Los Gatos City Council
October 21, 2025

IMPORTANT NOTICE
This is a hybrid meeting and will be held in-person at the Town Council Chambers at 110 E. Main Street and virtually through Zoom Webinar (log-in information provided below). You may watch the Council meeting without providing public comment on Comcast cable channel 15 or at www.LosGatosCA.gov/TownYouTube. Members of the public may provide public comments for agenda items in-person or virtually by following the instructions listed at the end of the agenda.

To watch and participate via Zoom, please go to:
https://losgatosca-gov.zoom.us/j/86730363468?pwd=pfKQoh92JnbwOYwFvZqIdSSWpjxYoK.1 Enter Passcode: 577971

CALL MEETING TO ORDER

ROLL CALL

PLEDGE OF ALLEGIANCE
CONSENT ITEMS (Consent Items are considered routine Town business and may be approved by one motion. Any member of the Council may remove an item from the Consent Items for comment and action. Members of the public may provide input on any or multiple Consent Item(s) when the Mayor asks for public comments on the Consent Items. If you wish to comment, please follow the Participation Instructions located at the end of this agenda. If an item is removed, the Mayor has the sole discretion to determine when the item will be heard.)

1. Approve the Minutes of the October 6, 2025, Joint Special Meeting of the Town Council and Finance Commission.

RECOMMENDATION: Approve the Minutes of the October 6, 2025, Joint Special Meeting of the Town Council and Finance Commission.
*AMENDED

TOWN OF LOS GATOS

COUNCIL MEETING AGENDA
OCTOBER 21, 2025
110 EAST MAIN STREET AND TELECONFERENCE

TOWN COUNCIL CHAMBERS
7:00 PM
Matthew Hudes, Mayor
Rob Moore, Vice Mayor
Mary Badame, Council Member
Rob Rennie, Council Member
Maria Ristow, Council Member

2. Approve the Minutes of the October 7, 2025, Closed Session Town Council Meeting.

RECOMMENDATION: Approve the Minutes of the October 7, 2025, Closed Session Town Council Meeting.

3. Approve the Minutes of the October 7, 2025, Town Council Meeting.

RECOMMENDATION: Approve the Minutes of the October 7, 2025, Town Council Meeting.

4. Approve the Minutes of the October 14, 2025, Closed Session Town Council Meeting.

RECOMMENDATION: Approve the Minutes of the October 14, 2025, Closed Session Town Council Meeting.

5. Receive the Monthly Financial and Investment Report for August 2025 RECOMMENDATION: Receive the Monthly Financial and Investment Reports for August 2025.

6. Adopt an Ordinance of the Town Council of the Town of Los Gatos Amending Planned Development Ordinance 2025 to Allow Modifications to Building E at 50 University Avenue (Old Town Center) on Property Zoned
C-2:LHP:PD. Building E is Located at 31 University Avenue Within the Old Town Center.

APN 529-02-044. Planned Development Modification Application PD-25-001.

Categorically Exempt Pursuant to CEQA Guidelines Section 15301: Existing Facilities.

Property Owner: SRI Old Town, LLC. Applicant: Rick Nelson, MBH Architects. Project Planner: Erin Walters.

Ordinance Title: An Ordinance of the Town Council of the Town of Los Gatos Amending Planned Development Ordinance 2025 to Allow Modifications to Building E at 50 University Avenue (Old Town Center).

RECOMMENDATION: Adopt an Ordinance of the Town Council of the Town of Los Gatos modifying Planned Development Ordinance 2025 to allow modifications to Building E at 50 University Avenue (Old Town Center) on property zoned C-2:LHP:PD. Building E is located at 31 University Avenue within the Old Town Center.

VERBAL COMMUNICATIONS (Members of the public are welcome to address the Town Council on any matter that is not listed on the agenda and is within the subject matter jurisdiction of the Town Council. The law generally prohibits the Town Council from discussing or taking action on such items. However, the Council may instruct staff accordingly. To ensure all agenda items are heard, this portion of the agenda is limited to 30 minutes. In the event additional speakers were not heard during the initial Verbal Communications portion of the agenda, an additional Verbal Communications will be opened prior to adjournment. Each speaker is limited to no more than three (3) minutes or such time as authorized by the Mayor.) OTHER BUSINESS (Up to three minutes may be allotted to each speaker on any of the following items.)

7. Authorize the Town Manager to Negotiate and Execute an Agreement with NHA Advisors, LLC (NHA) to deliver Fiscal Condition Analysis, Fiscal Impact Analysis, Asset Liability Management, and Wildfire Risk Mitigation Studies, including any optional services as directed by the Town Council, in the Amount Not to Exceed Amount of

$250,500 and Authorize an Expenditure Budget Adjustment up to $250,500 from the Available Unassigned fund Balance
RECOMMENDATION: Authorize the Town Manager to enter into an Agreement with NHA Advisors, LLC (NHA) to deliver Fiscal Condition Analysis, Fiscal Impact Analysis, Asset Liability Management, and Wildfire Risk Mitigation Studies including any optional services as directed by the Town Council, in the not to exceed amount of $250,50; and authorize an Expenditure Budget Adjustment of $250,500 from the available Unassigned fund Balance.

8. Receive an Update on the Town’s Federal Funding and Grants and Consider Federal Actions Impacting the Town
RECOMMENDATION: Receive an update on the Town’s federal funding and consider sunsetting the requirement to receive this report every other month.

PUBLIC HEARINGS (Applicants/Appellants and their representatives may be allotted up to a total of five minutes for opening statements. Members of the public may be allotted up to three minutes to comment on any public hearing item. Applicants/Appellants and their representatives may be allotted up to a total of three minutes for closing statements.)

9. Consider a Recommendation by the Planning Commission and Introduce an Ordinance to Repeal and Replace Town Code Chapter 29, Article IX, “Floodplain Management,” In its Entirety, and Adopt the Updated Flood Hazard Maps.

Ordinance Title: An Ordinance of the Town Council of the Town of Los Gatos Amending the Town Code to Repeal Town Code Chapter 29, Article IX, “Floodplain Management,” and Replace it with a New Chapter 29, Article IX, “Floodplain Management,” in its Entirety, Including Adoption of Updated Flood Hazard Maps.

RECOMMENDATION: Accept the Planning Commission’s recommendation and introduce an ordinance repealing Town Code Chapter 29, Article IX, “Floodplain Management,” in its entirety and replacing it with a new Chapter 29, Article IX, “Floodplain Management,” including the updated Flood Hazard Maps.

COUNCIL / MANAGER MATTERS

CLOSED SESSION REPORT
ADJOURNMENT (Council policy is to adjourn no later than midnight unless a majority of Council votes for an extension of time.)
ADA NOTICE - In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Clerk’s Office at (408) 354-6834.

Notification at least two (2) business days prior to the meeting date will enable the Town to make reasonable arrangements to ensure accessibility to this meeting [28 CFR §35.102-35.104].

NOTICE REGARDING SUPPLEMENTAL MATERIALS - Materials related to an item on this agenda submitted to the Town Council after initial distribution of the agenda packets are available for public inspection in the Clerk’s Office at Town Hall, 110 E. Main Street, Los Gatos and on the

Town’s website at www.losgatosca.gov. Town Council agendas and related materials can be viewed online at https://losgatos-ca.municodemeetings.com/.

HOW TO PARTICIPATE
Members of the public may provide public comments for agenda items in-person or virtually through the Zoom Webinar by following the instructions listed below.

The public is welcome to provide oral comments in real-time during the meeting in three ways:

Zoom Webinar (Online): To participate from a PC, Mac, iPad, iPhone or Android device.

Please use this URL to join: https://losgatoscagov.zoom.us/j/86730363468?pwd=pfKQoh92JnbwOYwFvZqIdSSWpjxYoK.1 Passcode: 577971. You can also type in 867 3036 3468 in the “Join a Meeting” page on the Zoom website at www.zoom.us and use passcode 577971. When the Mayor announces the item for which you wish to speak, click the “raise hand” feature in Zoom.

Telephone: To participate by phone please dial 1 (408) 961-3927 or 1 (855) 758-1310 for US Toll-free and use Meeting ID: 867 3036 3468. When the Mayor announces the item for which you wish to speak, press *9 on your telephone keypad to raise your hand.

In-Person: Please complete a “speaker’s card” located on the back of the chamber benches and submit it to the Town Clerk before the meeting or when the Mayor announces the item for which you wish to speak.

NOTES: Comments will be limited to three (3) minutes or less at the Mayor’s discretion. If you are unable to participate in real-time, you may email to [email protected] the subject line “Public Comment Item #__ ” (insert the item number relevant to your comment).

Deadlines to submit written comments are:
-11:00 a.m. the Friday and Monday before the Council meeting for inclusion in an addendum. -11:00 a.m. the day of the Council meeting for inclusion in a desk item. * The agenda has been amended to remove the remote participation listing for Council Member Rob Rennie.

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

TOWN OF LOS GATOS

COUNCIL CLOSED SESSION MINUTES
MEETING DATE: 10/21/2025
ITEM NO: 1
DRAFT
Minutes of the Joint Special Meeting
Town Council and Finance Commission: Study Session
Tuesday, October 6, 2025
The Town Council of the Town of Los Gatos conducted a special meeting in person and via teleconference.

MEETING CALLED TO ORDER AT APPROXIMATELY 5:30 P.M.

ROLL CALL

Present: Mayor Matthew Hudes, Vice Mayor Rob Moore, Council Member Mary Badame, Council Member Rob Rennie (participating remotely), Council Member Maria Ristow, Commissioner Phil Koen, Commissioner Joseph Rodgers, Commissioner Adam Fischer, Vice Chair Ashby Monk, Chair Linda Reiners.

Absent: None.

VERBAL COMMUNICATIONS (ONLY ON ITEMS ON THE AGENDA)
No one spoke.

OTHER BUSINESS

1. Presentation and Discussion of the Local Government Investment Environment and Its Implications on the Town’s California Employers’ Pension Prefunding Trust (CEPPT) and California Employers’ Retiree Benefit Trust (CERBT) to Provide a Training Foundation for the Town Council and Finance Commission.

Chris Constantin, Town Manager, introduced the consultant.

Mark Shuster, Shuster Advisory Group, gave a presentation on the local government investment environment and implications on the section 115 Trust for the Other PostEmployment Benefits (OPEB) and pension prefunding.

The Town Council and the Finance Commission asked questions and provided comments related to financial management, investment strategies, and pension liabilities.

ADJOURNMENT
The meeting adjourned at approximately 7:30 p.m.

Respectfully Submitted:
___________________________
Jenna De Long, Deputy Town Clerk

ITEM NO. 1.
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL CLOSED SESSION MINUTES
MEETING DATE: 10/21/2025
ITEM NO: 2
DRAFT
Minutes of the Town Council Special Meeting – Closed Session Tuesday, October 7, 2025
The Town Council of the Town of Los Gatos conducted a special meeting in person to hold a Closed Session.

MEETING CALLED TO ORDER AT APPROXIMATELY 6:15 P.M.

ROLL CALL

Present: Mayor Matthew Hudes, Vice Mayor Rob Moore, Council Member Mary Badame, Council Member Rob Rennie (participated remotely), and Council Member Maria Ristow.

Absent: None.

VERBAL COMMUNICATIONS (ONLY ON ITEMS ON THE AGENDA)
No one spoke.

Gabrielle Whelan, Town Attorney, announced the closed session title as listed on the agenda.

THE TOWN COUNCIL MOVED TO CLOSED SESSION ON THE FOLLOWING ITEMS:

1. CONFERENCE WITH REAL PROPERTY NEGOTIATOR (Government Code Section 54956.8) Property: 4 Tait Avenue Agency Negotiator(s): Chris Constantin, Town Manager; and Katy Nomura, Assistant Town Manager Negotiating Parties: Town of Los Gatos and Rob White Under Negotiation: Price and Terms of Payment

2. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION (Government Code §54956.9(d)(2)b) Significant exposure to litigation: 1 case

3. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION (Government Code Section 54956.9(d)(4) Initiation of litigation: 1 case.

There was no reportable action.

ADJOURNMENT
The meeting adjourned at approximately 6:55 p.m.

Attest: Submitted by:
___________________________ __________________________
Jenna De Long, Deputy Town Clerk Chris Constantin, Town Manager

ITEM NO. 2.
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 10/21/2025
ITEM NO: 3
DRAFT
Minutes of the Town Council Meeting
Tuesday, October 7, 2025
The Town Council of the Town of Los Gatos conducted a regular meeting in person and via teleconference.

MEETING CALLED TO ORDER AT 7:03 P.M.

ROLL CALL

Present: Mayor Matthew Hudes, Vice Mayor Rob Moore, Council Member Mary Badame, Council Member Rob Rennie (participated remotely), Council Member Maria Ristow.

Absent: None.

PLEDGE OF ALLEGIANCE
Mayor Hudes invited Pravin Balasingham to lead the Pledge of Allegiance. The audience was invited to participate.

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

1. Approve the Minutes of the September 16, 2025, Closed Session Town Council Meeting.

2. Approve the Minutes of the September 16, 2025, Town Council Meeting.

3. Adopt an Ordinance of the Town Council of the Town of Los Gatos Repealing and Replacing Planned Development Ordinance 1281 Establishing Development Standards and Allowable Uses for Lots within the Planned Development Overlay Zone Relative to the Maximum Floor Area Ratio and the Maximum Lot Coverage Allowed on Lot 8 in the Vasona Oaks Subdivision at Vasona Oaks Drive on Property Zoned R-M:5-12:PD. Located at 130 Vasona Oaks Drive. APN 424-42-008. Exempt Pursuant to CEQA Guidelines, Section 15061 Review for Exemption (b)(3). Planned Development Ordinance Application PD-25-002. Applicant: Elad Batito, Green Bay Remodeling Inc. Property Owner: Ken MacDonald. Project Planner: Samina Merchant. Ordinance Title: An Ordinance of the Town Council of the Town of Los Gatos Repealing and Replacing Planned Development Ordinance 1281 Establishing Development Standards and Allowable Uses for Lots within the Planned Development Overlay Zone Relative to the Maximum Floor Area Ratio and the Maximum Lot Coverage Allowed on Lot 8 in the Vasona Oaks Subdivision at Vasona Oaks Drive. ORDINANCE 2376

4. Approve the increase to the Confidential employee group vacation accrual cap maximum from 310 hours to 320 hours.

5. Authorize the Town Manager to execute an agreement for services with Kosmont Realty for brokerage services for the disposition of the 4 Tait Avenue property for an amount not to exceed three percent of the property sale price; authorize a revenue budget

ITEM NO. 3.

PAGE 2 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of October 7, 2025 DATE: October 7, 2025
adjustment in an amount up to the property sale price; and authorize an expenditure budget adjustment in an amount up to three percent of the property sale price.

6. Approve an amendment to the management salary schedule establish a new classification title and salary range for an Administrative Services Director.

7. Authorize the Town Manager to execute a second amendment to the Agreement for Services with OpenGov, Inc., revising the Scope of Work at no additional cost.

8. Adopt a Resolution as Required by the California Department of Tax and Fee Administration (CDTFA), Authorizing Certain Town Representatives and a Town Contractor Access to Sales, Transactions, and Use Tax Records Pursuant to Revenue and Taxation Code Section 7056 and Rescind the Earlier Resolution 2021-034. RESOLUTION 2025-051

9. Adopt the revised Council Policy 2-11: Residency and Attendance Requirements and Establishing a Quorum. POLICY 2-11

10. Adopt a resolution repealing the enabling resolution that established the General Plan Committee and designate the Planning Commission to assume the duties of reviewing and making recommendations regarding General Plan and Specific Plan amendment requests. RESOLUTION 2025-052
Mayor Hudes stated the recommendation for item number five is to authorize the Town Manager to potentially execute an agreement for services (Attachment 1) with Kosmont Realty for brokerage services for the disposition of the 4 Tait Avenue property for an amount not to exceed three percent of the property sale price pending negotiations; authorize a revenue budget adjustment in an amount up to the property sale price; and authorize an expenditure budget adjustment in an amount up to three percent of the property sale price.

Mayor Hudes stated that for item six, Government Code 54953 requires a public announcement of the recommendation for final action. The Town Council will be taking action on item six on the salaries, salary schedule, or compensation paid to a local agency executive. Pursuant to this code, the Town Council will be taking action on the creation of the Administrative Services Director position with the consent calendar. The salary range for the position will be $204,030 to $275,441, and the benefits will be the same as the management group.

Mayor Hudes opened public comment.

Member of the Public
- Commented on concerns related to item two.

Carin Yamamoto
- Commented on concerns related to item five.

Mayor Hudes closed public comment.

ITEM NO. 3.

PAGE 3 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of October 7, 2025 DATE: October 7, 2025
Council Member Ristow stated that due to the proximity of her residence to the Tait Avenue property, she will abstain from voting on item five.

MOTION: Motion by Council Member Ristow to approve items one through four and six through ten. Seconded by Vice Mayor Moore.

VOTE: Motion passed a unanimous roll call vote.

MOTION: Motion by Vice Mayor Moore to approve item five. Seconded by Council Member Badame.

VOTE: Motion passed by a 4-0-1 roll call vote. Council Member Ristow abstained.

VERBAL COMMUNICATIONS
Ron Cassel
- Commented on safety concerns regarding street lighting.

Wayne Scott
- Commented on safety concerns regarding street lighting.

Manish Vaidya
- Commented on safety concerns regarding street lighting.

Member of the Public
- Commented on various concerns.

Member of the Public
- Commented on various individuals.

Susan Bassi
- Commented on concerns related to public records.

Joe Enz, Friends of the Los Gatos Creek
- Commented on the Police Department and the Los Gatos Creek.

Fred Berkowitz
- Commented on concerns with e-bikes.

PUBLIC HEARING

11. Accept the Planning Commission’s recommendation and introduce a an ordinance modifying Planned Development Ordinance 2025 to allow modifications to Building E, and adopt a Resolution approving the Architecture and Site application for exterior modifications to an existing commercial building in the University/Edelen Historic District,

ITEM NO. 3.

PAGE 4 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of October 7, 2025 DATE: October 7, 2025
and the Conditional Use Permit application for formula retail over 10,000 square feet and for a restaurant with alcohol service on property zoned C-2:LHP:PD, located at 31 University Avenue. Ordinance Title: An Ordinance of the Town Council of the Town of Los Gatos Amending Planned Development Ordinance 2025 to Allow Modifications to Building E at 50 University Avenue (Old Town Center). RESOLUTION 2025-053 Erin Walters, Senior Planner, presented the staff report.

Council discussed the item.

Mayor Hudes opened public comment.

Jordan Brown and Stu Wagner, applicant representatives, gave a presentation on the proposed project.

Scot Vallee, Federal Reality
- Commented in support of the approval of the project.

Jennifer Lin, Chamber of Commerce
- Commented in support of the approval of the project.

Alan Feinberg
- Commented on concerns with the design of the proposed project.

Susan Burnett
- Commented on concerns with the design of the proposed project.

Lee Fagot
- Commented on concerns with the proposed project.

Carin Yamamoto
- Commented on the addresses referenced for the project and the Conditional Use Permit.

Jim Foley
- Commented in support of the approval of the proposed project.

Maria Gerst
- Commented in support of the approval of the proposed project.

Susan Testa
- Commented in support of the approval of the proposed project.

Jeff Kreshek, Federal Reality

ITEM NO. 3.

PAGE 5 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of October 7, 2025 DATE: October 7, 2025
- Commented in support of the proposed project.

Jordan Brown, applicant representative, provided closing comments.

Mayor Hudes closed public comment.

Council Member Rennie disclosed that he received a presentation from the applicant.

Council asked questions and discussed the item.

MOTION: Motion by Council Member Badame to accept the Planning Commission’s recommendation and introduce a an ordinance modifying the Planned Development Ordinance 2025 to allow modifications to Building E, and adopt a Resolution approving the Architecture and Site application for exterior modifications to an existing commercial building in the University/Edelen Historic District, and the Conditional Use Permit application for formula retail over 10,000 square feet and for a restaurant with alcohol service on property zoned C-2:LHP:PD, located at 31 University Avenue. Seconded by Council Member Ristow.

VOTE: Motion passed unanimously by a roll call vote.

Mayor Hudes called a recess at 9:07 p.m.

Mayor Hudes reconvened the meeting at 9:23 p.m.

OTHER BUSINESS

12. Adopt a Resolution Establishing Standard Operating Provisions for Boards, Commissions, and Committees RECOMMENDATION: Adopt a resolution establishing standard operating provisions for Boards, Commissions, and Committees, including exhibits outlining commission-specific details. RESOLUTION 2025-054
Wendy Wood, Town Clerk, presented the staff report.

Council discussed the item.

Mayor Hudes opened public comment.

Jeff Suzuki
- Commented on concerns with reducing the size of commissions.

Gordon Yamate
- Commented on retaining the existing membership of the Diversity, Equity, and Inclusion (DEI) Commission.

ITEM NO. 3.

PAGE 6 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of October 7, 2025 DATE: October 7, 2025
Mayor Hudes closed public comment.

MOTION: Motion by Vice Mayor Moore to adjust the revisions to the enabling resolutions considered to have seven adults on the commissions impacted by this policy [Arts and Culture Commission, Community Health and Senior Services Commission, Library Board, Parks and Sustainability Commission, Complete Street and Transportation Commission, and DEI Commission]; and to keep seven adult designated DEI Commissioners plus the two liaison positions [nine total members], and change the required characteristics to be priority characteristics. Seconded by Council Member Ristow.

VOTE: Motion passed unanimously by a roll call vote.

13. Adopt a Resolution granting consent to the County of Santa Cruz to establish the Santa Cruz Mountain Wine Improvement District (SCMWID) and include the Town of Los Gatos within the District. RESOLUTION 2025-055
Monica Renn, Economic Vitality Manager, presented the staff report.

Keikilani McKay, representative from the Santa Cruz Mountain Wine Growers Association, provided additional information.

Council discussed the item.

Mayor Hudes opened public comment.

No one spoke.

Mayor Hudes closed public comment.

MOTION: Motion by Council Member Badame to adopt a resolution granting consent to the County of Santa Cruz to establish the Santa Cruz Mountain Wine Improvement District (SCMWID) and include the Town of Los Gatos within the District. Seconded by Council Member Ristow.

VOTE: Motion passed unanimously by roll call vote.

14. Adopt a Resolution to Modify Town Council Policy 1-08: “Transportation Impact Policy” to Update the Project List, Modify Charges for Affordable Housing, Allow for Charges on Accessory Dwelling Units (ADUs) in Excess of 750 Square Feet, and Adjust How Credits are Calculated. RESOLUTION 2025-056
Nicolle Whelan, Parks and Public Works Director, presented the staff report.

ITEM NO. 3.

PAGE 7 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of October 7, 2025 DATE: October 7, 2025
Council discussed the item.

Mayor Hudes opened public comment.

Manuel Salazar
- Commented in support of the item.

Mayor Hudes closed public comment.

MOTION: Motion by Council Member Ristow to adopt a resolution to modify Town Council Policy 1-08: “Transportation Impact Policy” to update the project list, modify charges for affordable housing, allow for charges on accessory dwelling units (ADUs) in excess of 750 square feet, and clarify how credits are calculated. Seconded by Vice Mayor Moore.

VOTE: Motion passed unanimously by roll call vote.

15. Pursuant to Assembly Bill 481, renew Ordinance Approving Military Equipment Funding, Acquisition, and Use Policy and Determine that Use of Military Equipment Identified in Annual Report Complies with Standards. RESOLUTION 2025-057 Rebecca Albin, Police Captain, presented the staff report.

Council discussed the item.

Mayor Hudes opened public comment.

No one spoke.

Mayor Hudes closed public comment.

MOTION: Motion by Council Member Badame that pursuant to Assembly Bill 481, [adopt a resolution] to renew an ordinance approving the Military Equipment Funding, Acquisition, and Use Policy and determine that use of military equipment identified in the annual report complies with standards. Seconded by Council Member Ristow.

VOTE: Motion passed unanimously by roll call vote.

COUNCIL/TOWN MANAGER REPORTS
Council Matters
- Vice Mayor Moore stated he spoke to the Lions Club and the History Club; visited the Hillbrook School; attended Saratoga’s State of the City, Supervisor Abe-Koga’s Wildfire

ITEM NO. 3.

PAGE 8 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of October 7, 2025 DATE: October 7, 2025
Summit, the Los Gatos Birdwatchers’ 30th Anniversary Celebration, the Los Gatos Art and Wine Festival, and the St. Mary’s Parish Country Fair.
- Council Member Ristow stated she attended the St. Mary’s Parish Country Fair. - Council Member Badame stated she participated in a Council Policy Committee meeting, a Silicon Valley Animal Control Authority (SVACA) meeting; met with individuals regarding Restoration Hardware; attended the St. Mary’s Parish Country Fair; and participated in a Study Session of the Finance Commission and Town Council. - Council Member Rennie stated he attended a Silicon Valley Clean Energy Authority (SVCEA) Risk Oversight Committee meeting.
- Mayor Hudes stated he observed the Diversity Equity and Inclusion (DEI) Commission meeting, participated in a Council Policy Committee meeting, Supervisor Abe-Koga’s Wildfire Summit, a Community Health and Senior Services Commission meeting, a Los Gatos Thrives Foundation meeting, a meeting hosted by Congressman Liccardo for the West Valley Mayors; spoke at the Leadership Los Gatos meeting; and participated in a Study Session of the Finance Commission and Town Council.

Town Manager Matters
- Stated he had nothing to report.

Closed Session Report
- Gabrielle Whelan, Town Attorney, stated that the Town Council met in closed session with regard to real property negotiations at 4 Tait, and the Town Council authorized the action that was taken on the consent calendar. With regard to the conference with legal counsel regarding anticipated litigation, there was no reportable action that was taken. With regard to the conference with legal counsel regarding anticipated litigation in terms of initiation of litigation, the Town Council authorized staff to potentially initiate litigation. The nature of the action, the defendants, and other particulars will be disclosed to any person upon inquiry once the actions have formally commenced, unless doing so would jeopardize service of process.

ADJOURNMENT
The meeting adjourned at 11:30 p.m.

Respectfully Submitted:
_____________________________________
Jenna De Long, Deputy Town Clerk

ITEM NO. 3.
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL CLOSED SESSION MINUTES
MEETING DATE: 10/21/2025
ITEM NO: 4
DRAFT
Minutes of the Town Council Special Meeting – Closed Session Tuesday, October 14, 2025
The Town Council of the Town of Los Gatos conducted a special meeting in person to hold a Closed Session.

MEETING CALLED TO ORDER AT APPROXIMATELY 6:15 P.M.

ROLL CALL

Present: Mayor Matthew Hudes, Vice Mayor Rob Moore, Council Member Mary Badame, Council Member Rob Rennie (participated remotely), and Council Member Maria Ristow.

Absent: None.

Gabrielle Whelan, Town Attorney, announced the closed session title as listed on the agenda.

VERBAL COMMUNICATIONS (ONLY ON ITEMS ON THE AGENDA)
Member of the Public
- Commented on litigation.

THE TOWN COUNCIL MOVED TO CLOSED SESSION ON THE FOLLOWING ITEMS:

1. CONFERENCE WITH REAL PROPERTY NEGOTIATOR (Government Code Section 54956.8) Property: 4 Tait Avenue Agency Negotiator(s): Chris Constantin, Town Manager; and Katy Nomura, Assistant Town Manager Negotiating Parties: Town of Los Gatos and Rob White Under Negotiation: Price and Terms of Payment

2. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION (Government Code §54956.9(d)(2)b) Significant exposure to litigation: 1 case

3. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION (Government Code Section 54956.9(d)(4) Initiation of litigation: 1 case.

There was no reportable action.

ADJOURNMENT
The meeting adjourned at approximately 8:38 p.m.

Attest: Submitted by:
___________________________ __________________________
Wendy Wood, Town Clerk Chris Constantin, Town Manager

ITEM NO. 4.

PREPARED BY: Eric Lemon
Finance and Accounting Manager
Reviewed by: Town Manager, Assistant Town Manager, 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: 10/21/2025
ITEM NO: 5
DATE: October 14, 2025
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Receive the Monthly Financial and Investment Report for August 2025 RECOMMENDATION: Receive the Monthly Financial and Investment Reports for August 2025.

FISCAL IMPACT:

There is no fiscal impact from the receipt of this report.

STRATEGIC PRIORITY:

This item aligns with the strategic priority to ensure prudent financial management.

BACKGROUND:

California Government Code Section 41004 requires that the Town Treasurer submit to the Town Clerk and the legislative body a written report and accounting of all receipts, disbursements, and fund balances. The Finance Director assumes the Town Treasurer role.

Attachment 1 contains the August 2025 monthly Financial and Investment Report, which fulfills this requirement.

The August 2025 Monthly Financial and Investment Report was received by the Finance Commission at its October 13, 2025, regular meeting.

ITEM NO. 5.

PAGE 2 OF 3
SUBJECT: Monthly Financial and Investment Report for August 2025 DATE: October 14, 2025
DISCUSSION:

The August 2025 Monthly Financial and Investment Report includes a Fund Balance Schedule, representing estimated funding available for all funds at the beginning of the fiscal year and at the end of the respective month.

As operations fluctuate month to month, there are differences between balances in one month and balances in another. Such differences may be significant due to the type of activity in those months and the timing of any estimates used in the presentation, based on the information available. This is demonstrated by the attached August 31, 2025, fund balance report.

In the case that the differences are extraordinary and unanticipated, we will ensure we present more information to explain the differences.

The difference between the August 31, 2025, and July 31, 2025, estimated fund balances is due to normal day-to-day fluctuations in revenues and expenditures.

Please note that the amount in the Fund Schedule differs from the Portfolio Allocation and Treasurer’s Cash Fund Balances Summary schedule because assets and liabilities are components of the Fund Balance.

As illustrated in the summary below, Ending Fund Balance = Cash + Assets - Liabilities, which represents the actual amount of funds available.

As of August 31, 2025, the Town’s financial position (Cash Plus Other Assets $90.38M, Liabilities $27.99, and Fund Equity $62.39) remains strong, and the Town has sufficient funds to meet the cash demands for the next six months.

As of August 31, 2025, the Town’s weighted portfolio yield for investments under management was 4.34%, which was 9 basis points above the Local Agency Investment Fund (LAIF) yield of

4.25% for the same reporting period. Currently, the LAIF portfolio’s weighted average maturity (WAM) is 247 days versus the Town’s longer WAM of 617 days. The Town’s assets under management reflect the Town’s selection of the 1-3 year benchmark investment strategy through the Town’s investment advisor to lock in higher yields at the top of the interest rate cycle. The longer maturities are balanced with shorter-term yields available on investments held with the State’s LAIF. The Town’s weighted average rate of return on investments under

ITEM NO. 5.

PAGE 3 OF 3
SUBJECT: Monthly Financial and Investment Report for August 2025 DATE: October 14, 2025
management of 4.34% at the close of August decreased 5 basis points when compared to the July investment report.

Since August 2024, LAIF yields decreased from 458 basis points (4.58%) to 425 basis points (4.25%) through the end of August 2025. The State LAIF pool typically lags the market when current market yields are either increasing or decreasing.

During the first three quarters of 2025, the Federal Open Market Committee (FOMC) implemented a single adjustment to the federal funds rate at its meeting on September 17. The Committee lowered the target range by 25 basis points to 4.00%–4.25%, citing subdued economic growth in the first half of the year and signs of softening in the labor market. This adjustment aligns with the FOMC's objective to promote maximum employment and achieve a year-over-year inflation target of 2%.

The US economy added 73,000 new jobs in July, with services job gains still concentrated in healthcare. The unemployment rate increased to 4.2% from 4.1% while the participation rate fell from 62.3% to 62.2%. Elsewhere, the 4-week average of initial jobless claims rose from 221,000 to 228,000 over the month, albeit it may have been subject to residual seasonality.

Continuing claims remained around cycle highs.

The Town's investments are in compliance with the Town's Investment Policy dated March 18, 2025, and are also in compliance with the requirements of Section 53600 et seq. of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months.

CONCLUSION:

Receive the Monthly Financial and Investment Report for August 2025.

Attachments:

1. Financial and Investment Report (August 2025)

ITEM NO. 5.

Weighted Average YTM Portfolio Yield on Investments
under Management 4.34%
Weighted Average Maturity (days) 617
This Month Last Month One year ago
Portfolio Allocation & Treasurer's Cash Balances $69,644,461 $70,742,567 $69,642,660 Managed Investments $52,058,138
Local Agency Investment Fund $12,339,746
Reconciled Demand Deposit Balances $5,246,576
Portfolio Allocation & Treasurer's Cash Balances $69,644,461 Benchmarks/ References:

Town's Average Yield 4.34% 4.39% 4.47%
LAIF Yield for month 4.25% 4.26% 4.58%
3 mo. Treasury 4.14% 4.34% 5.11%
6 mo. Treasury 3.96% 4.27% 4.86%
2 yr. Treasury 3.62% 3.96% 3.92%
5 yr. Treasury 3.70% 3.97% 3.70%
10 Yr. Treasury 4.23% 4.37% 3.90%
Town of Los Gatos
Summary Investment Information
August 31, 2025
0 - 1 year
40%
1 - 2 years
19%
2 - 3 years
20%
3 - 5 years
21%
Portfolio Maturity Profile
Compliance: The Town's investments are in compliance with the Town's investment policy dated March 18, 2025, and also in compliance with the requirements of Section 53600 at seq. of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months. 1 ATTACHMENT 1 Page 19
ITEM NO. 5.

Month YTD
Cash & Investment Balances - Beginning of Month/Period $ 70,742,567.26 $ 81,558,113.19 Receipts 4,030,367.55 15,698,848.88
Disbursements (5,128,474.20) (27,612,501.46)
Cash & Investment Balances - End of Month/Period $69,644,460.61 $69,644,460.61 Portfolio Allocation Amount % of Portfolio
Max. % or $ Allowed
per State Law or Policy
BNY MM $132,491.52 0.21% 20% of Town Portfolio
US Treasury Notes $20,812,257.84 32.32% No Max. on US Treasuries Government Agency Debenture Notes $16,361,904.41 25.41% No Max. on Non-Mortgage Backed Corporate Medium Term Bonds $14,751,484.50 22.91% 30% of Town Portfolio Local Agency Investment Fund $12,339,746.03 19.16% $75 M per State Law Subtotal - Investments 64,397,884.30 100.01%
Reconciled Demand Deposit Balances 5,246,576.31
Total Portfolio Allocation & Treasurer's Cash Balances $69,644,460.61

0.0401

0.0388
Town of Los Gatos
Portfolio Allocation & Treasurer's Cash Balances
August 31, 2025
BNY MM

0.21%
US Treasury Notes

32.32%
Government Agency Debenture
Notes

25.41%
Corporate Medium Term Bonds

22.91%
Local Agency Investment Fund

19.16%
Portfolio Investment Allocation
$69.6 M $69.6 M
$0.0 M
$10.0 M
$20.0 M
$30.0 M
$40.0 M
$50.0 M
$60.0 M
$70.0 M
$80.0 M
$90.0 M
Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Treasurer's Fund Balances
2

ITEM NO. 5.

August 2025 August 2025 August 2025
Beginning Deposits Interest/ Ending
Balance Realized Gain/Adj. Earnings Withdrawals Balance Non-Treasury Funds:

Cert. of Participation 2002 Ser A Reserve Fund $ 699,392.74 $ - $ 2,243.93 $ 13,141.74 $ 688,494.93 Note 1 Cert. of Participation 2010 Ser Lease Payment Fund 1,158,762.50 - 2,616.40 1,158,762.50 2,616.40 Note 2 Cert. of Participation 2002 Ser A Lease Payment Fund 583,924.93 13,141.74 1,109.98 583,875.00 14,301.65 Note 1 Cert. of Participation 2010 Ser Reserve Fund 1,281,709.28 - 4,479.09 - 1,286,188.37 Note 2 Total Restricted Funds: $ 3,723,789.45 $ 13,141.74 $ 10,449.40 $ 1,755,779.24 $ 1,991,601.35 CEPPT IRS Section 115 Trust 3,091,128.87 - 56,463.32 - $ 3,147,592.19 Note 3 Grand Total COP's and CEPPT Trust $ 6,814,918.32 $ 13,141.74 $ 66,912.72 $ 1,755,779.24 $ 5,139,193.54 These accounts are not part of the Treasurer's fund balances reported elsewhere in this report, as they are for separate and distinct entities.

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

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

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

Town of Los Gatos
Non-Treasury Restricted Fund Balances
August 31, 2025
3

ITEM NO. 5.

July 2025 $ 238,713.97
August 2025 $ 238,367.28
September 2025 $ -
October 2025 $ -
November 2025 $ -
December 2025 $ -
January 2026 $ -
February 2026 $ -
March 2026 $ -
April 2026 $ -
May 2026 $ -
June 2026 $ -
$ 477,081.25
Town of Los Gatos
Statement of Interest Earned
August 31, 2025
4

ITEM NO. 5.

Original Issue Market Value Maturity Yield to Interest Interest Interest Days Deposit Par Original (Discount) Market Above (Under) Purchased Date or Maturity Received Earned Earned to Institution CUSIP # Security Coupon Date Value Cost Premium Value Cost Interest Call Date or Call to Date Prior Yrs. Current FY Maturity Apple 037833DB3 Corporate Bond 2.90% 12/20/2022 1,300,000.00 1,228,591.00 (71,409.00) 1,279,200.00 50,609.00 6/21/2027 4.19% $ 83,987.22 $ 135,426.07 $ 9,096.88 659 Home Depot 437076BM3 Corporate Bond 3.00% 8/4/2022 1,000,000.00 991,960.00 (8,040.00) 993,180.00 1,220.00 1/1/2026 3.04% $ 79,750.00 $ 94,051.74 $ 5,495.95 123 FFCB 3133EN5V8 Gov. Agency Debenture 4.13% 1/17/2023 236,000.00 239,174.20 3,174.20 236,856.68 (2,317.52) 1/11/2027 3.76% $ 24,175.25 $ 21,918.24 $ 1,518.36 498 US Treasury 91282CBT7 US Treasury Note 0.75% 9/30/2022 800,000.00 712,565.18 (87,434.82) 785,384.00 72,818.82 3/31/2026 4.14% $ 15,000.00 $ 85,193.12 $ 5,260.93 212 FFCB 3133ENP95 Gov. Agency Debenture 4.25% 9/30/2022 900,000.00 900,939.60 939.60 899,883.00 (1,056.60) 9/30/2025 4.14% $ 95,625.00 $ 104,352.97 $ 6,444.11 30 JP Morgan Chase 46625HRS1 Corporate Bond 3.20% 9/23/2022 500,000.00 474,660.00 (25,340.00) 496,235.00 21,575.00 3/15/2026 4.70% $ 43,644.44 $ 64,505.94 $ 3,955.85 196 FHLB 3130AQF65 Gov. Agency Debenture 1.25% 11/30/2022 1,300,000.00 1,160,559.40 (139,440.60) 1,258,361.00 97,801.60 12/21/2026 4.15% $ 41,572.92 $ 130,709.25 $ 8,593.82 477 FHLB 3130APJH9 Gov. Agency Debenture 1.00% 1/17/2023 1,000,000.00 907,010.00 (92,990.00) 980,960.00 73,950.00 10/28/2026 4.17% $ 23,354.17 $ 84,829.28 $ 5,876.44 423 FFCB 3133EN5N6 Gov. Agency Debenture 4.00% 2/8/2023 1,700,000.00 1,706,732.00 6,732.00 1,711,152.00 4,420.00 1/6/2028 3.91% $ 163,955.56 $ 159,363.33 $ 11,317.90 858 Freddie Mac 3137EAEX3 Gov. Agency Debenture 0.38% 5/1/2023 750,000.00 689,032.50 (60,967.50) 748,282.50 59,250.00 9/23/2025 3.97% $ 5,328.12 $ 61,146.74 $ 4,792.79 23 American Honda 02665WED9 Corporate Bond 4.70% 5/11/2023 600,000.00 608,856.00 8,856.00 607,974.00 (882.00) 1/12/2028 4.34% $ 61,178.33 $ 56,288.41 $ 4,468.48 864 US Treasury 91282CEF4 US Treasury Note 2.50% 6/9/2023 1,500,000.00 1,416,626.12 (83,373.88) 1,472,400.00 55,773.88 3/31/2027 4.09% $ 67,827.87 $ 122,333.72 $ 10,086.02 577 US Treasury 91282CGA3 US Treasury Note 4.00% 6/20/2023 2,100,000.00 2,080,558.59 (19,441.41) 2,099,265.00 18,706.41 12/15/2025 4.40% $ 166,852.46 $ 186,379.78 $ 15,594.53 106 Colgate-Palmolive 194162AR4 Corporate Bond 4.60% 7/14/2023 500,000.00 504,655.00 4,655.00 509,390.00 4,735.00 2/1/2028 4.37% $ 37,502.79 $ 43,173.83 $ 3,733.30 884 FannieMae 3135G06G3 Gov. Agency Debenture 0.50% 7/14/2023 500,000.00 455,157.00 (44,843.00) 496,635.00 41,478.00 11/7/2025 4.63% $ 4,534.72 $ 42,871.33 $ 3,707.14 68 FFCB 3133EPQC2 Gov. Agency Debenture 4.63% 7/17/2023 500,000.00 501,957.50 1,957.50 503,070.00 1,112.50 7/17/2026 4.48% $ 46,250.00 $ 43,961.07 $ 3,817.35 320 FFCB 3133EPBM6 Gov. Agency Debenture 4.13% 7/14/2023 600,000.00 596,220.00 (3,780.00) 604,638.00 8,418.00 8/23/2027 4.29% $ 52,181.25 $ 50,424.13 $ 4,360.25 722 PNC Bank 69353RFJ2 Corporate Bond 3.25% 7/25/2023 1,000,000.00 921,490.00 (78,510.00) 984,110.00 62,620.00 12/23/2027 5.23% $ 64,729.17 $ 97,247.67 $ 8,540.16 844 US Treasury 91282CFU0 US Treasury Note 4.13% 7/31/2023 1,300,000.00 1,290,660.60 (9,339.40) 1,313,299.00 22,638.40 10/31/2027 4.31% $ 93,843.75 $ 107,052.11 $ 9,481.76 791 Toyota Motor Credit 89236TKL8 Corporate Bond 5.45% 8/25/2023 1,600,000.00 1,617,168.00 17,168.00 1,648,688.00 31,520.00 11/10/2027 5.16% $ 148,966.67 $ 153,725.55 $ 14,119.98 801 US Treasury 912810FE3 US Treasury Note 5.50% 10/3/2023 1,200,000.00 1,238,207.14 38,207.14 1,264,824.00 26,616.86 8/15/2028 4.76% $ 123,211.96 $ 101,335.84 $ 9,878.65 1080 Pepsico Inc 713448DF2 Corporate Bond 2.85% 10/16/2023 1,000,000.00 947,570.00 (52,430.00) 993,480.00 45,910.00 11/24/2025 5.24% $ 52,883.33 $ 91,065.84 $ 9,062.73 85 FFCB 3133EPUW3 Gov. Agency Debenture 4.75% 10/13/2023 1,000,000.00 994,338.00 (5,662.00) 1,008,420.00 14,082.00 9/1/2026 4.96% $ 65,708.33 $ 84,828.57 $ 8,401.55 366 US Treasury 91282CEW7 US Treasury Note 3.25% 10/16/2023 1,000,000.00 950,039.06 (49,960.94) 992,850.00 42,810.94 6/30/2027 4.73% $ 55,461.96 $ 78,477.53 $ 7,809.96 668 US Treasury 91282CEN7 US Treasury Note 2.75% 10/31/2023 1,300,000.00 1,214,336.39 (85,663.61) 1,280,448.00 66,111.61 4/30/2027 4.82% $ 53,625.00 $ 100,336.49 $ 10,231.68 607 US Treasury 91282CCH2 US Treasury Note 1.25% 12/21/2023 900,000.00 798,647.55 (101,352.45) 843,750.00 45,102.45 6/30/2028 3.99% $ 17,180.71 $ 51,319.84 $ 5,712.44 1034 FNMA 3135G0Q22 Gov. Agency Debenture 1.88% 12/21/2023 900,000.00 845,676.00 (54,324.00) 881,010.00 35,334.00 9/24/2026 4.22% $ 21,234.38 $ 55,770.03 $ 6,207.80 389 US Treasury 91282CFB2 US Treasury Note 2.75% 1/2/2024 1,000,000.00 960,354.91 (39,645.09) 983,400.00 23,045.09 7/31/2027 3.95% $ 43,417.12 $ 57,605.73 $ 6,553.31 699 US Treasury 91282CHE4 US Treasury Note 3.63% 1/17/2024 1,800,000.00 1,775,185.72 (24,814.28) 1,801,188.00 26,002.28 5/31/2028 3.97% $ 89,317.63 $ 102,986.91 $ 12,047.52 1004 JP Morgan Chase 46647PDG8 Corporate Bond 4.85% 2/1/2024 1,400,000.00 1,396,528.00 (3,472.00) 1,417,066.00 20,538.00 7/25/2027 4.93% $ 100,739.10 $ 97,231.80 $ 11,705.58 693 US Bancorp 91159HJF8 Corporate Bond 4.55% 2/5/2024 1,000,000.00 989,200.00 (10,800.00) 1,006,700.00 17,500.00 7/22/2027 4.89% $ 66,577.67 $ 68,041.60 $ 8,255.54 690 Treasury 91282CHB0 US Treasury Note 3.63% 2/23/2024 1,175,000.00 1,151,962.92 (23,037.08) 1,172,379.75 20,416.83 5/15/2026 4.56% $ 52,189.05 $ 71,517.53 $ 8,994.09 257 FHLB 3130AXB31 Gov. Agency Debenture 4.88% 2/27/2024 1,000,000.00 1,003,060.00 3,060.00 1,004,640.00 1,580.00 3/13/2026 4.72% $ 51,729.17 $ 63,303.13 $ 8,026.16 194 FFCB 3133EP5U5 Gov. Agency Debenture 4.13% 3/28/2024 1,700,000.00 1,687,981.00 (12,019.00) 1,724,803.00 36,822.00 3/20/2029 4.28% $ 68,566.67 $ 91,219.09 $ 12,321.53 1297 US Treasury 9128285M8 US Treasury Note 3.13% 4/30/2024 1,200,000.00 1,123,832.14 (76,167.86) 1,182,660.00 58,827.86 11/15/2028 4.69% $ 39,045.34 $ 63,313.82 $ 9,214.69 1172 Cisco Systems 17275RBR2 Corporate Bond 4.85% 5/15/2024 1,000,000.00 999,130.00 (870.00) 1,026,890.00 27,760.00 1/26/2029 4.87% $ 62,106.94 $ 54,820.58 $ 8,269.77 1244 Home Depot 437076CW0 Corporate Bond 4.90% 5/17/2024 1,000,000.00 1,001,790.00 1,790.00 1,030,090.00 28,300.00 4/15/2029 4.86% $ 44,644.44 $ 54,498.76 $ 8,261.43 1323 Treasury 91282CJR3 US Treasury Note 3.75% 5/31/2024 1,200,000.00 1,154,629.02 (45,370.98) 1,205,160.00 50,530.98 12/31/2028 4.68% $ 48,708.79 $ 59,398.06 $ 9,323.24 1218 American Honda 02665WEY3 Corporate Bond 4.95% 6/27/2024 1,000,000.00 995,640.00 (4,360.00) 1,001,900.00 6,260.00 1/9/2026 5.25% $ 51,287.50 $ 52,766.88 $ 8,890.07 131 FHLB 3130B1BT3 Gov. Agency Debenture 4.88% 7/2/2024 1,150,000.00 1,150,966.00 966.00 1,156,980.50 6,014.50 6/12/2026 4.82% $ 47,341.67 $ 55,261.42 $ 9,438.59 285 Citibank 17325FBK3 Corporate Bond 4.84% 8/15/2024 1,250,000.00 1,263,062.50 13,062.50 1,280,812.50 17,750.00 7/6/2029 4.60% $ 58,963.12 $ 50,520.38 $ 9,819.01 1405 FNMA 3135G05Y5 Gov. Agency Debenture 0.75% 9/10/2024 1,100,000.00 1,010,724.00 (89,276.00) 1,036,398.00 25,674.00 10/8/2027 3.56% $ 4,766.67 $ 29,915.45 $ 6,330.23 768 US Treasury 91282CFL0 US Treasury Note 3.88% 12/3/2024 1,100,000.00 1,088,144.31 (11,855.69) 1,109,493.00 21,348.69 9/30/2029 4.12% $ 13,817.99 $ 25,813.46 $ 7,657.58 1491 FHLB 3130ATUT2 Gov. Agency Debenture 4.50% 2/12/2025 505,000.00 508,253.21 3,253.21 519,150.10 10,896.89 12/14/2029 4.35% $ 7,701.25 $ 8,337.70 $ 3,745.92 1566 FFCB 3133ER5X5 Gov. Agency Debenture 3.88% 3/12/2025 1,000,000.00 998,480.00 (1,520.00) 1,004,330.00 5,850.00 538.19 3/7/2028 3.93% $ (538.19) $ 11,831.34 $ 6,668.57 919 Treasury 91282CJF9 US Treasury Note 4.88% 3/31/2025 1,100,000.00 1,130,167.75 30,167.75 1,141,338.00 11,170.25 10/31/2028 4.04% $ 4,444.06 $ 11,273.90 $ 7,681.12 1157 State Street Corp 857477CD3 Corporate Bond 5.27% 4/30/2025 800,000.00 811,184.00 11,184.00 807,056.00 (4,128.00) 8/3/2026 4.04% $ 10,895.47 $ 5,565.50 $ 5,656.73 337 Freddie Mac 3134HAW33 Gov. Agency Debenture 4.75% 4/30/2025 1,000,000.00 1,005,644.00 5,644.00 1,005,480.00 (164.00) 12/18/2029 4.23% $ 6,993.07 $ 7,735.00 $ 7,861.80 1570 US Treasury 91282CNG2 US Treasury Note 4.00% 6/30/2025 660,000.00 665,184.24 5,184.24 668,949.60 3,765.36 2,163.92 5/31/2030 3.82% $ (2,163.92) $ - $ 4,305.42 1734 US Treasury 91282CMG3 US Treasury Note 4.25% 8/4/2025 825,000.00 842,308.43 17,308.43 844,206.00 1,897.57 381.11 1/31/2030 3.74% $ (381.11) $ - $ 2,308.88 1614 US Treasury 91282CMA6 US Treasury Note 4.13% 8/25/2025 1,200,000.00 1,218,847.77 18,847.77 1,221,660.00 2,812.23 11,631.14 11/30/2029 3.72% $ (11,631.14) $ - $ 741.11 1552 Subtotal $ 53,151,000.00 $ 51,925,646.75 $ (1,225,353.25) $ 53,246,475.63 $ 1,320,828.88 $ 14,714.36 $ 2,568,103.72 $ 3,451,046.46 $ 381,644.73 BNY MM Money Market 132,491.52 132,491.52 0.00 0.00% 1
LAIF State Investment Pool 12,339,746.03 12,354,532.87 14,786.84 4.25% 87,427.10 1 64,397,884.30 $65,733,500.02 $1,335,615.72 $14,714.36 $ 2,568,103.72 $ 3,451,046.46 $ 469,071.83 Matured Assets
US Treasury 91282CAB7 US Treasury Note 0.25% 11/15/2023 675,000.00 623,900.39 (51,099.61) 7/31/2025 4.92% $ 2,884.34 $ 51,302.62 $ 2,681.92 FHLB 3135G05X7 Gov. Agency Debenture 0.38% 6/10/2022 1,200,000.00 1,102,952.40 (97,047.60) 8/25/2025 3.04% $ 14,437.50 $ 106,169.42 $ 5,327.50 Total Investments "Matured" $ 8,009.42
Total Interest FY 24_25 Matured and Current $ 477,081.25 Maturity Profile Amount Percent
0-1 year $ 25,339,450.84 39%
1-2 years $12,302,433.08 19%
2-3 years $13,067,026.01 20%
3-5 years $ 13,688,974.37 21%
$64,397,884.30 100%
Town of Los Gatos
Investment Schedule
August 31, 2025
5

ITEM NO. 5.

Date Cusip/Id Description Transaction Type Trade Date Settlement Date Par Coupon Maturity Date Price Principal Interest Transaction
Total
8/4/2025 91282CMG3 USA TREASURY 4.25% 31JAN2030 PURCHASE 8/1/2025 8/4/2025 825,000.00 4.250% 1/31/2030 102.10 842,308.43 381.11 842,689.54 8/4/2025 857477CD3
STATE STREET CORP 5.272% 03AUG2026
(CALLABLE 03JUL26) BOND INTEREST 8/3/2025 8/3/2025 800,000.00 5.272% 8/3/2026 - - 21,088.00 21,088.00 8/4/2025 Cash-USD Cash-USD

SHORT TERM INVESTMENT
FUND INCOME 8/4/2025 8/4/2025 425.56 0.000% 100.00 - - 425.56 8/6/2025 17325FBK3
CITIBANK NA 4.838% 06AUG2029
(CALLABLE 06JUL29) BOND INTEREST 8/6/2025 8/6/2025 1,250,000.00 4.838% 8/6/2029 - - 30,237.50 30,237.50 8/15/2025 912810FE3 USA TREASURY 5.5% 15AUG2028 BOND INTEREST 8/15/2025 8/15/2025 1,200,000.00 5.500% 8/15/2028 - - 33,000.00 33,000.00 8/25/2025 91282CMA6 USA TREASURY 4.125% 30NOV2029 PURCHASE 8/22/2025 8/25/2025 1,200,000.00 4.125% 11/30/2029 101.57 1,218,847.77 11,631.14 1,230,478.91 8/25/2025 3133EPBM6
FEDERAL FARM CREDIT BANK 4.125%
23AUG2027 BOND INTEREST 8/23/2025 8/23/2025 600,000.00 4.125% 8/23/2027 - - 12,375.00 12,375.00 8/25/2025 713448DF2
PEPSICO INC 2.85% 24FEB2026
(CALLABLE 24NOV25) BOND INTEREST 8/24/2025 8/24/2025 1,000,000.00 2.850% 2/24/2026 - - 14,250.00 14,250.00 8/25/2025 3135G05X7 FANNIE MAE 0.375% 25AUG2025 BOND INTEREST 8/25/2025 8/25/2025 1,200,000.00 0.000% 8/25/2025 - - 2,250.00 2,250.00 8/25/2025 3135G05X7 FANNIE MAE 0.375% 25AUG2025 REDEMPTION 8/25/2025 8/25/2025 1,200,000.00 0.000% 8/25/2025 100.00 1,200,000.00 - 1,200,000.00 8/26/2025 17275RBR2
CISCO SYSTEMS INC 4.85% 26FEB2029
(CALLABLE 26JAN29) BOND INTEREST 8/26/2025 8/26/2025 1,000,000.00 4.850% 2/26/2029 - - 24,250.00 24,250.00 Town of Los Gatos
Investment Transaction Detail
August 31, 2025
6

ITEM NO. 5.

CUSIP Security description Maturity
date Par/Shares Total market value ($) S&P rating Moody's rating Insight ESG
rating Environment Social Governance
02665WEY3 AMERICAN HONDA FINANCE 4.95% 09JAN2026 1/9/2026 1,000,000 1,009,081 A- A3 3 3 4 3 02665WED9 AMERICAN HONDA FINANCE 4.7% 12JAN2028 1/12/2028 600,000 611,887 A- A3 3 3 4 3 037833DB3 APPLE INC 2.9% 12SEP2027 (CALLABLE 12JUN27) 9/12/2027 1,300,000 1,297,043 AA+ Aaa 5 2 5 5 17275RBR2 CISCO SYSTEMS INC 4.85% 26FEB2029 (CALLABLE 26JAN29) 2/26/2029 1,000,000 1,027,775 AA- A1 2 1 3 3 17325FBK3 CITIBANK NA 4.838% 06AUG2029 (CALLABLE 06JUL29) 8/6/2029 1,250,000 1,285,483 A+ Aa3 3 1 2 4 194162AR4 COLGATE-PALMOLIVE CO 4.6% 01MAR2028 (CALLABLE 01FEB28) 3/1/2028 500,000 521,037 A+ Aa3 3 3 3 3 437076CW0 HOME DEPOT INC 4.9% 15APR2029 (CALLABLE 15MAR29) 4/15/2029 1,000,000 1,048,881 A A2 3 3 3 2 437076BM3 HOME DEPOT INC 3% 01APR2026 (CALLABLE 01JAN26) 4/1/2026 1,000,000 1,005,751 A A2 3 3 3 2 46625HRS1 JPMORGAN CHASE & CO 3.2% 15JUN2026 (CALLABLE 15MAR26) 6/15/2026 500,000 499,656 A A1 3 2 3 4 46647PDG8 JPMORGAN CHASE & CO 4.851% 25JUL2028 (CALLABLE 25JUL27) 7/25/2028 1,400,000 1,424,119 A A1 3 2 3 4 713448DF2 PEPSICO INC 2.85% 24FEB2026 (CALLABLE 24NOV25) 2/24/2026 1,000,000 994,059 A+ A1 3 2 2 4 69353RFJ2 PNC BANK NA 3.25% 22JAN2028 (CALLABLE 23DEC27) 1/22/2028 1,000,000 987,861 A A2 3 3 3 3 857477CD3 STATE STREET CORP 5.272% 03AUG2026 (CALLABLE 03JUL26) 8/3/2026 800,000 810,433 A Aa3 2 1 2 2 89236TKL8 TOYOTA MOTOR CREDIT CORP 5.45% 10NOV2027 11/10/2027 1,600,000 1,675,270 A+ A1 3 1 2 5 91159HJF8 US BANCORP 4.548% 22JUL2028 (CALLABLE 22JUL27) 7/22/2028 1,000,000 1,011,819 A A3 3 3 4 3 Total Corporate / weighted average 14,950,000 15,210,154 3 2 3 3 ESG ratings are from 1 to 5, with 1 as the highest rating and 5 as the lowest. All ratings are weighted by industry rankings, based on the importance of the category within the individual industry

TOWN OF LOS GATOS, CA
Insight ESG ratings as of August 31, 2025
7

ITEM NO. 5.

Fund Schedule
Fund
Number Fund Description
Current
Revenue
Current
Expenditure
Transfer
In
Transfer
Out

GENERAL FUND
Non-Spendable:

Loans Receivable 159,000 - - - - - 159,000
Restricted Fund Balances:

Pension 2,188,659 - - - - - 2,188,659
Land Held for Resale 344,338 - - - - - 344,338
Committed Fund Balances:

Budget Stabilization 6,736,781 - - - - - 6,736,781
Catastrophic 6,736,781 - - - - - 6,736,781
Pension/OPEB 300,000 - - - - - 300,000
Measure G District Sales Tax 590,581 - - - - - 590,581
Assigned Fund Balances:

Open Space 410,000 - - - - - 410,000
Sustainability 140,553 - - - - - 140,553
Capital/Special Projects 8,651,059 - - - - - 8,651,059
Carryover Encumbrances 85,861 - - - - - 85,861
Compensated Absences 1,555,478 - - - - - 1,555,478
ERAF Risk Reserve 1,430,054 - - - - - 1,430,054
Market Fluctuations 1,712,246 - - - - - 1,712,246
Council Priorities - Economic Recovery 20,684 - - - - - 20,684 Unassigned Fund Balances:
111 Other Unassigned Fund Balance Reserve (Pre YE distribution) 4,605,391 (2,146,620) 2,888,216 (3,475,118) - - 1,871,869 General Fund Total 35,667,466 (2,146,620) 2,888,216 (3,475,118) - - 32,933,944 * Interfund transfers and Council Priorities/Economic Recovery funding allocation to be performed as part of the fiscal year end closing entries.

August 2025 Prior Year
Carryforward
7/1/2025*
Increase/
(Decrease)
July
Estimated Fund
Balance
8/31/2025*
8

ITEM NO. 5.

Fund Schedule
Fund
Number Fund Description
Current
Revenue
Current
Expenditure
Transfer
In
Transfer
Out

SPECIAL REVENUE
211/212 CDBG 166,653 - - - - - 166,653
222 Urban Runoff (NPDES) 664,168 (13,416) 34,173 (10,640) - - 674,285 231-236 Landscape & Lighting Districts 193,606 908 - (2,057) - - 192,457 251 Los Gatos Theatre 392,180 14,855 15,070 (7,120) - - 414,985 261-264,269 Library Trusts 559,745 (3,593) 70,230 (7,982) - - 618,400 Special Revenue Total 1,976,352 (1,246) 119,473 (27,799) - - 2,066,780

CAPITAL PROJECTS
411 GFAR - General Fund Appropriated Reserve 17,289,616 130,845 89,953 (263,235) - - 17,247,179 412 Community Center Development 819,604 - - - - - 819,604 421 Grant Funded Projects (1,730,651) (283,230) 283,230 (292,361) - - (2,023,012) 461-463 Storm Basin Projects 2,825,234 16,444 39,568 (18,291) - - 2,862,955 471 Traffic Mitigation Projects 676,482 - - - - - 676,482 472 Utility Undergrounding Projects 3,763,913 - - - - - 3,763,913 481 Gas Tax Projects 2,130,548 156,215 167,434 - - - 2,454,197 Capital Projects Total 25,774,746 20,274 580,185 (573,887) - - 25,801,318

INTERNAL SERVICE FUNDS
611 Town General Liability 148,746 (1,466,790) - (2,595) - - (1,320,639) 612 Workers Compensation 1,259,972 (458,963) 13,421 (57,137) - - 757,293 621 Information Technology 2,514,895 (227,658) 6,796 (113,655) - - 2,180,378 631 Vehicle & Equipment Replacement 3,890,428 - - - - - 3,890,428 633 Facility Maintenance 881,111 (17,429) 9,070 (132,126) - - 740,626 Internal Service Funds Total 8,695,152 (2,170,840) 29,287 (305,513) - - 6,248,086 Trust/Agency
942 RDA Successor Agency (2,916,323) (1,742,724) - (129) - - (4,659,176) Trust/Agency Fund Total (2,916,323) (1,742,724) - (129) - - (4,659,176) Total Town 69,197,393 (6,041,156) 3,617,161 (4,382,446) - - 62,390,952 * Interfund transfers and Council Priorities/Economic Recovery funding allocation to be performed as part of the fiscal year end closing entries.

Deposit Accounts of Interest:
111-23541 General Plan Update deposit account balance $482,196.38 111-23521 BMP Housing deposit account balance $3,723,190.79 Prior Year
Carryforward
7/1/2025*
Increase/
(Decrease)
July
August 2025 Estimated Fund
Balance
8/31/2025*
9

ITEM NO. 5.

PREPARED BY: Erin M. Walters
Senior Planner
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Community Development Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 10/21/2025
ITEM NO: 6
DATE: October 16, 2025
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Adopt an Ordinance of the Town Council of the Town of Los Gatos Amending Planned Development Ordinance 2025 to Allow Modifications to Building E at 50 University Avenue (Old Town Center) on Property Zoned C-2:LHP:PD. Building E is Located at 31 University Avenue Within the Old Town Center. APN 529-02-044. Planned Development Modification Application PD-25-001. Categorically Exempt Pursuant to CEQA Guidelines Section 15301: Existing Facilities. Property Owner: SRI Old Town, LLC.

Applicant: Rick Nelson, MBH Architects. Project Planner: Erin Walters.

Ordinance Title: An Ordinance of the Town Council of the Town of Los Gatos Amending Planned Development Ordinance 2025 to Allow Modifications to Building E at 50 University Avenue (Old Town Center).

RECOMMENDATION: Adopt an Ordinance of the Town Council of the Town of Los Gatos modifying Planned Development Ordinance 2025 to allow
modifications to Building E at 50 University Avenue (Old Town Center) on property zoned C-2:LHP:PD. Building E is located at 31 University Avenue within the Old Town Center.

FISCAL IMPACT:

There is no fiscal impact associated with this action. Modifying a Planned Development (PD) Ordinance does not in itself result in an impact on the Town’s budget.

STRATEGIC PRIORITY:

The proposed project aligns with the adopted Core Goal of Community Character and the Strategic Priority to foster the economic vitality of businesses in Town.

ITEM NO. 6.

PAGE 2 OF 2
SUBJECT: 31 University Avenue/PD-25-001
DATE: October 16, 2025
BACKGROUND:

On October 7, 2025, the Town Council considered and voted unanimously to introduce an Ordinance modifying Planned Development Ordinance 2025 to allow modifications to Building E at 50 University Avenue (Old Town Center).

The Planned Development Ordinance 2025 references the address of 50 University Avenue, which includes all properties associated with the Old Town Center development. The applicant for the PD modification is located at 31 University Avenue (APN 529-02-044), Building E, a building located within the Old Town Center.

The Ordinance will amend the Planned Development Ordinance 2025 to remove the following requirements that Building E:
 Design structure to appear to be a collective of individual structures that abut each other;  The roof design be reflective of the individual structures (break-up rooflines); and  The corner tower be redesigned into a clipped corner design.

These modifications apply only to Building E, 31 University Avenue, within the Planned Development zoning and do not affect other buildings within the Old Town Center.

Adoption of the ordinance (Attachment 1) would finalize the decision. The Ordinance will take effect 30 days after its adoption.

RECOMMENDATION:

Staff recommends that the Town Council Adopt the attached Ordinance effecting the zone change (Attachment 1).

COORDINATION:

This report was coordinated with the offices of the Town Manager and Town Attorney.

ENVIRONMENTAL ASSESSMENT:

This is a project as defined under CEQA, but is Categorically Exempt, Section 15301: Existing Facilities. No significant effect on the environment will occur since the project uses an existing structure with no increase in floor area. A Notice of Exemption will not be filed.

ATTACHMENTS:

1. Draft Planned Development Ordinance

ITEM NO. 6.

This Page
Intentionally
Left Blank

ITEM NO. 6.

ORDINANCE NO.

AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AMENDING PLANNED DEVELOPMENT ORDINANCE 2025

TO ALLOW MODIFICATIONS TO BUILDING E
AT 50 UNIVERSITY AVENUE (OLD TOWN CENTER).

THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS FOLLOWS:

WHEREAS, on December 16, 1996, the Town Council adopted Planned Development (PD) Ordinance 2025, amending the zoning ordinance effecting a zone change from C-2:LHP (Commercial Business District, Landmark and Historic Preservation Overlay Zone) to C-2:LHP:PD (Commercial Business District, Landmark and Historic Preservation Overlay Zone, Planned Development) at 50 University Avenue, Old Town commercial center; and WHEREAS, The PD Ordinance 2025 authorized the redevelopment of Old Town commercial center, including the construction of several new buildings, among them Building E; and
WHEREAS, the construction of Building E, located in the Old Town commercial center, was completed in 1999; and
WHEREAS, in January 2025, the applicant, RH, applied for a modification to the existing PD Ordinance to allow modifications to Building E; and
WHEREAS, the Historic Preservation Committee held a public meeting on February 26, 2025, at which time the Committee reviewed the proposed exterior modifications to Building E, continued the item for further consideration, and provided feedback to the applicant’s team; and WHEREAS, the Historic Preservation Committee held a public meeting on March 26, 2025, at which time the Committee reconsidered the proposed exterior modifications to Building E and forwarded a recommendation of denial to the Planning Commission as they were not able to make the findings for approving applications in historic districts; and WHEREAS, the Planning Commission held a duly noticed public hearing on August 27, 2025, at which time the Commission considered the public testimony, the Staff Report prepared for that meeting, and all other documentation related to the PD Amendment, made findings and forwarded a recommendation of approval to the Town Council; and WHEREAS, the amendments are consistent with the General Plan and its Elements; and WHEREAS, the amendments are consistent with Chapter 29, “Zoning Regulations” of the Town Code.

Draft Ordinance to be
modified by Town
Council deliberations
and direction.

ATTACHMENT 1

ITEM NO. 6.

NOW, THEREFORE, BE IT ORDAINED, by the Town Council of the Town of Los Gatos as follows:

SECTION I. Findings.

The Town Council of the Town of Los Gatos does hereby declare, determine, and order that the following findings are made by the Town Council of the Town of Los Gatos:

Finding for the California Environmental Quality Act (CEQA):

1. The project is Categorically Exempt pursuant to the adopted Guidelines for the Implementation of the California Environmental Quality Act, Sections 15301: Existing Facilities.

No significant effect on the environment will occur since the project uses an existing structure with no increase in floor area.

Finding for Compliance with the Town Code for granting a Planned Development Overlay Zone:

As required by Section 29.80.095 of the Town Code for granting a Planned Development Overlay Zone, the proposed amendment:

1. Is consistent with Chapter 29, Article VIII, Division 2 of the Town Code in that it meets the purpose and intent of a Planned Development Overlay Zone;

2. Is in conformance with the goals, policies, and applicable land use designations and standards of the Town’s General Plan, including but not limited to Policy LU-1.4;

3. Is in conformance with all other applicable provisions of the Town Code, including Town Council adopted guidelines, except as otherwise modified through the Planned Development process; and

4. Includes development standards or uses that deviate from the underlying zoning in a way that results in innovative site planning and provides public benefit to the citizens of the Town by providing additional dining opportunities, availability of goods and services, and tax revenue.

Finding for consistency with the Town’s General Plan:

1. That the amendment to the Planned Development Overlay is consistent with the General Plan and its Elements, including but not limited to Policy LU-1.4; and that the amendment to the Planned Development Overlay zoning is consistent with the existing General Plan designation.

SECTION II. Planned Development Overlay Zone.

The Town Code of the Town of Los Gatos is hereby amended to change zoning on property located at 50 University Avenue (APN 529-02-044) as shown on the map attached hereto as

ITEM NO. 6.

Exhibit A, as and is part of this Ordinance, from C-2:LHP:PD to C-2:LHP:PD. Ordinance 2025, passed and adopted by the Town Council of Los Gatos on December 16, 1996, remains in effect with the following amendments to Performance Standard 15 of Section V of Ordinance 2025:

15. BUILDING E. During the architecture and site approval process Building E shall be modified as follows:
a. Open up the center pathway. Building could be moved closer to the South property line to increase width of pathway.
b. Provide more variety in the buildings.

SECTION III. Severability.

In the event that a court of competent jurisdiction holds any Section, subsection, paragraph, sentence, clause, or phrase in this Ordinance unconstitutional, preempted, or otherwise invalid, the invalid portion shall be severed from this Section and shall not affect the validity of the remaining portions of this Section. The Town hereby declares that it would have adopted each Section, subsection, paragraph, sentence, clause, or phrase in this Section irrespective of the fact that any one or more Sections, subsections, paragraphs, sentences, clauses or phrases in this Section might be declared unconstitutional, preempted, or otherwise invalid.

SECTION IV. CEQA.

Adopting this Ordinance is not a project subject to CEQA because it can be seen with certainty that it will not impact the environment (CEQA Guidelines Section 15378).

SECTION V. Publication.

The Town Council hereby directs the City Clerk to cause this Ordinance or a summary thereof to be published or posted in accordance with Section 36933 of the Government Code of the State of California.

ITEM NO. 6.

SECTION VI. Effective Date.

In accordance with Section 36937 of the Government Code of the State of California, this Ordinance takes effect 30 days from the date of its passage. This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los Gatos on the 7th day of October 2025, and adopted by the Town Council of the Town of Los Gatos at its regular meeting on the 21st day of October 2025, 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. 6.

UNIVERSITY AV
ELM ST
SB HIGHWAY 17

W MAIN ST
NB HIGHWAY 17

MULLEN AV

STATION WY

EDELEN AV

LUNDY LN

N CREEK TRAIL

MILL ST

N SANTA CRUZ AV

TOWN OF LOS GATOS
Application No.

Change of zoning map amending the Town Zoning Ordinance.

Zone Change
Prezoning
From: C-2:LHP:PD To: C-2:LHP:PD
PD-25-001 A.P.N. # 529-02-044
Forwarded by Planning Commission
Approved by Town Council
Clerk Administrator:

Date:

Mayor:

Date:

Ord:
§
ATTACHMENT 1

EXHIBIT A

ITEM NO. 6.

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

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 10/21/2025
ITEM NO: 7
DATE: October 16, 2025
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Authorize the Town Manager to Negotiate and Execute an Agreement with NHA Advisors, LLC (NHA) to deliver Fiscal Condition Analysis, Fiscal Impact Analysis, Asset Liability Management, and Wildfire Risk Mitigation Studies, including any optional services as directed by the Town Council, in the Amount Not to Exceed Amount of $250,500 and Authorize an Expenditure Budget Adjustment up to $250,500 from the Available Unassigned fund Balance
RECOMMENDATION: Authorize the Town Manager to enter into an Agreement with NHA Advisors, LLC (NHA) to deliver Fiscal Condition Analysis, Fiscal Impact Analysis, Asset Liability Management, and Wildfire Risk Mitigation Studies including any optional services as directed by the Town Council, in the not to exceed amount of $250,500; and authorize an Expenditure Budget Adjustment of $250,500 from the available Unassigned fund Balance.

FISCAL IMPACT:

The requested budget adjustment in the amount of $250,500 will reduce the Town’s Unassigned Fund Balance. This amount reflects the full cost of all proposed services, including optional components. The final agreement amount may be lower, depending on the specific services selected by the Town Council.

STRATEGIC PRIORITY:

This initiative supports the Town’s strategic priority of ensuring prudent financial management to result in structurally balanced five-year forecasts and fully funded five-year Capital Improvement Plans, managing liabilities such as pension costs and leveraging the Town’s assets, efficiencies, partnerships, and revenue streams. The study is a material component in identifying the path to support this priority.

ITEM NO. 7.

PAGE 2 OF 6
SUBJECT: Authorize the Town Manager to Negotiate and enter into Agreement with NHA DATE: October 14, 2025
This initiative supports the Town’s core goals of:
 Fiscal Stability: Providing independent, data-driven forecasts and risk assessments to ensure sustainable financial planning.
 Community Character: Evaluating fiscal impacts of growth to balance economic vitality with quality-of-life considerations.
 Good Governance: Developing clear, auditable tools for decision-making and aligning long-term fiscal strategies with policy objectives.

BACKGROUND:

At its meeting on April 14, 2025, the Finance Commission discussed draft scopes of work for a Fiscal Impact Analysis and a Fiscal Condition Analysis with a Five-Year Projection. After reviewing the objectives and overlaps between the two scopes, the Commission recommended consolidating them into a single RFP process with three separate line items: (1) Fiscal Condition Analysis and Five-Year Forecast, (2) Long-Term Outlook to 2040 aligned with the General Plan and Housing Element, and (3) a standalone Asset Liability Management Study.

The Commission emphasized scenario planning, stakeholder engagement, transparency in methodology, and clear articulation of questions to be addressed regarding the Town’s shortand long-term fiscal condition and the fiscal impacts of projected development under the 2040 General Plan and Housing Element. Based on the Commission’s feedback, staff prepared a draft RFP (Attachment 2), which was approved on August 11, 2025. The RFP was issued on August 20, 2025, and closed on September 22, 2025. Responses to questions were posted publicly (Attachment 3).

DISCUSSION:

The Town received five proposals in response to the RFP. While the RFP did not require firms to address all three studies, it was encouraged where feasible. Of the five proposals submitted, two firms did not demonstrate experience in the State of California.

Three staff members independently reviewed and evaluated the proposals, ranking them based on quality. Upon comparison, the rankings were found to be consistent across all three reviewers. NHA ranked the highest with the reviewers. The highest-ranked firm submitted proposals for all three studies and also included an optional Fire Risk Assessment Study (Attachment 1). If the Council wishes to include this additional study, staff will work with the firm to determine the most appropriate level of optional services for the Town.

NHA Advisors, LLC submitted a proposal to provide Study 1: Fiscal Condition Analysis and Study 2: Fiscal Impact Analysis for the Town of Los Gatos. Their proposal represents a collaborative effort among three experienced firms:
 NHA Advisors, LLC – Lead advisor and project manager for Studies 1 and 2

ITEM NO. 7.

PAGE 3 OF 6
SUBJECT: Authorize the Town Manager to Negotiate and enter into Agreement with NHA DATE: October 14, 2025
 Raftelis Financial Consultants, Inc. – Subconsultant for Study 1  Willdan – Subconsultant for Study 2
NHA has previously worked with both Raftelis and Willdan on similar projects in California.

Their approach emphasizes collaboration, scenario-based modeling, and practical tools that Town staff can use independently.

NHA Advisors, LLC also submitted a separate proposal to provide Study 3: Asset Liability Management (ALM) services as requested in the Town’s RFP. For this task, NHA is the sole service provider, independent of the team assembled for Studies 1 and 2. In addition, NHA included an unsolicited proposal for an optional Study 4, which would develop a long-term funding plan for wildfire risk mitigation in Los Gatos.

NHA brings extensive experience advising California public agencies on CalPERS-related liabilities, debt management, and OPEB strategies. Their approach emphasizes integration with the fiscal condition model developed in Study 1, allowing for scenario planning that accounts for:
 CalPERS performance volatility
 Infrastructure impacts from new development
 Adequacy of cash reserves to withstand “Black Swan” events (e.g., wildfires) The proposal highlights NHA’s ability to translate complex financial data into clear, actionable insights for decision-makers and the public.

NHA also reaffirmed acceptance of the Town’s Sample Consultant Services Agreement and designated Mark Northcross as the primary contact authorized to bind the firm.

Proposed Project Timeline by Month After Contract Execution:

Month Study 1: Fiscal
Condition Analysis
(Raftelis)
Study 2: Fiscal Impact
Analysis (Willdan)
Study 3: Asset Liability
Management (NHA)
Month 1 Project Initiation Project Initiation Project Initiation Month 2 Data Collection and
Review
Inventory and Evaluate
Liabilities
Month 3 Assess Financial
Condition

ITEM NO. 7.

PAGE 4 OF 6
SUBJECT: Authorize the Town Manager to Negotiate and enter into Agreement with NHA DATE: October 14, 2025
Month Study 1: Fiscal
Condition Analysis
(Raftelis)
Study 2: Fiscal Impact
Analysis (Willdan)
Study 3: Asset Liability
Management (NHA)
Month 4 Develop Forecasting
Model
Develop Fiscal
Revenue and Cost
Inputs
Funding Needs and Risk
Reduction Analysis
Month 5 — —Complete 20-Year
Fiscal Impact Analysis
ALM Modeling
Month 6 Final Reporting &
Knowledge Transfer
Finalize Fiscal Impact
Model
Reserve Guidance
Contract Cost Summary:

Raftelis proposes to conduct the Fiscal Condition Analysis (Study 1) for a base cost of $105,500, with optional services—such as gap closure strategies and Council decision support—bringing the total to $165,000 if selected. Willdan submitted a fixed fee proposal of $18,000 for the Fiscal Impact Analysis (Study 2), which includes up to two meetings, with additional services billed hourly if needed. NHA Advisors proposes to lead the Asset Liability Management Study (Study 3) on a time-and-materials basis, with a not-to-exceed budget of $50,000, covering liability evaluation, risk analysis, modeling, and reserve guidance. NHA also offers an optional Wildfire Risk Mitigation Study (Study 4) for up to $45,000, which includes GIS analysis and funding strategy development, with additional optional tasks potentially adding up to $25,000.

In addition, NHA proposes to serve as Team Manager for Studies 1 and 2, coordinating across firms for a not-to-exceed amount of $17,500.

Study / Task Firm Fee Type Estimated
Cost
Notes
Study 1: Fiscal
Condition
Analysis
Raftelis Fixed Fee $105,500
(base)
$165,000
(with
options)
Includes forecasting
model, reporting, and
optional gap
strategies & Council
support
Study 2: Fiscal
Impact Analysis
Willdan Fixed Fee $18,000 Includes 2 meetings;
additional services
billed hourly

ITEM NO. 7.

PAGE 5 OF 6
SUBJECT: Authorize the Town Manager to Negotiate and enter into Agreement with NHA DATE: October 14, 2025
Study / Task Firm Fee Type Estimated
Cost
Notes
Study 3: Asset
Liability
Management
(ALM)
NHA Time &
Materials
(Blended
Rate:
$285/hr)
$35,055 –
$49,875
Not-toExceed:
$50,000
Includes modeling,
reserve guidance, and
liability analysis
Optional Study
4: Wildfire Risk
Mitigation
NHA Time &
Materials
Not-toExceed:
$45,000
Includes GIS work;
optional tasks may
add up to $25,000+
Team
Management for
Studies 1 & 2
NHA Time &
Materials
Not-toExceed:
$17,500
Approx. 50 hours of
coordination across
firms
If all services—Studies 1, 2, and 3 with options, along with the optional wildfire risk mitigation study—are included, the total not-to-exceed amount for the agreement is $250,500.

RECOMMENDATION:

Staff is requesting that the Town Council provide direction regarding which services to include in the agreement. If all services—Studies 1, 2, and 3, along with the optional wildfire risk mitigation study—are included, the total not-to-exceed amount would be $250,500. If the Council chooses to include only selected services, the agreement will be tailored accordingly to reflect those areas.

Based on the Council’s direction regarding optional services, staff will prepare the draft agreement. To ensure timely initiation of work, staff recommends that the Town Council authorize the Town Manager to negotiate and execute an agreement with NHA Advisors for all three requested services, in an amount not to exceed $250,500.

ALTERNATIVES
The Town Council may consider alternative approaches to the proposed scope of work, which would affect total cost and fiscal impact:

1. Proceed with All Studies (Recommended Option) — Approve all studies including optional components for a not-to-exceed amount of $250,500. This option provides the most comprehensive fiscal analysis, aligning with long-term financial planning objectives.

ITEM NO. 7.

PAGE 6 OF 6
SUBJECT: Authorize the Town Manager to Negotiate and enter into Agreement with NHA DATE: October 14, 2025

2. Remove Optional Study Components — Excluding the optional elements (Wildfire Risk Mitigation Study and optional tasks within Study 1) would reduce total project costs to approximately $180,000 to $190,000, depending on final scope adjustments. This would lower the immediate budget impact by roughly $60,000 to $70,000 while maintaining delivery of the three core studies.

3. Select Individual Studies Only — The Council may choose to fund only one or two studies (e.g., Fiscal Condition and Impact Analyses) at an estimated combined cost of $120,000 to $130,000. This would provide partial insights but limit integration between financial forecasting and liability management.

Reducing the scope will proportionally reduce the Unassigned Fund Balance adjustment.

However, omitting optional studies may limit the Town’s ability to evaluate long-term wildfire risk and related fiscal exposures, which could affect future budget forecasting accuracy.

COORDINATION:

This item was developed with the coordination of the Town Manager's Office, the Town Attorney's Office, and the Community Development Department.

Attachments:

1. NHA Proposals

2. Request For Proposals: Fiscal Condition Analysis With Five-Year and Long-Term Forecast, Fiscal Impact Analysis, and Asset Liability Management Study

3. Date issued: questions and answers provided

ITEM NO. 7.
s
SEPTEMBER 22,
2025 TOWN OF LOS GATOS
PROPOSAL FOR STUDIES 1 AND 2:

FISCAL CONDITION ANALYSIS WITH FIVE-YEAR

AND LONG-TERM FORECAST
AND

FISCAL IMPACT ANALYSIS
PROVIDED IN RESPONSE TO:

REQUEST FOR PROPOSALS DATED AUGUST 20, 2025:

FISCAL CONDITION ANALYSIS WITH FIVE-YEAR AND LONGTERM FORECAST, FISCAL IMPACT ANALYSIS, AND ASSET

LIABILITY MANAGEMENT STUDY

SUBMITTED BY
ATTACHMENT 1

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT) Table of Contents

1. COVER LETTER .......................................................................................................................................... 1

2. COMPLETED CERTIFICATION FORMS ............................................................................................................. 3

3. SCOPE COMMENTS AND METHODOLOGY .................................................................................................... 16

4. EXPERIENCE AND EXPERTISE ...................................................................................................................... 31

5. KEY PERSONNEL AND RESUMES ................................................................................................................. 35

6. TIMELINE AND WORK PLAN ...................................................................................................................... 36

7. SAMPLES OF COMPARABLE PROJECTS ......................................................................................................... 37

8. DISCLOSURE OF ABSENCE OF LITIGATION OR DISCIPLINE OVER LAST FIVE YEARS................................................. 37

9. REFERENCES ........................................................................................................................................... 38

10. PRELIMINARY FEE SCHEDULES ................................................................................................................... 43

11. STATEMENT OF INSURANCE COVERAGE ....................................................................................................... 46

12. TOOLS, DATA SOURCES, AND USE OF AI...................................................................................................... 47 APPENDIX A: NHA RESUMES ................................................................................................................................

APPENDIX B: RAFTELIS RESUMES ...........................................................................................................................

APPENDIX C: WILLDAN RESUMES...........................................................................................................................

APPENDIX D: WAUKESHA COUNTY WI BUDGET TASK FORCE REPORT ..........................................................................

APPENDIX E: RICHARDS RANCH FISCAL IMPACT REPORT ............................................................................................

APPENDIX F: NHA’S REQUIRED MUNICIPAL ADVISOR DISCLOSURES ............................................................................

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

1. COVER LETTER
September 22, 2025
Attn: Gitta Ungvari, Finance Director
[email protected]
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
RE: Proposal to Provide Study 1 (Fiscal Condition Analysis) and Study 2 (Fiscal Impact Analysis) Dear Ms. Ungvari,
NHA Advisors, LLC (“NHA”) is very pleased to submit this proposal to deliver Study 1 Fiscal Condition Analysis and Study 2 Fiscal Impact Analysis to the Town of Los Gatos (the “Town”). Our proposal represents a collaborative effort among three very well-qualified firms:

Proposing Firm Proposed Role
NHA Advisors LLC Lead Advisor: Overall Project Management for Studies 1 and 2 Independent Proposal for Study 3 Submitted Separately
Raftelis Financial Consultants Inc Subconsultant: Study 1 Willdan Subconsultant: Study 2
NHA Advisors has worked with both Raftelis and Willdan Finance before in other California cities and special districts. As a municipal advisor, the NHA team has coordinated many complex teams of both consultants and multiple stakeholders to deliver funding for major projects. Raftelis is a management consulting firm for local and regional governments with a national practice. Willdan is a civil engineering firm whose practice includes the delivery of key financial information, including fiscal impact analysis, for both local governments and land developers. Their practice is also national.

Collaboration is key to our approach: The fiscal condition analysis and forecast model will both inform and be informed by the fiscal impact analysis and the asset liability management work. A truly responsive multi-year forecasting model needs to address variables such as recessions, changes in the real estate market, major new real estate developments, and the ups and downs of CalPERS. "Black swan" events are also key to a good forecast model. For example, how does the Town respond to a black swan such as a major wildfire?
A Practical Sustainable Tool: We recognize that a financial model only has lasting value if it becomes part of the Town's management tool kit. Our team commits to delivering a model that is both detailed and user-friendly, enabling Town staff to update and apply it independently - without the need for consultants.

Real World Scenario Design: The partnership of all three firms enables us to design scenarios reflecting real-world assumptions about development patterns, service demands, long-term liabilities and "Black Swan" events. This ensures the Town can evaluate the fiscal and service-level implications of multiple scenarios, as well as understand the trade-offs between different policies and investment choices.

Communication Skills: Our team members have extensive and long-term experience in the public sector.

We know how to translate technical analysis into decision support packages that are clear, actionable and

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LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

accessible to governing bodies and the public. Just as important, we have extensive experience facilitating the tough conversations that local governments face when aligning resources with community priorities.

The stand-alone NHA proposal for Study 3 also includes an optional module for a “Task 4” – a long-term funding plan for wildfire risk reduction for the Los Gatos community.

As requested in the RFP, NHA provides the following statements as part of this cover letter:
• Mark Northcross is the primary contact authorized to bind the firm. • NHA Advisors confirms acceptance of the Town’s Sample Consultant Services Agreement While we emphasize our team commitment to collaboration, we also will accommodate the Town individually selecting one of our team members for a particular task but not selecting other team members for their assigned tasks.

We are again very pleased to deliver this proposal for the kind of integrated financial management work that we see as integral and pivotal for the future of Los Gatos, as well as so many other local governments in our team's collective client base.

Please feel free to contact us directly with any questions regarding this proposal.

Thank you for your consideration,
Mark Northcross
Principal
NHA Advisors LLC
Jonathan Ingram
Vice President
Raftelis
Mike Medve
Principal Consultant
Willdan
[email protected] [email protected] [email protected] (415) 785-2025 x2002 (513) 221-0500 (949) 392-0678

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2. COMPLETED CERTIFICATION FORMS
Conflict of Interest Statement (NHA Advisors)

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Conflict of Interest Statement (Raftelis)

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Conflict of Interest Statement (Willdan)

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Non-Collusion Declaration (NHA Advisors)

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Non-Collusion Declaration (Raftelis)

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Non-Collusion Declaration (Willdan)

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References

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Statement Regarding Insurance Coverage and Worker’s Compensation Insurance Acknowledgement Certificate (NHA Advisors)

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Statement Regarding Insurance Coverage and Worker’s Compensation Insurance Acknowledgement Certificate (Raftelis)

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Statement Regarding Insurance Coverage and Worker’s Compensation Insurance Acknowledgement Certificate (Willdan)

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3. SCOPE COMMENTS AND METHODOLOGY
Introduction: How This Proposal is Organized
This proposal, in response to the requirements of the Town's RFP, is organized as two separate proposal documents. The first proposal document (this document) contains the material required by the RFP for Study 1 and Study 2. The second proposal document (submitted separately from this document) contains the material for Study 3, and our proposed optional Study 4 for Wildfire Risk Mitigation.

Raftelis, a public sector management consulting firm with a national practice, is responsible for Study 1.

Willdan, a public sector focused civil engineering and financial consulting firm, also with a national practice, is responsible for Task 2. NHA Advisors, a municipal advisor with a statewide practice, is responsible for Study 3. We believe that all three (and potentially four) studies are integrated and inform each other. The outputs from both Study 2 and the Study 3 will inform Study 1. Furthermore, we see the best way of delivering Study 3, Task 3 ("Reserves Guidance") is through careful scenario design for outputs of the Study 1 fiscal condition analysis model.

Consequently, we have added to this Study 1 and Study 2 proposal document an additional task, “Task 0:

Team Management.” We see this as key to delivering the outcomes that the Town wants from this work.

This also means that the bulk of the background information and certifications required for NHA Advisors is in the second proposal document for Study 3, not in this Study 1 and Study 2 proposal document.

We acknowledge that our team's combined cost for all three studies is large. The Town is asking for a lot.

We believe our team is capable of delivering everything the Town is requesting. With respect to cost, please consider this: public agencies pay amounts greater than our combined proposal cost for engineering/design for major public works projects. The Town's RFP is analogous to the Town retaining a team to engineer and design a major project. In this case, the major project is a financial management structure designed to work for years into the future. That is the ultimate deliverable for our combined proposals for Studies 1, 2 and 3. We commit to delivering this financial management tool and structure within the proposed costs for both the Study 1 and Study 2 proposal, and the Study 3 proposal.

Task 0: NHA's Role as Team Manager
We see team management as crucial to delivering the outcomes that the Town wants from this effort. As explained in "Scope and Methodology", we see two key elements for team management:
• Communication amongst all team members, Town staff and other stakeholders • Careful scenario design for the outputs of the Study 1 Fiscal Condition Analysis NHA's qualifications to take the role of Team Manager for this assignment are robust:
• As a municipal advisor to multiple public agencies bringing large projects out of the ground we have learned how to coordinate and collaborate with multiple consultants and stakeholders to deliver funding for these projects. We know how to manage complex and disparate teams to deliver money. We believe this experience is very analogous to what the Town needs through their RFP.

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• NHA staff has comparable experience to what both Raftelis and Willdan are responsible for.

NHA does a much lighter version of the Study 1 fiscal condition analysis for our client base.

While we do not typically do the granular, comprehensive modeling that Raftelis will deliver, we understand how such models work. With respect to Willdan's analysis for Study 2, Mark Northcross, our proposed team manager, spent 5 years at the beginning of his career preparing fiscal impact analysis for Environmental Impact Reports on new development. He has a fundamental understanding of Willdan's deliverable for Study 2. • NHA's core expertise is in delivering funding for public projects, including operational needs.

We understand the constraints and opportunities available to local government in California for raising new funding - whether grants, taxes through ballot measures, impact fees or public/private partnerships. We believe that Mark Northcross’ expertise is important in outlining potential long-term financial management practices and strategies for the Town.

Scope and Methodology: We see two core functions for NHA’s role in Team Management, as described below:

1. Facilitating Good Communication. Based on long experience, we believe that the best way of facilitating good communication for the team is to have pre-scheduled standing Teams/Zoom calls on a regular basis. It does not matter whether the call is very short, or goes on for an hour. Regular calls ensure that we keep momentum going and keep everyone fully informed on what other team members are doing. In that spirit, we suggest the following protocol for standing calls:
o Town staff and NHA Advisors - once per week
o Town staff, NHA Advisors, Raftelis and Willdan - biweekly o Town staff, NHA Advisors, Raftelis, Willdan and other potential stakeholders - once per month.

2. Scenario Design. Once both Raftelis and Willdan have completed their work, we see Scenario Design as the key next step in delivering what the Town wants. Scenario Design is a key component for Activity 3 in the Raftelis Study 1 proposal. We also see the Task 3 deliverables of both Funding Needs & Risk Reduction and Reserve Guidance as being integral to Scenario Design. As Team Manager, NHA will facilitate the dialogue between Town staff, team members and other stakeholders to develop multiple scenarios for the fiscal condition model.

Cost: NHA's incremental cost for serving as Team Manager is not-to-exceed $17,500, whether or not NHA is selected for the Task 3 work. This will be billed on a time and materials basis, providing the Town control over this expense.

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Study 1: Fiscal Condition Analysis – Raftelis
The following material is provided by Raftelis for Study 1. As required by the RFP, this material can be considered as a stand-along proposal for Raftelis to prepare Study 1, should the Town choose to retain Raftelis, but not Willdan and/or NHA.

Fiscal Condition Assessment Methodology
The Town of Los Gatos is seeking a consultant to conduct a Fiscal Condition Analysis with Five-Year and Long-Term Forecast. This effort will provide a transparent assessment of the Town’s current fiscal health, develop projections of future revenues and expenditures, and identify risks and opportunities that could impact long-term financial sustainability. The resulting forecast will serve as a living tool for Town staff, elected officials, and the Finance Commission to evaluate fiscal strategies, plan for uncertainty, and communicate clearly with the public.

Our team brings extensive experience working with local governments in California and across the country to develop long-term financial forecasts and plans. We understand that the most effective solutions are those that are practical,
implementable, and aligned with the culture and capacity of the organization. Innovative recommendations only add value if they can be put into practice and embraced by both staff and the community.

We pride ourselves on our ability to listen, analyze, and collaborate with our clients to develop actionable solutions. Our prior engagements have resulted in the adoption of
recommendations that were not only technically sound but also politically and operationally feasible. We do not bring a prepackaged approach; instead, we tailor our methodology to the specific needs and priorities of each client.

Los Gatos, like many California communities, faces a challenging fiscal outlook. Rising costs of public services, increasing pension and OPEB obligations, and infrastructure demands place ongoing pressure on limited resources. At the same time, State housing mandates and the broader economic environment introduce uncertainty in both revenues and expenditures. The Town has long demonstrated sound fiscal management, but to maintain that strength in the years ahead requires careful planning, transparent forecasting, and proactive risk assessment.

Our approach builds on the Town’s existing capacity, while providing the tools, analysis, and training necessary for staff to sustain the forecasting model into the future. By combining rigorous financial analysis with stakeholder engagement and scenario testing, we will deliver a forecast that is not only technically robust but also aligned with the Town’s decision-making needs.

We are excited about the opportunity to assist Los Gatos in strengthening its fiscal planning capacity. Our intentional approach — grounded in respect for the staff who serve the community and focused on collaboration — ensures that the results of this project will be meaningful, actionable, and sustainable.

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Activity 1: Project Initiation
We will begin this engagement by facilitating a virtual kick-off meeting with the Town’s project team to review the details and expectations of this effort and to finalize the project schedule. During this session, we will confirm deliverables, establish communication protocols, and identify milestones for internal staff review, Finance Commission briefings, and Town Council presentations. We will also discuss the Town’s objectives for the long-term financial planning process, the anticipated uses of the model, and any initial concerns or issues that may shape the work.

We will conduct one-on-one meetings with the Town Manager and Finance Director to understand their perspectives on fiscal priorities, risks, and the intended role of the forecasting model in the Town’s planning and policy discussions. To ensure elected leadership perspectives are fully incorporated, we will also meet individually with the Mayor and Town Council members. These conversations will provide valuable insights into fiscal priorities, service expectations, and community needs, helping to shape assumptions and test scenarios later in the process.

We will request and review all relevant background information, such as budgets, audited financial statements, financial policies, actuarial reports, capital improvement plans, previous studies, and other supporting documentation. Early review of these materials will provide a foundation for the Fiscal Condition Assessment and help ensure the forecasting model is built on accurate and comprehensive information.

Throughout the project, we will provide the Town with regular status reports designed to maintain project progress and budget, identify and resolve emerging issues, and review interim work products. In addition to formal reporting, we anticipate numerous informal opportunities for Town staff to raise questions, share updates, or clarify assumptions with our project team. We welcome this open communication, as it will contribute to a more effective and successful project.

Meetings:

Kick-off meeting with Town’s project team
Deliverables:

Kick-off meeting agenda
Draft and final project schedule
Data/document request
Activity 2: Assess Fiscal Condition
Following the kick-off, we will conduct a comprehensive assessment of the Town’s current fiscal condition to establish the baseline for the long-term financial forecast. This activity begins with a detailed review of financial data to identify historical trends and current pressures, followed by structured engagement with Town staff and external partners to validate assumptions and incorporate operational and capital planning needs. The result will be a complete and transparent understanding of Los Gatos’ fiscal health that can serve as the foundation for modeling and scenario analysis.

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• Financial Data Review – Examine audited financial statements, budgets, interim financial reports, reserve policies, actuarial valuations, and cash flow records to identify revenue and expenditure trends, assess structural balance, and capture major fiscal pressures. • Finance & Budget Staff Sessions – Conduct two full days of virtual meetings with Finance and Budget staff to validate our interpretation of trends, confirm assumptions, and understand the Town’s forecasting methodologies and internal budget processes. • Department Director Discussions – Facilitate two full days of virtual meetings with department directors to gather insights on operational pressures, long-term service delivery needs, capital planning requirements, and other anticipated budget drivers. • External Agency Interviews – Meet with agencies such as the Fire District and Sewer District to incorporate intergovernmental obligations and cost-sharing arrangements into the fiscal assessment.
• Capital Improvement Program Review – Analyze the Town’s CIP to evaluate funded and anticipated projects, align infrastructure investment needs with available resources, and identify future fiscal pressures.
• Debt and Reserve Assessment – Evaluate the Town’s debt structure, repayment schedules, debt ratios, and reserve adequacy to determine capacity and resilience. • Unfunded Liability Analysis – Identify long-term obligations such as pensions, OPEB, and labor costs, along with structural cost drivers that could impact sustainability. • Environmental Scan – Review regional economic conditions, demographic trends, and State mandates (e.g., housing requirements, revenue shifts) that may influence future fiscal outlook. • Benchmarking Against Peers – Compare Los Gatos’ fiscal condition to comparable California municipalities using State Controller and GFOA data to highlight areas of strength and vulnerability.

We will prepare a draft Fiscal Condition Assessment memorandum that synthesizes these analyses into a clear picture of the Town’s current fiscal position. This draft will be reviewed virtually with the Town’s project team, allowing staff to validate assumptions, suggest refinements, and ensure accuracy. Following these discussions, we will make necessary adjustments and finalize the memorandum. This finalized assessment will serve as the baseline understanding of Los Gatos’ fiscal position — the foundation for the long-term financial forecasting model and a reference point for evaluating future policy scenarios.

Meetings:

Two days of virtual meetings with Finance and
Budget staff
Two days of virtual meetings with department
directors
Interviews with external partners (e.g., Fire
District, Sewer District)
Virtual review session with the Town’s project
team on draft Fiscal Condition Assessment
Deliverables:

Draft and Final Financial Condition Assessment
memoranda

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Activity 3: Develop Forecasting Model
In this Activity, the project team will develop a robust but user-friendly financial model that projects revenues and expenditures across a ten-year horizon for the Town’s General Fund, while also accounting for interrelationships with other funds and external obligations. The model will build directly on the Fiscal Condition Assessment and will serve as both a technical forecasting tool and a decision-support resource for Town leadership. It will be detailed enough to capture the complexity of Los Gatos’ fiscal structure, yet designed to be intuitive and easy to use for staff and policymakers.

The baseline projections will assume
continuation of existing policies, programs, and
obligations, and will then test how the
projections may change under alternative
conditions. As appropriate, the analyses will
integrate socio-economic and demographic
factors that shape revenue capacity and service
demands. The model will be dynamic, allowing
for flexible consideration of changing conditions
and providing the Town with a range of
projection scenarios.

This activity will accomplish the following goals:
• Financial Model Goal 1 – Baseline
Projections: Identify reasonable baseline assumptions based on historical revenue and expenditure trends, validated with Finance and Budget staff. This ensures the model accurately forecasts the Town’s fiscal trajectory and provides a reliable foundation for comparison. • Financial Model Goal 2 – Projection Scenarios: Develop alternative scenarios that reflect a range of revenue growth and expenditure pressures. These will allow the Town to compare impacts across varying conditions and evaluate the implications of policy and investment choices. Initial scenarios will include:
o Probable Scenario: Reflecting historical trends adjusted for known economic and demographic factors.
o Policy Scenario: Based on assumptions in the Town’s existing Financial Plan and adopted budgets.
o Constrained Scenario: Illustrating conservative revenue conditions to stress-test sustainability.
• Financial Model Goal 3 – Sensitivity Analysis: Create a functional and dynamic tool that can be used to test the fiscal impact of policy alternatives and external conditions in real time. The model will visually illustrate the impact of service, capital, or revenue decisions, enabling informed choices by Town leadership and the governing body.
• Financial Model Goal 4 – Integration with Related Studies: Work closely with Wildan and NHA Advisors, our proposed partners on Studies 2 and 3, to incorporate their concurrent findings into

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the model. This collaboration ensures that long-term forecasts reflect both fiscal impact analyses and asset/liability considerations.
• Financial Model Goal 5 – Usability and Staff Training: Ensure the model produces clear, usable dashboards and outputs that support Finance Commission discussions, Town Council deliberations, and public communication. We will train Finance staff on the model, tailor its functionality to staff preferences, and provide documentation so that the tool can be maintained as a living resource into the future.

Our team will prepare a draft model and review its structure, presentation, and functionality with Finance staff and the Town’s project team. We will then develop and vet recommended assumptions under each scenario with staff before incorporating them into the model. Once validated, we will project the Town’s fiscal condition and review results with staff.

The finalized model will be shared in a presentation that highlights the key dashboards, findings, and implications for long-term fiscal sustainability. This will not only meet internal forecasting needs but also provide elected officials and the public with a clear, transparent tool for understanding the Town’s fiscal future.

Meetings:

Workshops with Finance and Budget staff to
review draft model and assumptions
Coordination meetings with Wildan and NHA
Advisors
Review sessions with the Town’s project team
Deliverables:

Draft 10-year financial forecasting model
Final 10-year financial forecasting model with
scenario dashboards
Validated scenario assumptions and outputs
Training sessions and documentation for Finance
staff
Activity 4: Final Reporting and Knowledge Transfer
As the culmination of the Fiscal Condition Assessment and financial modeling process, the project team will prepare a comprehensive Long-Term Financial Plan (LTFP) Report. This report will synthesize the findings of the condition assessment, incorporate the validated assumptions and scenarios from the forecasting model, and present a clear roadmap for sustaining the Town’s financial health over the next decade.

The report will not only document the technical analyses completed during the project, but also translate them into actionable strategies that Town staff, elected officials, and community stakeholders can use to guide decision-making. The document will emphasize clarity, accessibility, and alignment with Los Gatos’ fiscal priorities and policy objectives.

This activity will accomplish the following goals:

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• Report Integration: Summarize the findings of the Fiscal Condition Assessment, baseline projections, and scenario analysis into a single, cohesive document that provides context and direction for the Town’s financial future.
• Policy Implications: Highlight the long-term implications of current fiscal trends and alternative scenarios, clearly identifying where risks may emerge and where opportunities exist to strengthen sustainability.
• Strategies and Recommendations: Present recommended fiscal strategies, including reserve policies, debt management approaches, and expenditure prioritization, that support sustainable long-term planning.
• Alignment with Related Studies: Integrate findings from Wildan’s Fiscal Impact Analysis and NHA Advisors’ Asset Liability Study to ensure consistency across all three efforts and provide Town leadership with a unified financial planning framework. • Accessibility and Communication: Develop a report that includes clear charts, tables, and dashboards drawn from the model, designed for use by both internal staff and external audiences such as the Finance Commission, Town Council, and the public. • Leadership Work Session: Facilitate a dedicated work session with the Town Council to review long-term fiscal trends, discuss key decision points identified in the model, and explore the policy trade-offs that will shape the Town’s financial future. This session will provide elected leaders with the opportunity to engage directly with the analysis and consider how best to align fiscal strategies with community priorities.

The draft Long-Term Financial Plan will be reviewed with Town staff to confirm accuracy and relevance.

Following revisions based on staff feedback, the final report will be produced and presented to Town leadership. A summary presentation will also be provided for the Town Council to ensure findings are communicated effectively and transparently.

Meetings:

Virtual review session of the draft Long-Term
Financial Plan with Town staff
Work session with the Town Council on trends
and decision points
Presentation and discussion with the Town
Council on the final report
Deliverables:

Draft Long-Term Financial Plan Report
Final Long-Term Financial Plan Report
Presentation materials summarizing findings,
trends, and strategies

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Optional Activity 5: Develop Gap Closure Strategies
This optional activity is designed to connect long-term financial planning directly to the operating and capital realities of each department. Its core value is enabling department directors to develop long-term budget adjustment strategies that are explicitly tied to service levels, workload growth, and capital needs emerging from the development patterns identified in Study 2.

Department-Level Strategy Sessions
Before convening the broader workshop, Raftelis will conduct individual strategy sessions with each department director and their key staff. These sessions will:
• Identify Development-Driven Impacts: Discuss how the land use and growth assumptions in Study 2 will translate into service demand increases and operational pressures. • Preliminary Costing: Work with each department to outline anticipated operating and staffing needs, as well as capital investment requirements, that may emerge over the 10-year planning horizon.
• Service-Level Implications: Pair anticipated investments and budget needs with expected impacts on service levels, customer outcomes, and workload capacity. • Scenario Development: Begin to frame potential strategies (cost containment, service delivery adjustments, or new revenue sources) that can be tested in the financial model.

Cross-Department Gap Closure Workshop
Following these department-level sessions, Raftelis will facilitate a one-day in-person workshop with Town leadership, division managers, and program managers to:
• Synthesize Department Input: Integrate operating and capital estimates across departments into a shared view of Townwide financial needs.
• Develop Coordinated Strategies: Refine cost and revenue strategies to address identified structural gaps, ensuring they reflect service-level tradeoffs and cross-department interdependencies.

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• Link to Financial Model: Incorporate these strategies into the Town’s financial model, testing feasibility under multiple projection scenarios.
• Assign Ownership: Confirm departmental ownership of strategies for continued refinement and validation, supported by Raftelis’ technical expertise.

Value for Leadership and Council
The outcome of this activity is not just a set of abstract fiscal strategies, but a grounded, departmentdriven understanding of how to align operating and capital budgets with development-driven service demands. These strategies will be presented to the Town Council in a structured format during the financial model review, enabling Councilmembers to make informed decisions about fiscal sustainability in the context of community growth and service expectations.

Meetings:

Department strategy sessions (virtual, with each
director)
One-day Gap Closure Strategies Workshop
Presentation of refined strategies to the Town
Council
Deliverables:

Department-level service impact and cost
estimate memos
Workshop facilitation and support materials
Gap closure strategies linked to service levels and
workload expansions
Refined scenarios integrated into the financial
model
Optional Activity 6: Facilitated Decision-support for Town Council
The Town may also find it prudent to engage with a broader group than Town staff and the governing body by forming a stakeholder review committee. A critical step in ensuring the long-term usefulness of the financial plan is helping the Town Council directly connect technical analysis with actionable policy decisions. This optional activity is designed to guide the governing body through a structured decisionmaking process that translates financial trends, gap-closure strategies, and cross-study findings into clear and publicly digestible choices.

Facilitated Council Workshop
Raftelis will facilitate a dedicated decision-making workshop with the Town Council that will:
• Integrate Cross-Study Findings: Bring together the results of the financial model (Study 1), fiscal impact analysis (Study 2), and asset/liability review (Study 3) to ensure Councilmembers are considering the full picture of the Town’s long-term fiscal outlook. • Present Gap-Closure Strategies: Summarize the department-driven strategies developed in Optional Activity 5, highlighting associated service-level tradeoffs, capital requirements, and fiscal outcomes.

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• Decision Support Tools: Provide structured “decision packages” that synthesize technical analysis into accessible formats, ensuring elected officials and the public understand the trade-offs, risks, and opportunities associated with each option.
• Prioritization Process: Facilitate discussions that allow the Council to evaluate and prioritize options, ensuring clear alignment between fiscal capacity, policy goals, and community expectations.
• Direction Setting: Capture Council decisions and provide Town staff with clear, documented guidance to support long-term planning, budgeting, and implementation efforts.

Value for Leadership and the Community
This workshop represents an opportunity to bridge detailed technical analysis with strategic decisionmaking. By translating the results of Studies 1, 2, and 3 into actionable choices and providing facilitation expertise, Raftelis will ensure that the Town Council is empowered to set a clear direction for staff and communicate trade-offs effectively to the community.

Meetings:

Governing Body Decision-Making Workshop
Deliverables:

Council workshop agenda and facilitation materials
Decision-support packages synthesizing financial,
service level, and workload trade-offs
Summary of Council decisions and direction for
staff Budget Task Force recommendations

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Study 2: Fiscal Impact Analysis - Willdan
The following material is provided by Willdan for Study 2. As required by the RFP, this material can be considered as a stand-along proposal for Willdan to prepare Study 2, should the Town choose to retain Willdan, but not Raftelis and/or NHA.

Project Understanding
The Town of Los Gatos (“Town”) is seeking a Fiscal Impact Analysis (FIA) to evaluate the potential fiscal effects of multiple large development proposals on the Town’s General Fund. The analysis will estimate recurring revenues and costs under best-case, baseline and worst-case scenarios through 2040.

The team members assembled for this engagement have extensive experience with financial modeling in Excel for a broad range of financial analyses. Stemming from the team’s experience managing long-term financial models of all types for cities, counties, school districts, toll road agencies, port authorities and other public entities, Willdan uses a modified version of the F1F9 financial modeling style to allow for the analysis of just about any type of cost or revenue, from the simplest to the most complex. Using the principles of structured design, transparency, robust annotation and adherence to sound financial modeling principles, our models are built to be flexible, auditable and easy to maintain and adjust to match the needs of the client.

Quality Control/Quality Assurance (QA/QC) is integrated into our team’s process. However, when dealing with large, complex financial models, the importance of adhering to time-tested financial modeling principles cannot be underestimated. This makes the initial modeling process less likely to result in errors and also makes errors easier to identify and fix during the QA/QC process.

The core of the financial model is a “back-end” simply formatted horizontal cash flow worksheet that contains all necessary calculations, assumptions and formulas. The formula-based back-end model can be easily audited and reviewed for assumptions and consistency. From there, we transpose the data into a more readable vertical format so that it can be presented in the report and/or the presentation. These tables will be robustly annotated and formatted for visual appeal and readability.

The draft report will be provided to the City in MS Word format. For each round of comments/edits, clean and redline versions will be distributed. When the report is finalized, a final Word file and PDF will be provided so that text and tables can be added to staff reports and/or other City documents, as needed.

Willdan uses Enterprise Artificial Intelligence (AI) occasionally and sparingly when developing work products. Examples may include the following:
• To accelerate the process of finding a specific law or industry best practice. • To receive suggestions for word choice, formatting and/or visual presentation of results. • Discovering lesser-used functions in Excel or save time developing regular expressions, conditional formatting formulas or similarly complex tasks.

Willdan does not use AI output directly in reports or use any suggestion provided by AI without first verifying, validating and/or auditing the results. Furthermore, the Enterprise AI software that we use does not share, store, or train on our data, ensuring complete confidentiality and compliance with client privacy requirements.

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

Work Plan
If selected, Willdan will provide fiscal impact analysis consulting services for the Town of Los Gatos. This scope of services is designed to directly respond to the Town’s request and will remain flexible in collaboration with Town staff as the project evolves.

Willdan’s scope of services and project approach incorporates the following:
 Regular meetings, email communication, and telephone conversations with Town staff as needed during the course of the engagement.
 Review and synthesis of all available financial, entitlement, and planning documentation.  Development of fiscal impact scenarios, including baseline, optimistic, and conservative cases, projecting through 2040.
 Inclusion of both recurring and specified one-time revenues, operating and capital costs, and net fiscal results.
 Preparation of a clear, accessible final report and presentation materials for Town staff, elected officials, and the community.

Task 1: Data Collection and Review
Description: Obtain the following data associated with the proposed fiscal impact analysis, as well as review the documentation.
 Town budget, CAFRs, and other relevant financial data.  Current and planned land uses, zoning, and development schedules.  Demographic and employment data related to residential and commercial growth.  Assessor parcel data and tax rate area information.
 Service level data, departmental cost information, and historical capital investment records.
 Selected project plans, entitlement documents, and construction timelines.  Anticipated construction schedules and occupancy timelines related to the selected projects.

Meeting: Kick-off meeting with Town staff to confirm assumptions, communication protocols, and project deliverables.

Deliverables: Initial data request and meeting summary.

Task 2: Develop Fiscal Revenue and Cost Inputs
Description: Develop fiscal model inputs using a per capita and/or case study approach based on the Town’s revenue and service structure.
 Calculate recurring revenue assumptions (property tax, sales tax, TOT, utility users tax, franchise fees, licenses, permits, fines, and other sources). Revenue modeling will generally be calculated using project-specific assumptions in a case study format.  Estimate service costs for major departments, including police, fire, parks, public works, and general government. Cost models will generally be growth-based.  Incorporate service population assumptions, using weighted employment equivalents where appropriate.

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

 Incorporate other locally controlled revenues (e.g. from third-party partners) at City’s request.

Deliverables: Revenue and cost input, formatted in summary tables.

Task 3: Fiscal Modeling and 20-Year Impact Analysis
Description: Produce a fiscal impact model using the assumptions and revenue/cost inputs. The model will analyze the fiscal impacts of growth through 2040 using three scenarios.  Best-case, baseline, and conservative scenarios will be produced.  Capital cost estimates based on discussions with Public Works staff and review of historical investments. Willdan will discuss assumptions incorporated into capital cost estimates and confirm with City staff to arrive at preferred methodology.  Sensitivity testing will consider range of possibilities for service-population growth, property values, cost escalation and revenue volatility to highlight fiscal risks and ranges of potential outcomes.

Deliverables: Tables and visualizations showing net fiscal impacts, breakdowns of revenue and cost categories, and scenario results through 2040.

Task 4: Report Preparation and Presentation
Description: Prepare administrative draft report that updates and explains the results, description of approach and assumptions. Based on discussions with project team and City staff, a final report and presentation will be produced. The report will contain the following elements:
 Annual fiscal impact model that estimates revenues, costs and net impacts for each year through 2040 for each scenario.
 Charts and tables that present the data and assumptions clearly and in a visually appealing manner.
 Qualitative analysis of the fiscal impacts of each type of development and level of density.

Meeting: Presentation of results to Town staff, Council, or designated commissions, as needed.

Deliverables: Fiscal Impact Analysis Report and presentation materials (PowerPoint or similar).

Willdan will rely on the validity and accuracy of Town and developer data and documentation to complete the analysis. The capital cost analysis will be based on discussions with staff and past investment levels, not an engineering or infrastructure capacity analysis.

Willdan will not independently verify the accuracy of data provided by the Town or third parties and will not be responsible for errors that result from inaccurate data.

Client Responsibilities
To complete our tasks on schedule, we will need the cooperation of Town staff. We suggest that the Town assign a key individual as project manager. We will expect the Town’s project manager to:
 Help resolve policy issues;
 Coordinate responses to requests for information; and

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

 Coordinate review of work products.

Project Disclaimer
Willdan is a registered municipal advisory firm with the U.S. Securities and Exchange Commission (“SEC”), as such the Town of Los Gatos represents, acknowledges, and agrees that Willdan is not acting as a “municipal advisor” (as defined by the SEC), to the Town, in any capacity as it relates to the project proposed in this Fiscal Analysis proposal.
(i) The Town uses, or may use, the services of one or more municipal advisors registered with the SEC to advise it in connection with municipal financial products and the issuance of municipal securities; (ii) The Town is not looking to Willdan to provide, and the Town shall not otherwise request or require Willdan to provide any advice or recommendations with respect to municipal financial products or the issuance of municipal securities (including any advice or recommendations with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues); (iii) The provisions of this proposal and the services to be provided hereunder as outlined in the scope of services are not intended (and shall not be construed) to constitute or include any municipal advisory services within the meaning of Section 15B of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations adopted thereunder; (iv) For the avoidance of doubt and without limiting the foregoing, in connection with any revenue projections, cash-flow analyses, feasibility studies and/or other analyses Willdan may provide the Town with respect to financial, economic or other matters relating to a prospective, new or existing issuance of municipal securities of the Town , (A) any such projections, studies and analyses shall be based upon assumptions, opinions or views (including, without limitation, any assumptions related to revenue growth) established by the Town , in conjunction with such of its municipal, financial, legal and other advisers as it deems appropriate; and (B) under no circumstances shall Willdan be asked to provide, nor shall it provide, any advice or recommendations or subjective assumptions, opinions or views with respect to the actual or proposed structure, terms, timing, pricing or other similar matters with respect to any municipal financial products or municipal securities issuances, including any revisions or amendments thereto; and
(v) Notwithstanding all of the foregoing, the Town recognizes that interpretive guidance regarding municipal advisory activities is currently quite limited and is likely to evolve and develop during the term of the potential engagement and, to that end, the Town will work with Willdan throughout the term of the potential Agreement to ensure that the Agreement and the services to be provided by Willdan hereunder, is interpreted by the parties, and if necessary amended, in a manner intended to ensure that the Town is not asking Willdan to provide, and Willdan is not in fact providing or required to provide, any municipal advisory services.

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

4. EXPERIENCE AND EXPERTISE
Firm Qualifications – NHA Advisors
https://nhaadvisors.com/
NHA Advisors, LLC is an Independent Registered Municipal Advisor registered with the SEC and MSRB and headquartered in San Rafael, California. NHA has been providing municipal advisory services (like the size and scope requested by the Town’s RFP) to California cities, special districts, and other public agencies since 2000 (formerly known as Northcross Hill & Ach, Inc. from 2000-2011). NHA has provided
comprehensive financial and consulting services to over 170 public agencies throughout California, with a primary focus on California cities and special districts.

NHA’s experience with California cities spans from rural, small cities to major metropolitan agencies, which informs NHA of the problems facing public agencies across the State and allows NHA to bring creative examples and solutions to our clients. We understand the time and staff resource constraints required to develop funding strategies and financing plans and believe our holistic approach allows us to be an “extension of staff” that will integrate with Town staff to provide the best solution and process for projects.

With an eye toward providing un-matched
service levels, NHA has developed eight
specialized practice groups that focus on key
areas within municipal finance. These groups
enable us to provide guidance on a wide
range of municipal finance issues.

Since 2020, NHA has been the top municipal
advisor, by number of bond transactions for
California cities (Source: California State
Treasurer as of July 15, 2025; excludes
commercial paper and conduit financings;
January 2020-present).

NHA Clients Served*
*Dots represent client engagements from 2012 - Present
98 81 78
69 65
40 21 19 17 15
NHA
Advisors
Urban
Futures
PRAG Fieldman
Rolapp
PFM
Group
KNN
Public Finance
CSGAdvisors Wulff
Hansen
Harrell &
Company
Kosmont
Companies

MUNICIPAL ADVISOR RANKINGS FOR CALIFORNIA CITIES
Transactions (January 2020 - Present)¹
1 Source: California State Treasurer as of 7/15/2025; excludes commercial paper and conduit financings

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

Firm Qualifications – Raftelis
https://www.raftelis.com/
Since our founding in 1993, local government and utility leaders have partnered with Raftelis to transform their organizations by enhancing performance, planning for the future, identifying top talent, improving their financial condition, and telling their story. At Raftelis, we know that the people who lead local governments and utilities are constantly seeking ways to provide better service to the communities that rely on them. That’s why we provide the best insights and expertise, exceptional talent, and trusted advice and experience—so your organization and your community can thrive. Local government leaders partner with Raftelis to transform their organizations by improving their financial condition, enhancing performance, planning for the future, identifying top talent, and telling their story. With more than 190 consultants, we've worked with more than
1,700 local governments and utilities across the country.

Raftelis is a subchapter S-Corporation incorporated in the state of North Carolina on April 23, 2004. The predecessor to Raftelis, Raftelis Environmental Consulting Group, Inc., was established by George A. Raftelis to provide financial and management consulting services of the highest quality to public-sector clients. In 1999, the firm’s name was changed to Raftelis Financial Consulting, PA. Following the sale of a portion of the firm to a group of employees on April 22, 2004, the firm’s name changed to Raftelis Financial Consultants, Inc., which remains the firm’s legal name.

We currently do business as Raftelis and are headquartered in Charlotte, NC, with 15 offices nationwide.

This project will be managed from our Los Angeles office.

We believe that Raftelis is the right fit for this project. We provide several key factors that will benefit Town and help to make this project a success.

RESOURCES AND EXPERTISE: This project will require the resources necessary to effectively staff the project and the skillsets to complete all required components. With more than 190 consultants, Raftelis has one of the largest local government management and financial consulting practices in the nation. Our depth of resources will allow us to provide the Town with the technical expertise necessary to meet your objectives. In addition to having many of the industry’s leading management and financial consultants, we also have experts in key related areas, like stakeholder engagement and data analytics, to provide additional insights as needed.

DECADES OF COLLECTIVE EXPERIENCE: Our associates and subject matter experts have decades of experience strengthening local municipalities and nonprofit organizations. They’ve served in a wide range of positions, from city manager to budget manager to fire chief.

PERSONAL SERVICE FROM SENIOR-LEVEL CONSULTANTS: You appreciate it when deadlines are met, phone calls are returned, and your challenges are given in-depth, out-of-the-box thinking. While other firms may assign your business to junior-level people, our approach provides exceptional service from senior-level consultants.

NICHE EXPERTISE: Our expertise lies in strengthening public-sector organizations. We’re consulting specialists rather than generalists, focusing our strengths to do a highly effective job for a specific group of clients.

Raftelis: HELPING LOCAL

GOVERNMENTS AND UTILITIES
THRIVE.

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

RAFTELIS FIRM CAPABILITIES
FINANCE: Promote financial integrity and the
equitable recovery of costs to achieve your objectives
• Rate, charge, and fee studies
• Financial and capital planning
• Cost of service and cost allocation
• Customer assistance programs
• Affordability analysis
• Utility valuation
• Budget development
• Financial condition assessments
• Debt issuance support
• Economic feasibility and analysis
• Regulated utility support
COMMUNICATION: Inform and engage with your
stakeholders to build understanding and support
• Strategic communication planning
• Public involvement and community outreach
• Public meeting facilitation
• Graphic design and marketing materials
• Media and spokesperson training
• Risk and crisis communication
• Social media strategy
• Visual facilitation
• Virtual engagement
• Technical writing and content development
STRATEGIC PLANNING/FACILITATION:

Plan for the future to guide your organization to success • Organization, department, and community-based strategic planning
• Climate action planning
• Effective Board / Commission / Council governance
• Retreat planning and facilitation
STORMWATER UTILITY SERVICES: Implement
sustainable financial practices to equitably fund
your stormwater program
• Stormwater utility development and implementation
support
ORGANIZATIONAL ASSESSMENT: Identify needs, plan
for the future, and implement positive changes
• Organizational and operational assessments
• Performance measurement
• Staffing analysis
• Sustainability
• Organizational climate and culture
• Asset management and operations
• Regional collaboration and service sharing
TECHNOLOGY: Gain insights from your data and
develop tools to increase effectiveness and
engagement
• Cybersecurity services
• Strategic technology planning services
• Financial management technology services
• Customer management technology services
• Maintenance and asset management technology services
• Data management, analytics, and visualization
• Custom software solutions
EXECUTIVE SERVICES: Identify and develop top talent
to lead local governments and utilities
• Executive recruitment
• Executive coaching
• Executive performance evaluations
SOLID WASTE SERVICES: Deliver effective solid
waste services while ensuring financial
sustainability and customer engagement
• Solid waste plans & sustainable materials management
planning & implementation
• Grant application assistance
• Billing technology planning and implementation
• Collection/routing and disposal/processing planning,
procurement, and implementation
• Rates and financial modeling
• Benchmarking and best practices
• Regulation and compliance
• Communications and public engagement

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

Firm Qualifications – Willdan
https://www.willdan.com/index
Fiscal Impact Analysis Project Experience
Willdan has completed fiscal and economic impact analyses for a variety of projects and public agencies across California. The team proposed for this engagement has prepared dozens of such studies to support planning efforts, development reviews, incorporations, and annexations. A representative selection of project examples is provided below.
 Gilead, Chess-Hatch, Mirabella, and Pilgrim-Triton Fiscal Impact Studies, City of Foster City – evaluated the fiscal impact of three specific plans in the City, analyzing the effect of these plans on services, anticipated new revenues and expenditures, and the necessity for new public facilities to serve each proposed project.
 Hayward Highway 238 Sites Analysis, City of Hayward – analyzed parcels available to the City for purchase from CalTrans under a number of development assumptions (such as housing or a commercial center) to determine residual land values and the possible use of public finance mechanisms for infrastructure.
 Monterey Downs Fiscal and Economic Impact Analysis, County of Monterey – prepared an analysis of the fiscal and economic impacts of the Monterey Downs project on the City of Seaside and the County of Monterey. Project included residential, retail, hotel and an equestrian facility that includes an event arena.
 Imperial Valley Solar Economic Impact Analyses, County of Imperial – evaluated the fiscal and economic impacts of a series of proposed solar voltaic facilities (or “solar farms”) on land near the City of Calipatria. Calculated the tax revenues and service expenditures accruing to the County from development of the project, and estimated the economic impacts, including the impact of the construction and ongoing operation of the solar farm, along with the negative impact of the removal of the project site from agricultural production.
 Alameda Point Conceptual Plan Fiscal Impact Analysis, City of Alameda – prepared an estimate of the fiscal impact of the development to provide guidance specific to the range of negotiation of incentives for development. Examined expected project revenues and expenditures required to provide municipal services.
 Napa Pipe Specific Plan Analysis, County of Napa – analyzed the fiscal and economic impact of the project on Napa County, as well the City of Napa, and prepared an urban decay analysis.  Loma Rica Specific Plan, City of Grass Valley – prepared a market study, fiscal impact study, and implementation plan for the Loma Rica Specific Plan.
 Newark Dumbarton Station Area Plan, City of Newark (CA) – prepared a market study, economic impact analysis, fiscal impact analysis, and infrastructure implementation plan.  Revenue Enhancement Options Study, City of Duarte – examined options to seek additional revenue as well as realize savings on City services. Analyzed the feasibility and approximate revenue from several sources, including parcel taxes, special taxes, utility user fees, sales tax measures, and others.  Downtown Revitalization Plan, City of Salinas – prepared a market study for the downtown area to identify opportunities for development. Provided advice on fiscal impact issues and financing tools available to assist with construction and rehabilitation of infrastructure in the downtown area.

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

5. KEY PERSONNEL AND RESUMES
NHA Advisors (Team Manager)
NHA’s Mark Northcross will serve as Team Manager to coordinate the efforts on Studies 1 and 2, facilitate good communication among the teams, and provide oversight on scenario design for the studies. A summary of Mark’s bio is provided below and full resume is provided in Appendix A.

Mark Northcross, Principal. Role: Team Manager
Mr. Northcross has more than 40 years of public finance experience in California. He is a leading advisor on climate change infrastructure and leads NHA’s alternative financing practice that focuses on “holistic” funding solutions, with special emphasis on SRF, WIFIA, Federal and State grants. Mr. Northcross has also managed the formation of CFDs for P3’s throughout the State since 1987 and is a leader in California in negotiating both public-private partnerships for both land-secured debt and redevelopment. He holds a B.A. in Social Sciences from the University of California, Irvine. He maintains his MSRB Series 50 License.

Raftelis (Study 1)
A summary of the Raftelis Team assigned to perform the scope of work for study 1 is provided in the organizational chart below. Full resumes for the assigned Raftelis team are provided in Appendix B.

Willdan (Study 2)
In order to perform the scope of services for Study 2 (Fiscal Impact Study), Willdan proposes to assign the following team to the Town:

Name Title
James Edison Managing Principal
Mike Medve Principal Consultant
Jasper Andrade Lead Analyst
Complete resumes for the Willdan team assigned to the Study 2 project are included in Appendix C.

FACILITATION

SUPPORT
Nancy Hetrick
Town of Los Gatos
STAFF

CONSULTANTS
Claire Pritchard
Polly Englot

PROJECT MANAGER / PRINCIPAL IN CHARGE /

LEAD FACILITATOR
Jonathan Ingram

FINANCIAL MODEL

DEVELOPMENT
Emily Uselton
Chad Cowan

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

6. TIMELINE AND WORK PLAN
Based on the scope of services discussed under Section 3 of this combined Study 1 and Study 2 proposal, our team proposes the timeline in the table below. Based on the schedule in the RFP, we understand that the Town intends to begin the contracting process with its selected consultants the week of September 2029.

Months After
Contract
Execution
Study 1: Fiscal Condition
Analysis and Five-Year
Forecast
Study 2: Fiscal Impact
Analysis
Study 3: Asset Liability
Management
(NHA Proposal Provided
Under A Separate Cover)
1 Project Initiation Project Initiation Project Initiation 2 Data Collection and
Review
Inventory and Evaluate
Liabilities
3 Assess Financial
Condition
4 Develop Forecasting
Model
Develop fiscal revenue
and cost inputs
Funding Needs and Risk
Reduction Analysis
5 Complete 20-Year Fiscal
Impact Analysis ALM Modeling
6 Final Reporting and
Knowledge Transfer
Finalize Fiscal Impact
Model Reserves Guidance
7 Study 1: Fiscal Condition Analysis (Raftelis) Additional Project Schedule Details Activity 1 - Proiect Initiation
Activity 2 - Assess Financial Condition
Activity 3 - Develop Forecasting
Model
Activity 4 - Final Reporting &
Knowledge Transfer
In-Person Meetings
Web Meetings
Deliverables

NOV DEC JAN FEB MAR APR

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

7. SAMPLES OF COMPARABLE PROJECTS
Study 1: Fiscal Condition Analysis (Raftelis)
Waukesha County Wisconsin
Waukesha County (County) contracted with Raftelis in early 2024 to conduct analyses related to County budget forecasting, gap identification and closure, and facilitation of a Budget Task Force comprised of community leaders to advise on gap closure recommendations. The goal of this engagement was to develop the information and understanding necessary to identify opportunities for improved efficiency and effectiveness of operations, staffing, structure, technology, processes, and policies necessary to provide desired services while operating within the County’s financial constraints. Raftelis completed detailed financial modeling and analysis and facilitated four budget task force meetings comprised of over 30 community members, stakeholders, and municipal and public safety leaders. The Budget Task Force Report for Waukesha County is included in Appendix D to this proposal.

Study 2: Fiscal Impact Study (Willdan)
Richards Ranch Fiscal Impact Study
The City of Santa Maria and the County of Santa Barbara engaged Willdan in 2025 to perform a fiscal impact study for a mixed-use Richards Ranch Project on the border of the City of Santa Maria in the unincorporated community of Orcutt. The analysis reviewed potential impacts of the Richards Ranch project on the city of Santa Maria General Fund and the County of Santa Barbara general fund. The fiscal impact analysis report is included in Appendix E to this proposal.

8. DISCLOSURE OF ABSENCE OF LITIGATION OR DISCIPLINE OVER LAST FIVE YEARS NHA Advisors (Team Manager)
There have been no instances in the last five years where NHA Advisors has been terminated in providing advisory services. There are no pending legal actions alleging violations of law against the firm, any partner of the firm, or any employee of the firm by any Federal or State regulatory agency.

Additionally, NHA does not have any legal events and disciplinary history on its Form MA and Form MA-I, which includes information about any criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation. The Town may electronically access NHA’ most recent Form MA and each most recent Form MA-I filed with the Commission at the following website:
www.sec.gov/edgar/searchedgar/companysearch.html
There have been no material changes to a legal or disciplinary event disclosure on any Form MA or Form MA-I filed with the SEC.

Raftelis (Study 1)
Description: Raftelis has been joined as a third-party defendant in a lawsuit filed by local developers against the Town of Fuquay-Varina, North Carolina. The subject of this currently pending litigation is development impact fees assessed by the town and developed by Raftelis. This is the only legal case in which Raftelis has been joined as a party in the history of our firm. Raftelis intends to vigorously defend the allegations and claim.

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

Willdan (Study 2)
Willdan Financial Services has not been involved in any litigation, arbitration, regulatory proceeding, or disciplinary action within the past five (5) years that would affect its ability to perform the services described in this proposal. Willdan is not subject to any conditions (e.g., bankruptcy, pending litigation, planned office closures, impending merger) that would impede completion of this engagement.

9. REFERENCES
NHA Advisors References (Team Manager)
Reference For Team Manager Services: Tahoe Douglas Visitors Authority Contact: Carol Chaplin, President & CEO
Contact Address: 4114 Lake Tahoe Blvd. South Lake Tahoe, CA 96150 Contact Phone & Email Address: (775) 589 - 2055 | [email protected] Start & End Date of Services: 2017 - Present
Description of Services:

Coordination between multiple consulting teams, legal counsel, and public agency staff to finance a $100 million events center in Stateline Nevada.

NHA’s role in this project was Municipal Advisor to the Tahoe Douglas Visitors Authority. However, that role included a project/team manager component to coordinate efforts from consultants (preparation of multiple studies to support the financing), legal counsel (efforts among TDVA’s general counsel, bond counsel, and disclosure counsel firms), construction contractors and engineers, and public agency staff at multiple public agencies.

Fee Charged: $309,788 (total fee charged over 2+ year engagement) Raftelis References (Study 1)
Commerce City CO
Reference: Theresa Wilson, CFO
P: 303.289.3627 / E: [email protected]
Cost: $153,610
Raftelis was engaged by the City of Commerce City, Colorado, to develop a comprehensive 10-year LongTerm Financial Plan. Our work included a thorough assessment of the City’s financial condition, analysis

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

of historical and projected revenues and expenditures, evaluation of debt capacity and reserve policies, and review of the City’s Capital Improvement Program. We developed a robust yet user-friendly financial model that enabled staff to test multiple projection scenarios and evaluate the fiscal impact of different policy and investment choices. The model was designed not only to serve as a forecasting tool but also as a decision-support resource for City leadership and the governing body.

Through a collaborative process that included staff interviews, department-level engagement, and workshops with the City Council and the public, we ensured that the plan reflected both operational realities and community priorities. The final Long-Term Financial Plan provided a clear roadmap for fiscal sustainability, equipping the City with the tools and strategies needed to balance service delivery expectations with underlying revenue growth. The project demonstrated our ability to integrate technical analysis with facilitation and decision-making support—helping Commerce City leadership make informed, transparent, and actionable fiscal choices.

Waukesha County WI
Reference: Shawn Lundie, Chief of Staff
P: 262.548.7902 / E: [email protected]
Cost: $124,550
Waukesha County (County) contracted with Raftelis in early 2024 to conduct analyses related to County budget forecasting, gap identification and closure, and facilitation of a Budget Task Force comprised of community leaders to advise on gap closure recommendations. The goal of this engagement was to develop the information and understanding necessary to identify opportunities for improved efficiency and effectiveness of operations, staffing, structure, technology, processes, and policies necessary to provide desired services while operating within the County’s financial constraints. Raftelis completed detailed financial modeling and analysis and facilitated four budget task force meetings comprised of over 30 community members, stakeholders, and municipal and public safety leaders.

City of Irvine CA
Reference: Dahle Bulosan, Director of Administrative Services P: 949.724.6263 / E: [email protected]
Cost: $65,000
In 2025 the City of Irvine engaged Raftelis to perform an assessment of its funding for fire services from the Orange County Fire Authority (OCFA). The City believed that its special district tax dollars were in excess of services received and sought an independent review and determination. Project work included meeting with City and OCFA leadership, and an extensive and detailed review of OCFA expenditures and revenues, including capital improvement expenditures in particular.

Raftelis concurred with the City that its contributions to OCFA exceeded services received and outlined the pros and cons of various models and alternatives for fire service provision, including estimates for standing up a City-run department and creating a City-specific fire district, among others. The City is undergoing internal discussions as to which method or methods to pursue going forward.

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

City of Centennial CO
Reference: Jeff Cadiz, Finance Director
P: 303.754.3440 / E: [email protected]
Cost: $38,800
The City of Centennial (City) engaged Raftelis to develop an interactive, dynamic, and sustainable model to support a better understanding of past resource availability and resource use, as well as provide mechanisms to forecast future requirements over a 10-year period. The model supports the use of both historical and current information as a basis for projecting revenues, expenditures, and fund balances in the major operating funds. The model is based on budgeted and actual revenue, expenditure, and fund balance data provided by the City of Centennial. Projections are based on a variety of factors, including historical data, the projected future cost of living increases, and other operating information provided by the City. The model is intended to serve as a living document and support updates by the City over time.

City of Loveland CO
Reference: Tim Sendelbach, Fire Chief
P: 970.962.2827 / E: [email protected]
Cost: $59,800
The Loveland Fire and Rescue Authority (LFRA) engaged Raftelis to assist the organization and its supporting partners, the City of Loveland and the Loveland Rural Fire Protection District, with the development of a comprehensive financial plan in the form of an interactive, eight-year financial sustainability model. The model will be used to evaluate the financial environment for the LFRA under current service levels, as well as testing assumptions regarding future impacts from growing service demands and initiatives.

In addition to the comprehensive model, the effort includes an assessment of financial impacts on the baseline and forecasting operating levels, including the following: developing a recommended property tax mill levy for the Loveland Rural Fire Protection District, investigating a proposed Fire Safety Tax, and reviewing the LFRA fee schedule for recommended changes and additions. The result is a comprehensive understanding of LFRA operations and services supported by a sustainable financial approach in order to support executive and Board decisions, as well as incorporation into the intergovernmental agreement for fire and rescue services.

The Woodlands Township TX
Reference: Monique Sharp, President and CEO
P: 281.210.3831 / E: [email protected] Cost: $333,300
The firm has enjoyed a 20-year history of engagements in The Woodlands (Township), with the former Woodlands Community Service Corporation and The Woodlands Township. Our previous experience with The Woodlands includes strategic planning, Board retreat facilitation, development of customer service standards, and the establishment of a performance evaluation system.

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

The Novak Consulting Group, now Raftelis, conducted a detailed financial analysis of incorporation alternatives for the Township. The Township selected us as the sole consulting firm to facilitate its incorporation process. Service sharing—contracting with local municipal utility districts and Montgomery Count —was a critical part of the incorporation assumptions. In 2020, we completed a report on governance planning in anticipation of an upcoming ballot measure on incorporation. This included extensive work on development review and land use plans and forecasts as the community moves forward.

City of Boulder CO
Reference: Jane Brautigam, Former City Manager (retired) P: 720.425.9757 / E: [email protected]
Cost: $114,500
The City of Boulder (City) has engaged the firm for a variety of services since 2010. Part of that effort included the development of a dynamic, user-friendly 10-year financial model to anticipate revenue and expenses and prioritize investments within the context of their long-term financial impact. This effort was later followed by the development of detailed financial and cost-allocation analysis of technology and facilities.

Willdan References (Study 2)
City of Lancaster, CA
Special Tax Consultant and Community Facilities District Formation Services Willdan assisted the City of Lancaster with a cost of service and fiscal study, and subsequent CFD formation, to fund maintenance services associated with new development projects in the City. The City requested that the special tax rates be lower in the City center to account for the existing availability of resources and lower demand for services within that region. Areas external to the City center generally would require the construction of new public facilities (community centers, corporation yards, parks, trails, etc.) and would incur greater maintenance demand. Only limited guaranteed revenues were considered in the fiscal analysis. The CFD was formed in early 2021.

Willdan completed special tax analysis and cash flow pro forma analysis for the project, developed a taxing methodology that suited anticipated development, and which apportioned the tax burden among the types of development expected in the areas proposed for inclusion in the CFD, and we prepared the Rate and Method of Apportionment and CFD Report. The first annexation to the CFD took place in Summer 2022.

Fees Charged: $45,000
Client Contact: George N. Harris II, MPA, Director of Finance Tel #: (661) 723-5988 | Email: [email protected] City of Alameda, CA
Fiscal & Economic Impact Analysis

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

The City of Alameda engaged Willdan to support the redevelopment of Alameda Point, a former naval air station comprising roughly 1,400 acres. Willdan’s work included preparing a fiscal impact analysis of the planned development, a facilities financing plan, and a feasibility analysis to evaluate whether projected development could sustain the infrastructure needed to rehabilitate the base. The team also assisted the City in negotiations with developers of the first two parcels and presented findings at several public meetings.

Willdan’s fiscal analysis modeled anticipated General Fund revenues (property tax, sales tax, and other sources) and expenditures (public safety, maintenance, and park services) at full buildout and for an initial phase. The infrastructure financing plan assessed potential funding sources—including developer equity, assessments, and special taxes—and phased infrastructure costs. The feasibility analysis then evaluated the tax and assessment burden relative to projected land values to determine whether development could reasonably support the City’s long-term financing strategy.

Fees Charged: $75,800
Client Contact: Jennifer Ott, Alameda City Manager
Tel #: (510) 747-4700 | Email: [email protected]
City of Hayward, CA
Fiscal Impact Analysis
The City of Hayward had an option to acquire several parcels from CalTrans that had been purchased as right of way for the expansion of Highway 238, connecting Interstate 580 and Interstate 880 through the City. The plan was stopped and CalTrans began the process of selling the land. Hayward reserved an option on certain parcels and needed assistance with the understanding the development potential of the parcels, including fiscal impacts, public finance, land uses, and residual value. This project is ongoing as Willdan assists the City and its elected officials in understanding each parcel and its potential, along with the tradeoffs inherent in City policy goals such as the provision of affordable housing or fostering a vital downtown.

To date Willdan has analyzed five of the parcels under a number of development assumptions to determine residual land value and the possible use of public finance mechanisms for infrastructure. As part of this effort Willdan has provided a sensitivity analysis showing the tradeoffs of various development and policy scenarios (primarily the effect on residual land value and project feasibility).

Fees Charged: $118,230
Client Contact: Nicole Gonzales, Finance Director, City of San Leandro (Formerly City of Hayward Finance Director)
Tel #: (510) 577-3376 | Email: [email protected]

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

10. PRELIMINARY FEE SCHEDULES
NHA Advisors (Team Manager)
For work as Team Manager facilitating Studies 1 and 2 described in this proposal, NHA proposes to be compensated based on time and materials required at the hourly rate schedule shown below. We propose a not-to-exceed budget for these services of $17,500. This budget equates to approximately 50 hours of time serving in this capacity.

Fixed Fee Fee
Engagement/Administrative Setup
(Contract, Insurance, etc.) $500
Professional Services (Hourly) 2025
Rates(1)(2)
Principal $360
Director / Senior Vice President $335
Vice President $310
Assist. Vice President / Sr. Associate $285
Associate $260
Senior Analyst $230
Analyst $205
Administrative $130
1) Hourly rates will escalate by 3% annually each January 1st (rounded to the nearest five dollars based on the
prior year’s rounded amount).
2) Effective hourly rates shown in invoices may be reduced to incorporate non-billable time.

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

Raftelis Proposed Fees for Study 1
A breakdown of costs for Study 1 by project activity is provided in the table below.

Activity Description Consultant
Labor Expenses Total Cost
1 Project Initiation $9,100 $1,250 $10,350
2 Assess Financial Condition $24,250 $4,900 $29,150
3 Develop Forecasting Model $39,250 $3,200 $42,450
4 Final Reporting & Knowledge Transfer $20,750 $2,800 $23,550 BASE SUBTOTAL $93,350 $12,150 $105,500
5 OPTIONAL – Develop Gap Closure Strategies $26,450 $3,600 $29,750 6 OPTIONAL – Decision-Support for Town Council $24,750 $5,280 $29,750 TOTAL WITH BOTH OPTIONS $144,550 $21,030 $165,000

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

Willdan Proposed Fees for Study 2
Based on the Scope of Services presented herein, we propose a fixed fee of $18,000. This fee includes attendance at a total of two meetings with Town staff and/or a Town Council meeting. Attendance at more than two meetings will require additional billing at the applicable hourly rate identified in the table below. Additionally, comprehensive written responses to resolve conflicts, and preparation of more than one set of major revisions to the report, will be classified as additional services, and may require additional billing at the stated hourly rates. These additional fees shall only take effect once the fixed fee stated above has been exceeded.

Hourly Rates/Additional Services
Willdan’s hourly rates are listed below.

Willdan Financial Services
Hourly Rate Schedule
Position Team Member Hourly Rate
Vice President / Director $310
Managing Principal James Edison $300
Principal Consultant Mike Medve $270
Senior Project Manager $250
Project Manager $210
Senior Project Analyst $150
Senior Analyst $135
Analyst II Jasper Andrade $120
Analyst I $110

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

11. STATEMENT OF INSURANCE COVERAGE
The tables below summarize each member of our team’s insurance coverage compared to the Town’s Sample Consultant Services Agreement. Each team member will maintain the required coverage for the term of the contract if selected by the Town for this engagement.

NHA’s Insurance Coverage
Coverage Type Town’s Requirements
in Sample CSA NHA's Coverage
Carriers N/A
• Valley Forge Insurance Company
• Hartford Casualty Insurance Company
• Underwriters at Lloyd’s, London
General Liability
(per occurrence) $2M $2M
General Liability
(aggregate) Not specified $4M
Auto Liability $1M (per accident) $1M (per accident)
Worker's Comp (per
occurrence) $1M $1M
Professional Liability $1M per occurrence $1M per occurrence / $2M aggregate Raftelis’ Insurance Coverage
Coverage Type Town’s Requirements
in Sample CSA Raftelis’ Coverage
Carriers N/A
• Federal Insurance Company
• Chubb National Insurance Company
• ACE American Insurance Company
• Hanover Insurance Company
General Liability
(per occurrence) $2M $1M
General Liability
(aggregate) Not specified $2M
Auto Liability $1M (per accident) $1M (per accident)
Worker's Comp (per
occurrence) $1M $1M
Professional Liability $1M per occurrence $5M
Additional Coverage $5M Excess Liability (Umbrella Coverage)

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

Willdan’s Insurance Coverage
Coverage Type Town’s Requirements
in Sample CSA Willdan’s Coverage
Carriers N/A
• Travelers Property Casualty Company
of America
• Allied World Surplus Lines Insurance
Company
General Liability
(per occurrence) $2M $1M
General Liability
(aggregate) Not specified $2M
Auto Liability $1M (per accident) $1M (per accident)
Worker's Comp (per
occurrence) $1M $1M
Professional Liability $1M per occurrence $1M per claim

12. TOOLS, DATA SOURCES, AND USE OF AI
Raftelis’ Response for Study 1 (Fiscal Condition Analysis) The fiscal condition assessment and financial projections will be developed using a flexible Excel-based model, which will be transmitted to the City. The model will be built on the City’s existing revenue and expenditure data, both current and historical. Artificial intelligence will not be used in the development of this model.

Willdan’s Response for Study 2 (Fiscal Impact Analysis) The team members assembled for this engagement have extensive experience with financial modeling in Excel for a broad range of financial analyses. Stemming from the team’s experience managing longterm financial models of all types for cities, counties, school districts, toll road agencies, port authorities and other public entities, Willdan uses a modified version of the F1F9 financial modeling style to allow for the analysis of just about any type of cost or revenue, from the simplest to the most complex. Using the principles of structured design, transparency, robust annotation and adherence to sound financial modeling principles, our models are built to be flexible, auditable and easy to maintain and adjust to match the needs of the client.

Quality Control/Quality Assurance (QA/QC) is integrated into our team’s process. However, when dealing with large, complex financial models, the importance of adhering to time-tested financial modeling principles cannot be underestimated. This makes the initial modeling process less likely to result in errors and also makes errors easier to identify and fix during the QA/QC process.

The core of the financial model is a “back-end” simply formatted horizontal cash flow worksheet that contains all necessary calculations, assumptions and formulas. The formula-based back-end model can be

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT)

easily audited and reviewed for assumptions and consistency. From there, we transpose the data into a more readable vertical format so that it can be presented in the report and/or the presentation. These tables will be robustly annotated and formatted for visual appeal and readability.

The draft report will be provided to the City in MS Word format. For each round of comments/edits, clean and redline versions will be distributed. When the report is finalized, a final Word file and PDF will be provided so that text and tables can be added to staff reports and/or other City documents, as needed.

Willdan uses Enterprise Artificial Intelligence (AI) occasionally and sparingly when developing work products. Examples may include the following:
• To accelerate the process of finding a specific law or industry best practice. • To receive suggestions for word choice, formatting and/or visual presentation of results. • Discovering lesser-used functions in Excel or save time developing regular expressions, conditional formatting formulas or similarly complex tasks.

Willdan does not use AI output directly in reports or use any suggestion provided by AI without first verifying, validating and/or auditing the results. Furthermore, the Enterprise AI software that we use does not share, store, or train on our data, ensuring complete confidentiality and compliance with client privacy requirements.

The following is a list of resources commonly used in fiscal impact studies:
• Microsoft Excel
• County Auditor data related to AB8 apportionment factors for each Tax Rate Area • ParcelQuest for Assessed Values and other property information • Bureau of Labor Statistics data related to the number of jobs within the City • Census and/or American Community Survey data
• California Department of Finance population and persons per household data • Other data points originating from government, NGO and qualified private sources as needed.

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT) APPENDIX A: NHA RESUMES

ITEM NO. 7.

Mark Northcross, Principal
During a California public finance career that spans back to 1981, Mark Northcross has structured debt for nearly every kind of issuer and nearly every kind of revenue source legally available in the State.

Mr. Northcross is a leader in statewide work on climate change adaptation.

He managed the delivery of a comprehensive funding guide for Resilience by Design, a Rockefeller Foundation funded program for the Bay Area. He works with the Bay Conservation and Development Commission, Bay Area Regional Collaborative, the Southern California Association of Governments and the Resources Legacy Fund on climate change adaptation issues. Mr. Northcross also serves on special climate change committees under the aegis of the City of Sacramento, the West County Wastewater District and the Coastal Hazards Adaptation Resiliency Group. With expertise in wildfire risk mitigation and funding, Mr. Northcross was invited by the Federal Reserve Bank of San Francisco to prepare an article on that subject for their Community Development Innovation Review publication, which was published in October 2019. A link to that article is available here:
https://www.frbsf.org/community-development/publications/community-developmentinvestment-review/2019/october/rebuild-to-fail-or-rebuild-to-adapt-how-cra-lending-canguide-climate-change-disaster-response/ Mr. Northcross was an integral team member for the California Resilience Challenge project in the Town of Paradise. That project was completed in April 2023 and featured groundbreaking work quantifying potential reductions in fire related losses and in insurance premiums in the wildlandurban Interface through fire mitigation methods. More detail about that project can be found here: https://www.bayareacouncil.org/press-releases/new-studyshows-how-communities-in-the-wildland-urban-interface-can-drastically-reduce-fire-risk-andreduce-insurance-premiums/ Mr. Northcross is also leader in negotiating both public-private partnerships and the workout of defaulted debt. He has negotiated public-private partnerships for the successful development of major mixed-use projects, including such diverse communities as Davis, Fort Ord Reuse Authority, Hemet, Mammoth Lakes, Palmdale, Rocklin, South Lake Tahoe, and West Covina. He is also a leader in negotiating joint ventures between different public agencies – with notable success in putting together bond funded risk sharing programs for cities, counties, and school districts in California.

With a practice in water and sewer financing dating back to 1983, Mr.

Northcross is very active in water and sanitation policy issues in California.

He presently serves on the California Association of Sanitation Agencies SRF committee.

Mr. Northcross also has hands-on experience as a CFO, serving since 2001 as treasurer for the West Point Inn Association, which runs a 117-year-old hikein hotel in the parklands of Marin County.

Public Finance
Professional Since:
1981
Expertise
• Public Policy
• Utility Financing
• Climate Change
Infrastructure
• Development/LandSecured Financing
• Economic
Development
• Developer
Negotiations
• Pension Financing
Education
• B.A. Social Sciences
Licenses & Registrations
• Registered with the
SEC and MSRB
• Series 50 License
Staff Resumes – NHA Advisors, LLC

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT) APPENDIX B: RAFTELIS RESUMES

ITEM NO. 7.

Jonathan Ingram

PROJECT MANAGER / PRINCIPAL IN CHARGE / LEAD

FACILITATOR
Vice President
ROLE
Jonathan will manage the day-to-day aspects of the project ensuring it is within budget, on schedule, and effectively meets the City’s objectives. He will also lead the consulting staff in conducting analyses and preparing deliverables for the project. Jonathan will serve as the City’s main point of contact for the project.

PROFILE
Jonathan has 20 years of experience in management consulting and local government management, most recently as budget manager in the City of Cincinnati, Ohio, budget office. Before that, Jonathan served as a management consultant and worked in the city manager's office for the City of Highland Park, Illinois.

Jonathan is a skilled financial analyst in the areas of budget and revenue analysis and has led our work with fiscally distressed communities, supporting their efforts to restore operational and financial sustainability.

Additionally, he has extensive experience as a management and operations consultant to local governments in the United States and abroad.

As a consultant, Jonathan has completed operations reviews for over 200 local governments and has helped to improve service delivery for a broad range of departments – from police to public works. He has developed staffing and deployment plans for city operating departments, analyzed and facilitated intergovernmental consolidations, helped local governments develop custom performance management systems, and facilitated the development of long-term strategic plans and financial models.

Jonathan's areas of expertise are in local government budgeting and finance, operations analysis, project management, public safety staffing analysis, process improvement, and performance measurement. He is adept at quickly assessing strengths and opportunities within a municipality, analyzing and developing actionable recommendations for improvement, and communicating findings and next steps to a wide variety of audiences, including staff, elected officials, and the public. During his tenure with the City of Cincinnati, Jonathan managed the development and administration of a $1 billion operating budget. He also conducted special analysis projects, served on the City's collective bargaining team, and co-managed the implementation of an enterprise budget system.

Jonathan earned a bachelor's degree in political science from Aurora University and a master's degree in public administration from Northern Illinois University. He is a member of the International City/County Management Association and the Ohio City/County Management Association.

Professional History
 Raftelis: Vice President
(2024-present); Senior
Manager (2021-2023);
Manager (2020-2021);
Senior Associate, The Novak
Consulting Group (2012-
2020)
 City of Cincinnati, Ohio:

Budget Manager (2010-
2012)
 Management Partners:

Senior Management Advisor
(2005-2010)
Education
 Master of Public
Administration - Northern
Illinois University (2005)
 Bachelor of Arts in Political
Science - Aurora University
(2003)
Professional Memberships
 International City/County
Management Association
(ICMA)
 Ohio City/County
Management Association
(OCMA)

ITEM NO. 7.

Nancy Hetrick

FACILITATION SUPPORT
Vice President
ROLE
Nancy will work at the direction of Jonathan in assisting with facilitation of meetings and workshops.

PROFILE
Nancy has nearly 30 years of experience as a local government management consultant and practitioner. Her lifelong commitment to the value and importance of public service underscores her work with local government clients. She invests time to understand both the human dynamic and the systems and culture within an organization to ensure project outcomes that will best service the unique needs of the organization.

Nancy has extensive experience as a facilitator and trainer. She has worked with both elected and appointed officials from jurisdictions throughout the western United States to conduct goal-setting, develop strategic plans, and prioritize service delivery. She has led engaging strategic planning processes that sharpen focus while strengthening teamwork. The strategic plans that are developed offer a meaningful and implementable road map for the organizations she serves. In addition, Nancy has worked with leadership teams in all local government service areas to improve team effectiveness.

In addition to her work in organizational development and strategic planning, Nancy has led hundreds of local government consulting engagements spanning all areas of general management consulting support, including executive recruitment, organization assessment, workforce and succession planning, performance management system design, and financial sustainability planning.

Nancy is active in professional associations that support the advancement of local government professionals. She served as the President of the Municipal Management Association of Northern California (MMANC), founded the Women’s Leadership Summit, and sits on the board of Cal-ICMA, where she chairs the Cal-ICMA Talent Initiative.

Nancy studied political science with a concentration in public administration as an undergraduate and continued her studies in a Master of Public Administration program. She has participated in an executive leadership program and received certifications in leadership and style assessment tools such as the Myers-Briggs Type Indicator (MBTI), DiSC, and the CPI 260 Psychological Inventory.

Professional History
 Raftelis: Vice President (2023-
present)
 Baker Tilly LLC: Managing
Director (through acquisition)
2022-2023
 Management Partners: Vice
President, Partner, Senior
Manager, Senior Management
Advisor (2006-2022)
 County of San Mateo, County
Manager’s Office: Principal
Management Analyst,
Management Analyst III (2001-
2006)
 Management Partners:

Management Advisor (1996-
2001)
 Norman Roberts and
Associates (Executive
Recruiters): Research
Associate (1995-1996)
Education
 Coursework complete toward
Master of Public Administration,
California State University, San
Francisco (1996-1997)
 Bachelor of Arts, Political
Science with concentration in
Public Administration, California
State University, Chico (1994)
Certifications
 Myers-Briggs Type Indicator
 DiSC
 CPI 260 California
Psychological Inventory
Professional Memberships
 ICMA
 Cal-ICMA
 Women Leading Government
 Municipal Management
Association of Northern
California, Past President,
founder, Women’s Leadership
Summit

ITEM NO. 7.

Emily Uselton

FINANCIAL MODEL DEVELOPMENT
Senior Manager
ROLE
Emily will work at the direction of Jonathan in developing the financial model for the City.

PROFILE
Emily joined Raftelis in 2023 after more than seven years of direct service to the City of Norfolk, Virginia. Emily has over 15 years of finance experience in both the private and public sectors. As Norfolk’s Budget Director and Assistant Director, Emily was responsible for overseeing the City’s strategic financial and policy planning, including managing the development and administration of a $1 billion operating budget. Her leadership helped provide effective resource recommendations, leading to better performance outcomes and the ability to solve challenging policy issues. Emily led several citywide initiatives, including public workforce recruiting and retention strategies, the development of a program budget, as well as budget development public engagement efforts. Emily’s direct service experience and breadth of exposure to relevant local government and utility policy issues make her skillful at asking thought-provoking questions, inspiring innovation and creativity in the problem-solving process, and yielding results that are as pragmatic as they are valuable. During her time in local government, she presented to a variety of stakeholders, including the City Council, executive leadership teams, community groups, and a cross-section of department-level staff.

Since joining Raftelis, Emily has continued to assist utility and local government clients across an array of focus areas, encompassing strategic planning, facilitation, and organizational assessments. Emily’s areas of expertise are in budgeting and finance, workforce planning, operations analysis, internal service functions, project management, and performance measurement. She is a quick study of organizational context, providing relevant and achievable recommendations that appreciate the unique considerations of each organization.

Previously, Emily worked in private-sector finance and accounting. She began her career as an auditor for mid-size financial institutions before transitioning to a commercial healthcare real estate company, where she built a team of accountants responsible for overseeing multiple mergers and acquisitions between the company and seniors housing operators across the U.S. and abroad.

Emily earned a master’s degree in Public Policy from the College of William and Mary, and a Bachelor of Science with concentrations in Accounting and Finance from Xavier University – Cincinnati. Since 2009, she has held a certified public accountant, CPA certification (inactive).

Professional History
 Raftelis: Senior Manager
(2025-present); Manager
(2023-2024)
 City of Norfolk, Virginia; Interim
Budget Director (2022);
Assistant Budget Director
(2021-2022); Budget and
Policy Manager (2019-2021);
Budget Analyst / Senior Analyst
(2015-2019)
 Welltower (formerly Healthcare
REIT): Director Relationship
Accounting (2010-2013)
 Crowe Horwath LLP: External
Auditor, Financial Institutions
Group (2008-2010)
Education
 Master of Public Policy –
College of William and Mary
(2015)
 Bachelor of Science in
Accounting and Finance –
Xavier University
(2008)
Certifications
 Certified Public Accountant,
CPA (inactive – 2009)
Professional Memberships
 Government Finance Officers
Association (GFOA)
 International City/County
Management Association
(ICMA)
 Engaging Local Government
Leaders (ELGL)

ITEM NO. 7.

Chad Cowan

FINANCIAL MODEL DEVELOPMENT
Senior Manager
ROLE
Chad will work at the direction of Jonathan in developing the financial model for the City.

PROFILE
Chad joined Raftelis in August of 2023. Chad has over 24 years of experience working with local governments, utilities, non-profits and Higher Education clients. He spent the majority of his career working as a municipal advisor, investment banker and local government official and has executed over $5 billion in financing. During this time, he has assisted clients in evaluating their long-term financial needs and the impact that current decisions have on their long-term financial health.

Through his work and education, Chad has developed a broad knowledge of long-term financial planning for his clients, including building unique models for his clients to help facilitate the decision-making process. As a Consultant with Raftelis, Chad is responsible for delivering client services across a range of activities, including long-term financial planning, feasibility studies, and other studies.

Chad earned a Master of Public Administration from the University of Southern California. He also earned a Bachelor of Science in Planning, Public Policy and Management.

KEY PROJECT EXPERIENCE
North Carolina DEQ (NC): Regional Water and Wastewater Infrastructure Concept Plan Chad served on the team that developed a methodology to evaluate the overall financial strength of the entities identified for approximately 40 individual utilities within the Study Area. The team developed a Utility Health Scorecard which provides a high-level overview of the health of each entity, considering various system characteristics and both financial and affordability metrics. Specifically, the Scorecard developed for this study leveraged the Environmental Protection Agency’s (EPA) Financial Capability Assessment (FCA) Guidance as well as commonly used financial metrics and metrics related to the overall strength of the subject utilities.

Piedmont Triad Regional Water Authority (NC): Long-term Financial Planning Model Chad served as the project manager for the development of a new long-term financial planning model for PTRWA in 2023 and 2024 to assist in the evaluation of significant expansion of the water treatment plant and implementation of new capital projects to deal with the treatment PFAs. Through the evaluation of the model in 2023 and 2023, the Authority worked with partners to evaluate the issuance of a significant increase in the Authority’s debt and adjustments to rates that support the Authority.

Professional History
 Raftelis: Senior Manager
(2023-Present)
 DebtBook: Director (2022-
2023)
 HilltopSecurities, Inc.:

Managing Director (2022-
2023); Director 2016-2022
 City of Durham, NC:

Treasurer (2013-2016);
Treasury Manager (2011-
2013)
 D.A. Davidson: Vice
President (2008-2011)
Education
 Master of Public
Administration - University of
Southern California (1999)
 Bachelor of Science in
Planning, Public Policy &
Management - University of
Oregon (1996)
Certifications
 Series 50 Municipal Advisor
Representative

ITEM NO. 7.

City of Bartow (FL): General Fund Development Study
Chad served as the project manager for the development of the General Fund Sustainability model for the City of Bartow in 2023 and 2024. The long-term financial plan leveraged Raftelis’ Decision Panel Model, which allowed the City to evaluate multiple millage rates, capital funding plans, and staffing options. Through the evaluation of the model in 2023, the City Council voted to increase its millage rate to fund long-overdue capital projects throughout the City. In 2024, the City hired Raftelis to update the analysis. The update confirmed the course set forth in the prior year’s review and allowed the City to move forward with the implementation of its plan.

Village of Palm Springs (FL): Utility Rate Studies, General Fund Sustainability Model, CRA Sustainability Model
Chad served on the team that developed multiple models for the Village of Palm Springs. Throughout the summer and fall of 2024, Raftelis partnered with the Village to complete four separate long-term models, including General Fund Sustainability, a CRA Fund Sustainability Model, a Stormwater Rate Study, and a Water and Sewer Rate Study. The team leveraged Raftelis’ Decision Panel Model for each of the models, which allowed the Village to evaluate multiple solutions for each fund. The project is ongoing and expected to be completed in the next several weeks.

City of Valdosta (GA): Water and Sewer Rate Studies
Chad led the Raftelis effort on the creation of a new Water and Sewer Rate Study and Bond Feasibility analysis for the City of Valdosta (City) in 2023 and 2024. He conducted a 10-year revenue sufficiency analysis update for the water and sewer system including evaluating the City’s upcoming capital plans and drafted the bond feasibility report related to the City’s 2024 Bond issuance.

Mecklenburg County (NC): Development of Long-term Financial Models for Solid Waste and Storm Water Departments
In a prior position, Chad served as the municipal advisor for the County and was tasked with developing long-term financial plans for the County’s Department of Solid Waste & Recycling and the Department of Stormwater Services. Each department had historically funded its capital plans with a Pay-Go model. With significant capital plans for each department, the proposed rate increases for each department were unacceptable to senior management. In conjunction with the finance team, Chad developed a long-term financial model for each department. The models provided the ability for each department to quickly adjust projected capital projects, fees and financing options. The models provided the ability for each department to partner with finance to develop proposed fee structures acceptable to senior management and adopted by the Board of County Commissioners.

City of Durham (NC): Served as City Treasurer – Responsibilities including Debt Structuring and Analysis, Management of the City’s Investment Portfolio, Traditional Banking Relationships, and Management of the Risk Management Team
Chad served as the Treasurer for the City of Durham, NC, from 2011 through 2016. During his tenure, he managed the issuance of over $400 million in debt, including general obligation bonds, limited obligation bonds, water revenue bonds (including interim financing solutions), and finalizing a Section 109 HUD Loan. During this time, he also managed the City’s investment portfolio and banking relationships – including the roll-out of a new online payment platform. Over the last two years of his tenure, he led the restructuring of the City’s Risk Management Team, including the implementation of a new Risk Management Information System, replacing the City’s ThirdParty Administrators for workers’ compensation and general liability and making significant improvements to the Department’s internal reporting process. Additionally, he assisted in the development of a long-term financial model for the City’s general fund and the evaluation of economic development proposals.

ITEM NO. 7.

Claire Pritchard

STAFF CONSULTANT
Senior Consultant
ROLE
Claire will work at the direction of Jonathan in conducting interviews, directing research and analysis, preparing recommendations, and drafting deliverables.

PROFILE
Claire has more than 10 years of experience in management consulting and local government management. She began her consulting career following five years of service with Dakota County, Minnesota, where, most recently, she held the position of assistant to the county manager. While with Dakota County, Claire coordinated the County’s legislative agenda, assisted in the development of the annual budget, and conducted financial impact analyses and process improvement efforts for a variety of County functions. Claire also coordinated the County’s transition to a new form of government in 2013.

As a consultant, Claire has worked on organizational and staffing analyses for communities around the country, such as the Town of Nantucket, Massachusetts, the City of Allentown, Pennsylvania, and the City of Bloomington, Indiana, as well as several utilities, including Fairfax Water, Virginia, Pinellas County Utilities, Florida, the San Diego Public Utilities Department, California, and Tampa Bay Water, Florida.

Claire has assisted in developing financial models to analyze revenue and expenditure trends, as well as conducting detailed staffing and workload analyses to determine optimal organizational structures. She has developed and analyzed an array of employee and community-based surveys. Claire has conducted several of the best practice and benchmarking research projects and has assisted in creating strategic planning and implementation deliverables.

As a student at the University of Chicago, Claire served as a policy intern with the National Association of Regional Councils, where she developed an educational program on the work of regional councils. She was also the associate editor for international development for the Chicago Policy Review.

Claire earned a bachelor’s degree in political science from the University of Chicago and a master’s in public policy from the University of Chicago Harris School of Public Policy. She is a member of the International City/County Management Association and is a former ICMA Local Government Management Fellow.

Professional History
 Raftelis: Senior Consultant
(2023-present); Consultant
(2021-2022); Associate
Consultant (2020-2021);
Associate Consultant, The
Novak Consulting Group
(2018-2020)
 Dakota County, Minnesota:

Assistant to the County
Manager (2013-2017)
 National Association of
Regional Councils: Policy
Intern (2012)
 Congressional Research
Service (2010-2011)
Education
 Master of Public Policy -
University of Chicago (2013)
 Bachelor of Arts in Political
Science - University of
Chicago (2009)
Professional Memberships
 International City/County
Management Association
(ICMA)
 Engaging Local Government
Leaders (ELGL)
 International Facility
Management Association
(IMFA)

ITEM NO. 7.

Polly Englot

STAFF CONSULTANT
Associate Consultant
ROLE
Polly will work at the direction of Jonathan in conducting interviews, directing research and analysis, preparing recommendations, and drafting deliverables.

PROFILE
Polly has robust analytical experience throughout the public sector, having worked in local government, nonprofit, and international development settings. She is proficient in the areas of budget planning and analysis, process improvement, and project management. Polly is a detail-oriented problem solver who leverages data and organizational analysis to identify trends and actionable solutions.

Prior to joining Raftelis, Polly worked in Broward County’s Office of Management and Budget in southern Florida. She supported the monitoring and development of over 100-million-dollar annual operating budgets for judicial offices and the county’s extensive environmental agency. This work included forecasting for a dozen special revenue funds, monitoring state and federal grants, assessing payroll and benefit costs for over 500 employees, and evaluating new staffing and capital project requests.

Throughout her academic studies, Polly developed highly functional skills in GIS analysis, data visualization and communication, evaluation design, and public budgeting. She strengthened these skills in the classroom by learning from her prior tenure at Food Bank for New York City, where she supported planning and content development for over 90 marketing campaigns and events annually. In addition, she collaborated with stakeholders and donors at all levels to raise awareness, fundraise, and support the Food Bank’s clients.

Polly began her career in program operations supporting international public health programs based in West Africa, funded by major public and private grantors. Programs ranged from women’s health information campaigns to sanitation service delivery research, and she completed technical assistance trips to Ghana and Liberia.

Polly earned a master’s degree in public policy from Duke University’s Sanford School of Public Policy and a bachelor’s degree in geography, with minors in Arabic and French, from Bucknell University in Pennsylvania.

Professional History
 Raftelis: Associate
Consultant (2024-present)
 Broward County: Budget and
Management Analyst (2022-
2023)
 Food Bank for New York
City: Marketing and Events
Coordinator (2018-2020)
 Population Services
International: Program
Coordinator (2016-2018)
Education
 Master of Public Policy -
Duke University, Sanford
School of Public Policy
(2022)
 Bachelor of Arts in
Geography, minors in Arabic
and French - Bucknell
University (2016)

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT) APPENDIX C: WILLDAN RESUMES

ITEM NO. 7.

Fiscal Impact Analysis for Proposed and Planned Growth 6 Town of Los Gatos, CA
Education
Juris Doctorate, University
of California, Berkeley,
School of Law
Master of Public Policy,
Goldman School of Public
Policy, University of
California, Berkeley
Bachelor of Arts,
magna cum laude, Harvard
University
Professional Registrations
Member of California
State Bar (inactive)
Affiliations
Council of Development
Finance Agencies
CFA Society of
San Francisco
Congress for the
New Urbanism
Urban Land Institute
Seaside Institute
International Economic
Development Council
25 Years’ Experience
James Edison
Managing Principal
Mr. James Edison specializes in the nexus between public and private, with expertise in publicprivate partnerships, and the benefits of economic development to municipalities and state, provincial, regional and national governments. He possesses deep expertise in land use economics, with a specialty in finance and implementation, including fiscal impact and the public and private financing of infrastructure and development projects, both in the U.S. and internationally. Mr. Edison’s public-sector experience includes local and regional economic impact studies; fiscal impact evaluations; new government formation strategies; and the creation of impact fees, assessments, and special taxes to fund infrastructure and public facilities. He has conducted numerous evaluations of the economic and fiscal impact of specific plans and consulted on a wide variety of land use planning topics related to community revitalization and the economic and fiscal impacts of development.

As a former bond attorney, Mr. Edison understands the legal underpinnings and technical requirements of public financing instruments and has advised both public and private clients on the use of individual instruments, and the interaction between those instruments and the needs of developers and project finance.

Relevant Project Experience
City of Foster City, CA – Gilead, Chess-Hatch, Mirabella and Pilgrim-Triton Fiscal Impact Studies: The City of Foster City hired Mr. Edison, while at Economics Research Associates (“ERA”), to provide an evaluation of the fiscal impact of three specific plans. He evaluated the impact on services of each plan, the anticipated new revenues and expenditures, and the necessity for new public facilities to serve the projects.

Alameda Point Development Corporation, CA – Alameda Point Conceptual Financing Plan: Mr.

Edison is assisted the Alameda Point Development Corporation on a number of assignments related to the financing of infrastructure at Alameda Point, the feasibility of development, the financing of services, fiscal impacts and mitigation, and selection of developers. Alameda Point is a former naval air station that was closed in 1997 and the City took title to the land on June 4, 2013.

County of Monterey, CA – East Garrison Specific Plan Financing and Implementation: East Garrison, located on the easternmost portion of the former Fort Ord in Monterey County, consisted of approximately 1,400 residential units, including single-family detached, town homes, apartments, and affordable housing, a town commercial center, and arts facilities. Mr.

Edison assisted the developer and the County with a wide range of financing issues, including the availability and structuring of public finance, fiscal mitigation measures, economic impacts, the implementation of affordable housing, and the negotiation of business terms between the developer and the County. He also assisted the developer in negotiations with the Fort Ord Reuse Authority regarding the base wide capital improvement program and the structuring of the payment of impact fees generated by the development.

County of Napa, CA – Napa Pipe Specific Plan Analysis: Mr. Edison evaluated infrastructure finance requirements for the Napa Pipe project in southern Napa County, consisting of approximately 500,000 square feet of commercial development, 3,000 residential units, and a hotel. An infrastructure financing strategy was provided that drew upon the resources of the project itself and other financing mechanisms such as special assessments.

ITEM NO. 7.

Fiscal Impact Analysis for Proposed and Planned Growth 7 Town of Los Gatos, CA
J. Edison
Resume Continued
The fiscal and economic impact of the project on the County was analyzed, also prepared an urban decay analysis evaluating the impact on retail businesses in the City of Napa. Mr. Edison presented the findings to the County Board of Supervisors and Napa’s City Council.

County of Imperial, CA – Solar Farm Fiscal and Economic Analysis: Mr. Edison was engaged by the County of Imperial to evaluate the fiscal and economic impacts of a series of proposed solarvoltaic facilities (or “solar farms”) on land near the Town of Calipatria in Imperial County.

For each, Mr. Edison calculated the tax revenues and service expenditures accruing to the County from development of the project, and also estimated the economic impacts of the project using IMPLAN, including the impact of the construction and ongoing operation of the solar farm, along with the negative impact of the removal of the project site from agricultural production.

City of Redding, CA – Oasis Towne Center Financing and Fiscal Analysis: Hired by the Levenson Development Company (LDC) to assist with an economic/fiscal impact study and a financing plan for the Oasis Towne Center, a retail development of approximately one million square feet in Redding, California. Mr. Edison advised LDC on how to structure the financing of the development in order to provide public benefits from the project and minimize the need for public resources. He prepared an economic and fiscal analysis and negotiated a series of service plans and fiscal mitigation measures with the City of Redding. Mr. Edison also prepared a financing plan for infrastructure needed not only for the immediate project but also for development within the entire Oasis Road Specific Plan area.

City of Fort Lauderdale, FL – Citywide Economic Development Strategic Plan: Mr. Edison served in the role of Senior Public Incentives Advisor for the City’s economic development strategic plan. This citywide Economic Development Strategic Action Plan includes an Economic Development Profile Report; as well as identification and recommendation of potential citywide economic development incentive programs for business retention and recruitment that are applicable to six geographic sub-areas and citywide; an entrepreneurial development and empowerment strategy, a targeted industry growth strategy, and a retail recruitment strategy; an implementation program and “economic dashboard” benchmarking metrics to measure the success of strategies and initiatives; and sources and uses of funding to support plan implementation (grants and other alternative funding opportunities allocated to each of the plan’s five-year implementation horizon).

City of Vallejo, CA – Costco Expansion Urban Decay, Economic and Fiscal Impact Analysis: In response to the City’s request, Mr. Edison examined the economic impact of a proposed expansion of an existing Costco. The analysis included projections of the impact on sales tax, employment, property tax and the net impact to the City’s budget. Based on the analysis, the City Planning Commission approved the Costco expansion.

County of Placer, CA – Bohemia Lumber Site, Fiscal Impact and Urban Decay Analysis: The County of Placer engaged Mr. Edison to examine the fiscal impact and potential urban decay effects from the development of the former Bohemia Lumber site into a retail center. He prepared the analysis and presented the results to the County Board of Supervisors.

City of Salinas, CA – Salinas Downtown Revitalization Plan: Prepared a market study for the downtown area to identify opportunities for development. Advised the City of Salinas on fiscal impact issues and financing tools available to assist with construction and rehabilitation of infrastructure in the downtown

ITEM NO. 7.

Fiscal Impact Analysis for Proposed and Planned Growth 8 Town of Los Gatos, CA
Mike Medve
Principal Consultant
Mr. Mike Medve is a principal consultant, with 18 years of experience, in the Financial Consulting Services group, with expertise in public finance, including special district formation and administration, fiscal impact analysis, public facilities financing plans, integrated financing districts, Proposition 218, tax credit financing, state and federal grant and loan programs, sales tax revenue bonds, and infrastructure financing districts. He has developed financial pro formas and cash flow analyses for numerous types of public and private project financing programs. Prior to joining Willdan, Mr. Medve was a consultant in the field of public finance for Parsons Brinckerhoff and David Taussig & Associates. Over the years, he has been a financing team member for over $150 million in limited obligation bonds and over $50 million in grant funds. He has served as the lead consultant for over two dozen clients, both public and private, throughout the country.

Relevant Project Experience
City of Oceanside, CA – Tax Increment/Special Tax Consulting: Mr. Medve provided consulting services related to the formation of one of the State’s first Enhanced Infrastructure Financing Districts (EIFD). The EIFD’s tax-sharing plan has been approved by both the City of Oceanside and the County of Monterey, bringing millions in funding to an area that will be annexed to the City and developed into a high-tech office park and research center. He also assisted the City with its Cost Allocation Plan and Comprehensive User Fee update.

City of Rancho Mirage, CA – Special Tax Consulting: In 2018 and 2019 Mr. Medve assisted the City with the formation of CFD 4A and CFD 4B, both of which were formed in association with the development of a Del Webb residential project in the City. He is also working on the current formation of CFD 4C. The CFDs were formed to provide for funding of backbone infrastructure required for the development, and for payment of certain development fees required by the City. Willdan’s work included preparation of the special tax and pro forma analyses, development of the tax methodology and preparation of the Rate and Method of Apportionment of Special Tax document, preparation of the CFD Report and other associated documents, and coordination of the formation process.

City of Upland, CA – Special Tax Consulting: In 2015 through 2019 Mr. Medve assisted the City of Upland with the initial formation of a CFD, the change proceedings that were subsequently conducted to amend the CFD to accommodate a change in the plan of development, and finally with the issuance of bonds associated with the CFD. He worked closely with the City and its financial advisor to ensure the CFD was formed in a manner that met the City’s requirements and financing objectives. The CFD was created to equitably spread the cost of the infrastructure being financed through a methodology that was equitably applied to various types of residential development in the project.

County of San Diego, CA – Special Tax Consulting: Mr. Medve is currently assisting the County with special tax consulting projects, specifically CFDs in unincorporated areas. He helped form the Horse Creek Ridge and Hillside Meadows CFDs and is now involved with the review and early steps of forming three additional CFDs to fund flood control, fire protection, and capital improvements. He is also assisting with replacing an existing Permanent Road Division special assessment with a special tax to fund street rehabilitation and maintenance.

Education
Bachelor of Science
Information and
Computer Science,
Management and
Mathematics Minors,
Cum Laude
University of
California Irvine
Areas of Expertise
Public Finance
Public Facility Financing
Special District Formation
and Administration
Proposition 218
New Markets Tax Credits
Grant Writing
20 Years’ Experience

ITEM NO. 7.

Fiscal Impact Analysis for Proposed and Planned Growth 9 Town of Los Gatos, CA
Education
Accounting,
Mt. San Jacinto
College
Areas of Expertise
Community Facilities
Districts
Landscaping and
Lighting Districts
Standby Charges
Assessment
Districts
Geographic
Information
System
6 Years’ Experience
Jasper Andrade
Lead Analyst
Mr. Jasper Andrade is an Analyst II and will serve as the lead analyst for this fiscal analysis project. His role includes data gathering and research, report preparation, peer reviews, and fiscal analysis to support the evaluation of revenues, expenditures, and long-term funding strategies.

Mr. Andrade possesses experience with various special tax financing mechanisms, including Community Facilities Districts (CFDs), fire taxes, parcel taxes, landscape and lighting districts, and standby charges. His responsibilities have included updating Engineer’s Reports, preparing resolutions for hearings, maintaining and analyzing parcel data, researching parcel changes, reviewing exemptions, and developing applied reports. These assignments have provided him with direct experience evaluating fiscal conditions, modeling tax and assessment impacts, and supporting decision-making through accurate financial reporting.

Mr. Andrade regularly coordinates with title companies, real estate agencies, appraisal firms, and public agencies. Leveraging Willdan’s proprietary MuniMagic+ system, he efficiently accesses ownership records, assessed values, and parcel tax data, which enhances his ability to perform accurate fiscal analysis and deliver timely project support.

Relevant Project Experience
Mr. Andrade currently works with the following agencies encompassing various annual administration services including 1972 Act Districts, Community Facilities Districts, Assessment Districts and Standby Charges.
 City of Coachella, CA
 Desert Recreation District, CA (Indio, CA)
 Valley Sanitary District, CA (Indio, CA)
 City of Arcadia, CA
 City of Artesia, CA
 City of Brea, CA
 City of California City, CA
 City of Indian Wells, CA
 City of Irwindale, CA
 City of La Puente, CA
 City of Lafayette, CA
 City of Lancaster, CA
 City of McFarland, CA
 City of Reedley, CA
 City of Rialto, CA
 City of San Fernando, CA
 City of Santa Fe Springs, CA
 West Contra Costa Healthcare District, CA

ITEM NO. 7.

LOS GATOS – PROPOSAL FOR STUDY 1 (FISCAL CONDITION) AND STUDY 2 (FISCAL IMPACT) APPENDIX D: WAUKESHA COUNTY WI BUDGET TASK FORCE REPORT

ITEM NO. 7.

Waukesha
County, WI
Budget Task Force Analysis and Facilitation
Report / August 2024

ITEM NO. 7.

WAUKESHA COUNTY, WI BUDGET TASK FORCE ANALYSIS AND FACILITATION This page intentionally left blank to facilitate two-sided printing.

ITEM NO. 7.
19 Garfield Place, Suite 500 Cincinnati, OH 45202
www.raftelis.com
August 27, 2024
Paul Farrow
Waukesha County Executive
Waukesha County Administrative Center
515 W. Moreland Blvd.

Room 320
Waukesha, WI 53188
Subject: 2024 County Budget Task Force
Dear Paul Farrow:

We are pleased to present this final report summarizing the County fiscal health assessment results and the 2024 Budget Task Force. This report includes a detailed review of the County’s current financial condition and financial management practices, future financial projections for the County’s operating budget, and a summary of the key themes and topics discussed during the Task Force facilitation sessions.

The fiscal health assessment included in this report provides both historical and future financial trend analysis designed to provide an objective review and context for the work of the Task Force. The assessment included development of an independent financial model projecting anticipated budget needs and gap closure scenarios for the County to consider. Applicable industry standards and best practices were used with input and information provided by County staff to inform the financial trend analysis. Key themes from the four Task Force sessions, including values and policy priorities, are also provided to help guide and inform the County Executive and the Board of Supervisors in future policy decisions.

We are confident that this report can serve as a framework for informing policy recommendations to you and the County Board. The Task Force provided invaluable insight regarding community priorities and strategies for the County to consider when making future budgetary decisions.

Thank you for the opportunity to work with Waukesha County. We enjoyed engaging with County staff and Task Force members throughout this project.

Sincerely,
Jonathan Ingram
Vice President - Organizational Assessment

ITEM NO. 7.

WAUKESHA COUNTY, WI BUDGET TASK FORCE ANALYSIS AND FACILITATION This page intentionally left blank to facilitate two-sided printing.

ITEM NO. 7.

WAUKESHA COUNTY, WI BUDGET TASK FORCE ANALYSIS AND FACILITATION Table of Contents
EXECUTIVE SUMMARY ........................................................................1 INTRODUCTION.....................................................................................3 BACKGROUND AND METHODOLOGY.......................................................... 3 ABOUT WAUKESHA COUNTY, WI................................................................. 3 Structure...........................................................................................................................4 Budget...............................................................................................................................5 Core Services Matrix .......................................................................................................8 Staffing............................................................................................................................10 FISCAL HEALTH ASSESSMENT........................................................11 FINANCIAL CONDITION ASSESSMENT...................................................... 11 General Fund Historical Overview................................................................................15 Peer Benchmarking .......................................................................................................16 FINANCIAL TREND ANALYSIS .................................................................... 19 Key Assumptions...........................................................................................................19 Future Projections .........................................................................................................20 GAP CLOSURE SCENARIOS ....................................................................... 22 Expenditure Reductions................................................................................................22 Revenue Enhancements................................................................................................24 BUDGET TASK FORCE.......................................................................31 Composition...................................................................................................................31 Session 1: Setting the Stage – Developing Values and Service Priorities................32 Session 2: Service Level Reductions...........................................................................35 Session 3: Revenue Generating Options.....................................................................39 Session 4: Guidance for County Executive and Board of Supervisors ....................42 CONCLUSION......................................................................................47

ITEM NO. 7.

WAUKESHA COUNTY, WI BUDGET TASK FORCE ANALYSIS AND FACILITATION List of Tables
Table 1: Waukesha County Demographic Characteristics, 2022............................................3 Table 2: Budgeted Expenditures by Functional Area, All Funds, FY2020 – FY2024.............7 Table 3: ARPA Allocation by Functional Area..........................................................................7 Table 4: County Core Services..................................................................................................9 Table 5: Authorized Staffing Level by Functional Area, FY2010 and FY2024......................10 Table 6: County Operating Revenues by Category, FY2019 – FY2023 ................................12 Table 7: County Expenditures by Category FY2019 – FY2023 .............................................15 Table 8: General Fund Budget to Actual Expenditures, FY2019 – FY2023..........................16 Table 9: Peer Counties Demographic Comparison ...............................................................17 Table 10: Peer Counties Spending Per Capita .......................................................................17 Table 11: Base Annual Change Assumptions for Operating Expenditures by Category...19 Table 12: Base Annual Change Assumptions for Non-Tax Operating Revenues by Category ....................................................................................................................................20 Table 13: Projected Operating Expenditures by Category, FY2024 – FY2030 ($M) ............21 Table 14: Projected Operating Revenues by Category, FY2024 – FY2030 ($M)..................21 Table 15: Results of Levy Increase Referendums in 2024 ....................................................24 Table 16: County Wheel Tax Rates in 2024 ............................................................................26 Table 17: Sales Tax Revenue in Benchmark Counties..........................................................28 Table 18: Average Taxable Expenditures by Category per Midwest Household, 2022 ......29 Table 19: County Budget Task Force Members.....................................................................32 Table 20: Task Force Service Priority Voting Results ...........................................................35 Table 21: Value-added Service Level Reductions..................................................................37 Table 22: Advantages and Disadvantages of New Tax Revenue Options ...........................40 Table 23: Summary of Sales Tax Structure Considerations .................................................42 List of Figures
Figure 1: Waukesha County, WI 2024 Budget Task Force Timeline.......................................2 Figure 2: Waukesha County, WI Organizational Chart, FY2024..............................................5 Figure 3: 2023 Property Tax Rates by County .........................................................................6 Figure 4: Waukesha County Property Tax Rates and Property Value, 2015-2024 ..............13 Figure 5: 2024 Tax Levy Allocation by Function, as $1.........................................................13 Figure 6: 2024 Revenue Sources for Counties That Budget with Comparable Categories18 Figure 7: Projected Operating Expenditures and Revenues Under Base Scenario, FY2024 – FY2030....................................................................................................................................22 Figure 8: Scope of Expenditure Reductions ..........................................................................23 Figure 9: Scope of Expenditure Reductions by Functional Area .........................................24 Figure 10: Estimated Levy Increase Revenue, FY2025 – FY2030.........................................25 Figure 11: Estimated Wheel Tax Revenue, FY2025 – FY2030...............................................27 Figure 12: Task Force Value Voting Results ..........................................................................34

ITEM NO. 7.

WAUKESHA COUNTY, WI BUDGET TASK FORCE ANALYSIS AND FACILITATION Figure 13: Service Level Adjustment Pyramid.......................................................................36 Figure 14: Task Force Service Prioritization and County Tax Levy Spending....................38 Figure 15: Sales and Wheel Tax Timeline – Adoption by Year.............................................41 Figure 16: Average Task Force Agreement Rating by Strategy to Address Budget Gap ..43 Figure 17: Average Task Force Agreement Rating by Revenue Option ..............................44 Figure 18: Average Task Force Agreement Rating by Revenue Option ..............................45 Figure 19: Task Force Agreement Rating on New Revenue .................................................50 Figure 20: Task Force Agreement Rating on Service Reductions .......................................50 Figure 21: Task Force Agreement Rating on New Revenue and Service Reductions........51 Figure 22: Task Force Agreement Rating on the Current Budget........................................51 Figure 23: Task Force Agreement Rating on a 9-1-1 Fee ......................................................52 Figure 24: Task Force Agreement Rating on a Levy Increase Referendum ........................52 Figure 25: Task Force Agreement Rating on a Wheel Tax....................................................53 Figure 26: Task Force Agreement Rating on a Sales Tax that Funds Property Tax Relief 53 Figure 27: Task Force Agreement Rating on a Sales Tax of Less Than 0.5%.....................54 Figure 28: Task Force Agreement Rating on a Sales Tax that Funds Property Tax Relief and General Municipal Aid.......................................................................................................54 Figure 29: Task Force Agreement Rating on a Sales Tax that Funds Property Tax Relief and Municipal Aid for Infrastructure.......................................................................................55 Figure 30: Task Force Agreement Rating on a Sales Tax that Funds Property Tax Relief and Municipal Aid for Public Safety........................................................................................55 Figure 31: Task Force Agreement Rating on a Sales Tax that Funds Property Tax Relief and Municipal Aid for Economic Development......................................................................56 Figure 32: Task Force Agreement Rating on a Sales Tax that Funds Property Tax Relief and Economic Development....................................................................................................56 Figure 33: Task Force Agreement Rating on the Effectiveness of the Task Force Process ....................................................................................................................................................57 List of Appendices
APPENDIX A: ............................................................................................................................49 APPENDIX B: ............................................................................................................................59

ITEM NO. 7.

WAUKESHA COUNTY, WI BUDGET TASK FORCE ANALYSIS AND FACILITATION This page intentionally left blank to facilitate two-sided printing.

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 1
Executive Summary
Property tax levy is the largest local revenue source to fund services provided by Waukesha County. Like other counties in the state of Wisconsin, the annual growth for this revenue is capped based on the growth in net new construction. Over the past several years, net new construction has grown at a rate of less than 2% each year.

Meanwhile, and especially after the Global Pandemic, the cost to continue providing services to County residents has increased, on average, between 3-4%. In order to meet balanced budget requirements, the County has had to identify efficiency gains, maximize other revenue sources where possible, and trim staffing levels. Recent economic trends, including above-average inflation, rising wages, and supply chain disruptions, have placed significant financial constraints on County operations.

The County engaged Raftelis to provide an independent fiscal health assessment and facilitate multiple sessions for a Budget Task Force comprised of community leaders. The Task Force was asked to advise the County Executive and County Board of Supervisors on policy actions in the near term that will help shape the County’s financial future by ensuring resources are allocated in a manner that best serves the community.

The fiscal health assessment included a financial condition assessment comprised of a historical review of past revenue and expenditure trends, interviews with County staff across each major department to understand core service functions and budgetary challenges, as well as peer benchmarking analysis for similar demographic counties in the state to assess revenue sources and budgetary practices. The financial condition assessment provided relevant context to inform the financial trend analysis. This analysis included developing a six-year financial forecast for the County’s operating budget that reflected an annual gap (e.g., budget gap) between projected revenues and estimated expenditures required to maintain services provided today. The forecast model relied upon key assumptions for revenue growth and cost of service inputs. Raftelis’ financial model yielded similar results to the County’s long-term forecast disclosed in the annual budget document. This financial backdrop was then used to develop and understand potential solutions to address future budget gaps, considering both service level reductions and revenue-generating options.

Raftelis facilitated four in-person Budget Task Force sessions from May to July 2024. The County’s Budget Task Force comprised of more than 30 community leaders charged with quickly understanding the County’s fiscal health and engaging in discussions and exercises that aimed to provide direction and guidance to the County Executive and County Board of Supervisors regarding the County’s financial future. A summary of the Task Force timeline and session topics is provided below.

ITEM NO. 7.
2 WAUKESHA COUNTY, WI
Figure 1: Waukesha County, WI 2024 Budget Task Force Timeline Details of the Task Force discussions and individual and group exercises are captured in this report. The density of financial information to review and understand during this short time horizon was challenging; nevertheless, the Task Force did a remarkable job of absorbing all the details, engaging in productive conversation, and ultimately crafting meaningful guidance for the County’s elected officials. This process also provided the County an opportunity to assess and confirm that current resource allocation aligns with community values and priorities.

Engaging the public regularly regarding policy priorities as part of the budget development process is both a best practice and a vehicle for maintaining trust among local governments and the residents they serve. Task Force members learned how well the County staff have navigated these fiscal challenges in the past and their ongoing dedication to prudent financial management of taxpayer resources.

Given the complexity and competing interests of individual Task Force members, reaching a consensus about addressing future budgetary challenges was unrealistic. Instead, the group reached a shared agreement regarding the values, priorities, and areas of focus over the next few years to provide sound guidance for elected officials as they navigate difficult policy decisions. The key themes that emerged from the work of the Budget Task Force are reflected below. The report provides more details regarding each of these themes. • Importance of fiscal responsibility
• Targeted budgetary service level reductions and enhancements • Desire to explore revenue options
• Support for infrastructure and economic development
• Evaluate shared services and shared revenue

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 3
Introduction
Background and Methodology
In March 2024, Waukesha County engaged Raftelis to conduct a fiscal health assessment and facilitate the work of a Budget Task Force charged with providing guidance and policy priorities to the Board of Supervisors to inform how the County can navigate short and long-term financial challenges.

To accomplish this, the project team held a kickoff meeting with key members of the County’s leadership and finance team to discuss the engagement. The project team then conducted individual and small group interviews with each of the major departments in the County to understand service level expectations, resourcing requirements, fiscal challenges, workload drivers, and opportunities to adjust resource allocation.

The project team reviewed and analyzed a variety of financial data and information provided by the County to understand organizational structure, authorized staffing levels, the budget development process, and core services provided by the County. As part of the financial condition assessment, historical financial data was analyzed to inform trends and key assumptions used to develop an independent financial model projecting estimated revenues and expenditure requirements to continue providing the same level of service today over the next several years.

Benchmarking analysis of peer counties selected based on geographic or demographic similarity was also conducted to provide important context during the Task Force sessions.

Members of the project team then developed and led four in-person Task Force sessions from May to July 2024 to discuss the results of the fiscal health assessment, viable gap closure scenarios, and guidance for how County elected officials should navigate the financial challenges to achieve fiscal sustainability over the next decade.

About Waukesha County, WI
Waukesha County is Wisconsin’s third- largest county, located directly west of Milwaukee and 70 miles east of Madison, the state capital. The County population is 411,538, according to the Wisconsin Demographic Services Center’s 2023 population estimates, which represents a 5.6% increase from the 2010 Census. Relative to the state at large, Waukesha County has higher median income, median home values, and educational attainment levels.

Table 1: Waukesha County Demographic Characteristics, 20221 Demographic Category Waukesha County State of Wisconsin Median age 43.8 40.4
Median household income $98,849 $70,996
Median home value $379,700 $252,800
Below federal poverty level 5.2% 10.7%
Homes owner-occupied 76.9% 68.1%
High school graduate equivalent or higher 97.8% 93.5%
Bachelor’s degree or higher 48.7% 33.2%
Graduate or professional degree (25+) 17.8% 11.6%
1 2022 American Community Survey, U.S. Census Bureau.

ITEM NO. 7.
4 WAUKESHA COUNTY, WI
Waukesha has a County Executive form of government, and the legislative body consists of a 25-member Board of Supervisors (Board). The County Board is elected for two-year terms to represent separate geographic districts with populations of around 16,500 each. The Board of Supervisors sets policy by adopting ordinances and resolutions, including reviewing and adopting the annual budget. The County Executive, who is elected to a four-year term, oversees the day-to-day operations of the County and appoints the heads of all County departments except those led by elected officials or state statutory boards and commissions. Elected positions in the County beyond legislative and executive roles include the Circuit Court Judges, Clerk of Courts, County Clerk, District Attorney, Register of Deeds, Sheriff, and Treasurer.

STRUCTURE
Waukesha County’s operations are organized by six functional areas depicted in the chart below. Departments led by an elected position are shown in grey. Attorneys in the District Attorney’s Office and judges within the Circuit Court are state employees, while support staff within these departments are funded by the County. The other departments are led by members of the County Executive’s cabinet. Law enforcement services are provided by the Sheriff’s Office for unincorporated areas of the County and by contract for select municipalities. The County operates a regional 911 dispatch center providing Police, Fire, and Emergency Medical (EMS) dispatch service to 34 of the 37 municipalities in the County. The Extension – Waukesha County is administered through county and state shared governance, and the Bridges Library System—a state-funded, combined two-county system with neighboring Jefferson County—is governed by a Board of Trustees composed of each county’s residents. 2 2 As part of library system funding required under state statute, the County administers a separate library property tax levy applied on non-library municipalities that is used to reimburse library communities for non-resident use.

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 5
Waukesha County
UW-Extension
Parks,
Environment,
Education, & Land
Use
Parks and Land
Use
Bridges Library
System
Register of Deeds
Public Works Health and Human
Services
Health and Human
Services
Corporation
Counsel: Child
Support
County Clerk
General
Administration
Department of
Administration
County Treasurer
County Board
County Executive
District Attorney
Justice and Public
Safety
Circuit Court
Emergency
Preparedness
Medical Examiner
Sheriff
Non-Departmental
Corporation
Counsel
Figure 2: Waukesha County, WI Organizational Chart, FY2024 BUDGET
Each year, at the beginning of budget development, the Budget division estimates tax levy revenue and makes recommendations to the County Executive for allocating new levy among departments. The allocation is based on the County’s Strategic Plan and service priorities, with Public Safety typically receiving the largest allocation of tax levy dollars. The Budget division also factors in anticipated spending growth and the ability of departments to generate non-tax levy revenues (e.g., user fees) to offset programmatic costs. From there, departments prioritize their estimated revenue and tax dollars to support core operations.

ITEM NO. 7.
6 WAUKESHA COUNTY, WI
The County’s budget philosophy is to “balance spending with people’s ability to pay,” and County management indicates that it has traditionally strived to keep taxes low, resulting in Waukesha County consistently maintaining one of the lowest property tax rates among the 72 Wisconsin counties. At the beginning of this assessment, Waukesha County was one of four counties that had not enacted a 0.5% sales tax. Recently, Manitowoc County adopted the 0.5% sales tax to take effect on January 1, 2025. Waukesha has the lowest property tax rate among counties without a sales tax.

Figure 3: 2023 Property Tax Rates by County3
The County’s conservative budget approach was further affected by state-imposed property tax levy limits.

Wisconsin State law caps counties’ annual property tax levy increase at the percent increase in equalized property value due to new construction, with the exception of levy used to fund debt service.4 The 2005 Wisconsin Act 25 limited the ability of localities to increase property tax, the single largest local revenue source. The initial legislation included minimum growth of at least 2%; however, the legislation was modified in 2011 (after the Great Recession) to lower the minimum growth to 0%. Additional details and analysis regarding this state policy are included in the financial condition assessment; nevertheless, it is worth noting the impact of the revenue cap for annual budget development purposes.
3 Property tax rates shown include library system and other special taxing authorities. 4 Wisconsin Statutes § 66.0602(3).
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
Ozaukee
Waukesha
Vilas
Washington Oneida
Dane
Chippewa La Crosse
Walworth
Racine
St Croix
Sawyer Door
Outagamie Brown
Washburn
Burnett
Polk
Grant
Marinette
Jefferson
Eau Claire
Kenosha
Sauk
Bayfield Milwaukee
Barron
Columbia
Douglas Dodge Forest
Oconto
Marathon
Winnebago Rock
Calumet
Shawano
Sheboygan Manitowoc
Pierce
Green
Vernon
Iron
Portage Lincoln
Wood
Buffalo
Monroe
Fond du Lac
Menominee
Adams
Langlade Rusk
Waupaca Dunn
Jackson
Iowa
Ashland
Green Lake
Waushara
Crawford
Trempealeau Juneau
Kewaunee
Lafayette Price
Marquette Richland
Pepin Clark
Florence
Taylor
Tax Rate per $1,000 of Equalized Value
2023 Property Tax Rates by Wisconsin County

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 7
Budgeted expenditures by functional area are illustrated in the table below. Data is presented based on financial information disclosed in the County’s Budget Document. It is important to highlight that the figures include all funds, including funds supplemented through user fees and other non-tax revenue sources. For example, included in the amounts below is the County’s special purpose grant fund, which was set up to accept and budget for the $78.5 million of one-time funding received from the American Rescue Plan Act (ARPA). As a result, expenditure trends reflect the temporary boost in budget levels from these one-time sources provided following the onset of the pandemic. Additional details regarding the allocation of ARPA funds by functional area are provided below.

Table 2: Budgeted Expenditures by Functional Area, All Funds, FY2020 – FY2024 Functional Area
FY2020
Adopted
Budget
FY2021
Adopted
Budget
FY2022
Adopted
Budget
FY2023
Adopted
Budget
FY2024
Adopted
Budget
Average
Annual
Change
Justice and Public Safety $66,932,509 $68,341,029 $71,650,398 $76,479,249 $78,062,531 4% Health and Human
Services $88,837,237 $89,612,129 $92,065,962 $101,654,563 $105,559,022 4% Parks, Environment,
Education, and Land Use $35,063,785 $33,498,114 $38,723,077 $44,724,903 $43,620,188 6% Public Works $33,905,037 $34,413,700 $34,827,094 $36,510,406 $37,733,516 3% General Administration $23,270,556 $23,362,925 $25,294,740 $26,125,174 $27,302,374 4% Non-Departmental $29,531,600 $30,749,479 $31,245,776 $29,715,040 $29,329,791 0% Debt Service (General) $14,944,779 $14,873,594 $15,081,796 $16,135,115 $16,839,088 3% Total Operating Budget $292,485,503 $294,850,970 $308,888,843 $331,344,450 $338,446,510 4% ARPA Allocation
Waukesha County, like other local governments around the country, received one-time federal ARPA funds to help offset impacts of the COVID-19 pandemic. The County’s allocation of ARPA funds totaled $78.5 million, to be spent or obligated by December 31, 2024, and completed by December 31, 2026. The County generally manages ARPA funds in the Special Purpose Grant fund. ARPA projects were chosen by prioritizing a number of long-term County objectives, addressing both near-term pandemic impacts and investments in infrastructure. The budgeting of ARPA funds by functional area is captured in the table below.

Table 3: ARPA Allocation by Functional Area
5 Includes multiple allocations that fund countywide initiatives but are recognized in “General Administration” for simplified reporting.

Functional Area Total
Justice and Public Safety $44,371,355
Health and Human Services $8,045,870
Parks, Environment, Education, and Land Use $10,235,000 Public Works $1,327,164
General Administration5 $14,531,334
Grand Total $78,510,723

ITEM NO. 7.
8 WAUKESHA COUNTY, WI
In general, following best practices, the County used one-time ARPA funds for one-time expenses. At times though, and because it was authorized by the federal government, ARPA funds were strategically used to support ongoing costs in order to avoid major service impact on residents. Short-term use of one-time funds for ongoing expenses has its place; however, prolonged reliance on such funds increases financial risk. The County appropriately developed a phased-in approach where ARPA funds would be replaced by ongoing levy revenue over a multi-year window to avoid structural imbalance. Structural imbalance refers to ongoing operational costs that are not supported by ongoing revenues. Some examples of ARPA funding used to avoid major operational disruption (e.g., ongoing operating costs) in the short run include:
• $1.3 million to support recommendations outlined in the compensation study • $2.5 million to phase in Sheriff Department sworn officer pay increases o Funding spans three years, with a budget of $720,000 in 2024 • $1.6 million to phase in higher fuel, utility, and vehicle parts o Funding spans three years with a budget of $327,000 in 2024 The Justice and Public Safety functional area received the largest total share of ARPA funds: more than $44 million. Most of this, $36 million, supported the Courthouse renovation project with an additional $2.5 million for renovations to the Medical Examiner’s Office. Additionally, a civil court was converted to a sixth criminal court to help address the pandemic-driven backlog, with nearly $2.5 million of ARPA funds supporting Circuit Court and District Attorney costs. Finally, $2.5 million supported increases in Public Safety personnel costs to maintain competitive wages and avoid service disruptions.

An additional $14.5 million supported countywide initiatives and is categorized as “General Administration” for simplicity purposes because of its effect on multiple county departments. This category includes about $4.8 million for implementation of an Enterprise Resource Planning (ERP) system, $4.3 million for recovery of administrative costs carrying out the grant initiatives, $3.0 million for salary and benefit adjustments to improve worker retention (e.g., phasing in the compensation study, mentioned previously), and $1.6 million in higher fuel, utility, and vehicle parts (mentioned previously).

Parks, Environment, Education, and Land Use share of funding was $10.2 million, including $7.5 million used to expand the County’s revolving loan GROW fund to promote economic development by retaining, expanding, and attracting businesses, as well as to increase workforce housing stock to meet projected employment growth in Waukesha County. Health and Human Services received more than $8 million for programs and infrastructure investments that supported response to emerging public health services. ARPA-funded initiatives in both areas were generally one-time, rather than ongoing, with the exception of a Crisis Services in Law Enforcement project that added positions to a grant-funded pilot of embedded mental health clinicians in public safety agencies. Finally, ARPA funded $1.3 million of one-time costs related to projects in Public Works.

CORE SERVICES MATRIX
The following table provides an overview of the County’s core services by functional area. It is meant to provide a high-level summary and is not inclusive of all County services. The programs outlined below provide a basis for understanding potential service level reductions or enhancements, including estimated fiscal and constituent impact.

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 9
Table 4: County Core Services
Functional Area Department Programs
Justice and Public
Safety
Emergency
Preparedness
• Radio Services
• Communication Center
• Emergency Planning
District Attorney
• Prosecution/Administrative Services
• Victim/Witness Program
• VOCA Grant Program
Circuit Court
• Clerk of Circuit Court Office
• Juvenile/Probate Division
• Court Commissioners and Family Court Services
Medical Examiner • Medical Examiner Services
Sheriff
• Administrative Services
• General Patrol
• Investigation
• Inmate Security and Services
• Court Security
• Process Service
Health and Human
Services
Corporation Counsel:

Child Support • Child Support
Health and Human
Services
• Administrative/Information Services
• Children and Family Services
• Adolescent and Family Services
• Clinical Services
• Public Health
• Aging and Disability Resource Division
• Criminal Justice Collaborating Council
• Veterans’ Services
Parks, Environment,
Education, and Land
Use
Register of Deeds
• Administrative Services
• Land Records
• Recording
• Vital Records
Extension –
Waukesha County • Strengthening County Citizens, Families, and Communities Bridges Library
System
• Administrative Services
• Resource Sharing
• Education and outreach
• Automation Technology
• Payments to Member Libraries/Systems
• CAFÉ Shared Automation Fund
Parks and Land Use
• Parks
• Administrative Services
• Golf Courses
• Ice Arenas
• Workforce Innovation and Opportunity
• Planning and Zoning
• Land Resource
• Environmental Health
• Community Development
Public Works Public Works
• Airport Operations
• Engineering Services
• Highway Operations
• Transit Services
• Central Fleet
• Facility Operations
• Administration

ITEM NO. 7.
10 WAUKESHA COUNTY, WI
Functional Area Department Programs
General
Administration
County Executive
• Advisory Boards
• County Administration
• Customer and Community Services
County Board • County Board and Committee Operations
• Legislative Support
County Clerk
• Licensing
• Legislative Support and Administrative Services
• Elections
County Treasurer
• Tax Collections
• Investments
• Administrative Services
Department of
Administration
• Human Resources
• Budget Management
• Purchasing and Risk Management
• Information Technology/Communications
• Accounting Services
• Administrative and Business Services
• American Job Center
Corporation Counsel • General Legal Services
Non-Departmental Non-Departmental
• General
• Health and Dental Insurance
• Contingency

STAFFING
Personnel-related costs are a key expenditure driver for the County’s budget. Salaries and benefits represent nearly half of the County’s annual spending. The table below provides a historical overview of funded positions before the state-imposed levy limits and funded positions in 2024. The data reflects staffing resources, where ongoing revenue is needed to support the position cost. Sunset positions, such as grant-funded or project-based, are excluded from the summary. Four of the County’s five Functional Areas with authorized positions experienced a decrease in staffing from FY2010 to FY2024. Health and Human Services, which is the only functional area that experienced a staffing increase, is shown separately because it receives more than 70% of its funding from non-tax levy sources, such as user fees and state pass-through revenue. Position growth in this area is correlated with higher revenue reimbursement.

Table 5: Authorized Staffing Level by Functional Area, FY2010 and FY2024 Functional Area FY2010
Budget
FY2024
Budget
Total Change
(Positions)
Total Change
(%)
Justice and Public Safety 539 527 (12) -2%
Parks, Environment,
Education, and Land Use 214 171 (43) -20%
Public Works 161 142 (19) -12%
General Administration 139 128 (11) -8%
Subtotal 1,053 968 (85) -8%
Health and Human Services 399 426 27 7%
Total Regular Positions 1,452 1,394 (58) -4%

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 11
Fiscal Health Assessment
As part of the annual budget development process, County staff conduct a comprehensive long-term forecast to inform future policy decisions based on anticipated revenue and spending levels. As part of the project scope, Raftelis conducted an independent, objective review of the County’s forecast model to determine future budget needs.

The Financial Condition Assessment reviewed five-year historical financial data (2019 – 2023) for all County funds to establish a financial baseline. It is important to note that the analysis excluded enterprise funds that are funded entirely through user fees or other non-tax sources as well as the capital budget except as it relates to debt service expenditures and financial policies dictating the percentage of cash contribution for bond-financed capital projects.

Raftelis also conducted a benchmarking analysis by identifying peer counties in Wisconsin based on similar demographic indicators. The analysis reviewed revenue sources and budgetary practices to help inform the County’s financial context.

The Financial Trend Analysis draws upon the findings of the Financial Condition Assessment, as well as other factors explained later in this section, to project future revenue and expenditure trends for the next five fiscal years.

The following sections summarize key historical findings and the financial trends anticipated to impact future budget needs for the County.

Financial Condition Assessment
The examination of Waukesha County’s financial condition spanned budgeted and actual staffing, spending, and revenues from fiscal years 2019 through 2023, as well as the 2024 adopted budget. The data considered included published budgets, internal and audited financial reports, and interviews with County leadership. Part of the fiveyear analysis reflects the economic and service impacts of the COVID-19 Global Pandemic, which began in March 2020 and ended in May 2023. This period was characterized by suspending or altering many private and public services and stimulus funding from the federal government to avoid economic recession. As a result, the actual financial data during this period experienced greater variation than previous historical averages.

Summary of County Funds
More than 55% of the County’s budget is organized within the General Fund. The three largest revenue sources comprising the General Fund are, in order, the property tax levy, intergovernmental contracts/grants, and charges for services. The County also maintains Debt Service and Capital Projects funds, distinct from the General Fund.

Debt Service is the third-largest recipient of tax levy, and capital projects are funded through a combination of available operating revenues (cash) and bond issuances (debt).

County operations include five Enterprise Funds where operating and capital costs are entirely or mostly recovered through user charges. As of 2024, these include a fund for two golf courses, a fund for two indoor ice arenas, a fund for a materials recycling facility managed by the Department of Parks and Land Use, a fund for the airport managed by the Department of Public Works, and a Radio Services Fund managed by the Department of Emergency Preparedness. Two relevant changes occurred in 2020 when the airport became self-sustaining without property tax levy support, and the County sold a third golf course.

ITEM NO. 7.
12 WAUKESHA COUNTY, WI
Finally, the County manages financing for interdepartmental goods and services through Internal Service Funds.

The Vehicle/Equipment Replacement, Central Fleet Maintenance, and Collections Management funds manage respective services for all County departments, who are then charged a usage-equivalent fee for service. The Risk Management, Health and Dental Insurance, and End User Technology Funds allocate most costs to departments or users, with certain centralized subsidies.

Major Revenue Sources and Recent Trends
The following table summarizes County revenues by category for the past five fiscal years.

Table 6: County Operating Revenues by Category, FY2019 – FY20236 The County currently levies tax through property values. As mentioned previously, state statute limits annual property tax levy increases to the prior year’s change in value owing to net new construction, which incorporates both new and demolished buildings. There is some flexibility beyond the limit, primarily for unused tax levy from the prior year and to support debt service obligations. The County apportions the levy across taxable properties based on their equalized values. With the state-imposed cap on levy growth, the effective tax rate has decreased in recent years. The County’s total equalized property value has consistently increased, often at a much higher rate than the rate of tax levy growth. From 2019 to 2024, equalized property value rose from $55 billion to nearly $83 billion, while the effective tax rate per $1,000 of equalized value fell 26%, from $1.89 to $1.39.

The following figure illustrates trends in property value and property tax rates over the past 10 years. 6 Excludes enterprise funds, debt, and capital.
7 Preliminary unaudited figures
8 Does not include levy dedicated to capital or debt service. 9 FY 2021 – FY 2023 included ARPA funding for operations. 10 Market value adjustment on investment income is excluded.

Revenue Category FY19 Actual FY20 Actual FY21 Actual FY22 Actual FY23 Actual7 Average
Annual
Change
Tax Levy- General
Operations8 $89,338,540 $90,609,579 $92,062,880 $93,696,377 $95,635,790 2% Tax Levy- Library $3,523,524 $3,538,749 $3,659,778 $3,706,706 $3,999,607 3% Intergovernmental9 $61,730,518 $75,515,929 $82,069,763 $84,115,231 $92,208,134 11% Fines, Licenses, and
Charges for
Services
$36,427,997 $35,484,735 $40,605,130 $37,985,293 $38,001,986 1% Interdepartmental
Charges $37,284,088 $38,086,965 $40,828,287 $41,708,475 $42,163,746 3% Other10 $17,296,583 $23,185,832 $17,989,986 $21,109,417 $23,957,337 11% Total $245,601,251 $266,421,789 $277,215,823 $282,321,499 $295,966,600 5%

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 13
Figure 4: Waukesha County Property Tax Rates and Property Value, 2015-2024 Justice and Public Safety receive the greatest share of tax levy (41.3% in 2024). The Sheriff’s Office receives nearly two-thirds of the levy allocated to this area, with the remaining allocated to the District Attorney, Emergency Preparedness, Circuit Court Services, and Medical Examiner. Tax levy supports the majority of service delivery costs for each of these five departments. Public Works is equally reliant on intergovernmental funds (most of which is funding for maintenance of state highways) as it is tax levy, followed by interdepartmental funding for vehicles and equipment. Tax levy is only the third largest revenue source for Parks, Environment, Education, and Land Use, as nearly two-thirds of services are funded by intergovernmental and service charge revenues. Lastly, less than 10% of the General Administration budget is funded through tax levy, with the balance supported by interdepartmental and other sources. Total tax levy allocation by functional area, as a share of one dollar, is reflected in the figure below.

Figure 5: 2024 Tax Levy Allocation by Function, as $1
$2.08
$1.39
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Billions
Waukesha County Property Tax Value and Tax
Rate, 2015-2024
Total Equalized Value Effective County Tax Rate
41¢
Justice and Public
Safety
24¢
Health and
Human Services
9¢
Parks, Env.,
Educ., and
Land Use
24¢
Infrastructure
2¢
Other

ITEM NO. 7.
14 WAUKESHA COUNTY, WI
Intergovernmental revenue increased by 10.6%, on average, over the past five years, the largest among each of the revenue categories. Much of this growth is driven by pandemic-era federal funding that cannot be relied upon in future budgets. County departments try to maximize state and federal funding resources to meet County priorities.

However, nearly all the funding—whether from grants, contracts, or aid—is restricted to specific purposes. Shared revenue from the state is the only major unrestricted intergovernmental funding available, and it generally comprises less than two percent of funding countywide (and even a portion of this is restricted to transportation and certain public safety functions). The state appropriation comes through a combination of programs and is derived from state taxes. Other intergovernmental funding includes federal entitlement programs like the Community Development Block Grant from the Department of Housing and Urban Development, state support for mandated services like the Courts, and grants that County staff pursue. State funding for mandated services is often flat or grows minimally, not keeping up with the cost of providing services. As a result, approximately 40% of local tax levy in the 2024 budget was used to meet state-mandated service obligations.

Interdepartmental revenues are primarily associated with the internal service funds described earlier for End User Technology, Vehicle/Equipment Replacement, Central Fleet Maintenance, Risk Management, Collection Management, and Health and Dental Insurance. Other interdepartmental revenues are also for internally provided goods and services, such as Court Security supplied by the Sheriff and paid from the Circuit Court budget.

Recognizing the fiscal constraints that many user departments are facing, most of these charges have been limited to 2-3% increases each year, despite the growing costs of providing these services. This has required significant subsidies to artificially lower interdepartmental charges through the use of internal service and general fund balance, including $613,000 in the End User Technology Fund and $268,000 in the Risk Management Fund in the 2024 budget. The use of one-time funds to bridge the gap between the cost of services and charges to departments will not be sustainable in the long term. From 2019 to 2023, these interdepartmental revenues increased by 3.1% on average, which still exceeds the average growth in the allowable property tax levy to support them.

Fines, licenses, and charges for services capture user-based revenue, whether they are imposed for compliance, authorization to operate, or in exchange for accessing a program or activity. Excluding Enterprise Funds, this revenue source has grown 4% from 2019 to 2023. Certain user fees are set by the state or an external agency with limited ability to change as operating costs evolve. Other fees that the County exerts greater control over—like golf course fees—are carefully balanced between cost recovery needs and remaining competitive in the regional market.

Where possible, the County has prioritized increasing user fee revenues to keep pace with the cost of providing the service. For example, Parks and Land Use, where a majority of programs are discretionary, achieves 77% cost recovery across all of its funds. This minimizes the reliance on tax levy support. Additionally, the outpatient clinic from Health and Human Services, which receives governmental reimbursement for eligible Medicaid patients, is able to charge patients who can pay higher commercial insurance reimbursement rates, increasing revenue to support other programs where cost-recovery is more challenging.

Expenditure Trends
The following table shows County expenditures by category for the past five fiscal years.

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 15
Table 7: County Expenditures by Category FY2019 – FY2023 Expenditure
Category FY19 Actual FY20 Actual FY21 Actual FY22 Actual FY23 Actual11 Average
Annual Change
Salaries $94,861,283 $99,997,477 $101,143,489 $101,500,262 $107,139,325 3% Benefits $32,385,290 $33,956,966 $35,705,532 $34,486,102 $36,234,191 3% Operating
Expenses $75,653,016 $76,998,367 $85,984,344 $78,553,630 $87,890,381 4% Contracted
Services $31,550,677 $32,136,358 $32,748,678 $34,850,104 $37,929,098 5% Debt Service $13,904,500 $14,254,500 $14,312,719 $14,520,921 $15,842,737 3% Utilities $2,943,744 $2,837,667 $3,226,256 $3,523,124 $3,535,724 5% Interdept. $21,032,319 $21,115,483 $22,375,468 $24,290,762 $24,265,908 4% Total $272,330,829 $281,296,818 $295,496,486 $291,724,905 $312,837,364 4% The modest average annual increase in expenditure primarily reflects the increasing cost of providing existing services and increased temporary federal funding. The County has had limited-service expansion over the past five years. High-quality service delivery relies on talented staff, and the County has worked diligently to remain a competitive employer. As previously discussed, salary and benefit costs have risen nationwide, and municipal employers are facing competitive pressure from not only private sector jobs but also neighboring localities. The County strives for cost-effective and competitive employee benefits by self-insuring health and dental insurance coverage and participating in the Wisconsin Municipal Mutual Insurance Company for eligible liability coverage.

For an organization with more than 1,000 employees, this is a best practice12; however, managing healthcare costs within a constrained revenue generating capacity is a challenge. Nationwide medical inflation was 7% in 2023, and the County has effectively managed to stay at or below this threshold. 13 Non-personnel operation costs increased between 15% to 20% over the past five years, well above the 7% growth in property tax levy revenue over the same period. Historically, the County has relied on a contract-based service model to increase efficiency and effectively manage resources. As large contracts have come due for renewal, the underlying labor and supply costs impacting contract pricing have resulted in significant renewal increases. For example, the jail medical services budgeted contract costs increased 25% between 2019 and 2024. The County’s utility costs jumped up 20% from FY2019 to FY2023, largely driven by a 14% increase in 2021 and a 9% increase in 2022. Finally, interdepartmental spending increased by approximately 4% per year on average, reflecting growing costs for essentials like software licenses, risk management charges, and bailiff services. One key contributor to rising costs is inflation.

GENERAL FUND HISTORICAL OVERVIEW
Budgeted and actual General Fund expenditures both increased, on average, between 3-4% each year over the past five years. A summary of actual revenue and expenditures by fiscal year is illustrated in the table below. The relatively small variance between these amounts is indicative of the County’s ability to both accurately forecast and adjust as needed based on revenue collections throughout the year. 11 Preliminary unaudited.
12 Sammer, Joane. Is Self-Insurance for you? Society for Human Resources Manager (SHRM). May 2011. https://www.shrm.org/topics-tools/news/hr-magazine/self-insurance 13 Kaiser Family Foundation (KFF). Employer Health Benefits; 2023 Summary of Findings. https://files.kff.org/attachment/Employer-Health-Benefits-Survey-2023-Annual-Survey-Summary-of-Findings.pdf

ITEM NO. 7.
16 WAUKESHA COUNTY, WI
Table 8: General Fund Budget to Actual Expenditures, FY2019 – FY2023 Year Actual Revenues Actual Expenditures
Favorable/
Unfavorable Variance
($)
Variance to
Modified
Budget (%)
2019 $174,375,559 $174,943,194 $567,635 0.3%
2020 $183,677,936 $189,168,729 $5,490,793 2.7%
2021 $189,565,729 $195,778,871 $6,213,142 3.2%
2022 $187,959,054 $195,545,024 $7,585,970 3.8%
2023 $199,356,512 $206,591,220 $7,234,708 3.4%
Average $5,418,450 2.7%

PEER BENCHMARKING
The project team compared Waukesha County’s financial profile to that of other Wisconsin counties to help provide context to the County’s financial position. Given the unique nature of local governments within each state, the benchmarking analysis focused on other counties in Wisconsin. Benchmarking can be a useful tool to identify shared challenges and opportunities. However, it is important to note that any municipal entity can vary significantly from its neighbors or similarly sized counties due to a variety of social and economic factors, and benchmarking should be considered as one data point in a more holistic analysis.

For this analysis, counties in Wisconsin were first reviewed based on population size. Waukesha is the third largest County in the state, within the top tier range of population size from around 170,000 in Kenosha County to more than 930,000 in Milwaukee. Population is a useful comparative metric because a County’s size typically impacts the resources available from the tax base, as well as the service level demands. Other comparative factors that were analyzed included whether the County had adopted the 0.5% sales tax; median income and house value; percent of the population below the federal poverty level; and crime rates. These factors were important given Waukesha’s strong property tax base, conservative financial policies, and prioritization of public safety services by residents.

The analysis also considered geographic proximity to Waukesha, as Wisconsin’s population tends to be concentrated in its southern region where the County is located.

As captured in the table below, Waukesha’s population size is closest to Brown County, which is located in northern Wisconsin near Green Bay. Although further north, Green Bay has both a major professional sports team and Lake Michigan waterfront, attributing similar socioeconomic characteristics to Waukesha. Waukesha’s median income and home values aligned closest to Dane County, where the state capital of Madison is located.

When examining the prevalence of poverty and crime, Waukesha ranks closer to Racine, which also happens to be the only other benchmark peer without a county sales tax.

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 17
Table 9: Peer Counties Demographic Comparison14
County 2023
Population15
Adopted
Sales
Tax
Median
Income
Median
House
Value
% Below
Federal
Poverty
Level
Violent
Crimes per
1,000
Residents16
Property
Crimes per
1,000
Residents17
Brown 273,333 1986 $71,127 $251,900 9.9% 8 12
Dane 590,056 1991 $84,831 $373,500 10.4% 7 16
Kenosha 170,243 1991 $74,534 $253,200 9.0% 9 10
Milwaukee 937,259 1991 $58,214 $216,900 17.1% 20 29
Racine 197,422 None $71,788 $238,200 8.0% 7 10
Waukesha 411,538 None $98,849 $379,700 5.2% 3 7
To gauge the overall resource allocation and spending of taxpayer dollars, the table below compares the budget, property tax levy, and state-shared revenue per capita for each of the peer counties. Among peer counties, Waukesha has the lowest per capita amounts across all three categories (although Dane County receives similar shared revenue per capita). To meet resident service level expectations with fewer resources year after year requires persistent operational efficiency.

Table 10: Peer Counties Spending Per Capita
County Total 2024 Budget Per
Capita
2024 Tax Levy Per
Capita
2024 Shared Revenue
Per Capita
Brown $1,702 $347 $17
Dane $1,641 $431 $10
Kenosha $1,657 $457 $16
Milwaukee $1,464 $311 $58
Racine $1,233 $327 $19
Waukesha $916 $279 $10
Comparison of Revenue Sources
The primary revenue source for all Wisconsin counties is tax revenue. All counties collect property taxes, and they also have the option to collect vehicle registration fees (also known as a wheel tax) and/or a 0.5% sales tax. Four of the five benchmark counties collect sales tax, as illustrated in Table 9. Milwaukee County also received special approval from the state legislature to increase its county sales tax and add a city sales tax beginning in January 2024.
18 14 Unless otherwise specified, all data is from 2022 (most recent available) and the 2022 U.S. Census American Community Survey.
15 “Demographic Services Center’s 2023 Population Estimates.” Wisconsin Department of Administration, https://doa.wi.gov/DIR/Final_Ests_Summary_2023.pdf.
16 “UCR Offense Data.” Wisconsin Department of Justice, https://www.doj.state.wi.us/dles/bjia/ucr-offense-data. 17 Ibid.
18 “Tax Rates.” Wisconsin Department of Revenue, https://www.revenue.wi.gov/Pages/FAQS/pcs-taxrates.aspx#txrate11.

ITEM NO. 7.
18 WAUKESHA COUNTY, WI
Waukesha, at the beginning of this assessment, was one of only four counties, out of 72 total, without the county sales tax. Recently, Manitowoc County adopted the sales tax with an effective collection date of January 1, 2025.

Among the remaining three counties without sales tax, Waukesha is certainly not alone in experiencing growing fiscal pressure. In the previous three other counties without the sales tax—Manitowoc, Racine, and Winnebago— the FY2024 budget development processes identified an average shortfall of $8.3 million. Further, in the 2024 budget messages for both Winnebago and Racine counties, the respective County Executive took the opportunity to highlight their mounting constraints and foreshadow seeking additional revenues.19 Waukesha has maintained its Aaa/AAA bond ratings despite fiscal constraints. The bond rating agencies acknowledge the availability of the additional revenue source (sales tax) and spending growth that has outpaced restricted revenue growth, noting they “expect spending to grow in line with, to slightly above, revenue growth in the absence of policy action.” 20 The chart below illustrates the distribution of major revenue sources among each of the peer counties.21 Of the four counties with comparable data,22 not surprisingly, Waukesha relies the most on a property tax levy and other revenues (including user fees). The addition of sales tax in the other three counties contributes to less reliance on the property tax levy. Intergovernmental revenue is a significant source of revenue for all counties in the state, with similar proportions among the four counties shown below. As mentioned previously, much of this revenue is restricted in use to support specific, often mandated, services provided by the County.

Figure 6: 2024 Revenue Sources for Counties That Budget with Comparable Categories 19 “Racine County 2024 Budget.” Racine County,
racinecounty.com/home/showpublisheddocument/46848/638428279760830000; “2024 Approved Budget Book.” Manitowoc County, https://manitowoccountywi.gov/wp-content/uploads/2024/05/2024-Approved-Budget-Book.pdf; “Adopted Budget 2024.” Winnebago County, https://www.co.winnebago.wi.us/sites/default/files/uploadedfiles/2024%20ADOPTED%20Budget.pdf. 20 “Fitch Rates Waukesha County, WI’s Series 2023A GO Notes ‘AAA’; Outlook Stable.” Fitch Ratings, https://www.fitchratings.com/research/us-public-finance/fitch-rates-waukesha-county-wi-series-2023a-go-notes-aaaoutlook-stable-12-04-2023. 21 “2024 Adopted Operating Budget.” Milwaukee County, https://county.milwaukee.gov/files/county/administrativeservices/PSB/BudgetsCopy-1/2024-Budget/2024-Adopted-Budget/2024-Operating-Budget2025.pdf; “2024 Budget.” Kenosha County, https://www.kenoshacounty.org/DocumentCenter/View/17819/2024-County-Budget; “2024 Adopted Budget.” Dane County, https://admin.danecounty.gov/documents/pdf/Budget/2024/Adopted-Budget-Report.pdf. 22 Counties are only shown if their revenue categories align with Waukesha closely enough for comparison. 28%
38%
31%
31%
26%
27%
21%
30%
9%
8%
14%
37%
28%
34%
39%
0% 100%
Dane
Kenosha
Milwaukee
Waukesha Intergovernmental
Property Tax Levy
Sales Tax
Other Revenues

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 19
Financial Trend Analysis
After reviewing historical financial results for revenue and expenditures, the project team created a financial model incorporating the historical trends along with anticipated future trends to forecast budget needs over the next six years, FY2025 – FY 2030. This independent analysis provided an objective review of the County’s annual forecasting process, and it began to identify some of the key challenges associated with achieving a balanced budget in future years.

KEY ASSUMPTIONS
The adopted FY2024 budget was used as the base year of data for the financial model. The financial model excluded Enterprise Funds and the Capital Improvement Fund, focusing on operating budget requirements for all other funds, including Special Revenue and Internal Service Funds. Key assumptions used in the model are detailed below.

Fund Balance
The starting fund balance for FY2024 is assumed to be $60.9 million, based on the adopted FY2024 County budget, and the starting fund balance for FY2025 is assumed to be $57.4 million, based on County staff projections.

These figures represent the unassigned fund balance for General and Special Revenue Funds only.

The annual target fund balance is assumed to be 15% of annual General and Special Revenue Fund expenditures, and the minimum is assumed to be 11% of annual expenditures, based on adopted County financial policies.23 Operating Expenditures
The model identifies assumptions for annual changes in base operating expenditures based on expenditure category. These assumptions were developed based on historical trends and input from County staff. The list of assumptions by category is shown in the table below.

Table 11: Base Annual Change Assumptions for Operating Expenditures by Category Category Assumed Annual
Percent Change
Salaries24 5%
Benefits 5%
Operating Expenses 4%
Capital Assets 5%
Contracted Services 8%
Utilities 10%
Interdepartmental Charges 4%
A total of 98% of budgeted operating expenditures are projected to be spent per year. Historically, the number has been closer to 97%, but this is largely due to high vacancy rates, and the model assumes a lower vacancy rate going forward.
23 “Financial Management Policies.” Waukesha County.
24 Includes across-the-board salary range adjustments, progression through step ranges, and performance pay, similar to recent years.

ITEM NO. 7.
20 WAUKESHA COUNTY, WI
Capital Expenditures
Assumptions for annual capital expenditures, as well as revenue offsetting the cost of these expenditures, are based on the County’s adopted capital plan. Based on past County practice, the model assumes that the County will pay for at least 20% of all capital costs directly (as down payment) and that the rest of the cost, aside from any offsetting revenue, will be financed through 10-year bonds. The annual interest rate for the bonds is assumed to be 4%, based on standard County assumptions.

Non-Tax Revenues
The model identifies assumptions for annual changes in base non-tax operating revenues based on revenue category. These assumptions were developed based on historical trends and input from County staff. The list of assumptions by category is shown in the table below.

Table 12: Base Annual Change Assumptions for Non-Tax Operating Revenues by Category Category Assumed Annual
Percent Change
Intergovernmental 2%
Fines, Licenses, and
Charges for Services 3%
Interdepartmental Revenues 4%
Other Revenues 3%
Tax Revenues
The model assumes that all debt service will be paid for via property tax levy, and that the remaining portion of the tax levy, which is subject to state restrictions on the annual increase, will increase by 1.4% per year. The 1.4% figure is based on County projections of future development and is supported by historical trends. Property appreciation has increased significantly, while net new construction is limited by the availability of developable properties and is affected by the economic cycles.

FUTURE PROJECTIONS
Based on the assumptions detailed in the previous section, projected operating revenues and expenditures are shown in the tables below. Numbers are rounded to the nearest million.

ITEM NO. 7.

BUDGET TASK FORCE ANALYSIS AND FACILITATION 21
Table 13: Projected Operating Expenditures by Category, FY2024 – FY2030 ($M)25 Category FY24 FY25 FY26 FY27 FY28 FY29 FY30 Average
Annual Change
Salaries $111.7 $116.9 $122.7 $128.8 $135.3 $142.0 $149.1 5% Benefits $40.2 $42.0 $44.1 $46.3 $48.6 $51.0 $53.6 5%
Operating Expenses $92.1 $90.9 $94.6 $98.4 $102.3 $106.4 $110.6 3% Capital Assets $1.8 $1.9 $2.0 $2.0 $2.2 $2.3 $2.4 5%
Contracted Services $37.8 $40.8 $44.1 $47.6 $51.4 $55.5 $60.0 8% Utilities $3.3 $3.7 $4.0 $4.4 $4.9 $5.4 $5.9 10%
Interdept. Charges $24.2 $25.0 $25.9 $26.8 $27.8 $28.7 $29.8 4% Transfers to Other Funds26 $1.0 $0.9 $1.0 $1.1 $1.2 $1.3 $1.4 6% Debt Service $16.8 $17.3 $19.8 $21.4 $22.0 $22.4 $21.8 5% Total $328.9 $339.4 $358.1 $376.9 $395.6 $415.0 $434.6 5% Table 14: Projected Operating Revenues by Category, FY2024 – FY2030 ($M)27 Category FY24 FY25 FY26 FY27 FY28 FY29 FY30 Average
Annual Change
Tax Levy $119.0 $122.4 $126.3 $129.5 $131.5 $133.5 $134.4 2% Intergovernmental $85.9 $88.2 $90.0 $91.8 $93.6 $95.5 $97.4 2% Fines, Licenses, and
Charges for Services $41.6 $42.8 $44.1 $45.4 $46.8 $48.2 $49.6 3% Interdept. Revenues $46.3 $47.9 $49.6 $51.3 $53.1 $55.0 $56.9 3% Dedicated Fund Balance $8.9 $7.1 $7.3 $7.5 $7.7 $7.9 $8.1 -1% ARPA $8.8 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 N/A
Other Revenues $18.5 $19.0 $19.6 $20.2 $20.8 $21.4 $22.0 3% Carryforward28 $0.0 $6.8 $7.2 $7.5 $7.9 $8.3 $8.7 N/A
Total $328.9 $334.2 $344.0 $353.2 $361.4 $369.7 $377.1 2% Operating expenditures are projected to outpace earnings each year, based on the base model assumptions. The gap is also expected to grow over time, as illustrated in the figure below. 25 Figures may not sum due to rounding.
26 Levy transferred to capital projects as part of down payment. 27 Figures may not sum due to rounding.
28 The model assumes that 2% of budgeted operating expenditures in 2025 onward are not expended, based on past trends, and these funds are carried forward.

ITEM NO. 7.
22 WAUKESHA COUNTY, WI
Figure 7: Projected Operating Expenditures and Revenues Under Base Scenario, FY2024 – FY2030 The baseline forecast provided above aligns with the County’s financial forecast provided in the budget document as part of budget development each year. The results indicate a structural deficit, where primary ongoing revenue sources are growing at a rate that is below the cost to continue providing the same level of service residents receive now over the next six years. Structural deficits can lead to decreased reserve balances, limit capacity for future capital investment, and require significant service level reductions to meet balanced budget requirements.

Gap Closure Scenarios
The difference between estimated revenue and cost to continue providing services (baseline) is referred to as the budget gap. As part of the financial analysis, Raftelis worked with County staff to identify gap closure options that either reduce services (expenditure savings) or increase revenue (revenue-generating options). Collectively these options will be needed to address the projected budget gap over the next several years. It is important to note that the structural imbalance experienced by the County is not new. Since 2019, the County has faced preliminary base budget gaps ranging from $3 to $8 million annually.

EXPENDITURE REDUCTIONS
Under the state-imposed levy limits, the “new” revenue provided through tax levy growth is usually insufficient to cover the increasing cost of providing core services, often resulting in staff reductions and other expenditure cuts.

As such, departments have identified cost savings by reducing non-mandated services and trimming support for mandated services. The anticipated budget gap starts at approximately $5 million in 2025. It grows to approximately $58 million in six years as inflationary pressure for operational costs increases an average of 3 – 5%, higher than historical averages of 2 – 3%. The financial model included a targeted analysis of needed expenditure reductions or revenue enhancements to solve for the next six years. The estimated savings target is approximately $30 million, which would help mitigate the inflationary impact that results in the $58 million gap. $0 $5 $14 $24 $34 $45 $58
$329 $339 $358 $377 $396 $415 $435
$329 $334 $344 $353 $361 $370 $377
2024 2025 2026 2027 2028 2029 2030
Total Projected Operating Revenues and
Expenditures
Base Scenario ($ Millions)
Funding Gap Total Operating Expenditures
Total Operating Revenues