001,692.91 1/31/2022 0.46% $ 11,100.00 $ 553.07 $ 1,183.32 31 FFCB 3133EKMX1 Gov. Agency Debenture 8/2/2019 1,000,000.00 1,014,400.00 1,035,558.04 2/23/2024 1.90% $ 51,475.83 $ 36,611.80 $ 9,651.25 784 FFCB 3133EMBE1 Gov. Agency Debenture 10/8/2020 1,600,000.00 1,598,000.00 1,582,070.85 3/28/2024 0.34% $ 4,653.34 $ 3,903.24 $ 2,710.18 818 FFCB 3133EMCQ3 Gov. Agency Debenture 10/16/2020 2,000,000.00 1,998,000.00 1,985,575.98 10/13/2024 0.31% $ 5,553.33 $ 4,295.55 $ 3,075.41 1017 BankAmerica Corp 06051GHC6 Corporate Bond 10/9/2020 1,300,000.00 1,366,287.00 1,326,948.74 12/20/2023 0.66% $ 46,753.92 $ 13,250.31 $ 9,235.07 719 IBM 459200HG9 Corporate Bond 8/8/2019 1,000,000.00 995,010.00 1,008,423.55 8/1/2022 2.05% $ 37,135.42 $ 38,718.82 $ 10,295.18 213 IBM 459200JY8 Corporate Bond 3/25/2021 1,000,000.00 1,071,040.00 1,044,797.43 5/15/2024 0.71% $ 19,166.67 $ 1,964.86 $ 3,727.16 866 US Treasury 912828R28 US Treasury Note 7/2/2019 500,000.00 497,246.09 507,226.56 4/30/2023 1.77% $ 18,921.54 $ 17,663.79 $ 4,458.35 485 Freddie Mac 3137EAEN5 Gov. Agency Debenture 7/19/2019 2,000,000.00 2,072,358.00 2,062,924.68 6/19/2023 1.79% $ 132,916.67 $ 71,285.65 $ 18,422.13 535 FFCB 3133EKVF0 Gov. Agency Debenture 7/22/2019 1,000,000.00 999,630.00 1,017,435.02 1/17/2023 1.89% $ 37,239.58 $ 36,626.98 $ 9,505.45 382 Treasury 912828L57 US Treasury Note 7/22/2019 1,200,000.00 1,197,988.40 1,212,796.87 9/30/2022 2.09% $ 46,016.39 $ 42,014.96 $ 10,903.74 273 Freddie Mac 3137EADB2 Gov. Agency Debenture 1/17/2020 2,100,000.00 2,132,039.70 2,101,362.80 1/13/2022 2.12% $ 74,258.34 $ 49,063.54 $ 17,033.38 13 US Treasury 91282CAW1 Gov. Agency Debenture 7/15/2021 1,200,000.00 1,199,437.50 1,190,250.00 11/15/2023 0.27% $ 1,002.72 $ - $ 1,500.49 684 American Honda 02665WCZ2 Corporate Bond 11/27/2019 1,000,000.00 1,012,410.01 1,030,214.47 6/27/2024 2.12% $ 48,733.34 $ 33,895.56 $ 10,734.57 909 JP Morgan Chase 46625HJE1 Gov. Agency Debenture 2/11/2020 900,000.00 934,587.00 918,051.60 9/23/2022 1.74% $ 47,287.50 $ 22,179.72 $ 8,081.32 266 Honeywell Int'l. 438516BW5 Corporate Bond 11/20/2019 1,000,000.00 1,014,660.00 1,033,527.98 7/15/2024 1.64% $ 39,483.33 $ 31,978.44 $ 10,006.86 927 Caterpillar Financial Serv 14913Q2V0 Corporate Bond 2/23/2021 1,000,000.00 1,077,370.00 1,044,144.53 5/17/2024 0.44% $ 20,900.00 $ 1,582.27 $ 2,292.42 868 FNMA 3135G0V75 Gov. Agency Debenture 10/17/2019 1,100,000.00 1,105,833.30 1,124,320.26 7/2/2024 1.63% $ 33,206.25 $ 30,694.63 $ 9,080.08 914 US Bancorp 91159HHV5 Corporate Bond 12/24/2019 1,000,000.00 1,049,040.00 1,048,424.92 1/5/2024 2.12% $ 54,468.75 $ 32,781.93 $ 10,887.86 735 FHLB 3133834G3 Gov. Agency Debenture 3/11/2021 1,400,000.00 1,460,522.00 1,430,600.99 6/9/2023 0.19% $ 22,147.22 $ 854.65 $ 1,416.71 525 FFCB 3133EKQA7 Gov. Agency Debenture 10/21/2019 1,000,000.00 1,019,780.00 1,035,709.38 9/10/2024 1.66% $ 39,231.11 $ 28,373.17 $ 8,447.67 984 PNC Financial 693476BN2 Corporate Bond 8/15/2019 1,000,000.00 1,029,280.00 1,002,759.81 2/6/2022 2.12% $ 68,108.33 $ 39,793.76 $ 10,689.13 37 FHLB 313379Q69 Gov. Agency Debenture 7/22/2019 1,000,000.00 1,006,960.00 1,008,262.56 6/10/2022 1.87% $ 50,645.83 $ 36,595.58 $ 9,497.30 161 FNMA 3135G0V59 Gov. Agency Debenture 11/27/2019 1,540,000.00 1,562,924.44 1,548,996.57 4/12/2022 1.61% $ 64,968.75 $ 39,792.92 $ 12,602.23 102 JP Morgan Chase 46625HJT8 Corporate Bond 9/23/2019 1,400,000.00 1,485,414.00 1,482,316.18 2/1/2024 2.39% $ 100,663.89 $ 61,355.87 $ 17,475.98 762 American Honda 02665WDH1 Corporate Bond 2/14/2020 600,000.00 603,756.00 609,512.21 5/10/2023 1.75% $ 22,295.00 $ 14,494.97 $ 5,312.90 495 Treasury 912828V23 US Treasury Note 11/29/2021 1,000,000.00 1,032,933.04 1,030,117.19 12/31/2023 0.66% $ 1,956.52 $ - $ 589.59 730 Treasury 91282CBE0_2 Gov. Agency Debenture 10/7/2021 1,000,000.00 994,768.98 987,539.06 285.33 1/15/2024 0.36% $ (285.33) $ - $ 826.80 745 FHLB 3130ALH98 Gov. Agency Debenture 2/26/2021 1,000,000.00 997,610.00 991,706.43 2/26/2024 0.33% $ 1,250.00 $ 1,119.96 $ 1,661.88 787 Treasury 912828M80 US Treasury Note 7/22/2019 1,000,000.00 1,006,175.23 1,014,492.19 11/30/2022 1.81% $ 47,158.47 $ 35,281.07 $ 9,156.16 334 Treasury 912828U57 US Treasury Note 7/31/2019 1,000,000.00 1,011,875.00 1,026,953.12 11/30/2023 1.84% $ 49,583.33 $ 35,502.32 $ 9,332.04 699 Treasury 912828X70 US Treasury Note 12/30/2019 1,000,000.00 1,010,589.29 1,027,304.69 4/30/2024 1.75% $ 40,703.30 $ 29,364.36 $ 9,859.56 851 Treasury 912828XT2 US Treasury Note 10/31/2019 1,000,000.00 1,015,667.41 1,027,656.25 5/31/2024 1.64% $ 41,639.34 $ 27,624.64 $ 8,360.09 882 American Honda 02665WCQ2 Corporate Bond 9/14/2021 950,000.00 1,012,871.00 996,012.81 10/10/2023 0.41% $ 2,487.15 $ - $ 1,208.15 648 FFCB 3133EJ3Q0 Gov. Agency Debenture 8/28/2019 1,500,000.00 1,587,503.75 1,569,611.10 12/21/2023 2.12% $ 99,786.46 $ 42,086.02 $ 11,523.55 720 Freddie Mac 3133EKKT2 Gov. Agency Debenture 6/24/2019 1,550,000.00 1,573,188.00 1,584,563.17 2/8/2023 1.82% $ 82,731.25 $ 57,521.06 $ 14,360.75 404 Treasury 91282CBE0 Gov. Agency Debenture 9/15/2021 650,000.00 647,615.46 641,900.39 136.88 1/15/2024 0.28% $ (136.88) $ - $ 537.65 745 Subtotal $ 45,090,000.00 $ 46,023,667.23 $ 45,886,814.76 $ 422.21 $ 1,529,317.52 $ 977,738.58 $ 302,361.55 BNY MM Money Market 247,510.43 247,510.43 0.00% 1
LAIF State Investment Pool 8,895,275.07 8,895,275.07 0.21% 11,103.75 1 $55,166,452.73 $55,029,600.26 $ 1,529,317.52 $ 977,738.58 $ 313,465.30 Matured Assets
US Treasury 912828Y20 Gov. Agency Debenture 1/31/2020 1,000,000.00 1,016,601.56 7/15/2021 1.47% $ 38,221.16 $ 20,977.00 $ 609.80 Wells Fargo 94988J6A0 Corporate Bond 6/24/2020 1,350,000.00 1,370,749.50 9/9/2021 0.80% $ 32,468.18 $ 10,139.92 $ 1,940.52 FNMA 3135G0Q89 Gov. Agency Debenture 2/10/2020 1,000,000.00 998,702.00 10/7/2021 1.38% $ 22,802.08 $ 20,147.24 $ 3,941.85 FHLB 3130AABG2 US Treasury Note 4/15/2019 1,000,000.00 988,250.00 11/29/2021 2.34% $ 49,166.67 $ 51,343.12 $ 9,670.58 Total Investments "Matured" $ 16,162.75
Total Interest FY 20_21 Matured and Current $ 329,628.05 Maturity Profile Amount
0-1 year $21,130,676.27
1-2 years $14,890,644.97
2-3 years $19,145,131.49
3-5 years $ -
$55,166,452.73
Amortized
Institution Cost
BNY Assets $46,023,667.23
BNY MM 247,510.43
LAIF 8,895,275.07
Totals: $55,166,452.73
Market to Cost Position Report

Page 40 ends

Town of Los Gatos
Summary Investment Information
November 30, 2021
Weighted Average YTM Portfolio Yield: 1.21% Weighted Average Maturity (days) 497 This Month Last Month One year ago
Portfolio Balance $61,676,887 $59,763,609 $60,767,876
Benchmarks/ References:

Town's Average Yield 1.21% 1.24% 1.62%
LAIF Yield for month 0.20% 0.20% 0.62%
3 mo. Treasury 0.05% 0.06% 0.08%
6 mo. Treasury 0.10% 0.06% 0.09%
2 yr. Treasury 0.52% 0.50% 0.15%
5 yr. Treasury (most recent) 1.15% 1.19% 0.36%
10 Yr. Treasury 1.45% 1.56% 0.84%
0 - 1 year
30%
1 - 2 years
30%
2 - 3 years
25%
3 - 5 years
15%
Portfolio Maturity Profile
Compliance: The Town's investments are in compliance with the Town's investment policy dated September 21, 2021 and also in compliance with the requirements of Section 53601 of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months.

Page 1 ends

59763608.84
Town of Los Gatos
Portfolio Allocation & Treasurer's Fund Balances
November 30, 2021
Month YTD
Fund Balances - Beginning of Month/Period $59,763,608.84 $67,951,235.09 Receipts 4,960,966.94 24,276,572.11
Disbursements (3,047,688.98) (30,550,920.40)
Fund Balances - End of Month/Period $61,676,886.80 $61,676,886.80 Portfolio Allocation: % of Portfolio Max. % 0r $ Allowed Per State Law or Policy BNY MM $130,170.95 0.24% 20% of Town Portfolio
US Treasury Notes $7,767,865.09 14.11% No Max. on US Treasuries Government Agency Debenture Notes $23,905,158.13 43.43% No Max. on Non-Mortgage Backed Corporate Medium Term Bonds $14,350,644.01 26.07% 30% of Town Portfolio Local Agency Investment Fund $8,895,275.07 16.16% $75 M per State Law Subtotal - Investments 55,049,113.25 100.00%
Reconciled Demand Deposit Balances 6,627,773.55
Total Treasurer's Fund $61,676,886.80
BNY MM

0.24% US Treasury Notes

14.11%
Government Agency Debenture Notes

43.43%
Corporate Medium Term Bonds

26.1%
Local Agency Investment Fund

16.2%
Portfolio Investment Allocation
54000000
56000000
58000000
60000000
62000000
64000000
66000000
68000000
70000000
Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Treasurer's Fund Balances
page 2 Page 42
Town of Los Gatos
Non-Treasury Restricted Fund Balances
November 30, 2021
NOV 21 NOV 21 NOV 21
Beginning Deposits Interest/ Ending
Balance Realized Gain/Adj. Earnings Withdrawals Balance Non-Treasury Funds:
`
Cert. of Participation 2002 Series A Reserve Fund 686,296.98 $ 5.89 $ 686,302.87 Note 1 Cert. Of Participation 2010 Ser A Lease Pymt Fund 21,141.15 0.26 $ 21,141.41 Note 1 Cert. of Participation 2002 Lease Payment Fund 22.41 0.00 $ 22.41 Note 1 Cert. of Participation 2010 Series Reserve Fund 1,277,094.81 10.85 1,277,105.66 Note 2 Total Restricted Funds: $ 1,984,555.35 $ - $ 17.00 $ - $ 1,984,572.35 CEPPT IRS Section 115 Trust 0.00 0.00 0.00 0.00 0.00
Grand Total COP's and CEPPT Trust $ 1,984,555.35 $ - $ 17.00 $ - $ 1,984,572.35 These accounts are not part of the Treasurer's fund balances reported elsewhere in this report, as they are for separate and distinct entities.

Note 3: The CEPPT Section IRS Section 115 Trust was established as an irrevocable trust dedicated to accumulate resources to fund the Town's unfunded liabilities related to pension and other p

Page 3 ends

Town of Los Gatos
Statement of Interest Earned
November 30, 2021
Interest by Month
July 2021 $57,076.80
August 2021 56,600.18
September 2021 54,523.00
October 2021 54,951.68
November 2021 51,445.84
December 2021
January 2022
February 2022
March 2022
April 20202
May 2022
June 2022
$274,597.50

Page 4 ends

Town of Los Gatos Investment Schedule March
2021
Maturity Yield to Interest Interest Interest Days
Deposit Par Original Market Purchased Date or Maturity Received Earned Earned to Institution CUSIP # Security Date Value Cost Value Interest Call Date or Call to Date Prior Yrs. Current FY Maturity Treasury 91282CAP6 US Treasury Note 6/30/2021 1,000,000.00 995,390.63 992,656.25 10/15/2023 0.33% $ 365.44 $ - $ 1,366.55 684 Toyota Motor Credit 89236TDP7 Corporate Bond 05/20/19 1,100,000.00 1,102,596.00 1,102,601.95 1/11/2022 2.50% $ 61,251.67 $ 58,418.45 $ 11,577.75 42 Toyota Motor Credit 89236THA6 Corporate Bond 4/12/2021 500,000.00 510,580.00 504,921.51 8/25/2023 0.45% $ 2,493.75 $ 494.69 $ 958.08 633 American Express Credit Corp. 0258M0EG0 Corporate Bond 4/5/2021 1,000,000.00 1,020,330.00 1,003,800.48 1/31/2022 0.46% $ 11,100.00 $ 553.07 $ 983.95 62 FFCB 3133EKMX1 Gov. Agency Debenture 8/2/2019 1,000,000.00 1,014,400.00 1,034,810.88 2/23/2024 1.90% $ 51,475.83 $ 36,611.80 $ 8,025.22 815 FFCB 3133EMBE1 Gov. Agency Debenture 10/8/2020 1,600,000.00 1,598,000.00 1,585,088.56 3/28/2024 0.34% $ 4,653.34 $ 3,903.24 $ 2,253.57 849 FFCB 3133EMCQ3 Gov. Agency Debenture 10/16/2020 2,000,000.00 1,998,000.00 1,988,598.06 10/13/2024 0.31% $ 5,553.33 $ 4,295.55 $ 2,557.27 1048 BankAmerica Corp 06051GHC6 Corporate Bond 10/9/2020 1,300,000.00 1,366,287.00 1,329,288.88 12/20/2023 0.66% $ 27,227.92 $ 13,250.31 $ 7,679.16 750 IBM 459200HG9 Corporate Bond 8/8/2019 1,000,000.00 995,010.00 1,009,153.93 8/1/2022 2.05% $ 37,135.42 $ 38,718.82 $ 8,560.66 244 IBM 459200JY8 Corporate Bond 3/25/2021 1,000,000.00 1,071,040.00 1,046,336.71 5/15/2024 0.71% $ 19,166.67 $ 1,964.86 $ 3,099.21 897 US Treasury 912828R28 US Treasury Note 7/2/2019 500,000.00 497,246.09 508,789.06 4/30/2023 1.77% $ 18,921.54 $ 17,663.79 $ 3,707.22 516 Freddie Mac 3137EAEN5 Gov. Agency Debenture 7/19/2019 2,000,000.00 2,072,358.00 2,071,625.82 6/19/2023 1.79% $ 105,416.67 $ 71,285.65 $ 15,318.40 566 FFCB 3133EKVF0 Gov. Agency Debenture 7/22/2019 1,000,000.00 999,630.00 1,018,211.21 1/17/2023 1.89% $ 37,239.58 $ 36,626.98 $ 7,903.99 413 Treasury 912828L57 US Treasury Note 7/22/2019 1,200,000.00 1,197,988.40 1,215,281.26 9/30/2022 2.09% $ 46,016.39 $ 42,014.96 $ 9,066.70 304 Freddie Mac 3137EADB2 Gov. Agency Debenture 1/17/2020 2,100,000.00 2,132,039.70 2,105,616.68 1/13/2022 2.12% $ 74,258.34 $ 49,063.54 $ 14,163.63 44 US Treasury 91282CAW1 Gov. Agency Debenture 7/15/2021 1,200,000.00 1,199,437.50 1,192,968.74 11/15/2023 0.27% $ 1,002.72 $ - $ 1,225.25 715 American Honda 02665WCZ2 Corporate Bond 11/27/2019 1,000,000.00 1,012,410.01 1,031,880.71 6/27/2024 2.12% $ 48,733.34 $ 33,895.56 $ 8,926.03 940 JP Morgan Chase 46625HJE1 Gov. Agency Debenture 2/11/2020 900,000.00 934,587.00 920,310.25 9/23/2022 1.74% $ 47,287.50 $ 22,179.72 $ 6,719.80 297 Honeywell Int'l. 438516BW5 Corporate Bond 11/20/2019 1,000,000.00 1,014,660.00 1,034,626.13 7/15/2024 1.64% $ 39,483.33 $ 31,978.44 $ 8,320.92 958 Caterpillar Financial Serv 14913Q2V0 Corporate Bond 2/23/2021 1,000,000.00 1,077,370.00 1,040,758.26 5/17/2024 0.44% $ 20,900.00 $ 1,582.27 $ 1,906.19 899 FNMA 3135G0V75 Gov. Agency Debenture 10/17/2019 1,100,000.00 1,105,833.30 1,127,678.42 7/2/2024 1.63% $ 33,206.25 $ 30,694.63 $ 7,550.29 945 US Bancorp 91159HHV5 Corporate Bond 12/24/2019 1,000,000.00 1,049,040.00 1,050,360.32 1/5/2024 2.12% $ 54,468.75 $ 32,781.93 $ 9,053.49 766 FHLB 3133834G3 Gov. Agency Debenture 3/11/2021 1,400,000.00 1,460,522.00 1,435,766.28 6/9/2023 0.19% $ 7,272.22 $ 854.65 $ 1,178.03 556 FFCB 3133EKQA7 Gov. Agency Debenture 10/21/2019 1,000,000.00 1,019,780.00 1,033,877.53 9/10/2024 1.66% $ 39,231.11 $ 28,373.17 $ 7,024.42 1015 PNC Financial 693476BN2 Corporate Bond 8/15/2019 1,000,000.00 1,029,280.00 1,004,983.58 2/6/2022 2.12% $ 68,108.33 $ 39,793.76 $ 8,888.24 68 FHLB 313379Q69 Gov. Agency Debenture 7/22/2019 1,000,000.00 1,006,960.00 1,010,707.64 6/10/2022 1.87% $ 40,020.83 $ 36,595.58 $ 7,897.21 192 FNMA 3135G0V59 Gov. Agency Debenture 11/27/2019 1,540,000.00 1,562,924.44 1,552,097.62 4/12/2022 1.61% $ 64,968.75 $ 39,792.92 $ 10,479.03 133 JP Morgan Chase 46625HJT8 Corporate Bond 9/23/2019 1,400,000.00 1,485,414.00 1,486,293.42 2/1/2024 2.39% $ 100,663.89 $ 61,355.87 $ 14,531.65 793 American Honda 02665WDH1 Corporate Bond 2/14/2020 600,000.00 603,756.00 609,946.00 5/10/2023 1.75% $ 22,295.00 $ 14,494.97 $ 4,417.79 526 Treasury 912828V23 US Treasury Note 11/29/2021 1,000,000.00 1,032,933.04 1,034,414.06 9,293.48 12/31/2023 0.66% $ (9,293.48) $ - $ 18.42 761 Treasury 91282CBE0_2 Gov. Agency Debenture 10/7/2021 1,000,000.00 994,768.98 989,765.62 285.33 1/15/2024 0.36% $ (285.33) $ - $ 525.26 776 FHLB 3130ALH98 Gov. Agency Debenture 2/26/2021 1,000,000.00 997,610.00 993,488.70 2/26/2024 0.33% $ 1,250.00 $ 1,119.96 $ 1,381.89 818 Treasury 912828M80 US Treasury Note 7/22/2019 1,000,000.00 1,006,175.23 1,017,265.62 11/30/2022 1.81% $ 47,158.47 $ 35,281.07 $ 7,613.55 365 Treasury 912828U57 US Treasury Note 7/31/2019 1,000,000.00 1,011,875.00 1,031,132.81 11/30/2023 1.84% $ 49,583.33 $ 35,502.32 $ 7,759.79 730 Treasury 912828X70 US Treasury Note 12/30/2019 1,000,000.00 1,010,589.29 1,031,445.31 4/30/2024 1.75% $ 40,703.30 $ 29,364.36 $ 8,198.44 882 Treasury 912828XT2 US Treasury Note 10/31/2019 1,000,000.00 1,015,667.41 1,031,875.00 5/31/2024 1.64% $ 41,639.34 $ 27,624.64 $ 6,951.59 913 American Honda 02665WCQ2 Corporate Bond 9/14/2021 950,000.00 1,012,871.00 999,245.94 10/10/2023 0.41% $ 2,487.15 $ - $ 861.37 679 FFCB 3133EJ3Q0 Gov. Agency Debenture 8/28/2019 1,500,000.00 1,587,503.75 1,569,566.57 12/21/2023 2.12% $ 78,223.96 $ 42,086.02 $ 9,582.08 751 Freddie Mac 3133EKKT2 Gov. Agency Debenture 6/24/2019 1,550,000.00 1,573,188.00 1,586,040.09 2/8/2023 1.82% $ 82,731.25 $ 57,521.06 $ 11,941.28 435 Treasury 91282CBE0 Gov. Agency Debenture 9/15/2021 650,000.00 647,615.46 643,347.65 136.88 1/15/2024 0.28% $ (136.88) $ - $ 381.88 776 Subtotal $ 45,090,000.00 $ 46,023,667.23 $ 45,976,623.51 $ 9,715.69 $ 1,423,979.02 $ 977,738.58 $ 250,555.27 BNY MM Money Market 130,170.95 130,170.95 0.00% 1
LAIF State Investment Pool 8,895,275.07 8,895,275.07 0.20% 7,879.48 1 $55,049,113.25 $55,002,069.53 $ 1,423,979.02 $ 977,738.58 $ 258,434.75 Matured Assets
US Treasury 912828Y20 Gov. Agency Debenture 1/31/2020 1,000,000.00 1,016,601.56 7/15/2021 1.47% $ 38,221.16 $ 20,977.00 $ 609.80 Wells Fargo 94988J6A0 Corporate Bond 6/24/2020 1,350,000.00 1,370,749.50 9/9/2021 0.80% $ 32,468.18 $ 10,139.92 $ 1,940.52 FNMA 3135G0Q89 Gov. Agency Debenture 2/10/2020 1,000,000.00 998,702.00 10/7/2021 1.38% $ 22,802.08 $ 20,147.24 $ 3,941.85 FHLB 3130AABG2 US Treasury Note 4/15/2019 1,000,000.00 988,250.00 11/29/2021 2.34% $ 49,166.67 $ 51,343.12 $ 9,670.58 Total Investments "Matured" $ 16,162.75
Total Interest FY 20_21 Matured and Current $ 274,597.50 Maturity Profile Amount
0-1 year $21,013,336.79
1-2 years $10,924,979.22
2-3 years $23,110,797.24
3-5 years $ -
$55,049,113.25
Amortized
Institution Cost
BNY Assets $46,023,667.23
BNY MM 130,170.95
LAIF 8,895,275.07
Totals: $55,049,113.25
Market to Cost Position Report

Page 45 ends

Town of Los Gatos
Summary Investment Information
October 31, 2021
Weighted Average YTM Portfolio Yield: 1.24% Weighted Average Maturity (days) 509 This Month Last Month One year ago
Portfolio Balance $59,763,609 $59,898,959 $58,591,198
Benchmarks/ References:

Town's Average Yield 1.24% 1.27% 1.63%
LAIF Yield for month 0.20% 0.21% 0.62%
3 mo. Treasury 0.06% 0.04% 0.09%
6 mo. Treasury 0.06% 0.05% 0.10%
2 yr. Treasury 0.50% 0.28% 0.16%
5 yr. Treasury (most recent) 1.19% 0.97% 0.39%
10 Yr. Treasury 1.56% 1.49% 0.88%
0 - 1 year
30%
1 - 2 years
30%
2 - 3 years
25%
3 - 5 years
15%
Portfolio Maturity Profile
Compliance: The Town's investments are in compliance with the Town's investment policy dated September 21, 2021 and also in compliance with the requirements of Section 53601 of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months.

Page 1 ends

Town of Los Gatos
Portfolio Allocation & Treasurer's Fund Balances
October 31, 2021
Month YTD
Fund Balances - Beginning of Month/Period $59,898,959.34 $67,951,235.09 Receipts 3,596,148.01 19,315,605.17
Disbursements (3,731,498.51) (27,503,231.42)
Fund Balances - End of Month/Period $59,763,608.84 $59,763,608.84 Portfolio Allocation: % of Portfolio Max. % 0r $ Allowed Per State Law or Policy BNY MM $81,734.42 0.15% 20% of Town Portfolio
US Treasury Notes $7,723,182.05 14.05% No Max. on US Treasuries Government Agency Debenture Notes $23,905,158.13 43.50% No Max. on Non-Mortgage Backed Corporate Medium Term Bonds $14,350,644.01 26.11% 30% of Town Portfolio Local Agency Investment Fund $8,895,275.07 16.19% $75 M per State Law Subtotal - Investments 54,955,993.68 100.00%
Reconciled Demand Deposit Balances 4,807,615.16
Total Treasurer's Fund $59,763,608.84
BNY MM

0.15% US Treasury Notes

14.05%
Government Agency Debenture Notes

43.50%
Corporate Medium Term Bonds

26.1%
Local Agency Investment Fund

16.2%
Portfolio Investment Allocation
52000000
54000000
56000000
58000000
60000000
62000000
64000000
66000000
68000000
70000000
Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Treasurer's Fund Balances
page 2 Page 47
Town of Los Gatos
Non-Treasury Restricted Fund Balances
October 31, 2021
OCT 21 OCT 21 OCT 21
Beginning Deposits Interest/ Ending
Balance Realized Gain/Adj. Earnings Withdrawals Balance Non-Treasury Funds:
`
Cert. of Participation 2002 Series A Reserve Fund $ 686,291.28 $ 5.70 $ 686,296.98 Note 1 Cert. Of Participation 2010 Ser A Lease Pymt Fund 21,140.90 0.25 $ 21,141.15 Note 1 Cert. of Participation 2002 Lease Payment Fund 22.41 0.00 $ 22.41 Note 1 Cert. of Participation 2010 Series Reserve Fund 1,277,084.31 10.50 1,277,094.81 Note 2 Total Restricted Funds: $ 1,984,538.90 $ - $ 16.45 $ - $ 1,984,555.35 CEPPT IRS Section 115 Trust 0.00 0.00 0.00 0.00 0.00
Grand Total COP's and CEPPT Trust $ 1,984,538.90 $ - $ 16.45 $ - $ 1,984,555.35 These accounts are not part of the Treasurer's fund balances reported elsewhere in this report, as they are for separate and distinct entities.

Note 3: The CEPPT Section IRS Section 115 Trust was established as an irrevocable trust dedicated to accumulate resources to fund the Town's unfunded liabilities related to pension and other p

Page 3 ends

Town of Los Gatos
Statement of Interest Earned
October 31, 2021
Interest by Month
July 2021 $57,076.80
August 2021 56,600.18
September 2021 54,523.00
October 2021 54,951.68
November 2021
December 2021
January 2022
February 2022
March 2022
April 20202
May 2022
June 2022
$223,151.66

Page 4 ends

Town of Los Gatos Investment Schedule March
2021
Maturity Yield to Interest Interest Interest Days
Deposit Par Original Market Purchased Date or Maturity Received Earned Earned to Institution CUSIP # Security Date Value Cost Value Interest Call Date or Call to Date Prior Yrs. Current FY Maturity Treasury 91282CAP6 US Treasury Note 6/30/2021 1,000,000.00 995,390.63 992,929.69 10/15/2023 0.33% $ 365.44 $ - $ 1,098.60 714 Toyota Motor Credit 89236TDP7 Corporate Bond 05/20/19 1,100,000.00 1,102,596.00 1,105,145.45 1/11/2022 2.50% $ 61,251.67 $ 58,418.45 $ 9,307.60 72 Toyota Motor Credit 89236THA6 Corporate Bond 4/12/2021 500,000.00 510,580.00 506,516.66 8/25/2023 0.45% $ 2,493.75 $ 494.69 $ 770.22 663 American Express Credit Corp. 0258M0EG0 Corporate Bond 4/5/2021 1,000,000.00 1,020,330.00 1,005,872.00 1/31/2022 0.46% $ 11,100.00 $ 553.07 $ 791.02 92 FFCB 3133EKMX1 Gov. Agency Debenture 8/2/2019 1,000,000.00 1,014,400.00 1,036,379.76 2/23/2024 1.90% $ 51,475.83 $ 36,611.80 $ 6,451.65 845 FFCB 3133EMBE1 Gov. Agency Debenture 10/8/2020 1,600,000.00 1,598,000.00 1,591,582.45 3/28/2024 0.34% $ 4,653.34 $ 3,903.24 $ 1,811.69 879 FFCB 3133EMCQ3 Gov. Agency Debenture 10/16/2020 2,000,000.00 1,998,000.00 1,996,824.14 10/13/2024 0.31% $ 5,553.33 $ 4,295.55 $ 2,055.85 1078 BankAmerica Corp 06051GHC6 Corporate Bond 10/9/2020 1,300,000.00 1,366,287.00 1,334,031.84 12/20/2023 0.66% $ 27,227.92 $ 13,250.31 $ 6,173.44 780 IBM 459200HG9 Corporate Bond 8/8/2019 1,000,000.00 995,010.00 1,011,532.04 8/1/2022 2.05% $ 37,135.42 $ 38,718.82 $ 6,882.10 274 IBM 459200JY8 Corporate Bond 3/25/2021 1,000,000.00 1,071,040.00 1,052,161.97 5/15/2024 0.71% $ 4,166.67 $ 1,964.86 $ 2,491.52 927 US Treasury 912828R28 US Treasury Note 7/2/2019 500,000.00 497,246.09 509,511.72 4/30/2023 1.77% $ 18,921.54 $ 17,663.79 $ 2,980.31 546 Freddie Mac 3137EAEN5 Gov. Agency Debenture 7/19/2019 2,000,000.00 2,072,358.00 2,074,223.74 6/19/2023 1.79% $ 105,416.67 $ 71,285.65 $ 12,314.80 596 FFCB 3133EKVF0 Gov. Agency Debenture 7/22/2019 1,000,000.00 999,630.00 1,019,546.95 1/17/2023 1.89% $ 37,239.58 $ 36,626.98 $ 6,354.19 443 Treasury 912828L57 US Treasury Note 7/22/2019 1,200,000.00 1,197,988.40 1,217,578.13 9/30/2022 2.09% $ 46,016.39 $ 42,014.96 $ 7,288.91 334 Freddie Mac 3137EADB2 Gov. Agency Debenture 1/17/2020 2,100,000.00 2,132,039.70 2,109,312.24 1/13/2022 2.12% $ 74,258.34 $ 49,063.54 $ 11,386.44 74 US Treasury 91282CAW1 Gov. Agency Debenture 7/15/2021 1,200,000.00 1,199,437.50 1,193,437.50 497.28 11/15/2023 0.27% $ (497.28) $ - $ 958.89 745 American Honda 02665WCZ2 Corporate Bond 11/27/2019 1,000,000.00 1,012,410.01 1,037,883.15 6/27/2024 2.12% $ 48,733.34 $ 33,895.56 $ 7,175.82 970 JP Morgan Chase 46625HJE1 Gov. Agency Debenture 2/11/2020 900,000.00 934,587.00 923,303.04 9/23/2022 1.74% $ 47,287.50 $ 22,179.72 $ 5,402.19 327 Honeywell Int'l. 438516BW5 Corporate Bond 11/20/2019 1,000,000.00 1,014,660.00 1,038,829.77 7/15/2024 1.64% $ 39,483.33 $ 31,978.44 $ 6,689.37 988 Caterpillar Financial Serv 14913Q2V0 Corporate Bond 2/23/2021 1,000,000.00 1,077,370.00 1,048,903.87 5/17/2024 0.44% $ 6,650.00 $ 1,582.27 $ 1,532.43 929 FNMA 3135G0V75 Gov. Agency Debenture 10/17/2019 1,100,000.00 1,105,833.30 1,130,642.50 7/2/2024 1.63% $ 33,206.25 $ 30,694.63 $ 6,069.84 975 US Bancorp 91159HHV5 Corporate Bond 12/24/2019 1,000,000.00 1,049,040.00 1,055,164.04 1/5/2024 2.12% $ 54,468.75 $ 32,781.93 $ 7,278.30 796 FHLB 3133834G3 Gov. Agency Debenture 3/11/2021 1,400,000.00 1,460,522.00 1,437,785.72 6/9/2023 0.19% $ 7,272.22 $ 854.65 $ 947.04 586 FFCB 3133EKQA7 Gov. Agency Debenture 10/21/2019 1,000,000.00 1,019,780.00 1,036,831.81 9/10/2024 1.66% $ 39,231.11 $ 28,373.17 $ 5,647.09 1045 PNC Financial 693476BN2 Corporate Bond 8/15/2019 1,000,000.00 1,029,280.00 1,007,772.38 2/6/2022 2.12% $ 68,108.33 $ 39,793.76 $ 7,145.45 98 FHLB 313379Q69 Gov. Agency Debenture 7/22/2019 1,000,000.00 1,006,960.00 1,012,485.75 6/10/2022 1.87% $ 40,020.83 $ 36,595.58 $ 6,348.74 222 FNMA 3135G0V59 Gov. Agency Debenture 11/27/2019 1,540,000.00 1,562,924.44 1,554,883.04 4/12/2022 1.61% $ 64,968.75 $ 39,792.92 $ 8,424.32 163 JP Morgan Chase 46625HJT8 Corporate Bond 9/23/2019 1,400,000.00 1,485,414.00 1,493,954.00 2/1/2024 2.39% $ 100,663.89 $ 61,355.87 $ 11,682.31 823 American Honda 02665WDH1 Corporate Bond 2/14/2020 600,000.00 603,756.00 612,327.86 5/10/2023 1.75% $ 16,445.00 $ 14,494.97 $ 3,551.56 556 FHLB 3130AABG2 US Treasury Note 4/15/2019 1,000,000.00 988,250.00 1,001,434.00 11/29/2021 2.34% $ 39,791.67 $ 51,343.12 $ 7,825.53 29 Treasury 91282CBE0_2 Gov. Agency Debenture 10/7/2021 1,000,000.00 994,768.98 990,117.19 285.33 1/15/2024 0.36% $ (285.33) $ - $ 233.45 806 FHLB 3130ALH98 Gov. Agency Debenture 2/26/2021 1,000,000.00 997,610.00 994,511.30 2/26/2024 0.33% $ 1,250.00 $ 1,119.96 $ 1,110.93 848 Treasury 912828M80 US Treasury Note 7/22/2019 1,000,000.00 1,006,175.23 1,019,726.56 11/30/2022 1.81% $ 37,158.47 $ 35,281.07 $ 6,120.69 395 Treasury 912828U57 US Treasury Note 7/31/2019 1,000,000.00 1,011,875.00 1,032,890.62 11/30/2023 1.84% $ 38,958.33 $ 35,502.32 $ 6,238.26 760 Treasury 912828X70 US Treasury Note 12/30/2019 1,000,000.00 1,010,589.29 1,033,398.44 4/30/2024 1.75% $ 40,703.30 $ 29,364.36 $ 6,590.90 912 Treasury 912828XT2 US Treasury Note 10/31/2019 1,000,000.00 1,015,667.41 1,033,789.06 5/31/2024 1.64% $ 31,639.34 $ 27,624.64 $ 5,588.54 943 American Honda 02665WCQ2 Corporate Bond 9/14/2021 950,000.00 1,012,871.00 1,003,772.68 10/10/2023 0.41% $ 2,487.15 $ - $ 525.77 709 FFCB 3133EJ3Q0 Gov. Agency Debenture 8/28/2019 1,500,000.00 1,587,503.75 1,574,275.65 12/21/2023 2.12% $ 78,223.96 $ 42,086.02 $ 7,703.24 781 Freddie Mac 3133EKKT2 Gov. Agency Debenture 6/24/2019 1,550,000.00 1,573,188.00 1,588,653.34 2/8/2023 1.82% $ 82,731.25 $ 57,521.06 $ 9,599.85 465 Treasury 91282CBE0 Gov. Agency Debenture 9/15/2021 650,000.00 647,615.46 643,576.17 136.88 1/15/2024 0.28% $ (136.88) $ - $ 231.14 806 Subtotal $ 45,090,000.00 $ 45,978,984.19 $ 46,063,498.22 $ 919.49 $ 1,405,839.17 $ 1,029,081.71 $ 208,780.01 BNY MM Money Market 81,734.42 81,734.42 0.00% 1
LAIF State Investment Pool 8,895,275.07 8,895,275.07 0.20% 7,879.48 1 $54,955,993.68 $55,040,507.71 $ 1,405,839.17 $ 1,029,081.71 $ 216,659.49 Matured Assets
US Treasury 912828Y20 Gov. Agency Debenture 1/31/2020 1,000,000.00 1,016,601.56 7/15/2021 1.47% $ 38,221.16 $ 20,977.00 $ 609.80 0 Wells Fargo 94988J6A0 Corporate Bond 6/24/2020 1,350,000.00 1,370,749.50 9/9/2021 0.80% $ 32,468.18 $ 10,139.92 $ 1,940.52 0 FNMA 3135G0Q89 Gov. Agency Debenture 2/10/2020 1,000,000.00 998,702.00 10/7/2021 1.38% $ 22,802.08 $ 20,147.24 $ 3,941.85 0 Total Investments "Matured" $ 6,492.17
Total Interest FY 20_21 Matured and Current $ 223,151.66 Maturity Profile Amount
0-1 year $20,946,975.03
1-2 years $10,731,716.95
2-3 years $23,277,301.70
3-5 years $ -
$54,955,993.68
Amortized
Institution Cost
BNY Assets $45,978,984.19
BNY MM 81,734.42
LAIF 8,895,275.07
Totals: $54,955,993.68
Market to Cost Position Report

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Security Description Maturity Date Par/Shares Moody Rating S&P Rating Insight ESG Rating Environment Social Governance TOYOTA MOTOR CREDIT CORP 2.6% 11JAN2022 1/11/2022 $ 1,100,000 A1 A+ 3 3 3 4 AMERICAN EXPRESS CREDIT 2.7% 03MAR2022 (CALLABLE 31JAN22) 3/3/2022 $ 1,000,000 A2 A- 2 1 2 3 PNC FINANCIAL SERVICES 3.3% 08MAR2022 (CALLABLE 06FEB22) 3/8/2022 $ 1,000,000 A2 A 2 2 3 3 IBM CORP 1.875% 01AUG2022 8/1/2022 $ 1,000,000 A3 A- 3 1 3 5 JPMORGAN CHASE & CO 3.25% 23SEP2022 9/23/2022 $ 900,000 A2 A- 3 1 3 4 AMERICAN HONDA FINANCE 1.95% 10MAY2023 5/10/2023 $ 600,000 A3 A- 3 1 4 3 TOYOTA MOTOR CREDIT CORP 1.35% 25AUG2023 8/25/2023 $ 500,000 A1 A+ 3 3 3 4 AMERICAN HONDA FINANCE 3.625% 10OCT2023 10/10/2023 $ 950,000 A3 A- 3 1 4 3 BANK OF AMERICA CORP 3.004% 20DEC2023 (CALLABLE 20DEC22) 12/20/2023 $ 1,300,000 A2 A+ 3 2 4 4 JPMORGAN CHASE & CO 3.875% 01FEB2024 2/1/2024 $ 1,400,000 A2 A- 3 1 3 4 US BANCORP 3.375% 05FEB2024 (CALLABLE 05JAN24) 2/5/2024 $ 1,000,000 A2 A+ 3 2 4 4 IBM CORP 3.0% 15MAY2024 5/15/2024 $ 1,000,000 A3 A- 3 1 3 5 CATERPILLAR FIN SERVICES 2.85% 17MAY24 5/17/2024 $ 1,000,000 A2 A 3 3 3 4 AMERICAN HONDA FINANCE 2.4% 27JUN2024 6/27/2024 $ 1,000,000 A3 A- 3 1 4 3 HONEYWELL INTERNATIONAL 2.3% 15AUG2024 (CALLABLE 15JUL24) 8/15/2024 $ 1,000,000 A2 A 4 4 5 3 Total/Average $ 14,750,000 2.9 1.6 3.3 3.8
*ESG ratings are from 1 to 5, with 1 as the highest rating and 5 as the lowest. All ratings are weighted by industry rankings, based on the importance of the category within the individual industry.

Town of Los Gatos
Insight ESG Ratings as of December 31, 2021

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PREPARED BY: WooJae Kim
Town Engineer
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Finance Director, and Parks and Public Works Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 2/15/2022
ITEM NO: 7
DATE: February 4, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Annual Street Repair and Resurfacing Project (CIP No. 811-9901):
a. Approve the Plans and Specifications; and
b. Authorize Advertising the Project for Bid; and
c. Authorize the Town Manager to Award and Execute a Construction Agreement in an Amount Not to Exceed $2,981,000, Including Contingencies; and
d. Authorize Staff to Execute Future Change Orders in an Amount not to Exceed Ten Percent of the Contract Award Amount; and
e. Authorize Revenue and Expenditure Increase for the Project in the Amount of $45,844 to Recognize an Increase in Gas Tax Revenues Anticipated for the Fiscal Year 2021/22.

RECOMMENDATION:

Staff recommends that the Town Council authorize the following actions for the Annual Street Repair and Resurfacing Project (CIP No. 811-9901):
a. Approve the Plans and Specifications; and
b. Authorize advertising the project for bid; and
c. Authorize the Town Manager to award and execute a construction agreement in an amount not to exceed $2,981,000, including contingencies; and
d. Authorize staff to execute future change orders in an amount not to exceed ten percent (10%) of the contract award amount; and
e. Authorize revenue and expenditure increase for the project in the amount of $45,844 to recognize an increase in Gas Tax revenues anticipated for the Fiscal Year (FY) 2021/22.

BACKGROUND:

The adopted Fiscal Year (FY) 2021/22-2025/26 Capital Improvement Program (CIP) Budget designates funding for the Town’s Street Repair and Resurfacing Project (CIP No. 811-9901).

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PAGE 2 OF 4
SUBJECT: Annual Street Repair and Resurfacing Project (CIP No. 811-9901) DATE: February 4, 2022
BACKGROUND (continued):

This is a recurring annual project for street rehabilitation activities throughout the Town to enhance safety for all travel modes and maintain the roadway infrastructure. It is important for the Town to keep up with the annual street maintenance projects each year to improve the Town’s roadways and prevent street pavements from deteriorating to more extensive and costly repair conditions.

On December 21, 2021, the Town Council approved the proposed street list for the FY 2021/22 Street Repair and Resurfacing Project (Attachment 1), and authorized staff to move forward with the final design. The proposed street list was shared with utility companies, applicants of potential or approved developments, and neighboring agencies to coordinate and minimize potential conflicts. Once streets are paved, the Parks and Public Works Department (PPW) imposes a five-year moratorium on future street work.

DISCUSSION:

For the FY 2021/22 Street Repair and Resurfacing (Street) Project, the focus will be on preventive maintenance through rubber cape seal, slurry seal, and crack seal treatments of locations identified in the proposed street list. Due to conflicts with utility company projects and others, the following street segments on the Proposed Street List are deferred to a future year:

STREET FROM TO

CARLESTER DR CARLTON AV LESTER LN

CARLTON AV LOS GATOS-ALMADEN RD LESTER LN

CARLTON CT CARLTON AV END

CARLTON WY CARLTON AV END

CLEARVIEW DR LA RINCONADA DR WIMBLEDON DR

CORINNE DR SUNRAY DR CHIRCO DR

DOWNING OAK CT UNION AV END

EASTVIEW DR LA RINCONADA DR CLEARVIEW DR

HANCOCK CT EASTVIEW DR END
SAN BENITO WY BRUCE AV END OF #17641
The updated Street List for the FY 2021/22 Street Project is included as Attachment 2.

The engineer’s estimate to complete the proposed work for FY 2021/22 Street Project is $2,981,000, which includes ten percent for contingencies. The project will include 155,760 square yards of recycled rubberized asphalt cape seal work, 24,780 square yards of slurry seal, and 32,500 square feet of asphalt base failure repair work at various project locations. The

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PAGE 3 OF 4
SUBJECT: Annual Street Repair and Resurfacing Project (CIP No. 811-9901) DATE: February 4, 2022
DISCUSSION (continued):
plans and specifications for the project are available for review on the PPW capital improvement webpage at www.losgatosca.gov/108/Capital-Improvement-Program.

Once authorized by the Town Council to advertise for bid, the following is the anticipated schedule for the project:

Milestones Anticipated Timeline
Advertise the Project for Bid February 18, 2022
Bids Due March 15, 2022
Award and Execute Agreement April 2022
Start Construction May 2022
Anticipated Completion September 2022
Staff will conduct project outreach via social media platforms and distribute project notifications to inform the affected communities of the upcoming project.

CONCLUSION:

Approval of the recommendations allows the Town’s Annual Street Repair and Maintenance Project to move forward for bidding and award. It is important for the Town to complete their annual street maintenance project each year to prevent Town streets succumbing to more extensive and costly repair categories.

COORDINATION:

This project has been coordinated with the Finance Department.

FISCAL IMPACT:

There are sufficient funds in the FY 2021/22 – 2025/26 CIP budget for this year’s Street Repair and Resurfacing Project (CIP No. 811-9901). Also, a revenue and expenditure budget increase is recommended to recognize an increase of $45,844 in Gas Tax revenues for FY 2021/22 receipts.

On December 21, 2021, the Town Council approved a reimbursement cost share agreement with the City of Campbell in an amount not to exceed $335,000 to be funded from the FY 2021/22 Repair and Resurfacing Project budget. The Town would reimburse the City of Campbell for the resurfacing related work completed on the Town’s right of way through their project.

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PAGE 4 OF 4
SUBJECT: Annual Street Repair and Resurfacing Project (CIP No. 811-9901) DATE: February 4, 2022
FISCAL IMPACT (continued):

Staff costs are tracked for all projects. Tracking of staff costs allows for accountability in the costs of projects, recovery of costs from grant funded projects, and identification of future staffing needs. This project utilizes a combination of full-time budgeted staff and temporary staff that support fluctuating workloads. The costs for temporary staff will be directly associated with this project while full-time staff are accounted for in the department’s operating budget.

Available project balance funds would be applied or carry forwarded to future Street Repair and Resurfacing Projects.

ENVIRONMENTAL ASSESSMENT:

This is a project defined under CEQA as being Categorically Exempt [Section 15301(c) Existing streets, sidewalks, trails and similar facilities]. A Notice of Exemption is filed with the County.

Attachments:

1. Proposed Street List for FY 2021/22 dated 12/14/2021

2. Updated Street List for FY 2021/22 dated 2/4/2022
Budget Costs
GFAR $2,471,318
Gas Tax $1,676,361
Gas Tax Increase $45,844
Total Budget $4,193,523
FY 2020/21 Street Project Closeout $200,000
FY 2021/22 Street Project Construction Estimate $2,710,000 10% Contingency $271,000
Cost Share - City of Campbell $335,000
Material Testing $30,000
Temporary Staff Costs $40,000
Other Project Related Costs $10,000
Total Expenditures $3,596,000
Remaining Budget $597,523
FY 2021/22 Street Repair and Resurfacing
Project 811-9901

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Key:

CS Crack seal
RC Rubber cape seal (chip seal with slurry seal)
S Slurry seal
Note:

Street From To Road Classification
Type of
Treatment
ANDREWS ST N SANTA CRUZ AV TOWN LIMITS Collector RC or S ASHLER AV SAN BENITO AV N. SANTA CRUZ AV Residential RC or S BEAN AVE MASSOL AV END Residential RC or S
BELLA VISTA AV CHARLES ST NEW YORK AV Residential RC or S CAMPANULA PL CARLTON AV END Residential RC or S
CARLTON AVE LESTER LN NATIONAL AV Collector RC or S
CHARLES ST BELLA VISTA AV LOS GATOS BLVD Residential RC or S CLARA ST LA RINCONADA DR GOLF LINKS DR Residential RC or S CLEARVIEW DR LA RINCONADA DR WIMBLEDON DR Residential RC or S DOWNING OAK CT UNION AV END Residential RC or S
EASTVIEW DR LA RINCONADA DR CLEARVIEW DR Residential RC or S ESCOBAR AV CAMINO DEL CERRO LG ALMADEN RD Residential RC or S ESCOBAR CT ESCOBAR AV END Residential RC or S
FANCHER CT SAN BENITO AV END Residential RC or S
GATEWAY DR LOS GATOS BLVD CARLTON AV Collector RC or S
GOLF LINKS DR CLARA ST CLEARVIEW DR Residential RC or S GRIFFITH PL ROSE AV END Residential RC or S
HANCOCK CT EASTVIEW DR END Residential RC or S
HAPPY ACRES RD SHANNON RD END (#333) Residential RC or S HIGH ST CYPRERSS WY #17621 Residential RC or S
JOHNSON AV LOMA ALTA AV NEW PAVEMEMT Residential RC or S LA RINCONADA DR WINCHESTER BLVD NATALYE RD Residential RC or S LA RINCONADA DR NATALYE RD CLEARVIEW DR Residential RC or S LITTLEFIELD LN ENGLEWOOD AV END Residential RC or S
LOMA ALTA AV LOS GATOS BLVD CYPRERSS WY Collector RC or S MARCHMONT DR ENGLEWOOD AV HILOW RD Residential RC or S
MARIPOSA AVE N SANTA CRUZ AV SAN BENITO AV Collector RC or S MARIPOSA CT SAN BENITO AV END Residential RC or S
MILMAR WAY CAMINO DEL CERRO ESCOBAR AV Residential RC or S MONTGOMERY ST LG‐SARATOGA RD (HWY‐9) ANDREWS ST Residential RC or S MONTEREY AV LG‐SARATOGA RD (HWY‐9) THURSTON ST Residential RC or S NALOR CT CLEARVIEW DR END Residential RC or S
NEW YORK AVE PLEASANT ST BELLA VISTA AV Residential RC or S OAK RIDGE WY BUENA VISTA AV WILD WY Residential RC or S OLIVE ST SAN BENITO AV N SANTA CRUZ AV Residential RC or S POPPY LN ROSE AV END Residential RC or S
POTTER CT FERRIS AV END Residential RC or S
ROBERTS RD N SANTA CRUZ AV UNIVERSITY AV Residential RC or S ROBERTS RD UNIVERSITY AV LEFT TURN BEND Residential RC or S ROBERTS RD LEFT TURN BEND BLOSSOM HILL RD Residential RC or S ROBIE LN SHANNON RD END Residential RC or S
ROSE AV TOWN LIMITS AT #16055 END Residential RC or S
ROSE AV #16017 #15940 Residential RC or S
SAN BENITO AV LG‐SARATOGA RD (HWY‐9) THURSTON ST Residential RC or S SAN BENITO AV THURSTON ST MARIPOSA AV Residential RC or S SAN BENITO WY BRUCE AV END OF #17641 Residential RC or S SAN MATEO AV SAN BENITO AV N SANTA CRUZ AV Residential RC or S SIMONS WY BELLA VISTA AV LOS GATOS BLVD Residential RC or S THURSTON ST SAN BENITO AV N SANTA CRUZ AV Residential RC or S TOPPING WY ENGLEWOOD AV HILOW RD Residential RC or S
TOURNEY RD FOSTER RD TOWN LIMIT Residential RC or S
The following project locations shall be considered for the FY 2021/22 Street Repair and Resurfacing project. Depending on the final design, cost estimates, and the budget available, some street segments may be deferred to the FY 2022/23 street project. 12/14/2021

TOWN OF LOS GATOS
Proposed Street List for FY 2021/22 Street Repair and Resurfacing Project (CIP NO. 811‐9901)

Page 1 of 3 ends

ATTACHMENT 1

Page 56 ends

Street From To Road Classification
Type of
Treatment
TOURNEY LP SPRING ST TOWN LIMIT Residential RC or S
VIA DE TESOROS BICKNELL RD END Residential RC or S
VILLA AV LIBRARY JACKSON ST Residential RC or S
WILD WY WINCHESTER BLVD END Residential RC or S
ASH CT CHIPPENDALE CT END Residential S or RC
CALLE EL PADRE CALLE MARGUERITA END Residential S or RC CALLE ESTORIA CALLE MARGUERITA END Residential S or RC
CALLE LOLITA CALLE MARGUERITA END Residential S or RC
CALLE MARGUERITA WEDGEWOOD AV WEDGEWOOD AV Residential S or RC CARLESTER DR CARLTON AV LESTER LN Residential S or RC
CARLTON AV LOS GATOS‐ALMADEN RD LESTER LN Collector S or RC CARLTON CT CARLTON AV END Residential S or RC
CARLTON WY CARLTON AV END Residential S or RC
CORINNE DR SUNRAY DR CHIRCO DR Residential S or RC
CHIPPENDALE CT BICKNELL RD END Residential S or RC
GREENDALE DR LONGRIDGE RD LG ALMADEN RD Residential S or RC HILOW RD SHANNON RD CARDINAL LN Residential S or RC
HOLLYCREST DR LONGRIDGE RD LG ALMADEN RD Residential S or RC MATTSON AV NEWVILLE DR ROXBURY LN Residential S or RC
NEWVILLE DR MORE AV WEDGEWOOD AV Residential S or RC
PLEASANT ST E. MAIN ST NEW YORK AV Residential S or RC SCARSBOROUGH WY MONTCLAIR RD CHIPPENDALE CT Residential S or RC SHIRE CT MONTCLAIR RD END Residential S or RC
SUMMIT WY WILD WY WILD WY Residential S or RC
ADRIAN PL WESTCHESTER DR END Residential CS
AURORA LN LOS GATOS‐ ALMADEN RD END Residential CS
BARBARA DR HERSHNER DR HOWES DR Residential CS
BLOSSOM GLEN WY CAMINO DEL CERRO CRAIG WY Residential CS BLOSSOM GLEN WY CRAIG WY CITY LIMITS Residential CS
BLOSSOM HILL RD GREENRIDGE TERR. CITY LIMITS Residential CS BLOSSOM HILL RD GREENRIDGE TERR. UNION AV Residential CS BROCASTLE WY NEWELL AV END Residential CS
BRIARWOOD WY CAMBRIAN VIEW WY ANNE WY Residential CS
CENTRAL AV OAK HILL WY CENTRAL CT Residential CS
CENTRAL AV OAK HILL WY END OF CURB AND GUTTER Residential CS CENTRAL CT END GROVE ST Residential CS
CRAIG WY BLOSSOM GLEN WY END Residential CS
DOVER ST WESTCHESTER DR BLOSSOM GLEN WY Residential CS
E. MAIN ST HIGHWAY 17 OVERPASS LOS GATOS BLVD Arterial CS ELENA WY NEWELL AV END Residential CS
FARM HILL WY GARDEN HILL DR END Residential CS
FOSTER RD RIGHT TURN BEND(BGNNNG OF CRB END Residential CS GARDEN HILL DR LARK AV GARDEN HILL DR Residential CS
GARDEN HILL DR FARM HILL WY IVY HILL Residential CS
GARDEN HILL DR IVY HILL LEFT TURN BEND Residential CS
GARDEN HILL DR LEFT TURN BEND COUNTY PARK GATE Residential CS GREEN HILL WY GARDEN HILL DR END Residential CS
GROVE ST CENTRAL CT OAK HILL WY Residential CS
HERSHNER CT HOWES DR END Residential CS
HERSHNER WY HERSHNER DR END Residential CS
HOLLY HILL WY GARDEN HILL DR END Residential CS
HOWES CT HOWES DR END Residential CS
HIGH SCHOOL CT CHURCH ST END Residential CS
IVY HILL WY GARDEN HILL DR END Residential CS
JO DR CARLTON AV END Residential CS
JOHNSON AV LOS GATOS BL(ONE WAY ENTRANCE FOSTER RD Residential CS JOHNSON AV FOSTER RD SPRING ST Residential CS
KENNEDY RD S. KENNEDY RD TERESITA WY Residential CS
KENSINGTON WY CAMBRIAN VIEW WY ANNE WY Residential CS
KENSINGTON WY ANNE WY PAV'T CHANGE @ CITY LIMIT Residential CS KINGSTON HILL WY GARDEN HILL DR END Residential CS

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Street From To Road Classification
Type of
Treatment
LESTER LN LOS GATOS‐ ALMADEN RD CARLESTER DR Collector CS LOMA VISTA CT LOS GATOS‐ ALMADEN RD END Residential CS
LONGRIDGE RD HOLLYCREST DR LESTER LN Residential CS
LOS GATOS BL HWY 9 CALDWELL AV Arterial CS
LOS GATOS BL CALDWELL AV NINO WY Arterial CS
LOS GATOS BL NINO WY MITCHELL AV Arterial CS
LOS GATOS BL MITCHELL AV BLOSSOM HILL RD Arterial CS
LOS GATOS BL BLOSSOM HILL RD FRANK AV Arterial CS
LOS GATOS BL FRANK AV CHIRCO DR Arterial CS
LOS GATOS BL CHIRCO DR GATEWAY DR Arterial CS
LOS GATOS BL GATEWAY DR LARK AV Arterial CS
LYNN AV UNION AV PINEHURST AV Residential CS
MARICOPA DR LONGRIDGE RD END Residential CS
NEWELL CT NEWELL AV END Residential CS
NEWELL AV NEWELL CT ELENA WY Residential CS
NEWELL AV ELENA WY WINCHESTER BL Residential CS
NOB HILL WY GARDEN HILL DR END Residential CS
OKA RD WIDTH CHANGE 836 FT N/O WIDTH CHANGE Residential CS OAK HILL WY JACKSON ST CENTRAL AV Residential CS
PINEHURST AV LOS GATOS‐ ALMADEN RD LYNN AV Residential CS PINEHURST AV LYNN AV BLOSSOM VALLEY WY Residential CS
ROSS CREEK CT LOS GATOS‐ ALMADEN RD END Residential CS
SHARON CT BLOSSOM GLEN WY END Residential CS
TEAKWOOD CT CASTLEWOOD DR END Residential CS
THOMAS DR HOWES DR UNION AV Residential CS
VERDE CT LOS GATOS‐ ALMADEN RD END Residential CS
VISTA DEL MONTE KENNEDY RD HARDING AV Residential CS
VISTA DEL MONTE HARDING AV VISTA DE SIERRA Residential CS VISTA DEL MONTE VISTA DE SIERRA SPRECKLES AV Residential CS WESTCHESTER DR CAMINO DEL CERRO BLOSSOM VALLEY DR Collector CS

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Key:

CS Crack seal
RC Rubber cape seal (chip seal with slurry seal)
S Slurry seal
Street From To Road Classification
Type of
Treatment
ANDREWS ST N SANTA CRUZ AV TOWN LIMITS Collector RC
ASHLER AV SAN BENITO AV N. SANTA CRUZ AV Residential RC BEAN AVE MASSOL AV END Residential RC
BELLA VISTA AV CHARLES ST NEW YORK AV Residential RC
CALLE EL PADRE CALLE MARGUERITA END Residential RC
CALLE ESTORIA CALLE MARGUERITA END Residential RC
CALLE LOLITA CALLE MARGUERITA END Residential RC
CALLE MARGUERITA WEDGEWOOD AV WEDGEWOOD AV Residential RC CHARLES ST BELLA VISTA AV LOS GATOS BLVD Residential RC CLARA ST LA RINCONADA DR GOLF LINKS DR Residential RC
ESCOBAR AV CAMINO DEL CERRO LG ALMADEN RD Residential RC ESCOBAR CT ESCOBAR AV END Residential RC
FANCHER CT SAN BENITO AV END Residential RC
GATEWAY DR LOS GATOS BLVD CARLTON AV Collector RC
GOLF LINKS DR CLARA ST CLEARVIEW DR Residential RC
GRIFFITH PL ROSE AV END Residential RC
HAPPY ACRES RD SHANNON RD END (#333) Residential RC
HIGH ST CYPRERSS WY #17621 Residential RC
JOHNSON AV LOMA ALTA AV NEW PAVEMEMT Residential RC
LA RINCONADA DR WINCHESTER BLVD NATALYE RD Residential RC LITTLEFIELD LN ENGLEWOOD AV END Residential RC
LOMA ALTA AV LOS GATOS BLVD CYPRERSS WY Collector RC
MARCHMONT DR ENGLEWOOD AV HILOW RD Residential RC
MARIPOSA AVE N SANTA CRUZ AV SAN BENITO AV Collector RC MARIPOSA CT SAN BENITO AV END Residential RC
MILMAR WAY CAMINO DEL CERRO ESCOBAR AV Residential RC
MONTGOMERY ST LG‐SARATOGA RD (HWY‐9) ANDREWS ST Residential RC MONTEREY AV LG‐SARATOGA RD (HWY‐9) THURSTON ST Residential RC NALOR CT CLEARVIEW DR END Residential RC
NEW YORK AVE PLEASANT ST BELLA VISTA AV Residential RC
OAK RIDGE WY BUENA VISTA AV WILD WY Residential RC
OLIVE ST SAN BENITO AV N SANTA CRUZ AV Residential RC
POPPY LN ROSE AV END Residential RC
POTTER CT FERRIS AV END Residential RC
ROBERTS RD N SANTA CRUZ AV UNIVERSITY AV Residential RC ROBERTS RD UNIVERSITY AV LEFT TURN BEND Residential RC
ROBERTS RD LEFT TURN BEND BLOSSOM HILL RD Residential RC ROBIE LN SHANNON RD END Residential RC
ROSE AV TOWN LIMITS AT #16055 END Residential RC
ROSE AV #16017 #15940 Residential RC
SAN BENITO AV LG‐SARATOGA RD (HWY‐9) THURSTON ST Residential RC SAN BENITO AV THURSTON ST MARIPOSA AV Residential RC
SAN MATEO AV SAN BENITO AV N SANTA CRUZ AV Residential RC SIMONS WY BELLA VISTA AV LOS GATOS BLVD Residential RC
THURSTON ST SAN BENITO AV N SANTA CRUZ AV Residential RC TOPPING WY ENGLEWOOD AV HILOW RD Residential RC
TOURNEY RD FOSTER RD TOWN LIMIT Residential RC
TOURNEY LP SPRING ST TOWN LIMIT Residential RC
VIA DE TESOROS BICKNELL RD END Residential RC
VILLA AV LIBRARY JACKSON ST Residential RC
WILD WY WINCHESTER BLVD END Residential RC
ASH CT CHIPPENDALE CT END Residential S
CHIPPENDALE CT BICKNELL RD END Residential S
GREENDALE DR LONGRIDGE RD LG ALMADEN RD Residential S

TOWN OF LOS GATOS
Street List for FY 2021/22 Street Repair and Resurfacing Project (CIP NO. 811‐9901) 2/4/2022

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Street From To Road Classification
Type of
Treatment
HILOW RD SHANNON RD CARDINAL LN Residential S
HOLLYCREST DR LONGRIDGE RD LG ALMADEN RD Residential S
MATTSON AV NEWVILLE DR ROXBURY LN Residential S
NEWVILLE DR MORE AV WEDGEWOOD AV Residential S
PLEASANT ST E. MAIN ST NEW YORK AV Residential S
SCARSBOROUGH WY MONTCLAIR RD CHIPPENDALE CT Residential S SHIRE CT MONTCLAIR RD END Residential S
SUMMIT WY WILD WY WILD WY Residential S
ADRIAN PL WESTCHESTER DR END Residential CS
AURORA LN LOS GATOS‐ ALMADEN RD END Residential CS
BARBARA DR HERSHNER DR HOWES DR Residential CS
BLOSSOM GLEN WY CAMINO DEL CERRO CRAIG WY Residential CS BLOSSOM GLEN WY CRAIG WY CITY LIMITS Residential CS
BLOSSOM HILL RD GREENRIDGE TERR. CITY LIMITS Residential CS BLOSSOM HILL RD GREENRIDGE TERR. UNION AV Residential CS BROCASTLE WY NEWELL AV END Residential CS
BRIARWOOD WY CAMBRIAN VIEW WY ANNE WY Residential CS
CENTRAL AV OAK HILL WY CENTRAL CT Residential CS
CENTRAL AV OAK HILL WY END OF CURB AND GUTTER Residential CS CENTRAL CT END GROVE ST Residential CS
CRAIG WY BLOSSOM GLEN WY END Residential CS
DOVER ST WESTCHESTER DR BLOSSOM GLEN WY Residential CS
E. MAIN ST HIGHWAY 17 OVERPASS LOS GATOS BLVD Arterial CS ELENA WY NEWELL AV END Residential CS
FARM HILL WY GARDEN HILL DR END Residential CS
FOSTER RD RIGHT TURN BEND(BGNNNG OF CRB END Residential CS GARDEN HILL DR LARK AV GARDEN HILL DR Residential CS
GARDEN HILL DR FARM HILL WY IVY HILL Residential CS
GARDEN HILL DR IVY HILL LEFT TURN BEND Residential CS
GARDEN HILL DR LEFT TURN BEND COUNTY PARK GATE Residential CS GREEN HILL WY GARDEN HILL DR END Residential CS
GROVE ST CENTRAL CT OAK HILL WY Residential CS
HERSHNER CT HOWES DR END Residential CS
HERSHNER WY HERSHNER DR END Residential CS
HOLLY HILL WY GARDEN HILL DR END Residential CS
HOWES CT HOWES DR END Residential CS
HIGH SCHOOL CT CHURCH ST END Residential CS
IVY HILL WY GARDEN HILL DR END Residential CS
JO DR CARLTON AV END Residential CS
JOHNSON AV LOS GATOS BL(ONE WAY ENTRANCE FOSTER RD Residential CS JOHNSON AV FOSTER RD SPRING ST Residential CS
KENNEDY RD S. KENNEDY RD TERESITA WY Residential CS
KENSINGTON WY CAMBRIAN VIEW WY ANNE WY Residential CS
KENSINGTON WY ANNE WY PAV'T CHANGE @ CITY LIMIT Residential CS KINGSTON HILL WY GARDEN HILL DR END Residential CS
LESTER LN LOS GATOS‐ ALMADEN RD CARLESTER DR Collector CS LOMA VISTA CT LOS GATOS‐ ALMADEN RD END Residential CS
LONGRIDGE RD CARLTON AV LESTER LN Residential CS
LOS GATOS BL HWY 9CALDWELL AV Arterial CS
LOS GATOS BL CALDWELL AV NINO WY Arterial CS
LOS GATOS BL NINO WY MITCHELL AV Arterial CS
LOS GATOS BL MITCHELL AV BLOSSOM HILL RD Arterial CS
LOS GATOS BL BLOSSOM HILL RD FRANK AV Arterial CS
LOS GATOS BL FRANK AV CHIRCO DR Arterial CS
LOS GATOS BL CHIRCO DR GATEWAY DR Arterial CS
LOS GATOS BL GATEWAY DR LARK AV Arterial CS
LYNN AV UNION AV PINEHURST AV Residential CS
MARICOPA DR LONGRIDGE RD END Residential CS
NEWELL CT NEWELL AV END Residential CS
NEWELL AV NEWELL CT ELENA WY Residential CS
NEWELL AV ELENA WY WINCHESTER BL Residential CS

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Street From To Road Classification
Type of
Treatment
NOB HILL WY GARDEN HILL DR END Residential CS
OKA RD LARK AV UNDER THE FWY Residential CS
OAK HILL WY JACKSON ST CENTRAL AV Residential CS
PINEHURST AV LOS GATOS‐ ALMADEN RD LYNN AV Residential CS PINEHURST AV LYNN AV BLOSSOM VALLEY WY Residential CS
ROSS CREEK CT LOS GATOS‐ ALMADEN RD END Residential CS
SHARON CT BLOSSOM GLEN WY END Residential CS
TEAKWOOD CT CASTLEWOOD DR END Residential CS
THOMAS DR HOWES DR UNION AV Residential CS
VERDE CT LOS GATOS‐ ALMADEN RD END Residential CS
VISTA DEL MONTE KENNEDY RD HARDING AV Residential CS
VISTA DEL MONTE HARDING AV VISTA DE SIERRA Residential CS VISTA DEL MONTE VISTA DE SIERRA SPRECKLES AV Residential CS WESTCHESTER DR CAMINO DEL CERRO BLOSSOM VALLEY DR Collector CS

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TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 2/15/2022
ITEM NO: 8
DATE: February 4, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Annual Curb, Gutter, and Sidewalk Maintenance Project (CIP No. 813-9921):
a. Approve the Plans and Specifications;
b. Authorize Advertising the Project for Bid;
c. Authorize the Town Manager to Award and Execute a Construction Agreement in an Amount Not to Exceed $588,500, Including Contingencies; and
d. Authorize Staff to Execute Future Change Orders in an Amount Not to Exceed Ten Percent of the Contract Award Amount
RECOMMENDATION:

Staff recommends that the Town Council authorize the following actions for the Annual Curb, Gutter, and Sidewalk Maintenance Project (CIP No. 813-9921) for Fiscal Year (FY) 2021/22:
a. Approve the Plans and Specifications;
b. Authorize advertising the project for bid;
c. Authorize the Town Manager to award and execute a construction agreement in an amount not to exceed $588,500, including contingencies; and
d. Authorize staff to execute future change orders in an amount not to exceed ten percent of the contract award amount.

BACKGROUND:

The adopted Fiscal Year (FY) 2021/22-2025/26 Capital Improvement Program (CIP) Budget designates funding for the Curb, Gutter, and Sidewalk Maintenance Project (CIP No. 813-9921).

The goal of this annually funded project is to replace and improve damaged or outdated curbs, gutters, sidewalks, driveways, and curb ramps within the Town’s jurisdiction to address safety and operational issues and to improve accessibility. Project locations are primarily based on

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PAGE 2 OF 3
SUBJECT: Annual Curb, Gutter, and Sidewalk Maintenance Project (CIP No. 813-9921) DATE: February 4, 2022
BACKGROUND (continued):
where concrete infrastructure improvements are needed prior to the annual Street Repair and Resurfacing (CIP No. 811-9901). The project is consistent with the Town’s goals to improve public safety and the quality of the Town’s infrastructure.

DISCUSSION:

For the FY 2021/22 Curb, Gutter, and Sidewalk Maintenance (Concrete) Project, a large portion of the work focuses on replacing or retrofitting curb ramps for compliance with the Americans with Disabilities Act (ADA) and other accessibility requirements. Title II of the ADA obligates jurisdictions to upgrade non-conforming curb ramps when streets are resurfaced from one intersection to another. The United States Department of Justice has determined that surface treatments such asphalt overlay and rubber cape seal trigger the requirement for ADA compliant curb ramps on associated streets.

On December 21, 2021, the Town Council approved the street list for the Fiscal Year 2021/22 Street Repair and Resurfacing Project (CIP 811-9901). Based on this list, staff identified a total of 57 curb ramps that are anticipated to be replaced or retrofitted with this year’s Concrete Project. The Concrete Project also includes approximately 250 square feet of sidewalk and 75 linear feet of curb and gutter. The engineer’s estimate for this project is $588,500, which includes a 10% contingency.

The Plans and Specifications for the FY 2021/22 Curb, Gutter, and Sidewalk Maintenance Project can be viewed on the Town website at https://www.losgatosca.gov/108/CapitalImprovement-Program.

Once authorized by the Town Council to advertise for bid, the following is the anticipated schedule for the Concrete Project:

Milestones Anticipated Timeline
Advertise the Project for Bid February 18, 2022
Bids Due March 10, 2022
Award and Execute Agreement April 2022
Start Construction May 2022
Anticipated Completion August 2022
CONCLUSION:

Approval of the recommendations would allow staff to move forward with bidding and contract award for the FY 2021/22 Curb, Gutter, and Sidewalk Maintenance Project. This project would be constructed in advance of this year’s Street Repair and Resurfacing Project.

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PAGE 3 OF 3
SUBJECT: Annual Curb, Gutter, and Sidewalk Maintenance Project (CIP No. 813-9921) DATE: February 4, 2022
COORDINATION:

This project has been coordinated with the Finance Department.

FISCAL IMPACT:

The FY 2021/22 – 2025/26 CIP Budget for the Curb, Gutter, and Sidewalk Maintenance Project (CIP No. 813-9921), with the FY 2021/22 approved allocation of the Transportation Development Act (TDA) funds from the Metropolitan Transportation Commission in an amount of $62,884, would be sufficient for the construction contract, including contingency and project delivery costs.

Curb, Gutter, and Sidewalk Maintenance Project
CIP No. 813-9921
Budget Costs
GFAR $ 581,550
TDA Fund Allocation $ 62,884
Total Budget $ 644,434
Construction $ 535,000
Construction Contingency (10%) $ 53,500
Temporary/Part-Time Staff $ 30,000
Material Testing $ 20,000
Other Project Delivery Costs $ 5,934
Total Expenditures $ 644,434
Available Balance $ 0
Staff costs are tracked for all projects. Tracking of staff costs allows for accountability in the costs of projects, recovery of costs from grant funded projects, and identification of future staffing needs. This project utilizes a combination of full-time budgeted staff and temporary staff that support fluctuating workloads. The costs for temporary staff will be directly associated with this project while full-time staff are accounted for in the department’s operating budget.

ENVIRONMENTAL ASSESSMENT:

This is a project defined under CEQA as being Categorically Exempt [Section 15301(c) Existing streets, sidewalks, trails, and similar facilities]. A Notice of Exemption will be filed with the County.

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PREPARED BY: Dan Keller
Facilities & Environmental Services Manager
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Finance Director, and Director of Parks and Public Works
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 2/15/2022
ITEM NO: 9
DATE: February 9, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Execute a Certificate of Acceptance and Notice of Completion for the Engineering Building Tenant Improvement Project (20-821-2302), Completed by EMC Services Inc. DBA DesignTek Consulting Group LLC, and Authorize the Town Clerk to File for Recordation RECOMMENDATION:

Authorize the Town Manager to execute a Certificate of Acceptance and Notice of Completion for the engineering building tenant improvement project (20-821-2302), completed by EMC Services Inc. DBA DesignTek Consulting Group LLC, and authorize the Town Clerk to file for recordation (Attachment 1).

BACKGROUND:

The adopted Fiscal Year (FY) 2019/20-2023/24 Capital Improvement Program (CIP) Budget designates funding for a tenant improvement project in the engineering building.

On August 15, 2020, the Town Council approved the tenant improvement project in the engineering building and authorized the Town Manager to award a construction contract to EMC Services Inc. DBA DesignTek Consulting Group LLC, the lowest responsible bidder in an amount not to exceed $716,645.95 including construction contingencies.

DISCUSSION:

This project converted warehouse space to office space that is now occupied by both the Engineering Group and Maintenance Leads within the Parks & Public Works Department.

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PAGE 2 OF 3
SUBJECT: Authorize the Town Manager to Execute a Certificate of Acceptance and Notice of Completion for the Engineering Building Tennant Improvement Project (20-821-2302), Completed by EMC Services Inc. DBA DesignTek Consulting Group LLC and Authorize the Town Clerk to File for Recordation DATE: February 9, 2022
DISCUSSION (continued):

Five percent of the faithful performance bond will remain in effect for a period of two years as a guarantee for any needed repair or replacement caused by defective materials and/or workmanship for the project. The execution and recordation of the Certificate of Acceptance is now required to finalize the Town’s acceptance of the project CONCLUSION:

Authorize the Town Manager to execute a Certificate of Acceptance and Notice of Completion for the engineering building tenant improvement project (20-821-2302), completed by EMC Services Inc. DBA DesignTek Consulting Group LLC for a tenant improvement project in the engineering building and authorize the Town Clerk to file for recordation.

FISCAL IMPACT:

The fiscal table below reflects the updated project budget and the costs accrued to date for the Building Replacement at Corporation Yard.

Budget Costs
GFAR $2,051,781
Total Budget $2,051,781
Phase 1
Phase 1 Construction $775,700
Includes EMC Services Inc. DBA DesignTek Consulting Group LLC Phase 1 Non-Construction $398,955
Phase 2
Expenditures to Date $140,685
Total Expenditures $1,315,341
Remaining Budget $736,440
Building Replacement at Corporation Yard
Project 821-2302

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PAGE 3 OF 3
SUBJECT: Authorize the Town Manager to Execute a Certificate of Acceptance and Notice of Completion for the Engineering Building Tennant Improvement Project (20-821-2302), Completed by EMC Services Inc. DBA DesignTek Consulting Group LLC and Authorize the Town Clerk to File for Recordation DATE: February 9, 2022
ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and not further action was required.

Attachments:

1. Certificate of Acceptance and Notice of Completion

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ATTACHMENT 1
Recording Requested by:

TOWN OF LOS GATOS
WHEN RECORDED MAIL TO:

TOWN CLERK

TOWN OF LOS GATOS
110 E MAIN ST
LOS GATOS, CA 95030
______________________________________________________________________________ (SPACE ABOVE BAR FOR RECORDER’S USE)
(RECORD WITHOUT FEE UNDER GOVERNMENT CODE SECTIONS 27383 AND 6103)

TYPE OF RECORDING

CERTIFICATE OF ACCEPTANCE AND NOTICE OF COMPLETION
CIP NO. 821-2302 Engineering Building Tenant Improvement TO WHOM IT MAY CONCERN:

I do hereby certify that EMC Services Inc. DBA DesignTek Consulting Group LLC completed the work called for in the agreement with the Town of Los Gatos dated September 15, 2020. The work is outlined in the Town’s bid process prepared by the Town of Los Gatos and generally consisted of furnishing all labor, materials, tools, equipment, and services required for completion of the CIP No. 20-821-2302 located in the TOWN OF LOS GATOS, County of Santa Clara, State of California and was completed, approved and accepted October 27, 2021.

Bond No.: 800101039
Date: October 5, 2020

TOWN OF LOS GATOS
By: __________________________________
Laurel Prevetti, Town Manager
Acknowledgement Required

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ATTACHMENT 1

AFFIDAVIT
To Accompany Certificate of Acceptance and Notice of Completion CIP NO. 20-821-2302 Engineering Building Tennant Improvement I, LAUREL PREVETTI, the Town Manager of the Town of Los Gatos, have read the foregoing CERTIFICATE OF ACCEPTANCE AND NOTICE OF COMPLETION and know the contents thereof. The same is true of my own knowledge, except as to the matters which are therein alleged on information or belief, and as to those matters I believe it to be true.

I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed on _____________________, 2022 at Los Gatos, California. __________________________________________

LAUREL PREVETTI, TOWN MANAGER
Town of Los Gatos
RECOMMENDED BY:

Date: ____________________________
Matt Morley
Director of Parks and Public Works

APPROVED AS TO FORM:

Date: ____________________________
Robert Schultz, Town Attorney
Notary Jurat Required

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PREPARED BY: Arn Andrews
Assistant Town Manager
Reviewed by: Town Manager and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 02/15/2022
ITEM NO: 10
DATE: February 7, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Review and Approve the Senior Services Committee Recommended Mission and Vision Statement and Accompanying Workplan
RECOMMENDATION:

Review and approve the Senior Services Committee recommended Mission and Vision Statement and accompanying workplan.

BACKGROUND:

On October 25, 2021, the Senior Services Committee created three subcommittees including the Vision/Mission/Workplan (VMW) subcommittee. The VMW subcommittee is Chaired by Councilmember Hudes and includes committee members Picraux, Mlinarich, Rossmann, and Konrad.

The subcommittee met on multiple occasions and provided an overview of the initial draft VMW to the full committee on November 29, 2021. The subcommittee took committee and community input under advisement and on January 24, 2022 returned to the Committee with the VMW provided in Attachments 1 and 2. The full Committee voted unanimously to approve the VMW and forward the documents to the Town Council for review and approval.

CONCLUSION:

The Town Council should review the Senior Services Committee recommended Vision and Mission statements and the accompanying workplan.

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PAGE 2 OF 2
SUBJECT: Senior Services Committee Vision/Mission/Workplan DATE: February 7, 2022
COORDINATION:

This staff report was coordinated with the Town Manager, Town Attorney, and the Senior Services Committee.

FISCAL IMPACT:

None.

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

Attachments:

1. Vision and Mission Statement

2. Senior Services Committee Workplan

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DRAFT Ver. 2
Los Gatos Senior Services Committee

CREATING A COMMUNITY WHERE OLDER ADULTS THRIVE
VISION: Our vision is to create a community where older adults are engaged, valued and provided equitable opportunities to thrive in an environment that protects against isolation and promotes inclusion.

MISSION: Our mission is to provide an age-friendly community that:
● Provides resources and facilities for older adults to live full and healthy lives with volunteer and leadership opportunities that provide a sense of purpose, connection and belonging.
● Promotes physical activity and physical, cognitive, mental and spiritual health for socially enriching lives.
● Promotes adequate and healthy nutrition through community programs. ● Embraces walkable spaces with safe, accessible and affordable transportation.
● Promotes increased participation and communication with the older adult community.
● Partners with local agencies that provide services and assistance for older adults, creating a network that supports public information that delivers services in a coordinated and collaborative manner.
● Ensures accountability by measuring and monitoring the results of our efforts to provide services for older adults.

ATTACHMENT 1

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Los Gatos Senior Services Committee
Workplan 2021-2022_v2 DRAFT Ver. 2

1. Develop Vision, Mission and Workplan

2. Conduct Needs Assessments
a. Benchmarking survey (CASOA) of Los Gatos 60+ adults
b. Workshops to assess needs in-depth ← Council Checkpoint Feb, 2022
c. Benchmark comparisons to neighboring cities

3. Conduct analysis of assessment results, gaps, needs

4. Develop roadmap for older adult services
a. Goals - align each element with mission objectives
b. Validate identified goals ← Council Checkpoint June 21, 2022 i. Town Halls
ii. Opinion leaders
iii. Community outreach feedback
c. Develop preliminary financial and operational estimates d. Initiate study of long term facility needs
e. Initiate study of governance
f. Measure results for accountability

5. Conduct ongoing outreach and engagement activities
a. Media – print, email, web, KCAT, 55 Plus, …
b. Presentations – service clubs, organizations, Town events

6. Explore selected new initiatives for older adult services ← Council Checkpoint October 18, 2022
a. Volunteer club; Expanded volunteer coordination and postings b. Social clubs expansion
c. Service providers information network

7. Prepare Senior Services Annual Report and Develop Year 2 funding proposal← Council Checkpoint December 20, 2022
ATTACHMENT 2

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PREPARED BY: Stephen Conway
Finance Director
Reviewed by: Town Manager, Assistant Town Manager, and Town Attorney 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 02/15/2022
ITEM NO: 11
DATE: February 9, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Mid-Year Budget Report - July 1 - December 31, 2021:
a. Receive FY 2021/22 Mid-Year Budget Report;
b. Authorize Budget Adjustments as Recommended in the Mid-Year Budget Report; and
c. Adopt the Town Council and Management Classifications Salary Schedule Updated with the Urban Forest Manager Position.

RECOMMENDATION:

Staff recommends that the Town Council take the following actions regarding the Mid-Year Budget Performance Report - July 1 - December 31, 2021:
a. Receive FY 2021/22 Mid-Year Budget Report (Attachment 1); b. Authorize budget adjustments as recommended in the Mid-Year Budget Report; and c. Adopt the Town Council and Management Classifications Salary Schedule updated with the Urban Forest Manager Position (Attachment 2).

REMARKS:

The purposes of the Mid-Year Report (Attachment 1) are to provide the Town Council with a status of the adopted Fiscal Year (FY) 2021/22 Operating Budget after the first six months and to make any adjustments to ensure the continuity of municipal services and operations for the remainder of the fiscal year. The Report is one of several periodic updates to the Town Council on the status of the current year’s revenues and expenditures and the projected financial condition of all Town funds compared with the Adopted Operating Budget. The updates primarily focus on the Town’s General Fund. The analysis and recommendations are contained in Attachment 1.

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PAGE 2 OF 4
SUBJECT: Mid-Year Budget Performance Report – Six Months Ending December 31, 2021 DATE: February 9, 2022
REMARKS (continued):

Highlights of the Mid-Year Budget Report include:

Financial Overview and Executive Summary
As discussed in the Report, the projected deficit for FY 2021/22 is less than originally estimated due to projected increases in Educational Revenue Augmentation Funds (ERAF) property tax distributions and Transient Occupancy Tax (TOT). ln addition to the slight improvement in revenue projections, staff is estimating that there will be year-end operating expenditure savings. Staff anticipates savings attributable to Departmental vacancies and lower cost structures associated with retiree replacements. In addition, for FY 2021/22, salaries were again budgeted at actual salary plus a one step increase, which was a significant budgeting methodology change from previous practice. Current fiscal year-end projections for FY 2021/22 reflect an anticipated $1.4 million deficit of operating revenues over expenditures compared to the anticipated $1.9 million deficit in the Adopted Budget.

General Fund Revenue Analysis
The current forecast expects decreases in economically sensitive revenues such as sales tax, property tax, and franchise fee; however, transient occupancy tax, and revenues related to development activities are performing significantly better. Business license tax for the current fiscal year was budgeted anticipating the continued impact of lower gross retail activities and additional business license closures due to the pandemic and no adjustments are needed at this time. The combined recommended mid-year revenue adjustments total a net increase of $1.0 million. While staff conducted a detailed analysis of all General Fund revenues and provided the expected year-end estimates, only major revenue sources are recommended for adjustment at this time.

General Fund Expenditure Analysis
General Fund expenditure totals are trending in accordance with the Adjusted Budget, with total operational expenditures at the end of the second quarter at or about 47% of the Adjusted Budget. With six months of data now available, staff expects that the next six months of expenditures will be within the Adjusted Budget, although unexpected costs can still occur which may require future Council action. The staff analysis examines potential salary and other expenditure savings; however, budget adjustments are only recommended in certain instances as outlined in the next section of the Report. The recommended General Fund mid-year expenditure adjustments total a net increase of $0.5 million.

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PAGE 3 OF 4
SUBJECT: Mid-Year Budget Performance Report – Six Months Ending December 31, 2021 DATE: February 9, 2022
REMARKS (continued):

FY 2021/22 Recommended Budget Adjustments and Summary of Key Recommended Budget Adjustments
All recommended revenue and expenditure adjustments are contained in these sections along with a description of the major adjustments.

General Fund Financial Summaries and Estimates
This section introduces the Schedule of General Fund Operating Revenues Versus Operating Expenditures for the second quarter of FY 2021/22 which includes comparison information from the prior year.

Financial Summaries of Other Funds
This section provides financial summaries and presents data by governmental, proprietary, and fiduciary fund types. For each, the fund information starts with a beginning fund balance, adds current year revenues, and subtracts current year expenditures, resulting in an ending fund balance.

COORDINATION:

All Town Departments participated in the data collection and analysis that informed the preparation of the Mid-Year Report and proposed budget adjustments.

CONCLUSION AND NEXT STEPS:

Staff is continuing to monitor all revenues and expenditures during the preparation of the Proposed Operating and Capital Budgets for FY 2022/23. Should any additional budget adjustments be necessary to balance operating revenue and expenditures prior to the FY 2021/22 close, staff will advise the Council accordingly. The Draft FY 2022/23 Operating and Capital Budgets will be available in May with the budget hearing tentatively scheduled for May 17, 2022.

Staff recommends that the Town Council approve the proposed revenue and expenditure budget adjustments as described in Attachment 1 and adopt the updated Town Council and Management Classifications Salary Schedule (Attachment 2). In additon, staff looks forward to answering the Town Council’s questions.

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

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PAGE 4 OF 4
SUBJECT: Mid-Year Budget Performance Report – Six Months Ending December 31, 2021 DATE: February 9, 2022
Attachments:

1. Mid-Year Budget Report - July 1 - December 31, 2021.

2. Town Council and Management Classifications Salary Schedule

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1 TOWN OF LOS GATOS

MID-YEAR BUDGET REPORT
JULY 1 - DECEMBER 31, 2021
February 10, 2022
FINANCIAL OVERVIEW AND EXECUTIVE SUMMARY: STATUS OF FY 2021/22

ADOPTED BUDGET
The purposes of the Mid-Year Report are to provide the Town Council with a status of the Adopted Fiscal Year (FY) 2021/22 Operating Budget after the first six months and to make any adjustments to ensure the continuity of municipal services and operations for the remainder of the fiscal year. The Report is one of several periodic updates to the Town Council on the status of the current year’s revenues and expenditures and the projected financial condition of all Town funds compared with the Adopted Operating Budget. The updates typically focus on the Town’s General Fund.

On January 25, 2022, the Town Council determined the Strategic Priorities for 2022-2024, providing guidance to Town staff and Commissions on workload prioritization. The Town Council reaffirmed its Core Goals, including: Community Character, Good Governance, Fiscal Stability, Quality Public Infrastructure, Civic Enrichment, and Public Safety. In addition, the Council affirmed its ongoing commitments to the Strategic Priorities of Safety, Quality of Life, Traffic/Transportation, and Prudent Financial Management. Even with budgetary challenges associated with the COVID-19 pandemic, many of Council’s primary goals and priorities will continue to be programed in the FY 2022/23 Operating and Capital Budgets. Specifically, the Council would like continued progress on wildfire protection safety; emergency preparedness; semi-permanent parklets; diversity, equity, and inclusion; community policing; parking study implementation; and the General Plan update (see the following page).

Based on the Town Council’s identified Strategic Priorities, staff has started budget development work, including an update of the Five-Year Financial Forecast, identification of critical Town needs, contractual obligations, unfunded mandates, potential adjustments to the Fee and Fine Schedule, and other analyses. Staff is actively engaged in the FY 2022/23 budget process with the primary focus of ensuring that the available Town resources are allocated to meet the priority service needs of the community.

The Town Council is scheduled to hold a public hearing on the Proposed FY 2022/23 Budget on May 17, 2022.

Current fiscal year-end projections for FY 2021/22 reflect an anticipated $1.4 million deficit of operating revenues over expenditures compared to the anticipated $1.9 million deficit in the Adopted Budget.

ATTACHMENT 1

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3 As discussed in greater detail later in this Report, the primary drivers of the reduction in the projected deficit is projected increases in Educational Revenue Augmentation Funds (ERAF) property tax distributions and Transient Occupancy Tax (TOT). ln addition to the slight improvement in revenue projections, staff is estimating that there will be year-end operating expenditure savings. Staff anticipates savings attributable to Departmental vacancies and lower cost structures associated with retiree replacements. In addition, for FY 2021/22, salaries were again budgeted at actual salary plus a one step increase, which was a significant budgeting methodology change from previous practice.

On June 1, 2021, the Town Council, under advisement from the Finance Commission, adopted the use of $1,912,536 in American Recovery Plan Act (ARPA) funding to balance the FY 2021/22 budget. With the slight reduction in projected deficits into the close of FY 2021/22, staff recommends maintaining onetime ARPA revenue loss funding in the amount of $1,444,021 for budget balancing.

Providing services to the community in this and future fiscal years will require a strong return to prepandemic performance of the Town’s economically sensitive revenues to offset continued projected cost increases. The FY 2022/23 budget development process will endeavor to maintain essential public services while controlling operational costs in light of the five-year fiscal forecast, which predicts operating revenue shortfalls in subsequent fiscal years.

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4 CONTENT OVERVIEW
The remainder of this Report focuses on the General Fund and provides analyses of key revenues and expenditures, including historic data by Town Department/Service Area. The next section contains descriptions of recommended revenue and expenditure budget adjustments. The Report also includes financial summaries of other funds as well as a table of General Fund Operating Revenues Versus Operating Expenditures for the second quarter of FY 2021/22 which includes comparison information from the prior year.

GENERAL FUND - KEY REVENUE ANALYSIS FY 2021/22
The following information provides a recap of the General Fund budgeted significant revenue sources, including estimated year end collection as of the second quarter ending December 31, 2021. Staff is monitoring developments in each major revenue source closely for potential adjustments to budgeted revenues as recommended in this Report.

Property Tax and Motor Vehicle in Lieu Fee (VLF)
Property tax and VLF are the single largest revenue source for the Town and comprised approximately 43% of total Town General Fund projected revenues for FY 2021/22. Property tax is levied by the Santa Clara County Assessor’s Office at 1% of a property’s assessed value, of which the Town receives approximately 9.3 cents per dollar paid on property located within the municipal limits of Los Gatos. In compliance with Proposition 13, the assessed value of real property is based on the 1975/76 assessment roll value, adjusted by a 2% inflation factor thereafter. However, when property changes hands or new construction occurs, property is than reassessed at its current market value.

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5 The County of Santa Clara provides property tax collection updates and projections throughout the year.

The current County estimate indicates a modest deviation from budget of approximately $400,000. The decrease is attributed to the combination of lower than expected secured property tax estimates and increases to VLF, property transfer tax, and Educational Revenue Augmentation Fund (ERAF) estimates.

The Town has been monitoring ongoing developments regarding the distribution of excess ERAF funds.

A portion of property tax revenue goes to the ERAF to support local school districts. When the amount contributed to ERAF is more than the minimum cost of funding local schools, excess funds have traditionally been returned to the county, cities, and special districts. Five counties, including Santa Clara, have been using a redistribution allocation formula that has been contested by the State. The Town received the full amount for FY 2020/21; however, the Santa Clara County Assessor’s Office recommends budgeting only 70% of the FY 2021/22 projected number. The Adopted FY 2021/22 Budget included a $1.45 million ERAF estimate, 70% of the current ERAF base revenue estimate is $1.5 million.

Property tax distributions are largely received in the third and fourth quarters. Second quarter receipts are trending similar to those received during the second quarter of the previous fiscal year and are at 27% of budgeted totals. Based on current County projections, staff recommends a $405,333 decrease in estimated General Property Tax and Motor Vehicle in Lieu Fee collections.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
2nd Quarter Actual Revenues $ 4,604,788 $ 4,785,479 $ 4,785,479 $ 5,481,928 $ 5,761,081 Fiscal Year Total Actual Revenues $ 15,958,406 $ 17,321,346 $ 18,330,427 $ 19,878,834 Fiscal Year Total Estimated Revenues $ 19,630,853
Fiscal Year Budgeted Revenues $ 20,036,186
2nd Quarter Percent of Total 29% 28% 26% 28% 29%
Recommended Budget Revision $ 405,333
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
$22,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Property Tax and VLF - Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual Revenues Fiscal Year Total Actual Re venues

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6 Sales Tax
Sales tax is the second largest revenue source for the Town’s General Fund, accounting for 18% of budgeted General Fund projected revenues for FY 2021/22. The Town currently receives 1.125 cents for every 9.125 cents of sales tax paid per dollar on retail sales and taxable services transacted within Los Gatos, including the Town of Los Gatos residents’ approved ballot Measure G enacting a one-eighth cent (0.125%) district sales tax for 20 years.

Sales tax estimates are based on actual sales tax data and annual sales tax estimates for five years provided by the Town’s consultant, MuniServices. In addition to brick-and-mortar sales tax generation, the MuniServices estimates include several online sales tax projections. The 2018 Wayfair Decision resulted in e-commerce vendors utilizing the Amazon platform to collect sales tax based on destination; however, items shipped directly from Amazon fulfillment centers are collecting sales tax based on the point of distribution. Regular sales tax collected through online transactions are distributed through the Santa Clara County pool for which the Town receives a pro rata share of the sales tax generated in Santa Clara County for that particular quarter. The Town directly receives the one-eighth district tax portion of the sales tax generated by the residents of Los Gatos. Current total sales tax estimates include $7,069,045 ($144,495 decrease) in proceeds from regular sales tax and $1,173,733 ($209,404 increase) in proceeds from the Measure G one-eighth cent district tax. Actual receipts net of administrative fees collected by the State will be confirmed at the close of the fiscal year and per prior Council direction, the Measure G funds are allocated 50 % for capital improvement projects and 50% for operating expenses.

While FY 2021/22 second quarter receipts are trending slightly lower than in the same period last fiscal year, staff recommends a $64,919 budget increase to reflect the MuniServices current estimates.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
2nd Quarter Actual Revenues $ 2,662,601 $ 2,568,415 $ 2,755,208 $ 2,813,652 $ 2,556,341 Fiscal Year Total Actual Revenues$ 7,592,206 $ 8,158,152 $ 7,531,425 $ 7,933,604 Fiscal Year Total Estimated Revenues $ 8,242,778
Fiscal Year Budgeted Revenues $ 8,177,859
2nd Quarter Percent of Total 35% 31% 37% 35% 31%
Recommended Budget Revision $ 64,919
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Sales Tax & Measure G Tax - Quarterly and Annual
Revenues
5-Year History
2nd Quarter Actual Revenues Fiscal Year Total Actual Re venues

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7 Franchise Fees
Franchise fees are collected by the Town for the privilege of operating a utility service within Los Gatos, and as a fee in lieu of a business license tax. Franchise fees are currently received from Comcast for cable television, PG&E for gas and electric services, West Valley Collection and Recycling for solid waste collection services, and AT&T and Comcast for video services. Franchise fees represent 6% of projected General Fund revenues in FY 2021/22.

Historically, franchise payments are not remitted equally throughout the fiscal year; therefore, second quarter receipts are not necessarily predictive of future receipts. Total franchise fee revenues are trending slightly lower than those of the second quarter in FY 2020/21 especially in the cable franchise fee category. This decrease reflects the current trend of customers using multiple streaming platforms instead of traditional cable broadcast services. Staff recommends a $83,610 budget decrease to this revenue source.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
2nd Quarter Actual Revenues $ 832,583 $ 840,555 $ 864,849 $ 807,833 $ 968,181 Fiscal Year Total Actual Revenues $ 2,474,814 $ 2,475,916 $ 2,495,792 $ 2,499,463 Fiscal Year Total Estimated Revenues $ 2,597,630
Fiscal Year Budgeted Revenues $ 2,503,560
2nd Quarter Revenue Percent of Total 34% 34% 35% 32% 37% Recommended Budget Revision $ 83,610
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Franhise Fees - Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual Revenues Fiscal Year Total Actual Re venues

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8 Business License Tax
The Town requires all businesses located within Los Gatos and/or those that operate within Los Gatos to obtain a business license. The amount of business license tax paid by each business is based on its business activity. Fees for activities such as wholesale sales and manufacturing are charged on a sliding scale based on gross receipts, as is retail, with retail being capped at $975. These gross receipt activities account for approximately 25% of annual business licenses, while the remaining 75% are flat fee businesses. Annual renewal payments are due on January 2 of each year. Payments for new flat-feebased businesses are prorated by quarter.

Business license tax revenue for the current fiscal year was budgeted anticipating the continued impact of lower gross retail activities and additional business license closures due to the pandemic. In addition, Council authorized the omission of late business license penalties for all businesses in 2021. Staff anticipates collecting the majority of the business license revenue during the third quarter. Staff is closely monitoring the activities and will return with any recommended adjustments in May, and does not recommend any changes to this revenue source this time.

FY 17/18 FY 18/19 FY 19/20 FY 20/21
2nd Quarter Actual Revenues $ 199,045 $ 240,293 $ 60,500 $ 224,388 $ 167,942** Fiscal Year Total Actual Revenues $ 1,686,251 $ 1,526,894 $ 1,357,080 $ 1,386,943 Fiscal Year Total Estimated Revenues $ 1,250,000
Fiscal Year Budgeted Revenues $ 1,250,000
2nd Quarter Revenue Percent of Total 53% 53% 59% 16% 13% Recommended Budget Revision $ -
FY 21/22
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Business License Tax - Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual Revenues Fiscal Year Total Actual Re venues

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9 Transient Occupancy Tax
TOT is an important revenue source for the Town and comprises approximately 3% of total Town adjusted estimated revenues of $1.4 million for FY 2021/22. The Town levies a 12% transient occupancy tax (TOT) on all hotel and motel rooms within the municipal limits of Los Gatos. The 12% rate has been in effect since January 1, 2017, after the voters approved a ballot measure to increase in the TOT from 10% to 12% at the November 8, 2016 election.

The FY 2021/22 Adopted Budget modeled a slight increase to $900,000 in anticipated TOT revenues from $700,000 the prior year. The slight increase reflected significant uncertainty around the return of corporate travel and a continuation of slower leisure travel. Due to a significant rebound in leisure “staycation” travel, current TOT collections are trending higher than anticipated and average occupancy rates are rebounding as well.

Staff will continue to monitor this revenue source since current estimates do not fully reflect what effect, if any, the Omicron variant may have had on occupancy in late December and January. However, based on the current trend and occupancy data analysis staff is recommending a $479,960 budget increase.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
2nd Quarter Actual Revenues $ 917,019 $ 994,581 $ 910,806 $ 399,620 $ 711,861 Fiscal Year Total Actual Revenues $ 2,628,927 $ 2,692,043 $ 1,869,685 $ 1,044,820 Fiscal Year Total Estimated Revenues $ 1,400,000
Fiscal Year Budgeted Revenues $ 920,040
2nd Quarter Revenue Percent of Total 35% 37% 49% 38% 77% Recommended Budget Revision $ 479,960
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
TOT - Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual Revenues Fiscal Year Total Actual Re venues

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10 Interest Income
The Town earns interest income by investing monies not immediately required for daily operations in a number of fixed income and money market instruments. These investments are made within the parameters stated in the Town Council’s Investment Policy and State regulation. The Town’s investment goal is to achieve a competitive rate of return while maintaining sufficient liquidity and protecting the safety of its funds. Interest income revenue is primarily dependent on two factors: the cash balance in the Town’s investment portfolio and the yield on those funds.

As of December 31, 2021, the Town’s weighted portfolio yield was 1.20% which trended approximately 100 basis points above the Local Agency Investment Fund (LAIF) yield of 0.21%. This favorable yield differential to LAIF was primarily due to the LAIF portfolio’s lower weighted average maturity (WAM) of 338 days versus the Town’s longer WAM of 471 days. The Town’s weighted average rate of return of

1.20% at the close of the Second quarter was 42 basis points lower when compared to the Second quarter return of 1.62% in 2020.

Staff recommends no change to this revenue source at this time.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
2nd Quarter Actual Revenues $ 284,009 $ 422,729 $ 482,517 $ 343,813 $ 263,702 Fiscal Year Total Actual Revenues $ 603,017 $ 801,729 $1,145,538 $ 876,640 Fiscal Year Total Estimated Revenues $ 551,233
Fiscal Year Budgeted Revenues $ 551,233
2nd Quarter Revenue Percent of Total 47% 53% 42% 39% 48% Recommended Budget Revision
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Interest - Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual Revenues Fiscal Year Total Actual Revenues Fiscal Year Budgeted Revenues Fiscal Year Total Estimated Revenues

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11 Charges for Services
Town Service revenues consist primarily of planning, building, inspections, and engineering fees assessed on local building and development activity. Development fees and charges are assessed based on cost recovery formulas, which reflect approximate costs of providing these regulatory services. This category includes charges for the School Resource Officer and crossing guard services.

Second quarter Town Service revenues, specifically Charges for Services, are trending higher than in the second quarter compared to the previous fiscal year, with 93% of budgeted revenues already received.

Typically, development fees are collected in advance for projects and recognized as revenue in the fiscal year the work is performed. Staff recommends a $287,660 budget increase to reflect increased activities in planning and engineering services.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
2nd Quarter Actual Revenues $ 2,567,814 $ 2,905,238 $ 3,258,027 $ 3,691,233 $ 3,854,415 Fiscal Year Total Actual Revenues $ 4,625,136 $ 4,580,511 $ 4,447,213 $ 4,835,962 Fiscal Year Total Estimated Revenues $ 4,152,549
Fiscal Year Budgeted Revenues $ 3,860,490
2nd Quarter Revenue Percent of Total 56% 63% 73% 76% 93% Recommended Budget Revision $ 287,660
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Charges for Services - Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual Revenues Fiscal Year Total Actual Re venues

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12 Licenses and Permits
Licenses and Permits consist mainly of planning and building permit fees which are collected by the Town to offset administrative costs associated with evaluating development proposals to ensure compliance with codes and policies. Licenses and Permits revenue was budgeted slightly lower than FY 2020/21 in anticipation of slower development activity; however, actual development activities are higher in the current fiscal year.

Second quarter License and Permit revenue is trending 83% of budgeted revenue and higher than second quarter results from the previous fiscal year. Staff recommends a $433,128 increase to this revenue source.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
2nd Quarter Actual Revenues $ 1,498,864 $ 1,692,252 $ 1,584,098 $ 1,494,487 $ 2,180,000 Fiscal Year Total Actual Revenues $ 3,011,309 $ 3,067,994 $ 2,996,457 $ 2,999,711 Fiscal Year Total Estimated Revenues $ 3,065,997
Fiscal Year Budgeted Revenues $ 2,641,779
2nd Quarter Revenue Percent of Total 50% 55% 53% 50% 83% Recommended Budget Revision $ 433,128
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Licenses & Permits - Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual Revenues Fiscal Year Total Actual Re venues

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13 GENERAL FUND – EXPENDITURE ANALYSIS
For FY 2021/22, General Fund Operating expenditures (not including debt payment and transfers out) are programmed at $44.7 million. The delivery of Town services is highly dependent on talent which comprises 64% of budgeted General Fund expenditures for FY 2021/22. General Fund expenditure totals are trending in accordance with the Adjusted Budget, with total operational expenditures at the end of the second quarter at or about 47% of the Adjusted Budget. With six months of data now available, staff expects that the next six months of expenditures will be within the Adjusted Budget, although unexpected costs can still occur which may require future Council action.

As with most municipalities, services are provided directly by employees to the Town’s residents, businesses, and visitors. As a service delivery enterprise, the cost of salaries and benefits are a significant portion of the budget. As the table below illustrates, at mid-year, actual salaries are trending at 47% of budgeted salaries, while pension benefits and other benefits are trending at 45% and 44% respectively to the adjusted budget. The Town submits its entire annual amortization payment of the Town’s unfunded pension liability upfront in July as a cost savings measure, saving approximately $145,000 in interest expense. The Town traditionally booked the entire lump sum payment in July to reflect the unfunded liability payment. Starting in the current fiscal year, staff continued disbursement of the lump sum payment in July to take advantage of the interest savings; however, the expense will be booked monthly to accurately reflect staffing costs throughout the year.

Salaries and benefits savings are anticipated due to vacancies and reduced cost structure due to retirements. In addition, vacant positions are often filled with temporary unbenefitted positions, which translate into additional benefit savings. Actual vacancies during the course of the first half of fiscal year are illustrated in the table below.

FY 2020/21
Actuals
FY 2020/21
2Q
Q2% of
FY 2020/21
Actuals
Q2% of
FY 2021/22
Adjusted
Budget
FY 2021/22
2Q
FY 2021/22
Estimated
FY 2021/22
Adjusted
Budget
Salaries $ 20,213,047 $ 9,977,252 49% 47% $ 9,805,293 $ 20,599,803 $ 20,812,013 Pension Benefits $ 6,374,120 $ 5,127,995 80% 45% $ 3,259,216 $ 6,630,301 $ 7,316,731 Other Benefits $ 3,710,337 $ 1,853,907 50% 44% $ 1,868,661 $ 3,760,575 $ 4,228,303 Total Salary & Benefit $ 30,297,504 $ 16,959,154 56% 46% $ 14,933,170 $ 30,990,679 $ 32,357,047 FY 2020/21 Upfront Annual Payment to CalPERS in July 2020 $3,954,819 (not including ADP) - Booked in July 2020 FY 2021/22 Upfront Annual Payment to CalPERS in July 2021 $4,231,602 (not including ADP) - Booked Monthly General Fund Salaries & Benefits

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14 The pie chart below represents the Departmental proportion of Town General Fund estimated operating expenditures. The subsequent pages review program expenditures and any anticipated savings are provided for each program. Also provided are historical program costs, year over year (YOY) percentage changes in actual expenditures, and five-year average changes per the Finance Commission’s suggestion.

YOY percentage changes are, in many cases, impacted by the timing of one-time expenditures that occur during the fiscal year. Historical analysis has been provided in selected cases to provide explanations for some of the fluctuations between fiscal years. The FY 2021/22 Estimated figures also include analysis on potential salary and other expenditure savings; however, budget adjustments are only recommended as identified in this Report.

Department Position
Town Attorney Legal Administrative Asisstant Filled with Temp Administrative Services Emergency Manager
Administrative Services Administrative Technician Filled - Permanent Filled Community Development Planning Manager Filled Interim Filled - Permanent Community Development Assistant Planner Filled - Permanent Filled with Temp Filled Community Development Senior Planner Filled - Permanent Filled Community Development Associate Planner Filled - Permanent Vacant Police Police Dispatcher
Police Police Dispatcher
Police Police Dispatcher Filled
Police Police Dispatcher Filled - Permanent
Police Police Officer
Police Police Officer Filled
Police Police Officer Filled - Permanent Filled
Police Police Officer Filled - Permanent Vacant
Police Police Officer Filled - Permanent Vacant
Police Police Officer Filled - Permanent Vacant
Police Police Chief Filled - Permanent Vacant
Police Police Records & Communication Manager Filled - Permanent Police Police Record Specialist Filled - Permanent Vacant Parks & Public Works Streets Maintenance Worker Filled with Temp Filled with Trainee Parks & Public Works Administrative Assistant Filled - Permanent Vacant Library Library Specialist Filled - Permanent
Library Librarian Filled - Permanent
Library Senior Library Page Filled - Permanent Vacant - Filled with Temp Jul-21
Vacant
Vacant
Vacant
Dec-21
Vacant
Vacant
Vacant
Vacant
Vacant
Aug-21 Sep-21 Oct-21 Nov-21
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant Page 91
15 Town Council
The Town Council is the elected legislative body that represents the residents and provides policy direction for the delivery of services and capital improvements for the Town of Los Gatos. Town Council expenditures are trending lower than the same quarter in prior year. Staff anticipates less than $10,000 in expenditures savings in this program. Savings are anticipated in office supplies and medical benefits.

Staff does not recommend any expenditure budget adjustment in this program.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Second Quarter Actual Expenditures $ 94,520 $ 100,209 $ 112,711 $ 99,787 $ 91,800 Fiscal Year Total Actual Expenditures $ 193,183 $ 205,903 $ 206,163 $ 192,280 Fiscal Year Total Estimated Expenditure $ 193,559
Fiscal Year Budgeted Expenditures $ 202,891
Second Quarter Percentage of Total 49% 49% 55% 52% 45%
Recommended Budget Revision
YOY Percentage Changes -0.21% 6.58% 0.13% -6.73% 0.67%
5-year Average Percentage Change 0.09%
$-
$500,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Town Council - Quarterly and Annual Expenditures
5-Year History
Second Quarter Actual Expenditures Fiscal Year Total Actual Expenditures Fiscal Year Budgeted Expenditures Fiscal Year Total Estimated Expenditure

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16 Town Attorney
The Town Attorney is the legal advisor to the Town Council, Successor Agency to the former Redevelopment Agency, and Town staff. In this capacity, the office of the Town Attorney provides a wide range of legal services to ensure that Town actions and activities are legally sound. Town Attorney program expenditures are trending lower than the same quarter in the prior year. This program had a Deputy Attorney position that was vacated in March 2021 which remained unfilled and was reclassified to Legal Administrative Assistant which was filled as of 12/31/2021. The Town Attorney position was vacated as of January 1,
, 2022 with an anticipated filling of the position in Spring. Staff estimates approximately $115,000 expenditures savings in this program. Savings is anticipated in staff salaries and benefits, travel and training, and office supplies. Staff does not recommend any expenditure budget adjustment in this program.

The decrease from FY 2016/17 to FY 2017/18 is attributable to the Town’s legal expenses related to the North 40 lawsuit in FY 2016/17. In addition, beginning in FY 2018/19, all personnel costs that were previously budgeted in Internal Service funds were transferred to the General Fund. While overall expenditures did not increase, salary and benefit costs that were formerly reported as an Internal Service Fund expense effective with the change became a General Fund expense.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Second Quarter Actual Expenditures $ 158,095 $ 310,219 $ 296,424 $ 311,520 $ 226,341 Fiscal Year Total Actual Expenditures $ 354,205 $ 562,542 $ 559,010 $ 537,296 Fiscal Year Total Estimated Expenditure $ 554,137
Fiscal Year Budgeted Expenditures $ 669,733
Second Quarter Percentage of Total 45% 55% 53% 58% 34%
Recommended Budget Revision
YOY Percentage Changes -16.96% 58.82% -0.63% -3.88% 3.13% 5-year Average Percentage Change 8.10%
$-
$500,000
$1,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Town Attorney - Quarterly and Annual Expenditures
5-Year History
Second Quarter Actual Expenditures Fiscal Year Total Actual Expenditures Fiscal Year Budgeted Expenditures Fiscal Year Total Estimated Expenditure Page 93 17 Administrative Services
The Town Manager provides overall management, administration, and direction for the entire Town organization, reporting to the full Town Council. Administrative Services incorporates five key programs:

Town Manager’s Office, Clerk Department, Finance Department, Human Resources Department, and Information Technology.

Administrative Services program expenditures are trending lower than same quarter expenditures in prior year. While this program had some vacancies during the course of the first half of the fiscal year there is only one vacancy (Temporary Emergency Services Coordinator) as of December 31, 2021. That position is scheduled to be filled in late February. The Finance Director position was vacated as of January 1, 2022, and staff anticipates filling the position in March/April. Staff estimates approximately $200,000 expenditures savings in this program. Savings are anticipated in staff salaries and benefits, travel and training, and office supplies. Staff recommends $28,400 budget adjustments to cover additional executive recruitment expenses.

Beginning in FY 2018/19, all personnel that were previously budgeted in Internal Service funds were transferred to the General Fund. While overall expenditures did not increase, salary and benefit costs that were formerly reported as an Internal Service Fund expense effective with the change became a General Fund expense. This program budget includes a limited temporary position to assist the Town with its emergency preparedness and response operations since FY 2019/20.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Second Quarter Actual Expenditures $1,567,002 $2,069,839 $2,204,552 $2,467,813 $2,584,905 Fiscal Year Total Actual Expenditures $3,193,995 $3,931,807 $4,380,504 $4,667,995 Fiscal Year Total Estimated Expenditure $5,501,110
Fiscal Year Budgeted Expenditures $5,701,385
Second Quarter Percentage of Total 49% 53% 50% 53% 45%
Recommended Budget Revision $ 28,400
YOY Percentage Changes 11.55% 23.10% 11.41% 6.56% 17.85% 5-year Average Percentage Change 14.09%
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
$5,500,000
$6,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Administrative Services - Quarterly and Annual Expenditures 5-Year History
Second Quarter Actual Expenditures Fiscal Year Total Actual Expenditures Fiscal Year Budgeted Expenditures Fiscal Year Total Estimated Expenditure

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18 Community Development Services
The Community Development Department works with elected and appointed officials, other Departments, and the community to guide the physical growth, development, and preservation of the Town.

Community Development program expenditures are trending higher than the same quarter expenditures in prior year due to increased development activities in the Department Pass Through program. The Pass Through program collects the required developer deposits for various review services. The Town provides those services through consultants and the consultants are paid out of the applicant’s account.

At the close of a project, all remaining fees collected will be refunded to the applicant. This program has one vacancy (Associate Planner) as of December 31, 2021; however, the Planning Manager, Assistant Planner, Senior Planner positions were all partially vacant during the first half of the fiscal year. Staff anticipates approximately $360 000 expenditures savings in this program. Savings are anticipated in staff salaries and benefits, travel and training, and office supplies. Staff does not recommend any expenditure budget adjustment in the Community Development Department expenditure budget.

Community Development Department expenditures varies year to year based on the development activity and pass through services. FY 2020/21 and FY 2021/22 include one-time special project related services to the General Plan update.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Second Quarter Actual Expenditures $2,012,335 $2,104,258 $2,245,767 $2,589,502 $3,460,301 Fiscal Year Total Actual Expenditures $4,192,165 $4,577,495 $4,473,790 $4,994,391 Fiscal Year Total Estimated Expenditure $5,094,473
Fiscal Year Budgeted Expenditures $5,461,716
Second Quarter Percentage of Total 48% 46% 50% 52% 63%
Recommended Budget Revision
YOY Percentage Changes 9.50% 9.19% -2.27% 11.64% 2.00%
5-year Average Percentage Change 6.01%
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
$5,500,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Community Development - Quarterly and Annual Expenditures 5-Year History
Second Quarter Actual Expenditures Fiscal Year Total Actual Expenditures Fiscal Year Budgeted Expenditures Fiscal Year Total Estimated Expenditure

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19 Police Services
The Los Gatos-Monte Sereno Police Department provides Police services to the Town of Los Gatos and contractually to the City of Monte Sereno. The Department is committed to ensuring public safety with integrity, compassion, and professionalism, by providing exceptional law enforcement services, building community partnerships, and engaging the community in problem solving.

Staff is continuing to monitor Police service program revenues and expenditures. Staffing levels remain a challenge for the Police Department with dedicated ongoing recruitment for open positions. Whenever feasible, open positions are filled with trainees, per diems, and temporary employees until positions are filled. The Police Department does not anticipate any budgetary concerns at mid-year. Staff recommends $14,636 expenditure budget increase related to crossing guard services as explained in the next section of this report.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Second Quarter Actual Expenditures $ 7,197,220 $ 7,832,251 $ 8,504,636 $ 9,041,998 $ 8,266,574 Fiscal Year Total Actual Expenditures $ 14,423,554 $ 14,948,952 $ 15,793,815 $ 16,570,836 Fiscal Year Total Estimated Expenditure $ 17,289,979
Fiscal Year Budgeted Expenditures $ 17,376,333
Second Quarter Percentage of Total 50% 52% 54% 55% 48%
Recommended Budget Revision $ 14,636
YOY Percentage Changes 8.13% 3.64% 5.65% 4.92% 4.34%
5-year Average Percentage Change 5.34%
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Police - Quarterly and Annual Expenditures
5-Year History
Second Quarter Actual Expenditures Fiscal Year Total Actual Expenditures Fiscal Year Budgeted Expenditures Fiscal Year Total Estimated Expenditure

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20 Parks and Public Works Services
The Parks and Public Works Department constructs and maintains the Town’s public parks, facilities, roadways, right-of-way, and other infrastructure. Six organizational units work in coordination to achieve the Department’s overarching goal of ensuring the Town’s facilities are safe, functional, and attractive.

The Parks and Public Works services program expenditures are trending lower than prior year same quarter expenditures. This program had one vacancy (Maintenance Worker) that was filled with a temporary replacement in order to deliver services until vacancies were filled permanently. In addition, an Administrative Assistant position opened up during December due to a staff promotion. Staff is requesting the addition of an Urban Forest Manager position to manage the Town’s urban forest and fire safety program. Funding for the current fiscal year of the position is available from the tree replacement deposit fund while in future years the Department is proposing to reclassify the Town Arborist position as it becomes vacant.

Staff anticipates approximately $270,000 expenditures savings in this program. Savings are anticipated in fuel expenditures, travel and training, and office supplies. Staff recommends an expenditure budget increase of $171,936 attributed to the additional Urban Forest Manager position, increased costs in underground utility locator services, emergency storm responses, and safety measures as explained in the next section of this Report.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Second Quarter Actual Expenditures $3,422,553 $3,717,900 $3,864,874 $4,185,306 $4,020,953 Fiscal Year Total Actual Expenditures $7,099,527 $7,969,631 $8,139,106 $8,175,987 Fiscal Year Total Estimated Expenditure $8,332,422
Fiscal Year Budgeted Expenditures $8,605,418
Second Quarter Percentage of Total 48% 47% 47% 51% 47%
Recommended Budget Revision $ 171,936
YOY Percentage Changes 7.07% 12.26% 2.13% 0.45% 1.91%
5-year Average Percentage Change 4.76%
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Parks and Public Works - Quarterly and Annual Expenditures 5-Year History
Second Quarter Actual Expenditures Fiscal Year Total Actual Expenditures Fiscal Year Budgeted Expenditures Fiscal Year Total Estimated Expenditure

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21 Library Services
The Los Gatos Library fosters curiosity and community connection and strives to be at the heart of an engaged and vibrant community.

Library services program expenditures are trending lower than prior year same quarter expenditures.

This program has one vacancy (Senior Library Page) as of as of December 31, 2021. Staff anticipates approximately $160,000 expenditures savings in this program. Savings are anticipated in temporary employee salaries, travel and training, and office supplies. Staff recommends a $9,000 budget increase to authorize spending of a State Library Grant received by the Department and no other adjustments at this time.

FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Second Quarter Actual Expenditures $1,289,625 $1,280,179 $1,404,285 $1,445,899 $1,365,415 Fiscal Year Total Actual Expenditures $2,529,017 $2,493,617 $2,700,802 $2,828,873 Fiscal Year Total Estimated Expenditure $2,886,606
Fiscal Year Budgeted Expenditures $3,053,708
Second Quarter Percentage of Total 51% 51% 52% 51% 45%
Recommended Budget Revision $ 9,000
YOY Percentage Changes 0.80% -1.40% 8.31% 4.74% 2.04%
5-year Average Percentage Change 2.90%
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22
Library - Quarterly and Annual Expenditures
5-Year History
Second Quarter Actual Expenditures Fiscal Year Total Actual Expenditures Fiscal Year Budgeted Expenditures Fiscal Year Total Estimated Expenditure

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22 FY 2021/22 RECOMMENDED BUDGET ADJUSTMENTS
Budget adjustments are recommended for the following revenues and expenditures at the second quarter as described below:

Fund Program Account
111 1201 411XX Property Tax $ (480,475) Based on Santa Clara County Property Tax Estimates 2/6/2022 111 1201 41141 Motor Vehicle In Lieu Fee 75,142 Based on Santa Clara County Property Tax Estimates 2/6/2022 111 1201 41211 Sales & Use Tax (144,495) Based on MuniServices Most Probable Sales Tax Estimates 111 1221 41214 Measure G - District Sales Tax 209,414 Based on MuniServices Most Probable Sales Tax Estimates 111 1201 41311 Transient Occupancy Tax 479,960 Funds Received 111 1201 41612 Cable Franchise Fees (83,610) Funds are not Received 111 3201 42413 Planning Permit 100,000 Funds Anticipated 111 3201 44412 Plan Check 25,000 Funds Anticipated
111 3301 45111 Planning Administration Citation 10,000 Funds Received 111 4202 43336 Prop 172 - Public Safety Sales Tax 65,400 Based on MuniServices Most Probable Sales Tax Estimates 111 4302 44512 Crossing Guards' Services 11,660 Funds Anticipated 111 4815 43525 Tobbacco Grant 7,000 Funds Anticipated
111 5202 42514 Encroachment Permits 300,000 Funds Anticipated 111 5202 45127 Engineering Services 150,000 Funds Anticipated 111 5202 44417 Engineering Review Services 50,000 Funds Anticipated 111 5202 42511 Grading Inspection 35,000 Funds Anticipated 111 5301 42511 OMP- Reservation Fees 53,128 Funds Anticipated 111 5301 42512 OMP- Parking Fee (20,000) Funds are not Received 111 5401 44627 Arborist Reimbursement Fee 16,000 Funds Anticipated 111 5401 From Tree Replacement Deposit 105,000 Funds are Available 111 7801 43343 Public Library Fund Grant 9,000 Matching Expenditure TOTAL GENERAL FUND REVENUES $ 973,124
Fund Program Account
111 1201 62113 Town Share of Retiree Medical $ 220,000 Funds are not Expended 111 1201 63219 Special Sudies - Business Tax Ordinance Review 20,000 Funds are not Expended 111 1201 63219 Special Sudies - Council Retreat 20,000 Funds are not Expended 111 1201 63219 Special Sudies - NUMU Antique Map 20,000 Funds are not Expended 111 1201 63219 Compensation Study 15,300 Funds are not Expended 111 2201 63213 Additional Executive Recruitment Services 28,400 Funds are not Expended 111 4302 63342 Crossing Guards' Services 14,636 Funds are Partially Expendd 111 5202 63356 Underground Utility Locator 15,000 Funds are not Expended 111 5401 63364 Underground Utility Locator 10,000 Funds are Partially Expendd 111 5301 61224 Playgorund Safety Equipment 3,027 Funds are Expended 111 5301 62379 Civic Center Fountain - Safety Enhancements 25,638 Funds are not Expended 111 5401 62379 Emergency Storm Responses 13,271 Funds are Expended 111 5401 5**** Urban Forest Manager 105,000 Funds are not Expended 111 7801 61172 Youth Collections 9,000 Matching Revenue TOTAL GENERAL FUND EXPENDITURES $ 519,272
FY 2021/22MID-YEAR BUDGET ADJUSTMENT REQUESTS - GENERAL FUNDS General Fund Revenues
General Fund Expenditures
Fund Program Account Other Fund Revenues
711
711 7301 45452 Additional Donation Received 15,000 Funds Received $ 15,000
TOTAL OTHER FUNDS REVENUES $ 15,000
411
411 411-xxx-xxxx 82405 Recreation Center HVAC Update 160,000 From Available GFAR balance 411 411-812-0130 82405 224 West Main to Below Market Housing Fund 1,498,776 From Available GFAR balance $ 1,658,776
612
2202 63323 Increase to Excess Claim Experience 42,000
From Available Workers Compensation Internal Service Fund Balance
$ 42,000
633
633 5404 62371 Theathre Needs 20,000 From Available Facilities Maintenance Internal Service Fund $ 20,000
711
711 7301 62424 Additional Donation Received 5,000 Funds are not Expended $ 5,000
TOTAL OTHER FUNDS EXPENDITURES $ 1,725,776
FY 2021/22 MID-YEAR BUDGET ADJUSTMENT REQUESTS - OTHER FUNDS Facilities Maintenance
Workers Compensation
Library Trust Fund
GFAR
Library Trust

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23 SUMMARY OF KEY RECOMMENDED BUDGET ADJUSTMENTS
 General Property Tax and Motor Vehicle in Lieu Fee: Staff recommends a decrease in projected revenues of approximately $480,475 in General Property Tax and an increase of $75,142 Motor Vehicle in Lieu fee which are in line with the estimates and forecasts provided to the Town from Santa Clara County.
 Sales and Use Tax: Staff recommends a $144,495 budget decrease to reflect current sales tax trends based on MuniServices most likely projections.
 Measure G – District Sales Tax: Staff recommends a $209,414 budget increase to reflect the current trends of the one-eight cent sales tax based on MuniServices most likely projections.  Transient Occupancy Tax (TOT): Staff recommends a $479,960 budget increase based on the current trends.
 Cable Franchise Fee: Staff recommends a decrease in projected revenues of approximately $83,610 in cable franchise fee based on current activities and trends.  Planning Permit Fee: Staff recommends a $100,000 budget increase based on the current planning activities.
 Plan Check Fee: Staff recommends a $25,000 budget increase based on the current plan check activities.
 Planning Administration Citation: Staff recommends a $10,000 budget increase based on the current administrative citation revenue received.
 Prop 172 – Public Safety Sales Tax: Staff recommends a $65,400 budget increase to reflect the current trends of the Prop 172- Public Safety Sales Tax based on MuniServices projections.  Crossing Guard Services: The Town Council approved an agreement with All City Management Services, Inc. (ACMS) to provide crossing guard services at selected school crossing locations in the Town of Los Gatos. The Town contracts with ACMS and the expenses for Crossing Guard services are shared between the Town, Los Gatos Union School District, and Union School District. Town expenditures for the contract account for approximately twenty percent of the annual cost. Staff recommends a revenue budget increase of $11,660 and a corresponding expenditure increase of $14,636.
 Tobacco Enforcement Grant: Staff recommends a $7,000 revenue budget increase to recognize the receipt of Tobacco Enforcement Grant funds.
 Encroachment Permits: Staff recommends a revenue budget increase of $300,000 to recognize increased developments happening in Town.
 Engineering Services: Staff recommends a revenue budget increase of $150,000 to recognize increased developments happening in Town.

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24  Engineering Review Surcharge: Staff recommends a revenue budget increase of $50,000 to recognize increased developments happening in Town.
 Grading Inspection: Staff recommends a revenue budget increase of $35,000 to recognize increased developments happening in Town.
 Oak Meadow Park Reservation Fees: Staff recommends a revenue budget increase of $53,128 to recognize the ongoing increased parks reservations during COVID.  Oak Meadow Park Parking Fee: Staff recommends a decrease in the Oak Meadow Park Parking fee revenue in the amount of $20,000 to recognize the inability to fill a booth attendant position.

Staff is in the process of procuring a pay station that will integrate with the Town’s current parking enforcement efforts.
 Arborist Reimbursement Fee: Staff recommends a revenue budget increase of $16,000 to recognize increased arborist review related to development projects.  Town Share of Retiree Medical: Staff recommends an expenditure budget increase of $220,000 to recognize increased cost related the retiree medical services due to additional recent retirements.
 Special Studies: Staff recommends an expenditure budget increase of $75,730 to cover the cost for special studies related to the Business Tax Ordinance Review, Council Retreat, NUMU Antique Map, and Compensation Study.
 Executive Recruitments Services: Staff recommends an expenditure budget increase of $28,400 to cover additional executive recruitment services.
 Arborist Reimbursement Fee: Staff recommends a revenue budget increase of $16,000 to recognize increased arborist review related to development projects.  Underground Utility Locator: Staff recommends an expenditure budget increase of $25,000 in multiple programs to recognize the increased construction activities in the first half of the fiscal year.
 Playground Safety Equipment: Staff recommends an expenditure budget increase of $3,027 to recognize the playground equipment installation needed to replace broken/hazardous equipment at Bachman Park.
 Civic Center Fountain – Safety Enhancements: Staff recommends an expenditure budget increase of $25,638 to recognize an increase in the contract amount and also for extra charges for the Plaza Fountain due to re-starting it after the COVID shutdown.  Emergency Storm Responses: Staff recommends an expenditure budget increase of $13,271 to recognize urgent expenditures during late December storms.

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25  Urban Forest Manager: Staff recommends an expenditure budget increase of $105,000 for the addition of an Urban Forest Manager position to manage the Town’s urban forest and fire safety program. Funding for the current fiscal year of the position is available from the tree replacement deposit fund while in future years the Department is proposing to reclassify the Town Arborist position as it becomes vacant. The Salary Schedule with the Urban Forest Manager classification is a separate attachment to this agenda item.

Other Fund Revenues and Expenditures
 Adult Recreation Center HVAC Cooling System: Staff recommends a $160,000 expenditure budget increase from available General Fund Appropriated Reserve balance for replacing failing HVAC units in the Adult Recreational Center.
 224 West Main Property: Staff recommends an expenditure budget increase of $1,498,776 to transfer the original Redevelopment money utilized for the purchase of the 224 West Main Property for development for low and moderate housing. Since low/mod housing has not been developed on the property as of 12/31/2021, staff recommends transferring the $1,498,776 to the Below Market Housing Deposit account for future development of low/mod housing. Funds are being drawn down from the available $1,460,210 Reserve for Parking and an additional $29,568 GFAR balance.
 Workers Compensation Activities: The Town is self-insured for workers’ compensation claims up to the first $250,000 of expenses per employee claim related to medical treatment and disability payments. Individual employee claims that exceed $250,000 in cost are fully insured through the Town’s excess insurance carrier. The annual premium cost is determined by the history of claim payments for the Town and also by the other local agencies that participate in the joint powers authority pool for the same amount of excess insurance. Based on the recent claims experience and increased costs related to two older claims for former Town employees, the annual premium was more than anticipated when preparing the annual budget. Staff is requesting an adjustment of $42,000 to replenish the workers’ compensation program insurance premium from the available Workers Compensation Fund balance.
 Theatre Needs: Staff recommends a $20,000 expenditure budget increase from available Facilities Maintenance Internal Service Fund balance for additional expenses related to the Los Gatos Theatre Building for startup of the facility – roof repair, fire system inspection, elevator inspection, fire and building alarm costs.
 Library Trust programming: Library Trust consists of funds that are received from philanthropic donation from the non-profit fundraising organization Friends of the Los Gatos Library. Due to impacts from COVID-19, the Friends normal fundraising operations were greatly reduced resulting in lower anticipated donated amount in the budget; however, the Friends were able to donate an additional of $15,000 this year. Staff anticipated spending $5,000 of the additional donation in the current fiscal year.

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26 American Rescue Plan Act (ARPA) Fund:

The FY 2001/22 budget was adopted prior to the receipt of American Rescue Plan Act (ARPA) funds.

Accounting procedures require the revenue to be recognized in the newly established ARPA Special Revenue Fund. ARPA adopted revenue and usage budgeted for FY 2021/22 is being reclassified to the ARPA Fund. Council approved ARPA funded expenses will be recorded as an expenditure in the ARPA Fund and as ARPA income replacement in the program ultimately receiving the revenue with the appropriate budget adjustments. The table below summarize the budget adjustment required to reclassify this revenue.

Fund Program Account
111 1201 43217 ARPA - Intergovernmental Revenue (2,844,315) Reclassification to ARPA Fund 111 5301 43217 ARPA - Intergovernmental Revenue (45,070) Reclassification to ARPA Fund 633 5404 43217 ARPA - Intergovernmental Revenue (261,382) Reclassification to ARPA Fund 731 7301 43217 ARPA - Intergovernmental Revenue (35,000) Reclassification to ARPA Fund 241 1241 43217 ARPA - Intergovernmental Revenue 3,185,767 Reclassification from General Fund $ -
111 1201 67109 (296,382) Reclassification to ARPA Fund
241 1241 68219 ARPA - Income Replacement Expense 296,382 Reclassification from General Fund $ -
American Rescue Plan Act (ARPA) Fund
ARPA - Grant Expense
FY 2021/22 MID-YEAR BUDGET ADJUSTMENT REQUESTS - ARPA RECLASSIFICATION

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27 GENERAL FUND FINANCIAL SUMMARIES AND ESTIMATES
The following table is the Schedule of General Fund Operating Revenues Versus Operating Expenditures for the second quarter of FY 2021/22 which includes comparison information from the prior year.

The FY 2021/22 Adjusted Budget column includes the adopted budget and items that Council approved during the course of the first two quarters of the fiscal year, such as additional funding for special studies, salary adjustments for Police Dispatchers, and miscellaneous carry over grants from prior fiscal year.

The FY 2021/22 Estimated column contains projections of final balances for the current fiscal year based upon staff analysis, the early trends observed through the second quarter in sales tax and property tax projections, and the proposed mid-year adjustments as listed in this report.

The FY 2021/22 Estimated figures also include analysis on potential salary and other expenditure savings; however, budget adjustments are only recommended as identified in this Report.

Staff continues to fine tune the detailed analysis of the FY 2021/22 year-end estimated revenue and expenditure numbers and an update will be provided with the presentation of the Proposed Fiscal Year 2022/23 Operating Budget.

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28 FY 2020/21 FY 2020/21
Q2% of
FY 2019/20
Q2% of
FY 2020/21 FY 2021/22 FY 2021/22 FY 2021/22
Actuals Q2 Actuals Adjusted
Budget
Q2 Adjusted
Budget
Estimated YE
Including
Mid-Year
Proposed
Revenues
Property Tax $ 15,826,162 $ 5,481,928 34.6% 36.3% $ 5,761,081 $15,881,866 $15,401,391 VLF Backfill Property Tax 4,052,672 - 0.0% 0.0% - 4,154,320 4,229,462 Sales & Use Tax 6,794,218 2,429,968 35.8% 29.7% 2,143,460 7,213,540 7,069,045 Measure G Sales & Use Tax 1,139,386 383,684 33.7% 42.8% 412,881 964,319 1,173,733 Franchise Fees 2,499,463 807,883 32.3% 37.3% 968,181 2,597,630 2,503,560 Transient Occupancy Tax 1,044,820 399,620 38.2% 77.4% 711,861 920,040 1,400,000 Business License Tax 1,386,943 224,388 16.2% 13.4% 167,942 1,250,000 1,250,000 Licenses & Permits 2,999,711 1,494,487 49.8% 82.5% 2,180,000 2,641,779 3,065,997 Intergovernmental 1,573,697 818,352 52.0% 9.5% 370,615 3,881,836 1,130,125 Town Services 4,835,962 3,691,233 76.3% 100.5% 3,854,415 3,834,579 4,152,549 Fines & Forfeitures 103,467 31,638 30.6% 58.4% 118,809 203,450 218,120 Interest 876,460 (1,485,278) -169.5% -15.4% (85,001) 551,233 551,233 GASB 31 to Market (780,399) 517,744 -66.3% 114.7% (126,168) (110,000) (110,000) Use of Property 36,372 - 0.0% - - -
Miscellanious Other 335,906 1,367,206 407.0% 24.4% 153,036 626,631 964,163 Park Construction Tax 14,921 - 7,680 7,000 8,280
Debt Service - Entry Eliminated for ACFR 1,908,494 - 0.0% 0.0% - 1,899,850 1,899,850 ARPA Income Replacement - Entry Eliminated for ACFR 79,176 Proceeds for Sales of Assets 1,201,369 - 0.0% -
Fund Transfer In 652,056 104,659 16.1% 16.5% 104,659 633,352 633,352 Total Revenues & Transfers In $ 46,580,856 $16,267,512 35% 36% $16,743,451 $47,151,425 $45,540,860 Use of Other Funding Sources:

Use of Reserves - Capital/Special Projects - Capital $ 3,401,479 $ - 0.0% 0.0% $ - $ 550,000 $ 550,000 Use of Reserves - Capital/Special Projects - Other $ 250,596 $ 250,596 Use of Reserve - Pension/OPEB $ 4,532,500
Use of Reserve - Accumulated Measure G - - - 590,581 590,581 Use of Reserves - Surplus Property - - - 1,200,000 1,200,000 Use of ARPA - Income Replacement - 1,444,021
Use of ARPA - Community Grants 550,000
Total Other Funding Sources $ 7,933,979 $ - 0% 0% $ - $ 3,141,177 $ 4,035,198 Total Revenues and Use of Reserves $ 54,514,835 $16,267,512 30% 33% $16,743,451 $50,292,602 $49,576,058 Expenditures
Town Council $ 192,280 $ 99,787 51.9% 45.2% 91,800 $ 202,891 $ 193,559 Attorney 537,296 311,520 58.0% 33.8% 226,341 669,733 554,137 Administrative Services 4,667,995 2,467,813 52.9% 45.3% 2,584,905 5,701,385 5,501,110 Non- Departmental 8,642,563 4,437,554 51.3% 32.0% 1,159,874 3,628,466 4,046,008 Community Development 4,994,391 2,589,502 51.8% 63.4% 3,460,301 5,461,716 5,094,473 Police 16,570,836 9,041,998 54.6% 47.6% 8,266,574 17,376,333 17,289,979 Parks & Public Works 8,175,987 4,185,306 51.2% 46.7% 4,020,953 8,605,418 8,332,422 Library 2,828,873 1,445,899 51.1% 44.4% 1,356,415 3,053,708 2,886,606 Capital Outlay 2,365 - - - -
Total Department Expenditures $ 46,612,586 $24,579,379 53% 47% $21,167,163 $44,699,650 $43,898,294 Debt Service - Entry Eliminated for ACFR $ 1,908,494 $ - 0.0% 0.0% $ - $ 1,899,850 $ 1,899,850 ARPA Income Replacement - Entry Eliminated for ACFR $ 79,176 Transfers Out 3,401,479 - 0.0% 0.0% - 2,801,047 2,801,047 Total Additional Non-Departmental Expenditures $ 5,389,149 $ - 0% 0% $ - $ 4,700,897 $ 4,700,897 Total Operating Expenditures $ 52,001,735 $24,579,379 47% 43% $21,167,163 $49,400,547 $48,599,191 Allocate to Budget Stabilization/Catastrophis Reserve 65,764 Allocate to Compensated Absences 110,509
Allocate to Surplus Property Reserve 1,200,000
Allocate to Sale of Property Reserve 5,302
Allocate to Pension/OPEB Reserve 300,000
Allocate to Measure G - Capital 482,160 586,867
Allocate to Restricted Pension Trust 390,000 390,000
Excess (Deficiency) of Revenues Over Expenditures $ 831,525 $ (8,311,867) * $ (4,423,712) * $ 19,895 $ -

SUMMARY OF REVENUES AND EXPENDITURES

GENERAL FUND
*FY 2020/21 and FY 2021/22 Q2 Net Operating Revenues are negative because some revenues budgeted for the entire fiscal year are received in the third or fourth quarters and fund expended in the first or second quarters.
** FY 2021/22 General Fund Budget included the ARPA revenue receipt, now the ARPA revenue is budgeted in a Special Revenue Fund.

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29 FINANCIAL SUMMARIES OF OTHER FUNDS
The group of financial summaries on the following pages present data by governmental, proprietary and fiduciary fund types. For each, the fund information starts with a beginning fund balance, adds current year revenues, and subtracts current year expenditures, resulting in an ending fund balance. Adopted budget amounts are provided as a basis for comparison of actuals to date.

Special Revenue Funds (Governmental Fund Type)
Special Revenue Funds account for the proceeds derived from specific revenue sources that are legally restricted or assigned to special purposes. The Town’s Special Revenue Funds are Community Development Block Grant Fund, Housing Conservation Program Fund, Urban Runoff Source Fund (NonPoint Source), and several Landscaping Lighting District (LLD) Funds, and the Newly established American Recovery Program Act (ARPA) Fund. Staff recommends designating ARPA funding as a special revenue fund instead of the recognizing it in the General Fund. This requires revenue budget decreases/increases in the amount of $3,185,767 for General Fund and In the ARPA Special Revenue Fund respectively and expenditure budget decreases/increases in the amount of $296,382 for the General Fund and ARPA Special Revenue Fund respectively.

CDBG Non-Point LLD's
Grants Source ARPA
Beginning Fund Balance $ 166,654 $ 371,240 $ 172,355 $ - Budgeted Revenues - 231,323 39,680 3,185,767
Total Actual Revenues - 2nd Qtr $ - $ 96,385 $ - $ 3,413,961 Budgeted Expenditures - 221,044 100,199 296,382
Total Actual Expenditures - 2nd Qtr - 97,568 11,896 -
2nd Quarter Ending Fund Balance $ 166,654 $ 370,057 $ 160,459 $ 3,413,961 Special Revenue Funds
Budget to Actuals Comparisons

Page 106 ends

30 Capital Projects Funds (Governmental Fund Type)
Capital Projects Funds account for resources used for the acquisition and construction of capital facilities by the Town. Funds in this category are the GFAR (General Fund Appropriated Reserve) Fund, Traffic Mitigation Fund, Grant Funded CIP Projects Fund, Utility Underground Fund, Gas Tax Fund, and three Storm Drain Funds. Staff recommends budget adjustment in the amount of $160,000 for the Adult Recreation Center HVAC Improvements and the Redevelopment funding of $1,658,776 used for the purchase of the 224 W Main Property to be transferred to the Below Market Housing Program deposit account. Staff will continue to monitor these revenues and expenditures throughout the remainder of the year. The Grant Funded CIP fund displays a deficit balance because this grant fund expends Town dollars first, then provides documentation of these expenditures to the State of California or other granting agencies and is reimbursed for those costs. The reimbursements eventually result with the fund “breaking even” or a zero fund balance.

GFAR* Traffic * Grant Funds* Storm Utility Gas
Fund Mitigation CIP Drains Undergd Tax
Beginning Fund Balance $ 15,433,836 $ 2,322,525 $ (699,244) $ 2,917,689 $ 3,201,310 $ 1,425,095 Budgeted Revenues 7,393,484 1,026,219 7,907,473 104,540 52,490 1,401,865 Total Actual Revenues - 2nd Qtr 1,742,745 159,207 895,330 177,314 34,562 598,329 Budgeted Expenditures 20,620,538 1,441,246 7,854,224 659,447 348,003 2,650,576 Total Actual Expenditures - 2nd Qtr 4,558,512 159,207 1,200,646 39,248 427 868,215 2nd Quarter Ending Fund Balance $ 12,618,069 $ 2,322,525 $ (1,004,560) $ 3,055,755 $ 3,235,445 $ 1,155,209 Capital Project Funds
Budget to Actuals Comparisons
* GFAR, Traffic Mitigation, and Grant Funds balances are combined in the ACFR. The combined balance of $15,115,912 is presented as an Appropriated Reserve. The Traffic Mitigation Fund balance includes $1,951205 deferred revenue.

Page 107 ends

31 Internal Service Funds (Proprietary Fund Type)
Internal Service Funds finance and account for special activities and services performed by a designated Town Department for other Town Departments on a cost reimbursement basis. Included in this fund type are the Equipment Replacement Fund, Workers’ Compensation Fund, Joint Powers Authority Pooled Liability Network (PLAN) Self-Insurance Fund, Information Technology Fund, and the Facilities Maintenance Fund.

Staff recommends a $20,000 expenditure budget adjustment to cover additional expenses related to the donated Los Gatos Theatre building. In addition, staff recommends expenditure adjustments in amount of $42,000 from the available Workers’ Compensation Fund to provide for the excess insurance premium due to increased claim activities. Staff will continue to monitor expenditures and propose a revised cost allocation if needed during the FY 2022/23 budget preparation.

Equipment Workers Self Information Facility
Replacemt Compensation Insurance Technology Maint.

Beginning Fund Balance $ 1,889,536 $ 1,673,019 $ 1,021,082 $ 2,870,823 $ 156,341 Budgeted Revenues 570,957 1,007,620 423,332 914,018 1,181,297 Total Actual Revenues - 2nd Qtr 317,925 602,947 200,987 509,809 475,412 Budgeted Expenditures 808,083 1,782,569 850,716 1,064,959 1,203,193 Total Actual Expenditures - 2nd Qtr 46,960 1,039,436 703,807 644,963 362,656 2nd Quarter Ending Fund Balance $ 2,160,501 $ 1,236,530 $ 518,262 $ 2,735,669 $ 269,097 Internal Service Funds
Budget to Actuals Comparisons

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32 Trust and Agency Funds (Fiduciary Fund Type)
Town Trust and Agency Funds have estimated fund balances as of December 31, 2021 of $570,185 for the Library Trust Funds and $243,825 for the Successor Agency (SA) Trust Fund. AB1x26 is the “Dissolution Bill” that eliminated the Town’s Redevelopment Agency effective February 1, 2012. AB 1484 is the “clean-up” bill that revised and attempted to clarify AB1x26. In accordance with the law, the Successor Agency continues to wind down the affairs and operations of the former Redevelopment Agency by implementing programs and activities in accordance with the State-approved Recognized Obligation payment Schedule (ROPS). The Successor Agency monies are now accounted for in a Private Purpose Trust fund and no longer part of the Town’s Financial Statements.

Staff recommends a $15,000 revenue budget increase and a $5,000 expenditure budget increase in the Library Trust to recognize and partially spend the additional donation received in the current fiscal year.

Library SA
Trust Trust
Beginning Fund Balance $ 552,877 $ 247,344
Budgeted Revenues 59,100 3,500
Total Actual Revenues - 2nd Qtr 30,167 1
Budgeted Expenditures 88,955 1,501,540
Total Actual Expenditures - 2nd Qtr 12,859 4,343
2nd Quarter Ending Fund Balance $ 570,185 $ 243,002
Trust & Agency Funds
Budget to Actuals Comparisons
* Certification of Participation Long Term Debt ($14,423,890) and net land and building value ($6,579,430) are not presented in the Fund Balance. FY 2022 transfer of Successor Agency property to the Town's BMP Housing Program not presented in the Fund Balance.

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Town of Los Gatos Town Council and Management Classifications Salary Schedule for Fiscal Year 2021/22
Effective June 27, 2021 (unless otherwise noted)
Adopted by Town Council February 15, 2022
Class
Code Classification Title Annual Salary Minimum
Annual
Salary
Maximum
2615 Assistant Parks & Public Works Director/Town Engineer $ 141,787 $ 191,413 2110 Assistant Town Manager $ 168,540 $ 227,529
2420 Chief Building Official $ 128,453 $ 173,411
2400 Community Development Director $ 164,425 $ 221,974 2180 Community Outreach Coordinator $ 88,692 $ 119,734
2130 Economic Vitality Manager $ 122,262 $ 165,054
2310 Finance and Budget Manager $ 128,453 $ 173,411
2300 Finance Director $ 160,419 $ 216,565
2200 Human Resources Director $ 148,965 $ 201,103
2900 Information Technology Manager $ 128,453 $ 173,411 2800 Library Director $ 148,965 $ 201,103
2820 Library Division Manager $ 97,899 $ 132,163
2600 Parks & Public Works Director $ 164,425 $ 221,974
2645 Parks & Public Works Operations Manager $ 110,764 $ 149,531 2630 Parks & Public Works Superintendent $ 128,453 $ 173,411 2412 Planning Manager $ 128,453 $ 173,411
2510 Police Captain $ 152,689 $ 206,130
2500 Police Chief $ 172,753 $ 233,217
2545 Police Records & Communication Manager $ 119,280 $ 161,028 2140 Senior Administrative Analyst $ 95,511 $ 128,940
2650 Senior Civil Engineer $ 122,262 $ 165,054
2000
Town Attorney - Council Appointed (Effective 9/19/21, Adopted by Town Council 11/16/21) $ 249,900
2190 Town Clerk $ 128,453 $ 173,411
2100
Town Manager - Council Appointed (Effective 8/22/21, Adopted by Town Council 11/16/21) $ 267,750
2655 Transportation & Mobility Manager $ 119,280 $ 161,028 2905 Urban Forest Manager (Classification Added 2/15/22) * $ 110,764 $ 149,531 1000
Town Council (Effective 1/1/19 Pursuant to Ordinance Adopted by Town Council on 2/6/18)
Management salaries reflect a spread of 35% to the top of the range.

Reflects a General Increase of 2%
*Proposed New Classification
$570 Stipend
per month, for
a total
compensation
of $6,840 per
year
7/1/21 Page 1 of 1 Proposed Amended 2/15/22
ATTACHMENT 2

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PREPARED BY: Stephen Conway
Finance Director
Reviewed by: Town Manager, Assistant Town Manager, and Town Attorney 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 02/15/2022
ITEM NO: 11

DESK ITEM
DATE: February 15, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Mid-Year Budget Report - July 1 - December 31, 2021:
a. Receive FY 2021/22 Mid-Year Budget Report;
b. Authorize Budget Adjustments as Recommended in the Mid-Year Budget Report; and
c. Adopt the Town Council and Management Classifications Salary Schedule Updated with the Urban Forest Manager Position.

RECOMMENDATION:

REMARKS:

On February 14, 2022, the Finance Commission received the FY 2021/22 Mid-Year Budget Report. After a brief presentation by staff, the Commission asked questions and provided input regarding the FY 2021/22 Mid-Year Budget Report. Below is a summary of the primary areas of review and comment provided by the Finance Commission.
 Commissioners asked about the transfer of funds for the 224 West Main property. Staff confirmed that it is an internal fund transfer and has no impact on the General Fund.  Commissioners asked about the recommended expense for the Los Gatos Theatre and anticipated future revenues for the Theatre. Staff explained that the two retail tenants

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PAGE 2 OF 3
SUBJECT: Mid-Year Budget Performance Report – Six Months Ending December 31, 2021 DATE: February 15, 2022
REMARKS (continued):
are providing monthly rent revenue and that the Request for Proposals that was issued for the operation and management of the Theatre is seeking a business model that will not require General Fund subsidies.
 Councilmembers and Commissioners inquired about the reduction in projected interest income. Staff confirmed that the reduction is predicated on lower estimated portfolio yields and not a factor of mark-to-market adjustments.
 Commissioners commented that the vacancy table appears to confirm that the Town routinely has about 10 to 12 vacancies throughout the year. Commissioners commented that the vacancy rate is consistent with typical organizational turnover.  Questions were asked regarding the potential savings associated with the vacancies.

Staff provided that vacancies have both a positive savings component and some offsetting increased costs. For example, savings associated with vacant sworn positions are partially offset by increased overtime to maintain sufficient staffing.

Savings associated with Dispatchers are partially offset by hiring contract Dispatchers.  Commissioners inquired about the debt service component of the revenue pie chart.

Staff described that the debt service is a passthrough component for the outstanding Certificates of Participation issuance for the Library and the former Redevelopment Agency Capital Projects. Corresponding expense offsets the revenue.  Commissioners asked if the retiree medical increase will be a continuing, ongoing increase in expenditures. Staff confirmed that it would be an ongoing increase in total healthcare funding. The recommended increase in retiree health care expense is partially offset by a reduced cost structure in new hires.  Commissioners commented that going forward proposed revenue and expenditure budget adjustments should be identified as ongoing or onetime in nature.

Commissioners commented that it will be important for Council to better understand which costs increase the total expenditure base relative to onetime additional costs.

Staff explained that the majority of the recommended adjustments are onetime with the exception of the Urban Forestry position and retiree medical.  Commissioners commented that some of the information contained in the Mid-Year staff report would be helpful with the development of the Commission’s Key Performance Indicators (KPIs).
 Commissioners inquired if the Urban Forest Manager position was the only Full Time Equivalent position addition. Staff confirmed that it was the only recommended staffing addition.
 A Councilmember inquired if staff agreed with a member of the public’s written statement regarding a “structural deficit of $3.1 M for FY 2022” (see Attachment 3).

Staff clarified that the public’s analysis incorrectly included a $2.8 M transfer to the General Fund Appropriated Reserve (GFAR). Transfers out from the General Fund to GFAR are for one-time infrastructure projects and not an ongoing obligation. The

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PAGE 3 OF 3
SUBJECT: Mid-Year Budget Performance Report – Six Months Ending December 31, 2021 DATE: February 15, 2022
projected deficit is approximately $1.4 M for FY 2021/22 and the Council has allocated American Rescue Plan Act (ARPA) funds to cover this amount.  Councilmembers and Commissioners acknowledged that while the transfer may be considered a onetime accounting expense, the Council should identify additional ongoing budgeted funds for capital improvements to maintain Town assets.  A Councilmember suggested that capital funding should at a minimum cover asset depreciation.
 A Councilmember commented that given the continued reduction in Transient Occupancy Tax revenues, the use of ARPA funds is appropriate currently; however, future potential structural deficits will ultimately need to be addressed.

There were no verbal public comments on the Mid-Year Budget Report.

Attachments previously received with the Staff Report:

1. Mid-Year Report: July 1 – December 31, 2021

2. Town Council and Management Salary Schedule
Attachment received with this Desk Item:

3. Public Comment Received by the Finance Commission

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ATTACHMENT 3

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economically sensitive revenues to offset the continue to projected cost increases”. This raises the question, what happens if this doesn’t happen and the cost of providing critical services such as safety services continues to accelerate? What then is the plan? Thank you.

Phil Koen

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SUMMARY OF REVENUES AND EXPENDITURES

Page 114 ends

Item 6.
43,641 010
Adj Ren
agar
on
Structural Deficit e

Page 116 ends

Achieving a Structurally Balanced Budget
https://www.gfoa.org/materials/achieving-a-structurally-balanced-budget[2/13/2022 10:05:08 AM] Most state and local governments are subject to a requirement to pass a balanced budget. However, a budget that may fit the statutory definition of a "balanced budget" may not, in fact, be financially sustainable. For example, a budget that is balanced by such standards could include the use of nonrecurring resources, such as asset sales or reserves, to fund ongoing expenditures, and thus not be in structural balance. A true structurally balanced budget is one that supports financial sustainability for multiple years into the future. A government needs to make sure that it is aware of the distinction between satisfying the statutory definition and achieving a true structurally balanced budget.

GFOA recommends that governments adopt rigorous policies, for all operating funds, aimed at achieving and maintaining a structurally balanced budget. The policy should include parameters for achieving and maintaining structural balance where recurring revenues are equal to recurring expenditures in the adopted budget.

As a first step, the government should identify key items related to structural balance. These include:
recurring and non-recurring revenues, recurring and non-recurring expenditures, and reserves.

Recurring revenues are the portion of a government's revenues that can reasonably be expected to continue year to year, with some degree of predictability. Property taxes are an example of recurring revenue. A settlement from a lawsuit is a good example of non-recurring revenue.

Home / Best Practices / Achieving a Structurally Balanced Budget

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Achieving a Structurally Balanced Budget
Adopt rigorous policies, for all operating funds, aimed at achieving and maintaining a structurally balanced budget
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Achieving a Structurally Balanced Budget
https://www.gfoa.org/materials/achieving-a-structurally-balanced-budget[2/13/2022 10:05:08 AM] Some revenue sources may have both non-recurring and recurring components. These sources require finance officials to exercise judgment in determining how much of the source is truly recurring. For instance, a government may regularly receive sales tax revenues, but a large part of its base may be made up of retailers with highly volatile sales. In this case, it may be prudent to regard unusually high revenue yields as a non-recurring revenue under the assumption that such revenues are unlikely to continue, making it imprudent to use them for recurring expenditures. Another example might be building permit revenues in a period of high growth in the community. Governments should review their revenue portfolio to identify non-recurring revenues and revenues with potentially volatile components, such as the examples above.

Recurring expenditures appear in the budget each year. Salaries, benefits, materials and services, and asset maintenance costs are common examples of recurring expenditures. Capital asset acquisitions are typically not thought of as recurring because although some capital assets may be acquired every year, they are not the same assets year after year. In general, recurring expenditures should be those that you expect to fund every year in order to maintain current/status quo service levels. In general, a government has a greater degree of flexibility to defer non-recurring expenditures than recurring ones.

Reserves are the portion of fund balance that is set aside as hedge against risk. The government should define a minimum amount of funds it will hold in reserve.2 This serves as a "bottom line measure" to help determine the extent to which structural balance goals are being achieved. If reserves are maintained at their desired levels, it is an indication that the organization is maintaining a structurally balanced budget. If reserves are declining, it may indicate an imbalance in the budget (e.g., if reserves are being used to fund on-going expenditures). It should be noted that reserves levels are not a perfect measure of structural balance, but are a good and readily available measure.

With the forgoing terms defined, a government should adopt a formal policy calling for structural balance of the budget. The policy should call for the budget to be structurally balanced, where recurring revenues equal or exceed recurring expenditures. The policy should also call for the budget presentation to identify how recurring revenues are aligned with or not aligned with recurring expenditures.3 For a variety of reasons, true structural balance may not be possible for a government at a given time. In such a case, using reserves to balance the budget may be considered but only in the context of a plan to return to structural balance, replenish fund balance, and ultimately remediate the negative impacts of any other short-term balancing actions that may be taken. Further, the plan should be clear about the time period over which returning to structural balance, replenishing reserves, and remediating the negative impacts of balancing actions are to occur.4
Notes:

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Achieving a Structurally Balanced Budget
https://www.gfoa.org/materials/achieving-a-structurally-balanced-budget[2/13/2022 10:05:08 AM] Note that this Best Practice excludes non-operating funds like capital and debt funds. While governments should ensure that these funds are financially sustainable as well, the specific recommendations found in this Best Practice may not always be a match to the circumstances of non-operating funds.

Please note that the best practice is not advocating that recurring revenues be formally allocated or "earmarked" to recurring expenditures, but rather is advocating that the budget presentation provide transparency as to whether recurring revenues and recurring expenditures are balanced.

Board approval date: Tuesday, February 28, 2012
Additional resources
116th GFOA Annual Conference

MORE INFO

Page 119 ends

Achieving a Structurally Balanced Budget
https://www.gfoa.org/materials/achieving-a-structurally-balanced-budget[2/13/2022 10:05:08 AM]

RESEARCH
The Rethinking Budgeting Initiative

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Distinguished Budget Presentation Award Program

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BEST PRACTICES
Website Posting of Financial Documents Page 120
Achieving a Structurally Balanced Budget
https://www.gfoa.org/materials/achieving-a-structurally-balanced-budget[2/13/2022 10:05:08 AM]

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Page 121 ends

PREPARED BY: Arn Andrews
Assistant Town Manager
Reviewed by: Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 02/15/2022
ITEM NO: 12
DATE: February 8, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Receive American Rescue Plan Act Update
RECOMMENDATION:

Receive American Rescue Plan Act update.

BACKGROUND:

On March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law by President Biden. The $1.9 trillion package (the Act) provides financial aid to families, governments, businesses, schools, non-profits and others impacted by the COVID-19 public health crisis. On May 10, 2021, the Secretary of the Treasury (Treasury) published an Interim Final Rule to outline the initial implementation of the Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund (CLFRF) established under the American Rescue Plan Act. Based on ARPA distribution guidelines provided to the States, the Town is slated to receive $7,229,744 of which the first tranche payment of $3,614,872 was received on July 13, 2021.

DISCUSSION:

On January 6, 2022, the United States Department of the Treasury adopted the final rule for implementing the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program under the American Rescue Plan Act (ARPA). The final rule takes effect on April 1, 2022, and provides state and local governments with even broader flexibility to pursue a wider range of uses to respond to local public health and economic needs. In addition, the final rule provides greater simplicity so recipients can focus on responding to the needs in their communities and maximizing the impact of their funds. An overview of the final rule can be found in Attachment

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PAGE 2 OF 4
SUBJECT: ARPA Update
DATE: February 8, 2022
DISCUSSION (continued):

Prior to April 1, 2022, recipients may take actions and use funds in a manner consistent with the final rule, and Treasury will not take action to enforce the Interim final rule if a use of funds is consistent with the terms of the final rule, regardless of when the SLFRF funds were used.

Of note, the final rule offers a standard allowance for revenue loss of up to $10 million, allowing recipients to select between a standard amount of revenue loss or continue to complete the prior revenue loss calculation. Recipients that select the standard allowance may use that amount for government services, with streamlined reporting requirements.

The rule provides that government services generally include any service traditionally provided by a government. Following are some examples provided by Treasury:
 Construction of schools and hospitals
 Road building and maintenance, and other infrastructure  Health services
 General government administration, staff, and administrative facilities  Environmental remediation
 Provision of police, fire, and other public safety services (including purchase of fire trucks and police vehicles)
In addition to the clarity that the final rule brings to the guidance for use of ARPA funds, there have been additional Town Council allocations and changes to previous allocations. The table on the next page provides an overview of ARPA commitments/allocations to date. While staff tracks Council allocations and commitments for accounting purposes, ARPA funding does not need to be expended until December 31, 2024 and can remain fluid until that time. As an example, the FY 2020/21 Budget projected utilizing $1.3 million in ARPA funding to replace lost revenue yet at the close of the year, the funding was no longer required. Currently the adopted FY 2021/22 Budget anticipated $1.9 million in ARPA funding for lost revenue, yet the mid-year budget projections also indicate a slight decrease ($468, 515) in ARPA reliance.

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PAGE 3 OF 4
SUBJECT: ARPA Update
DATE: February 8, 2022
DISCUSSION (continued):

Original
Allocations
Current
Allocations/
Commitments
Estimated ARPA Funds $7,229,744 $7,229,744
Replace Lost Revenue FY 20/21 - $1,362,910
FY 21/22 - $1,912,536
$0.0
$1,444,021
Economic Development
• Parklets
• CUP Fee waiver
• ADA Fee Waiver
• Destination Marketing
• K-Rail
• Promenades
Totals
$930,000
$50,000
$25,000
$55,000
$25,000
$80,000
$1,165,000

$930,000
$50,000
$25,000
$55,000
$25,000
$80,000
$1,165,000
Nonprofit/Community Assistance
• Rent Waiver
• Direct Grants
• Enhanced Senior Services
Totals
$341,452
$110,000
$500,000
$951,452
$341,452
$110,000
$500,000
$951,452
Total Allocations $5,391,898 $3,560,473
Total ARPA Funds Unallocated $1,837,846 $3,669,271
As the table illustrates, ARPA funding for lost revenue replacement was originally 61% of the total ARPA allocation and has since reduced to 40% of the total ARPA allocation to date. These shifts have resulted in an increase in unallocated funds for future use. Allocations to economic recovery efforts comprise about 33% of total allocations to date of which 90% of the economic vitality investments directly benefit downtown Los Gatos.

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PAGE 4 OF 4
SUBJECT: ARPA Update
DATE: February 8, 2022
DISCUSSION (continued):

Nonprofit and community assistance comprised almost 27% of total allocations to date.

CONCLUSION:

Staff will continue to monitor Treasury ARPA compliance guidance and report any subsequent impacts. In addition, as development of the Proposed Operating Budget proceeds, staff will return to Council with any potential changes affecting previously allocated ARPA funding for revenue loss. Through the budget process, Council may wish to maintain flexibility as there is no urgency to spend these funds and the Town may face budgetary challenges going into FY 2022/23.

COORDINATION:

This staff report was coordinated with the Town Manager, Town Attorney, and Finance Director.

FISCAL IMPACT:

None
ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

Attachments:

1. Final Rule Overview

Page 125 ends

Coronavirus State & Local
Fiscal Recovery Funds:

Overview of the Final Rule
U.S. DEPARTMENT OF THE TREASURY
January 2022
ATTACHMENT1

Page 126 ends

2 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
The Overview of the Final Rule provides a summary of major provisions of the final rule for informational purposes and is intended as a brief, simplified user guide to the final rule provisions.

The descriptions provided in this document summarize key provisions of the final rule but are non-exhaustive, do not describe all terms and conditions associated with the use of SLFRF, and do not describe all requirements that may apply to this funding. Any SLFRF funds received are also subject to the terms and conditions of the agreement entered into by Treasury and the respective jurisdiction, which incorporate the provisions of the final rule and the guidance that implements this program.

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3 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Contents
Introduction ..................................................................................................................................................4 Overview of the Program..............................................................................................................................6 Replacing Lost Public Sector Revenue ..........................................................................................................9 Responding to Public Health and Economic Impacts of COVID-19.............................................................12 Responding to the Public Health Emergency..........................................................................................14 Responding to Negative Economic Impacts............................................................................................16 Assistance to Households ...................................................................................................................17 Assistance to Small Businesses...........................................................................................................21 Assistance to Nonprofits.....................................................................................................................23 Aid to Impacted Industries..................................................................................................................24 Public Sector Capacity.............................................................................................................................26 Public Safety, Public Health, and Human Services Staff .....................................................................26 Government Employment and Rehiring Public Sector Staff...............................................................27 Effective Service Delivery....................................................................................................................28 Capital Expenditures...............................................................................................................................30 Framework for Eligible Uses Beyond those Enumerated .......................................................................32 Premium Pay ...............................................................................................................................................35 Water & Sewer Infrastructure ....................................................................................................................37 Broadband Infrastructure ...........................................................................................................................39 Restrictions on Use .....................................................................................................................................41 Program Administration .............................................................................................................................43

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4 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Introduction
The Coronavirus State and Local Fiscal Recovery Funds (SLFRF), a part of the American Rescue Plan, delivers $350 billion to state, local, and Tribal governments across the country to support their response to and recovery from the COVID-19 public health emergency. The program ensures that governments have the resources needed to:
• Fight the pandemic and support families and businesses struggling with its public health and economic impacts,
• Maintain vital public services, even amid declines in revenue, and • Build a strong, resilient, and equitable recovery by making investments that support long-term growth and opportunity.

EARLY PROGRAM IMPLEMENTATION
In May 2021, Treasury published the Interim final rule (IFR) describing eligible and ineligible uses of funds (as well as other program provisions), sought feedback from the public on these program rules, and began to distribute funds. The IFR went immediately into effect in May, and since then, governments have used SLFRF funds to meet their immediate pandemic response needs and begin building a strong and equitable recovery, such as through providing vaccine incentives, development of affordable housing, and construction of infrastructure to deliver safe and reliable water.

As governments began to deploy this funding in their communities, Treasury carefully considered the feedback provided through its public comment process and other forums. Treasury received over 1,500 comments, participated in hundreds of meetings, and received correspondence from a wide range of governments and other stakeholders.

KEY CHANGES AND CLARIFICATIONS IN THE FINAL RULE
The final rule delivers broader flexibility and greater simplicity in the program, responsive to feedback in the comment process. Among other clarifications and changes, the final rule provides the features below.

Replacing Lost Public Sector Revenue
The final rule offers a standard allowance for revenue loss of up to $10 million, allowing recipients to select between a standard amount of revenue loss or complete a full revenue loss calculation.

Recipients that select the standard allowance may use that amount – in many cases their full award – for government services, with streamlined reporting requirements.

Public Health and Economic Impacts
In addition to programs and services, the final rule clarifies that recipients can use funds for capital expenditures that support an eligible COVID-19 public health or economic response. For example, recipients may build certain affordable housing, childcare facilities, schools, hospitals, and other projects consistent with final rule requirements.

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5 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
In addition, the final rule provides an expanded set of households and communities that are presumed to be “impacted” and “disproportionately impacted” by the pandemic, thereby allowing recipients to provide responses to a broad set of households and entities without requiring additional analysis.

Further, the final rule provides a broader set of uses available for these communities as part of COVID19 public health and economic response, including making affordable housing, childcare, early learning, and services to address learning loss during the pandemic eligible in all impacted communities and making certain community development and neighborhood revitalization activities eligible for disproportionately impacted communities.

Further, the final rule allows for a broader set of uses to restore and support government employment, including hiring above a recipient’s pre-pandemic baseline, providing funds to employees that experienced pay cuts or furloughs, avoiding layoffs, and providing retention incentives.

Premium Pay
The final rule delivers more streamlined options to provide premium pay, by broadening the share of eligible workers who can receive premium pay without a written justification while maintaining a focus on lower-income and frontline workers performing essential work.

Water, Sewer & Broadband Infrastructure
The final rule significantly broadens eligible broadband infrastructure investments to address challenges with broadband access, affordability, and reliability, and adds additional eligible water and sewer infrastructure investments, including a broader range of lead remediation and stormwater management projects.

FINAL RULE EFFECTIVE DATE
The final rule takes effect on April 1, 2022. Until that time, the interim final rule remains in effect; funds used consistently with the IFR while it is in effect are in compliance with the SLFRF program.

However, recipients can choose to take advantage of the final rule’s flexibilities and simplifications now, even ahead of the effective date. Treasury will not take action to enforce the interim final rule to the extent that a use of funds is consistent with the terms of the final rule, regardless of when the SLFRF funds were used. Recipients may consult the Statement Regarding Compliance with the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule, which can be found on Treasury’s website, for more information on compliance with the interim final rule and the final rule.

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6 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Overview of the Program
The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program provides substantial flexibility for each jurisdiction to meet local needs within the four separate eligible use categories. This Overview of the Final Rule addresses the four eligible use categories ordered from the broadest and most flexible to the most specific.

Recipients may use SLFRF funds to:
• Replace lost public sector revenue, using this funding to provide government services up to the amount of revenue loss due to the pandemic.
• Recipients may determine their revenue loss by choosing between two options:
• A standard allowance of up to $10 million in aggregate, not to exceed their award amount, during the program;
• Calculating their jurisdiction’s specific revenue loss each year using Treasury’s formula, which compares actual revenue to a counterfactual trend. • Recipients may use funds up to the amount of revenue loss for government services; generally, services traditionally provided by recipient governments are government services, unless Treasury has stated otherwise.
• Support the COVID-19 public health and economic response by addressing COVID-19 and its impact on public health as well as addressing economic harms to households, small businesses, nonprofits, impacted industries, and the public sector. • Recipients can use funds for programs, services, or capital expenditures that respond to the public health and negative economic impacts of the pandemic. • To provide simple and clear eligible uses of funds, Treasury provides a list of enumerated uses that recipients can provide to households, populations, or classes (i.e., groups) that experienced pandemic impacts.
• Public health eligible uses include COVID-19 mitigation and prevention, medical expenses, behavioral healthcare, and preventing and responding to violence. • Eligible uses to respond to negative economic impacts are organized by the type of beneficiary: assistance to households, small businesses, and nonprofits. • Each category includes assistance for “impacted” and “disproportionately impacted” classes: impacted classes experienced the general, broad-based impacts of the pandemic, while disproportionately impacted classes faced meaningfully more severe impacts, often due to preexisting disparities. • To simplify administration, the final rule presumes that some populations and groups were impacted or disproportionately impacted and are eligible for responsive services.

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7 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
• Eligible uses for assistance to impacted households include aid for reemployment, job training, food, rent, mortgages, utilities, affordable housing development, childcare, early education, addressing learning loss, and many more uses.
• Eligible uses for assistance to impacted small businesses or nonprofits include loans or grants to mitigate financial hardship, technical assistance for small businesses, and many more uses.
• Recipients can also provide assistance to impacted industries like travel, tourism, and hospitality that faced substantial pandemic impacts, or address impacts to the public sector, for example by re-hiring public sector workers cut during the crisis. • Recipients providing funds for enumerated uses to populations and groups that Treasury has presumed eligible are clearly operating consistently with the final rule.

Recipients can also identify (1) other populations or groups, beyond those presumed eligible, that experienced pandemic impacts or disproportionate impacts and (2) other programs, services, or capital expenditures, beyond those enumerated, to respond to those impacts.
• Provide premium pay for eligible workers performing essential work, offering additional support to those who have and will bear the greatest health risks because of their service in critical sectors.
• Recipients may provide premium pay to eligible workers – generally those working inperson in key economic sectors – who are below a wage threshold or non-exempt from the Fair Labor Standards Act overtime provisions, or if the recipient submits justification that the premium pay is responsive to workers performing essential work. • Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, to support vital wastewater and stormwater infrastructure, and to expand affordable access to broadband internet. • Recipients may fund a broad range of water and sewer projects, including those eligible under the EPA’s Clean Water State Revolving Fund, EPA’s Drinking Water State Revolving Fund, and certain additional projects, including a wide set of lead remediation, stormwater infrastructure, and aid for private wells and septic units. • Recipients may fund high-speed broadband infrastructure in areas of need that the recipient identifies, such as areas without access to adequate speeds, affordable options, or where connections are inconsistent or unreliable; completed projects must participate in a low-income subsidy program.

While recipients have considerable flexibility to use funds to address the diverse needs of their communities, some restrictions on use apply across all eligible use categories. These include:
• For states and territories: No offsets of a reduction in net tax revenue resulting from a change in state or territory law.

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8 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
• For all recipients except for Tribal governments: No extraordinary contributions to a pension fund for the purpose of reducing an accrued, unfunded liability. • For all recipients: No payments for debt service and replenishments of rainy day funds; no satisfaction of settlements and judgments; no uses that contravene or violate the American Rescue Plan Act, Uniform Guidance conflicts of interest requirements, and other federal, state, and local laws and regulations.

Under the SLFRF program, funds must be used for costs incurred on or after March 3, 2021. Further, funds must be obligated by December 31, 2024, and expended by December 31, 2026. This time period, during which recipients can expend SLFRF funds, is the “period of performance.” In addition to SLFRF, the American Rescue Plan includes other sources of funding for state and local governments, including the Coronavirus Capital Projects Fund to fund critical capital investments including broadband infrastructure; the Homeowner Assistance Fund to provide relief for our country’s most vulnerable homeowners; the Emergency Rental Assistance Program to assist households that are unable to pay rent or utilities; and the State Small Business Credit Initiative to fund small business credit expansion initiatives. Eligible recipients are encouraged to visit the Treasury website for more information.

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9 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Replacing Lost Public Sector Revenue
The Coronavirus State and Local Fiscal Recovery Funds provide needed fiscal relief for recipients that have experienced revenue loss due to the onset of the COVID-19 public health emergency. Specifically, SLFRF funding may be used to pay for “government services” in an amount equal to the revenue loss experienced by the recipient due to the COVID-19 public health emergency.

Government services generally include any service traditionally provided by a government, including construction of roads and other infrastructure, provision of public safety and other services, and health and educational services. Funds spent under government services are subject to streamlined reporting and compliance requirements.

In order to use funds under government services, recipients should first determine revenue loss. They may, then, spend up to that amount on general government services.

DETERMINING REVENUE LOSS
Recipients have two options for how to determine their amount of revenue loss. Recipients must choose one of the two options and cannot switch between these approaches after an election is made.

1. Recipients may elect a “standard allowance” of $10 million to spend on government services through the period of performance.

Under this option, which is newly offered in the final rule Treasury presumes that up to $10 million in revenue has been lost due to the public health emergency and recipients are permitted to use that amount (not to exceed the award amount) to fund “government services.” The standard allowance provides an estimate of revenue loss that is based on an extensive analysis of average revenue loss across states and localities, and offers a simple, convenient way to determine revenue loss, particularly for SLFRF’s smallest recipients.

All recipients may elect to use this standard allowance instead of calculating lost revenue using the formula below, including those with total allocations of $10 million or less. Electing the standard allowance does not increase or decrease a recipient’s total allocation.

2. Recipients may calculate their actual revenue loss according to the formula articulated in the final rule.

Under this option, recipients calculate revenue loss at four distinct points in time, either at the end of each calendar year (e.g., December 31 for years 2020, 2021, 2022, and 2023) or the end of each fiscal year of the recipient. Under the flexibility provided in the final rule, recipients can choose whether to use calendar or fiscal year dates but must be consistent throughout the period of performance. Treasury has also provided several adjustments to the definition of general revenue in the final rule.

To calculate revenue loss at each of these dates, recipients must follow a four-step process:

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10 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
a. Calculate revenues collected in the most recent full fiscal year prior to the public health emergency (i.e., last full fiscal year before January 27, 2020), called the base year revenue.
b. Estimate counterfactual revenue, which is equal to the following formula, where n is the number of months elapsed since the end of the base year to the calculation date:
𝑏𝑎𝑠𝑒 𝑦𝑒𝑎𝑟 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 × (1 + 𝑔𝑟𝑜𝑤𝑡ℎ 𝑎𝑑𝑗𝑢𝑠𝑡𝑚𝑒𝑛𝑡)
𝑛
12 The growth adjustment is the greater of either a standard growth rate—5.2 percent—or the recipient’s average annual revenue growth in the last full three fiscal years prior to the COVID-19 public health emergency.
c. Identify actual revenue, which equals revenues collected over the twelve months immediately preceding the calculation date.

Under the final rule, recipients must adjust actual revenue totals for the effect of tax cuts and tax increases that are adopted after the date of adoption of the final rule (January 6, 2022). Specifically, the estimated fiscal impact of tax cuts and tax increases adopted after January 6, 2022, must be added or subtracted to the calculation of actual revenue for purposes of calculation dates that occur on or after April 1, 2022.

Recipients may subtract from their calculation of actual revenue the effect of tax increases enacted prior to the adoption of the final rule. Note that recipients that elect to remove the effect of tax increases enacted before the adoption of the final rule must also remove the effect of tax decreases enacted before the adoption of the final rule, such that they are accurately removing the effect of tax policy changes on revenue. d. Revenue loss for the calculation date is equal to counterfactual revenue minus actual revenue (adjusted for tax changes) for the twelve-month period. If actual revenue exceeds counterfactual revenue, the loss is set to zero for that twelve-month period.

Revenue loss for the period of performance is the sum of the revenue loss on for each calculation date.

The supplementary information in the final rule provides an example of this calculation, which recipients may find helpful, in the Revenue Loss section.

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11 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury

SPENDING ON GOVERNMENT SERVICES
Recipients can use SLFRF funds on government services up to the revenue loss amount, whether that be the standard allowance amount or the amount calculated using the above approach. Government services generally include any service traditionally provided by a government, unless Treasury has stated otherwise. Here are some common examples, although this list is not exhaustive:
✓ Construction of schools and hospitals
✓ Road building and maintenance, and
other infrastructure
✓ Health services
✓ General government administration,
staff, and administrative facilities
✓ Environmental remediation
✓ Provision of police, fire, and other public
safety services (including purchase of
fire trucks and police vehicles)
Government services is the most flexible eligible use category under the SLFRF program, and funds are subject to streamlined reporting and compliance requirements. Recipients should be mindful that certain restrictions, which are detailed further in the Restrictions on Use section and apply to all uses of funds, apply to government services as well.

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12 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Responding to Public Health and Economic Impacts of COVID-19 The Coronavirus State and Local Fiscal Recovery Funds provide resources for governments to meet the public health and economic needs of those impacted by the pandemic in their communities, as well as address longstanding health and economic disparities, which amplified the impact of the pandemic in disproportionately impacted communities, resulting in more severe pandemic impacts.

The eligible use category to respond to public health and negative economic impacts is organized around the types of assistance a recipient may provide and includes several sub-categories:
• public health,
• assistance to households,
• assistance to small businesses,
• assistance to nonprofits,
• aid to impacted industries, and
• public sector capacity.

In general, to identify eligible uses of funds in this category, recipients should (1) identify a COVID-19 public health or economic impact on an individual or class (i.e., a group) and (2) design a program that responds to that impact. Responses should be related and reasonably proportional to the harm identified and reasonably designed to benefit those impacted.

To provide simple, clear eligible uses of funds that meet this standard, Treasury provides a nonexhaustive list of enumerated uses that respond to pandemic impacts. Treasury also presumes that some populations experienced pandemic impacts and are eligible for responsive services. In other words, recipients providing enumerated uses of funds to populations presumed eligible are clearly operating consistently with the final rule.1
Recipients also have broad flexibility to (1) identify and respond to other pandemic impacts and (2) serve other populations that experienced pandemic impacts, beyond the enumerated uses and presumed eligible populations. Recipients can also identify groups or “classes” of beneficiaries that experienced pandemic impacts and provide services to those classes. 1 However, please note that use of funds for enumerated uses may not be grossly disproportionate to the harm. Further, recipients should consult the Capital Expenditures section for more information about pursuing a capital expenditure; please note that enumerated capital expenditures are not presumed to be reasonably proportional responses to an identified harm except as provided in the Capital Expenditures section.

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13 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Step 1. Identify COVID-19 public health or
economic impact

2. Design a response that addresses or
responds to the impact
Analysis
• Can identify impact to a specific
household, business or nonprofit or
to a class of households, businesses,
or nonprofits (i.e., group)
• Can also identify disproportionate
impacts, or more severe impacts, to
a specific beneficiary or to a class
• Types of responses can include a
program, service, or capital
expenditure
• Response should be related and
reasonably proportional to the harm
• Response should also be reasonably
designed to benefit impacted
individual or class
Simplifying
Presumptions
• Final Rule presumes certain
populations and classes are impacted
and disproportionately impacted
• Final Rule provides non-exhaustive
list of enumerated eligible uses that
respond to pandemic impacts and
disproportionate impacts
To assess eligibility of uses of funds, recipients should first determine the sub-category where their use of funds may fit (e.g., public health, assistance to households, assistance to small businesses), based on the entity that experienced the health or economic impact. 2 Then, recipients should refer to the relevant
section for more details on each sub-category.

While the same overall eligibility standard applies to all uses of funds to respond to the public health and negative economic impacts of the pandemic, each sub-category has specific nuances on its application. In addition:
• Recipients interested in using funds for capital expenditures (i.e., investments in property, facilities, or equipment) should review the Capital Expenditures section in addition to the eligible use sub-category.
• Recipients interested in other uses of funds, beyond the enumerated uses, should refer to the section on “Framework for Eligible Uses Beyond Those Enumerated.” 2 For example, a recipient interested in providing aid to unemployed individuals is addressing a negative economic impact experienced by a household and should refer to the section on assistance to households. Recipients should also be aware of the difference between “beneficiaries” and “sub-recipients.” Beneficiaries are households, small businesses, or nonprofits that can receive assistance based on impacts of the pandemic that they experienced. On the other hand, sub-recipients are organizations that carry out eligible uses on behalf of a government, often through grants or contracts. Sub-recipients do not need to have experienced a negative economic impact of the pandemic; rather, they are providing services to beneficiaries that experienced an impact.

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14 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury

RESPONDING TO THE PUBLIC HEALTH EMERGENCY
While the country has made tremendous progress in the fight against COVID-19, including a historic vaccination campaign, the disease still poses a grave threat to Americans’ health and the economy.

Providing state, local, and Tribal governments the resources needed to fight the COVID-19 pandemic is a core goal of the Coronavirus State and Local Fiscal Recovery Funds, as well as addressing the other ways that the pandemic has impacted public health. Treasury has identified several public health impacts of the pandemic and enumerated uses of funds to respond to impacted populations. • COVID-19 mitigation and prevention. The pandemic has broadly impacted Americans and recipients can provide services to prevent and mitigate COVID-19 to the general public or to small businesses, nonprofits, and impacted industries in general. Enumerated eligible uses include:
✓ Vaccination programs, including vaccine
incentives and vaccine sites
✓ Testing programs, equipment and sites
✓ Monitoring, contact tracing & public
health surveillance (e.g., monitoring for
variants)
✓ Public communication efforts
✓ Public health data systems
✓ COVID-19 prevention and treatment
equipment, such as ventilators and
ambulances
✓ Medical and PPE/protective supplies
✓ Support for isolation or quarantine
✓ Ventilation system installation and
improvement
✓ Technical assistance on mitigation of
COVID-19 threats to public health and
safety
✓ Transportation to reach vaccination or
testing sites, or other prevention and
mitigation services for vulnerable
populations
✓ Support for prevention, mitigation, or
other services in congregate living
facilities, public facilities, and schools
✓ Support for prevention and mitigation
strategies in small businesses, nonprofits,
and impacted industries
✓ Medical facilities generally dedicated to
COVID-19 treatment and mitigation (e.g.,
ICUs, emergency rooms)
✓ Temporary medical facilities and other
measures to increase COVID-19 treatment
capacity
✓ Emergency operations centers &
emergency response equipment (e.g.,
emergency response radio systems)
✓ Public telemedicine capabilities for COVID19 related treatment

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15 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
• Medical expenses. Funds may be used for expenses to households, medical providers, or others that incurred medical costs due to the pandemic, including:
✓ Unreimbursed expenses for medical care
for COVID-19 testing or treatment, such
as uncompensated care costs for
medical providers or out-of-pocket costs
for individuals
✓ Paid family and medical leave for public
employees to enable compliance with
COVID-19 public health precautions
✓ Emergency medical response expenses
✓ Treatment of long-term symptoms or effects
of COVID-19
• Behavioral health care, such as mental health treatment, substance use treatment, and other behavioral health services. Treasury recognizes that the pandemic has broadly impacted Americans’ behavioral health and recipients can provide these services to the general public to respond.

Enumerated eligible uses include:
✓ Prevention, outpatient treatment,
inpatient treatment, crisis care,
diversion programs, outreach to
individuals not yet engaged in
treatment, harm reduction & long-term
recovery support
✓ Enhanced behavioral health services in
schools
✓ Services for pregnant women or infants
born with neonatal abstinence
syndrome
✓ Support for equitable access to reduce
disparities in access to high-quality
treatment
✓ Peer support groups, costs for residence in
supportive housing or recovery housing, and
the 988 National Suicide Prevention Lifeline
or other hotline services
✓ Expansion of access to evidence-based
services for opioid use disorder prevention,
treatment, harm reduction, and recovery
✓ Behavioral health facilities & equipment
• Preventing and responding to violence. Recognizing that violence – and especially gun violence – has increased in some communities due to the pandemic, recipients may use funds to respond in these communities through:
✓ Referrals to trauma recovery services for
victims of crime
✓ Community violence intervention
programs, including:
• Evidence-based practices like
focused deterrence, with
wraparound services such as
behavioral therapy, trauma
recovery, job training, education,
housing and relocation services, and
financial assistance
✓ In communities experiencing increased
gun violence due to the pandemic:
• Law enforcement officers focused
on advancing community policing
• Enforcement efforts to reduce gun
violence, including prosecution
• Technology & equipment to support
law enforcement response

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16 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury

RESPONDING TO NEGATIVE ECONOMIC IMPACTS
The pandemic caused severe economic damage and, while the economy is on track to a strong recovery, much work remains to continue building a robust, resilient, and equitable economy in the wake of the crisis and to ensure that the benefits of this recovery reach all Americans. While the pandemic impacted millions of American households and businesses, some of its most severe impacts fell on low-income and underserved communities, where pre-existing disparities amplified the impact of the pandemic and where the most work remains to reach a full recovery.

The final rule recognizes that the pandemic caused broad-based impacts that affected many communities, households, and small businesses across the country; for example, many workers faced unemployment and many small businesses saw declines in revenue. The final rule describes these as “impacted" households, communities, small businesses, and nonprofits.

At the same time, the pandemic caused disproportionate impacts, or more severe impacts, in certain communities. For example, low-income and underserved communities have faced more severe health and economic outcomes like higher rates of COVID-19 mortality and unemployment, often because preexisting disparities exacerbated the impact of the pandemic. The final rule describes these as “disproportionately impacted” households, communities, small businesses, and nonprofits.

To simplify administration of the program, the final rule presumes that certain populations were “impacted” and “disproportionately impacted” by the pandemic; these populations are presumed to be eligible for services that respond to the impact they experienced. The final rule also enumerates a nonexhaustive list of eligible uses that are recognized as responsive to the impacts or disproportionate impacts of COVID-19. Recipients providing enumerated uses to populations presumed eligible are clearly operating consistently with the final rule.

As discussed further in the section Framework for Eligible Uses Beyond Those Enumerated, recipients can also identify other pandemic impacts, impacted or disproportionately impacted populations or classes, and responses.

However, note that the final rule maintains that general infrastructure projects, including roads, streets, and surface transportation infrastructure, would generally not be eligible under this eligible use category, unless the project responded to a specific pandemic public health need or a specific negative economic impact. Similarly, general economic development or workforce development – activities that do not respond to negative economic impacts of the pandemic but rather seek to more generally enhance the jurisdiction’s business climate – would generally not be eligible under this eligible use category.

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17 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Assistance to Households
Impacted Households and Communities
Treasury presumes the following households and communities are impacted by the pandemic:
✓ Low- or-moderate income households or
communities
✓ Households that experienced
unemployment
✓ Households that experienced increased
food or housing insecurity
✓ Households that qualify for the Children’s
Health Insurance Program, Childcare
Subsidies through the Child Care
Development Fund (CCDF) Program, or
Medicaid
✓ When providing affordable housing programs:
households that qualify for the National Housing
Trust Fund and Home Investment Partnerships
Program
✓ When providing services to address lost
instructional time in K-12 schools: any student
that lost access to in-person instruction for a
significant period of time
Low- or moderate-income households and communities are those with (i) income at or below 300 percent of the Federal Poverty Guidelines for the size of the household based on the most recently published poverty guidelines or (ii) income at or below 65 percent of the area median income for the county and size of household based on the most recently published data. For the vast majority of communities, the Federal Poverty Guidelines are higher than the area’s median income and using the Federal Poverty Guidelines would result in more households and communities being presumed eligible.

Treasury has provided an easy-to-use spreadsheet with Federal Poverty Guidelines and area median income levels on its website.

Recipients can measure income for a specific household or the median income for the community, depending on whether the response they plan to provide serves specific households or the general community. The income thresholds vary by household size; recipients should generally use income thresholds for the appropriate household size but can use a default household size of three when easier for administration or when measuring income for a general community.

The income limit for 300 percent of the Federal Poverty Guidelines for a household of three is $65,880 per year.3In other words, recipients can always presume that a household earning below this level, or a community with median income below this level, is impacted by the pandemic and eligible for services to respond. Additionally, by following the steps detailed in the section Framework for Eligible Uses Beyond Those Enumerated, recipients may designate additional households as impacted or disproportionately impacted beyond these presumptions, and may also pursue projects not listed below in response to these impacts consistent with Treasury’s standards. 3 For recipients in Alaska, the income limit for 300 percent of the Federal Poverty Guidelines for a household of three is $82,350 per year. For recipients in Hawaii, the income limit for 300 percent of the Federal Poverty Guidelines for a household of three is $75,780 per year.

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18 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Treasury recognizes the enumerated projects below, which have been expanded under the final rule, as eligible to respond to impacts of the pandemic on households and communities:
✓ Food assistance & food banks
✓ Emergency housing assistance: rental
assistance, mortgage assistance, utility
assistance, assistance paying delinquent
property taxes, counseling and legal aid to
prevent eviction and homelessness &
emergency programs or services for homeless
individuals, including temporary residences
for people experiencing homelessness
✓ Health insurance coverage expansion
✓ Benefits for surviving family members of
individuals who have died from COVID-19
✓ Assistance to individuals who want and are
available for work, including job training,
public jobs programs and fairs, support for
childcare and transportation to and from a
jobsite or interview, incentives for newlyemployed workers, subsidized employment, grants to hire underserved workers,
assistance to unemployed individuals to start
small businesses & development of job and
workforce training centers
✓ Financial services for the unbanked and
underbanked
✓ Burials, home repair & home weatherization
✓ Programs, devices & equipment for internet
access and digital literacy, including subsidies
for costs of access
✓ Cash assistance
✓ Paid sick, medical, and family leave programs
✓ Assistance in accessing and applying for
public benefits or services
✓ Childcare and early learning services, home
visiting programs, services for child welfareinvolved families and foster youth & childcare facilities
✓ Assistance to address the impact of learning
loss for K-12 students (e.g., high-quality
tutoring, differentiated instruction)
✓ Programs or services to support long-term
housing security: including development of
affordable housing and permanent
supportive housing
✓ Certain contributions to an Unemployment
Insurance Trust Fund4
4 Recipients may only use SLFRF funds for contributions to unemployment insurance trust funds and repayment of the principal amount due on advances received under Title XII of the Social Security Act up to an amount equal to (i) the difference between the balance in the recipient’s unemployment insurance trust fund as of January 27, 2020 and the balance of such account as of May 17, 2021, plus (ii) the principal amount outstanding as of May 17, 2021 on any advances received under Title XII of the Social Security Act between January 27, 2020 and May 17, 2021. Further, recipients may use SLFRF funds for the payment of any interest due on such Title XII advances. Additionally, a recipient that deposits SLFRF funds into its unemployment insurance trust fund to fully restore the pre-pandemic balance may not draw down that balance and deposit more SLFRF funds, back up to the pre-pandemic balance. Recipients that deposit SLFRF funds into an unemployment insurance trust fund, or use SLFRF funds to repay principal on Title XII advances, may not take action to reduce benefits available to unemployed workers by changing the computation method governing regular unemployment compensation in a way that results in a reduction of average weekly benefit amounts or the number of weeks of benefits payable (i.e., maximum benefit entitlement).

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19 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Disproportionately Impacted Households and Communities
Treasury presumes the following households and communities are disproportionately impacted by the pandemic:
✓ Low -income households and communities
✓ Households residing in Qualified Census
Tracts
✓ Households that qualify for certain federal
5 benefits
✓ Households receiving services provided by
Tribal governments
✓ Households residing in the U.S. territories or
receiving services from these governments
Low-income households and communities are those with (i) income at or below 185 percent of the Federal Poverty Guidelines for the size of its household based on the most recently published poverty guidelines or (ii) income at or below 40 percent of area median income for its county and size of household based on the most recently published data. For the vast majority of communities, the Federal Poverty Guidelines level is higher than the area median income level and using this level would result in more households and communities being presumed eligible. Treasury has provided an easy-to-use spreadsheet with Federal Poverty Guidelines and area median income levels on its website.

Recipients can measure income for a specific household or the median income for the community, depending on whether the service they plan to provide serves specific households or the general community. The income thresholds vary by household size; recipients should generally use income thresholds for the appropriate household size but can use a default household size of three when easier for administration or when measuring income for a general community.

The income limit for 185 percent of the Federal Poverty Guidelines for a household of three is $40,626 per year.6In other words, recipients can always presume that a household earning below this level, or a community with median income below this level, is disproportionately impacted by the pandemic and eligible for services to respond.
5 These programs are Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), Free- and Reduced-Price Lunch (NSLP) and/or School Breakfast (SBP) programs, Medicare Part D Low-Income Subsidies, Supplemental Security Income (SSI), Head Start and/or Early Head Start, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Section 8 Vouchers, Low-Income Home Energy Assistance Program (LIHEAP), and Pell Grants. For services to address educational disparities, Treasury will recognize Title I eligible schools as disproportionately impacted and responsive services that support the school generally or support the whole school as eligible. 6 For recipients in Alaska, the income limit for 185 percent of the Federal Poverty Guidelines for a household of three is $50,783 per year. For recipients in Hawaii, the income limit for 185 percent of the Federal Poverty Guidelines for a household of three is $46,731 per year

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20 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Treasury recognizes the enumerated projects below, which have been expanded under the final rule, as eligible to respond to disproportionate impacts of the pandemic on households and communities:
✓ Pay for community health workers to help
households access health & social services
✓ Remediation of lead paint or other lead
hazards
✓ Primary care clinics, hospitals, integration of
health services into other settings, and other
investments in medical equipment & facilities
designed to address health disparities
✓ Housing vouchers & assistance relocating to
neighborhoods with higher economic
opportunity
✓ Investments in neighborhoods to promote
improved health outcomes
✓ Improvements to vacant and abandoned
properties, including rehabilitation or
maintenance, renovation, removal and
remediation of environmental contaminants,
demolition or deconstruction, greening/vacant lot
cleanup & conversion to affordable housing7
✓ Services to address educational disparities,
including assistance to high-poverty school
districts & educational and evidence-based
services to address student academic, social,
emotional, and mental health needs
✓ Schools and other educational equipment &
facilities
7 Please see the final rule for further details and conditions applicable to this eligible use. This includes Treasury’s presumption that demolition of vacant or abandoned residential properties that results in a net reduction in occupiable housing units for low- and moderate-income individuals in an area where the availability of such housing is lower than the need for such housing is ineligible for support with SLFRF funds.

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21 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Assistance to Small Businesses
Small businesses have faced widespread challenges due to the pandemic, including periods of shutdown, declines in revenue, or increased costs. The final rule provides many tools for recipients to respond to the impacts of the pandemic on small businesses, or disproportionate impacts on businesses where pre-existing disparities like lack of access to capital compounded the pandemic’s effects.

Small businesses eligible for assistance are those that experienced negative economic impacts or disproportionate impacts of the pandemic and meet the definition of “small business,” specifically:

1. Have no more than 500 employees, or if applicable, the size standard in number of employees established by the Administrator of the Small Business Administration for the industry in which the business concern or organization operates, and

2. Are a small business concern as defined in section 3 of the Small Business Act8(which includes, among other requirements, that the business is independently owned and operated and is not dominant in its field of operation).

Impacted Small Businesses
Recipients can identify small businesses impacted by the pandemic, and measures to respond, in many ways; for example, recipients could consider:
✓ Decreased revenue or gross receipts
✓ Financial insecurity
✓ Increased costs
✓ Capacity to weather financial hardship
✓ Challenges covering payroll, rent or
mortgage, and other operating costs
Assistance to small businesses that experienced negative economic impacts includes the following enumerated uses:
✓ Loans or grants to mitigate financial
hardship, such as by supporting payroll
and benefits, costs to retain employees,
and mortgage, rent, utility, and other
operating costs
✓ Technical assistance, counseling, or other
services to support business planning
Disproportionately Impacted Small Businesses
Treasury presumes that the following small businesses are disproportionately impacted by the pandemic:
8 15 U.S.C. 632.

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22 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
✓ Small businesses operating in Qualified
Census Tracts
✓ Small businesses operated by Tribal
governments or on Tribal lands
✓ Small businesses operating in the U.S.
territories
Assistance to disproportionately impacted small businesses includes the following enumerated uses, which have been expanded under the final rule:
✓ Rehabilitation of commercial properties,
storefront improvements & façade
improvements
✓ Technical assistance, business incubators &
grants for start-up or expansion costs for
small businesses
✓ Support for microbusinesses, including
financial, childcare, and transportation costs

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23 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Assistance to Nonprofits
Nonprofits have faced significant challenges due to the pandemic’s increased demand for services and changing operational needs, as well as declines in revenue sources such as donations and fees.

Nonprofits eligible for assistance are those that experienced negative economic impacts or disproportionate impacts of the pandemic and meet the definition of “nonprofit”—specifically those that are 501(c)(3) or 501(c)(19) tax-exempt organizations.

Impacted Nonprofits
Recipients can identify nonprofits impacted by the pandemic, and measures to respond, in many ways; for example, recipients could consider:
✓ Decreased revenue (e.g., from donations
and fees)
✓ Financial insecurity
✓ Increased costs (e.g., uncompensated
increases in service need)
✓ Capacity to weather financial hardship
✓ Challenges covering payroll, rent or
mortgage, and other operating costs
Assistance to nonprofits that experienced negative economic impacts includes the following enumerated uses:
✓ Loans or grants to mitigate financial
hardship
✓ Technical or in-kind assistance or other
services that mitigate negative economic
impacts of the pandemic
Disproportionately Impacted Nonprofits
Treasury presumes that the following nonprofits are disproportionately impacted by the pandemic:
✓ Nonprofits operating in Qualified Census
Tracts
✓ Nonprofits operated by Tribal
governments or on Tribal lands
✓ Nonprofits operating in the U.S. territories
Recipients may identify appropriate responses that are related and reasonably proportional to addressing these disproportionate impacts.

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24 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Aid to Impacted Industries
Recipients may use SLFRF funding to provide aid to industries impacted by the COVID-19 pandemic.

Recipients should first designate an impacted industry and then provide aid to address the impacted industry’s negative economic impact.

This sub-category of eligible uses does not separately identify disproportionate impacts and corresponding responsive services.

1. Designating an impacted industry. There are two main ways an industry can be designated as “impacted.”

1. If the industry is in the travel, tourism, or hospitality sectors (including Tribal development districts), the industry is impacted.

2. If the industry is outside the travel, tourism, or hospitality sectors, the industry is impacted if:
a. The industry experienced at least 8 percent employment loss from pre-pandemic levels,9 or
b. The industry is experiencing comparable or worse economic impacts as the national tourism, travel, and hospitality industries as of the date of the final rule, based on the totality of economic indicators or qualitative data (if quantitative data is unavailable), and if the impacts were generally due to the COVID-19 public health emergency.

Recipients have flexibility to define industries broadly or narrowly, but Treasury encourages recipients to define narrow and discrete industries eligible for aid. State and territory recipients also have flexibility to define the industries with greater geographic precision; for example, a state may identify a particular industry in a certain region of a state as impacted.

2. Providing eligible aid to the impacted industry. Aid may only be provided to support businesses, attractions, and Tribal development districts operating prior to the pandemic and affected by required closures and other efforts to contain the pandemic. Further, aid should be generally broadly available to all businesses within the impacted industry to avoid potential conflicts of interest, and Treasury encourages aid to be first used for operational expenses, such as payroll, before being used on other types of costs.
9 Specifically, a recipient should compare the percent change in the number of employees of the recipient’s identified industry and the national Leisure & Hospitality sector in the three months before the pandemic’s most severe impacts began (a straight three-month average of seasonally-adjusted employment data from December 2019, January 2020, and February 2020) with the latest data as of the final rule (a straight three-month average of seasonally-adjusted employment data from September 2021, October 2021, and November 2021). For parity and simplicity, smaller recipients without employment data that measure industries in their specific jurisdiction may use data available for a broader unit of government for this calculation (e.g., a county may use data from the state in which it is located; a city may use data for the county, if available, or state in which it is located) solely for purposes of determining whether a particular industry is an impacted industry.

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25 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
Treasury recognizes the enumerated projects below as eligible responses to impacted industries.
✓ Aid to mitigate financial hardship, such
as supporting payroll costs, lost pay and
benefits for returning employees,
support of operations and maintenance
of existing equipment and facilities
✓ Technical assistance, counseling, or
other services to support business
planning
✓ COVID-19 mitigation and infection
prevention measures (see section Public
Health)
As with all eligible uses, recipients may pursue a project not listed above by undergoing the steps outlined in the section Framework for Eligible Uses Beyond Those Enumerated.

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26 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury

PUBLIC SECTOR CAPACITY
Recipients may use SLFRF funding to restore and bolster public sector capacity, which supports government’s ability to deliver critical COVID-19 services. There are three main categories of eligible uses to bolster public sector capacity and workforce: Public Safety, Public Health, and Human Services Staff; Government Employment and Rehiring Public Sector Staff; and Effective Service Delivery.

Public Safety, Public Health, and Human Services Staff
SLFRF funding may be used for payroll and covered benefits for public safety, public health, health care, human services and similar employees of a recipient government, for the portion of the employee’s time spent responding to COVID-19. Recipients should follow the steps below.

1. Identify eligible public safety, public health, and human services staff. Public safety staff include:
✓ Police officers (including state police
officers)
✓ Sheriffs and deputy sheriffs
✓ Firefighters
✓ Emergency medical responders
✓ Correctional and detention officers
✓ Dispatchers and supervisor personnel
that directly support public safety staff
Public health staff include:
✓ Employees involved in providing medical
and other physical or mental health
services to patients and supervisory
personnel, including medical staff
assigned to schools, prisons, and other
such institutions
✓ Laboratory technicians, medical
examiners, morgue staff, and other
support services essential for patient
care
✓ Employees of public health
departments directly engaged in
public health matters and related
supervisory personnel
Human services staff include:
✓ Employees providing or administering
social services and public benefits
✓ Child welfare services employees
✓ Child, elder, or family care employees

2. Assess portion of time spent on COVID-19 response for eligible staff.

Recipients can use a variety of methods to assess the share of an employees’ time spent responding to COVID-19, including using reasonable estimates—such as estimating the share of time based on discussions with staff and applying that share to all employees in that position.

For administrative convenience, recipients can consider public health and safety employees entirely devoted to responding to COVID-19 (and their payroll and benefits fully covered by SLFRF) if the

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27 U.S. DEPARTMENT OF THE TREASURY
Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule U.S. Department of the Treasury
employee, or his or her operating unit or division, is “primarily dedicated” to responding to COVID19. Primarily dedicated means that more than half of the employee, unit, or division’s time is dedicated to responding to COVID-19.

Recipients must periodically reassess their determination and maintain records to support their assessment, although recipients do not need to track staff hours.

3. Use SLFRF funding for payroll and covered benefits for the portion of eligible staff time spent on COVID-19 response. SLFRF funding may be used for payroll and covered benefits for the portion of the employees’ time spent on COVID-19 response, as calculated above, through the period of performance.

Government Employment and Rehiring Public Sector Staff
Under the increased flexibility of the final rule, SLFRF funding may be used to support a broader set of uses to restore and support public sector employment. Eligible uses include hiring up to a pre-pandemic baseline that is adjusted for historic underinvestment in the public sector, providing additional funds for employees who experienced pay cuts or were furloughed, avoiding layoffs, providing worker retention incentives, and paying for ancillary administrative costs related to hiring, support, and retention. • Restoring pre-pandemic employment. Recipients have two options to restore pre-pandemic employment, depending on the recipient’s needs.
• If the recipient simply wants to hire back employees for pre-pandemic positions: Recipients may use SLFRF funds to hire employees for the same positions that existed on January 27, 2020 but that were unfilled or eliminated as of March 3, 2021. Recipients may use SLFRF funds to cover payroll and covered benefits for such positions through the period of performance.
• If the recipient wants to hire above the pre-pandemic baseline and/or would like to have flexibility in positions: Recipients may use SLFRF funds to pay for payroll and covered benefits associated with the recipient increasing its number of budgeted FTEs up to 7.5 percent above its pre-pandemic baseline. Specifically, recipients should undergo the following steps:
a. Identify the recipient’s budgeted FTE level on January 27, 2020. This includes all budgeted positions, filled and unfilled. This is called the pre-pandemic baseline. b. Multiply the pre-pandemic baseline by 1.075. This is called the adjusted prepandemic baseline. c. Identify the recipient’s budgeted FTE level on March 3, 2021, which is the beginning of the period of performance for SLFRF funds. Recipients may, but are not required to, exclude the number of FTEs dedicated to responding to the COVID-19 public health emergency. This is called the actual number of FTEs. d. Subtract the actual number of FTEs from the adjusted pre-pandemic baseline to calculate the number of FTEs that can be covered by SLFRF funds. Recipients do not have to hire for the same roles that existed pre-pandemic.

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Los Gatos City CouncilFebruary 15, 2022

Los Gatos City Council
February 15, 2022