ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
Discount Rate
The discount rate used to measure the total pension liability was 6.9 percent for the Plans. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the Plans, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets.
Therefore, the current 6.9 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 6.9 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website.
Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and longterm returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The table below reflects the longterm expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative expenses.
Assumed Long-Term
Asset Expected Real
Asset Class (a) Allocation Return (1)(2)
Global Equity Cap Weighted 30.00% 4.54%
Global Equity NonCap Weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
(1) An expected inflation of 2.3% used for this period. (2) Figures are based on the 2021-22 Asset Liability Study.
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the Town’s net pension liability for the Plans, calculated using the discount rate for the Plans, as well as what the Town’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
Payable to the Pension Plans
As of June 30, 2024, the Town reported a payable of $33,474 and $30,506 for the outstanding amount of contributions to the Miscellaneous Agent Multiple Employer Plan and the Safety Cost Sharing Plan.
IRS Section 115 Trust
During the fiscal year ending June 30, 2020, the Town established an IRS Section 115 Trust with the CalPERS California Employer’ Pension Prefunding Trust (CEPPT) program. In fiscal year 2024, the Town reported $2,188,659 as restricted cash with fiscal agent within the General Fund. Per GASB, amounts placed in trusts for CalPERS plans are treated as side trusts that do not directly reduce the net pension liability.
NOTE 12 - OTHER POSTEMPLOYMENT BENEFITS
Plan Description
The Town makes contributions to California Employer’s Retiree Benefit Trust (CERBT), an agent multiple-employer defined benefit healthcare plan administered by CalPERS. The purpose of the CERBT Fund is to provide California government employers with a trust through which they may prefund retiree medical costs and Other Postemployment Benefits (OPEB). The Town uses CERBT 1 as its investment vehicle and requests disbursements on an as needed basis to reimburse the Town for the cost of retiree health insurance benefits. Benefit provisions and all other requirements are established by state statute and Town ordinance. Copies of PERS' annual financial report may be obtained from their Executive Office, 400 P Street, Sacramento, CA 95814.
Miscellaneous Safety
1% Decrease 5.90% 5.90%
Net Pension Liability $ 45,575,753 49,604,375
Current 6.90% 6.90%
Net Pension Liability $ 29,048,582 33,979,087
1% Increase 7.90% 7.90%
Net Pension Liability $ 15,432,672 21,204,301
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
In accordance with the Public Employees' Medical and Hospital Care Act (PEMHCA), employees qualify for retiree health benefits upon five (5) years of service if they meet the vesting requirements as set forth by CalPERS and take a service or disability retirement from Town employment. Additionally, the employee must actually draw a CalPERS pension within ninety (90) days of separation from the Town, provided the employee remains with the Town's health plan through COBRA. For employees who retire on or after February 1, 2016, at Medicare eligibility, the Town will align contributions to the full cost of the employee’s enrollment, including enrollment of family members, in a health benefits plan or plans up to a maximum of 100% Single Party and 90% Dependents for Kaiser Bay Area Basic/Medicare/Combo per month. During negotiations in fiscal year 2018/19, the Town’s discretionary retiree medical benefit contribution was eliminated for all future hires.
Upon retirement, employees have the option to roll over their sick leave accrual into a Town managed fund. Employees can request reimbursement of medical expenses from the fund up to the value of their sick leave at retirement.
Employees Covered by Benefit Terms
At June 30, 2024 (the measurement date), the benefit terms covered the following employees:
Contributions
The contribution requirements of Plan members and the Town are established and may be amended by the Town. The required contribution is based on projected pay-as-you-go financing requirements, with additional amounts to prefund benefits as determined annually by the Town Council. For the fiscal year ended June 30, 2024, the Town contributed $1,818,298 from the General Fund. During the measurement period ended June 30, 2023, the Town contributed $1,733,337 to the Plan and benefit payments were $1,716,592. Plan members receiving benefits contributed did not make any contributions.
Active employees 149
Inactive employees - receiving benefits 150
Inactive employees - not receiving benefits 42
Total employees 341
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
Actuarial Assumptions
The following summarized the actuarial assumptions for the OPEB plan included in this fiscal year:
Discount Rate
The discount rate used to measure the total OPEB liability was 6.25 percent. The projection of cash flows used to determine the discount rate assumed that Town contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
Valuation Date: June 30, 2023
Measurement Date: June 30, 2023
Actuarial Cost Method: Entry-Age Normal
Amortization Period:
Asset Valuation Method:
Actuarial Assumptions:
Discount Rate 6.25%
Inflation 2.50%
Salary Increases 2.75%
Investment Rate of Return 6.25%
Healthcare Trend Rate
Mortality
Retirement
Tier 1 Actives in insurance program: 100%
Tier 1 Actives in cash allocation program: 80%
Tier 2 Actives in insurance program: 60%
Tier 2 Actives in cash allocation program:
Agency service < 3 months: 60%
Agency service >= 3 months: 40%
Waived retirees aged <65: 20%
Waived retirees aged ≥65: 0%
15 year fixed
Medicare (Kaiser) - 4.60% for 2023,
decreasing to an ultimate rate of 3.75% in 2076
Investment gains and losses spread over 5-year rolling period CalPERS 2000-2019 Experience Study
CalPERS 2000-2019 Experience Study
Non-Medicare - 6.50% for 2023,
decreasing to an ultimate rate of 3.75% in 2076
Mortality projected fully generational with Scale MP-2021 Medicare (Non-Kaiser) - 5.65% for 2023,
decreasing to an ultimate rate of 3.75% in 2076
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
Net OPEB Liability
The Town's net OPEB liability was measured as of June 30, 2023 (measurement date) and was determined by an actuarial valuation as of June 30, 2023 (valuation date) for the fiscal year ended June 30, 2024 (reporting date).
Changes in the Net OPEB Liability
The following summarizes the changes in the net OPEB liability during the year ended June 30, 2024:
Deferred Inflows and Outflows of Resources
At June 30, 2024, the Town reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Fiscal Year Ended June 30, 2024
(Measurement Date June 30, 2023)
Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability
(Asset)
Balance at June 30, 2023 $ 29,888,940 $ 22,860,307 $ 7,028,633 Service cost 940,674 - 940,674
Interest in Total OPEB Liability 1,873,207 - 1,873,207
Actual vs. expected experience 153,933 - 153,933
Assumption changes 2,191,064 - 2,191,064
Employer contributions - 1,733,337 (1,733,337)
Net investment income - 1,468,115 (1,468,115)
Administrative expenses - (23,387) 23,387
Benefit payments (1,716,592) (1,716,592) -
Net changes 3,442,286 1,461,473 1,980,813
Balance at June 30, 2024 $ 33,331,226 $ 24,321,780 $ 9,009,446 Covered Employee Payroll $ 17,809,965
Total OPEB Liability as a % of Covered Employee Payroll 187.15% Plan Fid. Net Position as a % of Total OPEB Liability 72.97% Service Cost as a % of Covered Employee Payroll 5.28%
Net OPEB Liability as a % of Covered Employee Payroll 50.59% Contributions as a % of Cov. Emp. Payroll 9.73%
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Difference between actual and expected experience $ 128,277 $ 1,283,522 Difference between actual and expected earnings 1,506,978 - Change in assumptions 2,353,206 231,810
OPEB contribution subsequent to measurement date 1,818,298 - Totals $ 5,806,759 $ 1,515,332
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
Of the total amount reported as deferred outflows of resources related to OPEB, $1,818,298 were the result of Town contributions subsequent to the measurement date and before the end of the fiscal year.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:
Rate of Return
The long-term expected rate of return on OPEB plan investments was determined using a building- block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the table below.
Year Ended June 30,
2025 $ 278,421
2026 252,572
2027 1,168,381
2028 382,923
2029 390,832
Thereafter -
Total $ 2,473,129
Asset Class
Percentage of
Portfolio
Long-Term
Expected Rate of
Return
Global Equity 49.00% 4.56%
Fixed Income 23.00% 1.56%
TIPS 5.00% -0.08%
Commodities 3.00% 1.22%
REITs 20.00% 4.06%
Total
DRAFT
100.00%
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
OPEB Expense
The following summarizes the OPEB expense by source during the year ended June 30, 2024:
The following summarizes changes in the net OPEB liability as reconciled to OPEB expense during the year ended June 30, 2024:
Sensitivity to Changes in the Discount Rate
The net OPEB liability of the Town, as well as what the Town's net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher, is as follows:
Sensitivity to Changes in the Healthcare Cost Trend Rates The net OPEB liability of the Town, as well as what the Town's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than current healthcare cost trend rates, is as follows:
Service cost $ 940,674
Interest in TOL 1,873,207
Expected investment income (1,428,561)
Difference between actual and expected experience (419,899) Difference between actual and expected earnings 323,069 Change in assumptions 383,915
Administrative expenses 23,387
OPEB Expense $ 1,695,792
$ 9,009,446
(7,028,633)
1,980,813
Changes in deferred outflows (1,415,768)
Changes in deferred inflows (602,590)
Employer contributions and implicit subsidy 1,733,337
OPEB Expense $ 1,695,792
Net OPEB liability ending
Net OPEB liability beginning
Change in net OPEB liability
(1% Decrease ) 6.25% (1% Increase )
Net OPEB Liability (Asset) $ 12,986,126 $ 9,009,446 $ 5,691,792 Discount Rate
(1% Decrease ) Current (1% Increase )
Net OPEB Liability (Asset) $ 5,438,579 $ 9,009,446 $ 13,343,702 Trend Rate
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 13 - RISK MANAGEMENT
The Town participates in the following public entity risk pools through formally organized and separate legal entities. The Town does not have an equity interest in the joint ventures. These entities exercise full powers and authority within the scope of the related agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Obligations and liabilities of the separate entities are not those of the Town, although the Town retains an ongoing financial interest or an ongoing financial responsibility.
Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA) The Town participates in PLAN, which covers general liability claims in the amount up to $1,000,000 plus $34,000,000 in excess liability for total coverage of $35,000,000 per occurrence. The Town has a deductible or uninsured liability of up to $50,000 per claim. PLAN also provides all risk property coverage of $1,000,000,000, excluding flood and earthquake coverage. The Town has a $5,000 deductible for property and vehicle damage. Once the Town’s deductible is met, PLAN becomes responsible for payment of all claims up to the limit. Financial statements may be obtained from PLAN at 1750 Creekside Drive, Suite 200, Sacramento, CA, 95833.
Local Agency Workers’ Compensation Joint Powers Authority (LAWCX) The Town is a member of LAWCX for workers compensation claims coverage. The Town has a $250,000 self-insured retention level or uninsured liability for all employees. Once the Town’s deductible is met, LAWCX becomes responsible for claims up to $5,000,000. For claims greater than $5,000,000, LAWCX has a commercial policy providing coverage. Financial statements may be obtained from LAWCX at 1750 Creekside Oaks Dr., Suite 200, Sacramento, California, 95833. The Town has not significantly reduced its insurance coverage from the prior year and settlements have not exceeded insurance coverage for the past three years.
Liability for Uninsured Claims
The Town is required to record its liability for uninsured claims and to reflect the current portion of this liability as an expenditure in its financial statements. As discussed above, the Town has coverage for such claims, but it has retained the risk for the deductibles, or uninsured portion of these claims. The change in Workers’ Compensation and Self-Insurance Service Funds’ claims liabilities, is based on historical trend information provided by its third party administrator and was computed as follows as of June 30, 2024:
Workers' SelfCompensation Insurance
Internal Internal
Service Fund Service Fund Total
Claims payable balance - June 30, 2022 $ 1,364,558 $ 19,557 $ 1,384,115 Claims incurred 790,928 224,382 1,015,310
Inc./(Dec.) in estimated liability for prior claims - - - Claims paid (186,507) (86,210) (272,717)
Claims payable balance - June 30, 2023 1,968,979 157,729 2,126,708 Claims incurred - 124,525 124,525
Claims paid (253,382) (107,859) (361,241)
Claims payable balance - June 30, 2024 $ 1,715,597 $ 174,395 $ 1,889,992 DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 14 - COMMITMENTS AND CONTINGENCIES
Federal and State Grants - The Town participates in several federal and state grant programs. These are subject to examination by grantors and the amount, if any, of disallowed expenditures cannot be determined at this time. The Town expects such amounts, if any, to be immaterial.
Litigation - The Town is subject to litigation arising from the normal course of business. The Town Attorney believes there is no pending litigation which is likely to have a material adverse effect on the financial position of the Town.
Successor Agency - As of June 30, 2024, the Successor Agency trust fund reported a net deficit of $4,643,704.
Encumbrances- As of June 30, 2024, the town had the following encumbered balances that were carried into the next fiscal year:
NOTE 15 - TOWN/SUCCESSOR AGENCY GRANTS, COOPERATIVE AGREEMENTS Public Improvement Grants and Cooperative Agreements
In January of 2011, the Redevelopment Agency entered into a public improvement grant and cooperative agreement with the Town for the purpose of funding the acquisition of public land and designing and constructing various public improvements to be owned by the Town provided that the projects were in accordance with the Redevelopment Agency’s five year implementation plan and redevelopment plan.
The improvement plan, as identified in the agreement, called for approximately $24 million to be granted to the Town for the following projects:
a. Expansion and improvement of current and new downtown parking b. Highway 9 improvements from Highway 17 to Monte Sereno c. Almond Grove Area street, sidewalk and other improvements d. Downtown Los Gatos gateways, signage, banners and art e. Storm drain, retaining wall, street and other improvements f. New Los Gatos library building
During the fiscal year ended June 30, 2012, the rights and obligations resulting from this cooperative agreement were transferred to the Successor Agency Trust Fund as a part of the Town’s dissolution of its Redevelopment Agency.
General Fund $ 1,296,796
Appropriated Reserves Fund 9,182,140
Internal Service Funds 428,490
Total Encumbrances $ 10,907,426
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
Affordable Housing Cooperative Agreement
In March of 2011, the Redevelopment Agency entered into an affordable housing cooperative agreement with the Town for the purpose of funding affordable housing projects and programs to be developed and/or administered by the Town in accordance with the Redevelopment Agency’s five year implementation plan and redevelopment plan. The improvement plan, as identified in the agreement, called for approximately $16 million to be granted to the Town for the following projects:
a. Development of affordable housing at 224 Main St.
b. Development of affordable housing at Dittos Lane
c. Partnership with Senior Housing Solutions for the creation of senior housing in Los Gatos d. Partnerships for the conversion of existing residential developments dedicated to affordable housing e. Grants to the Santa Clara County Housing Trust for the development of affordable housing.
During the fiscal year ended June 30, 2012, the rights and obligations resulting from this cooperative agreement were transferred to the Successor Agency Trust Fund as a part of the Town’s dissolution of its Redevelopment Agency.
DRAFT
ITEM NO. 14.
Required Supplementary Information
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
BENEFIT PLAN SCHEDULES
Schedule of Pension Plan Contributions
Schedule of Proportionate Share of Net Pension Liability – CalPERS Safety Cost Sharing Plan Schedule of Proportionate Share of Net Pension Liability – CalPERS Misc. Agent-Multiple Employer Plan
Schedule of OPEB Contribution
Schedule of Changes in Net OPEB Liability
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
SCHEDULE OF PENSION PLAN CONTRIBUTIONS
Miscellaneous Plan
Plan Measurement Date 2014 2015 2016 2017 2018
Fiscal Year Ended 2015 2016 2017 2018 2019
Contractually Required Contributions $ 1,941,765 $ 2,223,782 $ 2,407,496 $ 2,669,133 $ 3,049,748 Contributions in Relation to
Contractually Required Contributions 1,941,765 2,223,782 2,407,496 2,669,133 3,049,748 Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 8,487,940 $ 9,198,318 $ 9,024,370 $ 9,576,157 $ 10,211,967 Contributions as a % of Covered Payroll 22.88% 24.18% 26.68% 27.87% 29.86% Miscellaneous Plan
Plan Measurement Date 2019 2020 2021 2022 2023
Fiscal Year Ended 2020 2021 2022 2023 2024
Contractually Required Contributions $ 3,366,304 $ 3,529,373 $ 3,472,727 $ 3,687,213 $ 3,878,991 Contributions in Relation to
Contractually Required Contributions 8,146,791 9,160,680 3,472,727 3,687,213 3,878,991 Contribution Deficiency (Excess) $ (4,780,487) $ (5,631,307) $ - $ - $ - Covered Payroll $ 11,188,927 $ 12,082,520 $ 12,305,265 $ 11,094,190 $ 13,817,826 Contributions as a % of Covered Payroll 72.81% 75.82% 28.22% 33.24% 28.07% Continued
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
SCHEDULE OF PENSION PLAN CONTRIBUTIONS
Safety Plan
Plan Measurement Date 2014 2015 2016 2017 2018
Fiscal Year Ended 2015 2016 2017 2018 2019
Contractually Required Contributions $ 1,999,757 $ 1,586,129 $ 1,738,150 $ 1,951,711 $ 2,325,357 Contributions in Relation to
Contractually Required Contributions 1,999,757 1,586,129 1,738,150 1,951,711 2,325,357 Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 4,897,104 $ 5,022,498 $ 4,941,138 $ 5,079,440 $ 4,445,061 Contributions as a % of Covered Payroll 40.84% 31.58% 35.18% 38.42% 52.31% Safety Plan
Plan Measurement Date 2019 2020 2021 2022 2023
Fiscal Year Ended 2020 2021 2022 2023 2024
Contractually Required Contributions $ 2,565,205 $ 2,853,764 $ 3,072,032 $ 3,409,275 $ 3,554,897 Contributions in Relation to
Contractually Required Contributions 2,565,205 2,853,764 3,072,032 3,409,275 3,554,897 Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 4,928,821 $ 5,178,418 $ 5,603,211 $ 5,863,101 $ 6,557,458 Contributions as a % of Covered Payroll 52.05% 55.11% 54.83% 58.15% 54.21% Concluded
Notes to Schedule:
Valuation Date: June 30, 2022
Assumptions Used: Entry Age Method used for Actuarial Cost Method Level Percentage of Payroll and Direct Rate Smoothing
Remaining Amortization Period no more than 29 years
Inflation Assumed at 2.30%
Investment Rate of Returns set at 6.8%
The CalPERS discount rate was increased from 7.50% to 7.65% in FY2016, to 7.15% in FY2018, and then decreased to 6.9% in FY2023.
The CalPERS mortality assumptions was adjusted in fiscal year 2023.
The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing morality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website.
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
SCHEDULE OF PROPORTIONARE SHARE OF NET PENSION LIABILITY
CALPERS SAFETY COST SHARING PLAN
Safety Plan
Plan Measurement Date 2014 2015 2016 2017 2018
Fiscal Year Ended 2015 2016 2017 2018 2019
Proportion of Net Pension
Liability 0.28588% 0.14860% 0.22394% 0.22603% 0.23583%
Proportionate Share of
Net Pension Liability $ 17,788,690 $ 10,199,904 $ 19,377,843 $ 22,415,954 $ 22,725,267 Covered Payroll $ 4,916,535 $ 4,897,104 $ 5,022,498 $ 4,941,138 $ 5,079,440 Proportionate Share of NPL
as a % of Covered Payroll 361.81% 208.28% 385.82% 453.66% 447.40% Plan's Fiduciary Net Position
as a % of the TPL 78.83% 74.89% 74.89% 73.87% 74.52%
Safety Plan
Plan Measurement Date 2019 2020 2021 2022 2023
Fiscal Year Ended 2020 2021 2022 2023 2024
Proportion of Net Pension
Liability 0.24100% 0.24953% 0.30994% 0.27474% 0.50522%
Proportionate Share of
Net Pension Liability $ 24,695,687 $ 27,149,916 $ 16,762,598 $ 31,734,686 $ 63,027,669 Covered Payroll $ 4,445,061 $ 4,928,821 $ 5,178,418 $ 5,603,211 $ 5,863,101 Proportionate Share of NPL
as a % of Covered Payroll 555.58% 550.84% 323.70% 566.37% 1074.99% Plan's Fiduciary Net Position
as a % of the TPL 73.61% 72.46% 83.55% 71.34% 72.85%
The CalPERS discount rate was increased from 7.50% to 7.65% in FY2016, to 7.15% in FY2018, and then decreased to 6.80% in FY2023.
The CalPERS mortality assumptions was adjusted in fiscal year 2023.
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
SCHEDULE OF PROPORTIONARE SHARE OF NET PENSION LIABILITY
CALPERS MISCELLANEOUS AGENT-MULTPLE EMPLOYER PLAN
Measuement Date 2014 2015 2016 2017 2018
Total Pension liability
Service cost $ 1,579,547 $ 1,491,925 $ 1,560,679 $ 1,651,550 $ 1,700,438 Interest 6,268,015 6,483,032 6,697,247 6,820,536 7,073,843 Diff. between expected and actual exp. (623,495) - (357,870) (892,479) 994,994 Changes of assumptions (1,513,132) - 5,481,432 - (655,541) Changes of benefits - - - - -
Benefit payments (including refunds) (4,241,487) (4,748,786) (4,953,756) (5,138,083) (5,448,374) Net change in Total Pension Liability 3,606,075 1,089,544 2,946,300 7,922,956 3,665,360 Total Pension Liability - beginning 84,904,502 88,510,577 89,600,121 92,546,421 100,469,377 Total Pension Liability - ending $ 88,510,577 $ 89,600,121 $ 92,546,421 $ 100,469,377 $ 104,134,737 Plan fiduciary net position
Employer contributions $ 1,796,079 $ 1,941,765 $ 2,223,782 $ 2,407,496 $ 2,669,104 Employee contributions 668,167 679,796 691,770 682,891 761,705 Plan to plan resource movement - 22,561 (28,866) - (170) Projected investment earnings 4,328,173 - - - -
Diff. between est. and actual earnings 5,831,718 - - - - Net investment income 1,470,873 - 369,185 7,171,443 5,883,868 Benefit payments (including refunds) (4,241,487) (4,748,786) (4,953,756) (5,138,083) (5,448,374) Administrative expense (74,706) - (40,462) (95,455) (108,582) Adjsutments - - - (206,199) -
Net change in plan fiduciary net position 8,382,650 (708,497) (1,738,347) 5,028,292 3,551,352 Plan fiduciary net position - beginning 58,716,725 67,099,375 66,390,878 64,652,531 69,680,823 Plan fiduciary net position - ending $ 67,099,375 $ 66,390,878 $ 64,652,531 $ 69,680,823 $ 73,232,175 Net Pension liability (asset) $ 21,411,202 $ 23,209,243 $ 27,893,890 $ 30,788,554 $ 30,902,562 Plan fiduciary net position as a percentage
of the total Pension liability 75.81% 74.10% 69.86% 69.36% 70.32% Covered Payroll $ 8,406,315 $ 8,487,940 $ 9,198,318 $ 9,024,370 $ 9,576,157 Net Pension liability % of covered payroll 254.70% 273.44% 303.25% 341.17% 322.70% Continued
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
SCHEDULE OF PROPORTIONARE SHARE OF NET PENSION LIABILITY
CALPERS MISCELLANEOUS AGENT-MULTPLE EMPLOYER PLAN
Measuement Date 2019 2020 2021 2022 2023
Total Pension liability
Service cost $ 1,771,368 $ 1,930,090 $ 2,062,486 $ 2,264,169 $ 2,092,786 Interest 7,381,846 7,729,269 7,943,404 8,142,881 8,437,589 Diff. between expected and actual exp. 1,082,289 1,465,653 (581,801) (108,166) 631,264 Changes of assumptions - - 3,399,004 - -
Changes of benefits - - - 164,628 -
Benefit payments (including refunds) (5,720,232) (5,958,101) (6,339,615) (6,623,114) (7,069,109) Net change in Total Pension Liability 4,515,271 5,166,911 3,084,474 7,074,774 4,257,158 Total Pension Liability - beginning 104,134,737 108,650,008 113,816,919 116,901,393 123,976,167 Total Pension Liability - ending $ 108,650,008 $ 113,816,919 $ 116,901,393 $ 123,976,167 $ 128,233,325 Plan fiduciary net position
Employer contributions $ 3,049,748 $ 8,146,791 $ 9,160,680 $ 3,472,727 $ 3,687,226 Employee contributions 846,125 834,145 889,649 871,063 916,606 Plan to plan resource movement - - - - -
Projected investment earnings - - - - -
Diff. between est. and actual earnings - - - - -
Net investment income 4,759,034 3,913,294 19,606,360 (7,988,150) 5,876,311 Benefit payments (including refunds) (5,720,232) (5,958,101) (6,339,615) (6,623,114) (7,069,109) Administrative expense (52,260) (107,303) (82,856) (66,142) (70,479) Adjsutments 170 - - - -
Net change in plan fiduciary net position 2,882,585 6,828,826 23,234,218 (10,333,616) 3,340,555 Plan fiduciary net position - beginning 73,232,175 76,114,760 82,943,586 106,177,804 95,844,188 Plan fiduciary net position - ending $ 76,114,760 $ 82,943,586 $ 106,177,804 $ 95,844,188 $ 99,184,743 Net Pension liability (asset) $ 32,535,248 $ 30,873,333 $ 10,723,589 $ 28,131,979 $ 29,048,582 Plan fiduciary net position as a percentage
of the total Pension liability 70.05% 72.87% 90.83% 77.31% 77.35% Covered Payroll $ 10,211,967 $ 11,188,927 $ 12,082,520 $ 12,305,265 $ 11,404,827 Net Pension liability % of covered payroll 318.60% 275.93% 88.75% 228.62% 254.70% Concluded
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
SCHEDULE OF OPEB CONTRIBUTIONS
Fiscal Year Ended 2018 2019 2020 2021 2022 2023 2024
Actuarially determined contribution (ADC) $ 2,129,000 $ 2,108,000 $ 2,172,000 $ 1,859,000 $ 1,860,000 $ 1,372,000 $ 1,427,000 Less: actual contribution in relation to ADC (2,935,000) (2,406,636) (2,508,306) (2,096,847) (1,754,922) (1,733,337) (1,818,298) Contribution deficiency (excess) $ (806,000) $ (298,636) $ (336,306) $ (237,847) $ 105,078 $ (361,337) $ (391,298) Covered payroll $ 16,192,060 $ 17,338,201 $ 17,406,541 $ 17,982,237 $ 16,987,042 $ 17,809,965 $ 18,255,214 Contrib. as a % of covered employee payroll 18.13% 13.88% 14.41% 11.66% 10.33% 9.73% 9.96% Notes to Schedule:
Assumptions and Methods
Valuation Date:
Measurement Date:
Actuarial Cost Method:
Amortization Period:
Asset Valuation Method: Investment gains and losses spread over 5-year rolling period Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Investment Rate of Return
Healthcare Trend Rate
Mortality
Retirement
Other Notes
In FY 2022, the discount rate was updated based on newer capital market assumptions In FY 2022, decreased medical trend rate for Kaiser Senior Advantage In FY 2022, demographic assumptions were updated to CalPERS 2000-2019 Experience Study in FY 2022, the inflation rate decreased 25 basis points, decreasing discount rate, medical trend, and salary increases in FY 2022, retiree and family participation rates at retirement updated In FY 2022, the implicit subsidy was added for Tier 1 Medicare eligible In FY 2022, the mortality improvement scale was updated to Scale MP-2021 June 30, 2023
June 30, 2023
Entry-Age Normal Cost
15 year fixed period for 2023/24
GASB 75 requires a schedule of contributions for the last ten fiscal years, or for as many years as are available if less than ten years are available. GASB 75 was adopted as of June 30, 2018.
CalPERS 2000-2019 Experience Study
CalPERS 2000-2019 Experience Study
6.25%
2.50%
2.75%
Non-Medicare - 6.50% for 2023,
decreasing to an ultimate rate of 3.75% in
6.25%
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
SCHEDULE OF CHANGES IN NET OPEB LIABILITY
Measurement Date 2017 2018 2019 2020 2021 2022 2023
Total OPEB liability
Service cost $ 1,134,000 $ 1,168,227 $ 1,203,274 $ 1,159,152 $ 1,115,309 $ 955,115 $ 940,674 Interest 1,607,000 1,706,270 1,814,072 1,887,105 1,956,034 1,804,972 1,873,207 Differences between expected & actual exp. - (149,297) - (2,521,500) - 153,933 - Changes of assumptions - (392,681) - (533,825) 1,054,638 2,191,064 - Benefit payments (1,269,000) (1,326,313) (1,298,623) (1,399,933) (1,494,906) (1,591,150) (1,716,592) Net change in Total OPEB Liability 1,472,000 1,548,184 1,176,745 1,112,499 109,575 1,168,937 3,442,286 Total OPEB Liability - beginning 23,301,000 24,773,000 26,321,184 27,497,929 28,610,428 28,720,003 29,888,940 Total OPEB Liability - ending $ 24,773,000 $ 26,321,184 $ 27,497,929 $ 28,610,428 $ 28,720,003 $ 29,888,940 $ 33,331,226 Plan fiduciary net position
Employer contributions $ 3,878,000 $ 2,935,313 $ 2,406,636 $ 2,508,306 $ 2,096,847 $ 1,754,922 $ 1,733,337 Net investment income 1,049,000 1,082,977 1,009,315 652,656 5,529,824 (3,510,434) 1,468,115 Benefit payments (1,269,000) (1,326,313) (1,298,623) (1,399,933) (1,494,906) (1,591,150) (1,716,592) Administrative expense (14,000) (34,261) (11,502) (17,357) (18,556) (21,454) (23,387) Net change in plan fiduciary net position 3,644,000 2,657,716 2,105,826 1,743,672 6,113,209 (3,368,116) 1,461,473 Plan fiduciary net position - beginning 9,964,000 13,608,000 16,265,716 18,371,542 20,115,214 26,228,423 22,860,307 Plan fiduciary net position - ending $ 13,608,000 $ 16,265,716 $ 18,371,542 $ 20,115,214 $ 26,228,423 $ 22,860,307 $ 24,321,780 Net OPEB liability (asset) $ 11,165,000 $ 10,055,468 $ 9,126,387 $ 8,495,214 $ 2,491,580 $ 7,028,633 $ 9,009,446 Plan fiduciary net position as a percentage
of the total OPEB liability 54.93% 61.80% 66.81% 70.31% 91.32% 76.48% 72.97% Covered payroll $ 14,985,716 $ 16,192,060 $ 17,338,201 $ 17,406,541 $ 17,982,237 $ 16,987,042 $ 17,809,965 NOL as a % of cov. emp. payroll 74.50% 62.10% 52.64% 48.80% 13.86% 41.38% 50.59% Other Notes
GASB 75 requires a schedule of contributions for the last ten fiscal years, or for as many years as are available if less than ten years are available. GASB 75 was adopted as of June 30, 2018.
DRAFT
ITEM NO. 14.
Supplementary Information
DRAFT
ITEM NO. 14.
This Page Left Intentionally Blank
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
MAJOR GOVERNMENTAL FUND SCHEDULES
(OTHER THAN THE GENERAL FUND) AND
NONMAJOR GOVERNMENTAL FUNDS
Schedule of Revenue, Expenditures and Changes in Fund Balances – Budget and Actual (GAAP):
Appropriated Reserves Fund is used to account for resources provided for capital projects not fully funded from other sources.
Capital Projects Funds:
Storm Drain Basin Funds were established to account for fees paid in conjunction with the development in specified drainage areas.
Construction Tax Funds were established to account for tax levies on building additions or alterations including capital improvements, underground utilities and parks.
Gas Tax Fund was established to account for revenue and expenditures under the State of California Streets and Highways Code Sections 2106, 2107 and 2107.5. The revenues must be used for the maintenance and construction of streets.
Special Revenue Funds:
Community Development Block Grant Fund was established to account for grant funds received and expended under the Community Development Act of 1974.
Non-Point Source Maintenance Fund was established to comply with obligations under the National Pollutant Discharge Elimination system permit issued by the California Regional Water Quality Control Board.
Lighting and Landscape Fund was established to account for maintenance of trees, landscaping, irrigation systems and lighting within the boundaries of Tract No. 8439.
LG Theatre Fund was established to account for monies received from rents on donated property and related expenditures.
Library Trust Fund was established to provide for the servicing of donations and bequests to the Town's Library Program.
DRAFT
ITEM NO. 14.
Variance
Original Final Positive
Budget Budget Actual (Negative)
REVENUES
Licenses & permits $ 110,000 $ 110,000 $ 157,535 $ 47,535 Intergovernmental 3,188,473 2,994,500 3,362,026 367,526 Charges for services 951,800 904,869 1,137,659 232,790
Developer assessments 10,000 10,000 12,880 2,880
Interest - - 100,179 100,179
Use of Property 96,000 96,000 91,284 (4,716)
Other - - - -
Total Revenues 4,356,273 4,115,369 4,861,563 746,194
EXPENDITURES
Capital outlay 7,993,617 10,192,475 10,193,353 (878)
Total Expenditures 7,993,617 10,192,475 10,193,353 (878)
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (3,637,344) (6,077,106) (5,331,790) 745,316
OTHER FINANCING SOURCES (USES)
Transfers in 2,253,273 3,119,554 3,101,325 (18,229)
Transfers (out) (427,616) (451,491) (453,990) (2,499)
Total Other Financing Sources (Uses) 1,825,657 2,668,063 2,647,335 (20,728) CHANGE IN FUND BALANCE $ (1,811,687) $ (3,409,043) (2,684,455) $ 724,588 BEGINNING FUND BALANCE 21,750,025
ENDING FUND BALANCE $ 19,065,570
BUDGET AND ACTUAL (GAAP)
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
TOWN OF LOS GATOS
APPROPRIATED RESERVES FUND
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
DRAFT
ITEM NO. 14.
Total
Capital
Storm Construction Gas Projects
Drains Tax Tax Funds
ASSETS
Cash & investments $ 3,531,248 $ 3,584,251 $ 1,698,293 $ 8,813,792 Restricted cash & investments - - - -
Receivables:
Accounts - - - -
Intergovernmental receivable - - 229,874 229,874
Leases receivable - - - -
Long term notes receivable - - - -
Total Assets $ 3,531,248 $ 3,584,251 $ 1,928,167 $ 9,043,666
LIABILITIES
Accounts payable $ - $ - $ - $ -
Accrued payroll and benefits - - - -
Unearned revenue - - - -
Total Liabilities - - - -
DEFERRED INFLOWS OF RESOURCES
Leases - - - -
FUND BALANCE
Restricted for:
Library - - - -
Repairs and maintenance - - - -
Capital projects 3,531,248 3,584,251 1,928,167 9,043,666 Committed to:
Special revenue funds - - - -
Total Fund Balances 3,531,248 3,584,251 1,928,167 9,043,666 Total Liabilities and Fund Balances $ 3,531,248 $ 3,584,251 $ 1,928,167 $ 9,043,666 (Continued)
CAPITAL PROJECTS FUNDS
TOWN OF LOS GATOS
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEETS
JUNE 30, 2024
DRAFT
ITEM NO. 14.
Non-Point
Community Source Lighting and
Development Maintenance Landscaping
ASSETS
Cash & investments $ 94,412 $ 711,648 $ 187,092
Restricted cash & investments 58,344 - -
Receivables:
Accounts - 46,938 -
Intergovernmental receivable - - 220
Leases receivable - - -
Long term notes receivable 78,752 - -
Total Assets $ 231,508 $ 758,586 $ 187,312
LIABILITIES
Accounts payable $ 60 $ 1,228 $ 4,687
Accrued payroll and benefits - 3,224 -
Unearned revenue 64,795 - -
Total Liabilities 64,855 4,452 4,687
DEFERRED INFLOWS OF RESOURCES
Leases - - -
FUND BALANCE
Restricted for:
Library - - -
Repairs and maintenance - - 182,625
Capital projects - - -
Committed to:
Special revenue funds 166,653 754,134 -
Total Fund Balances 166,653 754,134 182,625
Total Liabilities and Fund Balances $ 231,508 $ 758,586 $ 187,312 (Continued)
SPECIAL REVENUE FUNDS
TOWN OF LOS GATOS
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEETS
JUNE 30, 2024
DRAFT
ITEM NO. 14.
Total
Total Nonmajor
LG Library Special Revenue Governmental
Theatre Trust Funds Funds
ASSETS
Cash & investments $ 48,338 $ 559,788 $ 1,601,278 $ 10,415,070 Restricted cash & investments - - 58,344 58,344
Receivables:
Accounts 35,905 - 82,843 82,843
Intergovernmental receivable - - 220 230,094
Leases receivable 304,129 - 304,129 304,129
Long term notes receivable - - 78,752 78,752
Total Assets $ 388,372 $ 559,788 $ 2,125,566 $ 11,169,232
LIABILITIES
Accounts payable $ 15,085 $ 2,940 $ 24,000 $ 24,000
Accrued payroll and benefits - - 3,224 3,224
Unearned revenue - - 64,795 64,795
Total Liabilities 15,085 2,940 92,019 92,019
DEFERRED INFLOWS OF RESOURCES
Leases 202,252 - 202,252 202,252
FUND BALANCE
Restricted for:
Library - 556,848 556,848 556,848
Repairs and maintenance - - 182,625 182,625
Capital projects - - 9,043,666 -
Committed to:
Special revenue funds 171,035 1,091,822 - 1,091,822
Total Fund Balances 171,035 556,848 1,831,295 10,874,961 Total Liabilities and Fund Balances $ 388,372 $ 559,788 $ 2,125,566 $ 11,169,232 (Concluded)
TOWN OF LOS GATOS
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEETS
JUNE 30, 2024
SPECIAL REVENUE FUNDS
DRAFT
ITEM NO. 14.
Total
Storm Construction Gas Capital Projects
Drain Tax Tax Funds
REVENUES
Property Taxes $ - $ - $ - $ -
Other Taxes - 24,838 - 24,838
License and permits 196,604 - - 196,604
Intergovernmental - - 1,781,448 1,781,448
Interest 116,313 120,417 46,074 282,804
Use of property - - - -
Other - - - -
Total Revenues 312,917 145,255 1,827,522 2,285,694
EXPENDITURES
Current:
Parks and public works - - - -
Library services - - - -
Sanitation and other - - - -
Capital Outlay - - 1,464,600 1,464,600
Total Expenditures - - 1,464,600 1,464,600
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 312,917 145,255 362,922 821,094
OTHER FINANCING SOURCES (USES)
Transfers in - - - -
Transfers (out) - - (106,000) (106,000)
Total Other Financing Sources (Uses) - - (106,000) (106,000) Changes in Fund Balances 312,917 145,255 256,922 715,094 Fund Balances - Beginning of year 3,218,331 3,438,996 1,671,245 8,328,572 Fund Balances - End of year $ 3,531,248 $ 3,584,251 $ 1,928,167 $ 9,043,666 (Continued)
TOWN OF LOS GATOS
NONMAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
CAPITAL PROJECTS FUNDS
DRAFT
ITEM NO. 14.
Non-Point
Community Source Lighting and
Development Maintenance Landscaping
REVENUES
Property Taxes $ - $ - $ 38,437
Other Taxes - - -
License and permits - 359,950 -
Intergovernmental - 16,946 -
Interest - - 6,118
Use of property - - -
Other - - -
Total Revenues - 376,896 44,555
EXPENDITURES
Current:
Parks and public works - - 33,976
Library services - - -
Sanitation and other - 252,605 -
Capital Outlay - - -
Total Expenditures - 252,605 33,976
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES - 124,291 10,579
OTHER FINANCING SOURCES (USES)
Transfers in - - -
Transfers (out) - - (4,920)
Total Other Financing Sources (Uses) - - (4,920)
Changes in Fund Balances - 124,291 5,659
Fund Balances - Beginning of year 166,653 629,843 176,966 Fund Balances - End of year $ 166,653 $ 754,134 $ 182,625 (Continued)
NONMAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
TOWN OF LOS GATOS
AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
DRAFT
ITEM NO. 14.
Total
LG Library Special Revenue
Theatre Trust Funds Total
REVENUES
Property Taxes $ - $ - $ 38,437 $ 38,437
Other Taxes - - - 24,838
License and permits - - 359,950 556,554
Intergovernmental - - 16,946 1,798,394
Interest - 20,263 26,381 309,185
Use of property 171,495 - 171,495 171,495
Other - 88,411 88,411 88,411
Total Revenues 171,495 108,674 701,620 2,987,314
EXPENDITURES
Current:
Parks and public works 75,451 - 109,427 109,427
Library services - 82,000 82,000 82,000
Sanitation and other - - 252,605 252,605
Capital Outlay - - - 1,464,600
Total Expenditures 75,451 82,000 444,032 1,908,632
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 96,044 26,674 257,588 1,078,682
OTHER FINANCING SOURCES (USES)
Transfers in - - - -
Transfers (out) - - (4,920) (110,920)
Total Other Financing Sources (Uses) - - (4,920) (110,920) Changes in Fund Balances 96,044 26,674 252,668 967,762
Fund Balances - Beginning of year 74,991 530,174 1,578,627 9,907,199 Fund Balances - End of year $ 171,035 $ 556,848 $ 1,831,295 $ 10,874,961 (Concluded)
AND CHANGES IN FUND BALANCES
TOWN OF LOS GATOS
NONMAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
SPECIAL REVENUE FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS
BUDGETED NONMAJOR FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (GAAP)
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Property taxes $ - $ - $ - $ - $ - $ -
Other taxes - - - 30,000 24,838 (5,162)
License and permits 92,500 196,604 104,104 - - -
Intergovernmental - - - - - -
Interest 13,170 116,313 103,143 15,190 120,417 105,227
Use of property - - - - - -
Other - - - - - -
Total Revenues 105,670 312,917 207,247 45,190 145,255 100,065
EXPENDITURES
Current:
Parks and public works - - - - - -
Library services - - - - - -
Sanitation and other - - - - - -
Capital outlay - - - - - -
Total Expenditures - - - - - -
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 105,670 312,917 207,247 45,190 145,255 100,065
OTHER FINANCING SOURCES (USES)
Operating transfers in - - - - - -
Operating transfers (out) - - - - - -
Total Other Financing Sources (Uses) - - - - - -
CHANGE IN FUND BALANCE $ 105,670 312,917 $ 207,247 $ 45,190 145,255 $ 100,065 BEGINNING FUND BALANCE 3,218,331 3,438,996
ENDING FUND BALANCE $ 3,531,248 $ 3,584,251
(Continued)
STORM DRAIN CONSTRUCTION TAX
DRAFT
ITEM NO. 14.
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Property taxes $ - $ - $ - $ - $ - $ -
Other taxes - - - - - -
License and permits - - - - - -
Intergovernmental 1,712,974 1,781,448 68,474 - - -
Interest 1,402 46,074 44,672 - - -
Use of property - - - - - -
Other - - - - - -
Total Revenues 1,714,376 1,827,522 113,146 - - -
EXPENDITURES
Current:
Parks and public works - - - - - -
Library services - - - - - -
Sanitation and other - - - - - -
Capital outlay 1,464,599 1,464,600 (1) - - -
Total Expenditures 1,464,599 1,464,600 (1) - - -
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 249,777 362,922 113,145 - - -
OTHER FINANCING SOURCES (USES)
Operating transfers in - - - - - -
Operating transfers (out) (106,000) (106,000) - - - -
Total Other Financing Sources (Uses) (106,000) (106,000) - - - - CHANGE IN FUND BALANCE $ 143,777 256,922 $ 113,145 $ - - $ - BEGINNING FUND BALANCE 1,671,245 166,653
ENDING FUND BALANCE $ 1,928,167 $ 166,653
(Continued)
GAS TAX
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
COMMUNITY DEVELOPMENT
TOWN OF LOS GATOS
BUDGETED NONMAJOR FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (GAAP)
DRAFT
ITEM NO. 14.
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Property taxes $ - $ - $ - $ 38,220 $ 38,437 $ 217
Other taxes - - - - - -
License and permits 359,950 359,950 - - - -
Intergovernmental - 16,946 16,946 - - -
Interest - - - 1,010 6,118 5,108
Use of property - - - - - -
Other - - - - - -
Total Revenues 359,950 376,896 16,946 39,230 44,555 5,325
EXPENDITURES
Current:
Parks and public works - - - 42,764 33,976 8,788
Library services - - - - - -
Sanitation and other 274,587 252,605 21,982 - - -
Capital outlay - - - - - -
Total Expenditures 274,587 252,605 21,982 42,764 33,976 8,788
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 85,363 124,291 38,928 (3,534) 10,579 14,113
OTHER FINANCING SOURCES (USES)
Operating transfers in - - - - - -
Operating transfers (out) - - - (4,920) (4,920) -
Total Other Financing Sources (Uses) - - - (4,920) (4,920) - CHANGE IN FUND BALANCE $ 85,363 124,291 $ 38,928 $ (8,454) 5,659 $ 14,113 BEGINNING FUND BALANCE 629,843 176,966
ENDING FUND BALANCE $ 754,134 $ 182,625
(Continued)
TOWN OF LOS GATOS
BUDGETED NONMAJOR FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (GAAP)
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
NON-POINT
SOURCE MAINTENANCE LIGHTING AND LANDSCAPING
DRAFT
ITEM NO. 14.
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Property taxes $ - $ - $ - $ - $ - $ -
Other taxes - - - - - -
License and permits - - - - - -
Intergovernmental - - - - - -
Interest - - - 4,800 20,263 15,463
Use of property 119,845 171,495 51,650 - - -
Other 54,155 - (54,155) 88,300 88,411 111
Total Revenues 174,000 171,495 (2,505) 93,100 108,674 15,574
EXPENDITURES
Current:
Parks and public works 117,364 75,451 41,913 - - -
Library services - - - 79,800 82,000 (2,200)
Sanitation and other - - - - - -
Capital outlay - - - 21,000 - 21,000
Total Expenditures 117,364 75,451 41,913 100,800 82,000 18,800
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 56,636 96,044 39,408 (7,700) 26,674 34,374
OTHER FINANCING SOURCES (USES)
Operating transfers in - - - - - -
Operating transfers (out) - - - - - -
Total Other Financing Sources (Uses) - - - - - -
CHANGE IN FUND BALANCE $ 56,636 96,044 $ 39,408 $ (7,700) 26,674 $ 34,374 BEGINNING FUND BALANCE 74,991 530,174
ENDING FUND BALANCE $ 171,035 $ 556,848
(Continued)
TOWN OF LOS GATOS
BUDGETED NONMAJOR FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (GAAP)
LG Theatre Library Trust
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
DRAFT
ITEM NO. 14.
Variance
Positive
Budget Actual (Negative)
REVENUES
Property taxes $ 38,220 $ 38,437 $ 217
Other taxes 30,000 24,838 (5,162)
License and permits 452,450 556,554 104,104
Intergovernmental 1,712,974 1,798,394 85,420
Interest 35,572 309,185 273,613
Use of property 119,845 171,495 51,650
Other 142,455 88,411 (54,044)
Total Revenues 2,531,516 2,987,314 455,798
EXPENDITURES
Current:
Parks and public works 160,128 109,427 50,701
Library services 79,800 82,000 -
Sanitation and other 274,587 252,605 21,982
Capital outlay 1,485,599 1,464,600 20,999
Total Expenditures 2,000,114 1,908,632 93,682
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 531,402 1,078,682 547,280
OTHER FINANCING SOURCES (USES)
Operating transfers in - - -
Operating transfers (out) (110,920) (110,920) -
Total Other Financing Sources (Uses) (110,920) (110,920) - CHANGE IN FUND BALANCE $ 420,482 967,762 $ 547,280
BEGINNING FUND BALANCE 9,907,199
ENDING FUND BALANCE $ 10,874,961
(Concluded)
TOWN OF LOS GATOS
BUDGETED NONMAJOR FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (GAAP)
TOTALS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
DRAFT
ITEM NO. 14.
TOWN OF LOS GATOS, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
PROPRIETARY FUNDS
INTERNAL SERVICE FUNDS
Internal service funds are used to finance and account for special activities and service performed by a designed department for other departments in the Town on a cost reimbursement basis.
The concept of major funds does not extend to internal service funds because they are used for internal activities only. In the Government-Wide Statement of Activities, the net revenues and expenses of the internal service funds are allocated to the Town departments or programs that generated them, thus eliminating internal service funds.
However, internal service funds are still presented separately in the fund financial statements and include the following funds:
Equipment Fund was established to account for the replacement of major Town equipment and all vehicle replacement.
Workers’ Compensation Fund was established to account for future claims that may occur related to workers compensation injuries.
Self-Insurance Fund was established to account for future general liability claims against the Town.
Information Technology Fund was established to account for the replacement of management information computer systems and components.
Facilities Maintenance Fund was established to account for preventative maintenance and repair for all Town buildings.
DRAFT
ITEM NO. 14.
Workers' Self Information Facilities
Equipment Comp Insurance Technology Maintenance Total
ASSETS
Cash & Investments $ 3,282,974 $ 2,197,137 $ 374,533 $ 2,496,250 $ 498,673 $ 8,849,567 Restricted Cash & Investments - 121,438 - - - 121,438
Receivables:
Accounts 4,553 - - 4,403 30,454 39,410
Leases receivable - - - - 1,407,683 1,407,683
Subscription assets, net - - - 511,016 - 511,016
Total Assets $ 3,287,527 $ 2,318,575 $ 374,533 $ 3,011,669 $ 1,936,810 $ 10,929,114
LIABILITIES
Accounts Payable $ 975 $ 16,731 $ 22,261 $ 22,596 $ 154,954 $ 217,517 Due to Other Governments - - - - 59 59
Interest payable - - - 19,943 - 19,943
Claims Payable - 1,715,597 174,395 - - 1,889,992
Subscription liabilities - - - 445,781 - 445,781
Total Liabilities $ 1,732,328 975 $ $ 196,656 $ 488,320 $ 155,013 $ 2,573,292 Deferred Inflows of Resources
Leases $ - $ - $ - $ 821,272 - $ $ 821,272
NET POSITION
Net investment in capital assets -$ -$ -$ 65,235 $ -$ $ 65,235 Restricted for:
Wokers compensation claims - 121,438 - - - 121,438
Unrestricted 3,286,552 464,809 177,877 2,458,114 960,525 7,347,877 Total Net Position $ 3,286,552 $ 586,247 $ 177,877 $ 2,523,349 $ 960,525 $ 7,534,550
TOWN OF LOS GATOS
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 2024
DRAFT
ITEM NO. 14.
Workers' Self Information Facilities
Equipment Comp Insurance Technology Maintenance Total
OPERATING REVENUES
Charges for services $ 1,026,738 $ 1,011,814 $ 662,039 $ 781,902 $ 916,324 $ 4,398,817 Use of money and property 1,100 - - - 165,273 166,373
Other local taxes - - - - 24,838 24,838
Other revenue & reimbursements 32,317 392,312 5,000 (1,253) 57,889 486,265 Total Operating Revenues 1,060,155 1,404,126 667,039 780,649 1,164,324 5,076,293
OPERATING EXPENSES
Insurance expenses - 1,332,697 1,131,184 - - 2,463,881
Services and supplies 187,323 - - 507,075 1,374,009 2,068,407 Depreciation/amortization expense - - - 202,422 - 202,422 Total Operating Expenses 187,323 1,332,697 1,131,184 709,497 1,374,009 4,734,710 Operating Income (loss) 872,832 71,429 (464,145) 71,152 (209,685) 341,583
NONOPERATING REVENUE (EXPENSES)
Investment earnings - 5 - - 21,511 21,516
Interest expense - - - (22,421) - (22,421)
Income (loss) before transfers 872,832 71,434 (464,145) 48,731 (188,174) 340,678 Transfers in - - 430,000 - 221,000 651,000
Transfers out - - - - - -
Net Transfers - - 430,000 - 221,000 651,000
Change in Net Position 872,832 71,434 (34,145) 48,731 32,826 991,678 BEGINNING NET POSITION 2,413,720 514,813 212,022 2,474,618 927,699 6,542,872 ENDING NET POSITION $ 3,286,552 $ 586,247 $ 177,877 $ 2,523,349 $ 960,525 $ 7,534,550
TOWN OF LOS GATOS
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE FISCAL YEAR ENDED JUNE 30, 2024
DRAFT
ITEM NO. 14.
Workers' Self Information Facilities
Equipment Comp Insurance Technology Maintenance Total
CASH FLOWS FROM OPERATING
ACTIVITIES
Receipts from customers $ 1,086,133 $ 1,013,814 $ 662,039 $ 794,300 $ 1,202,972 $ 4,759,258 Payments to suppliers and providers (204,320) (1,321,360) (1,001,301) (580,860) (1,325,830) (4,433,671) Insurance reimbursements - 392,312 5,000 - - 397,312
Claims paid - (253,382) (107,859) - - (361,241)
Net Cash Provided (Used) by
Operating Activities 881,813 (168,616) (442,121) 213,440 (122,858) 361,658
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in - - 430,000 - 221,000 651,000
Transfers out - - - - - -
Net Cash Provided (Used) by
Noncapital Financing Activities - - 430,000 - 221,000 651,000
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Interest paid - - - (30,393) - (30,393)
Principal paid - - - (149,154) - (149,154)
Acquisition of subscription assets - - - - - -
Net Cash Used by Capital and
Related Financing Activities - - - (179,547) - (179,547)
CASH FLOWS FROM INVESTING ACTIVITIES
Collections from investment earnings - 5 - - 21,511 21,516 Net Cash Provided by Investing Activities - 5 - - 21,511 21,516 Net Increase(Decrease) in Cash and Investments 881,813 (168,611) (12,121) 33,893 119,653 854,627 Cash and investments - beginning of year 2,401,161 2,487,186 386,654 2,462,357 379,020 8,116,378 Cash and investments - end of year $ 3,282,974 $ 2,318,575 $ 374,533 $ 2,496,250 $ 498,673 $ 8,971,005 Reconciliation of Operating Income to Cash
Flows from Operating Activities:
Operating Income $ 872,832 $ 71,429 $ (464,145) $ 71,152 $ (209,685) $ 341,583 Adjustments to reconcile operating income to
cash flows from operating activities:
Depreciation/amortization - - - 202,422 - 202,422
Change in assets and liabilities:
Accounts receivable 25,978 2,000 - 13,651 (5,601) 36,028 Leases receivable - - - - (59,528) (59,528)
Deferred inflows of resources - - - - 103,777 103,777
Accounts payable (16,997) 11,337 5,358 (73,785) 48,179 (25,908) Claims payable - (253,382) 16,666 - - (236,716)
Cash Flows From Operating Activities $ 881,813 $ (168,616) $ (442,121) $ 213,440 $ (122,858) $ 361,658
TOWN OF LOS GATOS
INTERNAL SERVICE FUNDS
COMBINING STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
DRAFT
ITEM NO. 14.
Statistical Section
DRAFT
ITEM NO. 14.
This Page Left Intentionally Blank
DRAFT
ITEM NO. 14.
STATISTICAL (UNAUDITED)
This part of the Town of Los Gatos Annual Comprehensive Financial Report (“ACFR”) presents the detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the Town’s overall financial health.
Financial Trends
These schedules contain trend information to help the reader understand how Town’s financial performance and well-being have changed over time. (Schedule 1, Schedule 2, Schedule 3, and Schedule 4).
Revenue Capacity
These schedules contain information to help the reader assess one of the Town’s most significant local revenue source, the property tax (Schedule 5, Schedule 6, Schedule 7, and Schedule 8).
Debt Capacity
These schedules present information to help the reader assess the affordability of the Town’s current levels of outstanding debt and its ability to issue additional debt in the future (Schedule 9, Schedule 10, and Schedule 11)
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the Town’s financial activities take place (Schedule 12, Schedule 13, and schedule 14).
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the Town’s ACFR relates to the services the Town provides and activities it performs (Schedule 15 and Schedule 16).
DRAFT
ITEM NO. 14.
This Page Left Intentionally Blank
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 1
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Fiscal Net Investment Total
Year in Capital Assets Restricted Unrestricted Net Position 2015 93,687,029 5,663,182 7,180,919 106,531,130
2016 93,383,855 6,386,014 12,744,637 112,514,506
2017 96,265,652 5,627,707 15,134,420 117,027,779
2018 102,098,729 8,199,598 170,590 110,468,917 (1)
2019 107,542,588 11,918,688 -4,642,167 114,819,109 (2)
2020 111,700,225 7,117,984 -3,967,178 114,851,031
2021 109,894,936 8,358,267 -4,735,103 113,518,100
2022 126,418,275 10,203,412 1,785,294 138,406,981
2023 130,888,581 11,091,020 11,542,661 153,522,262
2024 137,253,582 13,015,461 9,137,174 159,406,217
(2) The decrease in unrestricted net position resulted largely from the use of approximately $8.0 million in unrestricted cash balances in the Town’s GFAR fund during the year to invest in the Town’s infrastructure and equipment. (1) Net position was restated for FY 2018 for amounts placed into fiduciary funds, reclassified to General Fund Restricted Asset. -15,000,000
-10,000,000
-5,000,000
0 5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
50,000,000
55,000,000
60,000,000
65,000,000
70,000,000
75,000,000
80,000,000
85,000,000
90,000,000
95,000,000
100,000,000
105,000,000
110,000,000
115,000,000
120,000,000
125,000,000
130,000,000
135,000,000
140,000,000
145,000,000
Net Investment in Capital Assets Restricted Unrestricted DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 2
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014/15 2015/16 2016/17 2017/18 2018/19
Expenses
Governmental Activities:
General Government $ 6,465,852 $ 6,993,661 $ 6,771,628 $ 7,948,918 $ 8,163,991 Public Safety 12,644,221 12,825,688 14,587,597 15,545,521 16,635,726 Parks and Public Works 8,069,352 8,320,623 9,502,707 10,047,003 10,627,716 Community Development 4,047,738 3,227,224 5,093,459 4,667,609 5,064,637 Library Services 2,553,414 2,522,142 2,868,748 3,087,684 3,059,294 Sanitation 491,359 528,580 466,762 536,296 684,673
Interest and Fees - - - - -
Total Governmental Activities 34,271,936 34,417,918 39,290,901 41,833,031 44,236,037 Program Revenues
Charges for Services:
General Government 1,888,213 1,517,012 1,669,020 1,701,146 1,562,683 Public Safety 3,529,166 3,278,585 2,076,688 1,888,359 1,745,889 Parks and Public Works 2,206,765 1,516,108 2,155,841 4,150,068 2,910,936 Community Development 5,027,497 4,359,146 3,803,626 3,456,390 4,155,231 Library Services 53,123 46,192 46,746 14,702 9,476
Sanitation 328,868 368,813 410,626 771,442 966,130
Operating Grants and Contributions:
General Government - 15,291 - - -
Public Safety 24,838 98,138 837,329 895,730 826,643
Parks and Public Works 907,745 749,300 665,779 953,294 1,301,152 Community Development - - - - -
Library Services 4,062 12,228 - 57,200 47,482
Capital Grants and Contributions:
General Government 176,705 - - - -
Public Safety - - - - -
Parks and Public Works 2,338,154 1,610,657 770,600 348,437 146,792 Community Development - - 9,280 - -
Total Program Revenues 16,485,136 13,571,470 12,445,535 14,236,768 13,672,414 General Revenues and Special Items:
Property Taxes 12,931,603 13,763,458 14,756,214 15,958,406 17,321,347 Sales Taxes 8,202,678 7,501,175 8,925,276 7,466,253 8,158,152 Franchise Taxes 2,215,430 2,258,892 2,366,908 2,474,814 2,475,916 Other Taxes 2,062,893 1,997,497 2,351,223 2,667,840 2,726,743 Motor Vehicle in Lieu - 12,308 14,056 16,483 14,689
Developer Assessments - - - - -
Investment Earnings 428,772 698,324 192,260 333,120 1,809,128 Sale of Property - - - - -
Miscellaneous 813,324 598,170 528,946 622,105 2,407,840 Insurance recoveries - - - - -
Total General Revenues and Special Items 26,654,700 26,829,824 29,134,883 29,539,021 34,913,815 Change in Net Position $ 8,867,900 $ 5,983,376 $ 2,289,517 $ 1,942,758 $ 4,350,192 Continued
Fiscal Year
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 2
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2019/20 2020/21 2021/22 2022/23 2023/241
Expenses
Governmental Activities:
General Government $ 7,405,368 $ 7,086,377 $ 15,681,345 $ 10,522,568 $ 11,113,238 Public Safety 20,446,188 19,808,230 15,093,308 17,428,923 23,783,313 Parks and Public Works 11,803,005 13,141,034 12,969,615 12,258,626 14,075,171 Community Development 5,001,958 6,846,834 5,827,001 5,215,961 5,481,765 Library Services 3,347,523 3,496,153 2,969,954 3,653,642 3,853,748 Sanitation 3,041 185,981 178,575 208,262 263,706
Interest and Fees - - - 29,221 26,137
Total Governmental Activities 48,007,083 50,564,609 52,719,798 49,317,203 58,597,078 Program Revenues
Charges for Services:
General Government1 1,470,324 1,894,080 1,725,857 2,635,527 2,694,162 Public Safety 1,549,207 1,288,358 1,596,313 1,846,312 1,980,431 Parks and Public Works 3,674,222 4,209,048 5,090,014 3,590,936 4,211,420 Community Development 3,351,753 4,063,776 4,129,718 3,971,336 4,247,279 Library Services 11,522 - 521 2,039 2,514
Sanitation 231,323 299,478 231,323 359,950 359,950
Operating Grants and Contributions:
General Government 12,290 - 2,766,833 - 63,088
Public Safety 952,045 1,061,344 1,144,226 4,622,373 917,317 Parks and Public Works 2,824,638 1,547,102 1,482,896 1,735,608 1,828,050 Community Development 15,864 223,129 670,929 616,937 692,151 Library Services 49,351 55,181 114,958 174,663 167,303
Capital Grants and Contributions:
General Government 8,258 2,365 12,205,050 - -
Public Safety 9,100 - - - -
Parks and Public Works 832,755 843,980 10,021,156 3,915,175 5,668,252 Community Development - - - - -
Total Program Revenues 14,992,652 15,487,841 41,179,794 23,470,856 22,831,917 General Revenues and Special Items:
Property Taxes 18,330,426 19,878,835 21,132,098 22,746,842 24,224,142 Sales Taxes 7,531,425 7,933,604 8,483,673 8,806,477 8,071,735 Franchise Taxes1 2,495,792 2,499,463 2,822,515 3,074,624 2,547,011 Other Taxes 1,911,774 1,126,887 2,042,580 2,292,008 2,422,849 Motor Vehicle in Lieu 24,526 23,058 35,624 34,406 41,461 Developer Fees - - 1,735,571 614,820 12,880
Investment Earnings 2,428,470 227,136 (1,278,978) 797,587 3,129,616 Sale of Property - - - - -
Miscellaneous 323,940 1,528,039 755,400 1,029,864 1,199,422 Insurance recoveries - - - 1,565,000 -
Total General Revenues and Special Items 33,046,353 33,217,022 35,728,483 40,961,628 41,649,116 Change in Net Position $ 31,922 $ (1,859,746) $ 24,188,479 $ 15,115,281 $ 5,883,955 Concluded
(1) Starting in March 2024, due to a change in the JPA agreement, Garbage Franchise Fees were categorized as encroachment fees under Charges for Services. The total amount classified in Fiscal Year
Licenses & Permits in FY 2023/24 was $765,900. The garbage Franchise Fees were $2,051,33 in FY 2022/23 and $1,493,184 in FY 2023/24.
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 3
Fund Balance, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2014/15 2015/16 2016/17 2017/18 2018/19
General Fund
Nonspendable $ - $ - $ - $ - $ -
Restricted - - - 1,206,851 5,015,316
Committed - 20,019,187 15,129,925 12,953,399 15,070,944 Assigned 24,121,256 9,555,085 14,050,699 17,475,285 18,256,895 Unassigned - - - - -
Total General Fund 24,121,256 29,574,272 29,180,624 31,635,535 38,343,155 All Other Governmental Funds
Restricted 5,663,182 6,386,014 5,627,707 6,992,747 6,903,372 Committed - 3,696,000 10,354,584 5,571,087 2,579,997
Assigned 15,346,558 11,099,076 7,928,994 6,361,403 6,180,930 Unassigned 206,875 - - - -
Total All Other Governmental Funds 21,216,615 21,181,090 23,911,285 18,925,237 15,664,299 Total Fund Balances $ 45,337,871 $ 50,755,362 $ 53,091,909 $ 50,560,772 $ 54,007,454 Continued
Fiscal Year
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 3
Fund Balance, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2019/20 2020/21 2021/22 2022/23 2023/24
General Fund
Nonspendable $ - $ 159,000 $ 159,000 $ 159,000 $ 159,000 Restricted 669,978 - 690,000 1,444,501 2,532,997
Committed 15,387,706 11,220,970 12,283,132 13,150,130 14,364,143 Assigned 13,277,813 12,534,648 13,764,657 14,774,673 14,005,932 Unassigned - - - - -
Total General Fund 29,335,497 23,914,618 26,896,789 29,528,304 31,062,072 All Other Governmental Funds
Restricted 6,448,006 8,562,653 9,383,483 9,530,538 10,361,026 Committed - - 637,711 2,590,257 2,664,441
Assigned 14,181,679 15,360,481 13,944,155 19,536,429 16,915,064 Unassigned - - - - -
Total All Other Governmental Funds 20,629,685 23,923,134 23,965,349 31,657,224 29,940,531 Total Fund Balances $ 49,965,182 $ 47,837,752 $ 50,862,138 $ 61,185,528 $ 61,002,603 Concluded
Fiscal Year
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 4
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2014/15 2015/16 2016/17 2017/18 2018/19
Revenues:
Taxes $ 23,208,820 $ 23,269,892 $ 25,945,129 $ 26,253,026 $ 28,244,329 Licenses & Permits 6,467,771 5,442,133 5,075,503 5,937,044 5,173,876 Intergovernmental 2,921,002 2,573,475 1,715,580 2,124,903 2,310,655 Charges for Services 5,794,386 4,773,001 4,210,174 5,395,057 5,584,504 Fines and Forfeitures 868,564 879,277 917,105 676,212 510,266 Franchise Fees 2,215,430 2,258,892 2,366,908 2,474,814 2,475,916 Developer Fees - - - - -
Investment Income 428,735 698,308 192,978 332,938 1,809,164 Use of Property 32,209 31,723 32,096 32,206 32,960
Other 3,130,975 2,396,992 1,011,939 640,844 579,755
Total Revenues 45,067,892 42,323,693 41,467,412 43,867,044 46,721,425 Expenditures:
Current
General Government 8,647,451 9,144,797 8,390,959 8,770,082 8,004,254 Public Safety 13,747,198 13,763,316 13,251,288 14,423,554 14,945,407 Parks and Public Works 5,840,097 6,307,266 6,633,748 7,125,686 7,962,135 Community Development 4,218,500 3,695,504 3,793,930 4,192,165 4,577,495 Library Services 2,268,844 2,332,268 2,508,677 2,529,017 2,493,617 Sanitation & Other 411,863 452,726 466,762 521,147 628,240 Capital Outlay 3,800,478 3,241,657 6,867,034 9,778,058 7,888,914 Debt Service
Principal Repayment - - - - -
Interest and Fiscal Charges - - - - -
Total Expenditures 38,934,431 38,937,534 41,912,398 47,339,709 46,500,062 Excess (Deficiency) of Revenues
Over (Under) Expenditures 6,133,461 3,386,159 (444,986) (3,472,665) 221,363 Other Financing Sources(Uses):
Transfers In 8,977,220 3,315,846 7,907,692 3,176,760 4,264,131 Transfers Out (7,788,049) (1,284,514) (7,612,012) (3,880,131) (3,323,756) Gain from Sale of Property - - - 378,219 1,912,316
Insurance Recoveries - - - - -
Issuance of Debt - - 4,435 - -
Total Other Financing Sources(Uses) 1,189,171 2,031,332 300,115 (325,152) 2,852,691 Special Item:
Extraordinary Gain (Loss) RDA Dissolution - - - - -
Prepayment of Pension Obligations - - - - -
Net Change in Fund Balances $ 7,322,632 $ 5,417,491 $ (144,871) $ (3,797,817) $ 3,074,054 Capitalized Capital Outlay $ 3,800,478 $ 3,241,657 $ 6,867,034 $ 9,778,058 $ 7,861,972 Debt Service as a Percentage
of Non Capital Expenditures 0.00% 0.00% 0.00% 0.00% 0.00% Continued
Fiscal Year
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 4
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2019/20 2020/21 2021/22 2022/23 2023/241
Revenues:
Taxes $ 27,811,665 $ 28,977,919 $ 31,627,593 $ 33,851,411 $ 34,735,349 Licenses & Permits1 4,818,671 5,212,831 6,055,040 6,333,675 6,227,298 Intergovernmental 4,498,153 3,746,587 15,492,982 10,145,820 6,317,644 Charges for Services 5,309,470 6,035,659 6,925,359 5,718,714 7,051,179 Fines and Forfeitures 271,117 103,468 319,170 416,950 480,634 Franchise Fees1 2,495,792 2,499,463 2,822,515 3,074,624 2,547,011 Developer Fees - - 1,735,571 614,820 12,880
Investment Income 2,428,453 227,940 (1,278,983) 797,582 3,108,100 Use of Property 31,039 40,372 144,901 237,647 297,501
Other 376,922 423,115 349,145 985,188 604,493
Total Revenues 48,041,282 47,267,354 64,193,293 62,176,431 61,382,089 Expenditures:
Current
General Government 13,024,146 14,040,134 15,953,968 8,828,779 9,573,022 Public Safety 15,793,815 16,570,836 16,451,190 18,446,048 20,718,781 Parks and Public Works 8,168,599 8,229,944 8,639,128 9,084,406 9,899,083 Community Development 4,473,790 5,195,302 6,313,511 5,065,412 5,246,729 Library Services 2,700,802 2,847,988 2,827,210 3,208,027 3,335,389 Sanitation & Other 162,837 166,173 194,969 204,097 252,605 Capital Outlay 7,861,972 5,707,439 10,478,670 8,917,075 12,366,255 Debt Service
Principal Repayment - 39,008 156,034 156,034 225,370
Interest and Fiscal Charges - - - - 3,716
Total Expenditures 52,185,961 52,796,824 61,014,680 53,909,878 61,620,950 Excess (Deficiency) of Revenues
Over (Under) Expenditures (4,144,679) (5,529,470) 3,178,613 8,266,553 (238,861) Other Financing Sources(Uses):
Transfers In 8,935,260 4,053,535 8,154,307 11,886,022 3,666,235 Transfers Out (8,628,719) (3,940,015) (8,310,685) (11,396,347) (4,317,235) Gain from Sale of Property 1,566 1,201,369 2,151 2,162 223 Insurance Recoveries - - - 1,565,000 -
Issuance of Debt - 1,560,336 - - 706,713
Total Other Financing Sources(Uses) 308,107 2,875,225 (154,227) 2,056,837 55,936 Special Item:
Extraordinary Gain (Loss) RDA Dissolution - - - - -
Prepayment of Pension Obligations - - - - -
Net Change in Fund Balances $ (3,836,572) $ (2,654,245) $ 3,024,386 $ 10,323,390 $ (182,925) $ 7,861,972 $ 5,707,439 $ 9,180,716 $ 8,598,811 $ 12,016,644 Debt Service as a Percentage
of Non Capital Expenditures 0.00% 0.08% 0.30% 0.35% 0.46% Concluded
(1) Starting in March 2024, due to a change in the JPA agreement, Garbage Franchise Fees were categorized as Licenses & Permits under Charges for Services. The total amount classified in Fiscal Year
Licenses & Permits in FY 2023/24 was $765,900. The garbage Franchise Fees were $2,051,33 in FY 2022/23 and $1,493,184 in FY 2023/24.
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 5
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
Utility
and Total
Fiscal Unsecured Percent Secured Percent Total Estimated Direct Year Property Change Property Change Assessed Full Market Tax Rate 2015 $ 227,331,042 1.45% $ 9,767,782,505 5.73% 9,995,113,547 $ $ 39,071,130,020 1.0544 2016 217,035,545 -4.53% 10,417,804,357 6.65% 10,634,839,902 41,671,217,428 1.0533 2017 304,443,013 40.27% 11,240,554,198 7.90% 11,544,997,211 44,962,216,792 1.0560 2018 330,504,877 8.56% 11,969,049,272 6.48% 12,299,554,149 47,876,197,088 1.0659 2019 359,276,665 8.71% 12,795,393,103 6.90% 13,154,669,768 51,181,572,412 1.0607 2020 331,517,212 -7.73% 13,510,676,336 5.59% 13,842,193,548 54,042,705,344 1.0494 2021 308,749,655 -6.87% 14,599,669,332 8.06% 14,908,418,987 58,398,677,328 1.0627 2022 304,460,199 -1.39% 15,255,884,284 4.49% 15,560,344,483 61,023,537,136 1.0616 2023 357,370,065 17.38% 16,404,930,826 7.53% 16,762,300,891 65,619,723,304 1.0591 2024 432,381,651 20.99% 17,623,641,576 7.43% 18,056,023,227 70,494,566,304 1.0591 Source: Santa Clara County Assessed Value Report
0 2000
4000
6000
8000
10000
12000
14000
16000
18000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Millions
Unsecured Property Secured Property
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 6
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
Santa Clara School
Fiscal Basic County County Bonds Special District Bonds Year Wide Levy and Levies Districts and Loans Total
2015 1.0000 0.0479 0.0065 0.1442 1.1986
2016 1.0000 0.0476 0.0057 0.1381 1.1914
2017 1.0000 0.0474 0.0086 0.1223 1.1783
2018 1.0000 0.0597 0.0062 0.1177 1.1836
2019 1.0000 0.0565 0.0042 0.1006 1.1613
2020 1.0000 0.0557 0.0041 0.0935 1.1533
2021 1.0000 0.0457 0.0037 0.0959 1.1453
2022 1.0000 0.0576 0.0051 0.0902 1.1529
2023 1.0000 0.0559 0.0057 0.0854 1.1470
2024 1.0000 0.0538 0.0053 0.0720 1.1311
Source: Santa Clara County Book of Tax Rates
0.00 0.25
0.50 0.75
1.00 1.25
Per Hundred $
Santa Clara Valey Water District County
County Bonds and Levies
School District Bonds and Loans
Basic County Wide Levy
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 7
Principle Property Tax Payers
Last Ten Fiscal Years *
Percentage Percentage Percentage Percentage Percentage
of Total City of Total City of Total City of Total City of Total City Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed ASSESSEE NAME Value Value Value Value Value Value Value Value Value Value 750 University LLC $ 19,000,000 0.17% $ 19,379,620 0.19% $ 19,675,159 0.18% $ 25,241,863 0.21% $ 25,746,699 0.20% 980 JR LLC 19,277,879 0.15%
140 Toll House Hotel LLC
17443 Farley Rd LLC
Alberto Way Holdings LLC 23,715,141 0.21% 24,188,966 0.23% 24,557,845 0.22% 25,048,998 0.21% 25,549,975 0.20% A W Los Gatos LLC
Boccardo Corporation 38,772,905 0.34% 21,617,318 0.21% 21,918,921 0.20% 22,211,650 0.19% 22,651,732 0.18% D&K Los Gatos LLC 15,974,003 0.14% 16,293,163 0.16%
David A. and Shari Flick Trustee 15,388,884 0.14%
Donahue Schriber Realty Group LP 53,872,083 0.45% 56,370,186 0.44% DS Downing Los Gatos LLC 20,006,861 0.18% 21,980,568 0.21% 22,315,770 0.20% DS Village Square 22,799,599 0.20%
El Camino Hospital 20,803,609 0.19% 26,477,160 0.25% 26,880,933 0.24% 23,353,576 0.20% 28,596,104 0.22% EL Gato 15 LLC
Equestrian 3 Investments LLC 29,584,251 0.25% 28,563,864 0.22% Fox Creek Fund LLC 21,558,664 0.17%
Good Samaritan Hospital LP 19,602,594 0.17% 19,880,366 0.19% 22,402,756 0.20% 22,516,823 0.19% 22,934,274 0.18% Grade Way Associations VI 15,163,152 0.13%
Grosvenor USA Ltd. 22,990,624 0.20% 23,449,975 0.23%
Health Care REIT Inc, 20,765,810 0.18% 20,089,903 0.19% 20,396,274 0.18% International Hotel 30,144,617 0.25% 30,747,509 0.24%
Kay K. & Go Sasaki Sr., Trustee 24,744,983 0.24% 25,122,131 0.22% 25,624,027 0.21% 26,135,962 0.20% Knowles Los Gatos LLC 48,204,708 0.43% 49,167,836 0.47% 49,917,644 0.44% 50,915,995 0.43% 51,934,313 0.41% KSL Capital Partners 43,580,326 0.39% 30,134,614 0.29% 30,105,945 0.27% 25,893,946 0.22% 26,411,820 0.21% Leland E Lester, Trustee 29,004,169 0.26%
LG Business Park Bldg 3 LLC 61,947,284 0.59% 53,465,724 0.45% LG Business Park Bldg 4 LLC 43,937,857 0.37%
LG Business Park LLC 39,347,485 0.35% 17,507,261 0.17% 31,070,572 0.28% LG Hotel LLC 15,448,057 0.14% 15,497,395 0.15%
Los Gatos Hotel Corp. 15,573,314 0.14% 15,676,113 0.15% Preylock Los Gatos LLC
Safeway Inc. 24,394,468 0.20%
San Jose Water Works 36,693,453 0.33% 37,081,049 0.36% 38,710,728 0.34% 41,202,805 0.34% 46,150,577 0.36% Serramonte Corporate Center LLC 200,844,610 1.57%
SF Los Gatos LLC
SHP Newark LLC
SI 32 LLC 150,563,119 1.34% 141,348,894 1.36% 143,442,269 1.28% 146,317,944 1.22% 149,208,182 1.17% Sobrato Interests IV LLC 20,869,338 0.19% 44,930,482 0.43% 42,240,994 0.38% 43,071,837 0.36% 43,919,879 0.34% SRI Old Town LLC 31,122,427 0.28% 31,744,252 0.30% 32,228,351 0.29% 32,872,917 0.27% 33,530,374 0.26% Summerhill N40 LLC
Summerhill Prospect Avenue LLC 18,274,508 0.16%
Wealthcap Los Gatos 121 109,100,000 0.97% 111,282,000 0.93% 113,507,640 0.89% Wealthcap Los Gatos 31 84,000,000 0.75% 85,680,000 0.72% 87,393,600 0.68% Total - Principal taxpayers $ 633,585,810 6.49% $ 663,137,202 6.37% 814,164,568 $ 7.24% $ 916,633,381 7.66% 1,061,033,843 $ 8.29% Total - All real properties assessed by the Town (1) $ 9,766,765,025 $ 10,416,786,877 $ 11,239,536,718 $ 11,968,031,792 $ 12,793,751,423 (1) Assessed value includes only net secured real properties. (2) Excludes the value of tax-exempt properties
Source Data: California Municipal Statistics, Inc. Continued 2014/15 2015/16 2016/17 2017/18 2018/19
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 7
Principle Property Tax Payers
Last Ten Fiscal Years *
Percentage Percentage Percentage Percentage Percentage
of Total City of Total City of Total City of Total City of Total City Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed ASSESSEE NAME Value Value Value Value Value Value Value Value Value Value 750 University LLC $ 26,261,632 0.19% $ 26,786,863 0.18% $ 27,064,374 0.19% $ 27,605,660 0.17% $ 28,157,772 0.16% 980 JR LLC
140 Toll House Hotel LLC 35,043,180 0.24% 35,499,104 0.24% 34,808,066 0.21% 35,490,590 0.20% 17443 Farley Rd LLC 29,000,000 0.16%
Alberto Way Holdings LLC 24,158,350 0.18% 24,641,514 0.17% 24,896,799 0.17% A W Los Gatos LLC 26,749,500 0.16%
Boccardo Corporation 23,099,314 0.17% 24,268,078 0.15%
D&K Los Gatos LLC
David A. and Shari Flick Trustee
Donahue Schriber Realty Group LP 57,497,587 0.43% 58,647,535 0.40% 59,255,121 0.41% 60,440,222 0.37% 61,649,025 0.35% DS Downing Los Gatos LLC
DS Village Square
El Camino Hospital 30,789,155 0.23% 42,611,768 0.29% 50,456,560 0.35% 43,379,731 0.26% 42,156,737 0.24% 36,719,999 0.21%
Equestrian 3 Investments LLC 25,525,880 0.19% 26,036,395 0.18% 26,306,130 0.18% 26,832,251 0.16% 27,368,894 0.16% Fox Creek Fund LLC 27,231,335 0.19% 27,078,255 0.17% 28,331,465 0.16% Good Samaritan Hospital LP 23,391,289 0.17% 23,846,402 0.16% 24,111,608 0.17% 24,569,780 0.15% Grade Way Associations VI
Grosvenor USA Ltd.
Health Care REIT Inc,
International Hotel 31,362,458 0.23% 31,989,706 0.22%
Kay K. & Go Sasaki Sr., Trustee 28,864,942 0.21% 27,190,951 0.19% 27,471,495 0.19% 28,020,326 0.17% 28,585,258 0.16% Knowles Los Gatos LLC 52,972,998 0.39% 54,032,455 0.37% 54,592,229 0.37% 55,684,072 0.34% 56,797,751 0.32% KSL Capital Partners 33,069,058 0.24% 33,118,759 0.23% 33,037,818 0.23% 32,098,542 0.20% 31,484,883 0.18% Leland E Lester, Trustee
LG Business Park Bldg 3 LLC
LG Business Park Bldg 4 LLC
LG Business Park LLC
LG Hotel LLC
Los Gatos Hotel Corp.
Preylock Los Gatos LLC 89,141,472 0.66% 95,880,000 0.66% 96,873,316 0.66% 98,810,782 0.60% 96,498,189 0.55% Safeway Inc. 25,752,231 0.19% 25,577,034 0.18%
San Jose Water Works 47,777,432 0.35% 49,649,154 0.34% 53,320,614 0.37% 51,657,625 0.31% 52,511,158 0.30% Serramonte Corporate Center LLC 204,861,501 1.52% 208,958,729 1.43% 211,123,540 1.45% 215,346,008 1.31% 219,652,926 1.25% SF Los Gatos LLC 33,214,527 0.23%
31,799,550 31,799,550 0.18%
SI 32 LLC 152,166,578 1.13% 155,181,793 1.06% 158,132,236 1.08% 159,929,209 0.97% 163,243,322 0.93% Sobrato Interests IV LLC 44,781,377 0.33% 45,682,006 0.31% 46,155,127 0.32% 47,067,863 0.29% 48,004,098 0.27% SRI Old Town LLC 34,200,980 0.25% 34,884,999 0.24% 35,246,406 0.24% 35,951,333 0.22% 36,670,359 0.21% Summerhill N40 LLC 56,244,782 0.42% 57,369,661 0.39% 59,462,462 0.41% 71,006,795 0.43% 42,705,086 0.24% Summerhill Prospect Avenue LLC
Wealthcap Los Gatos 121 115,777,792 0.86% 118,093,347 0.81% 119,316,793 0.82% 121,703,128 0.74% 124,137,190 0.70% Wealthcap Los Gatos 31
Total - Principal taxpayers $ 1,127,696,808 8.35% 1,175,222,251 $ 8.05% 1,202,767,594 $ 8.24% 1,244,806,776 $ 7.39% 1,220,964,252 $ 6.93% Total - All real properties assessed by the Town (1) $ 13,509,034,656 $ 14,598,027,652 $ 15,254,242,604 $ 16,403,289,146 $ 17,621,748,976 (1) Assessed value includes only net secured real properties. (2) Excludes the value of tax-exempt properties
Source Data: California Municipal Statistics, Inc. Concluded 2019/20 2020/21 2021/22 2022/23 2023/24
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 8
Property Tax Levies and Collections
Last Ten Fiscal Years
Value of
Redevelopment
Agency Value of
Town Redevelopment Total Property Value of Town Property Property Property Tax Property Tax Tax Levied Property subject Subject to Subject to Fiscal Levied and Levied and and to Local Tax Local Local Year Collected Collected Collected Rate Tax Rate Tax Rate 2015 $ 9,787,519 $ - $ 9,787,519 $ 9,995,113,547 $ 1,318,214,863 $ 11,313,328,410 2016 10,388,424 - 10,388,424 10,634,839,902 1,395,509,489 12,030,349,391 2017 11,345,588 - 11,345,588 11,544,997,211 1,537,577,241 13,082,574,452 2018 12,060,228 - 12,060,228 12,299,554,149 1,650,746,473 13,950,300,622 2019 12,924,592 - 12,924,592 13,154,669,768 1,717,358,555 14,872,028,323 2020 13,559,587 - 13,559,587 13,842,193,548 1,715,982,555 15,651,922,606 2021 13,864,271 - 13,864,271 14,908,418,987 1,809,729,058 16,718,148,045 2022 14,566,808 - 14,566,808 15,560,344,483 1,891,297,788 17,451,642,271 2023 16,300,797 - 16,300,797 16,762,300,891 2,047,530,717 18,809,831,608 2024 17,431,668 - 17,431,668 18,056,023,227 2,162,668,731 20,218,691,958 Sources: Santa Clara County Auditor-Controller Office and the Town of Los Gatos $7.0
$8.0
$9.0
$10.0
$11.0
$12.0
$13.0
$14.0
$15.0
$16.0
$17.0
$18.0
$19.0
$20.0
$21.0
Billions
Value of Property
$7.0
$8.0
$9.0
$10.0
$11.0
$12.0
$13.0
$14.0
$15.0
$16.0
$17.0
$18.0
Millions
Tax Levied
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 9
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Total Total Percentage of
Fiscal PG&E Governmental Primary Personal Per
Year Loan SBITA's Activities Government Income Capita
2015 $ - $ - $ - $ - 0.0% 0.00
2016 $ - $ - $ - $ - 0.0% 0.00
2017 $ - $ - $ - $ - 0.0% 0.00
2018 $ - $ - $ - $ - 0.0% 0.00
2019 $ - $ - $ - $ - 0.0% 0.00
2020 $ - $ - $ - $ - 0.0% 0.00
2021 1,508,325 $ $ - $ 1,508,325 $ 1,508,325 96.4% 48.91 2022 1,352,291 $ $ - $ 1,352,291 $ 1,352,291 95.5% 40.90 2023 1,196,257 $ $ 594,934 $ 1,791,191 $ 1,791,191 118.7% 36.14 2024 1,040,224 $ $ 1,083,858 $ 2,124,082 $ 2,124,082 108.9% 31.30 Debt was transferred to the Successor Agency Trust Fund as a part of the RDA dissolution in FY 2011 Governmental Activities
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 10
Direct and Overlapping Governmental Activities Debt
June 30, 2024
2023/24 Assessed Valuation: $18,056,023,227 Estimated Share of Direct and
Total Debt at Overlapping Debt
DIRECT AND OVERLAPPING BONDED DEBT: % Applicable (1) June 30, 2024 at June 30, 2024 Overlapping Tax & Assesment Debt
Santa Clara County 2.735% $ 1,041,125,000 $ 26,167,660
West Valley-Mission Community College District 9.553% $ 694,320,000 $ 63,340,211 Campbell Union High School District 7.894% $ 354,085,000 $ 26,538,444 Los Gatos-Saratoga Joint Union High School District 36.786% $ 81,235,000 $ 28,759,295 Cambrian School District 0.757% $ 96,314,944 $ 678,423
Campbell Union School District 7.886% $ 205,899,324 $ 19,739,393 Los Gatos Union School District 74.219% $ 62,020,000 $ 42,364,205 Saratoga Union School District 0.049% $ 15,206,197 $ 5,778 Union School District 20.070% $ 144,497,533 $ 28,183,190 Midpeninsula Regional Open Space District 4.444% $ 82,680,000 $ 3,586,308 Santa Clara Valley Water District Benefit Assessment District 2.735% $ 38,900,000 $ 799,577 Total Overlapping Tax and Assesmet Debt $ 240,162,484
Overlapping General Fund Debt
Santa Clara County General Fund Obligations 2.735% $ 1,057,709,440 $ 28,928,353 Santa Clara County Pension Obligation Bonds 2.735% $ 323,733,582 $ 8,854,113 Santa Clara County Board of Education Certificates of Participation 2.735% $ 12,073,098 $ 330,199 West Valley-Mission Community College District General Fund Obligations 9.553% $ 2,520,000 $ 240,736 Campbell Union High School District General Fund Obligations 7.894% $ 13,500,000 $ 1,065,690 Campbell Union School District General Fund Obligations 7.886% $ 1,230,000 $ 96,998 Saratoga Union School District Certificates of Participation 0.049% $ 1,455,000 $ 713 Town of Los Gatos 100.000% $ - $ 2,123,381
Santa Clara County Vector Control District Certificates of Participation 2.735% $ 945,000 $ 25,846 Santa Clara County Central Fire Protection District Certificates of Participation 26.139% $ 27,130,000 $ 7,091,511 Midpeninsula Regional Open Space Park District General Fund Obligations 4.444% $ 79,795,600 $ 3,546,116 Total Gross Overlapping General Fund Debt $ 52,303,656
Less: Santa Clara County Supported Obligations $ 72,751 Total Overlapping General Fund Debt $ 52,230,905
Overlapping Tax Increment Debt ( Successor Agency)
Town of Los Gatos Certificated of Participations $ 10,015,000 Total of Overlapping Tax Increment Debt $ 10,015,000
Total Direct Debt $ 2,123,381
Total Gross Overlapping Dept $ 302,481,140
Total Net Overlapping Debt $ 302,408,389
Gross Combined Total Debt $ 302,481,140 (2)
Net Combined Total Debt $ 302,408,389
Ratios to 2023/24 Assessed Valuation:
Total Overlapping Tax and Assessment Debt: 1.33%
Total Direct Debt: 0.00%
Gross Combined Total Debt: 1.66%
Net Combined Total Debt: 1.66%
Ratios to Redevelpment Incremental Valuation ( $1,916,471,918):
Total Overlapping Tax Increment Debt: 0.52%
Source Data: California Municipal Statistics, Inc.
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the distric's total taxable asessed value. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue bonds and non-bonded capital lease obligations.
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 11
Legal Debt Margin Information,
Last Ten Fiscal Years
(In Thousands of Dollars)
Assessed Value
Debt Limit
Debt Applicable to Limit:
Legal Debt Margin
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Debt Limit $ 1,379,254 $ 1,444,943 $ 1,556,252 $ 1,679,736 $ 1,789,097 $ 2,076,329 $ 2,236,263 $ 2,334,052 $ 2,514,345 $ 2,708,403 Debt Applicable to Limit - - - - - - - 1,352 1,196 1,040 Legal Debt Margin $ 1,379,254 $ 1,444,943 $ 1,556,252 $ 1,679,736 $ 1,789,097 $ 2,076,329 $ 2,236,263 $ 2,332,700 $ 2,332,699 $ 2,707,363 Total Net Debt
Applicable to the Limit
as a Percentage
of Debt Limit 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.06% 0.05% 0.04% Notes:
(1) The Town of Los Gatos is a general law city and has a debt limit of 15%. (2) Excludes RDA asessed valuation and debt transferred to the Successor Agency trust as a part of the RDA dissolution.
Legal Debt Margin Calculation
Fiscal Year
$ 18,056,023,227
2,708,403,484
$ 2,708,403,484
for Fiscal Year 2023/24
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 12
Demographic and Economic Statistics
Last Ten Fiscal Years
Personal
Income Per Capita Public County
Fiscal (thousands Personal Median School Unemployment
Year Population of dollars) Income Age Enrollment Rate
Ended (1) (2) (3) (4) (5) (6)
2015 30,505 $ 2,197,885 72,050 46.10 6,622 3.8%
2016 31,376 $ 2,286,087 72,861 46.30 6,646 3.5%
2017 31,314 $ 2,281,569 72,861 46.50 6,631 3.8%
2018 30,601 $ 2,290,638 74,855 46.81 6,588 2.6%
2019 30,998 $ 2,365,178 76,301 46.72 6,544 2.6%
2020 31,439 $ 2,546,748 81,006 46.83 6,520 10.7%
2021 30,836 $ 2,686,155 87,111 46.83 6,180 5.2%
2022 33,062 $ 3,055,987 92,432 46.67 6,000 2.2%
2023 33,102 $ 3,443,767 104,035 46.76 5,895 3.7%
2024 33,230 $ 4,006,242 120,561 47.03 5,856 4.1%
Source:
(1) California State Dept. of Finance - Population Research Unit (January 2023) (2) California State Dept. of Finance - Estimate equals county per capita average times population (3) US Census Bureau - QuickFacts
(4) Claritas demographic snapshot report
(5) Los Gatos Saratoga Joint Union and Los Gatos Union Elementary School Districts (6) State of California, Employment Development Dept., Labor Market Info. Div.
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 13
Principal Employers
Last Ten Fiscal Years
Percentage Percentage Percentage Percentage Percentage
of Total Town of Total Town of Total Town of Total Town of Total Town Principal Employers Emp. Employment Emp. Employment Emp. Employment Emp. Employment Emp. Employment Columbia Health Care Assoc/Mission Oaks Hospital - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% El Camino Hospital, Los Gatos 560 3.73% 560 3.53% 560 3.49% 560 3.43% 560 3.49% Los Gatos Union School District 273 1.82% 280 1.76% 274 1.71% 267 1.64% 281 1.75% Los Gatos-Saratoga High School District 157 1.05% 157 0.99% 370 2.30% 367 2.25% 367 2.28% Netflix 1,530 10.19% 1,976 12.45% 1,864 11.61% 2,117 12.98% 2,314 14.41% Safeway 314 2.09% 314 1.98% 314 1.95% 314 1.92% 314 1.95% Alain Pinel Realtors 156 1.04% 146 0.92% 148 0.92% 131 0.80% 131 0.82% Courtside Tennis Club 440 2.93% 440 2.77% 468 2.91% 542 3.32% 542 3.37% Town of Los Gatos 157 1.05% 158 1.00% 160 1.00% 159 0.97% 160 1.00% Whole Foods 179 1.19% 179 1.13% 179 1.11% 179 1.10% 125 0.78% Vasona Creek Health Care Center 233 1.55% 233 1.47% 233 1.45% 233 1.43% 233 1.45% Good Samaritan Regional Cancer Center 200 1.33% 200 1.26% 200 1.25% 200 1.23% 200 1.25% Roku - 0.00% 487 3.07% 554 3.45% 664 4.07% 516 3.21%
Terraces of Los Gatos - 0.00% 228 1.44% 228 1.42% 228 1.40% 228 1.42% Source: Town of Los Gatos, Finance
Department and Muniservices Continued
2014/15 2015/16 2016/17 2017/18 2018/19
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 13
Principal Employers
Last Ten Fiscal Years
Percentage Percentage Percentage Percentage Percentage
of Total Town of Total Town of Total Town of Total Town of Total Town Principal Employers Emp. Employment Emp. Employment Emp. Employment Emp. Employment Emp. Employment Columbia Health Care Assoc/Mission Oaks Hospital - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% El Camino Hospital, Los Gatos 560 3.49% 560 3.35% 517 3.09% 509 3.04% 548 3.45% Los Gatos Union School District 281 1.75% 281 1.68% 281 1.68% 281 1.68% 287 1.81% Los Gatos-Saratoga High School District 367 2.28% 320 1.92% 320 1.91% 320 1.91% 320 2.01% Netflix 2,314 14.41% 2,524 15.11% 2,278 13.62% 2,263 13.53% 2,444 15.39% Safeway 314 1.95% 314 1.88% 314 1.88% 314 1.88% 314 1.98% Alain Pinel Realtors 131 0.82% - 0.00% - 0.00% - 0.00% - 0.00% Courtside Tennis Club 542 3.37% 542 3.24% 542 3.24% 542 3.24% 342 2.15% Town of Los Gatos 160 1.00% 161 0.96% 165 0.99% 163 0.97% 165 1.04% Whole Foods 125 0.78% 125 0.75% 180 1.08% 132 0.79% 133 0.84% Vasona Creek Health Care Center 233 1.45% 250 1.50% 250 1.49% 250 1.49% 250 1.57% Good Samaritan Regional Cancer Center 200 1.25% 200 1.20% 200 1.20% 200 1.20% 111 0.70% Roku 516 3.21% - 0.00% - 0.00% - 0.00% - 0.00%
Terraces of Los Gatos 228 1.42% 228 1.36% 200 1.20% 200 1.20% 230 1.45% Source: Town of Los Gatos, Finance
Department and Muniservices Concluded
2019/20 2020/21 2021/22 2022/23 2023/24
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 14
Full-time-Equivalent Employees by Function/Program
Last Ten Fiscal Years
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Function/Program
General Government 20.97 20.97 21.35 21.97 22.16 21.80 21.80 22.06 22.05 22.06 Police 60.00 59.00 59.00 59.00 59.00 60.00 60.00 60.00 60.00 60.00 Economic Development 0.63 0.63 0.63 0.75 0.75 0.75 0.75 0.75 0.75 0.75 Library 10.80 11.00 12.25 12.25 12.50 12.50 12.50 12.50 13.50 13.50 Planning 19.50 19.00 19.26 19.63 20.08 20.08 20.20 20.20 20.20 20.45 Public Works 32.00 33.50 33.50 34.50 34.50 34.50 34.75 34.75 36.75 35.75 Total 143.90 144.10 145.98 148.10 148.99 149.63 150.00 150.26 153.25 152.51 Full-time equivalent employment is calculated as one or more employee positions totaling one full year of service or approximately 2,080 hours a year.
Page C-45 of Town Budget FY 2023/24
Fiscal Year
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 15
Operating Indicators
Last Ten Fiscal Years
FUNCTION/PROGRAM
General government 2014/15 2015/16 2016/17 2017/18 2017/18 Building Permits Issued
Residential Permits Issued 805 899 744 849 814
Residential Permits Value 76,896,111 85,000,754 53,625,891 63,083,249 80,030,846 Commercial Permits Issued 133 147 135 105 122
Commercial Permits Value 178,195,997 20,185,884 50,024,177 16,626,196 13,295,999 Publically Owned Permits Issued - - - - -
Publically Owned Permits Value - - - - -
Residential Parking Permits
Number of Special Event Permits Issued 127 107 118 113 78 Number of Annual Permits Issued 1,570 1,363 1,251 1,342 1,395 City Clerk
Number of Council Resolutions Passed 72 61 69 69 59
Number of Ordinances Passed 9 11 5 17 11
Number of Contracts Passed 222 283 240 262 245
General Services
Number of Purchase Orders Issued 277 334 331 322 343
Police
Physical Arrests 695 987 1,030 1,164 1,138
Parking Violations 13,321 13,975 12,863 11,784 6,817
Traffic Violations 4,633 5,400 4,634 4,757 2,877
DUI Arrests 48 58 60 51 70
Library
Number of Library Visits - - - - -
Annual Circulation - - - - -
Number of Library Card holders - - - - -
Circulated e-audiobooks 5,867 ( 7,761 10,006 8,844 12,130 Other Public Works
Street Resurfacing/Overlay/Reconstruction (miles) 1.8 8.0 10.0 2.6 5.8 ADA Compliance: Curb Ramps 23 11 30 68 49
Traffic Circles 1 1 1 1 1
Street Poles 1,609 1,609 1,609 1,762 1,830
Planning and Development Department
Building & Safety Inspections Performed 11,652 8,655 14,722 13,918 13,966 Redevelopment: Number of active projects - - - - -
Source: Town of Los Gatos, Finance Department Continued Fiscal Year
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 15
Operating Indicators
Last Ten Fiscal Years
FUNCTION/PROGRAM
General government 2019/20 2020/21 2021/22 2022/23 2023/24 Building Permits Issued
Residential Permits Issued 898 1,128 1,144 1,118 957
Residential Permits Value 47,961,529 111,242,724 132,784,439 73,432,645 63,352,925 Commercial Permits Issued 92 68 117 84 62
Commercial Permits Value 12,389,688 37,285,259 23,442,964 19,422,918 31,245,689 Publically Owned Permits Issued - - - - -
Publically Owned Permits Value - - - - -
Residential Parking Permits
Number of Special Event Permits Issued - - - - - (1)
Number of Annual Permits Issued 1,400 1,568 1,958 1,827 1,847 City Clerk
Number of Council Resolutions Passed 57 50 64 71 69
Number of Ordinances Passed 24 9 14 10 14
Number of Contracts Passed 242 205 296 275 322
General Services
Number of Purchase Orders Issued 359 376 306 296 302
Police
Physical Arrests 616 360 504 522 642
Parking Violations 4,023 1,584 4,678 8,569 8,644
Traffic Violations 1,225 764 1,245 1,427 1,787
DUI Arrests 64 23 49 42 51
Library
Number of Library Visits - - 150,198 206,874 249,120 (3) Annual Circulation - - 432,707 397,517 422,733 (3)
Number of Library Card holders - - 29,322 29,815 33,551 (3) Circulated e-audiobooks 57,839 54,614 - - - (2)
Other Public Works
Street Resurfacing/Overlay/Reconstruction (miles) 16.2 10.0 9.9 10.9 10.1 ADA Compliance: Curb Ramps 68 91 59 50 69
Traffic Circles 1 1 1 1 1
Street Poles 1,830 2,113 2,113 2,113 2,113
Planning and Development Department
Building & Safety Inspections Performed 13,633 13,806 16,906 16,641 14,696 Redevelopment: Number of active projects - -
(3) New metrics being presented in FY 2021/22.
Source: Town of Los Gatos, Finance Department Concluded Fiscal Year
(2) Changed operating indicators to fully reflect Department's efficiency metrics starting FY 2021/22.
(1) The Town streamlined the special event application where multiple events require only one permit.
DRAFT
ITEM NO. 14.
Town of Los Gatos Schedule 16
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Function/Program
Police
Number of Stations 2 2 2 2 2 2 2 2 2 2
Number of Patrol Units 14 14 14 14 14 14 14 14 14 14
Parking Enforcement Vehicles 2 2 2 2 2 2 2 2 2 2
Other Public Works
Streets (miles) 132 132 132 132 132 132 132 132 112 112 (1) Streetlights 1,609 1,609 1,609 1,762 1,830 1,830 2,113 2,113 2,113 2,113 Traffic Signals 29 30 30 30 31 31 31 31 31 31
Parks and Recreation
Number of Parks 12 12 12 12 N/A N/A N/A N/A N/A N/A
Number of Community Centers 1 1 1 1 1 1 1 1 1 1
Number of Parks & Open Spaces N/A N/A N/A N/A 17 17 17 17 17 17 Parking
Number of Parking Garages 1 1 1 1 1 1 1 1 1 1
Number of Parking Lots 22 22 22 22 22 22 22 22 22 22
Number of Off Street Parking Garage Spaces 1,126 1,126 1,126 1,126 N/A N/A N/A N/A N/A N/A Number of Downtown Off-Street Parking Spaces N/A N/A N/A N/A 1,269 1,269 1,269 1,269 1,269 1,269 Source: Town of Los Gatos, Finance Department
Fiscal Year
(1) Based on Metropolitan Transportation Commission (MTC) funded Pavement Technical Assistance Program (P-TAP) inventory for year 2022.
DRAFT
ITEM NO. 14.
Other Independent Auditor’s Reports
DRAFT
ITEM NO. 14.
Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the
Town Council of the Town of Los Gatos
Los Gatos, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Town of Los Gatos (the “Town”) as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Town’s basic financial statements, and have issued our report thereon dated November 11, 2024.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses and significant deficiencies may exist that were not identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not DRAFT
ITEM NO. 14.
Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Morgan Hill, California
November 11, 2024
DRAFT
ITEM NO. 14.
DRAFT
ITEM NO. 14.
1 ATTACHMENT 4
Comments and questions on the FY 2023/24 Draft Annual
Comprehensive Financial Report
The following are comments, questions, and recommendations made by members of the Finance Commission. In accordance with Section 2.50.225 (a)(3), the Finance Commission is to review the [Annual Comprehensive Financial Report] and the Town Manager is to respond in writing regarding their rationale for accepting or rejecting each comment and recommendation. The following responses as well as the changes proposed in Attachment 1 represent the Town Manager’s written response.
1. The transmittal letter doesn’t call out the change in Town Manager - I know Chris wasn’t there for the reported fiscal year but he is issuing the transmittal - within the letter the listed officials for the fiscal year (appropriately) has Laurel. It might be helpful to mention the change in the body of the letter to avoid confusion.
Added. See Footnote on page 8 of the ACFR. There is also a correction to change the Human Resources Director to the appropriate reference.
2. It is mentioned that the assumed vacancy rate for staffing/salaries of 4.6% was exceeded? Was that avg across the town departments? What was the actual vacancy rate (by dept?).
Do we need to consider updating the budget assumption?
Not added. The discussion is more appropriate for Mid-Year and Budget discussions. Here is the summary provided at the meeting:
The final General Fund salaries and benefits budgets of $35,611,692, include a negative $1,670,530 original salary savings and a positive $714,666 budget restoration for Departments that were fully staffed. In addition, the General Fund had $1,041, 299 salaries and benefits savings. While individual Departments had various savings, the Townwide salaries and benefits savings would translate to
5.6% if all positions are budgeted without vacancy savings factors. At this time, staff do not believe a change in assumption is necessary; however, staff remains open to continuing the conversation during the budget process.
3. On the 4th bulletin within the MD&A highlights - could we show the breakout of the transfers out of capital projects and general liability? Added. See page 18 of the ACFR. During FY 2023/24, the General Fund had an excess of revenues over expenditures of $4.0 million, excluding transfers. Transfers out exceeded transfers in by $3.2 million. The principal purpose of the Town’s interfund transfers was contributions toward capital projects ($3.1 million) and general liability ($.43 million). The detail of the interfund transfers is illustrated in Note #5.
ITEM NO. 14.
2 ATTACHMENT 4
4. On the second bulletin within in the MD&A highlights - it is noted that while the net positive of $5.9M in position the net difference from the prior year was $15.1 (61%).
Given the size of the difference can we understand what was different from 22 to 23 - was this an anomaly?
Added. See deletion and recommended changes per Commissioner’s recommendation on page 18 of the ACFR. This is shown as the 2nd bullet under “Financial Highlights.”
“The Town’s total net position increased by $5.9 million in FY 2023/24. The overall increase of $5.9 million is primarily due to the combined effect of infrastructure capitalization, grant revenue recognition, and changes to pension expenses.”
5. On page 75 of the packet, 4th paragraph in the discussion on sales tax revenue - notes the reduction in business-to-business activities, less sales tax activity and decrease to gas stations due to popularity of EV’s. How do we know these causes for the difference - asking because I think this could be helpful information to know in the scorecard process.
Also, given the evolution to EV’s - have we thought about how we will replace traditional gas related revenues with EV driven revenue? These thoughts aren’t really about changing the MD&A but broader questions.
Not added. Great observations, but the discussion is more appropriate when performance metrics are discussed.
6. On page 76 of the packet, bottom of the page - $1.5 variance in salary and benefits - see my first note but another reason I was asking the overall staffing/salary/benefits question.
We had several factors influencing one of our largest expense categories - labor negotiation, staffing/vacancy and benefits. Might be helpful to provide a chart of this category? I’m also really trying to understand the validity of our underlying assumptions.
Not added. Please see response to Question 2.
7. Pages 81-83 Changes in Budgets (org and updated), Budgets (org and updated) vs Actuals. Not sure if we need two separate walk downs: The second set of charts showing all 3 histograms with a walk down of the differences including updated budget and actuals might suffice. I’m OK if others think this is helpful but offer it as a suggestion to tighten up the MD&A.
Added. See streamlined presentation starting on page 31 et seq. of the ACFR.
Staff removed and modified the graphics.
Town Manager Letter
ITEM NO. 14.
3 ATTACHMENT 4
8. While the $63m in unfunded pension liability increased from FY 2023 level of $59.9m, the major impact has been the Town’s total pension expense has materially increased. In FY 2024 total pension expense was $11.2m which was a 91% or $5.3m increase from FY 2023 pension expense of $5.9m. This is the single largest cost increase the Town experienced in FY 2024.
Not added. See page 4 of the Management Letter which talks about variability.
Here is the summary provided at the meeting.
Pension expense is a combination of net changes in net pension liability, deferred inflows and outflows of resources, and contributions in the current measurement period. Pension expense varies year to year based on actual market performance and actuarial assumptions. For example, FY 2022/23 was $5.9 million, FY 2021/22 was $3.4 million, and FY 2019/20 was $10.8 million.
9. There have been no ADP’s made since $4.8m ADP in FY 2020 and $5.6m ADP in FY 2021.
Confirmed. No further response is necessary.
10. FY2024’s capital outlay of $12.4m was the largest single-year capital outlay in the past 10 years and represented a 39% increase over FY 2023. The next highest year was FY 2022 with $10.4m. For the 5-year period FY 20 – FY 24, the Town incurred a total capital outlay of $45.4m as compared to the prior 5-year period FY15 – FY19 of $31.6m. This represents a 44% increase.
Noted. See additional information provided on page 34 in the Fixed Asset Presentation. The $7.1 million addition to construction in progress is comprised of $3.8 million for pathways projects, $1.2 million for streets and curbs improvements, $0.9 million for land and building improvements, $0.6 million for bridges, $0.4 million for equipment, and $0.2 million for retaining walls, traffic signals, parking lots, and park improvements.
Independent Auditor’s Report
11. Confirm the auditor has “audited the accompanying financial statements” and is expressing an opinion on “the financial statements” as opposed to the trial balance, which is an underlying record.
Confirmed by auditor.
ITEM NO. 14.
4 ATTACHMENT 4
12. Confirm the auditor prepared the financial statements applying appropriate risk mitigation and the Town management accepts responsibility for the preparation and fair presentation of the financial statements.
Confirmed by auditor.
Management’s Discussion and Analysis
Financial Highlights
13. Separate the discussion of the FY 2024 increase in net position of $5.9m from the discussion of the change in the change in net position from the prior year. The $5.9m increase in net position for FY 2024 was because total revenues exceeded total expenses.
The fact that the FY 2024 $5.9m increase was less than the prior year’s increase of $15.1m is due to total expenses in FY 2024 increased $9.3m from FY 2023 level of $49.3m while total revenues remained relatively flat. As written, the discussion is confusing.
Added. Please see the response to Question 4.
14. Staff should consider adding a full-throated disclosure of the $7.2m in ARPA/SLRF grant money the Town has received. The ARPA funds need to be fully committed to contracts and projects by December 2024 and fully expended by December 2026. Last year the Town reported separately an ARPA fund which had a balance of $3.6m which was transferred out. A discussion of how the full $7.2m was spent is an important disclosure.
No one understands this.
Added. Please see page 35 of the ACFR.
General Fund Monies Made Available because of the ARPA Grant The Town recognized the American Rescue Plan Act (ARPA) operating revenue over three fiscal years including FY 2020/21 ($200,911), FY 2021/22 ($3,413,961), and FY 2022/23 ($3,614,872) for allowable expenditures under the standard allowance provision of the ARPA federal rules. The funds were received in the ARPA special revenue fund and were transferred out to other funds and used for qualifying public safety expenditures under the provisions of the Act.
ITEM NO. 14.
5 ATTACHMENT 4
The Utilization of the ARPA grant, enabled the Town to support the following activities using unrestricted resources:
Net Position Discussion
15. Please explain “unavailable revenue classification (to revenue) of $2.3m. What is this? Not added. Please see response provided at the meeting. Under modified accrual bases of accounting, receivables that are not received within 60 days of year-end have to be reclassified as a liability. The unavailable revenue classification is the liability reclassification back to revenue under the accrual bases of accounting for the government wide financial statements.
ITEM NO. 14.
6 ATTACHMENT 4
Governmental Activities
16. Why not restate FY 2023 to reflect the reclassification of garbage franchise fees so FY 2024 and FY 2023 are presented on a comparable basis? As presented it is confusing for the reader. At least disclose the amount of the reclassification.
Added. See footnote on pages 23 and 29.
“(1) Starting with the March 2024 services, Garbage Franchise Fees are categorized as encroachment fees under Charges for Services. The total amount classified in Charges for Services in FY 2023/24 was $765,900.”
17. Provide more transparency regarding the $1.7m increase in capital grant activity. What were the specific grants that drove this increase?
Added. See page 25 of the ACFR where discussion “Governmental Activities Revenue Discussion” exists.
“$1.7 million net increase in capital grant activity including grants received toward the Los Gatos Creek Trail to Highway 9 Trailhead Connector project.”
18. What is Town Management trying to accomplish by establishing an assigned “market fluctuation reserve”? I realize this is in the Fund Reserve Policy, but does this really accomplish anything? Should it be classified as nonspendable? Not added. Staff cursorily reviewed the item and will continue to research the classification. For the FY 2023/24 ACFR, the market fluctuation reserve is kept as assigned consistent with the resolution approved by the Council before June 30, 2024.
19. Governmental total expenses increased $9.3m. $7.7m of the increase is discussed. What is the cost force that contributed the additional $1.6m? Are these increases “one-time” or recurring?
Not Added. The other $1.6 million increase is attributable to multiple ongoing cost increases such as retiree medical expenses, utilities, landscape maintenance, safety supplies and equipment, and one-time costs in temporary employee services, labor relations services, consultant services, one-time grants, and building maintenance repairs. After further discussion at the December 9 Finance Commission meeting, the Commissioners recommended removing the detail originally provided since the change was due to multiple miscellaneous items.
ITEM NO. 14.
7 ATTACHMENT 4
Governmental Funds Discussion
20. Disclose the cost force that caused the general operating increase of $1.5m. Why did this occur?
Not Added. The other $1.5 million increase is attributable to multiple ongoing cost increases such as retiree medical expenses, utilities, landscape maintenance, safety supplies and equipment, and one-time costs in temporary employee services, labor relations services, consultant services, one-time grants, and building maintenance repairs. After further discussion at the December 9 Finance Commission meeting, the Commissioners recommended removing the detail originally provided since the changes were due to multiple miscellaneous items.
21. Discuss the capital outlay increase of $3.4m. What was this for? Added. Discussed in the Capital Asset section of the ACFR. See the response to Question 26.
22. Explain the $4.6m increase in General Fund expenditures from FY 23 level of $44.9m to FY 24 level of $49.5m. Why did this occur?
Not added. Paragraphs 4, 5, and 6 on page 31 already describe the Governmental Funds General Fund portion. See detailed description.
23. Clarify the $2.6m from other financing sources for the Appropriated Reserves Fund was transfers in from the General Fund.
Clarified. Refer to Note 5. Total transfer in including the 50% of Measure G proceeds is $3.1 million, the total transfer out is $0.5 million.
General Fund Budgetary Highlights
24. Consider adding a discussion of the operating surplus (e.g., excess of revenues over expenditure). It is not disclosed that the General Fund surplus for FY 2024 was $4.0m.
Discuss if this was the result of onetime events or if the surplus reflected a structure where recurring revenues exceeded recurring expenditures.
Added. See page 33.
ITEM NO. 14.
8 ATTACHMENT 4
“The General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual (GAAP) for Fiscal Year Ended June 30, 2024, reports an approximate favorable variance overall with the final budget of approximately $3.6 million. During FY 2023/24, the General Fund had an excess of revenues over expenditures of $4.0 million, excluding transfers. This favorable variance was created largely by the net effect of the following factors.” Variance with the Final General Fund Budget
25. Provide more detail regarding the $0.8m in operational “savings” Town-wide. What exactly is an “operational savings”?
Added. See page 34.
“Actual expenditures ended the fiscal year at $1.8 million below final budgeted expenditures. Significant factors affecting actual expenditures include: $1.0 million savings in salaries and benefits in limited term vacancies throughout the organization combined with $0.8 million less actual expenditures than budgeted in multiple categories Town-wide. The chart below illustrates the original expenditure budget, final expenditure budget and actual expenditures.” Capital Assets
26. As a general comment this section needs additional work given the magnitude of the capital expenditures made in FY 24. Total capital expenditures were $12.0m with $7.1m in CIP and $3.9m for Infrastructure (streets and other). This is a material change from the prior year profile where total capital expenditures were $8.6m with $0 for CIP and $8.0m for infrastructure (streets and other). Why the $4.1m decrease in street investment year over year? There needs to be more discussion as to what specific projects are included in CIP and the year-over-year change in total capital expenditures.
Added. Please see page 35 of the ACFR and Note 6.
“The $7.1 million addition to construction in progress is comprised of $3.8 million for pathways projects, $1.2 million for streets and curbs improvements, $0.9 million for land and building improvements, $0.6 million for bridges, $0.4 million for equipment, and $0.2 million for retaining walls, traffic signals, parking lots, and park improvements.”
ITEM NO. 14.
9 ATTACHMENT 4
“During the year, the Town transferred $2,907,014 from construction in progress (CIP) to buildings and improvements and $141,324 to infrastructure streets for capital projects that were completed and placed in service. The transfers out were offset by $3,894,579 of transfers in. The Town transferred $3,891,824 from infrastructure - streets back into CIP since these assets were not available for service. The net transfers out of infrastructure - streets of $3,750,500 include the $3,891,824 transfer out to CIP net of the $141,324 transfer in from CIP as reported in the above schedule. There was also a reclassification of equipment back into CIP of $2,751. Total transfers into buildings and improvements included a land reclassification of $1,368 for a total transfer in of $2,908,377. The assets reclassified to CIP had not been depreciated.”
27. The schedule of “notable additions” should be gross additions and exclude current year depreciation. As shown, the schedule understates the magnitude of gross additions made.
Added. Discussed in the Capital Asset section of the ACFR. See the response to Question 26.
28. Consider reporting depreciation and amortization expense separately. For FY 24 total depreciation expense was $5.0m and amortization expense was $220k.
Not added. Not required by the Government Accounting Standards Board, and the amortization expense is not material to the total amount of the expense.
Capital Assets
Accumulated
Depreciation
Capital Assets,
Net
Infrastructure - Streets $ 86,301,911 $ (40,509,975) $ 45,791,936 Infrastructure -Other 28,491,627 (10,552,383) 17,939,244 Subscription Right of Use Assets 1,622,573.00 (422,512.00) 1,200,061 Buildings 42,862,716 (11,995,280) 30,867,436
Land 26,064,735 - 26,064,735
Equipment 12,893,445 (10,870,937) 2,022,508
Construction in Progress 15,491,043 - 15,491,043
$ 213,728,050 $ (74,351,087) $ 139,376,963
Capital Assets
Town of Los Gatos
For the Year Ended June 30, 2024
ITEM NO. 14.
10 ATTACHMENT 4
Economic Factors, Next Year’s Budget, and Rates
29. In my opinion there is a major disconnect between the actual results for FY 24 and the FY 25 budget. This section references the “Five Year Forecast” which the FC reviewed and provided extensive comments. There is no information provided regarding the Five-Year forecast, so the reader does not have the ability to judge the merit of the comment “endeavored to maintain essential public services while controlling operational costs.” The fact is the FY 24 GF results reported a surplus of $4.0m. Even if we adjust for the Mark to Market adjustment of $1.7m and exclude the “unplanned” capital outlay of $700k, there was an adjusted surplus of $3.0m. Unfortunately, for many years the GF budget has not been an effective fiscal management tool because there has been a negative bias in forecasting revenues and expenditures. This can easily be seen by comparing the GF original FY 24 budget, the GF final FY 24 budget and the actual results for “excess of revenues over expenditures”. Historically revenues exceed the budget, and expenditures are favorable to the budget. When viewed in this historical context, I am unclear as to the purpose of this section.
Added. Please see the additional discussion starting on page 37. This entire section is revised to present the economic outlook in a more understandable fashion.
Note 1
30. Reclassification – why not disclose the reclassification of the garbage fee? Are there any other reclassifications?
Not added. See additional footnotes on pages 23 and 29. The revisions do not include a reclassification of the garage fee as this is not the result of an error. We added the below footnote to provide clarity for the user for the financial statements.
“(1) Starting with the March 2024 services, Garbage Franchise Fees are categorized as encroachment fees under Charges for Services. The total amount classified in Charges for Services in FY 2023/24 was $765,900.”
31. Why not adopt GASB 103 early?
Not adopted. GASB 103, Financial Reporting Model Improvements will be effective for fiscal years ending June 30, 2026. Staff will consider an early adoption for the next fiscal year ACFR. One of the major changes will be that the analysis of budgetary variations will be included in Required Supplementary Information not in the MD&A.
ITEM NO. 14.
11 ATTACHMENT 4
Note 5
32. Is there a better description than “non-departmental”? It is difficult to understand what the source of transfers from the General Fund is and how this is linked to the Fund Balance.
Not added. Appropriated funds are provided in the Non-Departmental Program to account for a variety of Town Services and activities not specifically attributable to individual Departments. Most of the transfers are expended in the Non-Departmental Program. We considered but did not identify a better term to provide clarity.
Note 6
33. Please explain the “transfers” column. What caused a $3.8m transfer from Infrastructure – Streets and a $2.9m transfer in of buildings and improvements? Does this suggest an internal control issue?
Added. See Note 6 (a more detailed description provided below). “During the year, the Town transferred $2,907,014 from construction in progress (CIP) to buildings and improvements and $141,324 to infrastructure streets for capital projects that were completed and placed in service. The transfers out were offset by $3,894,579 of transfers in. The Town transferred $3,891,824 from infrastructure - streets back into CIP since these assets were not available for service. The net transfers out of infrastructure - streets of $3,750,500 include the $3,891,824 transfer out to CIP net of the $141,324 transfer in from CIP as reported in the above schedule. There was also a reclassification of equipment back into CIP of $2,751. Total transfers into buildings and improvements included a land reclassification of $1,368 for a total transfer in of $2,908,377. The assets reclassified to CIP had not been depreciated.”
34. Why not show separate depreciation and amortization by government activities? Not added. Not required by the Government Accounting Standards Board, and the amortization expense is not material to the total amount of the expense.
Note 10
35. Please explain the “deletions” for ERAF Risk and Economic Recovery. What is the counter entry?
Added. Please see page Note 10. ERAF Risk should only show addition. Staff redlined the correction.
ITEM NO. 14.
12 ATTACHMENT 4
36. The FY 25 CIP budget shows for the GFAR an “assigned” beginning fund balance of $1.2m for ARPA. Why wouldn’t this be included in the Governmental Fund schedule? Not added. CIP Budget will be updated with the correct terminology.
37. What is the reasoning for an ERAF assigned fund balance? If there is concern that this is true liability, why wouldn’t we establish contingent liability on the General Fund Balance sheet?
Not added. A future obligation is not a current liability, it can be assigned fund balance. The assigned fund balance was established by resolution.
38. What is the reasoning for not having an unassigned fund balance which could absorb unplanned revenue shortfalls or unplanned expenditures? Historically the Capital/Special Projects reserve has been tapped to fund this, which does not comply with the intent of the assigned reserve.
Not added. An unassigned fund balance would be welcomed; however, a broader discussion of fund balances and the Town’s approach to reserving resources should occur prior to changes. The Finance Commission will review the General Fund Reserve Policy at its December meeting.
39. The footnote on page 23 should also disclose the amount of the garbage franchise fee for FY 2022/23 since the schedule shows FY 2022/23. This will help the reader understand the full impact of the change in reporting year over year.
Partially Added. See footnote on pages 23 and 29.
“(1) Starting with the March 2024 services, Garbage Franchise Fees are categorized as encroachment fees under Charges for Services. The total amount classified in Charges for Services in FY 2023/24 was $765,900. The garbage Franchise Fees were $2,051,335 in FY 2022/23 and $1,493,184 in FY 2023/24. ”
40. On page 38, there is a comment sales tax is expected to stagnate or decline. How does this square with the sales tax analysis prepared by outside consultants in evaluating the fiscal impact of the household growth in the adopted the 2040 General Plan (source: Land Use Alternatives Report – December 2019)? The 2040 General Plan EIR studied a potential increase of 3,738 household units (8,971 people) by 2040 which represents a 27% increase from 13,637 units in 2021. Until a proper fiscal impact analysis is prepared, I am unsure the Town has a good understanding of the longer-term fiscal impact on revenues, operating expenditures and capital requirements stemming from the anticipated growth. Shouldn’t there be a discussion of this point?
Not Added. The current sales tax forecast is based on the existing businesses and market environment. Historical data demonstrated flattening sales tax collection.
ITEM NO. 14.
13 ATTACHMENT 4
When the longer-term fiscal analysis is available, staff will update the sales forecast.
41. On page 45, setting aside the broader discussion of the General Fund Reserve Policy, why isn’t the Market Fluctuation reserve fund balance classified as a non-spendable fund balance?
Not Added. Staff cursorily reviewed the item and will continue to research the classification. For the FY 2023/24 ACFR, the market fluctuation reserve is kept as assigned consistent with the resolution approved by the Council before June 30, 2024. Please refer to Question # 18.
42. One other point we should discuss is whether or not the ERAF assigned fund balance should be recorded as a contingent liability on the face of the balance sheet. If the liability is likely to occur and is measurable, then that would meet the test according to GAAP. What has the auditor done to assure himself that this isn’t a contingent liability? Not Added. Staff and auditor confirmed that it is not a contingent liability because of the uncertainty as to whether or not the expenditures will be incurred and because it has not been incurred as of 6/30/2024.
ITEM NO. 14.
PREPARED BY: Paul Horvat
Emergency Services Coordinator
Reviewed by: Town Manager, Assistant 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: 12/17/2024
ITEM NO: 15
DATE: December 12, 2024
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Adopt the Town of Los Gatos Community Wildfire Protection Plan (Annex 9 of the Countywide Community Wildfire Protection Plan)
RECOMMENDATION:
Adopt the Town of Los Gatos Community Wildfire Protection Plan (Annex 9 of the Countywide Community Wildfire Protection Plan)(Attachment 1).
BACKGROUND:
In 2003 the U.S. Congress recognized the widespread decline in forest health and the increased incidence of wildfire risk nationwide by passing the Healthy Forests Restoration Act (HFRA). The HFRA was revised in 2009 to address changes to funding and provide a renewed focus on wildfire mitigation.
The HFRA expedites the development and implementation of hazardous fuels reduction projects on federal land and emphasizes the need for federal agencies to work collaboratively with local communities. A key component of the HFRA is the recommended development of Community Wildfire Protection Plans (CWPPs), to facilitate the collaboration between federal agencies and local communities to develop hazardous fuels reduction projects and place priority on treatment areas identified by communities in a CWPP.
In addition, communities with an established CWPP are given priority for funding of hazardous fuels reduction projects carried out in accordance with the HFRA.
ITEM NO. 15.
PAGE 2 OF 3
SUBJECT: Adopt the Town of Los Gatos Community Wildfire Protection Plan DATE: December 12, 2024
DISCUSSION:
In 2023, Santa Clara County completed the preparation of the Santa Clara County Community Wildfire Protection Plan.
1 The CWPP document is intended to identify wildfire risks in communities that are most likely to see wildfires and present options for mitigating those hazards. It is a tool designed for identifying, prioritizing, and tracking wildland fire mitigation measures across complex jurisdictional boundaries. The Santa Clara County CWPP includes a series of annexes for the jurisdictions in its service area that address specific issues and mitigation measures unique to those communities. Since Los Gatos is served by the Santa Clara County Fire Department, a CWPP annex to (Annex 9) was prepared for the Town (Attachment 1).
Community wildfire protection planning is the basis for a community’s long-term strategy to reduce wildland fire risk through the ongoing evaluation and analysis of an ever-changing environment. This CWPP annex identifies the Town’s wildland fire risks and provides a plan for departments, stakeholders, and the community to reduce those risks through various mitigation and educational outreach efforts.
The Town’s comprehensive approach to wildland fire mitigation employs the following varied techniques:
• Prevention: the Town utilizes administrative and regulatory actions, such as planning and zoning requirements, that influence the way land and buildings are developed to reduce wildfire risks.
• Natural Resource Protection: actions minimize wildfire risk and preserve or restore the functions of natural systems via vegetation management and post-wildfire watershed management.
• Property Protection: vegetation management projects are implemented to reduce the risk of life and property.
• Public Education and Awareness: informing the public, residents and businesses about wildland fire hazards and ways to reduce their own loss and to lower risk in the community.
This CWPP Annex is designed to be used as a hazard identification and analysis reference document that is part of the overall County of Santa Clara Community Wildfire Protection Plan.
CONCLUSION:
This CWPP Annex is a vital component of the Town’s emergency management goals. Staff recommends adoption of the Town of Los Gatos CWPP.
1 https://santa-clara-cwpp-sccfc.hub.arcgis.com/
ITEM NO. 15.
PAGE 3 OF 3
SUBJECT: Adopt the Town of Los Gatos Community Wildfire Protection Plan DATE: December 12, 2024
COORDINATION:
This CWPP Annex has been coordinated with the Parks and Public Works Department, Town Manager’s Office, Santa Clara County Fire Department, County of Santa Clara Department of Emergency Management, and the County Fire Safe Council.
FISCAL IMPACT:
There is no fiscal impact associated with adopting the Town’s CWPP annex. Fire mitigation efforts are ongoing and any additional funding required will be requested as part of the Town’s budgeting process.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Town of Los Gatos Community Wildfire Protection Plan (Annex 9 of the Countywide CWPP)
ITEM NO. 15.
ANNEX 9
TOWN OF LOS GATOS COMMUNITY WILDFIRE PROTECTION
PLAN (CWPP)
Organization and Jurisdiction
The Town of Los Gatos is located at the base of the Sierra Azul mountains in the southwestern portion of Santa Clara County, where the Santa Clara Valley meets the lower slopes of the Santa Cruz Mountains.
Los Gatos encompasses a wide variety of terrain, ranging from flat topography at the edge of the valley floor to densely wooded hillsides. Both the valley and hillsides are interspersed with creeks, streams and riparian habitat. The sharp contrast between the valley floor and the hillsides provides the Town's picturesque background. The population is estimated to be 33,529 in a 14-square-mile area.
The Town of Los Gatos is governed by a publicly elected Town Council and has authority for General Plan land use planning, code adoption, and permit processing. The Town of Los Gatos does not have a Town fire department; Los Gatos is within the Central Fire Protection District. Fire protection services for Los Gatos are provided by Santa Clara County Central Fire Protection District (dba Santa Clara County Fire Department), including emergencies in State Responsibility Areas (SRAs) in unincorporated areas of the wildland urban interface (WUI), adjacent to Los Gatos.
State law designates all lands within the Town limits of Los Gatos as a Local Responsibility Area (LRA) for purposes of wildland fire protection. Most State fire prevention and defensible space laws do not apply within LRAs. Recent legislation requires State review and input on General Plan Safety Element updates where wildland fire is a hazard (Government Code Section 65040.20).
Planning Team Participation
The Los Gatos community is represented on the Core Team by representatives of the Santa Clara County Fire Department, Santa Clara County Firesafe Council, the Town’s Parks and Public Works and Community Development Departments, and the Town Manager’s Office. The community has been engaged in the Community Wildfire Protection Plan (CWPP) planning process through two rounds of meetings held in 2022 and 2023.
Risk-Hazard Summary
Community hazard assessments include ratings of community conditions compared to best practices for WUI fire mitigation. Community hazard ratings include consideration of applicable State codes, local ordinances, and recognized best practices guidelines.
The National Fire Protection Association Standard 1144 (NFPA 1144) defines WUI hazards and risks at the community and parcel level. This plan utilizes components of NFPA 1144, California laws and local ordinances to evaluate neighborhood WUI hazard and risk. California Public Resource Code (PRC) 4290 and 4291 sections address best practices WUI community design and defensible space standards.
The NFPA 1144 community risk assessment completed for the Los Gatos Hills Community assigned the WUI community a risk rating of High with a score of 89 (<40= low, >40 = moderate, >70 = High, >112 = Extreme) see tabulated list below. Factors that contributed to the risk are illustrated below. Averages are taken across the community for each of these parameters.
ATTACHMENT 1
ITEM NO. 15.
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
In addition to the on-the-ground hazard assessment, the CWPP also includes a Composite Fire Risk/Hazard Assessment, which uses fire behavior modelling to determine potential fire behavior and is based on fuel characteristics, topography, weather, and fire history. The Composite Risk/Hazard Assessment for the planning area is shown in Figure 9.5. For more information on the methodology for this assessment please refer to Chapter 3 of the County of Santa Clara CWPP. For mapping on Wildfire risk to homes, likelihood, exposure, and vulnerable populations visit the following link:
https://wildfirerisk.org/explore/overview/06/06085/0600044112/.
WUI Area Description
WUI Area Defined
The Los Gatos WUI planning area includes primarily Very High Fire Hazard Severity Zone areas on the southern side of Los Gatos (Figure 9.1). The WUI area is best described as a wildland-urban intermix with homes scattered amongst wildland fuels.
Fire History
For fire history information, please see Figure 2.9 in the main County of Santa Clara CWPP document.
Hazardous Fuel Characteristics
The Los Gatos planning area comprises a range of vegetation communities that differ depending upon elevation, precipitation, and slope. Chaparral vegetation is often found on south facing slopes, where winter precipitation is relatively high, but dry summers are common. The chaparral will have long flame lengths under either moderate or extreme weather scenarios. The nature of these fuels is to burn quickly and intensely. Oak woodlands comprised of a variety of oak species are also interspersed throughout as well as mixed conifer comprising knob cone pine and grey pine. A fire in either the mixed conifer or hardwood would likely be a surface fire with patches of active behavior and low rates of spread. However, active fire behavior is possible in this vegetation type under extreme weather conditions, especially where there is high surface loading. Coastal coniferous forest communities such as redwoods and Douglas fir are located at lower elevations where precipitation is high, fog is common, and temperatures are moderate. Fire spread is generally limited in this fuel type; however, given the right combination of weather conditions, surface fire can be expected to burn uphill. Areas with increased fuel loading from dead and down materials may experience crowning under the right conditions. The varied vegetation composition result in the Los Gatos WUI comprising a range of wildfire hazards.
ITEM NO. 15.
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
Photo of Chaparral vegetation
ITEM NO. 15.
3 2024
Santa Clara County Community Wildfire Protection Plan
Town of Los Gatos
Figure 9.1. Los Gatos planning area.
ITEM NO. 15.
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
4 2024
Neighborhood and Structural Characteristics
The foothills above Los Gatos (shown in Figure 9.2 below) are characterized by steep, winding, and narrow roads that pose potentially difficult ingress and egress during events requiring emergency response and evacuations. Some areas may experience slow response times due to the distance from the nearest fire station and existing road conditions. Some homes have minimal turnaround space, posing a concern to emergency responders due to potential entrapment. There are several dead-end roads and narrow driveways.
Most homes have moderate defensible space (at least 30 feet) but some homes do not meet the necessary 70- to 100-foot space. Homes are inspected by Santa Clara County Fire Department (SCCFD) personnel at least every three years. Most homes have non-combustible siding, but the majority have combustible decks and fencing that abuts directly next to wildland fuels. Some homes have wood shake roofs which put the property and neighborhood at risk. Many subdivisions are managed by homeowner associations (HOAs), which provide a conduit for fire prevention and public education and outreach messages regarding structural ignitability and defensible space. Many 7A compliant new build properties (Figure 9.3) are interspersed with older properties, many are on large lots with good separation and have well maintained yards. Many homes are landscaped by contracted landscape companies; outreach regarding defensible space and non-flammable landscape vegetation could be targeted at those companies. Vulnerable populations, such as retirement homes, are a concern to law enforcement and fire department personnel, due to evacuation concerns along narrow roads. Defensible space in these areas is a priority, particularly where vegetation is close to the property (Figure 9.4).
Many homes are located upslope from thick scrub fuels, with continuous canopies. Homes are located on steep slopes with often minimal set-back from the slope. Topography is a concern due to the influence steep slopes have on potential fire behavior.
Figure 9.2. Overview of Los Gatos WUI community.
ITEM NO. 15.
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
5 2024
Figure 9.3. New build property, built to 7A compliance.
Figure 9.4. Eucalyptus close to units in a former retirement community in hills above Los Gatos.
Emergency Response Capacity
Fire Response
Fire suppression for the Los Gatos WUI area is provided by:
Santa Clara County Central Fire Protection District:
o Los Gatos Fire Station, 306 University Ave, Los Gatos o Shannon Fire Station, 16565 Shannon Rd, Los Gatos
o Winchester Fire Station, 14850 Winchester Blvd, Los Gatos
ITEM NO. 15.
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
6 2024
Public Education and Outreach Programs
Santa Clara County Fire Department, Fire Prevention Division provides a comprehensive fire and life safety educational program within Los Gatos. More information can be found on its website:
http://www.sccfd.org/community-education/overview.
The Santa Clara County Fire Safe Council is actively involved in the Town of Los Gatos and surrounding communities (https://sccfiresafe.org/). This organization provides information regarding chipping programs, defensible space mitigation, forest health issues, and much more. They also offer public meetings and forums to support wildfire awareness.
The Town of Los Gatos provides comprehensive emergency preparedness information on its website:
https://www.losgatosca.gov/2026/Emergency-Preparedness. In addition, the Town has an active CERT program: http://www.town.los-gatos.ca.us/152/CERT-Emergency-Management.
Social Vulnerabilities
The Town has a large senior population, some individuals with disabilities, and some with low income and language barriers. The Town of Los Gatos will outreach to these communities to provide education and awareness on disaster preparedness. The 55 Plus program maintains a list of senior living communities in Los Gatos and other senior services that can be found here: https://www.lgsrecreation.org/55-plus/hub/.
Los Gatos, CA, has a population of more than 25,000 and does not meet the population criteria for the SlipOn Tanker program, which can be used by local governments to purchase slip-on tanker units that allow trucks and other vehicles to be operated as wildland fire engines. Local governments that provide emergency services to areas with a population of 25,000 or less are eligible to apply.
Policies, Regulations, Ordinances, and Codes
Buildings within the Town of Los Gatos would be subject to the Municipal Code of Los Gatos. Chapter 9 Fire Protection and Prevention outlines codes and ordinances pertaining to wildfire:
https://library.municode.com/ca/los_gatos/codes/code_of_ordinances?nodeId=CO_CH9FIPRPR.
California Fire Code Section 4907.1 states, “Defensible space will be managed around all buildings and structures in State Responsibility Areas (SRA) as required in Public Resources Code 4291.” In addition, buildings and structures within the Very High Fire Hazard Severity Zones of an LRA shall maintain defensible space as outlined in Government Code 51175 - 51189 and any local ordinance of the authority having jurisdiction.
Refer to Chapter 49 of the California Fire Code as amended and adopted by the Town of Los Gatos for all of the requirements for Wildland Urban Interface Fire Areas in the Town. Refer to Section 9 of the Town Code for more information.
Risk-Hazard Assessment
As mentioned in the Risk Hazard Summary, the NFPA 1144 community risk assessment completed for the Los Gatos Hills Community assigned the WUI community a risk rating of High with a score of 89 (<40= low, >40 = moderate, >70 = High, >112 = Extreme) see tabulated list below. Factors that contributed to the risk are illustrated below. Averages are taken across the community for each of these parameters.
ITEM NO. 15.
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
7 2024
Los Gatos
Parameter Condition Rating
Access Two roads in and out but access still concern +/- Narrow road width -
Surfaced road with greater than 5% grade +
Poor fire access, dead end spurs, lack turnaround -
Street signs are present, some are non-reflective +/-
Vegetation Adjacent fuels: Medium +/-
Defensible space: >30 feet < 70 feet around structure +/- Topography within 300 feet of structure 21%–30% -
Topographic features Moderate to high concern +/-
History of high fire occurrence Low +
Severe fire weather potential Low +
Separation of adjacent structures Good separation +
Roofing assembly Class C -
Building construction Combustible siding and deck -
Building set back <30 feet to slope -
Available fire protection Water: hydrants present with variable pressure + Response: Station <5 miles from structure +
Internal sprinklers: some newer 7A compliant homes +/-
Utilities One above and one below ground +/-
Risk Rating- High (89)
In addition to the on-the-ground hazard assessment, the CWPP also includes a Composite Fire Risk/Hazard Assessment, which uses fire behavior modelling to determine potential fire behavior and is based on fuel characteristics, topography, weather, and fire history. The Composite Risk/Hazard Assessment for the planning area is shown in Figure 9.5. For more information on the methodology for this assessment please refer to Chapter 3 of the countywide CWPP.
PARCEL LEVELASSESSMENT
A model for determining parcel level risk and effect of mitigations has been developed through this CWPP project. The model can use information available through public record for basic analysis but can be further refined with a site visit with property owner for a thorough analysis of risk score. The County will be seeking funding to fully implement this parcel level assessment in the future. The goal is for the property owner to be able to use this analysis to determine the most effective steps they can take to reduce their risk. For more information refer to Chapter 3 in the countywide CWPP.
ITEM NO. 15.
8 2024
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
Figure 9.5. Composite Risk and Hazard Assessment for Los Gatos WUI community.
ITEM NO. 15.
2024
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
9 CALFIRE Fire Hazard Severity Zones
The CALFIRE Fire Hazard Severity Zones (FHSZ) system is a science-based system where severity zones are defined based on vegetation, topography, and weather (temperature, humidity, and wind), and represent the likelihood of an area burning over a 30- to 50-year time period without considering modifications such as fuel reduction efforts. The CALFIRE FHSZ maps present wildfire hazard and not wildfire risk. Wildfire risk takes building construction materials, vegetation management projects, distance to fire station and water supply into account. In California, CAL FIRE maintains FHSZ data for the entire State. There are three classes of fire hazard severity ratings within FHSZs: Moderate, High, and Very High (CA GOPR 2020).
Critical Infrastructure and Community Values at Risk
Critical utility infrastructure such as, electric power supply lines, substations, and natural gas lines are essential to supply services to residents and businesses that are in some cases are critical to health and life safety. In many parts of the project area, electric power is needed to operate pumps for domestic water supply, and to provide heating and lighting. Wildfire is a significant threat to the electric utility supply.
The project area has several watersheds that contain infrastructure and vegetation which can both impact water distribution and quality when exposed to a wildland fire. Watersheds need to be maintained and protected from catastrophic wildfire damage to prevent erosion, sedimentation and water contamination (Taylor et al. 1993). Long-term issues that could result from damage to watersheds include increased run off, poor soil retention, and decreased water quality.
The WUI area surrounding Los Gatos is comprised of open space areas, including El Sereno Open Space, St. Josephs Hill Open Space, Heintz Open Space, Sierra Azul Open Space, and Santa Rosa Open Space. These open space areas are valued both for their natural resources and for the recreational opportunities they provide.
In addition to open space areas, other community assets at risk from possible wildfire include: life safety, homes and property values, infrastructure, recreation and lifestyle, wildlife habitat, watershed protection, environmental resources, and commercial business. For example, a number of wineries/vineyards are located within the WUI, including the Testarossa Winery, McCarthy Family Estate Vineyards, La Rusticana D’Orsa Vineyard, and Perrucci Family Vineyard. See Town of Los Gatos critical infrastructure in the link below can be copied and pasted in your browser to view the Town of Los Gatos critical infrastructure: https://www.losgatosca.gov/DocumentCenter/View/31982/6-LGGP_2040_PublicFacilities-Services-and-Infrastructure-Element.
Mitigation Projects and Prioritizations
Los Gatos started a Roadside Vegetation Management project with Town funds in 2020 and in 2021. Work completed through the program resulted in the removal of vegetation along Priority 1 and Priority 2 roads as identified in the Vegetation Management Plan that can be found at:
https://www.losgatosca.gov/2620/Vegetation-Management.
The next phases of work will be undertaken in 2024, with the full 31 miles of priority 1 and 2 roadways expected to be completed by the end of 2025. Vegetation removal completed under this program is designed to provide a clear width of 20 feet and a clear height of 13.5 feet. The work will be funded by a USDA grant supplemented by Town matching funds. This is the same funding that was used to remove 18 eucalyptus trees on Overlook Road.
ITEM NO. 15.
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
10 2024
Table 1- 1. Recommended Projects for Creating Resilient Landscapes (Fuel Reduction Projects) in Town of Los Gatos planning area.
Project
ID Status Priority (H,M,L)
Timeline
for Action Project Description Location Land Ownership/ Lead Agency Methodology/Approach Serves To: Monitoring/Maintenance Requirements Funding Sources LG.FR.1 Ongoing H Ongoing Identify needed road
maintenance and strategic road
buffers
Highest risk
roadways as
identified in the
risk assessment
for access
ingress and
egress in the
WUI.
County Fire, Cal
Fire, FireSafe
Council, and Town
of Los Gatos
Roadway improvements:
While increasing roadway width may not be feasible
in many locations, creation of passing areas where
possible should be prioritized
Grade and maintain roads to reduce hazards to
emergency apparatus (potholes and poor surfacing)
Road ROW vegetation improvements:
Frequent maintenance of ROW
Treat surface fuels for a minimum of 10 ft buffer and up to 30ft where possible
Trim fuels (limbing-up timber) to allow safe passage
of emergency vehicles
Control for invasive species that may contribute to
rapid fire spread (i.e., weeds and grasses).
Conduct assessment of evacuation route that have
limited egress
Provides for safe and
effective wildfire response
capabilities
Creates a strategic fuel
break along roadways to
create potential firebreak
And improve evacuation
routes.
Regular maintenance needed to
ensure the roads are drivable for
emergency response vehicles
Grants (FEMA, Ca FireSafe Council,
U.S. Forest Service and Cal Fire) and
PPW (Town Parks and Public Works)
budget
LG.FR.2 Ongoing H Ongoing Improve and maintain existing fuel breaks and potential fire
containment features. Define
and delineate safe refuge areas.
Highest risk
areas as
identified in the
risk assessment:
County, State,
Federal
Strategic placement of fuel breaks will help to limit the spread of wildland fire and increase access to difficult areas.
Fuel break prescriptions should be site specific depending on the fuel type, topography, soils, adjacent land
management practices and environmental regulations
(NEPA/CEQA). The prescriptions will incorporate the use of best management practices for habitat protection (i.e., protection of vulnerable species and habitat and prevention of invasive species).
Look for opportunities to develop and/or increase fire breaks to double as access within the WUI or difficult
to access areas and look for opportunities to widen
some public trails to better serve as fuel breaks/fire
access roads on lands adjacent to WUI.
Encourage clearance of an additional width when
possible.
Create additional buffer zones between existing
development and the forest, ensuring fire
suppression access. Maintain existing fire breaks and
buffers (Figure X will be a map of existing and
planned fuel treatments).
Work with adjacent landowners to develop internal
capacity to help enhance fire access-through road
and trail improvements on those lands
Identify Safety zones in case egress is limited
Protect life and property by
mitigating fuels, providing
defensible space for
firefighters protecting
structures.
Create a fuel arrangement
unlikely to support crown
fire
Ensure the protection of
vulnerable ecosystems and
values at risk.
Protect life for evacuees in
case egress is limited
Regular maintenance needed to
ensure the fuel break remains clear
of vegetation.
Monitor for invasive species.
Continued management of fire
breaks maintained by grazing, brush
breaking, controlled burns.
Identification and continued
maintenance of safety zones
Grants (FEMA, Ca FireSafe Council,
U.S. Forest Service and Cal Fire) and
PPW budget
LG.FR.3 Ongoing H Ongoing Fire Safe Council to continue community outreach to prioritize
treatments along existing trails
that could help to provide a more
substantial fuel break and break
up the continuity of fuels.
Trails that run
adjacent to the
Community
Open Space
Lands Owner
Detailed analysis would be needed in development of
treatment location to ensure protection of natural resources.
Provide access when fires
occur to reduce spread
Enhance Community fire
defense by breaking up fuel
continuity
Regular maintenance needed to
ensure the fuel breaks remain clear
of vegetation.
Grants: CA FSC; California Forest Improvement
Program (CFIP); Natural Resource
Conservation Service (NRCS), FEMA, Green
House Gas Reduction Fund (GHGRF)
ITEM NO. 15.
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
11 2024
Project
ID Status Priority (H,M,L)
Timeline
for Action Project Description Location Land Ownership/ Lead Agency Methodology/Approach Serves To: Monitoring/Maintenance Requirements Funding Sources LG.FR.4 Ongoing H Ongoing Continue roadside
brushing/mowing throughout
community to increase buffer
from wildfire ignitions and
provide for safe evacuation.
Establish assistance program
for hazardous fuel reduction and
defensible space for elderly or
physically challenged individuals
within Los Gatos
Town of Los
Gatos roads, Los
Gatos
neighborhood
groups, HOAs in
the WUI
Town of Los
Gatos PPW,
private road
associations,
PG&E, Cable
and Phone
companies.
Led by SCCFSC.
Determine suite of treatment methods allowed and
restriction for roadside hazard reduction including
mowing, mastication, chemical, plantings, mulching, etc.
Develop treatment plan and rotation schedule for
roadside treatments, focusing of primary evacuation or
access/egress corridors.
Identify barriers to achieving parcel level defensible
space and establish assistance program of resources:
education, consulting, guidance, people, funding.
Reduce fuel loading around
roads and highways to
ensure safe passage of
vehicles in event of
evacuation and reduce
unplanned ignitions from
vehicles and highway users
Ensure that individual
properties with poor
property hygiene do not
put adjoining properties at
risk in event of wildfire.
For residents who are not
capable of implementing
good property hygiene
Regular maintenance schedule
should be implemented to ensure
clearance levels are maintained.
Develop standards for road
crews.
Establish levels of participation
by assistance type,
Grants: Federal Emergency Management
Agency (FEMA), California Fire Safe Council
(CA FSC), Department of Homeland Security
(DHS), NRCS, GHGRF
LG.FR.5 Ongoing H Ongoing Create Sustainable programs for creating Defensible Space at the
parcel Level within Los Gatos
Town of Los
Gatos residents
in the WUI
Homeowner,
FireSafe Councils,
Homeowner
Associations,
SCCFD,
Administrators for
SRA fee
distributions.
Example projects - Curbside green waste pickup programs, community chipping piles, drive-up chipping, on site
chipping.
Ensure that defensible
space actions are sustained
in all communities
Regular maintenance schedule
should be implemented to ensure
clearance levels are maintained.
Grants: CA FSC; CFIP; NRCS, FEMA, GHGRF
LG.FR.6 Not Started H Identify all wood shake-roofed
properties within planning area
and target homeowners with
outreach on retrofitting roofs.
Homes in the
WUI
Town of Los
Gatos Community
Development
Department in
conjunction with
County Fire
Survey homes in the WUI. Create a database of wood
shake roofs and explore
elimination of flammable
roofs through attrition or
potential Town Code
modification
Update list annually. NA
LG.FR.7 Annual H Annual Participate in an annual
community workday to
encourage yard clean-up and
defensible space maintenance
Homes in the
WUI
County Fire, CAL
FIRE, FireSafe
Council and the
Town.
ITEM NO. 15.
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
12 2024
Table 1-2. Recommended Projects for Creating Fire Adapted Communities (Public Education and Outreach and Structural Ignitability Projects) in Town of Los Gatos planning area Project
ID Status Priority (H,M,L)
Timeline
for Action Project Description Location Land Ownership/ Lead Agency Methodology/Approach Serves To: Monitoring/Maintenance Requirements Funding Sources LG.EO.1 Ongoing H Ongoing Identify vulnerable
populations located in the WUI
Prioritize high
risk areas
Fire Department,
HOA’s,
community
leaders
The County needs to identify vulnerable populations
(elderly, disabled, low income) who may need
additional help to mitigate home hazards and to
evacuate during a wildfire.
Seek grant opportunities to support assistance for
vulnerable populations.
Protect life and property of
the most vulnerable members
of the community.
Annual review of number of
actions taken to address
vulnerable populations
LG.EO.2 Ongoing M Ongoing Identify priority ignition
concerns.
Extreme threat
areas:
Public agencies,
Fire Department,
Department of
Emergency
Management
Utilize fire history data to identify areas with frequent fire starts and develop strategy to reduce incidence of ignitions.
Convene a working group to develop strategies to reduce human starts:
Education campaign
Signage
Fire response plans
Law enforcement
Reduce unnecessary ignition
through unlawful or
irresponsible behavior.
Annual evaluation of priority
ignition concerns.
5-year re-run of risk assessment to
determine success in mitigating
hazards.
Review fire history data on a 2-
year frequency to monitor trends.
LG.EO.3 New M 2024 Designate a member to the
Countywide CWPP Core Team
for CWPP updates.
NA Town of Los
Gatos
PPW Wildfire Mitigation Projects Manager to participate in the working group and identify tasks and goals for CWPP updates.
Represent the Town of Los
Gatos
Commit to attendance to CWPP
meeting annually.
PPW
LG.EO.4 New M 2025/2026 Develop methods for
sustainability of hazardous fuel
reduction and collaborate with
the SCCFSC on a data
collection method for past and
current vegetation management
projects.
Town of Los
Gatos WUI
PPW Develop options for Town Council to evaluate sustainable hazardous fuel maintenance funding and prioritize projects.
Coordinate data collection of
current and past vegetation
management projects
Update when new projects have
been completed
PPW
LG.EO.5 Ongoing M Ongoing Continue to disseminate
information that provides fire
safety information, fire
announcements, and
emergency planning.
Town of Los
Gatos
Town Manager’s
Office and PPW.
Content to be provided by fire departments, local residents, Santa Clara County FireSafe Council and the Town.
Protect communities and
infrastructure through
increasing public awareness
and providing medium for
information regarding
emergency fire response.
Participate in Town meetings,
special events and fairs.
Grants and Town General Funds
ITEM NO. 15.
Santa Clara County Community Wildfire Protection Plan
Annex 9 – Town of Los Gatos
13 2024
Table 1-3. Recommended Projects for Safe and Effective Wildfire Response (Fire Fighting Capability Projects) in Town of Los Gatos planning area Project
ID Status Priority (H,M,L)
Timeline
for Action Project Description Location Land Ownership/ Lead Agency Methodology/Approach Serves To: Monitoring/Maintenance Requirements Funding Sources LG.FC.1 New M 1-5 years Develop a coordinated approach
between the fire department and
water district to identify needed
improvements to the water
distribution system, initially
focusing on areas of highest
wildfire hazard as determined in
the risk assessment and areas
with limited water pressure or no
existing water supply.
Priority areas Fire Department,
Local Community
Organizations and
Water Purveyors
-Initiate a detailed study of feasible locations for water development improvements.
-Install hand pumps or other methods independent of the grid for accessing private well water.
Evaluate and consider Heli Hydrants through the interface Improve fire-fighting
response if water is more
readily available or closest
locations could be identified
on a GIS map on a
tablet/computer.
Alleviates public and agency
concern for limited water
supply in some WUI areas
Convene annually
Document number of meetings held
Document number of actions taken
Water Purveyors and Fire Department
LG.FC.2 Ongoing H Develop strategies to enhance
safe wildfire response in areas
with poor ingress and egress.
Priority areas Fire Department -Address narrow access concerns for wildfire apparatus through road improvements, new egress points, or
development of response plans.
-Identify alternative apparatus for access into narrow areas. -Identify potential areas that threaten entrapment of
response crews and develop response plans and/or safety zones.
-Map all weak bridges and develop alternative
ingress/egress or response plan.
-Identify areas with limited all-weather access and develop response plan.
-Work with HOAs and Community Associations to address
locked gates and access concerns
Improve fire-fighting
response if smaller more
agile vehicles are available
to navigate narrow
unimproved roads
NA
ITEM NO. 15.
PREPARED BY: Gitta Ungvari
Finance Director
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Community Development Director, and Parks and Public Works Director
110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 12/17/2024
ITEM NO: 16
DATE: November 22, 2024
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Receive a Fiscal Year (FY) 2023/24 Status Report on Receipt and Use of Development Impact Fees
RECOMMENDATION:
Receive a fiscal year (FY) 2023/24 status report on receipt and use of Development Impact Fees.
BACKGROUND:
To ensure that mitigation fees associated with private land use development are spent in a timely manner and on projects for which they were being collected, the State Legislature passed the Mitigation Fee Act (AB 1600). This bill applies to developer fees which were increased or imposed on or after January 1, 1989.
The Mitigation Fee Act (California Government Code, §66000 et seq.) requires local agencies that impose Development Impact Fees to present an annual, consolidated report showing the receipt and use of those fees. The Annual Status Report (Attachment 1) must be reviewed by the Council within 180 days after the close of the fiscal year represented.
The Town collects four Development Impact Fees that meet the AB 1600 reporting requirement: the Traffic Impact Mitigation Fee, the Below-Market Priced Housing Program InLieu Fee, the Construction Activity Impact Fee, and the Public Art Fee. Separate balances exist for each of these fees either as individual accounts or in the case of Traffic Impact Mitigation Fees, separate funds. As required by AB 1600, as of June 30, 2024, all accounts or funds with unspent balances have been credited interest revenue at the Town’s current interest rate earned on its total.
ITEM NO. 16.
PAGE 2 OF 3
SUBJECT: Receive Fiscal Year (FY) 2023/24 Status Report on Receipt and Use of Development Impact Fees
DATE: November 22, 2024
DISCUSSION:
AB 1600 requires that a status report be prepared annually which must include the following:
A brief description of the fee and the fund into which the fee was deposited; The amount of the fee;
The associated fund’s beginning and ending balances for the fiscal year; The total amount of fees collected and interest earned; Identification of each public improvement on which impact fees were expended and the amount of expenditure on each improvement, including the total percentage of the cost of the public improvement that was funded with impact fees; Identification of the approximate date by which construction of a public improvement will begin;
Determination as to whether sufficient funds have been collected to complete financing on an incomplete public improvement;
Description of each inter-fund transfer or loan made from the account or fund, including the public improvement on which the loaned funds will be expended, and in the case of an inter-fund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan;
Amount of any refunds made due to inability to expend impact fees once a determination is made that sufficient impact fees have been collected to finance a public improvement, the improvement remains incomplete, and the Town has not determined an approximate date by which construction will begin; Whenever the funds are held for five years or more, the Town must present plans or commitments to demonstrate the intended future use of these funds; Identification of public improvements identified in the previous report and information regarding whether construction began on the approximate date noted; For previously identified projects that did not start construction on the approximate date identified in the prior report, a reason for the delay and a revised approximate construction start date; and
For any refunds made, the number of persons identified to receive those refunds.
This information is presented in the attached FY 2023/24 Annual Status Report on Receipt and Use of Development Impact Fees. The Report depicts balances and the intended use of balances, including decisions made after June 30, 2024, to demonstrate that the fees will be used for their respective purposes.
CONCLUSION:
Staff recommends the Council receive the FY 2023/24 Annual Status Report on Receipt and Use of Development Impact Fees as required under the Mitigation Fee Act (AB 1600).
ITEM NO. 16.
PAGE 3 OF 3
SUBJECT: Receive Fiscal Year (FY) 2023/24 Status Report on Receipt and Use of Development Impact Fees
DATE: November 22, 2024
COORDINATION:
This report was coordinated with the Community Development and Park and Public Works Departments.
FISCAL IMPACT:
There is no fiscal impact from this action.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachment:
1. FY 2023/24 Annual Status Report on Receipt and Use of Development Impact Fees
ITEM NO. 16.
ATTACHMENT 1
TOWN OF LOS GATOS
ANNUAL STATUS REPORT ON RECEIPT AND USE OF DEVELOPMENT IMPACT FEES JUNE 30, 2024
Traffic Impact Mitigation Fee:
The Traffic Impact Mitigation Fee assures that each new development or expansion of use pays its fair share of the transportation improvements needed to accommodate the cumulative traffic impacts. The fee, $1,104 per new average daily trip generated, is paid in full to the Town Building Department prior to issuance of the building permit for new development or expansion of use. The collected fee is held in the Traffic Mitigation Fee Fund. The Traffic Mitigation Fund should be used solely to fund transportation improvement projects related to mitigating the impacts of new development. The funds cannot be used for routine repair or maintenance.
Beginning Cash Balance (07/01/2023) 1,242,957
Source of Funds
Fees Collected FY 2023/24 2,726,394
Interest Earned FY 2023/24 78,413
Total Source of Funds $4,047,763
Use of Funds
Capital Outlay:
Developer Reimbursement for Transportation Related Improvements (100% of FY 2023/24 Expenditures) 47,977 Traffic Signal Modernization (14% of the Project's Estimated Life-Time Cost) 157,832 Completed - August 2024
Traffic Signal Modernization - Admin Support (100% of FY 2023/24 Expenditures) 12,499 Total Use of Funds $218,308
Expenses Incurred in FY 2022/23, Paid in July of FY 2023/24 (6,521) Expenses Incurred in FY 2023/24, Paid in July of FY 2024/25 29,571 Ending Cash Balance (6/30/2024) $3,852,505
Designated Future Projects:
Per FY 2024/25 through 2028/29 Capital Improvement Plan:
Shannon Road Pedestrian and Bikeway Improvements (100% of Total Project Costs) $133,380 Start Date - September 2024 - Projected Completion Date - April 2025 Traffic Signal Modernization (3% of the Project Estimated Life-Time Cost) 31,884 Completed - August 2024
Total CIP and Operating Budget Commitments $165,264
Potential Project Listed in CIP Plan (The Town has collected sufficient design funding but construction has not begun yet because sufficient funding for construction has not yet been collected. No start date have been identified because siffucuent funds have not yet been collected.):
Highway 17 Bicycle & Pedestrian Bridge – Design (75% of Collections) $2,765,431 Kennedy Sidewalk & Bike Lanes - LGB to Englewood (25% of Collections) $921,810 Total Potential Project List $3,687,241
Total Designated and Unfunded Projects $3,852,505
Current Funding Shortfall $0
TRAFFIC IMPACT MITIGATION FEES FUND (Fund 471)
ITEM NO. 16.
TOWN OF LOS GATOS
ANNUAL STATUS REPORT ON RECEIPT AND USE OF DEVELOPMENT IMPACT FEES JUNE 30, 2024
(Continued)
Construction Impact Activity Fee:
Construction Impact Activity Fee is assessed on construction projects based on the square foot size of the project at a rate of $1.48 per square foot. These fees are intended to recover the damage caused to Town streets by construction traffic. The collected fee is held in the General Fund Appropriated Reserves.
Beginning Cash Balance (07/01/2023) $0
Source of Funds
Fees Collected FY 2023/24 157,535
Interest Earned FY 2023/24 (Funds expended upon receipt) - Total Source of Funds $157,535
Use of Funds
Business Services Charge
Capital Outlay:
Street Repair and Resurfacing Project FY 23/24 (FY 2023/24 Fees Collected Cover 7.2% of FY 2023/24 Expenditures) 2,185,299
Total Use of Funds 2,185,299
Ending Cash Balance (6/30/2024) ($2,027,764)
Designated Future Projects
Per FY 2024/25 through 2028/29 Capital Improvement Plan:
Street Repair and Resurfacing Project (Ongoing) $9,657,919 Total Designated Future Projects $9,657,919
Current Funding Shortfall ($11,685,682)
CONSTRUCTION IMPACT ACTIVITY FEE (411-42531/42532/42533)
ITEM NO. 16.
TOWN OF LOS GATOS
ANNUAL STATUS REPORT ON RECEIPT AND USE OF DEVELOPMENT IMPACT FEES JUNE 30, 2024
(Continued)
Below-Market Priced (BMP) Housing Program In-Lieu Fee:
BMP In-Lieu Fees are collected from residential development projects with five (5) or more units when the construction of the BMP unit is impractical or there are unusual circumstances that make the construction of the unit inconsistent with Town policy. The required in-lieu fee is to be paid to the Town prior to issuance of the certificate of occupancy. The BMP In-Lieu Fee is equal to the amount of six (6) percent of the building permit valuation for the entire project.
The collected fees are held in the General Fund BMP Housing liability account and are restricted to be used solely for BMP Housing Program activities.
Beginning Cash Balance (07/01/2023) 4,021,281
Source of Funds
Fees Collected FY 2023/24 -
Interest Earned FY 2023/24 140,150
Total Source of Funds 4,161,431
Use of Funds
Program Operating Expense (100% of FY 2023/24 Expenditures) 215,088 Staff Administration (100% of FY 2023/24 Expenditures) 23,000 Total Use of Funds 238,088
Ending Cash Balance (6/30/2024) 3,923,343
Unavailable Source
Land Held for Resale 344,338
Total Cash Balance and Unavailable Source 4,267,681
Potential Future Projects
Low and Moderate Income Housing (Future Project - Pending Funding) 3,000,000 Reacquisition of Distressed/Foreclosed Properties (Future Project - Pending Funding) 700,000 Hello Housing and House Keys Program Services (Future Project - Pending Funding - 5 Year Total) 600,000 Total Potential Future Projects 4,300,000
Current Funding Shortfall (32,319)
BELOW-MARKET PRICED HOUSING PROGRAM IN-LIEU FEES (111-23521)
ITEM NO. 16.
TOWN OF LOS GATOS
ANNUAL STATUS REPORT ON RECEIPT AND USE OF DEVELOPMENT IMPACT FEES JUNE 30, 2024
(Continued)
Public Art In-Lieu Fee:
Los Gatos Public Art In-Lieu Fees are collected In lieu of installation of on-site public art, the developer may elect to make a monetary contribution to the Los Gatos Public Arts Fund. The Public In-Lieu Fee is equal to the amount of one (1) percent of the construction valuation for the entire project. Public Art In-Lieu Fee app to all new commercial developments (including mixed use projects), including new construction, and additions and remodels that add more than fifty (50) percent square footage; and all new residential projects of three (3) or more units, including new construction, and additions and remodels that add more than fifty (50) percent square footage. A developer who elects to satisfy the requirements of this Chapter through a contribution to the Fund must complete the payment in-lieu prior to the issuance of any building permit for the development project. The Los Gatos Public Art Funds may be used for the following purposes, including: acquisition, placement, maintenance, and promotion of temporary and permanent art and art programs, including visual or performing arts, as approved by the Arts and Culture Commission, on or in Town owned, public property throughout the Town. Art works acquired through the Public Art Fund shall be owned by the Town of Los Gatos and generally made accessible to the public.
Other Required Disclosures:
As required by law, no inter-fund (loans/transfers) were made doing the reporting period and no refund were necessary as all fees collected have a current funding short fall status as presented in the Annual Status Report.
Beginning Cash Balance (07/01/2023) -
Source of Funds
Fees Collected FY 2023/24 23,509
Interest Earned FY 2023/24 819
Total Source of Funds 24,328
Use of Funds
-
Total Use of Funds -
Ending Cash Balance (6/30/2024) 24,328
Designated Future Projects:
None -
Total Designated Future Projects -
Potential Future Projects
Not Identified Yet- Anticipate to Evaluate Potential Projects with FY 2024/25 Budget Process - Total Potential Future Projects -
Current Funding 24,328
PUBLIC ART FEE (111-23514)
ITEM NO. 16.
PREPARED BY: Lance Bayer
Special Counsel
Reviewed by: Town Manager, Assistant 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: 12/17/2024
ITEM NO: 17
DATE: December 17, 2024
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Conduct a Public Hearing for Appeal of Administrative Citation VL-19-362 (16660 Cypress Way) for Violations of the Los Gatos Town Code Related to Grading and Building and Adopt a Resolution Upholding the Administrative Citation and Imposing Costs According to Proof
RECOMMENDATION:
Conduct a public hearing to hear an appeal of Administrative Citation VL-19-362 (16660 Cypress Way) for violations of the Los Gatos Town Code related to grading and building and adopt a resolution upholding the administrative citation and imposing costs according to proof.
BACKGROUND:
On September 16, 2024, Town Code Compliance Officer Allen Meyer issued an Administrative Citation against Theodore and Lauri Deffenbaugh, the owners of the property located at 16660 Cypress Way (“subject property”) (Attachment 19). The citation alleged violations of the Los Gatos Town Code (“LGTC”) for unpermitted construction and unpermitted grading. The citation asserted that there were violations of LGTC section 6.150.010, incorporating California Residential Code section R105.1, regarding four buildings and one retaining wall. The citation also asserted that there was a violation of LGTC section 12.20.010 regarding failing to have the required grading permit. The citation imposed an administrative penalty of $9,250.00 for the violations of section 6.150.010 and $1,850.00 for the violation of section 12.20.010. The locations that are the subject of the citation are shown on the aerial photograph in Attachment
4. LGMC section 1.10.040(d) states that every day of violation constitutes a separate offense. The administrative penalties in the citation were calculated from the compliance date on the Administrative Warning dated 7/8/2024.
ITEM NO. 17.
PAGE 2 OF 5
SUBJECT: Public Hearing for Appeal of Administrative Citation VL-19-362 (16660 Cypress Way) for Violations of the Los Gatos Town Code Related to Grading and Building DATE: December 17, 2024
Mr. and Ms. Deffenbaugh have appealed the citation and are entitled to an appeal hearing. In hearing this appeal, the Town Council is acting both as Hearing Officer under LGTC section
1.30.040 and as a Board of Appeals under California Residential Code section R112.1.1 The Council shall determine whether to uphold or cancel the citation. The Council also may assess administrative costs against the violator when the Hearing Officer determines that a violation has occurred and that compliance was not achieved. Administrative costs may include any and all costs incurred by the Town (both direct and indirect costs) in investigating and commencing administrative proceedings for the violation as well as any and all costs incurred by the Town in connection with the hearing before the Hearing Officer, including but not limited to costs the Enforcement Officer incurred in preparation for the hearing and for participating in the hearing itself, and costs of the Town to conduct the hearing.
DISCUSSION:
On September 27, 2016, Theodore and Lauri Deffenbaugh (“the Deffenbaughs”) purchased the property located at 16660 Cypress Way (Attachment 22). Aerial photographs show grading and paving activity taking place without the required permits in May and August of 2018 (Attachments 1,2, and 3).
In the summer of 2019, Town staff became aware of the violations of the LGTC at the subject property. Code Compliance Officer Allen Meyer sent an Administrative Warning to the Deffenbaughs on July 17, 2019, describing observed violations consisting of new buildings, retaining walls, grading, interior remodeling, electrical, plumbing, and HVAC (Attachment 8).
The Administrative Warning requested the Deffenbaughs contact Town staff to schedule a meeting to discuss the scope of work. After the Deffenbaughs failed to respond, a second notice was sent on August 22, 2019 (Attachment 9).
The subject property contains a large residential accessory unit that was built with permits. In 2019, several marketing internet sites showed unpermitted construction inside the unit. This construction was done without obtaining the necessary permits (Attachments 5, 6, and 7).
The Deffenbaughs submitted an application for a grading permit and an architectural and site approval at the subject property on July 9, 2021 (Attachment 10). The accompanying letter of justification cited previously unpermitted “emergency” construction and proposed to mitigate the non-conforming installations. The letter of justification did not address the unpermitted construction involving accessory structures.
Town staff conducted a site inspection on August 24, 2021, and took photographs (Attachment 11). Some photographs show unpermitted retaining walls. The Town provided the Deffenbaughs with a Staff Technical Review addressing numerous deficiencies in the
1 California Health and Safety Code section 17920.5
ITEM NO. 17.
PAGE 3 OF 5
SUBJECT: Public Hearing for Appeal of Administrative Citation VL-19-362 (16660 Cypress Way) for Violations of the Los Gatos Town Code Related to Grading and Building DATE: December 17, 2024
Deffenbaughs’ application, including the failure to provide a full scope of work, failure to address hillside development standards, and failure to describe the proposed design that will mitigate the unpermitted work (Attachment 12).
The Deffenbaughs did not respond to the Staff Technical Review. A pending civil lawsuit between the Deffenbaughs and their neighbors, Deffenbaugh v. Watson, et. al., addressed issues regarding grading and the retaining walls as well as a structure of the Deffenbaughs that purportedly straddled the property line between the two neighbors. The Town’s code enforcement action is independent of the litigation between the Deffenbaughs and their neighbors.
On October 30, 2023, the Town notified the Deffenbaughs and their attorney that the Town would renew its code enforcement efforts at the subject property, beginning with a site inspection (Attachment 13). On December 13, 2023, the Deffenbaughs submitted an updated letter of justification for their July 9, 2021 application (Attachment 14). On January 31, 2024, the Town provided the Deffenbaughs with a Staff Technical Review addressing numerous deficiencies in the Deffenbaughs revised application, including the failure to provide a full scope of work, failure to address hillside development standards, and failure to describe the proposed design that will mitigate the unpermitted work (Attachment 15). The Deffenbaughs have not responded to the Staff Technical Review.
After efforts by Town staff to obtain consent to inspect the subject property were unsuccessful, the Town applied to the superior court and obtained an inspection warrant for the subject property on May 20, 2024 (Attachment 16).
The inspection took place on May 30, 2024. It was conducted by Town Chief Building Official Robert Gray and included other members of Town staff. During the inspection, staff took photographs and observed: (1) The interior of an ADU above the garage (Attachment 4, #1).
There was an interior remodel of the kitchen and bathroom areas without obtaining the required permits. The sleeping room lacked sufficient emergency egress and the bathroom window was not tempered as required in a wet hazard area. The front entrance deck, stairs, and railings were unstable and appeared unsafe. The railings were far below minimum requirement and have openings exceeding a 4” diameter sphere; (2) A detached “office structure” beside the ADU (Attachment 4, #2). The structure was constructed without obtaining the required permits. It did not appear to be used for sleeping. It did not appear to have a foundation or seismic restraint. The power was provided via an extension cord (possibly 12- gauge cord with ground). The structure was approximately 124 square feet with electrical.
Although the building would require a building permit, the Zoning Code does not allow a structure at that location; (3) A storage structure behind the ADU (Attachment 4, #3). The structure was constructed without obtaining the required permits. The primary use appears to be storage but is wired for electrical and plumbed for what may be a future restroom. When asked about the electricity to the structure, the property owner stated it was provided via a
ITEM NO. 17.
PAGE 4 OF 5
SUBJECT: Public Hearing for Appeal of Administrative Citation VL-19-362 (16660 Cypress Way) for Violations of the Los Gatos Town Code Related to Grading and Building DATE: December 17, 2024
battery system and is not connected to permanent power. The source or termination of the plumbing was not determined. The structure was approximately 197 sq. ft. with electrical and plumbing. Although the structure would require a building permit, the Zoning Code does not allow a structure at that location; and (4) The garage structure near the second living unit and pool (Attachment 4, #4). The structure was constructed without obtaining the required permits.
This structure appeared to be a garage/storage with electrical provided from the second living unit. The structure was approximately 294 sq. ft. with electrical. The structure would require a building permit; however, the structure crosses a property line boundary and must be demolished (Attachment 17).
Code Compliance Officer Allen Meyer sent an Administrative Warning to the Deffenbaughs on July 8, 2024, describing observed code violations (Attachment 18). The warning provided a compliance date of September 8, 2024. The warning advised the Deffenbaughs that failure to comply “may result in daily fines and/or any other available legal remedies.” The Deffenbaughs did not meet the compliance requirements.
On September 16, 2024, Town Code Compliance Officer Allen Meyer issued an Administrative Citation against the Deffenbaughs (Attachment 19). On October 14, 2024, the Deffenbaughs submitted an Administrative Citation Hearing Request Form (Attachment 21). On the same date, attorney Richard M. Harris, representing the Deffenbaughs, submitted a letter to the Town Community Development Department regarding the appeal (Attachment 22). Notice of the Administrative Appeal hearing was sent to the Deffebaughs and their legal counsel on November 7, 2024 (Attachment 23).
Town staff have calculated their costs related to the enforcement of this action as follows:
Employee Amount of hours Hourly rate (including
benefits)
Total
Allen Meyer 23.5 $ 140.27 $3296.34
Robert Gray 6 $ 208.88 $1253.28
Erin Walters 8 $ 159.33 $1274.64
TOTAL $5824.26
CONCLUSION:
Town staff respectfully requests the Town Council adopt a resolution (Attachment 24) upholding the administrative citation and imposing costs according to proof.
ITEM NO. 17.
PAGE 5 OF 5
SUBJECT: Public Hearing for Appeal of Administrative Citation VL-19-362 (16660 Cypress Way) for Violations of the Los Gatos Town Code Related to Grading and Building DATE: December 17, 2024
ALTERNATIVES:
The Town Council has the following alternatives:
1. Uphold the administrative citation.
2. Cancel the administrative citation.
3. Impose costs.
4. Not impose costs.
FISCAL IMPACT:
None.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Aerial View of Subject Property 9/2017
2. Aerial View of Subject Property 5/2018 Showing Grading in Progress
3. Aerial View of Subject Property 8/2018 Showing Completed Paving
4. Aerial View of Subject Property Showing Locations of Structures in Violation
5. Hotpads Internet Posting, Showing Violations
6. Trulia Internet Posting, Showing Violations
7. Realtor.com Internet Posting, Showing Violations
8. Administrative Warning Dated 7/17/2019
9. Administrative Warning (2nd notice) Dated 8/22/2019
10. Application for Grading Permit and Architecture and Site Approval dated 7/9/2021 and Letter of Justification and Project Description Dated 7/8/2021
11. Photos of Town Inspection on 8/24/2021
12. Staff Technical Review Dated 8/24/2021 and 8/25/2021
13. Email from Town Attorney Dated 10/30/2023
14. Updated Letter of Justification Regarding Application Dated 12/13/2023
15. Staff Technical Review Dated 1/31/2024
16. Letter dated 5/22/2024 and Inspection Warrant Dated 5/20/2024
17. Description and Photos of Site Inspection of Subject Property on May 30, 2024
18. Administrative Warning Dated 7/8/2024
19. Administrative Citation Dated 9/16/2024
20. Property Detail Report
21. Administrative Citation Hearing Request Dated 10/14/2024
22. Letter to Town Community Development Department from Attorney Rogers Joseph Dated 10/14/2024
23. Notice of Appeal Hearing
24. Proposed Resolution
ITEM NO. 17.
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May2018
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August 2018
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https://hotpads.com/ 16664-cypress-way-los-gatos-ca-95030-ltxztsu/pad Accessed 11-13-19 ATTACHMENT 5
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https://www.trulia.com/p/ ca/los-gatos/16664-cypress-way-los-gatos-ca-9 5030--2345 7 44967 Accessed 11-13-19 Outside parking for your horse or horseless carriage. Up to 120 square foot out-building will be built depending on your desire. While a one year lease is offered, preference will be given to individuals that will sign a 2 year lease, with second year locked in at 5% higher rental rate than first year.
We ore in final stages of the refresh, and are targeting a March 1st move in dote. If you act now. you will be able to help us finalize the window coverings. laundry room sink, washer and dryer combo, and specify what you would like in the outbuilding, which can be a workshop storage or possibly even extra space for a separate office.
ATTACHMENT 6
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16664 Cypress Way- https://www.realtor.com/realestateandhomes-detail/16664-Cypress-Way LosGatos CA 95030 M19889-26473 ATTACHMENT 7
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1 of 2
Draft Resolution Adoption Date
DRAFT RESOLUTION
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
UPHOLDING AN ADMINISTRATIVE CITATION ISSUED TO
THEODORE DEFFENBAUGH AND LAURI DEFFENBAUGH
AND IMPOSING ADMINISTRATIVE COSTS
WHEREAS, Town staff conducted a site inspection of the property located at 16660 Cypress Way, Los Gatos, on May 30, 2024.
WHEREAS, During that inspection, Town staff observed four violations of Los Gatos Town Code section 6.150.010 (incorporating California Residential Code section R105.1), regarding unpermitted remodeling of a permitted accessory unit and regarding three unpermitted structures.
WHEREAS, During that inspection, Town staff observed a violation of Los Gatos Town Code section 12.20.010 regarding unpermitted grading associated with retaining walls and roadways.
WHEREAS, Town staff issued an administrative warning notice dated July 8, 2024, which notified Theodore and Lauri Deffenbaugh, the property owners, of the violations and provided them with an administrative warning and an opportunity to abate the violations.
WHEREAS, Town staff conducted a site inspection of the property located at 16660 Cypress Way, Los Gatos, on September 13, 2024 and determined that the violations of the Town Code had not been abated.
WHEREAS, Previous unsuccessful efforts by Town staff to abate violations of Town Code sections 6.150.010 (incorporating California Residential Code section R105.1) and 12.20.010 at 16660 Cypress Way, Los Gatos, included issuing two written administrative warnings to Theodore and Lauri Deffenbaugh dated July 17, 2019 and August 22, 2019.
WHEREAS, After Theodore and Lauri Deffenbaugh failed to abate the violations set forth in the abatement warning dated July 8, 2024, Town staff issued an administrative citation on September 16, 2024, imposing daily penalties, as authorized by the Town Code, in the amount of $11,100.00.
WHEREAS, Town staff seek to recover costs of enforcement in the amount of $5,824.26 according to proof as provided by the Town Code. ATTACHMENT 24
ITEM NO. 17.
2 of 2
Draft Resolution Adoption Date
WHEREAS, Theodore and Lauri Deffenbaugh requested and received a public hearing before the Town Council, on December 17, 2024, to appeal the administrative citation.
NOW, THEREFORE, BE IT RESOLVED that the Town Council of the Town of Los Gatos does hereby declare, determine, and order as follows:
1. The administrative citation issued to Theodore and Lauri Deffenbaugh on September 16, 2024 is UPHELD in the amount of $11,100.00.
2. Administrative costs are imposed in the amount of $5,824.26.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the day of Month, Year, by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
_______________________________
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
___________________________________
TOWN CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ITEM NO. 17.
PREPARED BY: Erin Walters
Associate Planner
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Community Development Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6872 www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 12/17/2024
ITEM NO: 18
DATE: December 12, 2024
TO: Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Consider an Appeal of a Planning Commission Decision to Approve an Architecture and Site Application for Construction of a Single-Family Residence and Site Improvements Requiring a Grading Permit on Vacant Property Zoned R-1:8. Located at 15411 National Avenue. APN 424-12- 140. Architecture and Site Application S-23-033. Categorically Exempt Pursuant to CEQA Guidelines Section 15303: New Construction. Property Owners: Vyankatesh and Ramya Muddada. Applicant: Jose Rama. Appellant:
Hellen Martinez. Project Planner: Erin Walters.
RECOMMENDATION:
Adopt a resolution denying an appeal of a Planning Commission decision to approve an Architecture and Site application for construction of a new single-family residence and site improvements requiring a grading permit on vacant property zoned R-1:8, located at 15411 National Avenue.
BACKGROUND:
The subject property is 13,209 square feet, located on the west side of National Avenue approximately 152 feet south of Blackwell Drive (Attachment 1, Exhibit 1). The property is a vacant rear flag lot, located behind a property with an existing one-story single-family residence.
On October 10, 2023, the applicant submitted an Architecture and Site application for the construction of a two-story single-family residence with a cellar and associated site grading on the subject site. In August 2024, the applicant obtained permits and demolished multiple accessory structures from the subject site. The site is currently vacant.
ITEM NO. 18.
PAGE 2 OF 10
SUBJECT: 15411 National Avenue/S-23-033
DATE: December 17, 2024
On November 13, 2024, the Planning Commission considered the application, including written and verbal public comments (Attachments 1, 2, and 3). The Planning Commission approved the application subject to modified conditions as described in the Action Letter (Attachment 4) and Section B below.
On November 25, 2024, the decision of the Planning Commission was appealed to the Town Council by an interested person, Hellen Martinez, property owner of 377 Blackwell Drive (Attachment 5). The appellant indicated that there was an error or abuse of discretion by the Planning Commission.
Pursuant to the Town Code, any interested person as defined by Section 29.10.020 may appeal to the Council any decision of the Planning Commission. For residential projects, an interested person is defined as “a person or entity who owns property or resides within 1,000 feet of a property for which a decision has been rendered and can demonstrate that their property will be injured by the decision.” The appellant meets the requirements.
Pursuant to Town Code Section 29.20.280, the appeal must be heard within 56 days of the Planning Commission hearing, in this case by January 8, 2025. The Council must at least open the public hearing for the item and may continue the matter to a date certain if the Council does not complete its deliberations.
Pursuant to Town Code Section 29.20.295, in the appeal, and based on the record, the appellant bears the burden to prove that either there was an error or abuse of discretion by the Planning Commission or the decision was not supported by substantial evidence in the record.
If neither is proved, the appeal should be denied. If the appellant meets the burden, the Council shall grant the appeal and may modify, in whole or in part, the determination from which the appeal was taken or, at its discretion, return the matter to the Planning Commission. If the basis for granting the appeal is, in whole or in part, information not presented to or considered by the Planning Commission, the matter shall be returned to the Planning Commission for review.
DISCUSSION:
A. Project Summary
The applicant proposes construction of a new 3,240-square foot, two-story residence with an attached 901-square foot, three-car garage. The residence also includes 1,700 square feet of below grade square footage, which includes a 500-square foot Junior Accessory Dwelling Unit (JADU). The development plans also include a detached 900-square foot Accessory Dwelling Unit (ADU). The proposed JADU and ADU are not the subject of this application and require ministerial building permit approval pursuant to state law. (Attachment 1, Exhibit 11).
ITEM NO. 18.
PAGE 3 OF 10
SUBJECT: 15411 National Avenue/S-23-033
DATE: December 17, 2024
A single-family residence is permitted in the R-1:8 zone. The proposed residence is in compliance with the maximum allowable floor area, building height, setbacks, lot coverage, and on-site parking requirements for the property. A full discussion and analysis of the application is provided in the November 13, 2024, Planning Commission Staff Report (Attachment 1). Within the immediate neighborhood, the proposed project results in the largest residence in terms of square footage, by 511 square feet, and the largest garage in terms of square footage, by 124 square feet.
B. Planning Commission
On November 13, 2024, the Planning Commission received the staff report and addendum (Attachment 1 and 2). After receiving public comment and asking questions of the applicant, the Planning Commission closed the public hearing and discussed the project. Based on the neighbor’s concerns, the motion for approval included additional conditions of approval requiring selection of non-allergenic privacy tree species, window placement, and the use of obscured glass on windows to address privacy concerns (Attachment 4, Conditions 10, 11, 12, and 14). The Planning Commission voted three to two to approve the application with modified conditions of approval. Attachment 3 contains the verbatim minutes.
C. Appeal to Town Council
The decision of the Planning Commission was appealed on November 25, 2024, by an interested person, Hellen Martinez (Attachment 5). On the appeal form, the appellant states that there was an error or abuse of discretion by the Planning Commission based on the following:
The project is inconsistent with neighborhood compatibility per the Residential Design Guidelines;
Incorrect assumption was made that neighbors would only accept a single-story development; and
The conditions of approval are vague and difficult to enforce.
On December 4, 2024, the appellant submitted a supplemental letter to support their appeal (Attachment 6). The supplemental letter expands on reasons for the appeal as described in the November 25, 2024, Appeal of a Planning Commission Decision form (Attachment 5). On December 10, 2024, the applicant submitted a response to the appeal (Attachment 7). A summary of the specific reasons listed in the appeal form and in the appellant’s supplemental letter are provided below as verbatim excerpts, followed by the applicant’s response in italic, and staff’s response.
ITEM NO. 18.
PAGE 4 OF 10
SUBJECT: 15411 National Avenue/S-23-033
DATE: December 17, 2024
1. Appellant: There was an error or abuse of discretion by the Planning Commission as “the project is inconsistent with neighborhood compatibly per the Residential Design Guidelines.”
Excerpt from Appellant’s Supplemental Letter: “The project is inconsistent with neighborhood compatibility, sizing, massing, and scale of the Residential Design Guidelines. The proposed two-story, three level structure, with 3,240 square feet, a 901- square foot oddly distributed garage, a 1,700 square foot basement, a 570 sq ft covered patio, and a 36 square feet front porch coverage, totaling 6,447 square feet of gross square footage, plus an attic, is massive. The project maximizes the allowable size, which as one of the commissioners put it, “is a maximum, not a goal”, and would be by far the largest structure among the surrounding single-family, residential homes. It is over twice the structural size of the largest adjacent two-story and single-story houses, which also lie on similarly sized lots of approximately 10,000 square feet. One of the commissioners said the proposed structure is “not that much larger than the next largest house” and that is incorrect. The size, massing, scale, bulk, and style of the proposed structure does not harmonize with the houses in the immediate neighborhood, including ours, and it stands out even more so by its location in the middle of the city block (in a flag lot/corridor lot), which causes it to overlook all the neighboring backyards from every side. This is not in line with the Residential Design Guidelines.”
Appellant’s Request: The appellant requests to “decrease the size of the proposed twostory structure to one that is less massive, more harmonious and in scale, bulk, and size with the surrounding structures and its positioning in the middle of the city block, by following the Residential Design Guidelines.”
Applicant’s Response: “We have worked with the staff for over a year to make sure we are following all the Town codes and guidelines, to not exceed Floor Area calculated by staff, to meet almost all suggestions mentioned by the Town Architect, and plan multigenerational home while still adhering to the FAR provided to us.” “We are following the Residential Design Guidelines as stated by Planning Commission.” Staff Response: The proposed residence is 511 square feet larger than the next largest residence in the immediate neighborhood. The project does not exceed the maximum allowable floor area and is not the largest floor area ratio in the immediate neighborhood. The Planning Commission made the finding that the project is in compliance with the Residential Design Guidelines for single-family residences not in hillside areas and approved the project with modified conditions.
ITEM NO. 18.
PAGE 5 OF 10
SUBJECT: 15411 National Avenue/S-23-033
DATE: December 17, 2024
2. Appellant: There was an error or abuse of discretion by the Planning Commission as an “incorrect assumption was made that neighbors would only accept a single-story development.”
Excerpt from Appellant’s Supplemental Letter: “Based on various comments made by some of the Commissioners during the hearing, we believe they incorrectly assumed that we, the neighbors, were asking that the application be changed from a two-story house to a one-story house. This is inaccurate. In fact, two of our properties are twostory houses (373 Blackwell Dr and 377 Blackwell Dr), so we have no fundamental opposition to another two-story structure.”
Appellant’s Request: The appellant requests that the size of the proposed two-story structure be reduced to one that is less massive and more harmonious with the surrounding structures, especially given its location in the middle of the city block (flag lot), which causes it to overlook all the neighboring backyards from every side.
Applicant’s Response: No response provided.
Staff Response: During the Commissions deliberations Planning Commissioner Hansen suggested making some adjustments to the residence in order to satisfy the back neighbors and stated that she “suspected that the only adjustment that would work for the neighbors would be making the project a single-story” and that it would not be reasonable to reduce the project to a single-story because there are other two-story homes in the neighborhood.
3. Appellant: There was an error or abuse of discretion by the Planning Commission as an “the conditions of approval are vague and difficult to enforce.” Relocation of Windows
Excerpt from Appellant’s Supplemental Letter: “Clarification is needed on the condition of approval to relocate windows. One of the Commission’s conditions for approval is that, in order to address the strong privacy concerns brought up by multiple neighbors before and during the hearing, ’the applicants shall meet in good faith to relocate the offending windows such that they are the least offensive to the privacy interest of the neighbors.’ We feel that this language is vague and does not specifically state that the windows shall be relocated, or encompass all the windows brought up as an issue during the hearing.”
Appellant’s Request: The appellant requests that the condition of approval be amended to require redesign that all the offending windows shall be repositioned to a location that addresses the neighbors’ privacy interests.
ITEM NO. 18.
PAGE 6 OF 10
SUBJECT: 15411 National Avenue/S-23-033
DATE: December 17, 2024
Applicant’s Response: “We are going to put permanent obscure glass to cover the line of sight on both the egress windows and to address the Planning Commissions’ conditions of approval we have decided to obscure additional windows.” “Unfortunately, we cannot move our egress windows facing Blackwell Drive. The first window, the suggestion to move to the front, will affect my neighbor, 15385 National Ave; we had assured him that there would be no egress window on the front side of the property facing his, and going against it would be more offensive. The second egress window has multiple issues due to which this cannot be moved. a. We had assured 113 Leila Ct neighbor that there would be no egress window on the back side of the property facing their property, this discussion is in the staff report as part of neighborhood reach out. b. Our current patio roof design doesn’t allow for an egress window in the back.” Staff Response: Condition of Approval 12 requires that the applicant shall meet in good faith to relocate the offending windows such that they are least offensive to the privacy interests of the neighbors (Attachment 4). Prior to submitting for Building Permits the applicant must relocate the offending windows to address privacy interests of the neighbors. Note some windows may need to retain their location due to building egress and ingress requirements.
Privacy Trees
Excerpt from Appellant’s Supplemental Letter: “Clarification is needed on the condition of approval regarding trees. One of the Commission’s conditions for approval is that “the [privacy] tree species shall be mutually agreed upon by the neighbors that they are a minimum protective of privacy and non-allergenic to any of the neighbors.” While we appreciate and value this condition, we believe it’s insufficient to address the concerns we expressed before and during the hearing, given that the proposed plan includes planting privacy trees by the section of the north fence facing 373 Blackwell Drive only, but not the section facing our property at 377 Blackwell Drive.” Appellant’s Request: The appellant requests that the condition of approval be amended to require that both the species and also the number and location of the privacy trees shall be mutually agreed upon by the neighbors.
Applicant’s Response: No response provided.
Staff Response: The Planning Commission added Condition of Approval 10 requiring the tree species to be mutually agreed upon by the neighbors, that they are at a minimum protective of privacy, and non-allergenic to any of the neighbors. The motion by the Planning Commission did not include requiring that the number and location of the privacy trees shall be mutually agreed upon by the neighbors. Condition of Approval 11 requires that prior to obtaining a building final, the property owner must plant five 24-
ITEM NO. 18.
PAGE 7 OF 10
SUBJECT: 15411 National Avenue/S-23-033
DATE: December 17, 2024
gallon trees along the northern fence line. Privacy trees must be maintained by the property owner.
Appellants Additional Reasons for the Appeal
The appellant provided additional reasons for the appeal, which are included in the appellant’s supplemental letter (Attachment 6). These reasons were not included in the November 25, 2024, Appeal of a Planning Commission Decision form (Attachment 5).
1. Ongoing Tree Maintenance Covenant
Excerpt from Appellant’s Supplemental Letter: “All the adjacent neighbors have experienced difficulties with the applicants during the last seven years since their ownership of the two lots, with multiple maintenance and repair and maintenance issues, specifically with respect to the level and speed of responsiveness even when dealing with severe damage caused by storms, for instance. We all have severe concerns about their level of commitment to perform the adequate level and frequency of maintenance to the privacy trees (which will be on their property).”
Appellant’s Request: Add a condition of approval that an enforceable covenant of ongoing maintenance be established.
Applicant’s Response: “The maintenance of the fence and gigantic oak tree that sits between two properties is the responsibility of all the property owners who share them, and this was never an issue before 2024. We shared the project plans with our neighbors in early 2024. I have never backed out of a commitment to have a new fence or pay my share. The same goes for the trimming of the Oak tree. I did request additional time as there was an access issue at my end of the property. Currently, the fences for both properties are new, and the Oak tree is trimmed.”
Staff Response: Condition of Approval 11 requires the privacy trees to be maintained by the property owner (Attachment 4). During the public hearing, the Planning Commission discussed the possibility of including a tree maintenance covenant; however, this was not included in the final motion.
2. Unaddressed Significant Privacy and Quality of Life Concerns Excerpt from Appellant’s Supplemental Letter: “We have significant privacy and quality of life concerns given the intended use of the flag lot by the applicants as a high-density multidwelling complex. This includes the massive proposed 3-level structure, which could easily be subdivided at any time to be partially/totally used as multi-family dwellings, as well as their stated intent to build two ADUs in the future (which we understand is allowed by California law). While the applicant claims the proposed structure is a single-family
ITEM NO. 18.
PAGE 8 OF 10
SUBJECT: 15411 National Avenue/S-23-033
DATE: December 17, 2024
residence, its size, design, and layout suggest it could be easily converted into a multi-family dwelling or house several tenants.”
Appellant’s Request: “We respectfully encourage the Town Council/Planning Commission to reject this proposal. Allowing what is likely a multi-family unit to be disguised as a single-family home would not only be a violation of the zoning regulations but would also undermine the very fabric of our neighborhood. We ask that the size of the proposed two-story structure, be reduced to one that is less massive, more harmonious and in scale with the surrounding structures and its positioning in the middle of the city block.”
Applicant’s Response: “The letter provided by the appellant contained a lot of incorrect, misleading, and misinformation. It is riddled with unfounded accusations that have no proof and is made with a sole intent of undermining our project and question our character.” Staff Response: A single-family residence, ADU, and JADU are permitted uses in the subject R-1:8 zone. The detached ADU and JADU are not the subject of this application and will require a ministerial building permit approval pursuant to state law.
If the property or uses are not compliant with Town Code, the Town’s Code Enforcement Officer can be contacted.
3. Clarification Regarding Visibility of Proposed House from Street Excerpt from Appellant’s Supplemental Letter: “Inaccurate information regarding the visibility from the street of the proposed development, given that one of the very large trees (#67) blocking the structure from the street shows as ‘to be removed’ in the development plans, and upon further inquiry continues to be in question as to whether it will remain or not. This was a stated key clarifying point for one Commissioner as she considered the applicant’s not meeting one of the consulting architect’s recommendations.”
Applicant’s Response: Our proposed plan is not visible from any street corner; you can only see it if you are standing right across 15415 National Avenue. The top of the front façade is only visible to 15400 National Avenue which is an office space and 15385 National Avenue (who has no objection to the project).”
Staff Response: The proposed two-story residence is partially visible from National Avenue as it is located behind the existing one-story house located at 15415 National Avenue. The Planning Commissioner asked staff if the tower feature on the front elevation of the residence could be seen from National Avenue. Staff responded that it could not be seen from the street.
ITEM NO. 18.
PAGE 9 OF 10
SUBJECT: 15411 National Avenue/S-23-033
DATE: December 17, 2024
Tree #67, located on the front property, is proposed to be removed as part of a separate public sidewalk improvements requirement. Trees #62, #61, #68, #69 and #70 will remain at the front property.
PUBLIC COMMENTS:
Story poles and signage have been maintained on the site since the November 13, 2024, Planning Commission meeting. Written notice of the Town Council hearing was sent to property owners and tenants within 300 feet of the subject property. Public comments received between 11:01 a.m., Wednesday, November 13, 2024, and 11:00 a.m., Thursday, December 12, 2024, are included as Exhibit 9.
ENVIRONMENTAL REVIEW:
The project is Categorically Exempt pursuant to the adopted Guidelines for the Implementation of the California Environmental Quality Act, Section 15303: New Construction.
CONCLUSION:
A. Recommendation
For the reasons stated in this report, it is recommended that the Town Council uphold the decision of the Planning Commission and adopt a resolution (Attachment 8) denying the appeal.
B. Alternatives
Alternatively, the Town Council could continue the application to a date certain and:
1. Provide direction to staff to prepare a resolution to grant the appeal and remand the application back to the Planning Commission with specific direction;
2. Provide direction to staff to prepare a resolution granting the appeal and denying the application; or
3. Continue the application to a date certain with other specific direction.
ITEM NO. 18.
PAGE 10 OF 10
SUBJECT: 15411 National Avenue/S-23-033
DATE: December 17, 2024
Attachments:
1. November 13, 2024 Planning Commission Staff Report, with Exhibits 1 through 12
2. November 12, 2024 Planning Commission Addendum, with Exhibits 13 and 14
3. November 13, 2024 Planning Commission Verbatim Minutes
4. November 15, 2024 Planning Commission Action Letter with Modified Conditions of Approval
5. Appeal of the Planning Commission Decision, received January 22, 2024
6. Supplemental Correspondence from the Appellant, received December 4, 2024
7. Applicant’s Response to Appeal, Received December 10, 2024
8. Draft Resolution to Deny Appeal and Approve Project
9. Public comments received between 11:01 a.m., Wednesday, November 13, 2024, and 11:00 a.m., Thursday, December 12, 2024
ITEM NO. 18.
PREPARED BY: Erin Walters
Associate Planner
Reviewed by: Planning Manager and Community Development Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6872 www.losgatosca.gov
TOWN OF LOS GATOS
PLANNING COMMISSION
REPORT
MEETING DATE: 11/13/2024
ITEM NO: 2
DATE: November 8, 2024
TO: Planning Commission
FROM: Joel Paulson, Community Development Director
SUBJECT: Requesting Approval for Construction of a Single-Family Residence and Site Improvements Requiring a Grading Permit on a Vacant Property Zoned R-1:8.
Located at 15411 National Avenue. APN 424-12-140. Architecture and Site Application S-23-033. Categorically Exempt Pursuant to CEQA Guidelines Section 15303: New Construction. Property Owner: Vyankatesh and Rammy Muddada. Applicant: Jose Rama. Project Planner: Erin Walters.
RECOMMENDATION:
Denial.
PROJECT DATA:
General Plan Designation: Low Density Residential
Zoning Designation: R-1:8, Single-Family Residential
Applicable Plans and Standards: General Plan, Residential Design Guidelines Gross Parcel Size: 13,209 square feet
Net Parcel Size: 10,729 square feet
Surrounding Area:
Existing Land Use General Plan Zoning
North Residential Low Density Residential R-1:8
South Residential Low Density Residential R-1:8
East Residential and
Office
Low Density Residential and Office
Professional
R-1:8 and O
West Residential Low Density Residential O:PD
ATTACHMENT 1 Page 710
ITEM NO. 18.
PAGE 2 OF 11
SUBJECT: 15411 National Avenue/S-23-033
DATE: November 8, 2024
CEQA:
The project is Categorically Exempt pursuant to the adopted Guidelines for the Implementation of the California Environmental Quality Act, Section 15303: New Construction.
FINDINGS:
▪ The project is Categorically Exempt pursuant to the adopted Guidelines for the Implementation of the California Environmental Quality Act, 15303: New Construction. ▪ The project meets the objective standards of Chapter 29 of the Town Code (Zoning Regulations).
▪ The project complies with the Residential Design Guidelines.
CONSIDERATIONS:
▪ As required by Section 29.20.150 of the Town Code for granting approval of an Architecture and Site application.
ACTION:
The decision of the Planning Commission is final unless appealed within ten days.
BACKGROUND:
The subject 13,209 square-foot vacant rear flag lot is located on National Avenue between Los Gatos-Almaden Road and Blackwell Drive (Exhibit 1). The applicant submitted an Architecture and Site application for the construction of a single-family residence and associated site grading. The proposed project would result in the largest residence in terms of square footage, by 511 square feet, and the largest garage in terms of square footage, by 124 square feet, in the immediate neighborhood. The applicant has not addressed all of the Consulting Architect’s recommendations. Public comment has also raised concerns regarding neighborhood compatibility, privacy, and landscaping. Due to the reasons listed above, the application has been referred to the Planning Commission for consideration.
PROJECT DESCRIPTION:
A. Location and Surrounding Neighborhood
The subject property is 13,209 square feet, located on the westside of National Avenue approximately 152 feet south of Blackwell Drive (Exhibit 1). The property is a vacant rear flag lot, located behind a property with an existing one-story single-family residence.
Single-family residential development surrounds the property with office and multi-family development located across the street on National Avenue, east of the subject site.
ITEM NO. 18.
PAGE 3 OF 11
SUBJECT: 15411 National Avenue/S-23-033
DATE: November 8, 2024
B. Project Summary
The applicant proposes construction of a two-story residence and site improvements requiring a Grading Permit (Exhibit 4).
C. Zoning Compliance
A single-family residence is permitted in the R-1:8 zone. The proposed residence is in compliance with the maximum allowable floor area, building height, setbacks, lot coverage, and on-site parking requirements for the property.
DISCUSSION:
A. Architecture and Site Analysis
The applicant proposes construction of a new 3,240-square foot, two-story residence with an attached 901-square foot, three car garage. The residence also includes 1,700 square feet of below grade square footage which includes a proposed 500-square foot Junior Accessory Dwelling Unit (JADU). The proposed JADU is not part of this application and requires a ministerial building permit. The height of the proposed residence is 30 feet, where a maximum of 30 feet is allowed. The applicant proposes a future detached 900 square foot Accessory Dwelling Unit (ADU). The proposed ADU is not part of this application and requires a ministerial building permit.
A summary of the floor area for the proposed residence is included in the table below.
Floor Area Summary
Proposed SF Maximum Allowed SF
Main Residence
Second Floor 1,518 --
First Floor 1,722 --
Total Countable 3,240 3,263
Attached Garage 901 901
Below-Grade Area 1,700 Exempt
Below-Grade JADU 500 Located in Below Grade
500 max.
Not part of this application.
Detached ADU 900 1,073 s.f. max.
Not part of this application.
The applicant has provided a Scope of Work and a Letter of Justification summarizing the project (Exhibits 4 and 5), photographs of the existing site (Exhibit 6), and Development Plans included as Exhibit 11.
ITEM NO. 18.
PAGE 4 OF 11
SUBJECT: 15411 National Avenue/S-23-033
DATE: November 8, 2024
B. Building Design
The proposed two-story contemporary style residence has been designed with contrasting colors and materials. Proposed exterior materials include: a concrete tile roof; smooth stucco siding with stone wainscot sills; metal-clad wood windows with wood trim; iron doors; and metal garage doors (Sheet A4.3, Exhibit 11). The upper floor of the residence includes the main bedroom suite, and two-bedroom suites. The second-story bedroom windows on the north elevation include obscure glass for privacy. The lower floor of the residence includes a living room, additional bedroom suite and the attached three-car garage with storage. A covered patio is located off the lower rear elevation from the kitchen and great room space.
The Town’s Consulting Architect reviewed the proposed residence in October 2023 and noted that the neighborhood contains a predominance of one-story homes designed in traditional styles. These homes are modest in scale and mass and have simple roof forms (Exhibit 7). The Town’s Consulting Architect stated that the proposed house design appears to emulate a traditional Mediterranean home style, but is designed in much more generic design style with lack of consistency in its design treatment. This would not appear to be consistent with the Town’s Residential Design Guidelines 3.2.1 and 3.2.2.
3.2.1 Select an architectural style with sensitivity to the surrounding neighborhood
3.2.2 Design for architectural integrity
Building massing, roof pitches, materials, window types and proportions, design features (e.g., roof dormers), and other architectural features should be consistent with the traditions of the selected style.
The Consulting Architect made eight recommendations to simplify the design and bring it into greater compliance with the Town’s Residential Design Guidelines. In response to these recommendations, the applicant made several modifications to the design of the residence, summarizing the changes in a written response (Exhibit 8). The Consulting Architect’s issues and recommendations are provided below, followed by the applicant’s response in italics.
Issues and Recommendations:
1. Provide an under-the-eave entry in lieu of the proposed stone tower. • Revised the entry way from large tower to smaller stone entry way. Applicant investigated multiple homes in the surrounding that have been approved by the Town, that have a stone tower as an entry way. See Letter of Justification for image of house (Exhibit 8).
2. Match the lower first floor roofing to the shingles on the main roof. • Lower first floor roofing revised to match the shingles on the main roof.
ITEM NO. 18.
PAGE 5 OF 11
SUBJECT: 15411 National Avenue/S-23-033
DATE: November 8, 2024
3. Add a projecting balcony at the second-floor elevation. • Revised front elevation by removing the JADU from the second floor over the garage, reducing the bulky design and redesigned the roofline to accommodate a smoother transition.
4. Extend the main roof form over the bay windows on the side elevations and use stucco in lieu of the proposed wood siding.
• Revised the north elevation by relocating the JADU to the basement level. That reduces the massing and blends the JADU entrance with the façade. Extended the main roof form over the bay windows on side elevations and use stucco in lieu of proposed wood siding. Revised the roof line to accommodate the extension of the bay windows at all locations.
5. Provide projecting trim at the second-floor line around all sides of the home. • The applicant investigated multiple homes in the surrounding area that do not have a belly band trim at the break of the first and second floors. See Letter of Justification for image of house (Exhibit 8).
6. Provide a projecting stucco base around all façades. • Revised the base to project from wall with a wainscot profile.
7. Integrate the stair on the right-side elevation into the main building form. • Stairs removed.
8. Provide a visual screen on the deck side nearest the adjacent property line. • Second story rear deck removed to address privacy.
The applicant responded to the Consulting Architect’s issues and recommendations through design revisions with the exception meeting the following recommendations:
• Recommendation 1 - Provide an under-the-eave entry in lieu of the proposed stone tower.
• Recommendation 5 - Provide projecting trim at the second-floor line around all sides of the home.
C. Neighborhood Compatibility
The subject rear flag lot has a net lot size of 10,728 square feet and the maximum allowable floor area is 3,263 square feet for the residence, and 901 square feet for the garage. The maximum allowable FAR for the residence and any accessory structure is 0.30. The table
ITEM NO. 18.
PAGE 6 OF 11
SUBJECT: 15411 National Avenue/S-23-033
DATE: November 8, 2024
below reflects the current conditions of the residences in the immediate neighborhood based on County records.
FAR Comparison - Neighborhood Analysis
Address Zoning Residential
SF
Garage
SF
Total
SF
Lot
Area
SF
Residential
FAR
No. of
Stories
373 Blackwell Dr. R-1:8 2,693 489 3,182 10,180 0.26 2
377 Blackwell Dr. R-1:8 2,693 468 3,161 9,883 0.27 2
381 Blackwell Dr. R-1:8 2,173 411 2,584 10,303 0.21 1
15385 National Ave. R-1:8 1,056 128 1,184 10,707 0.10 1 15415 National Ave. R-1:8 1,719 317 2,036 8,060 0.21 1
15425 National Ave. R-1:8 1,357 483 1,840 20,727 0.07 1 15439 National Ave. R-1:8 2,386 777 3,163 9,655 0.25 1
15461 National Ave. R-1:8 2,729 693 3,422 7,439 0.37 2
15899 Los Gatos
Almaden Rd.
O
-- -- -- -- -- --
15400 National Ave. O -- -- -- -- -- --
279 De Soto Dr.
R-M:
5-12 -- -- -- -- -- --
15411 National Ave. (E) R-1:8 -- -- -- 10,729 0.00 --
15411 National Ave. (P) R-1:8 3,240 901 4,141 10,729 0.30 2 * Residential square footage includes the residence and detached accessory structures, except garages.
** The total square footage numbers do not include below grade square footage.
The eight properties in the immediate neighborhood are developed with one- and two-story single-family residences located in the Single-Family Residential zone. The three properties located across the street from the subject property on National Avenue and are zoned Office and Multi-Family residential. These properties are not included in the immediate neighborhood comparison as they are not zoned single-family residential and are different uses, office and multi-family.
The property sizes within the immediate neighborhood range from 7,439 square feet to 20,727 square feet. Based on Town and County records, the residences in the immediate neighborhood range in size from 1,056 square feet to 2,729 square feet. The FAR of the residences in the immediate neighborhood range from 0.07 to 0.37. The applicant is proposing a 3,240-square foot residence and a FAR of 0.30 on a 10,729-square foot parcel.
The proposed project has the second largest FAR in the immediate neighborhood. The proposed project would result in the largest residence in terms of square footage, by 511 square feet, and the largest garage in terms of square footage, by 124 square feet, in the immediate neighborhood.
ITEM NO. 18.
PAGE 7 OF 11
SUBJECT: 15411 National Avenue/S-23-033
DATE: November 8, 2024
The applicant has provided justification for proposing the largest residence and largest garage, in terms of square footage, in the immediate neighborhood (Exhibit 5). The applicant notes that the immediate neighborhood isn’t uniform in terms of building age, style, or size. The presence of both older and newer structures with varying FARs can make it challenging to establish a benchmark for comparison structures. There is a two-story residence the immediate neighborhood, built in 2017, that exceeds the maximum allowable FAR for the site. The applicant also describes that the immediate neighborhood includes a large hospital building at 15400 National Avenue. The justification includes that the uses on National Avenue are commercial, including multiple multi-story buildings, adding another layer of complexity to the neighborhood’s composition and that the commercial nature of the area might further impact the comparison of FARs, especially when assessing residential properties.
The applicant’s justification states that the unique configuration of the rear flag lot presents distinctive challenges and opportunities in adhering to zoning regulations while ensuring the proposed structure harmonizes with the immediate neighborhood. The applicant describes that the proposed design does not exceed the stipulated FAR and it remains in reasonable limits and is the result of conscientious planning to accommodate the needs of the multigenerational household without compromising the neighborhood’s integrity. The applicant states that the design integrates architectural elements that contribute positively to the visual appeal and uniqueness of the area, aligning with the overarching aim of the Residential Design Gudelines.
D. Neighbor Outreach
The property owners have been in communication with the surrounding neighbors regarding the proposed project. A summary of their outreach efforts is included as Exhibit
10. Neighbors have provided public comment and raised concerns regarding the proposed two-story residence (Exhibit 12).
Based on the applicant’s neighborhood outreach and the public comments received by staff three main issues have been raised:
1. Neighborhood Compatibility – Height, bulk, and mass.
2. Privacy – Window placement, and balcony placement.
3. Landscaping – Location, height and maintenance of proposed trees.
The following sections discuss each topic.
E. Neighborhood Compatibility
Public comments include concerns regarding neighborhood compatibility with regards to height, bulk, and mass (Exhibit 12). The subject property is a rear flag lot. Three properties
ITEM NO. 18.
PAGE 8 OF 11
SUBJECT: 15411 National Avenue/S-23-033
DATE: November 8, 2024
located on Blackwell Drive, north of the subject flag lot, have rear yards that face the side of the proposed property and proposed residence.
Orientation of Subject Flag Lot
The applicant has modified the second-floor massing on the northern elevation to reduce the bulk and mass of the building that faces the rear properties along Blackwell Drive. The applicant has removed the second-story rear balcony to further reduce massing and address privacy concerns.
F. Privacy
Public comments include concerns regarding privacy, including window placement, and balcony placement (Exhibit 12). To address privacy concerns the applicant has incorporated the following into the proposed design (Exhibit 10):
• Removal of second-story rear balcony;
• Use of obscure/frosted glass on the two-story bedroom windows located on north elevation facing the Blackwell Drive rear yards;
• Planting of evergreen trees to provide screening along the northern fence line; • Retention and trimming of the existing large Oak tree at rear corner of the lot; and • Proposed side yard setback provides between 80 to 120 feet of distance between the proposed two-story windows on the subject property and the existing two-story elevation windows at the rear of the Blackwell Avenue residences.
Exhibit 3 includes Condition of Approval #11, requiring the two second floor bedroom windows located on the northern elevation of the residence have frosted or obscure glass to provide privacy between the properties.
G. Landscaping
Public comments include concerns regarding proposed landscaping, including location of screening trees and species (Exhibit 12). To address privacy concerns the applicant has proposed planting five screening trees along the Blackwell Drive fence line (Sheet A0.12,
ITEM NO. 18.
PAGE 9 OF 11
SUBJECT: 15411 National Avenue/S-23-033
DATE: November 8, 2024
Exhibit 11). The proposed tree species is Leyland Cypress. Leyland Cypress trees are fast growing, upright in growth, and evergreen. Mature height can reach 50 to 60 feet tall with a mature spread of 15 to 20 feet.
Staff received two public comments expressing the following concerns about the proposed privacy trees to be planted along the Blackwell Drive fence:
• Drainage of rainwater onto the adjacent property;
• Ongoing maintenance of the trees;
• Tree height will not adequately screen the view from the second story; and • Future detached ADU construction may interfere with the proposed privacy trees.
Exhibit 3 includes Condition of Approval #10, requiring that prior to obtaining a building final the property owner must plant five 24-gallon Leyland Cypress trees along the northern fence line to address privacy concerns. Privacy trees must be maintained by the property owner.
H. Tree Impacts
The Town’s Consulting Arborist prepared a report for the site and made recommendations for the project (Exhibit 9). The project site contains six protected trees. Four trees are proposed to be removed due the proposed location of the house and to accommodate the new driveway. Arborist recommendations for tree protection have been included in the Conditions of Approval (Exhibit 9). Tree #67 is located on the front parcel and is not part of this application.
I. Grading
The project includes site improvements with grading quantities exceeding 50 cubic yards, which requires approval of a Grading Permit. The Town’s Parks and Public Works Engineering staff have included a condition of approval requiring submittal and evaluation of a Grading Permit in parallel with the required Building Permits (Exhibit 3).
J. Off-Site Improvements
The project includes off-site improvements requiring the applicant to install a new sidewalk, curb, and gutter along frontage of the parcel along National Avenue, tying into the existing condition to the north. In addition, applicant shall pave and/or restore pavement from the centerline to the newly constructed gutter along the National Avenue frontage per Condition of Approval 73, Exhibit 3.
K. CEQA Determination
ITEM NO. 18.
PAGE 10 OF 11
SUBJECT: 15411 National Avenue/S-23-033
DATE: November 8, 2024
The project is Categorically Exempt pursuant to the adopted Guidelines for the Implementation of the California Environmental Quality Act, Section 15303: New Construction.
PUBLIC COMMENTS:
Story poles and signage were installed on the site and written notice was sent to property owners and tenants located within 300 feet of the subject property. Public comments received by 11:00 A.M., Friday, November 8, 2024, are included as Exhibit 12.
CONCLUSION:
A. Summary
The applicant is requesting approval of an Architecture and Site application for construction of a new two-story single-family residence. The project is consistent with the Zoning and General Plan Land Use designation for the property. The project is in compliance with the objective standards of the Town Code related to allowable floor area, height, setbacks, lot coverage, and on-site parking requirements. The proposed project would result in the largest residence in terms of square footage, by 511 square feet, and the largest garage in terms of square footage, by 124 square feet, in the immediate neighborhood. The project was reviewed by the Town’s Consulting Architect who provided recommendations to address the consistency of the project with the Residential Design Guidelines. The applicant responded to the Consulting Architect’s issues and recommendations through design revisions with the exception meeting two recommendations. Public comment has raised outstanding concerns regarding neighborhood compatibility, privacy, and landscaping.
The applicant has provided a Scope of Work and a Letter of Justification for the proposed two-story residence, speaking to the design’s compatibly with the immediate and surrounding neighborhood (Exhibits 4 and 5).
B. Recommendation
Based on the analysis above, staff recommends denial of the Architecture and Site application based on concerns related to size, neighborhood compatibility, and consistency with the Residential Design Guidelines, as discussed in this report.
ITEM NO. 18.
PAGE 11 OF 11
SUBJECT: 15411 National Avenue/S-23-033
DATE: November 8, 2024
C. Alternatives
Alternatively, the Commission can:
1. Approve the application by taking the following actions:
a. Make the finding that the proposed project is Categorically Exempt, pursuant to the adopted Guidelines for the implementation of the California Environmental Quality Act, Section 15303: New Construction (Exhibit 2);
b. Make the finding that the project complies with the objective standards of Chapter 29 of the Town Code (Zoning Regulations) (Exhibit 2);
c. Make the finding that the project complies with the Residential Design Guidelines (Exhibit 2);
d. Make the considerations as required by Section 29.20.150 of the Town Code for granting approval of an Architecture and Site application (Exhibit 2); and e. Approve Architecture and Site application S-23-033 with the conditions contained in Exhibit 3 and the development plans in Exhibit 11.
2. Approve the applications with additional and/or modified conditions; or
3. Continue the matter to a date certain with specific direction.
EXHIBITS:
1. Location Map
2. Required Findings and Considerations
3. Recommended Conditions of Approval
4. Scope of Work
5. Letter of Justification
6. Photographs of Site
7. Consulting Architect’s Report
8. Applicant’s Response to Consulting Architect
9. Consulting Arborist’s Report
10. Applicant’s Summary of Neighborhood Outreach
11. Development Plans
12. Public Comments received by 11:00 a.m., Friday, November 8, 2024
ITEM NO. 18.
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ITEM NO. 18.
JO DR
NATIONAL AV
DE SOTO DR
LOS GATOS-ALMADEN RD
VISTA LN
LEILA CT
BLACKWELL DR
VERDE CT
EL GATO LN
LOMA VISTA CT
DRAKES BAY AV
LINDA LN
DRAKES CT
SEQUOIA CT
VISTA REAL CT
15411 National Avenue
0 0.125 0.25
Miles
°
EXHIBIT 1
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\\TLG-FILE\DATA\SHARE\PLANNING COMMISSION REPORTS\2024\11-13-2024\ITEM 2 - 15411 NATIONAL AVENUE\EXHIBIT 2 - REQUIRED FINDINGS AND CONSIDERATIONS.DOCX
PLANNING COMMISSION – November 13, 2024
REQUIRED FINDINGS and CONSIDERATIONS FOR:
15411 National Avenue
Architecture and Site Application S-23-033
Requesting Approval for Construction of a Single-Family Residence and Site Improvements Requiring a Grading Permit on a Vacant Property Zoned R-1:8. APN 424-12-140. Categorically Exempt Pursuant to CEQA Guidelines Section 15303: New Construction.
Property Owner: Vyankatesh and Rammy Muddada.
Applicant: Jose Rama.
Project Planner: Erin Walters.
FINDINGS
Required findings for CEQA:
■ The project is Categorically Exempt pursuant to the adopted Guidelines for the Implementation of the California Environmental Quality Act, Section 15303: New Construction.
Required compliance with the Zoning Regulations:
■ The project meets the objective standards of Chapter 29 of the Town Code (Zoning Regulations).
Required compliance with the Residential Design Guidelines:
■ The project is in compliance with the Residential Design Guidelines for singlefamily residences not in hillside areas.
CONSIDERATIONS
Required considerations in review of Architecture & Site applications:
■ As required by Section 29.20.150 of the Town Code, the considerations in review of an Architecture and Site application were all made in reviewing this project.
EXHIBIT 2 Page 724
ITEM NO. 18.
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ITEM NO. 18.
PLANNING COMMISSION – November 13, 2024
CONDITIONS OF APPROVAL
15411 National Avenue
Architecture and Site Application S-23-033
Requesting Approval for Construction of a Single-Family Residence and Site Improvements Requiring a Grading Permit on a Vacant Property Zoned R-1:8. APN 424-12-140. Categorically Exempt Pursuant to CEQA Guidelines Section 15303: New Construction.
Property Owner: Vyankatesh and Rammy Muddada.
Applicant: Jose Rama.
Project Planner: Erin Walters.
TO THE SATISFACTION OF THE COMMUNITY DEVELOPMENT DIRECTOR:
Planning Division
1. APPROVAL: This application shall be completed in accordance with all of the conditions of approval and in substantial compliance with the approved plans. Any changes or modifications to the approved plans and/or business operation shall be approved by the Community Development Director, DRC, or the Planning Commission depending on the scope of the changes.
2. EXPIRATION: The approval will expire two years from the approval date pursuant to Section 29.20.320 of the Town Code, unless the approval has been vested.
3. OUTDOOR LIGHTING: Exterior lighting shall be kept to a minimum, and shall be down directed fixtures that will not reflect or encroach onto adjacent properties. No flood lights shall be used unless it can be demonstrated that they are needed for safety or security.
4. TREE REMOVAL PERMIT: A Tree Removal Permit shall be obtained for any trees to be removed, prior to the issuance of a building or grading permit.
5. EXISTING TREES: All existing trees shown on the plan and trees required to remain or to be planted are specific subjects of approval of this plan, and must remain on the site.
6. ARBORIST REQUIREMENTS: The developer shall implement, at their cost, all recommendations identified in the Arborist’s report for the project, on file in the Community Development Department. These recommendations must be incorporated in the building permit plans and completed prior to issuance of a building permit where applicable.
7. TREE FENCING: Protective tree fencing and other protection measures consistent with Section 29.10.1005 of the Town Code shall be placed at the drip line of existing trees prior to issuance of demolition and building permits and shall remain through all phases of construction. Include a tree protection plan with the construction plans.
8. TREE STAKING: All newly planted trees shall be double-staked using rubber tree ties.
9. FRONT YARD LANDSCAPE: Prior to issuance of a Certificate of Occupancy the front yard must be landscaped.
10. PRIVACY TREE PLANTING: Prior to obtaining a building final the property owner must plant EXHIBIT 3
ITEM NO. 18.
five 24-gallon Leyland Cypress trees along the northern fence line. Privacy trees must be maintained by the property owner.
11. FROSTED/OBSCURE PRIVACY WINDOWS – The two second floor bedroom windows located on the northern elevation of the residence shall have frosted or obscure glass to provide privacy between properties.
12. WATER EFFICIENCY LANDSCAPE ORDINANCE: The final landscape plan shall meet the Town of Los Gatos Water Conservation Ordinance or the State Water Efficient Landscape Ordinance, whichever is more restrictive. A review fee based on the current fee schedule adopted by the Town Council is required when working landscape and irrigation plans are submitted for review.
13. STORY POLES/PROJECT IDENTIFICATION SIGNAGE: Story poles and/or project identification signage on the project site shall be removed within 30 days of approval of the Architecture & Site application.
14. TOWN INDEMNITY: Applicants are notified that Town Code Section 1.10.115 requires that any applicant who receives a permit or entitlement (“the Project”) from the Town shall defend (with counsel approved by Town), indemnify, and hold harmless the Town, its agents, officers, and employees from and against any claim, action, or proceeding (including without limitation any appeal or petition for review thereof) against the Town or its agents, officers or employees related to an approval of the Project, including without limitation any related application, permit, certification, condition, environmental determination, other approval, compliance or failure to comply with applicable laws and regulations, and/or processing methods (“Challenge”). Town may (but is not obligated to) defend such Challenge as Town, in its sole discretion, determines appropriate, all at applicant’s sole cost and expense.
Applicant shall bear any and all losses, damages, injuries, liabilities, costs and expenses (including, without limitation, staff time and in-house attorney’s fees on a fully-loaded basis, attorney’s fees for outside legal counsel, expert witness fees, court costs, and other litigation expenses) arising out of or related to any Challenge (“Costs”), whether incurred by Applicant, Town, or awarded to any third party, and shall pay to the Town upon demand any Costs incurred by the Town. No modification of the Project, any application, permit certification, condition, environmental determination, other approval, change in applicable laws and regulations, or change in such Challenge as Town, in its sole discretion, determines appropriate, all the applicant’s sole cost and expense. No modification of the Project, any application, permit certification, condition, environmental determination, other approval, change in applicable laws and regulations, or change in processing methods shall alter the applicant’s indemnity obligation.
15. COMPLIANCE MEMORANDUM: A memorandum shall be prepared and submitted with the building plans detailing how the Conditions of Approval will be addressed.
ITEM NO. 18.
Building Division
16. PERMITS REQUIRED: A Building Permit is required for the construction of the new singlefamily residence and attached garage. An additional Building Permit will be required for the PV System that is required by the California Energy Code.
17. APPLICABLE CODES: The current codes, as amended and adopted by the Town of Los Gatos as of January 1, 2023, are the 2022 California Building Standards Code, California Code of Regulations Title 24, Parts 1-12, including locally adopted Reach Codes.
18. CONDITIONS OF APPROVAL: The Conditions of Approval must be blue lined in full on the cover sheet of the construction plans. A Compliance Memorandum shall be prepared and submitted with the building permit application detailing how the Conditions of Approval will be addressed.
19. BUILDING & SUITE NUMBERS: Submit requests for new building addresses to the Building Division prior to submitting for the building permit application process.
20. SIZE OF PLANS: Minimum size 24” x 36”, maximum size 30” x 42”.
21. SOILS REPORT: A Soils Report, prepared to the satisfaction of the Building Official, containing foundation, and retaining wall design recommendations, shall be submitted with the Building Permit Application. This report shall be prepared by a licensed Civil Engineer specializing in soils mechanics.
22. SHORING: Shoring plans and calculations will be required for all excavations which exceed five (5) feet in depth, or which remove lateral support from any existing building, adjacent property, or the public right-of-way. Shoring plans and calculations shall be prepared by a California licensed engineer and shall confirm to the Cal/OSHA regulations.
23. FOUNDATION INSPECTIONS: A pad certificate prepared by a licensed civil engineer or land surveyor shall be submitted to the project Building Inspector at foundation inspection.
This certificate shall certify compliance with the recommendations as specified in the Soils Report, and that the building pad elevations and on-site retaining wall locations and elevations have been prepared according to the approved plans. Horizontal and vertical controls shall be set and certified by a licensed surveyor or registered Civil Engineer for the following items: Building pad elevation
a. Finish floor elevation
b. Foundation corner locations
c. Retaining wall(s) locations and elevations
24. TITLE 24 ENERGY COMPLIANCE: All required California Title 24 Energy Compliance Forms must be blue-lined (sticky-backed), i.e., directly printed, onto a plan sheet.
25. TOWN RESIDENTIAL ACCESSIBILITY STANDARDS: New residential units shall be designed with adaptability features for single-family residences per Town Resolution 1994-61:
a. Wood backing (2” x 8” minimum) shall be provided in all bathroom walls, at water closets, showers, and bathtubs, located 34 inches from the floor to the center of the backing, suitable for the installation of grab bars if needed in the future. b. All passage doors shall be at least 32-inch-wide doors on the accessible floor level. c. The primary entrance door shall be a 36-inch-wide door including a 5’x 5’ level landing, no more than 1 inch out of plane with the immediate interior floor level and with an 18-inch clearance at interior strike edge.
ITEM NO. 18.
d. A door buzzer, bell or chime shall be hard wired at primary entrance.
26. BACKWATER VALVE: The scope of this project may require the installation of a sanitary sewer backwater valve per Town Ordinance 6.40.020. Please provide information on the plans if a backwater valve is required and the location of the installation. The Town of Los Gatos Ordinance and West Valley Sanitation District (WVSD) requires backwater valves on drainage piping serving fixtures that have flood level rims less than 12 inches above the elevation of the next upstream manhole.
27. HAZARDOUS FIRE ZONE: All projects in the Town of Los Gatos require Class A roof assemblies.
28. SPECIAL INSPECTIONS: When a special inspection is required by CBC Section 1704, the Architect or Engineer of Record shall prepare an inspection program that shall be submitted to the Building Official for approval prior to issuance of the Building Permit. The Town Special Inspection form must be completely filled-out and signed by all requested parties prior to permit issuance. Special Inspection forms are available online at www.losgatosca.gov/building.
29. BLUEPRINT FOR A CLEAN BAY SHEET: The Town standard Santa Clara Valley Nonpoint Source Pollution Control Program Sheet (page size same as submitted drawings) shall be part of the plan submittal as the second page. The specification sheet is available online at www.losgatosca.gov/building.
30. APPROVALS REQUIRED: The project requires the following departments and agencies approval before issuing a building permit:
a. Community Development – Planning Division: (408) 354-6874 b. Engineering/Parks & Public Works Department: (408) 399-5771 c. Santa Clara County Fire Department: (408) 378-4010
d. West Valley Sanitation District: (408) 378-2407
e. Local School District: The Town will forward the paperwork to the appropriate school district(s) for processing. A copy of the paid receipt is required prior to permit issuance.
TO THE SATISFACTION OF THE DIRECTOR OF PARKS & PUBLIC WORKS:
Engineering Division
31. GENERAL: All public improvements shall be made according to the latest adopted Town Standard Plans, Standard Specifications and Engineering Design Standards. All work shall conform to the applicable Town ordinances. The adjacent public right-of-way shall be kept clear of all job-related mud, silt, concrete, dirt and other construction debris at the end of the day. Dirt and debris shall not be washed into storm drainage facilities. The storing of goods and materials on the sidewalk and/or the street will not be allowed unless an encroachment permit is issued by the Engineering Division of the Parks and Public Works Department. The Owner’s representative in charge shall be at the job site during all working hours. Failure to maintain the public right-of-way according to this condition may result in the issuance of correction notices, citations, or stop work orders and the Town performing the required maintenance at the Owner’s expense.
ITEM NO. 18.
32. PAYMENT OPTIONS:
a. All payments regarding fees and deposits can be mailed to:
Town of Los Gatos PPW – Attn: Engineering Dept
41 Miles Avenue
Los Gatos, CA 95030
Or hand deliver/drop off payment in engineering lock box Checks made out to “Town of Los Gatos” and should mention address and application number on memo/note line.
33. APPROVAL: This application shall be completed in accordance with all the conditions of approval listed below and in substantial compliance with the latest reviewed and approved development plans. Any changes or modifications to the approved plans or conditions of approvals shall be approved by the Town Engineer.
34. CONSTRUCTION PLAN REQUIREMENTS: Construction drawings shall comply with Section 1 (Construction Plan Requirements) of the Town’s Engineering Design Standards, which are available for download from the Town’s website.
35. CHANGE OF OCCUPANCY: Prior to initial occupancy and any subsequent change in use or occupancy of any non-residential condominium space, the buyer or the new or existing occupant shall apply to the Community Development Department and obtain approval for use determination and building permit and obtain inspection approval for any necessary work to establish the use and/or occupancy consistent with that intended.
36. GENERAL LIABILITY INSURANCE: The property owner shall provide proof of insurance to the Town on a yearly basis. In addition to general coverage, the policy must cover all elements encroaching into the Town’s right-of-way.
37. PUBLIC WORKS INSPECTIONS: The Owner, Applicant and/or Developer or their representative shall notify the Engineering Inspector at least twenty-four (24) hours before starting any work pertaining to on-site drainage facilities, grading or paving, and all work in the Town's right-of-way. Failure to do so will result in penalties and rejection of any work that occurred without inspection.
38. RESTORATION OF PUBLIC IMPROVEMENTS: The Owner, Applicant and/or Developer or their representative shall repair or replace all existing improvements not designated for removal that are damaged or removed because of the Owner, Applicant and/or Developer or their representative's operations. Improvements such as, but not limited to: curbs, gutters, sidewalks, driveways, signs, pavements, raised pavement markers, thermoplastic pavement markings, etc., shall be repaired and replaced to a condition equal to or better than the original condition. Any new concrete shall be free of stamps, logos, names, graffiti, etc. Any concrete identified that is displaying a stamp or equal shall be removed and replaced at the Contractor’s sole expense and no additional compensation shall be allowed therefore. Existing improvement to be repaired or replaced shall be at the direction of the Engineering Construction Inspector and shall comply with all Title 24 Disabled Access provisions. The restoration of all improvements identified by the Engineering Construction Inspector shall be completed before the issuance of a certificate of occupancy. The Owner, Applicant and/or Developer or their representative shall request a walk-through with the
ITEM NO. 18.
Engineering Construction Inspector before the start of construction to verify existing conditions.
39. PLAN CHECK FEES: Plan check fees associated with the Grading Permit shall be deposited with the Engineering Division of the Parks and Public Works Department prior to the commencement of plan check review.
40. SITE SUPERVISION: The General Contractor shall provide qualified supervision on the job site at all times during construction.
41. INSPECTION FEES: Inspection fees shall be deposited with the Town prior to the issuance of permits or recordation of maps.
42. DESIGN CHANGES: Any proposed changes to the approved plans shall be subject to the approval of the Town prior to the commencement of any and all altered work. The Owner’s project engineer shall notify, in writing, the Town Engineer at least seventy-two (72) hours in advance of all the proposed changes. Any approved changes shall be incorporated into the final “as-built” plans.
43. PLANS AND STUDIES: All required plans and studies shall be prepared by a Registered Professional Engineer in the State of California and submitted to the Town Engineer for review and approval. Additionally, any post-project traffic or parking counts, or other studies imposed by the Planning Commission or Town Council shall be funded by the Owner, Applicant and/or Developer.
44. GRADING PERMIT DETERMINATION DURING CONSTRUCTION DRAWINGS: All grading work taking place with this application and related applications/projects within a two year time period are considered eligible for the grading permit process and will be counted toward the quantities used in determining grading permit requirements. In the event that, during the production of construction drawings and/or during construction of the plans approved with this application by the Town of Los Gatos, it is determined that a grading permit would be required as described in Chapter 12, Article II (Grading Permit) of the Town Code of the Town of Los Gatos, an Architecture and Site Application would need to be submitted by the Owner for review and approval by the Development Review Committee prior to applying for a grading permit.
45. GRADING: Any grading work, cut/fill, earthwork or combination thereof (completed or proposed on submitted plans) on the parcel over the upcoming two-year period are combined with regards to grading permit thresholds. This also applies to adjacent parcels with identical owners, applicants and or developers.
46. ILLEGAL GRADING: Per the Town’s Comprehensive Fee Schedule, applications for work unlawfully completed shall be charged double the current fee. As a result, the required grading permit fees associated with an application for grading will be charged accordingly.
47. DUST CONTROL: Blowing dust shall be reduced by timing construction activities so that paving and building construction begin as soon as possible after completion of grading, and by landscaping disturbed soils as soon as possible. Further, water trucks shall be present and in use at the construction site. All portions of the site subject to blowing dust shall be watered as often as deemed necessary by the Town, or a minimum of three (3) times daily, or apply (non-toxic) soil stabilizers on all unpaved access roads, parking areas, and staging areas at construction sites in order to insure proper control of blowing dust for the duration of the project. Watering on public streets shall not occur. Streets shall be cleaned by street
ITEM NO. 18.
sweepers or by hand as often as deemed necessary by the Town Engineer, or at least once a day. Watering associated with on-site construction activity shall take place between the hours of 8 a.m. and 5 p.m. and shall include at least one (1) late-afternoon watering to minimize the effects of blowing dust. All public streets soiled or littered due to this construction activity shall be cleaned and swept on a daily basis during the workweek to the satisfaction of the Town. Demolition or earthwork activities shall be halted when wind speeds (instantaneous gusts) exceed twenty (20) miles per hour (MPH). All trucks hauling soil, sand, or other loose debris shall be covered. For sites greater than four (4) acres in area:
a. Enclose, cover, water twice daily or apply (non-toxic) soil binders to exposed stockpiles (dirt, sand, etc.).
b. Limit traffic speeds on unpaved roads to fifteen (15) miles per hour. c. Install sandbags or other erosion control measures to prevent silt runoff to public roadways.
d. Replant vegetation in disturbed areas as quickly as possible. e. Hydroseed or apply (non-toxic) soil stabilizers to inactive construction areas (previously graded areas inactive for ten days or more).
48. CONSTRUCTION ACTIVITIES: All construction shall conform to the latest requirements of the CASQA Stormwater Best Management Practices Handbooks for Construction Activities and New Development and Redevelopment, the Town's grading and erosion control ordinance, and other generally accepted engineering practices for erosion control as required by the Town Engineer when undertaking construction activities.
49. SILT AND MUD IN PUBLIC RIGHT-OF-WAY: It is the responsibility of Contractor and homeowner to make sure that all dirt tracked into the public right-of-way is cleaned up on a daily basis. Mud, silt, concrete and other construction debris SHALL NOT be washed into the Town’s storm drains.
50. COVERED TRUCKS: All trucks transporting materials to and from the site shall be covered.
51. GOOD HOUSEKEEPING: Good housekeeping practices shall be observed at all times during the course of construction. All construction shall be diligently supervised by a person or persons authorized to do so at all times during working hours. The Owner’s representative in charge shall be at the job site during all working hours. Failure to maintain the public right-of-way according to this condition may result in penalties and/or the Town performing the required maintenance at the Owner’s expense
52. SITE DESIGN MEASURES: All projects shall incorporate at least one of the following measures:
a. Protect sensitive areas and minimize changes to the natural topography. b. Minimize impervious surface areas.
c. Direct roof downspouts to vegetated areas.
d. Use porous or pervious pavement surfaces on the driveway, at a minimum. e. Use landscaping to treat stormwater.
53. CONSTRUCTION HOURS: All improvements and construction activities, including the delivery of construction materials, labors, heavy equipment, supplies, etc., shall be limited to the hours of 8:00 a.m. to 6:00 p.m., weekdays and 9:00 a.m. to 4:00 p.m. Saturdays. The Town may authorize, on a case-by-case basis, alternate construction hours. The Owner,
ITEM NO. 18.
Applicant and/or Developer shall provide written notice twenty-four (24) hours in advance of modified construction hours. Approval of this request is at discretion of the Town.
54. CONSTRUCTION NOISE: Between the hours of 8:00 a.m. to 6:00 p.m., weekdays and 9:00 a.m. to 4:00 p.m. Saturdays, construction, alteration or repair activities shall be allowed.
No individual piece of equipment shall produce a noise level exceeding eighty-five (85) dBA at twenty-five (25) feet from the source. If the device is located within a structure on the property, the measurement shall be made at distances as close to twenty-five (25) feet from the device as possible. The noise level at any point outside of the property plane shall not exceed eighty-five (85) dBA.
55. DELAYED/DEFERRED REPORTS AND REVIEWS: TLGPPW strongly recommend that reports requiring a peer review be submitted and completed prior to committee approval/building permit stage. Note that these reviews may require a design change by the applicant and/or additional studies. Applicants who chose to defer assume risk that required changes may send project back to planning stage.
56. WATER METER: Water meters currently in public right-of-way shall be relocated within the property in question, within 30” of the property line / the public right-of-way line. The Owner, Applicant and/or Developer shall repair and replace to existing Town standards any portion of concrete flatwork within said right-of-way that is damaged during this activity prior to issuance of a certificate of occupancy.
57. SANITARY SEWER CLEANOUT: Sanitary sewer cleanouts currently in public right-of-way shall be relocated within the property in question, within one (1) foot of the property line per West Valley Sanitation District Standard Drawing 3, or at a location specified by the Town. The Owner, Applicant and/or Developer shall repair and replace to existing Town standards any portion of concrete flatwork within said right-of-way that is damaged during this activity prior to issuance of a certificate of occupancy.
58. PRECONSTRUCTION MEETING: Prior to issuance of any grading or building permits or the commencement of any site work, the general contractor shall:
a. Along with the Owner, Applicant and/or Developer, setup a pre-construction meeting with Eric Christianson, Senior Public Works Inspector [email protected] (408) 354-6824 to discuss the project conditions of approval, working hours, site maintenance and other construction matters;
b. Acknowledge in writing that they have read and understand the project conditions of approval and will make certain that all project sub-contractors have read and understand them as well prior to commencing any work, and that a copy of the project conditions of approval will be posted on-site at all times during construction.
59. CONSTRUCTION VEHICLE PARKING: Construction vehicle parking within the public right-ofway will only be allowed if it does not cause access or safety problems as determined by the Town.
60. FOR PLANTERS: The Owner, Applicant and/or Developer shall apply for an encroachment permit for the proposed planters within the public sidewalk and/or Town’s right-ofway. The Owner, Applicant and/or Developer shall work with Parks and Public Works Department staff to arrive at a mutually agreeable solution that addresses safety and aesthetic issues. If no solution is reached, the vegetative screening requirement shall be waived. A Private Improvements in the Public Right-of-Way (formerly Indemnity)