Agenda packet — Los Gatos City Council, December 16, 2025 (part 1 of 7)

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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 November 24, 2025, Special Town Council Meeting.

RECOMMENDATION: Approve the Minutes of the November 24, 2025, Special Town Council Meeting.

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

RECOMMENDATION: Approve the Minutes of the December 2, 2025, Closed Session Town Council Meeting.

TOWN OF LOS GATOS

COUNCIL MEETING AGENDA
DECEMBER 16, 2025
110 EAST MAIN STREET AND TELECONFERENCE

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

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3. Approve the Minutes of the December 2, 2025, Town Council Meeting.

RECOMMENDATION: Approve the Minutes of the December 2, 2025, Town Council Meeting.

4. Approve the Minutes of the December 9, 2025, Special Town Council Meeting.

RECOMMENDATION: Approve the Minutes of the December 9, 2025, Special Town Council Meeting.

5. Receive the October 2025 Monthly Financial and Investment Report and the Revised September 2025 Financial and Investment Report.

RECOMMENDATION: Receive the October 2025 Monthly Financial and Investment Report and the Revised September 2025 Financial and Investment Report.

6. Adopt Council Committee Appointments Effective January 1, 2026.

RECOMMENDATION: Adopt Council Committee Appointments effective January 1, 2026.

7. Receive Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2025, and Adopt a Resolution Confirming June 30, 2025 Fund Balances in Accordance With Fiscal Year 2024-25 Final Audit and Town Council General Fund Reserve Policy.

RECOMMENDATION: Receive the Annual Comprehensive Financial Report (ACFR) for the Fiscal Year Ended June 30, 2025, as recommended by the Finance Commission, and adopt a Resolution Confirming June 30, 2025, Fund Balances in Accordance with Fiscal Year 2024-25 Final Audit and Town Council General Fund Reserve Policy.

8. Authorize the Town Manager to Execute a Notice of Completion for the Civic Center HR Offices and ADA Ramp Project (CIP No. 821-2117) and Authorize Staff to Record the Notice of Completion.

RECOMMENDATION: Accept the Civic Center Human Resources Offices and ADA Ramp Project (CIP No. 821-2117) and authorize the Town Manager to execute a Notice of Completion; and direct staff to record the Notice of Completion.

9. Adopt a Resolution Setting the Compensation and Benefits for Management and Confidential Employees.

RECOMMENDATION: Adopt a resolution setting the salary and benefits for employees in the Management and Confidential employee groups.

10. Authorize the Town Manager to Reopen the Los Gatos Creek Trailhead Connector Project (4118503, 4218503; CIP 832-4505), Authorize Associated Budget Adjustments, and Authorize the Town Manager to Execute an Amendment to the Agreement for Services with Zoon Engineering.

RECOMMENDATION: Authorize an expenditure budget adjustment in the amount of $89,726 from previously awarded One Bay Area Grant funds; authorize an expenditure budget adjustment in the amount of $421 from previously awarded Transportation Fund for Clean Air Grant funds; authorize an expenditure budget adjustment in the amount of $3,188 from the General Fund Appropriations Reserve; and authorize the Town Manager

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to execute the Second Amendment to the Agreement with Zoon Engineering to extend the agreement date to March 31, 2026.

11. Approve the 2026 Town Council Meeting Schedule.

RECOMMENDATION: Approve the proposed regular meeting schedule for 2026, with a modification to change the first meeting in November to Monday, November 2, 2026, to avoid conflicts with Election Day.

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.)

12. Adopt a Resolution for the California Public Employees’ Retirement System Retirement Plan to Waive the 180-day Retiree Rehire Wait Period for Gitta Ungvari.

RECOMMENDATION: Adopt a Resolution for the California Public Employees’ Retirement System Retirement Plan to waive the 180-day retiree rehire wait period and to appoint Gitta Ungvari as the interim Administrative Services Director in the Finance Department.

13. Adopt a Resolution for the California Public Employees’ Retirement System Retirement Plan to Waive the 180-day Retiree Rehire Wait Period for Jose Reyes.

RECOMMENDATION: Adopt a Resolution for the California Public Employees’ Retirement System Retirement Plan to waive the 180-day retiree rehire wait period and to appoint Jose Reyes as extra help in the Police Department.

14. Adopt a Resolution for the California Public Employees’ Retirement System Retirement Plan to Waive the 180-day Retiree Rehire Wait Period for Janette Judd.

RECOMMENDATION: Adopt a Resolution for the California Public Employees’ Retirement System Retirement Plan to waive the 180-day retiree rehire wait period and to appoint Janette Judd as an Interim Executive Assistant to the Town Manager in the Town Manager’s Office.

15. Discuss, Consider, and Provide Direction to Modify the Town of Los Gatos Flag Policy for TownOwned Flagpoles, Including Potential Future Display of the Pride Flag During LGBTQ+ Pride Month in June 2026.

RECOMMENDATION: Discuss and provide direction on a preferred policy approach for modifying the Town’s Flag Policy to address commemorative flags.

16. Approve the Senior Services Roadmap Update and Next Steps.

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RECOMMENDATION: Approve the report on Senior Services Roadmap Update and Next Steps, and provide any direction.

17. Discuss, Consider, and Provide Direction Regarding Wildfire Risk Mitigation Program Options, Planning Level Cost Estimates, and Emergency Management Initiatives Update.

RECOMMENDATION: Discuss, Consider, and Provide Direction Regarding Wildfire Risk Mitigation Program Options, Planning Level Cost Estimates, and Emergency Management Initiatives Update.

18. Adopt by Resolution “Statement and Findings” in Response to a Challenged Conduct Notice Submitted Regarding a Planning Application for the Proposed Project at 14288 Capri Drive.

RECOMMENDATION: Adopt by resolution “Statement and Findings” in response to a Challenged Conduct Notice submitted regarding a planning application for the proposed project at 14288 Capri Drive.

19. Adopt the Revised Town Agenda Format and Rules Policy 2-01.

RECOMMENDATION: Adopt the revised Town Agenda Format and Rules Policy 2-01.

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:

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 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 Thursday before the Council meeting for inclusion in the agenda packet. -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.

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

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 12/16/25
ITEM NO: 1
DRAFT
Minutes of the Town Council Special Meeting – Commissioner Interviews Monday, November 24, 2025
5:15 P.M.

The Town Council of the Town of Los Gatos conducted this special meeting in person and utilizing teleconferencing means.

MEETING CALLED TO ORDER AT 5:20 P.M.

Mayor Hudes welcomed applicants and provided introductory comments.

ROLL CALL

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

Absent: None.

Wendy Wood, Town Clerk, explained the interview process.

VERBAL COMMUNICATIONS
Member of the Public
- Commented on various commissions.

OTHER BUSINESS

1. Interview Applicants and Make Appointments to Town Boards, Committees, and Commissions.

Mayor Hudes provided comments to explain the interview process that will be used for the meeting.

Mayor Hudes stated that if an applicant is not selected for the Board, Commission, or Committee for which they applied, the applicant may indicate their desire to be appointed to the Personnel Board or the Community Health and Senior Services Commission.

The Town Council interviewed the following applicants:
 COMMUNITY HEALTH AND SENIOR SERVICES COMMISSION (CHSSC) o Shailaja Venkatsubramanayan

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ITEM NO. 1.

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SUBJECT: Draft Minutes of the Town Council Special Meeting of November 24, 2025 – Commissioner Interviews
DATE: December 16, 2025
 PLANNING COMMISSION (PC)
o Nigel Chandler
o Jeffrey Barnett
o Ed Boland
o Adam Mayer
 COMPLETE STREETS AND TRANSPORTATION COMMISSION (CSTC) o Thomas Theakanath
o Nigel Chandler
o Sanem Alkan (Sam)
o Tanya Stafford (Lauren)
o Jeffrey Suzuki (Jeff)
 PARKS AND SUSTAINABILITY COMMISSION (PARKS)
o Chirag Mapara
o Mark Richard
o Linus Lundberg
o Carla Richard
Mayor Hudes called a recess at 7:04 p.m.

The meeting was reconvened at 7:18 p.m.
 LIBRARY BOARD (LIB)
o Abby (Horowitz) Bramley
o Bernadette White
o Edana Beck
o Kathleen Yen (Kathy)
 PERSONNEL BOARD
o Martha Johanson
 DIVERSITY, EQUITY, AND INCLUSION COMMISSION (DEIC)
o Laleh Imanverdi (employee)
o Tooba Ahmed (non-profit employee)
o Lynn Bruno (resident)
o Patricia Uro-May (resident)
o Joy Su (resident)
o Charlotte Sparacino (resident)

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ITEM NO. 1.

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SUBJECT: Draft Minutes of the Town Council Special Meeting of November 24, 2025 – Commissioner Interviews
DATE: December 16, 2025
 ARTS AND CULTURE COMMISSION (ACC)
o Joy Su
o Anne Lamborn
o Julie Mauerer
o Maureen Cappon-Javey
o Stephaine Wallace
Mayor Hudes called a recess at 9:11 p.m.

The meeting was reconvened at 9:20 p.m.

Ballots were distributed to each Council Member, and the Town Clerk explained that a candidate must receive a majority vote of three or more to be appointed. The Council Members completed their ballots and provided them to the Town Clerk. Town Clerk Wood read the votes and appointments as follows (Note: applicants not listed did not receive a vote):
 COMMUNITY HEALTH AND SENIOR SERVICES COMMISSION (CHSSC) o Shailaja Venkatsubramanayan received four votes (Moore, Badame, Ristow, and Rennie).

Shailaja Venkatsubramanayan was appointed to the Community Health and Senior Services Commission by a majority vote.
 PLANNING COMMISSION (PC)
o Adam Mayer received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).
o Jeffrey Barnett received three votes (Moore, Rennie, and Ristow). o Ed Boland received two votes (Hudes and Badame).

Adam Mayer and Jeffrey Barnett were appointed to the Planning Commission by a majority vote.
 COMPLETE STREETS AND TRANSPORTATION COMMISSION (CSTC) o Thomas Theakanath received one vote (Hudes).
o Nigel Chandler received four votes (Moore, Badame, Rennie, and Ristow). o Sanem Alkan received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).
o Tanya Stafford received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).
o Jeffrey Suzuki received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).

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ITEM NO. 1.

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SUBJECT: Draft Minutes of the Town Council Special Meeting of November 24, 2025 – Commissioner Interviews
DATE: December 16, 2025
Nigel Chandler, Sanem Alkan, Tanya Stafford, and Jeffrey Suzuki were appointed to the Complete Streets and Transportation Commission by a majority vote.  PARKS AND SUSTAINABILITY COMMISSION (PARKS)
o Chirag Mapara received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).
o Mark Richard received two votes (Moore and Rennie).
o Linus Lundberg received four votes (Hudes, Badame, Rennie, and Ristow). o Carla Richard received four votes (Hudes, Moore, Badame, and Ristow).

Chirag Mapara, Linus Lundberg, and Carla Richard were appointed to the Parks and Sustainability Commission by a majority vote.
 LIBRARY BOARD (LIB)
o Abby Bramley received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).
o Bernadette White received three votes (Moore, Badame, and Rennie). o Edana Beck received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).
o Kathleen Yen received two votes (Hudes and Ristow).

Abby Bramley, Bernadette White, and Edana Beck were appointed to the Library Board by a majority vote.
 PERSONNEL BOARD
o Martha Johanson received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).

Martha Johanson was appointed to the Personnel Board by a majority vote.  DIVERSITY, EQUITY, AND INCLUSION COMMISSION (DEIC)
o Laleh Imanverdi received two votes for the Los Gatos Business Owner or Employee seat (Hudes and Badame).
o Tooba Ahmed received a unanimous vote for the Non-Profit Employee seat (Hudes, Moore, Badame, Ristow, and Rennie).
o Lynn Bruno received a unanimous vote for the Resident seat (Hudes, Moore, Badame, Ristow, and Rennie).
o Patricia Uro-May received one vote for the Resident seat (Rennie). o Joy Su received two votes for the Resident seat (Moore and Ristow).

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ITEM NO. 1.

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SUBJECT: Draft Minutes of the Town Council Special Meeting of November 24, 2025 – Commissioner Interviews
DATE: December 16, 2025
Tooba Ahmed was appointed to the Diversity, Equity, and Inclusion Commission for a NonProfit Employee seat; Lynn Bruno was appointed to the Diversity, Equity, and Inclusion Commission for a Resident seat.

The Town Clerk announced that another ballot will be distributed to determine the third seat.  ARTS AND CULTURE COMMISSION (ACC)
o Joy Su received two votes (Hudes and Rennie).
o Anne Lamborn received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).
o Maureen Cappon-Javey received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).
o Stephaine Wallace received three votes (Moore, Badame, and Ristow).

Anne Lamborn, Maureen Cappon-Javey, and Stephaine Wallace were appointed to the Arts and Culture Commission by a majority vote.

Run-off ballots for the Diversity, Equity, and Inclusion Commission were distributed to each Council Member. The Council Members completed the supplementary ballots and provided them to the Town Clerk. Town Clerk Wood read the votes and appointments as follows:
 DIVERSITY, EQUITY, AND INCLUSION COMMISSION (DEIC)
o Laleh Imanverdi received one vote for the Los Gatos Business Owner or Employee seat (Badame).
o Patricia Uro-May received one vote for the Resident seat (Hudes). o Joy Su received three votes for the Resident seat (Moore, Rennie, and Ristow).

Joy Su was appointed to the Diversity, Equity, and Inclusion Commission for a Resident seat.

The names of the applicants interested in serving on the Community Health and Senior Services Committee were added to a supplementary ballot and were distributed to each Council Member. The Council Members completed the supplementary ballots and provided them to the Town Clerk. Town Clerk Wood read the votes and appointments as follows:
 COMMUNITY HEALTH AND SENIOR SERVICES COMMISSION (CHSSC) o Patricia Uro-May received a unanimous vote (Hudes, Moore, Badame, Ristow, and Rennie).

Patricia Uro-May was appointed to the Community Health and Senior Services by a majority vote.

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ITEM NO. 1.

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SUBJECT: Draft Minutes of the Town Council Special Meeting of November 24, 2025 – Commissioner Interviews
DATE: December 16, 2025

ANNOUNCEMENT OF FINANCE COMMISSION APPOINTMENT
Council Member Rennie announced Linda Reiners as his appointment to the Finance Commission.

MOTION: Motion by Mayor Hudes to extend the recruiting period for Personnel Board and Community Health and Senior Services Commission until January 12, 2026.

Seconded by Vice Mayor Moore
VOTE: Motion passed unanimously

ADJOURNMENT
The meeting adjourned at 9:59 p.m.

Respectfully Submitted:
_____________________________________
Keara Johnson, Deputy Town Clerk

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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: 12/16/2025
ITEM NO: 2
DRAFT
Minutes of the Town Council Special Meeting – Closed Session Tuesday, December 2, 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 5:17 P.M.

ROLL CALL

Present: Mayor Matthew Hudes, Vice Mayor Rob Moore (arrived at 5:23 p.m.), Council Member Mary Badame, Council Member Rob Rennie, 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 LEGAL COUNSEL – ANTICIPATED LITIGATION Significant exposure to litigation pursuant to subdivision (d)(2) of Government Code Section 54956.9: 2 cases

2. CONFERENCE WITH LEGAL COUNSEL— EXISTING LITIGATION (Government Code §54956.9(d)(1))
Los Gatos LLC v. Town of Los Gatos
Santa Clara County Superior Court Case Number: 25CV467536 The Council recessed at 6:40 p.m. with the intention of reconvening in closed session after its regular meetings.

The Council reconvened in closed session at approximately 9:22 p.m.

There was no reportable action.

ADJOURNMENT
The meeting adjourned at approximately 10:29 p.m.

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

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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: 12/16/2025
ITEM NO: 3
DRAFT
Minutes of the Town Council Meeting
Tuesday, December 2, 2025
The Town Council of the Town of Los Gatos conducted a regular meeting in person and via teleconference.

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

ROLL CALL

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

Absent: None.

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

The Mayor announced that items seventeen and eighteen will be moved to the next regular meeting, and that item twelve will be addressed immediately after the Youth Commission’s presentation on their work plan.

PRESENTATIONS
The Youth Commission gave a presentation on their work plan.

OTHER BUSINESS

12. Approval of a Two-Year Work Plan for the Los Gatos Youth Commission (2026 - 2028).

Council discussed the item.

Mayor Hudes opened public comment.

No one spoke.

Mayor Hudes closed public comment.

MOTION: Motion by Council Member Ristow to approve the work plan with the change suggested by the Vice Mayor [support the Town of Los Gatos’s implementation of the 2026 statewide plastic bag ban through educating residents and recognizing businesses that comply with the new law]. Seconded by Vice Mayor Moore.

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ITEM NO. 3.

PAGE 2 OF 6
SUBJECT: Draft Minutes of the Town Council Meeting of December 2, 2025 DATE: December 2, 2025
VOTE: Motion passed unanimously.

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

1. Approve the Minutes of the November 18, 2025, Town Council Meeting.

2. Adopt a Resolution Declaring Weeds a Public Nuisance, Ordering Such Nuisance to be Abated, and Setting a Public Hearing Date of February 3, 2026, to Consider Objections to the Proposed Abatement. RESOLUTION 2025-060

3. Authorize the Town Manager to Execute a Third Amendment to an Agreement for Services with OpenGov, Inc., for an Amount Not to Exceed $401,214.79.

4. Authorize the Town Manager to Execute an Agreement for Consultant Services with Dudek for the Preparation of an Urban Forest Management Plan for an Amount Not to Exceed $243,810 and Approve Revenue and Expenditure Budget Adjustments in the Amount of $243,810.

5. Receive an Annual Report Regarding the Independent Police Auditor Function.

6. Authorize the Town Manager to Execute a First Amendment to the Agreement for Services with Lisa Wise, Inc., Revising the Scope of Work at No Additional Cost.

7. Adopt an Ordinance of the Town Council of the Town of Los Gatos Repealing Chapter 6, “Building Regulations,” and Chapter 9, “Fire Prevention and Protection,” of the Town of Los Gatos Municipal Code, and Replacing Them with a New Chapter 6, “Building Code and Regulations,” that Includes the New 2025 California Building, Fire, and Reach Codes as Amended. Amendments Include Updated Fire Safety Requirements in Wildland Urban Interface Areas for New, Renovated, or Repaired Structures, as well as Reach Codes Affecting Air Conditioning Replacement and Electrical Readiness in Renovations/Alterations.

Town Code Amendment Application A25-005. Project Locations: Town Wide. Applicant:

Town of Los Gatos.

Ordinance Title: An ordinance of the Town Council of the Town of Los Gatos Repealing Chapter 6, “Building Regulations,” and Chapter 9, “Fire Prevention and Protection,” and Replacing Them with a New Chapter 6, “Building Codes and Regulations,” that Includes the New 2025 California Building, Fire, and Reach Codes, as Amended. Amendments Include Updated Fire Safety Requirements in Wildland Urban Interface Areas for New, Renovated, or Repaired Structures. ORDINANCE 2380

8. Authorize the Town Manager to Execute Agreements for Environmental Consultant Services with David J. Powers and Associates, EMC Planning Group, Inc., and Raney Planning and Management, Inc.

9. Authorize the Town Manager to Execute the First Amendment to an Agreement for Services with Los Gatos Monte Sereno Safe Routes to School Program for an Amount of $371,158.26 Plus Annual CPI Increases, and Budget Adjustments in the Amount of $88,457 to Recognize Annual Funding from Valley Transportation Authority’s Measure B Education & Encouragement Program (CIP No. 812-0134).

10. Authorize the Town Manager to Execute a Fourth Amendment to the Agreement for Services with Sequoia Ecological Consulting Inc.

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ITEM NO. 3.

PAGE 3 OF 6
SUBJECT: Draft Minutes of the Town Council Meeting of December 2, 2025 DATE: December 2, 2025

11. Authorize the Town Manager to Reopen the Building Replacement at Corporation Yard Project (4118715; CIP No. 821-2302) and Authorize an Expenditure Budget Adjustment in the Amount of $83,565.38.

12. Approval of a Two-Year Work Plan for the Los Gatos Youth Commission (2026 - 2028).

13. Authorize the Town Manager or Designee to Enter into a First Amendment to the Contract for Litigation Legal Services for FY 2025-26 with Goldfarb and Lipman to Increase the Contract Amount by $150,000.00, for a Total Contract Amount Not to Exceed $350,000.00 and Authorize an Expenditure Budget Adjustment of $150,000.00 from the General Fund Unassigned Fund Balance.

14. Authorize the Town Manager to Execute a Fifth Amendment in substantially the form presented with Hinderliter de Llamas & Associates dba HdL Companies for Sales or Transaction and Use Tax Management and Audit Services; 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 or Transactions, and Use Tax Records Pursuant to Revenue and Taxation Code Section 7056; and Rescind Resolution 2025-051. RESOLUTION 2025-063

15. Authorize a Revenue and Expenditure Budget Adjustment in the Amount of $9,500.00 from the Town’s Public Art Fund for the Forbes Mill Footbridge Children’s Art for Fiscal Year 2025-26.

16. Adopt a Resolution Modifying the Hours of Enforcement for Passenger Loading Zones on East Main Street Adjacent to Los Gatos High School. RESOLUTION 2025-061 Mayor Hudes opened public comment.

Lee Quintana
- Commented on item eight.

Mayor Hudes closed public comment.

MOTION: Motion by Council Member Ristow to approve items one through eleven, and thirteen through sixteen. Seconded by Vice Mayor Moore.

VOTE: Motion passed unanimously.

VERBAL COMMUNICATIONS
Sudhana Belur, Indigenous Justice Coalition
- Commented on the federal recognition for Muwekma Ohlone Tribe.

Parker Huynhm, Indigenous Justice Coalition
- Commented on the federal recognition for Muwekma Ohlone Tribe.

Ray He, Indigenous Justice Coalition
- Commented on the federal recognition for Muwekma Ohlone Tribe.

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ITEM NO. 3.

PAGE 4 OF 6
SUBJECT: Draft Minutes of the Town Council Meeting of December 2, 2025 DATE: December 2, 2025
Gavin Chang, Indigenous Justice Coalition
- Commented on the federal recognition for Muwekma Ohlone Tribe.

OTHER BUSINESS

17. Adopt a Resolution for the California Public Employees’ Retirement System Retirement Plan to Waive the 180-day Retiree Rehire Wait Period for Gitta Ungvari.

This item was moved to the next regular Town Council Meeting (December 16).

18. Adopt a Resolution for the California Public Employees’ Retirement System Retirement Plan to Waive the 180-day Retiree Rehire Wait Period for Janette Judd.

This item was moved to the next regular Town Council Meeting (December 16).

19. Resolution Terminating Membership in the Pooled Liability Assurance Network Joint Powers Authority and Authorizing Membership in the California Joint Powers Insurance Authority (CJPIA) to Obtain Risk Management and Insurance Coverages. RESOLUTION 2025-062 Chris Constantin, Town Manager, presented the staff report and provided a presentation outlining the purpose of the item, the staff recommendation, and an overview of the item.

The Council asked questions of a CJPIA representative.

Mayor Hudes opened public comment.

No one spoke.

Mayor Hudes closed public comment.

Council asked questions and discussed the item.

MOTION: Motion by Council Member Badame to adopt a resolution authorizing the Town Manager and Town Attorney to issue written notice of termination of the Town’s membership in the Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA) at the end of the fiscal year and to execute all necessary agreements to join the California Joint Powers Insurance Authority (CJPIA) and obtain risk management and insurance coverages. Seconded by Vice Mayor Moore.

VOTE: Motion passed unanimously.

COUNCIL/TOWN MANAGER REPORTS
Council Matters

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ITEM NO. 3.

PAGE 5 OF 6
SUBJECT: Draft Minutes of the Town Council Meeting of December 2, 2025 DATE: December 2, 2025

20. Discuss a Letter from the Historic Preservation Committee to the Town Council Regarding Future Historic Preservation Workplan Items and Provide Direction to Staff.

Sean Mullin, Planning Manager, presented the staff report.

Mayor Hudes opened public comment.

Lee Quintana, Historic Preservation Committee Chair
- Commented on the proposed work plan items.

Susan Burnett
- Commented on the reasons for the proposed workplan items.

Mayor Hudes closed public comment.

The Council asked questions and discussed the item.

MOTION: Motion by Mayor Hudes to ask staff to evaluate the level of effort and the feasibility of the following items: preserving smaller homes, reviewing the boundaries of the historic districts, refreshing the Bloomfield survey, considering replacement structure historically relevant, and adopting pre-1941 to seventy year rolling, and to update and clarify definitions and required findings for determining [historic] status after the objective standards have been substantially completed. Seconded by Council Member Badame.

VOTE: Motion passed unanimously.

Council Matters
- Council Member Badame stated she participated in a meeting of the Silicon Valley Animal Control Authority (SVACA), a resident wildfire advisory group; attended a Diversity, Equity, and Inclusion Commission (DEIC) meeting as an observer, and a meeting of the Finance Commission as an observer.
- Council Member Ristow stated she attended the Los Gatos Interfaith Thanksgiving Service, the Live Oak Thanksgiving Celebration, a Silicon Valley Clean Energy Authority (SVCEA) Finance and Administration Committee meeting; met with the North40 developers, and residents.
- Vice Mayor Moore stated he attended the Los Gatos Interfaith Thanksgiving Service, a meeting with El Camino Hospital representatives, Muse Markets, a Finance Commission meeting, and other meetings.
- Council Member Rennie stated he attended the SVCEA Risk Oversight Committee meeting. - Mayor Hudes stated he met with neighbors of the Twin Oaks development; observed the DEIC meeting; participated in meetings with the Community Center group, SVCEA, the West Valley Mayors and Managers, and the Los Gatos Thrives Foundation.

Page 17 ends

ITEM NO. 3.

PAGE 6 OF 6
SUBJECT: Draft Minutes of the Town Council Meeting of December 2, 2025 DATE: December 2, 2025
Town Manager Report
Chris Constantin, Town Manager
- Stated he had no report.

Closed Session Report
Gabrielle Whelan, Town Attorney
- Stated that the Town Council started closed session (before the regular meeting) and will reconvene in closed session after the regular meeting is adjourned, and will return to the Chambers to report out.

ADJOURNMENT
The meeting adjourned at 9:17 p.m.

Respectfully Submitted:
_____________________________________
Jenna De Long, Deputy Town Clerk

Page 18 ends

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

TOWN OF LOS GATOS

COUNCIL SPECIAL SESSION MINUTES
MEETING DATE: 12/16/2025
ITEM NO: 4
DRAFT
Minutes of the Town Council Special Meeting
Tuesday, December 9, 2025
The Town Council of the Town of Los Gatos conducted a special meeting in person and via teleconference.

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

ROLL CALL

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

Absent: None.

VERBAL COMMUNICATIONS (ONLY ON ITEMS ON THE AGENDA)
Maragret Abe-Koga, Santa Clara County District 5 Supervisor - Commented on the partnership with Town’s, commended outgoing Mayor Matthew Hudes, and presented him with a commendation.

Mayor Hudes recognized elected officials in the audience.

Raanin Mohsen, Director for Congressman Sam Liccardo
- Commended outgoing Mayor Hudes for his service to the Town and partnership with Sam Liccardo’s Office and presented him with a certificate.

Belal Aftab, Saratoga City Council Member
- Commended outgoing Mayor Hudes and congratulated the incoming Mayor.

OTHER BUSINESS

1. Recognize Outgoing Mayor Matthew Hudes; and Elect a Mayor and Vice Mayor.

Chris Constantin, Town Manager, presented a video commemorating Mayor Hudes’s year as Mayor and presented the Mayor with a commemorative plaque.

Mayor Hudes opened public comment.

Gail Pellerin, Assembly Member
- Commended outgoing Mayor Hudes and welcomed the new Mayor.

Mayor Hudes closed public comment.

Outgoing Mayor Hudes commented on the key accomplishments of the Town during his year as Mayor and thanked his family and the community.

Page 19 ends

ITEM NO. 4.

PAGE 2 OF 2
SUBJECT: Draft Minutes of the Special Town Council Meeting of December 9, 2025 DATE: December 9, 2025
The Council Members commended outgoing Mayor Hudes for his service to the Town and his leadership.

MOTION: Motion by Mayor Hudes to nominate Vice Mayor Moore to be the Town’s next Mayor. Seconded by Council Member Ristow.

VOTE: Motion passed unanimously.

The Council Members commended Mayor-Elect Moore.

Mayor-Elect Moore provided brief comments on his upcoming Mayoral year, and requested Council Member Rennie provide comments.

Council Member Rennie commented on the Mayor rotation and stated he would be declining a nomination for Vice Mayor.

MOTION: Motion by Council Member Rennie to nominate Council Member Ristow to be the Town’s next Vice Mayor. Seconded by Council Member Badame.

VOTE: Motion passed unanimously.

Kylie Clark administered the ceremonial Oath of Office to Vice Mayor-Elect Ristow and MayorElect Moore.

Vice Mayor Ristow provided brief comments on her upcoming Vice Mayoral year.

Former Mayor Hudes passed the gavel to Mayor Moore.

Mayor Moore accepted the gavel, thanked the community, and made closing comments.

ADJOURNMENT
The meeting adjourned at 7:56 p.m.

Respectfully Submitted:
___________________________
Jenna De Long, Deputy Town Clerk

Page 20 ends

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: 12/16/2025
ITEM NO: 5
DATE: December 9, 2025
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Receive the October 2025 Monthly Financial and Investment Report and the Revised September 2025 Financial and Investment Report
RECOMMENDATION: Receive the October 2025 Monthly Financial and Investment Report and the Revised September 2025 Financial and Investment Report.

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 3 contains the October 2025 monthly Financial and Investment Report, which fulfills this requirement.

The October 2025 Monthly Financial and Investment Report was received by the Finance Commission at its December 8, 2025, regular meeting.

DISCUSSION:

The September Monthly Financial and Investment Report (Attachment 1) received by the Town Council included an incorrect balance for the 2010 Certificate of Participation Lease account on

Page 21 ends

ITEM NO. 5.

PAGE 2 OF 3
SUBJECT: Monthly Financial and Investment Reports for September and October 2025 DATE: December 9, 2025
page 3. The report has also been updated to reflect a corrected security type for the investment with CUSIP 3133EN5V8 on page 5, which adjusts the demand deposit balance on pages 1 and 2.

A redlined version of the September 2025 report is provided as Attachment 1, with a final corrected version as Attachment 2. The corrected version was received by the Finance Commission at its December 8, 2025, regular meeting.

The October 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 October 30, 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 September 30, 2025, and October 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 October 31, 2025, the Town’s financial position (Cash Plus Other Assets $90.47M, Liabilities $27.41, and Fund Equity $63.06) remains strong, and the Town has sufficient funds to meet the cash demands for the next six months.

As of October 31, 2025, the Town’s weighted portfolio yield for investments under management was 4.28%, which was 13 basis points above the Local Agency Investment Fund (LAIF) yield of 4.15% for the same reporting period. Currently, the LAIF portfolio’s weighted

Page 22 ends

ITEM NO. 5.

PAGE 3 OF 3
SUBJECT: Monthly Financial and Investment Reports for September and October 2025 DATE: December 9, 2025
average maturity (WAM) is 258 days versus the Town’s longer WAM of 642 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 management of 4.28% at the close of October was 3 basis points lower when compared to the prior month’s return of 4.31% reported as of September 30, 2025.

Since October 2024, LAIF yields decreased from 452 basis points (4.52%) to 415 basis points (4.15%) through the end of October 2025. The State LAIF pool typically lags the market when current market yields are either increasing or decreasing.

As of the date of this report, the Federal Open Market Committee (FOMC) has enacted two rate adjustments in 2025. On September 17, the Committee lowered the federal funds 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. A second 25 basis point reduction followed on October 29, bringing the range to 3.75%–4.00%, in response to continued labor market weakness and economic uncertainty. These adjustments align with the FOMC's objective to promote maximum employment and achieve a year-over-year inflation target of 2%.

Due to the government shutdown, the usual monthly jobs report was not released. However, private payroll data continued to point toward labor market moderation. U.S.-wide initial and continuing jobless claims data were also not published.

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 Reports for September and October 2025.

Attachments:

1. Financial and Investment Report (September 2025) – Redlined

2. Financial and Investment Report (September 2025)

3. Financial and Investment Report (October 2025)

Page 23 ends

ITEM NO. 5.

Weighted Average YTM Portfolio Yield on Investments
under Management 4.31%
Weighted Average Maturity (days) 625
This Month Last Month One year ago
Portfolio Allocation & Treasurer's Cash Balances $69,933,610 $69,644,461 $67,158,455 Managed Investments $52,078,969
Local Agency Investment Fund $12,339,746
Reconciled Demand Deposit Balances $5,514,895
Portfolio Allocation & Treasurer's Cash Balances $69,933,610 Benchmarks/ References:

Town's Average Yield 4.31% 4.34% 4.45%
LAIF Yield for month 4.21% 4.25% 4.58%
3 mo. Treasury 3.93% 4.14% 4.62%
6 mo. Treasury 3.84% 3.96% 4.40%
2 yr. Treasury 3.61% 3.62% 3.64%
5 yr. Treasury 3.74% 3.70% 3.56%
10 Yr. Treasury 4.15% 4.23% 3.78%
Town of Los Gatos
Summary Investment Information
September 30, 2025
0 - 1 year
41%
1 - 2 years
17%
2 - 3 years
19%
3 - 5 years
23%
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 24
ITEM NO. 5.

Month YTD
Cash & Investment Balances - Beginning of Month/Period $ 69,644,460.61 $ 81,558,113.19 Receipts 4,328,104.35 20,026,953.23
Disbursements (4,038,954.77) (31,651,456.23)
Cash & Investm Cash & Investment Balances - End of Month/Period $69,933,610.19 $69,933,610.19 Portfolio Allocation Amount % of Portfolio
Max. % or $ Allowed
per State Law or Policy
BNY MM $1,015,432.36 1.58% 20% of Town Portfolio
US Treasury Notes $21,779,294.22 33.82% No Max. on US Treasuries Government Agency Debenture Notes $14,532,758.11 22.56% No Max. on Non-Mortgage Backed Corporate Medium Term Bonds $14,751,484.50 22.90% 30% of Town Portfolio Local Agency Investment Fund $12,339,746.03 19.16% $75 M per State Law Subtotal - Investments 64,418,715.22 100.02%
Reconciled Demand Deposit Balances 5,514,894.97
Total Portfolio Allocation & Treasurer's Cash Balances $69,933,610.19

0.0401

0.0388
Town of Los Gatos
Portfolio Allocation & Treasurer's Cash Balances
September 30, 2025
BNY MM

1.58%
US Treasury Notes

33.81%
Government Agency Debenture
Notes

22.56%
Corporate Medium Term Bonds

22.90%
Local Agency Investment Fund

19.16%
Portfolio Investment Allocation
$67.2 M $69.9 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
Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Treasurer's Fund Balances
2

Page 25 ends

ITEM NO. 5.

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

Cert. of Participation 2002 Ser A Reserve Fund $ 688,494.93 $ - $ 2,206.52 $ - $ 690,701.45 Note 1 Cert. of Participation 2010 Ser Lease Payment Fund 2,616.40 1,158,762.50 8.05 - 1,161,386.95 Note 2 Cert. of Participation 2002 Ser A Lease Payment Fund 14,301.65 - 38.49 - 14,340.14 Note 1 Cert. of Participation 2010 Ser Reserve Fund 1,286,188.37 - 4,510.33 - 1,290,698.70 Note 2 Total Restricted Funds: $ 1,991,601.35 $ 1,158,762.50 $ 6,763.39 $ - $ 3,157,127.24 CEPPT IRS Section 115 Trust 3,147,592.19 - 48,635.64 - $ 3,196,227.83 Note 3 Grand Total COP's and CEPPT Trust $ 5,139,193.54 $ 1,158,762.50 $ 55,399.03 $ - $ 6,353,355.07 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
September 30, 2025
3

Page 26 ends

ITEM NO. 5.

July 2025 $ 238,713.97
August 2025 $ 238,367.28
September 2025 $ 259,685.13
October 2025 $ -
November 2025 $ -
December 2025 $ -
January 2026 $ -
February 2026 $ -
March 2026 $ -
April 2026 $ -
May 2026 $ -
June 2026 $ -
$ 736,766.38
Town of Los Gatos
Statement of Interest Earned
September 30, 2025
4

Page 27 ends

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) 1,280,461.00 51,870.00 6/21/2027 4.19% $ 102,837.22 $ 135,426.07 $ 13,498.59 629 Home Depot 437076BM3 Corporate Bond 3.00% 8/4/2022 1,000,000.00 991,960.00 (8,040.00) 994,870.00 2,910.00 1/1/2026 3.04% $ 79,750.00 $ 94,051.74 $ 8,155.29 93 FFCB 3133EN5V8 3133EN5V8 4.13% 1/17/2023 236,000.00 239,174.20 3,174.20 237,170.56 (2,003.64) 1/11/2027 3.76% $ 24,175.25 $ 21,918.24 $ 2,253.05 468 US Treasury 91282CBT7 US Treasury Note 0.75% 9/30/2022 800,000.00 712,565.18 (87,434.82) 787,848.00 75,282.82 3/31/2026 4.14% $ 18,000.00 $ 85,193.12 $ 7,806.54 182 JP Morgan Chase 46625HRS1 Corporate Bond 3.20% 9/23/2022 500,000.00 474,660.00 (25,340.00) 497,145.00 22,485.00 3/15/2026 4.70% $ 43,644.44 $ 64,505.94 $ 5,869.98 166 FHLB 3130AQF65 Gov. Agency Debenture 1.25% 11/30/2022 1,300,000.00 1,160,559.40 (139,440.60) 1,262,768.00 102,208.60 12/21/2026 4.15% $ 41,572.92 $ 130,709.25 $ 12,752.12 447 FHLB 3130APJH9 Gov. Agency Debenture 1.00% 1/17/2023 1,000,000.00 907,010.00 (92,990.00) 984,750.00 77,740.00 10/28/2026 4.17% $ 23,354.17 $ 84,829.28 $ 8,719.88 393 FFCB 3133EN5N6 Gov. Agency Debenture 4.00% 2/8/2023 1,700,000.00 1,706,732.00 6,732.00 1,708,024.00 1,292.00 1/6/2028 3.91% $ 163,955.56 $ 159,363.33 $ 16,794.30 828 American Honda 02665WED9 Corporate Bond 4.70% 5/11/2023 600,000.00 608,856.00 8,856.00 607,506.00 (1,350.00) 1/12/2028 4.34% $ 61,178.33 $ 56,288.41 $ 6,630.64 834 US Treasury 91282CEF4 US Treasury Note 2.50% 6/9/2023 1,500,000.00 1,416,626.12 (83,373.88) 1,474,800.00 58,173.88 3/31/2027 4.09% $ 86,577.87 $ 122,333.72 $ 14,966.36 547 US Treasury 91282CGA3 US Treasury Note 4.00% 6/20/2023 2,100,000.00 2,080,558.59 (19,441.41) 2,100,189.00 19,630.41 12/15/2025 4.40% $ 166,852.46 $ 186,379.78 $ 23,140.27 76 Colgate-Palmolive 194162AR4 Corporate Bond 4.60% 7/14/2023 500,000.00 504,655.00 4,655.00 508,935.00 4,280.00 2/1/2028 4.37% $ 49,002.79 $ 43,173.83 $ 5,539.74 854 FannieMae 3135G06G3 Gov. Agency Debenture 0.50% 7/14/2023 500,000.00 455,157.00 (44,843.00) 498,140.00 42,983.00 11/7/2025 4.63% $ 4,534.72 $ 42,871.33 $ 5,500.92 38 FFCB 3133EPQC2 Gov. Agency Debenture 4.63% 7/17/2023 500,000.00 501,957.50 1,957.50 503,935.00 1,977.50 7/17/2026 4.48% $ 46,250.00 $ 43,961.07 $ 5,664.45 290 FFCB 3133EPBM6 Gov. Agency Debenture 4.13% 7/14/2023 600,000.00 596,220.00 (3,780.00) 604,758.00 8,538.00 8/23/2027 4.29% $ 52,181.25 $ 50,424.13 $ 6,470.04 692 PNC Bank 69353RFJ2 Corporate Bond 3.25% 7/25/2023 1,000,000.00 921,490.00 (78,510.00) 984,560.00 63,070.00 12/23/2027 5.23% $ 64,729.17 $ 97,247.67 $ 12,672.50 814 US Treasury 91282CFU0 US Treasury Note 4.13% 7/31/2023 1,300,000.00 1,290,660.60 (9,339.40) 1,313,403.00 22,742.40 10/31/2027 4.31% $ 93,843.75 $ 107,052.11 $ 14,069.71 761 Toyota Motor Credit 89236TKL8 Corporate Bond 5.45% 8/25/2023 1,600,000.00 1,617,168.00 17,168.00 1,648,960.00 31,792.00 11/10/2027 5.16% $ 148,966.67 $ 153,725.55 $ 20,952.22 771 US Treasury 912810FE3 US Treasury Note 5.50% 10/3/2023 1,200,000.00 1,238,207.14 38,207.14 1,262,256.00 24,048.86 8/15/2028 4.76% $ 123,211.96 $ 101,335.84 $ 14,658.64 1050 Pepsico Inc 713448DF2 Corporate Bond 2.85% 10/16/2023 1,000,000.00 947,570.00 (52,430.00) 995,350.00 47,780.00 11/24/2025 5.24% $ 52,883.33 $ 91,065.84 $ 13,447.93 55 FFCB 3133EPUW3 Gov. Agency Debenture 4.75% 10/13/2023 1,000,000.00 994,338.00 (5,662.00) 1,009,510.00 15,172.00 9/1/2026 4.96% $ 89,458.33 $ 84,828.57 $ 12,466.82 336 US Treasury 91282CEW7 US Treasury Note 3.25% 10/16/2023 1,000,000.00 950,039.06 (49,960.94) 993,590.00 43,550.94 6/30/2027 4.73% $ 55,461.96 $ 78,477.53 $ 11,588.98 638 US Treasury 91282CEN7 US Treasury Note 2.75% 10/31/2023 1,300,000.00 1,214,336.39 (85,663.61) 1,282,177.00 67,840.61 4/30/2027 4.82% $ 53,625.00 $ 100,336.49 $ 15,182.50 577 US Treasury 91282CCH2 US Treasury Note 1.25% 12/21/2023 900,000.00 798,647.55 (101,352.45) 844,704.00 46,056.45 6/30/2028 3.99% $ 17,180.71 $ 51,319.84 $ 8,476.53 1004 FNMA 3135G0Q22 Gov. Agency Debenture 1.88% 12/21/2023 900,000.00 845,676.00 (54,324.00) 884,133.00 38,457.00 9/24/2026 4.22% $ 29,671.88 $ 55,770.03 $ 9,211.57 359 US Treasury 91282CFB2 US Treasury Note 2.75% 1/2/2024 1,000,000.00 960,354.91 (39,645.09) 984,450.00 24,095.09 7/31/2027 3.95% $ 43,417.12 $ 57,605.73 $ 9,724.27 669 US Treasury 91282CHE4 US Treasury Note 3.63% 1/17/2024 1,800,000.00 1,775,185.72 (24,814.28) 1,800,558.00 25,372.28 5/31/2028 3.97% $ 89,317.63 $ 102,986.91 $ 17,876.97 974 JP Morgan Chase 46647PDG8 Corporate Bond 4.85% 2/1/2024 1,400,000.00 1,396,528.00 (3,472.00) 1,418,718.00 22,190.00 7/25/2027 4.93% $ 100,739.10 $ 97,231.80 $ 17,369.56 663 US Bancorp 91159HJF8 Corporate Bond 4.55% 2/5/2024 1,000,000.00 989,200.00 (10,800.00) 1,007,850.00 18,650.00 7/22/2027 4.89% $ 66,577.67 $ 68,041.60 $ 12,250.15 660 Treasury 91282CHB0 US Treasury Note 3.63% 2/23/2024 1,175,000.00 1,151,962.92 (23,037.08) 1,173,425.50 21,462.58 5/15/2026 4.56% $ 52,189.05 $ 71,517.53 $ 13,346.07 227 FHLB 3130AXB31 Gov. Agency Debenture 4.88% 2/27/2024 1,000,000.00 1,003,060.00 3,060.00 1,004,490.00 1,430.00 3/13/2026 4.72% $ 76,104.17 $ 63,303.13 $ 11,909.79 164 FFCB 3133EP5U5 Gov. Agency Debenture 4.13% 3/28/2024 1,700,000.00 1,687,981.00 (12,019.00) 1,729,920.00 41,939.00 3/20/2029 4.28% $ 103,629.17 $ 91,219.09 $ 18,283.56 1267 US Treasury 9128285M8 US Treasury Note 3.13% 4/30/2024 1,200,000.00 1,123,832.14 (76,167.86) 1,182,000.00 58,167.86 11/15/2028 4.69% $ 39,045.34 $ 63,313.82 $ 13,673.41 1142 Cisco Systems 17275RBR2 Corporate Bond 4.85% 5/15/2024 1,000,000.00 999,130.00 (870.00) 1,026,310.00 27,180.00 1/26/2029 4.87% $ 62,106.94 $ 54,820.58 $ 12,271.27 1214 Home Depot 437076CW0 Corporate Bond 4.90% 5/17/2024 1,000,000.00 1,001,790.00 1,790.00 1,029,160.00 27,370.00 4/15/2029 4.86% $ 44,644.44 $ 54,498.76 $ 12,258.89 1293 Treasury 91282CJR3 US Treasury Note 3.75% 5/31/2024 1,200,000.00 1,154,629.02 (45,370.98) 1,204,080.00 49,450.98 12/31/2028 4.68% $ 48,708.79 $ 59,398.06 $ 13,834.48 1188 American Honda 02665WEY3 Corporate Bond 4.95% 6/27/2024 1,000,000.00 995,640.00 (4,360.00) 1,001,930.00 6,290.00 1/9/2026 5.25% $ 51,287.50 $ 52,766.88 $ 13,191.72 101 FHLB 3130B1BT3 Gov. Agency Debenture 4.88% 7/2/2024 1,150,000.00 1,150,966.00 966.00 1,158,303.00 7,337.00 6/12/2026 4.82% $ 47,341.67 $ 55,261.42 $ 14,005.65 255 Citibank 17325FBK3 Corporate Bond 4.84% 8/15/2024 1,250,000.00 1,263,062.50 13,062.50 1,280,575.00 17,512.50 7/6/2029 4.60% $ 58,963.12 $ 50,520.38 $ 14,570.14 1375 FNMA 3135G05Y5 Gov. Agency Debenture 0.75% 9/10/2024 1,100,000.00 1,010,724.00 (89,276.00) 1,038,785.00 28,061.00 10/8/2027 3.56% $ 4,766.67 $ 29,915.45 $ 9,393.25 738 US Treasury 91282CFL0 US Treasury Note 3.88% 12/3/2024 1,100,000.00 1,088,144.31 (11,855.69) 1,107,601.00 19,456.69 9/30/2029 4.12% $ 35,130.49 $ 25,813.46 $ 11,362.86 1461 FHLB 3130ATUT2 Gov. Agency Debenture 4.50% 2/12/2025 505,000.00 508,253.21 3,253.21 518,695.60 10,442.39 12/14/2029 4.35% $ 7,701.25 $ 8,337.70 $ 5,558.47 1536 FFCB 3133ER5X5 Gov. Agency Debenture 3.88% 3/12/2025 1,000,000.00 998,480.00 (1,520.00) 1,004,170.00 5,690.00 3/7/2028 3.93% $ 18,836.81 $ 11,831.34 $ 9,895.30 889 Treasury 91282CJF9 US Treasury Note 4.88% 3/31/2025 1,100,000.00 1,130,167.75 30,167.75 1,139,446.00 9,278.25 10/31/2028 4.04% $ 4,444.06 $ 11,273.90 $ 11,397.79 1127 State Street Corp 857477CD3 Corporate Bond 5.27% 4/30/2025 800,000.00 811,184.00 11,184.00 807,592.00 (3,592.00) 8/3/2026 4.04% $ 10,895.47 $ 5,565.50 $ 8,393.86 307 Freddie Mac 3134HAW33 Gov. Agency Debenture 4.75% 4/30/2025 1,000,000.00 1,005,644.00 5,644.00 1,005,600.00 (44.00) 12/18/2029 4.23% $ 6,993.07 $ 7,735.00 $ 11,665.90 1540 US Treasury 91282CNG2 US Treasury Note 4.00% 6/30/2025 660,000.00 665,184.24 5,184.24 667,887.00 2,702.76 2,163.92 5/31/2030 3.82% $ (2,163.92) $ - $ 6,388.68 1704 US Treasury 91282CMG3 US Treasury Note 4.25% 8/4/2025 825,000.00 842,308.43 17,308.43 842,696.25 387.82 381.11 1/31/2030 3.74% $ (381.11) $ - $ 4,874.31 1584 US Treasury 91282CMA6 US Treasury Note 4.13% 8/25/2025 1,200,000.00 1,218,847.77 18,847.77 1,219,596.00 748.23 11,631.14 11/30/2029 3.72% $ (11,631.14) $ - $ 4,446.68 1522 US Treasury 91282CHR5 US Treasury Note 4.00% 9/23/2025 950,000.00 967,036.38 17,036.38 960,944.00 (6,092.38) 5,576.08 7/31/2030 3.59% $ (5,576.08) $ - $ 661.47 1765 Subtotal $ 52,451,000.00 $ 51,302,711.03 $ (1,148,288.97) $ 52,584,724.91 $ 1,282,013.88 $ 19,752.25 $ 2,645,987.02 $ 3,285,546.75 $ 555,094.08 BNY MM Money Market 1,015,432.36 1,015,432.36 0.00 0.00% 1 LAIF State Investment Pool 12,339,746.03 12,363,556.57 23,810.54 4.21% 157,529.89 1 64,657,889.42 $65,963,713.84 $1,305,824.42 $19,752.25 $ 2,645,987.02 $ 3,285,546.75 $ 712,623.97 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 FFCB 3133ENP95 Gov. Agency Debenture 4.25% 9/30/2022 900,000.00 900,939.60 939.60 9/30/2025 4.14% $ 114,750.00 $ 104,352.97 $ 9,562.22 Freddie Mac 3137EAEX3 Gov. Agency Debenture 0.38% 5/1/2023 750,000.00 689,032.50 (60,967.50) 9/23/2025 3.97% $ 6,734.37 $ 61,146.74 $ 6,570.76 Total Investments "Matured" $ 24,142.41
Total Interest FY 24_25 Matured and Current $ 736,766.38 Maturity Profile Amount Percent
0-1 year $ 26,472,433.58 41%
1-2 years $11,058,639.08 17%
2-3 years $12,470,806.01 19%
3-5 years $ 14,656,010.75 23%
$64,657,889.42 100%
Town of Los Gatos
Investment Schedule
September 30, 2025
5

Page 28 ends

ITEM NO. 5.

Date Cusip/Id Description Transaction Type Trade Date Settlement Date Par Coupon Maturity Date Price Principal Interest Transaction
Total
9/2/2025 3133EPUW3
FEDERAL FARM CREDIT BANK 4.75%
01SEP2026 BOND INTEREST 9/1/2025 9/1/2025 1,000,000.00 4.750% 9/1/2026 - - 23,750.00 23,750.00 9/2/2025 194162AR4
COLGATE-PALMOLIVE CO 4.6%
01MAR2028 (CALLABLE 01FEB28) BOND INTEREST 9/1/2025 9/1/2025 500,000.00 4.600% 3/1/2028 - - 11,500.00 11,500.00 9/3/2025 Cash-USD Cash-USD

SHORT TERM INVESTMENT
FUND INCOME 9/3/2025 9/3/2025 609.57 0.000% 100.00 - - 609.57 9/8/2025 3133ER5X5
FEDERAL FARM CREDIT BANK 3.875%
07MAR2028 BOND INTEREST 9/7/2025 9/7/2025 1,000,000.00 3.875% 3/7/2028 - - 19,375.00 19,375.00 9/12/2025 037833DB3 912810FE3 BOND INTEREST 9/12/2025 9/12/2025 1,300,000.00 2.900% 9/12/2027 - - 18,850.00 18,850.00 9/15/2025 3130AXB31
FEDERAL HOME LOAN BANK 4.875%
13MAR2026 BOND INTEREST 9/13/2025 9/13/2025 1,000,000.00 4.875% 3/13/2026 - - 24,375.00 24,375.00 9/23/2025 91282CHR5 USA TREASURY 4% 31JUL2030 PURCHASE 9/17/2025 9/23/2025 950,000.00 4.000% 7/31/2030 101.79 967,036.39 5,576.09 972,612.48 9/17/2025 91282CHR5 USA TREASURY 4% 31JUL2030 PURCHASE 9/17/2025 950,000.00 4.000% 7/31/2030 101.79 967,036.38 5,576.08 972,612.46 9/22/2025 3133EP5U5
FEDERAL FARM CREDIT BANK 4.125%
20MAR2029 BOND INTEREST 9/20/2025 9/20/2025 1,700,000.00 4.125% 3/20/2029 - - 35,062.50 35,062.50 9/23/2025 3137EAEX3 FREDDIE MAC 0.375% 23SEP2025 BOND INTEREST 9/23/2025 9/23/2025 750,000.00 0.000% 9/23/2025 - - 1,406.25 1,406.25 9/23/2025 3137EAEX3 FREDDIE MAC 0.375% 23SEP2025 REDEMPTION 9/23/2025 9/23/2025 750,000.00 0.000% 9/23/2025 100.00 750,000.00 - 750,000.00 9/24/2025 3135G0Q22 FANNIE MAE 1.875% 24SEP2026 BOND INTEREST 9/24/2025 9/24/2025 900,000.00 1.875% 9/24/2026 - - 8,437.50 8,437.50 9/30/2025 91282CBT7 USA TREASURY 0.75% 31MAR2026 BOND INTEREST 9/30/2025 9/30/2025 800,000.00 0.750% 3/31/2026 - - 3,000.00 3,000.00 9/30/2025 3133ENP95
FEDERAL FARM CREDIT BANK 4.25%
30SEP2025 BOND INTEREST 9/30/2025 9/30/2025 900,000.00 0.000% 9/30/2025 - - 19,125.00 19,125.00 9/30/2025 3133ENP95
FEDERAL FARM CREDIT BANK 4.25%
30SEP2025 REDEMPTION 9/30/2025 9/30/2025 900,000.00 0.000% 9/30/2025 100.00 900,000.00 - 900,000.00 9/30/2025 91282CEF4 USA TREASURY 2.5% 31MAR2027 BOND INTEREST 9/30/2025 9/30/2025 1,500,000.00 2.500% 3/31/2027 - - 18,750.00 18,750.00 9/30/2025 91282CFL0 USA TREASURY 3.875% 30SEP2029 BOND INTEREST 9/30/2025 9/30/2025 1,100,000.00 3.875% 9/30/2029 - - 21,312.50 21,312.50 Town of Los Gatos
Investment Transaction Detail
September 30, 2025
6

Page 29 ends

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 1,013,039 A- A3 3 3 4 3 02665WED9 AMERICAN HONDA FINANCE 4.7% 12JAN2028 1/12/2028 600,000 613,541 A- A3 3 3 4 3 037833DB3 APPLE INC 2.9% 12SEP2027 (CALLABLE 12JUN27) 9/12/2027 1,300,000 1,282,094 AA+ Aaa 5 2 5 5 17275RBR2 CISCO SYSTEMS INC 4.85% 26FEB2029 (CALLABLE 26JAN29) 2/26/2029 1,000,000 1,030,713 AA- A1 2 1 3 3 17325FBK3 CITIBANK NA 4.838% 06AUG2029 (CALLABLE 06JUL29) 8/6/2029 1,250,000 1,289,274 A+ Aa3 3 1 2 4 194162AR4 COLGATE-PALMOLIVE CO 4.6% 01MAR2028 (CALLABLE 01FEB28) 3/1/2028 500,000 510,719 A+ Aa3 3 3 3 3 437076CW0 HOME DEPOT INC 4.9% 15APR2029 (CALLABLE 15MAR29) 4/15/2029 1,000,000 1,051,201 A A2 3 3 3 2 437076BM3 HOME DEPOT INC 3% 01APR2026 (CALLABLE 01JAN26) 4/1/2026 1,000,000 1,009,759 A A2 3 3 3 2 46625HRS1 JPMORGAN CHASE & CO 3.2% 15JUN2026 (CALLABLE 15MAR26) 6/15/2026 500,000 501,787 A A1 3 2 3 4 46647PDG8 JPMORGAN CHASE & CO 4.851% 25JUL2028 (CALLABLE 25JUL27) 7/25/2028 1,400,000 1,430,772 A A1 3 2 3 4 713448DF2 PEPSICO INC 2.85% 24FEB2026 (CALLABLE 24NOV25) 2/24/2026 1,000,000 998,181 A+ A1 3 2 2 4 69353RFJ2 PNC BANK NA 3.25% 22JAN2028 (CALLABLE 23DEC27) 1/22/2028 1,000,000 990,572 A A2 3 3 3 3 857477CD3 STATE STREET CORP 5.272% 03AUG2026 (CALLABLE 03JUL26) 8/3/2026 800,000 814,258 A Aa3 2 1 2 2 89236TKL8 TOYOTA MOTOR CREDIT CORP 5.45% 10NOV2027 11/10/2027 1,600,000 1,682,755 A+ A1 3 1 2 5 91159HJF8 US BANCORP 4.548% 22JUL2028 (CALLABLE 22JUL27) 7/22/2028 1,000,000 1,016,162 A A3 3 3 4 3 Total Corporate / weighted average 14,950,000 15,234,828 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 September 30, 2025
7

Page 30 ends

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 3,090,731 - - - - - 3,090,731
Land Held for Resale - - - - - - -
Committed Fund Balances:

Budget Stabilization 7,870,639 - - - - - 7,870,639
Catastrophic 7,870,639 - - - - - 7,870,639
Pension/OPEB 1,000,000 - - - - - 1,000,000
Measure G District Sales Tax - - - - - - -
Assigned Fund Balances:

Open Space 410,000 - - - - - 410,000
Sustainability 140,553 - - - - - 140,553
Capital/Special Projects 1,983,271 - - - - - 1,983,271
Carryover Encumbrances 6,367 - - - - - 6,367
Compensated Absences 1,519,243 - - - - - 1,519,243
ERAF Risk Reserve - - - - - - -
Market Fluctuations 1,340,098 - - - - - 1,340,098
Council Priorities - Economic Recovery - - - - - - -
Unassigned Fund Balances:
111 Other Unassigned Fund Balance Reserve (Pre YE distribution) 10,372,775 (2,787,310) 2,258,639 (3,436,384) - - 6,407,720 General Fund Total 35,763,316 (2,787,310) 2,258,639 (3,436,384) - - 31,798,261 * Interfund transfers and Council Priorities/Economic Recovery funding allocation to be performed as part of the fiscal year end closing entries.

September 2025 Prior Year
Carryforward
7/1/2025*
Increase/
(Decrease)
July-August
Estimated Fund
Balance
9/30/2025*
8

Page 31 ends

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 10,117 13,641 (9,962) - - 677,964 231-236 Landscape & Lighting Districts 193,606 (1,149) - (3,063) - - 189,394 251 Los Gatos Theatre 381,120 22,805 15,070 (4,381) - - 414,614 261-264,269 Library Trusts 559,745 57,863 - (3,325) - - 614,283 Special Revenue Total 1,965,292 89,636 28,711 (20,731) - - 2,062,908

CAPITAL PROJECTS
411 GFAR - General Fund Appropriated Reserve 16,974,946 (49,736) 94,879 (864,698) - - 16,155,391 412 Community Center Development 819,604 - - - - - 819,604 421 Grant Funded Projects (1,577,430) (292,361) 1,181,467 (171,679) - - (860,003) 461-463 Storm Basin Projects 2,825,234 37,721 15,414 (8,966) - - 2,869,403 471 Traffic Mitigation Projects 676,482 - - - - - 676,482 472 Utility Undergrounding Projects 3,763,913 - - - - - 3,763,913 481 Gas Tax Projects 2,130,548 323,648 154,785 (692,443) - - 1,916,538 Capital Projects Total 25,613,297 19,272 1,446,545 (1,737,786) - - 25,341,328

INTERNAL SERVICE FUNDS
611 Town General Liability 208,746 (1,469,385) - (13,056) - - (1,273,695) 612 Workers Compensation 1,259,972 (503,258) 32,659 (60,177) - - 729,196 621 Information Technology 2,585,103 (336,982) 9,140 (13,867) - - 2,243,394 631 Vehicle & Equipment Replacement 3,890,428 - - (81,556) - - 3,808,872 633 Facility Maintenance 820,099 (148,124) 24,334 (107,571) - - 588,738 Internal Service Funds Total 8,764,348 (2,457,749) 66,133 (276,227) - - 6,096,505 Trust/Agency
942 RDA Successor Agency (2,916,323) (1,742,853) - (132) - - (4,659,308) Trust/Agency Fund Total (2,916,323) (1,742,853) - (132) - - (4,659,308) Total Town 69,189,930 (6,879,004) 3,800,028 (5,471,260) - - 60,639,694 * 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
September 2025 Estimated Fund
Balance
9/30/2025*
9

Page 32 ends

ITEM NO. 5.

Weighted Average YTM Portfolio Yield on Investments
under Management 4.31%
Weighted Average Maturity (days) 625
This Month Last Month One year ago
Portfolio Allocation & Treasurer's Cash Balances $69,933,610 $69,644,461 $67,158,455 Managed Investments $52,318,143
Local Agency Investment Fund $12,339,746
Reconciled Demand Deposit Balances $5,275,721
Portfolio Allocation & Treasurer's Cash Balances $69,933,610 Benchmarks/ References:

Page 33 ends

ITEM NO. 5.

Month YTD
Cash & Investment Balances - Beginning of Month/Period $ 69,644,460.61 $ 81,558,113.19 Receipts 4,328,104.35 20,026,953.23
Disbursements (4,038,954.77) (31,651,456.23)
Cash & Investm Cash & Investment Balances - End of Month/Period $69,933,610.19 $69,933,610.19 Portfolio Allocation Amount % of Portfolio
Max. % or $ Allowed
per State Law or Policy
BNY MM $1,015,432.36 1.57% 20% of Town Portfolio
US Treasury Notes $21,779,294.22 33.69% No Max. on US Treasuries Government Agency Debenture Notes $14,771,932.31 22.85% No Max. on Non-Mortgage Backed Corporate Medium Term Bonds $14,751,484.50 22.81% 30% of Town Portfolio Local Agency Investment Fund $12,339,746.03 19.08% $75 M per State Law Subtotal - Investments 64,657,889.42 100.00%
Reconciled Demand Deposit Balances 5,275,720.77
Total Portfolio Allocation & Treasurer's Cash Balances $69,933,610.19

0.0401

0.0388
Town of Los Gatos
Portfolio Allocation & Treasurer's Cash Balances
September 30, 2025
BNY MM

1.57%
US Treasury Notes

33.69%
Government Agency Debenture
Notes

22.85%
Corporate Medium Term Bonds

22.81%
Local Agency Investment Fund

19.08%
Portfolio Investment Allocation
$67.2 M $69.9 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
Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Treasurer's Fund Balances
2

Page 34 ends

ITEM NO. 5.

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

Cert. of Participation 2002 Ser A Reserve Fund $ 688,494.93 $ - $ 2,206.52 $ - $ 690,701.45 Note 1 Cert. of Participation 2010 Ser Lease Payment Fund 2,616.40 - 8.05 - 2,624.45 Note 2 Cert. of Participation 2002 Ser A Lease Payment Fund 14,301.65 - 38.49 - 14,340.14 Note 1 Cert. of Participation 2010 Ser Reserve Fund 1,286,188.37 - 4,510.33 - 1,290,698.70 Note 2 Total Restricted Funds: $ 1,991,601.35 $ - $ 6,763.39 $ - $ 1,998,364.74 CEPPT IRS Section 115 Trust 3,147,592.19 - 48,635.64 - $ 3,196,227.83 Note 3 Grand Total COP's and CEPPT Trust $ 5,139,193.54 $ - $ 55,399.03 $ - $ 5,194,592.57 These accounts are not part of the Treasurer's fund balances reported elsewhere in this report, as they are for separate and distinct entities.

Town of Los Gatos
Non-Treasury Restricted Fund Balances
September 30, 2025
3

Page 35 ends

ITEM NO. 5.

Page 36 ends

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) 1,280,461.00 51,870.00 6/21/2027 4.19% $ 102,837.22 $ 135,426.07 $ 13,498.59 629 Home Depot 437076BM3 Corporate Bond 3.00% 8/4/2022 1,000,000.00 991,960.00 (8,040.00) 994,870.00 2,910.00 1/1/2026 3.04% $ 79,750.00 $ 94,051.74 $ 8,155.29 93 FFCB 3133EN5V8 Gov. Agency Debenture 4.13% 1/17/2023 236,000.00 239,174.20 3,174.20 237,170.56 (2,003.64) 1/11/2027 3.76% $ 24,175.25 $ 21,918.24 $ 2,253.05 468 US Treasury 91282CBT7 US Treasury Note 0.75% 9/30/2022 800,000.00 712,565.18 (87,434.82) 787,848.00 75,282.82 3/31/2026 4.14% $ 18,000.00 $ 85,193.12 $ 7,806.54 182 JP Morgan Chase 46625HRS1 Corporate Bond 3.20% 9/23/2022 500,000.00 474,660.00 (25,340.00) 497,145.00 22,485.00 3/15/2026 4.70% $ 43,644.44 $ 64,505.94 $ 5,869.98 166 FHLB 3130AQF65 Gov. Agency Debenture 1.25% 11/30/2022 1,300,000.00 1,160,559.40 (139,440.60) 1,262,768.00 102,208.60 12/21/2026 4.15% $ 41,572.92 $ 130,709.25 $ 12,752.12 447 FHLB 3130APJH9 Gov. Agency Debenture 1.00% 1/17/2023 1,000,000.00 907,010.00 (92,990.00) 984,750.00 77,740.00 10/28/2026 4.17% $ 23,354.17 $ 84,829.28 $ 8,719.88 393 FFCB 3133EN5N6 Gov. Agency Debenture 4.00% 2/8/2023 1,700,000.00 1,706,732.00 6,732.00 1,708,024.00 1,292.00 1/6/2028 3.91% $ 163,955.56 $ 159,363.33 $ 16,794.30 828 American Honda 02665WED9 Corporate Bond 4.70% 5/11/2023 600,000.00 608,856.00 8,856.00 607,506.00 (1,350.00) 1/12/2028 4.34% $ 61,178.33 $ 56,288.41 $ 6,630.64 834 US Treasury 91282CEF4 US Treasury Note 2.50% 6/9/2023 1,500,000.00 1,416,626.12 (83,373.88) 1,474,800.00 58,173.88 3/31/2027 4.09% $ 86,577.87 $ 122,333.72 $ 14,966.36 547 US Treasury 91282CGA3 US Treasury Note 4.00% 6/20/2023 2,100,000.00 2,080,558.59 (19,441.41) 2,100,189.00 19,630.41 12/15/2025 4.40% $ 166,852.46 $ 186,379.78 $ 23,140.27 76 Colgate-Palmolive 194162AR4 Corporate Bond 4.60% 7/14/2023 500,000.00 504,655.00 4,655.00 508,935.00 4,280.00 2/1/2028 4.37% $ 49,002.79 $ 43,173.83 $ 5,539.74 854 FannieMae 3135G06G3 Gov. Agency Debenture 0.50% 7/14/2023 500,000.00 455,157.00 (44,843.00) 498,140.00 42,983.00 11/7/2025 4.63% $ 4,534.72 $ 42,871.33 $ 5,500.92 38 FFCB 3133EPQC2 Gov. Agency Debenture 4.63% 7/17/2023 500,000.00 501,957.50 1,957.50 503,935.00 1,977.50 7/17/2026 4.48% $ 46,250.00 $ 43,961.07 $ 5,664.45 290 FFCB 3133EPBM6 Gov. Agency Debenture 4.13% 7/14/2023 600,000.00 596,220.00 (3,780.00) 604,758.00 8,538.00 8/23/2027 4.29% $ 52,181.25 $ 50,424.13 $ 6,470.04 692 PNC Bank 69353RFJ2 Corporate Bond 3.25% 7/25/2023 1,000,000.00 921,490.00 (78,510.00) 984,560.00 63,070.00 12/23/2027 5.23% $ 64,729.17 $ 97,247.67 $ 12,672.50 814 US Treasury 91282CFU0 US Treasury Note 4.13% 7/31/2023 1,300,000.00 1,290,660.60 (9,339.40) 1,313,403.00 22,742.40 10/31/2027 4.31% $ 93,843.75 $ 107,052.11 $ 14,069.71 761 Toyota Motor Credit 89236TKL8 Corporate Bond 5.45% 8/25/2023 1,600,000.00 1,617,168.00 17,168.00 1,648,960.00 31,792.00 11/10/2027 5.16% $ 148,966.67 $ 153,725.55 $ 20,952.22 771 US Treasury 912810FE3 US Treasury Note 5.50% 10/3/2023 1,200,000.00 1,238,207.14 38,207.14 1,262,256.00 24,048.86 8/15/2028 4.76% $ 123,211.96 $ 101,335.84 $ 14,658.64 1050 Pepsico Inc 713448DF2 Corporate Bond 2.85% 10/16/2023 1,000,000.00 947,570.00 (52,430.00) 995,350.00 47,780.00 11/24/2025 5.24% $ 52,883.33 $ 91,065.84 $ 13,447.93 55 FFCB 3133EPUW3 Gov. Agency Debenture 4.75% 10/13/2023 1,000,000.00 994,338.00 (5,662.00) 1,009,510.00 15,172.00 9/1/2026 4.96% $ 89,458.33 $ 84,828.57 $ 12,466.82 336 US Treasury 91282CEW7 US Treasury Note 3.25% 10/16/2023 1,000,000.00 950,039.06 (49,960.94) 993,590.00 43,550.94 6/30/2027 4.73% $ 55,461.96 $ 78,477.53 $ 11,588.98 638 US Treasury 91282CEN7 US Treasury Note 2.75% 10/31/2023 1,300,000.00 1,214,336.39 (85,663.61) 1,282,177.00 67,840.61 4/30/2027 4.82% $ 53,625.00 $ 100,336.49 $ 15,182.50 577 US Treasury 91282CCH2 US Treasury Note 1.25% 12/21/2023 900,000.00 798,647.55 (101,352.45) 844,704.00 46,056.45 6/30/2028 3.99% $ 17,180.71 $ 51,319.84 $ 8,476.53 1004 FNMA 3135G0Q22 Gov. Agency Debenture 1.88% 12/21/2023 900,000.00 845,676.00 (54,324.00) 884,133.00 38,457.00 9/24/2026 4.22% $ 29,671.88 $ 55,770.03 $ 9,211.57 359 US Treasury 91282CFB2 US Treasury Note 2.75% 1/2/2024 1,000,000.00 960,354.91 (39,645.09) 984,450.00 24,095.09 7/31/2027 3.95% $ 43,417.12 $ 57,605.73 $ 9,724.27 669 US Treasury 91282CHE4 US Treasury Note 3.63% 1/17/2024 1,800,000.00 1,775,185.72 (24,814.28) 1,800,558.00 25,372.28 5/31/2028 3.97% $ 89,317.63 $ 102,986.91 $ 17,876.97 974 JP Morgan Chase 46647PDG8 Corporate Bond 4.85% 2/1/2024 1,400,000.00 1,396,528.00 (3,472.00) 1,418,718.00 22,190.00 7/25/2027 4.93% $ 100,739.10 $ 97,231.80 $ 17,369.56 663 US Bancorp 91159HJF8 Corporate Bond 4.55% 2/5/2024 1,000,000.00 989,200.00 (10,800.00) 1,007,850.00 18,650.00 7/22/2027 4.89% $ 66,577.67 $ 68,041.60 $ 12,250.15 660 Treasury 91282CHB0 US Treasury Note 3.63% 2/23/2024 1,175,000.00 1,151,962.92 (23,037.08) 1,173,425.50 21,462.58 5/15/2026 4.56% $ 52,189.05 $ 71,517.53 $ 13,346.07 227 FHLB 3130AXB31 Gov. Agency Debenture 4.88% 2/27/2024 1,000,000.00 1,003,060.00 3,060.00 1,004,490.00 1,430.00 3/13/2026 4.72% $ 76,104.17 $ 63,303.13 $ 11,909.79 164 FFCB 3133EP5U5 Gov. Agency Debenture 4.13% 3/28/2024 1,700,000.00 1,687,981.00 (12,019.00) 1,729,920.00 41,939.00 3/20/2029 4.28% $ 103,629.17 $ 91,219.09 $ 18,283.56 1267 US Treasury 9128285M8 US Treasury Note 3.13% 4/30/2024 1,200,000.00 1,123,832.14 (76,167.86) 1,182,000.00 58,167.86 11/15/2028 4.69% $ 39,045.34 $ 63,313.82 $ 13,673.41 1142 Cisco Systems 17275RBR2 Corporate Bond 4.85% 5/15/2024 1,000,000.00 999,130.00 (870.00) 1,026,310.00 27,180.00 1/26/2029 4.87% $ 62,106.94 $ 54,820.58 $ 12,271.27 1214 Home Depot 437076CW0 Corporate Bond 4.90% 5/17/2024 1,000,000.00 1,001,790.00 1,790.00 1,029,160.00 27,370.00 4/15/2029 4.86% $ 44,644.44 $ 54,498.76 $ 12,258.89 1293 Treasury 91282CJR3 US Treasury Note 3.75% 5/31/2024 1,200,000.00 1,154,629.02 (45,370.98) 1,204,080.00 49,450.98 12/31/2028 4.68% $ 48,708.79 $ 59,398.06 $ 13,834.48 1188 American Honda 02665WEY3 Corporate Bond 4.95% 6/27/2024 1,000,000.00 995,640.00 (4,360.00) 1,001,930.00 6,290.00 1/9/2026 5.25% $ 51,287.50 $ 52,766.88 $ 13,191.72 101 FHLB 3130B1BT3 Gov. Agency Debenture 4.88% 7/2/2024 1,150,000.00 1,150,966.00 966.00 1,158,303.00 7,337.00 6/12/2026 4.82% $ 47,341.67 $ 55,261.42 $ 14,005.65 255 Citibank 17325FBK3 Corporate Bond 4.84% 8/15/2024 1,250,000.00 1,263,062.50 13,062.50 1,280,575.00 17,512.50 7/6/2029 4.60% $ 58,963.12 $ 50,520.38 $ 14,570.14 1375 FNMA 3135G05Y5 Gov. Agency Debenture 0.75% 9/10/2024 1,100,000.00 1,010,724.00 (89,276.00) 1,038,785.00 28,061.00 10/8/2027 3.56% $ 4,766.67 $ 29,915.45 $ 9,393.25 738 US Treasury 91282CFL0 US Treasury Note 3.88% 12/3/2024 1,100,000.00 1,088,144.31 (11,855.69) 1,107,601.00 19,456.69 9/30/2029 4.12% $ 35,130.49 $ 25,813.46 $ 11,362.86 1461 FHLB 3130ATUT2 Gov. Agency Debenture 4.50% 2/12/2025 505,000.00 508,253.21 3,253.21 518,695.60 10,442.39 12/14/2029 4.35% $ 7,701.25 $ 8,337.70 $ 5,558.47 1536 FFCB 3133ER5X5 Gov. Agency Debenture 3.88% 3/12/2025 1,000,000.00 998,480.00 (1,520.00) 1,004,170.00 5,690.00 3/7/2028 3.93% $ 18,836.81 $ 11,831.34 $ 9,895.30 889 Treasury 91282CJF9 US Treasury Note 4.88% 3/31/2025 1,100,000.00 1,130,167.75 30,167.75 1,139,446.00 9,278.25 10/31/2028 4.04% $ 4,444.06 $ 11,273.90 $ 11,397.79 1127 State Street Corp 857477CD3 Corporate Bond 5.27% 4/30/2025 800,000.00 811,184.00 11,184.00 807,592.00 (3,592.00) 8/3/2026 4.04% $ 10,895.47 $ 5,565.50 $ 8,393.86 307 Freddie Mac 3134HAW33 Gov. Agency Debenture 4.75% 4/30/2025 1,000,000.00 1,005,644.00 5,644.00 1,005,600.00 (44.00) 12/18/2029 4.23% $ 6,993.07 $ 7,735.00 $ 11,665.90 1540 US Treasury 91282CNG2 US Treasury Note 4.00% 6/30/2025 660,000.00 665,184.24 5,184.24 667,887.00 2,702.76 2,163.92 5/31/2030 3.82% $ (2,163.92) $ - $ 6,388.68 1704 US Treasury 91282CMG3 US Treasury Note 4.25% 8/4/2025 825,000.00 842,308.43 17,308.43 842,696.25 387.82 381.11 1/31/2030 3.74% $ (381.11) $ - $ 4,874.31 1584 US Treasury 91282CMA6 US Treasury Note 4.13% 8/25/2025 1,200,000.00 1,218,847.77 18,847.77 1,219,596.00 748.23 11,631.14 11/30/2029 3.72% $ (11,631.14) $ - $ 4,446.68 1522 US Treasury 91282CHR5 US Treasury Note 4.00% 9/23/2025 950,000.00 967,036.38 17,036.38 960,944.00 (6,092.38) 5,576.08 7/31/2030 3.59% $ (5,576.08) $ - $ 661.47 1765 Subtotal $ 52,451,000.00 $ 51,302,711.03 $ (1,148,288.97) $ 52,584,724.91 $ 1,282,013.88 $ 19,752.25 $ 2,645,987.02 $ 3,285,546.75 $ 555,094.08 BNY MM Money Market 1,015,432.36 1,015,432.36 0.00 0.00% 1 LAIF State Investment Pool 12,339,746.03 12,363,556.57 23,810.54 4.21% 157,529.89 1 64,657,889.42 $65,963,713.84 $1,305,824.42 $19,752.25 $ 2,645,987.02 $ 3,285,546.75 $ 712,623.97 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 FFCB 3133ENP95 Gov. Agency Debenture 4.25% 9/30/2022 900,000.00 900,939.60 939.60 9/30/2025 4.14% $ 114,750.00 $ 104,352.97 $ 9,562.22 Freddie Mac 3137EAEX3 Gov. Agency Debenture 0.38% 5/1/2023 750,000.00 689,032.50 (60,967.50) 9/23/2025 3.97% $ 6,734.37 $ 61,146.74 $ 6,570.76 Total Investments "Matured" $ 24,142.41
Total Interest FY 24_25 Matured and Current $ 736,766.38 Maturity Profile Amount Percent
0-1 year $ 26,472,433.58 41%
1-2 years $11,058,639.08 17%
2-3 years $12,470,806.01 19%
3-5 years $ 14,656,010.75 23%
$64,657,889.42 100%
Town of Los Gatos
Investment Schedule
September 30, 2025
5

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ITEM NO. 5.

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ITEM NO. 5.

TOWN OF LOS GATOS, CA
Insight ESG ratings as of September 30, 2025
7

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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 3,090,731 - - - - - 3,090,731
Land Held for Resale - - - - - - -
Committed Fund Balances:

September 2025 Prior Year
Carryforward
7/1/2025*
Increase/
(Decrease)
July-August
Estimated Fund
Balance
9/30/2025*
8

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ITEM NO. 5.

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

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ITEM NO. 5.

Weighted Average YTM Portfolio Yield on Investments
under Management 4.28%
Weighted Average Maturity (days) 642
This Month Last Month One year ago
Portfolio Allocation & Treasurer's Cash Balances $66,741,033 $69,933,610 $68,118,481 Managed Investments $52,439,010
Local Agency Investment Fund $9,497,276
Reconciled Demand Deposit Balances $4,804,747
Portfolio Allocation & Treasurer's Cash Balances $66,741,033 Benchmarks/ References:

Town's Average Yield 4.28% 4.31% 4.45%
LAIF Yield for month 4.15% 4.21% 4.52%
3 mo. Treasury 3.80% 3.93% 4.54%
6 mo. Treasury 3.80% 3.84% 4.46%
2 yr. Treasury 3.57% 3.61% 4.17%
5 yr. Treasury 3.69% 3.74% 4.16%
10 Yr. Treasury 4.08% 4.15% 4.28%
Town of Los Gatos
Summary Investment Information
October 31, 2025
0 - 1 year
38%
1 - 2 years
18%
2 - 3 years
19%
3 - 5 years
25%
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 3

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ITEM NO. 5.

Month YTD
Cash & Investment Balances - Beginning of Month/Period $ 69,933,610.19 $ 81,558,113.19 Receipts 7,062,764.84 27,089,718.07
Disbursements (10,255,342.50) (41,906,798.73)
Cash & Investm Cash & Investment Balances - End of Month/Period $66,741,032.53 $66,741,032.53 Portfolio Allocation Amount % of Portfolio
Max. % or $ Allowed
per State Law or Policy
BNY MM $122,936.07 0.20% 20% of Town Portfolio
US Treasury Notes $22,792,656.94 36.80% No Max. on US Treasuries Government Agency Debenture Notes $14,771,932.31 23.85% No Max. on Non-Mortgage Backed Corporate Medium Term Bonds $14,751,484.50 23.82% 30% of Town Portfolio Local Agency Investment Fund $9,497,275.92 15.33% $75 M per State Law Subtotal - Investments 61,936,285.74 100.00%
Reconciled Demand Deposit Balances 4,804,746.79
Total Portfolio Allocation & Treasurer's Cash Balances $66,741,032.53

0.0401

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

0.20%
US Treasury Notes

36.80%
Government Agency Debenture
Notes

23.85%
Corporate Medium Term Bonds

23.82%
Local Agency Investment Fund

15.33%
Portfolio Investment Allocation
$68.1 M $66.7 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
Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Treasurer's Fund Balances
2

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ITEM NO. 5.

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

Cert. of Participation 2002 Ser A Reserve Fund $ 690,701.45 $ - $ 2,087.51 $ - $ 692,788.96 Note 1 Cert. of Participation 2010 Ser Lease Payment Fund 2,624.45 - 8.69 - 2,633.14 Note 2 Cert. of Participation 2002 Ser A Lease Payment Fund 14,340.14 - 43.38 - 14,383.52 Note 1 Cert. of Participation 2010 Ser Reserve Fund 1,290,698.70 - 4,275.12 - 1,294,973.82 Note 2 Total Restricted Funds: $ 1,998,364.74 $ - $ 6,414.70 $ - $ 2,004,779.44 CEPPT IRS Section 115 Trust 3,196,227.83 - 21,926.15 - $ 3,218,153.98 Note 3 Grand Total COP's and CEPPT Trust $ 5,194,592.57 $ - $ 28,340.85 $ - $ 5,222,933.42 These accounts are not part of the Treasurer's fund balances reported elsewhere in this report, as they are for separate and distinct entities.

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

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ITEM NO. 5.

July 2025 $ 238,713.97
August 2025 $ 238,367.28
September 2025 $ 259,685.13
October 2025 $ 228,769.00
November 2025 $ -
December 2025 $ -
January 2026 $ -
February 2026 $ -
March 2026 $ -
April 2026 $ -
May 2026 $ -
June 2026 $ -
$ 965,535.38
Town of Los Gatos
Statement of Interest Earned
October 31, 2025
4

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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) 1,279,434.00 50,843.00 6/21/2027 4.19% $ 102,837.22 $ 135,426.07 $ 18,047.03 598 Home Depot 437076BM3 Corporate Bond 3.00% 8/4/2022 1,000,000.00 991,960.00 (8,040.00) 996,910.00 4,950.00 1/1/2026 3.04% $ 94,750.00 $ 94,051.74 $ 10,903.26 62 FFCB 3133EN5V8 Gov. Agency Debenture 4.13% 1/17/2023 236,000.00 239,174.20 3,174.20 236,920.40 (2,253.80) 1/11/2027 3.76% $ 24,175.25 $ 21,918.24 $ 3,012.23 437 US Treasury 91282CBT7 US Treasury Note 0.75% 9/30/2022 800,000.00 712,565.18 (87,434.82) 790,160.00 77,594.82 3/31/2026 4.14% $ 18,000.00 $ 85,193.12 $ 10,437.01 151 JP Morgan Chase 46625HRS1 Corporate Bond 3.20% 9/23/2022 500,000.00 474,660.00 (25,340.00) 497,545.00 22,885.00 3/15/2026 4.70% $ 43,644.44 $ 64,505.94 $ 7,847.90 135 FHLB 3130AQF65 Gov. Agency Debenture 1.25% 11/30/2022 1,300,000.00 1,160,559.40 (139,440.60) 1,265,797.00 105,237.60 12/21/2026 4.15% $ 41,572.92 $ 130,709.25 $ 17,049.03 416 FHLB 3130APJH9 Gov. Agency Debenture 1.00% 1/17/2023 1,000,000.00 907,010.00 (92,990.00) 985,480.00 78,470.00 10/28/2026 4.17% $ 28,354.17 $ 84,829.28 $ 11,658.10 362 FFCB 3133EN5N6 Gov. Agency Debenture 4.00% 2/8/2023 1,700,000.00 1,706,732.00 6,732.00 1,708,109.00 1,377.00 1/6/2028 3.91% $ 163,955.56 $ 159,363.33 $ 22,453.25 797 American Honda 02665WED9 Corporate Bond 4.70% 5/11/2023 600,000.00 608,856.00 8,856.00 607,746.00 (1,110.00) 1/12/2028 4.34% $ 61,178.33 $ 56,288.41 $ 8,864.88 803 US Treasury 91282CEF4 US Treasury Note 2.50% 6/9/2023 1,500,000.00 1,416,626.12 (83,373.88) 1,476,030.00 59,403.88 3/31/2027 4.09% $ 86,577.87 $ 122,333.72 $ 20,009.37 516 US Treasury 91282CGA3 US Treasury Note 4.00% 6/20/2023 2,100,000.00 2,080,558.59 (19,441.41) 2,100,042.00 19,483.41 12/15/2025 4.40% $ 166,852.46 $ 186,379.78 $ 30,937.54 45 Colgate-Palmolive 194162AR4 Corporate Bond 4.60% 7/14/2023 500,000.00 504,655.00 4,655.00 508,305.00 3,650.00 2/1/2028 4.37% $ 49,002.79 $ 43,173.83 $ 7,406.39 823 FannieMae 3135G06G3 Gov. Agency Debenture 0.50% 7/14/2023 500,000.00 455,157.00 (44,843.00) 499,795.00 44,638.00 11/7/2025 4.63% $ 4,534.72 $ 42,871.33 $ 7,354.50 7 FFCB 3133EPQC2 Gov. Agency Debenture 4.63% 7/17/2023 500,000.00 501,957.50 1,957.50 502,895.00 937.50 7/17/2026 4.48% $ 46,250.00 $ 43,961.07 $ 7,573.13 259 FFCB 3133EPBM6 Gov. Agency Debenture 4.13% 7/14/2023 600,000.00 596,220.00 (3,780.00) 604,956.00 8,736.00 8/23/2027 4.29% $ 52,181.25 $ 50,424.13 $ 8,650.16 661 PNC Bank 69353RFJ2 Corporate Bond 3.25% 7/25/2023 1,000,000.00 921,490.00 (78,510.00) 987,330.00 65,840.00 12/23/2027 5.23% $ 64,729.17 $ 97,247.67 $ 16,942.58 783 US Treasury 91282CFU0 US Treasury Note 4.13% 7/31/2023 1,300,000.00 1,290,660.60 (9,339.40) 1,312,844.00 22,183.40 10/31/2027 4.31% $ 120,656.25 $ 107,052.11 $ 18,810.59 730 Toyota Motor Credit 89236TKL8 Corporate Bond 5.45% 8/25/2023 1,600,000.00 1,617,168.00 17,168.00 1,645,344.00 28,176.00 11/10/2027 5.16% $ 148,966.67 $ 153,725.55 $ 28,012.21 740 US Treasury 912810FE3 US Treasury Note 5.50% 10/3/2023 1,200,000.00 1,238,207.14 38,207.14 1,260,792.00 22,584.86 8/15/2028 4.76% $ 123,211.96 $ 101,335.84 $ 19,597.97 1019 Pepsico Inc 713448DF2 Corporate Bond 2.85% 10/16/2023 1,000,000.00 947,570.00 (52,430.00) 995,870.00 48,300.00 11/24/2025 5.24% $ 52,883.33 $ 91,065.84 $ 17,979.29 24 FFCB 3133EPUW3 Gov. Agency Debenture 4.75% 10/13/2023 1,000,000.00 994,338.00 (5,662.00) 1,008,100.00 13,762.00 9/1/2026 4.96% $ 89,458.33 $ 84,828.57 $ 16,667.60 305 US Treasury 91282CEW7 US Treasury Note 3.25% 10/16/2023 1,000,000.00 950,039.06 (49,960.94) 993,950.00 43,910.94 6/30/2027 4.73% $ 55,461.96 $ 78,477.53 $ 15,493.96 607 US Treasury 91282CEN7 US Treasury Note 2.75% 10/31/2023 1,300,000.00 1,214,336.39 (85,663.61) 1,283,139.00 68,802.61 4/30/2027 4.82% $ 71,500.00 $ 100,336.49 $ 20,298.34 546 US Treasury 91282CCH2 US Treasury Note 1.25% 12/21/2023 900,000.00 798,647.55 (101,352.45) 846,594.00 47,946.45 6/30/2028 3.99% $ 17,180.71 $ 51,319.84 $ 11,332.75 973 FNMA 3135G0Q22 Gov. Agency Debenture 1.88% 12/21/2023 900,000.00 845,676.00 (54,324.00) 885,015.00 39,339.00 9/24/2026 4.22% $ 29,671.88 $ 55,770.03 $ 12,315.47 328 US Treasury 91282CFB2 US Treasury Note 2.75% 1/2/2024 1,000,000.00 960,354.91 (39,645.09) 985,200.00 24,845.09 7/31/2027 3.95% $ 43,417.12 $ 57,605.73 $ 13,000.93 638 US Treasury 91282CHE4 US Treasury Note 3.63% 1/17/2024 1,800,000.00 1,775,185.72 (24,814.28) 1,800,918.00 25,732.28 5/31/2028 3.97% $ 89,317.63 $ 102,986.91 $ 23,900.73 943 JP Morgan Chase 46647PDG8 Corporate Bond 4.85% 2/1/2024 1,400,000.00 1,396,528.00 (3,472.00) 1,417,528.00 21,000.00 7/25/2027 4.93% $ 100,739.10 $ 97,231.80 $ 23,222.35 632 US Bancorp 91159HJF8 Corporate Bond 4.55% 2/5/2024 1,000,000.00 989,200.00 (10,800.00) 1,006,360.00 17,160.00 7/22/2027 4.89% $ 66,577.67 $ 68,041.60 $ 16,377.92 629 Treasury 91282CHB0 US Treasury Note 3.63% 2/23/2024 1,175,000.00 1,151,962.92 (23,037.08) 1,173,801.50 21,838.58 5/15/2026 4.56% $ 52,189.05 $ 71,517.53 $ 17,843.12 196 FHLB 3130AXB31 Gov. Agency Debenture 4.88% 2/27/2024 1,000,000.00 1,003,060.00 3,060.00 1,003,780.00 720.00 3/13/2026 4.72% $ 76,104.17 $ 63,303.13 $ 15,922.87 133 FFCB 3133EP5U5 Gov. Agency Debenture 4.13% 3/28/2024 1,700,000.00 1,687,981.00 (12,019.00) 1,724,361.00 36,380.00 3/20/2029 4.28% $ 103,629.17 $ 91,219.09 $ 24,444.33 1236 US Treasury 9128285M8 US Treasury Note 3.13% 4/30/2024 1,200,000.00 1,123,832.14 (76,167.86) 1,183,176.00 59,343.86 11/15/2028 4.69% $ 39,045.34 $ 63,313.82 $ 18,280.75 1111 Cisco Systems 17275RBR2 Corporate Bond 4.85% 5/15/2024 1,000,000.00 999,130.00 (870.00) 1,024,720.00 25,590.00 1/26/2029 4.87% $ 62,106.94 $ 54,820.58 $ 16,406.16 1183 Home Depot 437076CW0 Corporate Bond 4.90% 5/17/2024 1,000,000.00 1,001,790.00 1,790.00 1,029,420.00 27,630.00 4/15/2029 4.86% $ 69,144.44 $ 54,498.76 $ 16,389.60 1262 Treasury 91282CJR3 US Treasury Note 3.75% 5/31/2024 1,200,000.00 1,154,629.02 (45,370.98) 1,204,308.00 49,678.98 12/31/2028 4.68% $ 48,708.79 $ 59,398.06 $ 18,496.10 1157 American Honda 02665WEY3 Corporate Bond 4.95% 6/27/2024 1,000,000.00 995,640.00 (4,360.00) 1,001,000.00 5,360.00 1/9/2026 5.25% $ 51,287.50 $ 52,766.88 $ 17,636.76 70 FHLB 3130B1BT3 Gov. Agency Debenture 4.88% 7/2/2024 1,150,000.00 1,150,966.00 966.00 1,158,487.00 7,521.00 6/12/2026 4.82% $ 47,341.67 $ 55,261.42 $ 18,724.95 224 Citibank 17325FBK3 Corporate Bond 4.84% 8/15/2024 1,250,000.00 1,263,062.50 13,062.50 1,279,100.00 16,037.50 7/6/2029 4.60% $ 58,963.12 $ 50,520.38 $ 19,479.65 1344 FNMA 3135G05Y5 Gov. Agency Debenture 0.75% 9/10/2024 1,100,000.00 1,010,724.00 (89,276.00) 1,040,754.00 30,030.00 10/8/2027 3.56% $ 8,891.67 $ 29,915.45 $ 12,558.36 707 US Treasury 91282CFL0 US Treasury Note 3.88% 12/3/2024 1,100,000.00 1,088,144.31 (11,855.69) 1,108,118.00 19,973.69 9/30/2029 4.12% $ 35,130.49 $ 25,813.46 $ 15,191.65 1430 FHLB 3130ATUT2 Gov. Agency Debenture 4.50% 2/12/2025 505,000.00 508,253.21 3,253.21 518,837.00 10,583.79 12/14/2029 4.35% $ 7,701.25 $ 8,337.70 $ 7,431.43 1505 FFCB 3133ER5X5 Gov. Agency Debenture 3.88% 3/12/2025 1,000,000.00 998,480.00 (1,520.00) 1,003,670.00 5,190.00 3/7/2028 3.93% $ 18,836.81 $ 11,831.34 $ 13,229.58 858 Treasury 91282CJF9 US Treasury Note 4.88% 3/31/2025 1,100,000.00 1,130,167.75 30,167.75 1,138,797.00 8,629.25 10/31/2028 4.04% $ 31,256.56 $ 11,273.90 $ 15,238.35 1096 State Street Corp 857477CD3 Corporate Bond 5.27% 4/30/2025 800,000.00 811,184.00 11,184.00 806,456.00 (4,728.00) 8/3/2026 4.04% $ 10,895.47 $ 5,565.50 $ 11,222.23 276 Freddie Mac 3134HAW33 Gov. Agency Debenture 4.75% 4/30/2025 1,000,000.00 1,005,644.00 5,644.00 1,005,810.00 166.00 12/18/2029 4.23% $ 6,993.07 $ 7,735.00 $ 15,596.80 1509 US Treasury 91282CNG2 US Treasury Note 4.00% 6/30/2025 660,000.00 665,184.24 5,184.24 668,329.20 3,144.96 2,163.92 5/31/2030 3.82% $ (2,163.92) $ - $ 8,541.39 1673 US Treasury 91282CMG3 US Treasury Note 4.25% 8/4/2025 825,000.00 842,308.43 17,308.43 843,018.00 709.57 381.11 1/31/2030 3.74% $ (381.11) $ - $ 7,525.25 1553 US Treasury 91282CMA6 US Treasury Note 4.13% 8/25/2025 1,200,000.00 1,218,847.77 18,847.77 1,220,016.00 1,168.23 11,631.14 11/30/2029 3.72% $ (11,631.14) $ - $ 8,275.77 1491 US Treasury 91282CHR5 US Treasury Note 4.00% 9/23/2025 950,000.00 967,036.38 17,036.38 961,580.50 (5,455.88) 5,576.08 7/31/2030 3.59% $ (5,576.08) $ - $ 3,590.82 1734 US Treasury 91282CGQ8 US Treasury Note 4.00% 10/3/2025 1,000,000.00 1,013,362.72 13,362.72 1,012,310.00 (1,052.72) 3,646.41 2/28/2030 3.67% $ (3,646.41) $ - $ 2,835.95 1581 Subtotal $ 53,451,000.00 $ 52,316,073.75 $ (1,134,926.25) $ 53,598,957.60 $ 1,282,883.85 $ 23,398.66 $ 2,762,465.61 $ 3,285,546.75 $ 751,018.34 BNY MM Money Market 122,936.07 122,936.07 0.00 0.00% 1
LAIF State Investment Pool 9,497,275.92 9,515,601.68 18,325.76 4.15% 190,374.64 1 61,936,285.74 $63,237,495.35 $1,301,209.61 $23,398.66 $ 2,762,465.61 $ 3,285,546.75 $ 941,392.98 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 FFCB 3133ENP95 Gov. Agency Debenture 4.25% 9/30/2022 900,000.00 900,939.60 939.60 9/30/2025 4.14% $ 114,750.00 $ 104,352.97 $ 9,562.22 Freddie Mac 3137EAEX3 Gov. Agency Debenture 0.38% 5/1/2023 750,000.00 689,032.50 (60,967.50) 9/23/2025 3.97% $ 6,734.37 $ 61,146.74 $ 6,570.76 Total Investments "Matured" $ 24,142.41
Total Interest FY 24_25 Matured and Current $ 965,535.38 Maturity Profile Amount Percent
0-1 year $ 23,644,477.18 38%
1-2 years $11,162,353.08 18%
2-3 years $11,460,082.01 19%
3-5 years $ 15,669,373.47 25%
$61,936,285.74 100%
Town of Los Gatos
Investment Schedule
October 31, 2025
5

Page 46 ends

ITEM NO. 5.

Date Cusip/Id Description Transaction Type Trade Date Settlement Date Par Coupon Maturity Date Price Principal Interest Transaction
Total
10/1/2025 437076BM3
HOME DEPOT INC 3% 01APR2026
(CALLABLE 01JAN26) BOND INTEREST 10/1/2025 10/1/2025 1,000,000.00 3.000% 4/1/2026 - - 15,000.00 15,000.00 10/3/2025 91282CGQ8 USA TREASURY 4% 28FEB2030 PURCHASE 10/2/2025 10/3/2025 1,000,000.00 4.000% 2/28/2030 101.34 1,013,362.73 3,646.41 1,017,009.14 10/2/2025 Cash-USD Cash-USD

SHORT TERM INVESTMENT
FUND INCOME 10/2/2025 10/2/2025 637.85 0.000% 100.00 - - 637.85 10/8/2025 3135G05Y5 FANNIE MAE 0.75% 08OCT2027 BOND INTEREST 10/8/2025 10/8/2025 1,100,000.00 0.750% 10/8/2027 - - 4,125.00 4,125.00 10/15/2025 437076CW0
HOME DEPOT INC 4.9% 15APR2029
(CALLABLE 15MAR29) BOND INTEREST 10/15/2025 10/15/2025 1,000,000.00 4.900% 4/15/2029 - - 24,500.00 24,500.00 10/28/2025 3130APJH9
FEDERAL HOME LOAN BANK 2%
28OCT2026 (CALLABLE 28JAN26) #0006 BOND INTEREST 10/28/2025 10/28/2025 1,000,000.00 2.000% 10/28/2026 - - 8,750.00 8,750.00 10/31/2025 91282CEN7 USA TREASURY 2.75% 30APR2027 BOND INTEREST 10/31/2025 10/31/2025 1,300,000.00 2.750% 4/30/2027 - - 17,875.00 17,875.00 10/31/2025 91282CJF9 USA TREASURY 4.875% 31OCT2028 BOND INTEREST 10/31/2025 10/31/2025 1,100,000.00 4.875% 10/31/2028 - - 26,812.50 26,812.50 10/31/2025 91282CFU0 USA TREASURY 4.125% 31OCT2027 BOND INTEREST 10/31/2025 10/31/2025 1,300,000.00 4.125% 10/31/2027 - - 26,812.50 26,812.50 Town of Los Gatos
Investment Transaction Detail
October 31, 2025
6

Page 47 ends

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 1,016,423 A- A3 3 3 3 3 02665WED9 AMERICAN HONDA FINANCE 4.7% 12JAN2028 1/12/2028 600,000 616,382 A- A3 3 3 3 3 037833DB3 APPLE INC 2.9% 12SEP2027 (CALLABLE 12JUN27) 9/12/2027 1,300,000 1,284,761 AA+ Aaa 5 2 5 5 17275RBR2 CISCO SYSTEMS INC 4.85% 26FEB2029 (CALLABLE 26JAN29) 2/26/2029 1,000,000 1,033,624 AA- A1 2 1 3 3 17325FBK3 CITIBANK NA 4.838% 06AUG2029 (CALLABLE 06JUL29) 8/6/2029 1,250,000 1,294,755 A+ Aa3 3 1 2 4 194162AR4 COLGATE-PALMOLIVE CO 4.6% 01MAR2028 (CALLABLE 01FEB28) 3/1/2028 500,000 512,217 A+ Aa3 3 3 3 2 437076CW0 HOME DEPOT INC 4.9% 15APR2029 (CALLABLE 15MAR29) 4/15/2029 1,000,000 1,031,518 A A2 3 3 3 3 437076BM3 HOME DEPOT INC 3% 01APR2026 (CALLABLE 01JAN26) 4/1/2026 1,000,000 999,385 A A2 3 3 3 3 46625HRS1 JPMORGAN CHASE & CO 3.2% 15JUN2026 (CALLABLE 15MAR26) 6/15/2026 500,000 503,606 A A1 3 2 3 4 46647PDG8 JPMORGAN CHASE & CO 4.851% 25JUL2028 (CALLABLE 25JUL27) 7/25/2028 1,400,000 1,435,911 A A1 3 2 3 4 713448DF2 PEPSICO INC 2.85% 24FEB2026 (CALLABLE 30NOV25) 2/24/2026 1,000,000 1,001,215 A+ A1 3 2 2 4 69353RFJ2 PNC BANK NA 3.25% 22JAN2028 (CALLABLE 23DEC27) 1/22/2028 1,000,000 996,404 A A2 3 3 4 2 857477CD3 STATE STREET CORP 5.272% 03AUG2026 (CALLABLE 03JUL26) 8/3/2026 800,000 816,779 A Aa3 2 1 2 2 89236TKL8 TOYOTA MOTOR CREDIT CORP 5.45% 10NOV2027 11/10/2027 1,600,000 1,687,035 A+ A1 3 1 2 4 91159HJF8 US BANCORP 4.548% 22JUL2028 (CALLABLE 22JUL27) 7/22/2028 1,000,000 1,019,149 A A3 3 3 3 3 Total Corporate / weighted average 14,950,000 15,249,162 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 October 31, 2025
7

Page 48 ends

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 3,090,731 - - - - - 3,090,731
Land Held for Resale - - - - - - -
Committed Fund Balances:

Open Space 410,000 - - - - - 410,000
Sustainability 140,553 - - - - - 140,553
Capital/Special Projects 1,983,271 - - - - - 1,983,271
Carryover Encumbrances 6,367 - - - - - 6,367
Compensated Absences 1,519,243 - - - - - 1,519,243
ERAF Risk Reserve - - - - - - -
Market Fluctuations 1,201,824 - - - - - 1,201,824
Council Priorities - Economic Recovery - - - - - - -
Unassigned Fund Balances:
111 Other Unassigned Fund Balance Reserve (Pre YE distribution) 10,511,049 (1,057,947) 3,184,209 (5,083,693) - - 7,553,618 General Fund Total 35,763,316 (1,057,947) 3,184,209 (5,083,693) - - 32,805,885 * Interfund transfers and Council Priorities/Economic Recovery funding allocation to be performed as part of the fiscal year end closing entries.

October 2025
Prior Year
Carryforward
7/1/2025*
Increase/
(Decrease)
July-September
Estimated Fund
Balance
10/31/2025*
8

Page 49 ends

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 13,796 13,641 (14,376) - - 677,229 231-236 Landscape & Lighting Districts 193,606 (4,212) - (2,063) - - 187,331 251 Los Gatos Theatre 381,120 33,494 15,070 (6,506) - - 423,178 261-264,269 Library Trusts 559,745 54,538 - (3,470) - - 610,813 Special Revenue Total 1,965,292 97,616 28,711 (26,415) - - 2,065,204

CAPITAL PROJECTS
411 GFAR - General Fund Appropriated Reserve 16,974,946 (981,855) 1,989,550 (134,741) - - 17,847,900 412 Community Center Development 819,604 - - - - - 819,604 421 Grant Funded Projects (1,577,430) 717,426 194,136 (39,541) - - (705,409) 461-463 Storm Basin Projects 2,825,234 44,169 15,190 (2,727) - - 2,881,866 471 Traffic Mitigation Projects 676,482 - - - - - 676,482 472 Utility Undergrounding Projects 3,763,913 - - - - - 3,763,913 481 Gas Tax Projects 2,130,548 (214,010) 171,070 (238,208) - - 1,849,400 Capital Projects Total 25,613,297 (434,270) 2,369,946 (415,217) - - 27,133,756

INTERNAL SERVICE FUNDS
611 Town General Liability 208,746 (1,482,441) - (22,367) - - (1,296,062) 612 Workers Compensation 1,259,972 (530,776) 15,851 (7,231) - - 737,816 621 Information Technology 2,585,103 (343,148) 7,197 (124,431) - - 2,124,721 631 Vehicle & Equipment Replacement 3,890,428 (81,556) - - - - 3,808,872 633 Facility Maintenance 820,099 (231,362) 25,864 (158,805) - - 455,796 Internal Service Funds Total 8,764,348 (2,669,283) 48,912 (312,834) - - 5,831,143 Trust/Agency
942 RDA Successor Agency (3,037,146) (1,742,985) - (190) - - (4,780,321) Trust/Agency Fund Total (3,037,146) (1,742,985) - (190) - - (4,780,321) Total Town 69,069,107 (5,806,869) 5,631,778 (5,838,349) - - 63,055,667 * 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-September
October 2025
Estimated Fund
Balance
10/31/2025*
9

Page 50 ends

ITEM NO. 5.

PREPARED BY: Janette Judd
Executive Assistant to the Town Manager and Town Council

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

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 12/16/2025
ITEM NO: 6
DATE: December 1, 2025
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Adopt Council Committee Appointments Effective January 1, 2026 RECOMMENDATION: Adopt Council Committee Appointments effective January 1, 2026.

FISCAL IMPACT:

There is no fiscal impact associated with adopting the Council Committee Appointments.

STRATEGIC PRIORITY:

Not applicable.

DISCUSSION:

Recommended Appointments:

The Mayor is recommending Council Members to Town Boards and Committees and various regional Commissions, Boards, and Committees, as shown on the attached 2026 Council Committee Appointment Roster (Attachment 1). While the Mayor makes the recommendations, the Council needs to consider and vote on them.

Role of Members and Alternates:

The appointed Member is the primary attendee and voting participant for the Committee(s) to which they are appointed. If a Member cannot attend, the Alternate should attend on the Member’s behalf as the Los Gatos representative and voting participant.

Alternates may attend a meeting as a member of the public in the audience when the Member is in attendance. In these circumstances, the Alternate may not vote or take other action that may affect the primary’s effectiveness on the Committee.

Page 51 ends

ITEM NO. 6.

PAGE 2 OF 2
SUBJECT: Council Committee Appointments Effective January 1, 2026 DATE: December 16, 2025
Attachments:

1. 2026 Council Committee Appointment Roster

Page 52 ends

ITEM NO. 6.
*Draft* 2026 COUNCIL COMMITTEE APPOINTMENTS Rev.Dec.2025 Council Consideration for Adoption December 16, 2025 - - Effective January 1, 2026 Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
Community Health and
Senior Services
Committee (CHSSC)
Appointee serves as Council
liaison to the Commission
and not a voting member.

Matthew Hudes N.A. Town of Los
Gatos Council
Chambers, 110
East Main St.,
Los Gatos, CA
95030
Conceptual
Development Advisory
Committee
The Conceptual Development
Advisory Committee advises
prospective applicants about
their proposed projects'
compliance with Town
regulations prior to initiating
the development review
process. The Committee also
identifies potential issues
with proposals that should be
addressed in the review
process.

Two Appointees:

Mary Badame
and
Maria Ristow
N.A. Monthly
2nd Wed
4:30 p.m.

Town of Los
Gatos Council
Chambers, 110
East Main St.,
Los Gatos, CA
95030
Joel Paulson, Director
of Community
Development
(408) 354-6879
2026 Council Committee Appointments.12.2025 DRAFT working doc 12/11/2025 1

Page 53 ends

ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
Council Policy
Committee
The Town Council Policy
Committee reviews and
recommends changes to
Town Council Policies,
ordinances, and other
documents.

Two Appointees:

Rob Moore
and
Mary Badame
N.A. (prior schedule:

Monthly
4th Tuesday,
5:00 p.m.)
2026 Meeting
schedule
anticipated to
continue Monthly,
4th Tuesday,
5:00 p.m.)
Town of Los
Gatos Council
Chambers, 110
East Main St.,
Los Gatos, CA
95030
Chris Constantin,
Town Manager
(408) 354-6832
Finance Commission Established December 2020,
the Finance Commission
advises the Town Council on
budgetary and fiscal matters.

Resident appointments
established January 19,
2021.

Two Appointees
(one of whom
needs to be
Mayor or Vice
Mayor)
Matthew Hudes
and
Maria Ristow

N.A. (prior schedule:

Monthly
2nd Monday,
5:30 p.m.)
2026 Schedule
anticipated to
continue Monthly,
2nd Monday,
5:30 p.m.

Town of Los
Gatos Council
Chambers, 110
East Main St.,
Los Gatos, CA
95030
Gitta Ungvari,
Finance Director
(408) 354-6805
2026 Council Committee Appointments.12.2025 DRAFT working doc 12/11/2025 2

Page 54 ends

ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)

OUTSIDE AGENCIES' COMMITTEES
Association of Bay Area
Governments (ABAG)
General Assembly
The Association of Bay Area
Governments (ABAG)
General Assembly is a
regional agency that
represents 9 Bay Area
Counties and all cities within
those Counties. Membership
is voluntary and the Town is
a member. The ABAG
General Assembly determines
the fair share housing
allocations to each city and
county as required by the
State and other matters.

Rob Rennie Maria Ristow Generally meets
twice annually
(Spring TBD
Fall TBD)
Special Meetings
as needed.

Spring and Fall
Locations TBD
Fred Castro
fcastro@bayareametro
.gov
(415) 820-7913
Town Staff Contact:

Chris Constantin,
Town Manager
(408) 354-6832
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ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
League of California
Cities
(Peninsula Division)
The League of California
Cities is a State-wide
organization that represents
the member cities, holds
conferences, provides
training sessions, and lobbies
the legislature. The League
Peninsula Division is the
regional division of the
League of California Cities
which discusses and
addresses legislative issues
from a regional perspective.

Rob Moore Matthew Hudes Quarterly Meeting:

January
March
May
September
Other:

April (Legislative
Action Day &
Reception)

June TBD
Mayors and Council
Members Executive
Forum
Location: TBD
October TBD
Annual Conference
Location: TBD
TBD (Varies) Seth Miller
[email protected]
(415) 595-8629
Town Staff Contact:

Chris Constantin,
Town Manager
(408) 354-6832
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ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
Santa Clara County
Housing and
Community
Development Advisory
Committee
The Committee is composed
of City Council members of
the eight participating nonentitlement cities and one
member of the Board of
Supervisors who is the
chairperson. The Committee
makes policy
recommendations to the
Board of Supervisors on the
planning, monitoring, and
evaluation of the HCD
Program and the
development of a
comprehensive, coordinated
housing and community
development plan.

Maria Ristow Rob Moore Scheduled as
needed.

Typically:

February
March
October
2310 N. 1st
Street (at
Charcot)
Charcot Training
Center, Suite 100
San Jose
Housing and
Community
Development
Offices of Santa Clara
County – Office of
Affordable Housing
70 West Hedding
Street, 7th Floor
San Jose, CA 95110
Town Staff Contact:

Chris Constantin,
Town Manager
(408) 354-6832

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ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
Santa Clara County
Cities Association
(CASCC)
Board of Directors
The Santa Clara County
Cities Association Board of
Directors provides a unified
voice for all member cities
with respect to regional,
state, and federal agency
activities that impact local
government. The Board
advocates for member cities
by monitoring and engaging
in the regional, state, and
federal legislation processes.

Rob Moore Maria Ristow Monthly - 2nd
Thursday
7:00-9:00 p.m.

Note:

April TBD
(General
Membership
Meeting with
City Managers)
December TBD
(General
Membership –
Holiday Party)
TBD Shali Sirkay
(Acting) Executive
Director
Santa Clara County
Cities Association
505 W. Olive Avenue,
Suite 749
Sunnyvale, CA 94086
Executive_Director@
citiesassociation.org
(408) 730-7770
Town Staff Contact:

Chris Constantin,
Town Manager
(408) 354-6832
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ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
Santa Clara County
Cities Association
(CASCC)
Legislative Action
Committee
The Santa Clara County
Cities Association Legislative
Action Committee reviews the
legislative priorities that the
Board of Directors sets for
the year. The Committee
tracks State/Federal
legislation related to those
priorities and makes
recommendations to the
Board.

Historically, the same
appointee serves on the
Cities Assoc. Board, as the
meetings occur back-to-back.

Maria Ristow Rob Moore Meets as needed
(2nd Thursday of
each month prior
to SCCCA Board
Meeting
(See SCCCA
Board of Directors
meeting dates on
page 6)
TBD Shali Sirkay
(Acting) Executive
Director
Santa Clara County
Cities Association
505 W. Olive Avenue,
Suite 749
Sunnyvale, CA 94086
Executive_Director@
citiesassociation.org
(408) 730-7770
Town Staff Contact:

Chris Constantin,
Town Manager
(408) 354-6832
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ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
Santa Clara County
Cities Association
(CASCC)
City Selection
Committee
The City Selection Committee
makes appointments to
LAFCO, MTC, and the
Recycling and Waste
Reduction Commission, and
recommendations to the
County Board of Supervisors
for appointment to the Bay
Area Quality Management
District Board.

Historically, the same
appointee serves on the
Cities Assoc. Board, as the
meetings occur back-to-back.

Rob Moore Maria Ristow Meets as needed
(2nd Thursday of
each month prior
to SCCCA Board
Meeting – 6:00 or
6:15 p.m.)
(See SCCCA
Board of Directors
meeting dates on
page 6)
TBD Shali Sirkay
(Acting) Executive
Director
Santa Clara County
Cities Association
505 W. Olive Avenue,
Suite 749
Sunnyvale, CA 94086
Executive_Director@
citiesassociation.org
(408) 730-7770
Town Staff Contact:

Chris Constantin,
Town Manager
(408) 354-6832
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ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
Santa Clara Valley
Water District (Valley
Water) Commission
The Commission serves in an
advisory capacity to the
Valley Water Board
regarding water-related
matters. The Valley Water is
responsible for flood control,
water supply, and other
water-related infrastructure
for the County of Santa
Clara.

Rob Rennie Maria Ristow Quarterly
4th Wednesday
12:00 p.m. to 2:00
p.m.

Typically:

January
April
July
October
Santa Clara
Valley Water
District,
Headquarters
Building
Boardroom,
5700 Almaden
Expressway, San
Jose, California
95118
Glenna Branbill
Valley Water
5750 Almaden
Expressway
San Jose, CA 95118
GBrambill@valleywat
er.org
(408) 630-2408
Town Staff Contact:

Nicolle Burnham,
Director of Parks &
Public Works
(408) 399-5770
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ITEM NO. 6.

The VTA Board is comprised
of elected officials from cities
and the County.

Maria Ristow Rob Rennie Monthly
2nd Thursday
4:00 p.m.

Santa Clara
Valley
Transportation
Authority
3331 N. First,
Building B -
Room B-104
San Jose, CA
95134-1906
Michelle Garza
Board Assistant
Santa Clara Valley
Transportation
Authority (CMP)
3331 N. First Street
San Jose, CA 95134
[email protected]
(408) 546-7977
Town Staff Contact:

Nicolle Burnham,
Director of Parks &
Public Works
(408) 399-5770
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ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
Santa Clara Valley
Transportation
Authority (VTA) State
Route 85 Corridor
Policy Advisory Board
(SR85 PAB)
Formed in 2015, the VTA
State Route 85 Corridor
Policy Advisory Board (SR85
PAB) studies the long-term
transit and transportation
plans to serve the SR 85
Corridor and advises the
VTA Board of Directors on
the scope, funding and
construction of both nearand long-term transit and
transportation improvement
projects for this corridor.

Maria Ristow Rob Rennie Quarterly,
Mondays,
10:00 a.m. to
12:00 p.m.

Typically:

April
May
September
December
TBD Michelle Garza
Board Assistant
Santa Clara Valley
Transportation
Authority (CMP)
3331 N. First Street
San Jose, CA 95134
[email protected]
(408) 546-7977
Town Staff Contact:

Nicolle Burnham,
Director of Parks &
Public Works
(408) 399-5770
Silicon Valley Animal
Control Authority
(SVACA)
JPA Board of Directors
*New appointment with
the Town joining the JPA
in 2024
Mary Badame,
Director
Representative
Rob Moore,
Alternate
Director
Representative
Monthly 3rd
Wednesday, 8:30
a.m.

Silicon Valley
Animal Control
Authority (3370
Thomas Rd,
Santa Clara, CA
95054)
Heidi Springer
[email protected]
Town Staff Contact:

Chris Constantin,
Town Manager
(408) 354-6832
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ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
Silicon Valley Clean
Energy
(SVCE)
Formed March 2016, Silicon
Valley Clean Energy is a
local, public non-profit that
purchases cleaner energy on
the open market for residents
and businesses in
participating communities.

Decisions are made through
the Board of Directors, which
is composed of a
representative from each
member community.

Participating jurisdictions
include Campbell, Cupertino,
Gilroy, Los Altos, Los Altos
Hills, Los Gatos, Monte
Sereno, Morgan Hill,
Mountain View, Saratoga,
Sunnyvale and the
unincorporated parts of
Santa Clara County.

Rob Rennie Maria Ristow Monthly 2nd
Wednesday
7:00 p.m.
(or as needed)
Cupertino
Community Hall
10350 Torre
Avenue,
Cupertino, CA
95014
Andrea Pizano, Board
Clerk/Executive
Assistant
333 W. El Camino
Real, Ste. 290
Sunnyvale, CA 94087
Andrea.Pizano@svcle
anenergy.org
(408) 721-5301x1005
or (844) 474-7823
Town Staff Contact:

Chris Constantin,
Town Manager
(408) 354-6832
and
Nicolle Burnham,
Director of Parks &
Public Works
(408) 399-5770
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ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
Solid Waste
Management Joint
Powers Agency (JPA)
Board of Directors
The Solid Waste Management
Joint Powers Agency (JPA)
Board of Directors reviews
issues related to the solid
waste management franchise,
disposal, recycling, and yard
waste agreement.

Mary Badame Maria Ristow Quarterly
1st Thursday of the
month
5:00 p.m.

February
May
September
November
Monte Sereno
City Hall
18041 SaratogaLos Gatos Road
Monte Sereno
Marva M. Sheehan,
CPA
Vice President
Hilton, Farnkopf &
Hobson (HF&H)
Consultants, LLC
201 North Civic
Drive, Suite 230
Walnut Creek, CA
94596
Phone (925) 977-6961
Fax (925) 977-6955
Email:
msheehan@hfhconsultants.com
Town Staff Contact:

Nicolle Burnham,
Director of Parks &
Public Works
(408) 399-5770
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Page 65 ends

ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
West Valley Stornwater
Authority (WVSA)
Board of Directors
(formerly West Valley
Clean Water Program
Authority
or WVCW)
The West Valley Stormwater
Joint Powers Authority (the
Authority) manages
stormwater and pollution
prevention programs for its
member agencies. The
Authority coordinates
compliance with state and
federal stormwater
regulations and administers
programs required to
manage stormwater runoff
and reduce pollutants
discharged to locato
waterways. it is governed by
a four-member Board of
Directors, with one Council
Member representing each
member agency.

Member Agencies:

City of Campbell, Town of
Los Gatos, City of Monte
Sereno, City of Saratoga
Mary Badame Maria Ristow first Thursday of
February, May,
September,
November
4:00 p.m.

Monte Sereno
City Hall
18041 SaratogaLos Gatos Road
Monte Sereno
Sheila Tucker,
Executive Director
1 West Campbell
Avenue, #H73,
Campbell, CA 95008
Phone (925) 977-6967
Fax (925) 977-6955
Email: sholt@hfhconsultants.com
Town Staff Contact:

Nicolle Burnham,
Director of Parks &
Public Works
(408) 399-5770
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Page 66 ends

ITEM NO. 6.

Name of Committee Purpose 2026 Appointee 2026 Alternate 2026 Meeting Schedule
*Tentative*
based on 2025
Location Contact Person(s)
West Valley Sanitation
District Board of
Directors
The West Valley Sanitation
District Board of Directors
oversees the treatment of
sewage for the cities of
Campbell, Cupertino, Los
Gatos, Monte Sereno, and
Saratoga.
...............................................
........

Board of Directors receive
$210 stipend per meeting.

Rob Moore Maria Ristow Monthly
2nd Wednesday
(or 4th Wednesday
if needed)
5:00 p.m.

West Valley
Sanitation
District
100 E.

Sunnyoaks
Avenue
Campbell, CA
95008
Lesha Luu
West Valley
Sanitation District
100 E. Sunnyoaks
Avenue
Campbell, CA 95008
[email protected]
(408) 378-2407
Town Staff Contact:

Nicolle Burnham,
Director of Parks &
Public Works
(408) 399-5770
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Page 67 ends

ITEM NO. 6.

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

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 12/16/2025
ITEM NO: 7
DATE: December 9, 2025
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Receive Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2025, and Adopt a Resolution Confirming June 30, 2025 Fund Balances in Accordance With Fiscal Year 2024-25 Final Audit and Town Council General Fund Reserve Policy
RECOMMENDATION: Receive the Annual Comprehensive Financial Report (ACFR) for the Fiscal Year Ended June 30, 2025, as recommended by the Finance Commission, and adopt a Resolution Confirming June 30, 2025, Fund Balances in Accordance with Fiscal Year 2024-25 Final Audit and Town Council General Fund Reserve Policy.

FISCAL IMPACT:

There is no fiscal impact associated with receiving this report.

STRATEGIC PRIORITY:

This item is not associated with a strategic priority.

BACKGROUND:

The Town contracts with an independent certified public accountant to examine the books, records, inventories, and reports of all officers and employees who receive, handle, or disburse public funds each fiscal year (FY). The FY 2024-25 audit was performed by Chavan and Associates, LLP, an experienced firm specializing in audit services for California public agencies.

The firm also assisted with the Draft ACFR for the Town of Los Gatos.

Page 68 ends

ITEM NO. 7.

PAGE 2 OF 2
SUBJECT: Receive Draft FY 2024-25 Draft ACFR
DATE: December 9, 2025
The information contained in the ACFR provides detailed financial information that the Los Gatos community and others can use to better understand the Town's fiscal standing. In addition, the financial information contained in the document is one element that the credit rating agencies review annually to affix a credit rating to the Town’s outstanding debt obligations.

With the passage of Measure A, the Finance Commission has been tasked with several mandated duties as described in the provisions of the adopted Ordinance. Section 2.50.225. – Duties state that:
(a) The Finance Commission shall:
(3) Review the Town Manager's draft Annual Comprehensive Financial Report (ACFR) for the preceding fiscal year and provide written comments and recommendations to the Town Manager.
(A) The Town Manager shall respond in writing to the Finance Commission providing his or her rationale for accepting or rejecting each of the Finance Commission's comments and recommendations prior to presenting the ACFR to the Town Council for formal consideration.
(B) The Town Manager may not present the ACFR to the Town Council for formal consideration unless or until he or she considers and responds in writing to all of the Finance Commission's comments and recommendations.

DISCUSSION:

On November 25, 2025, the Draft FY 2024-25 Annual Comprehensive Financial Report (ACFR) was posted to the Town’s website, and a link was provided to the Finance Commission.

Finance Commissioners were given the opportunity to submit written questions to staff.

Questions and comments received from Commissioners by 11:00 a.m. on December 1, 2025, were compiled into Desk Items for the December 1 Special Finance Commission meeting.

At the Finance Commission meetings on December 1, 2025, and December 8, 2025, the Town’s independent auditor and staff addressed the Commissioners’ questions and comments, which are included in Attachment 4.

The Finance Commission concluded its review of the draft ACFR and unanimously recommended that the Town Council receive the Annual Comprehensive Financial Report (ACFR) for the Fiscal Year Ended June 30, 2025, with recommended modifications (see Attachment 3 for redlined version).

Additionally, staff thoroughly reviewed all financial and statistical schedules to ensure that data and footnotes are accurately displayed throughout the current document across fiscal years and prior ACFRs.

Page 69 ends

ITEM NO. 7.

PAGE 3 OF 2
SUBJECT: Receive Draft FY 2024-25 Draft ACFR
DATE: December 9, 2025
Independent Auditor’s Report
The auditor has given the Town’s financial statements a “clean” audit opinion for the year ended June 30, 2025, giving reasonable assurance that the financial statements are “free of material misstatement” (Attachment 1).

Purpose of the Budget and Annual Comprehensive Financial Report Our Town’s budget is more than just numbers, it is a plan that ensures we use our resources efficiently and effectively, prioritizing our most important goals. Through this budget, the Town Council shapes our community's direction and priorities by allocating financial resources. The Annual Comprehensive Financial Report reflects the activities and financial condition of the previous year, serving as an essential document for residents, taxpayers, and other stakeholders to assess the Town’s financial standing. While both documents are critical, they do not provide the complete picture of the financial or operational reality of the Town.

Forecasting Our Finances
The FY 2025-26 budget projections are based on economic trends and forecasts specific to the Town’s geographic area. These estimates, informed by local data from the County of Santa Clara and consultants such as Avenu Insights & Analytics and HdL Coren & Cone, help predict revenue from sources like taxes and government grants. Expenditures are carefully reviewed by departments and the Finance Department and are incorporated into the budget with a vacancy savings factor of 4.6%, reflecting the Town’s historical trend of not fully expending predicted salaries and benefit costs.

Overall, the Town is financially stable and secure for the foreseeable future. During the FY 2024-25 fiscal year, the Town-wide Statement of Activities reported an increase in net position of $7.3 million, a measure of the change in the value of assets impacted by Town operations during the year. This net position includes $3.8 million from investment earnings, driven by higher than usual interest rates. It also includes $1.2 million unrealized gains, which are not available to spend, due to the requirement to value current investments at market value as of June 30. Additionally, conservative budgeting and operations resulted in revenue exceeding budget estimates and expenditures coming in below projections, which contributed to this positive change.

This increase in net position reflects a broader trend, with seven of the last nine years showing positive net position growth. In the General Fund, the primary operating fund for Town operations, the available resources for the next fiscal year have also increased.

Page 70 ends

ITEM NO. 7.

PAGE 4 OF 2
SUBJECT: Receive Draft FY 2024-25 Draft ACFR
DATE: December 9, 2025
the police department's separate buildings is also not considered in the standards or the Town’s Capital Improvement Program. Rising costs in key Town operations and contracted services also pose challenges that could outpace revenue growth. Despite our stable current position and financial cushion, maintaining this stability will require fiscal prudence and foresight to address future challenges.

Emerging Financial Challenges
Although we have experienced financial gains this year, we are facing significant cost pressures.

Rising costs for basic services, including salaries, benefits, and contracting, are compounded by volatile pension costs, which have fluctuated in recent years. The competitive Silicon Valley market and increasing regulatory requirements on local governments also drive up the cost of services and materials.

A major concern is the lack of preparation to fully fund or quantify the liabilities and annualized costs for maintaining our infrastructure, such as roads, parks, and buildings. These deferred maintenance needs could add millions to future expenses. The cost per mile of infrastructure repair continues to rise, leading to tradeoffs between non-capital and capital priorities. While progress has been made in identifying some of our needs, the Town is quite a ways from achieving a sustainable investment to address its substantial capital liabilities. Further, the Town does not have identified resources to address a recommended police station consolidation, Town Hall replacement/rehabilitation, or to fully implement its various plans, such as the Bicycle and Pedestrian Master Plan or Senior Roadmap.

Additionally, the region's economy is heavily influenced by industries affected by geopolitical dynamics. These dynamics could impact employment, property, and transfer tax revenue, fees, occupancy taxes, and sales taxes, further adding uncertainty to the financial outlook. While the Town is benefiting today, an economic reversal can have the same negative impact.

Proactive Financial Strategies and Sustainable Financial Planning It is essential for us to continuously monitor and evaluate our long-term financial sustainability, balancing major capital needs with the provision of essential services. Los Gatos is currently in a relatively good financial position, supported by significant reserves. However, we must remain vigilant and prepared to address rising operational and capital costs that could outpace revenue growth, as well as address future capital, wildfire, and other capital needs not currently scheduled in a five-year Capital Improvement Program. Our goal is to preserve the exceptional quality of life in our community through prudent and strategic financial management. To strengthen the Town’s long-term financial sustainability and provide strategic insights to the Council, the Town is collaborating with an independent consultant to perform a Fiscal Condition Analysis, Fiscal Impact Analysis, and Asset-Liability Management Studies.

To achieve this, the Town must work to fully identify the true costs of basic operations as well as additional programs and services, comparing these costs to our capacity to sustain such activities over the long term. While our overall financial position is balanced, our focus must

Page 71 ends

ITEM NO. 7.

PAGE 5 OF 2
SUBJECT: Receive Draft FY 2024-25 Draft ACFR
DATE: December 9, 2025
shift to achieving a sustainably balanced budget that ensures efficient and effective delivery of services at a level supported by available resources. In considering the capital intensive needs of buildings, infrastructure, and disaster mitigation, a longer view of financial condition and outlook is necessary.

Key efforts in this direction should include:
 Establishing a shared understanding of our current and projected financial condition.  Defining the basic and enhanced services provided to residents and businesses.  Taking deliberate steps toward long-term financial sustainability.  Identifying system and process improvements that reflect careful planning in how Town activities are delivered, ensuring accountability to those who fund these services.

These initiatives require a multi-year approach, and I am confident we can make meaningful progress in the years ahead.

Fund Balance Resolution
The Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance and Governmental Fund Type Definitions, requires that the Town Council of the Town of Los Gatos classify governmental fund balances as restricted, assigned, or committed fund balances with formal actions. Staff is requesting the Town Council adopt a resolution confirming June 30, 2025, Fund Balances in accordance with the FY 2024-25 Final Audit as listed in Attachment 2.

COORDINATION:

This report has been prepared in coordination with the Town Manager’s Office and the Town Attorney’s Office.

ENVIRONMENTAL ASSESSMENT:

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

ATTACHMENTS:

1. Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2025

2. Fund Balance Resolution Establishing June 30, 2025 Fund Balances

3. Redlined Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2025

4. Town Manager’s Responses to Commissioners’ Questions and Comments

Page 72 ends

ITEM NO. 7.

ATTACHMENT 1

Page 73 ends

ITEM NO. 7.

Page 74 ends

ITEM NO. 7.

TOWN OF LOS GATOS

CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

PREPARED BY THE

OFFICE OF THE TOWN MANAGER

Page 75 ends

ITEM NO. 7.

TOWN HISTORY
Los Gatos is located at the base of the Santa Cruz Mountains at the southwest edge of Santa Clara County and approximately 50 miles south of San Francisco. The natural landscape includes picturesque hillsides, creeks, and valley flatlands. Los Gatos is in an area once occupied by Indigenous People, who lived sustainably in the area rich with fertile soils, abundant wildlife, and other natural resources.

The name Los Gatos comes from “El Rancho de Los Gatos,” a ranch established in 1839 by a Mexican land grant and so named because of the large number of mountain lions in the area. In 1854, James Alexander Forbes purchased some of this land and built a flour mill. In 1860, the first hotel was opened to provide a stage stop on the toll road which had been built between San Jose and Santa Cruz.

Wheat production gave way to orchards, and rapid growth ensued when the railroad reached Los Gatos in 1878. The residential subdivisions of Broadway, Bayview, Fairview, and Almond Grove were built in the 1880’s. By 1887, the population had grown to 1,500 and the Los Gatos community voted to incorporate.

Fruit industries faded slowly during the Depression and World War II, but the postwar period brought an influx of people, producing residential and commercial development. Highway 17 was constructed through the center of town, opening in 1940. Growth levelled off in the early 1970’s, leaving Los Gatos with its small-town atmosphere and pedestrian-oriented downtown.

Because of its distance from other centers of population, Los Gatos developed as a complete community including residential, business, and industrial elements. Preserving Los Gatos as a complete and wellbalanced community has been and remains a prominent goal of residents. From the first 100-acre town site in 1890 with a population of 1,652, Los Gatos grew slowly so that by 1963 the area was 6.3 square miles, with a population of 11,750. Today Los Gatos covers nearly 15 square miles and has a population of about 33,355. This growth over the first 80 years resulted in a human scale community with narrow streets and small buildings.

As it exists now, Los Gatos’ boundaries encompass a wide variety of terrain, ranging from level land to steep and densely wooded hillsides. The sharp visual contrasts among these features and charming architecture create the picturesque setting of the Town. In the midst of the growth of Silicon Valley, Los Gatos attracts people with a preference for the Town’s distinctive, high quality natural and urban environment.

Page 76 ends

ITEM NO. 7.

TOWN VISON STATEMENT
The Town of Los Gatos’s Vision Statement articulates the future Los Gatos and reflects the high ideals identified by the community:

Residents are united in their desire to maintain a high quality of life and preserve the character of the Town. The overall community consensus is that Los Gatos be a full-service community that is also environmentally sensitive; that Los Gatos maintains a balanced, well-designed mix of residential, commercial, service and open space uses, fostering a pedestrian-oriented community with a small town, village-like character; that Los Gatos supports an active business community that provides a wide variety of goods and services and a broad range of employment opportunities, eliminating the need to travel to other communities; and that Los Gatos provides a well-run, efficient municipal government that is fiscally healthy, with high levels of public safety, recreational, art and cultural amenities and is connected to high quality education.

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

TABLE OF CONTENTS
INTRODUCTORY SECTION:

Letter of Transmittal........................................................................................................................................... 1 Organization Chart ............................................................................................................................................. 5 Principal Officers................................................................................................................................................ 6 GFOA Award ..................................................................................................................................................... 7 FINANCIAL SECTION:

Independent Auditor’s Report........................................................................................................................... 11 Management’s Discussion and Analysis........................................................................................................... 16 Basic Financial Statements:

Government-Wide Financial Statements:.................................................................................................... 33 Statement of Net Position..................................................................................................................... 34 Statement of Activities......................................................................................................................... 35 Fund Financial Statements:

Governmental Funds: ........................................................................................................................... 36 Balance Sheet.................................................................................................................................... 37 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position.............................................................................................................. 38 Statement of Revenues, Expenditures and Changes in Fund Balances............................................. 39 Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities...................................................... 40 Statement of Revenue, Expenditures and Changes in Fund Balances – Budget and Actual (GAAP) General Fund.................................................................................... 41 Proprietary Funds – Internal Service Funds: ....................................................................................... 42 Statement of Net Position ................................................................................................................. 43 Statement of Revenue, Expenses and Changes in Net Position........................................................ 44 Statement of Cash Flows .................................................................................................................. 45 Fiduciary Funds: .................................................................................................................................. 46 Statement of Fiduciary Net Position ................................................................................................. 47 Statement of Changes in Fiduciary Net Position .............................................................................. 48 Notes to the Basic Financial Statements...................................................................................................... 51 REQUIRED SUPPLEMENTARY INFORMATION:

Schedule of Pension Plan Contributions...................................................................................................... 93 Schedule of Proportionate Share of Net Pension Liability – CalPERS Safety Cost Sharing Plan ................................................................................................................................. 95 Schedule of Proportionate Share of Net Pension Liability – CalPERS Misc.

Agent-Multiple Employer Plan ............................................................................................................ 96 Schedule of OPEB Contributions................................................................................................................ 98 Schedule of Changes in Net OPEB Liability............................................................................................... 99

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

TABLE OF CONTENTS
SUPPLEMENTARY INFORMATION:

Major Governmental Fund Schedules (other than the General Fund):

Schedule of Revenue, Expenditures and Changes in Fund Balance – Budget and Actual (GAAP) Appropriated Reserves Fund................................................................... 103 Nonmajor Governmental Funds:

Combining Balance Sheets.......................................................................................................................... 104 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances...................................................................................................................................... 107 Budgeted Nonmajor Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (GAAP) ................................................................... 110 Internal Service Funds:

Combining Statement of Fiduciary Net Position......................................................................................... 116 Combining Statement of Revenue, Expenses and Changes in Net Position................................................ 117 Combining Statement of Cash Flows.......................................................................................................... 118 STATISTICAL SECTION .............................................................................................................................. 121 Net Position by Component......................................................................................................................... 123 Changes in Net Position .............................................................................................................................. 124 Fund Balances, Governmental Funds.......................................................................................................... 126 Changes in Fund Balances, Governmental Funds....................................................................................... 128 Assessed Value and Estimated Actual Value of Taxable Property ............................................................. 130 Direct and Overlapping Property Tax Rates................................................................................................ 131 Principal Property Tax Payers..................................................................................................................... 132 Property Tax Levies and Collections........................................................................................................... 134 Ratios of Outstanding Debt by Type ........................................................................................................... 135 Direct and Overlapping Governmental Activities Debt............................................................................... 136 Legal Debt Margin ...................................................................................................................................... 137 Demographic and Economic Statistics........................................................................................................ 138 Principal Employers.................................................................................................................................... 139 Full-time Equivalent Town Government Employees by Function/Program ............................................... 141 Operating Indicators by Function/Program ................................................................................................. 142 Capital Assets Statistics by Function/Program............................................................................................ 144 OTHER INDEPENDENT AUDITOR’S REPORTS:

Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards................................................................................................................. 146

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INTRODUCTORY SECTION

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ITEM NO. 7.

Mayor and Town Council
November 24, 2025

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November 24, 2025
I am pleased to submit the Town’s Annual Comprehensive Financial Report(ACFR) for the fiscal year ending June 30, 2025.

In coordination with the Town Manager’s Office, this report was prepared by the Finance Department, which assumes responsibility for the accuracy of the data, the completeness and fairness of the presentation, and all disclosures. The information in this report presents the reader with a comprehensive view of the Town’s financial position and the results of its operations for the fiscal year ending June 30, 2025, along with additional disclosures and financial information designed to enable the reader to gain an understanding of the Town’s financial activities. Operating revenues remained stable, while development activity and investment performance provided additional funding capacity.

This report was prepared as prescribed in Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments (GASB 34). This GASB Statement requires management to provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of a Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the Independent Auditor’s Report.

This Annual Comprehensive Financial Report is organized into three sections:

I. The Introductory Section includes the table of contents, letter of transmittal, listing of elected officials, Town administrative personnel, and an organization chart delineating organizational structure.

II. The Financial Section includes the Independent Auditor’s opinion, the MD&A, the basic financial statements, notes to the financial statements, combining statements of nonmajor funds, and required supplemental information.

III. The Statistical Section includes both financial and nonfinancial data about the Town.

The Annual Comprehensive Financial Report is prepared in accordance with Generally Accepted Accounting Principles (GAAP) promulgated by the Governmental Accounting Standards Board (GASB) and includes the audit report of Chavan & Associates, the Town’s independent certified public accountants.

This Annual Comprehensive Financial Report was developed in accordance with best practices of the Government Finance Officers Association and will be submitted for consideration of its Achievement of Excellence Award in financial reporting certification. This award is granted only to entities whose reports meet the highest standards of municipal financial reporting.

AWARDS
The Town’s Annual Comprehensive Financial Report for the fiscal year ended June 30, 2024, was awarded a Certificate of Achievement for Excellence in Financial Reporting by the national Government Finance Officers Association. This is the 30th consecutive year that the Town has received the award. This prestigious award recognizes the report’s conformance with strict accounting and reporting standards established by the Government Accounting Standards Board and government

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Mayor and Town Council
November 24, 2025

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finance organizations. This award is annual in nature and valid for one year only. This year’s report will be submitted for award consideration by this organization, as we believe it continues to meet these standards.

THE REPORTING ENTITY AND ITS SERVICES
Los Gatos is a general law Town, incorporated under the legal framework of California in 1887. The Town is located in the foothills and level terrain of southwestern Santa Clara Valley, referred to internationally as “Silicon Valley.” From the first 100acre Town site and an 1890 population of 1,652, Los Gatos grew slowly so that by 1963, the area was 6.3 square miles with a population of 11,750. Today, Los Gatos covers approximately 15 square miles with a population of 33,355 (California Department of Finance, January 2025). The growth over the last 80 years resulted in a community with vibrant business districts, well-maintained neighborhoods, and lovely parks and open spaces. Preserving the unique charm of Los Gatos as a complete and well-balanced community while meeting its economic and housing needs, has been, and remains a key goal for the Town.

The Town maintains a CouncilManager form of government which combines the strong political leadership of elected officials with the strong managerial experience of an appointed Town Manager. Five Council members are elected at large for staggered fouryear terms to govern the Town. The Mayor and Vice Mayor are appointed by the Council from its own ranks and serve one-year terms. The Town Manager and Town Attorney are appointed and supervised directly by the Council. The Town Manager oversees all municipal services such as Public Safety, Parks and Public Works, Community Development, Library, and Town Administration including Human Resources, Information Technology, and Finance.

ECONOMIC CONDITIONS AND OUTLOOK
This past year, the Town continued to see increases in economically sensitive revenues. The Town General Fund closed FY 2024-25 with $5.7 million in revenue over expenditure before transfers. The excess revenue includes $1.2 million unrealized gain in the Town investment portfolio. The General Fund Balance increased $4.7 million.

General Fund revenues (not including transfers in other financing sources) increased 7.7% from the prior year. Property tax revenues remain the largest and most consistent source of support for General Fund operations, comprising approximately 43.8% of General Fund revenues in FY 2024-25 For FY 2024-25, property tax receipts of $25.3 million were $1.0 million higher than the prior year’s collection, reflecting the continued desirability of the Town, its environment, culture, and educational opportunities
The Town also depends on sales tax revenues to fund General Fund operations, which made up about 14.4% of total General Fund revenues in FY 2024–25. Sales tax receipts for the year reached $8.3 million, a $0.3 million increase from the previous year, indicating modest growth.

As with most municipalities, services are provided directly by employees to the Town’s residents, businesses, and visitors.

As a service delivery enterprise, the cost of salaries and benefits are a significant portion of the Town’s expenditures.

Salaries are largely dictated by regional market forces as evidenced by fierce competition for talent in the San Francisco Bay Area, and inflationary pressures nationwide. During the Summer 2024, the Town successfully completed negotiations with all bargaining units for three fiscal years. Salaries increased $0.8 million from the prior year. In addition, non-pension benefits increased by $0.7 million, primarily due to rising costs associated with health insurance, and related employee benefit programs. These increases are reflected in the overall personnel expenditures and contribute to the year-over-year variance.

The Town also continues to adjust and prepare for pension employer coststo continue to be a primary expense in conjunction with salaries. Pension-related benefits increased by $0.8 million compared to the previous year. For the year ended June 30, 2025, the Town recognized a pension expense of $12 million compared to $11.2 million in the prior fiscal year. The Town’s pension plans over the past several decades, like all other CalPERS participants, have experienced changes in actuarial assumptions, demographic changes, and volatile investment returns which have outweighed any positive plan experiences. The outcome of these unfavorable economic and demographic conditions is the creation of unfunded pension and Other PostEmployment Benefits (OPEB) obligations for the Town. According to the 2024 CalPERS actuarial valuations, the unfunded actuarial liability for pensions was $ 62.2 million and $7.5 million for OPEB, as determined by an actuarial valuation as of June 30, 2023.

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Mayor and Town Council
November 24, 2025

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It should be noted that the net pension obligation varies annually depending upon the plan’s actual investment earnings compared to the assumed rate of return during the plan’s measurement periods. The Net Pension Obligation (NPO) reported in the Town’s ACFRs has experienced a high degree of variability in recent years, with Net Pension Obligation reported in the June 30, 2017 ACFR in the amount of $33.4 million rising to $58.02 million in FY 2020-21 and decreasing to $27.48 million in FY 2021-22. The NPO reported in this year’s financial statements (ACFR 2024-25) has decreased 2.5% from $63.0 million to the current NPO of $61.4 million. Due to CalPERS preliminary returns of 11.6% for FY 2024-25, staff expects the NPO to decrease in the next fiscal year reporting period.

Readers are cautioned that in considering the amount of the pension and OPEB liabilities and other actuarial data as reported by CalPERS and the Town’s actuary, this is “forward looking” information. Such “forward looking” information reflects the judgment of the Board of Administration of CalPERS, its actuaries, and the Town’s actuary as to the amount of assets which the pension and OPEB plans will be required to accumulate to fund future benefits. These judgments are based upon a variety of assumptions, one or more of which may prove to be inaccurate or that may change with the future experience of the pension and OPEB plans. The actuarial methods and assumptions could be changed by CalPERS and the Town’s actuary at any time based on their professional judgement. Such changes could cause the Town’s obligations to the pension and OPEB plans to be higher or lower in any particular year. This sensitivity to changes in actuarial assumptions is especially evident in changes to the Discount Rate as illustrated in Note 11 and changes to Healthcare Trend and Discount rates as illustrated in Note 12.

For detailed information about the Town employees’ retirement plan please refer to Note 11 of the Notes to Basic Financial Statements Section. For detailed information about the Town OPEB obligations please refer to Note 12 of the Notesto Basic Financial Statements Section. In addition, the Town provides extensive information on pension and OPEB information on the Town’s website.

Despite revenue constraints and increasing costs associated with unfunded federal and state mandates, the Town has managed to maintain high service levels and balanced budget through prudent fiscal management. The Town continues its outreach to the community, the League of California Cities, and local legislators to prevent and limit any future revenue losses and mandated cost increases.

MAJOR CAPITAL PROJECT INITIATIVES
During FY 2024-25, the Town continued its focus on long-term infrastructure renewal. Approximately $16.5 million was invested in capital projects, including $8.5 million in construction in progress, $4.2 million in street improvements, $2.5 million in other infrastructure, and $1.3 million in facility and equipment upgrades. These investments reflect the Town’s strategy of translating accumulated reserves and grant funding into tangible improvements.

Additional infrastructure improvements are scheduled in accordance with the Town’s approved Capital Improvement Plan and will continue into future years. All of these improvements are funded either through grants, or via revenues accumulated from prior year budget savings and/or excess revenues per Town Council Policy.

ACCOUNTING SYSTEM AND BUDGETARY CONTROL
The effectiveness of internal controls is a primary consideration in the development and evaluation of the Town’s accounting system. Internal accounting controls are designed to provide reasonable but not absolute assurance regarding:
1) safeguarding of assets against loss from unauthorized loss or disposition, 2) accuracy and reliability of accounting data, and
3) adherence to managerial policy.

The concept of reasonable assurance recognizes that the cost of internal controls should not outweigh the benefits, and that management must make estimates and judgments in evaluating these costs and benefits.

All governmental fund types use the modified accrual basis of accounting. This means that revenues are recorded when measurable and available rather than when received. Measurable means the amount can be determined and available means

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Mayor and Town Council
November 24, 2025

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the cash is received within sixty days after the end of the fiscal year. Expenditures are recorded when the liability isincurred, rather than when paid. An exception to this rule is principal and interest on general long-term debt, which is not recognized by debt service funds until it is due.

Proprietary (internal service) funds are accounted for using the accrual basis of accounting, similar to that used by corporations. Proprietary fund revenues are recognized when they are earned rather than when the cash is received.

Proprietary fund expenses are recognized when they are incurred, even if the cash is not available. With the implementation of GASB 34, the Town prepares its Basic Financial Statements on the accrual basis. Internal accounting procedures have been developed to provide reasonable assurance regarding the safeguarding of assets and the reliability of financial records for preparing financial statements and maintaining asset accountability.

An annual operating budget, five-year budget forecast, and five-year capital improvement plan is adopted by the Town Council. All budget adjustments and transfers between funds must be approved by the Town Council during the fiscal year.

The Town Manager is authorized to transfer unencumbered appropriations within a budget category, within a fund.

Appropriations are valid for each fiscal year and lapse at yearend.

INDEPENDENT AUDIT
State law requires an annual audit of the Town’s accounts by independent certified public accountants. The accounting firm of Chavan & Associates LLP performs this function for the Town of Los Gatos, and their report is included in the financial section of the ACFR.

ACKNOWLEDGEMENTS
The preparation of this Annual Comprehensive Financial Report, as presented herein, is the result of the combined efforts and dedicated services of the excellent staff of the Department of Finance. Special thanks to Eric Lemon, Finance and Accounting Manager; Eagled’Or Am, Accountant; Ed Karas, Accountant; Diane Howard, Division Manager; Melissa Ynegas, Senior Administrative Analyst; and Wayne Chen, Administrative Technician, for their efforts in preparing this report. The Town’s Finance Commission is also recognized for its contributions to strengthening the ACFR through its review, discussion, and comments.

Respectfully submitted,
____________________________________ ____________________________________ Chris Constantin Gitta Ungvari
Town Manager Director of Finance
Chris Constantin Gitta Ungvari

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Town of Los Gatos
Organizational Structure

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TOWN OF LOS GATOS

PRINCIPAL OFFICERS
JUNE 30, 2025

TOWN COUNCIL
Mayor Mathew Hudes
Vice Mayor Rob Moore
Council Member Maria Ristow
Council Member Mary Badame
Council Member Rob Rennie

COUNCIL APPOINTEES
Town Manager Chris Constantin
Town Attorney Gabrielle Whelan

APPOINTED OFFICIALS
Assistant Town Manager Katy Nomura
Chief of Police Jamie Field
Community Development Director Joel Paulson
Parks and Public Works Director Nicolle Burnham
Library Director Ryan Baker
Finance Director Gitta Ungvari
Human Resources Director Cheryl Parkman

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FINANCIAL SECTION

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Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the
Town Council of the Town of Los Gatos
Los Gatos, California
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, each major fund, General Fund budgetary statement, and the aggregate remaining fund information of the Town of Los Gatos (the “Town"), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise Town’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, General Fund budgetary statement, and the aggregate remaining fund information of the Town of Los Gatos, as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Town and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements Town management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Town’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement

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Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and GAGAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Town’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town’s basic financial statements. The combining and individual fund financial statements, schedules, and other information listed in the supplementary information section of the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements.

Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
The Town’s management is responsible for the other information included in the annual comprehensive financial report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 19, 2025 on our consideration of the Town’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.

The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town’s internal control over financial reporting and compliance.

Chavan & Associates, LLP
Certified Public Accountants
November 19, 2025
Morgan Hill, California

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MANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the Town of Los Gatos’s Annual Comprehensive Financial Report (ACFR) presents Management’s Discussion and Analysis (MD&A) of the Town’s financial performance during the fiscal year that ended on June 30, 2025. This analysis should be read in conjunction with the Transmittal Letter at the front of this report and the accompanying Basic Financial Statements.

FINANCIAL HIGHLIGHTS
• Town assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at the close of Fiscal Year (FY) 2024-25 by $166.7 million (net position). The unrestricted net position, which represents the amounts available to meet the Town ongoing obligations to citizens and creditors, is $8.7 million. • The Town’s total net position increased by $7.3 million in FY 2024-25. The overall increase of $7.3 million is primarily due to the combined effects of the $7.5 million increase in Capital Assets, $7.8 million decrease in Deferred Outflows, and $1.8 million decrease in Deferred Inflows related to Pension and OPEB expenses; and $5.3 million decrease in liabilities. These combined changes reflect the Town’s continued investment in infrastructure and the impact of variability in net pension and OPEB obligations. This variability is influenced by the difference between the plans’ actual investment earnings and the assumed rate of return during the measurement period.
• At the close of the current fiscal year, the Town’s governmental funds reported combined fund balances of $63.3 million, an increase of $2.3 million in comparison with the prior year. Of this amount, $10.4 million, is available for spending at the Government’s discretion (unassigned fund balance). • During FY 2024-25, the General Fund had an excess of revenues over expenditures of $5.7 million, excluding transfers. Transfers out exceeded transfers in by $1.0 million. The principal purpose of the Town’s interfund transfers was contributions toward capital projects ($1.8 million) and general liability ($0.1 million). The detail of the interfund transfers is illustrated in Note #5.
• At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned, and unassigned components of the fund balance) for the general fund was $32.5 million, or approximately 63% of the total general fund expenditures.

OVERVIEW OF THE FINANCIAL STATEMENTS
The financial section of the ACFR contains the following information: Independent Auditor’s Report, Management’s Discussion and Analysis (this section), the Basic Financial Statements, and the Required Supplementary Information.

The ACFR also includes a Supplementary Information section, which presents combining and budgetary schedules for individual nonmajor funds. The Basic Financial Statements are comprised of three components: 1) GovernmentWide Financial Statements, 2) Fund Financial Statements, and 3) Notes to the Financial Statements. The Management’s Discussion and Analysis is intended to be an introduction to the Basic Financial Statements.

Government-Wide Financial Statements
The Government-Wide Financial Statements present the financial picture of the Town from an economic resources measurement focus using the accrual basis of accounting. An economic resources measurement focus is when a body of financial statements report all inflows, outflows, and balances affecting or reflecting an entity’s net position.

The Statement of Net Position presents information on all of the Town’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating.

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The Statement of Activities presents information showing how the Town’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this Statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both Government-Wide Financial Statements distinguish functions of the Town that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business–type activity). The governmental activities of the Town include public safety, parks and public works, community development, library, community services, debt service, and general government. Governmental activities typically include financial data for all governmental funds. Internal service funds are typically incorporated into governmental activities as well. Businesstype activities typically include financial data for all enterprise funds. The Town has no enterprise funds and therefore reports no business-type activities.

Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Town, like other local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The funds of the Town are segregated into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds – The Town’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using the modified accrual basis of accounting, which measures cash and other financial assets that can readily be converted to cash. The Governmental Fund Statements provide a detailed short-term view of the Town’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the Town’s operations. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

Proprietary funds – The Town maintains one type of proprietary fund: Internal Service Funds. Proprietary funds are reported using the accrual basis of accounting. Internal Service Funds are an accounting tool used to accumulate and allocate costs internally among the Town’s various functions. The Town uses Internal Service Funds to account for its fleet of vehicles, computer equipment, risk management activities, and other items. Internal Service Funds help smooth the variability of certain expenses and insulate the Town from large unanticipated costs. The Internal Service Funds are included within governmental activities in the Government-Wide Financial Statements.

Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of parties outside the Town.

Fiduciary funds are not reflected in the Government-Wide Financial Statements because the resources of those funds are not available to support the Town’s own programs.

Included in fiduciary funds is the Redevelopment Successor Agency private-purpose Trust Fund created upon the dissolution of the former Redevelopment Agency (RDA) in 2012. The Trust Fund was created to hold the assets of the former Redevelopment Agency until they are transferred for governmental purposes to other entities or distributed to the underlying taxing jurisdictions in Santa Clara County after the payment of enforceable obligations.

Additional information on the dissolution of the RDA and this fiduciary fund can be found in Note 15 in the notes to basic financial statements.

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Notes to Basic Financial Statements
The notes provide additional information to facilitate a full understanding of the data provided in the GovernmentWide and Fund Financial Statements.

Required Supplementary Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Town’s progress in funding its obligation to provide Pension and Other Post Employment benefits to its employees.

ANALYSIS OF GOVERNMENT-WIDE FINANCIAL STATEMENTS
The Government-Wide Financial Statements provide long-term and short-term information about the Town’s overall financial condition. This analysis addresses the Town's financial statements as a whole, using data from throughout the ACFR to describe changes between 2024 and 2025.

Net Position Discussion
In general, net position can serve as an important indicator of whether the Town’s overall financial condition is improving or deteriorating over time. As shown below, the Town’s assets and deferred outflows of resources (consumption of net position that applies to a future period) exceeded liabilities and deferred inflows of resources (acquisition of net position that applies to a future period) by $166.7 million, reflecting an increase of approximately $7.3 million to the prior year’s net position of $159.4 million.

Capital assets increased $7.5 million to $146.8 million for the year, reflecting the current year’s capital asset additions/retirements less the annual depreciation/amortization expense. 2025 2024
Current and other Assets $ 94,529,842 $ 93,959,415
Capital Assets 146,834,839 139,376,963
Total Assets $ 241,364,681 $ 233,336,378
Deferred Outflows - Pension/OPEB 21,188,217 28,973,675
Current Liabilities 19,655,539 21,254,648
Long-Term Liabilities Outstanding 73,597,018 77,271,453 Total Liabilities $ 93,252,557 $ 98,526,101
Deferred Inflows - Pension/OPEB 2,611,631 4,377,735
Net Position
Net Investment in Capital Assets 145,079,170 137,253,582 Restricted 12,933,419 13,015,461
Unrestricted 8,676,121 9,137,174
Total Net Position $ 166,688,710 $ 159,406,217
Town of Los Gatos
Net Position
Governmental Activites
For the Year Ended June 30, 2025

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Deferred Outflows for Pension and Other Post-Employment Benefits (OPEB) decreased by $7.8 million primarily due to the difference between the projected assumed investment returns and actual investment earnings on pension and OPEB investments, changes in assumptions, and the change in the Town’s proportionate share for the pooled safety pension plan.

Long-term liabilities decreased by $3.7 million. The overall change is mainly due to a net pension liability decrease of $1.6 million and a reduction in net OPEB liabilities of $1.5 million, driven by higher current investment earnings for CalPERS than the 6.9% discount rate. See Note 11 and Note 12 in the Notes to the Financial Statements for more details on the Town’s pension and OPEB plans.

Deferred Inflows decreased by $1.8 million, mainly due to the difference between projected investment returns and actual investment earnings on pension and OPEB investments. The decreases consisted of pension inflows of $0.9 million, the OPEB plan of $0.6 million, and leases of $0.3 million.

The largest segment of the Town’s net position, representing $145.1 million, reflects the net investment in capital assets (e.g., land, buildings, infrastructure, subscriptions, and equipment) less accumulated depreciation/amortization and related outstanding debt used to acquire those assets. The Town uses these capital assets to provide infrastructure and services to the residents. They do not represent a liquid financial resource to the Town and, consequently, are not readily available to fund current obligations.

The chart below shows the Town’s net position for the fiscal year ended June 30, 2024 and 2025.

Restricted net position totaled approximately $12.9 million, representing approximately $9.0 million for capital projects and maintenance, $3.1 million for restricted pension trust, $0.6 million placed in a special revenue trust account for Library services, and $0.2 million for Lighting and Landscaping Assessment Districts.

As of June 30, 2025, the unrestricted net position, the amounts available to meet the Town’s ongoing obligations to citizens and creditors, reports an approximate $0.5 million decrease from the prior year to an ending balance of $8.7 million.

The Town’s overall net position increased $7.3 million from the prior fiscal year. The reasons for this overall increase are discussed in the following sections for governmental activities. $0 $50 $100 $150
Net Investment in Capital Assets
Restricted
Unrestricted
Millions
Statement of Net Position
2025 2024

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Governmental Activities
Governmental activities are generally financed through taxes, intergovernmental revenues, and other non-exchange revenues. The Statement of Activities is intended to illustrate how the cost of governmental activities is financed and determine the annual change in net position.

The Statement of Activities shown above details how the $70 million in Governmental Activities revenues and contributions were derived. Approximately $17.9 million or 25.6% of the revenues were recorded from fees paid by residents/businesses who directly benefited from the respective program or service. Another $9.8 million or 14.0% of the revenues were sourced from operating/capital grants and contributions. The remaining $42.3 million or 60.4% represents general revenues of the Town, including taxes, intergovernmental revenues, and other miscellaneous revenues.
2025 2024
Revenues:

Program revenues:

Charges for Services $ 17,919,376 $ 13,495,756
Operating Grants and Contributions 3,098,154 3,667,909
Capital Grants and Contributions 6,710,310 5,668,252
General Revenues:

Property Taxes 25,252,782 24,224,142
Sales Taxes 8,330,978 8,071,735
Franchise Taxes 1,057,483 2,547,011
Transient Occupancy Taxes 2,417,630 2,367,653
Other Taxes 50,036 55,196
Motor Vehicle in Lieu 52,733 41,461
Developer Assessment 12,880
Investment Earnings 2,581,393 1,417,370
Unrealized gains (losses) 1,201,824 1,712,246
Miscellaneous 1,341,229 1,199,422
Total Revenues 70,013,928 64,481,033
Expenses:

Police Department 24,095,151 23,783,313
Parks and Public Works 17,745,141 14,075,171
General Government 11,122,319 11,113,238
Community Development 5,734,087 5,481,765
Library Services 3,716,806 3,853,748
Sanitation 276,528 263,706
Interest and Fees 41,403 26,137
Total Expenses 62,731,435 58,597,078
Change in Net Position 7,282,493 5,883,955
Net Position - Beginning 159,406,217 153,522,262
Net Position, Ending $ 166,688,710 $ 159,406,217
Town of Los Gatos
Statement of Activities
For the Year Ended June 30, 2025

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The chart below summarizes the financial activities of the major programs.

Governmental Activities Revenue Discussion
The chart below summarized the Town’s government wide revenues for the FY 2023-24 and FY 2024-25.

Total Government-Wide Revenues increased by $5.5 million.

Program revenues increased by approximately $4.9 million compared to the prior fiscal year. A key component of this increase—$1.5 million—is due to a reclassification of fees collected from the garbage hauler company. In FY 2023–24, these fees were reclassified from franchise fees to license and permit fees as a result of changes in the JPA agreement, and are now reported under the Charges for Services category in the Statement of Activities. This reclassification resulted in a $1.5 million decrease in franchise fees and a corresponding $1.5 million increase in $0 $5 $10 $15 $20 $25 $30
General Government
Public Safety
Parks and Public Works
Community
Development
Library Services
Sanitation
Interest and Fees
Millions
Expenses and Revenues - Governmental Activities
Expenses
Program Revenues
$0 $5 $10 $15 $20 $25 $30
Charges for Services
Operating Grants and Contributions
Capital Grants and Contributions
Property Taxes
Sales Taxes
Franchise Taxes
Other Taxes
Motor Vehicle in Lieu
Developer Fee
Investment Earnings
Unrealized gains (losses)
Miscellaneous
Millions
Government Wide Revenues
2025 2024

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Charges for Services, with no net change in total collections from the garbage hauler company; however, it does affect year-over-year comparability. The remaining $2.9 million increase in program revenues is primarily attributable to a $1.5 million increase in business license tax collections, due to timing differences in license payments crossing fiscal years, and a $1.7 million increase from increased development activity, partially offset by a $0.3 million decrease in revenues from street sweeping and crossing guard services, which were contracted out in FY 2024–25.

Additionally, the Town received an additional $1.0 million in capital grants, including funding for the Los Gatos Creek Trail to Highway 9 Trailhead Connector project. These gains were partially offset by a $0.6 million decrease in operating grants and contributions, reflecting reduced availability of operating grant funding in the current year.

The Town’s general revenues related to governmental activities increased by approximately $0.6 million compared to the prior year. This increase was primarily driven by a $1.0 million rise in property tax revenues, a $0.7 million increase in investment earnings, including mark-to-market adjustments on the Town’s investment portfolio—and a $0.3 million increase in sales tax collections. These gains were partially offset by a $1.5 million decrease in franchise fee collections. The total amount of the Encroachment Fee was $2.3 million in FY 2024-25 and $0.8 million in FY 2023-24.

Property tax is the Town's largest individual revenue source, and collections for the year were $1.0 million more than the previous year. This increase was primarily due to a $0.8 million rise in general property tax collection and a $0.2 million increase in the Vehicle License Fee (VLF) Property Tax In-Lieu fee. It is important to note that assessed valuations for FY 2024-25 were established on the tax roll in January 2024 and collected during FY 2024-25.

Sales taxes totaled $8.3 million for the fiscal year, making them the second-largest individual General Fund revenue source for the Town. This represents an increase of $0.3 million from the prior year. The modest growth reflects stable sales tax collections from business-to-business transactions.

Investment earnings for the fiscal year ended June 30, 2025, totaled $2.6 million, representing an increase of $1.2 million from the prior year. This growth reflects improved interest income from the Town’s investment portfolio, due to a higher interest rate environment. Additionally, the Town recorded $1.2 million in unrealized gains from mark-to-market adjustments, which, while positive, were $0.5 million lower than the prior year’s unrealized gains of $1.7 million. The $1.2 million unrealized gain is an increase in the value of the asset that has not been sold and is not available for spending.

Miscellaneous Revenue increased by $0.1 million from the prior year. This category includes many different items, primarily $0.5 million in revenue recognized for Capital Projects, received through developer contributions and costsharing agreements with local governments and utility companies. Additionally, the Town received $0.4 million in insurance reimbursements related to property damage and workers’ compensation claims. Another $0.2 million was contributed by nonprofit organizations, including the Friends of the Library and the Police Foundation.

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Governmental Activities Expenses Discussion
The chart below summarizes the Town’s government-wide expenses for the FY 2023-24 and FY 2024-25.

The Town provides residents, businesses, and visitors with an array of high-quality municipal services. General government strategic support comprises seven Departments (Town Council, Town Clerk, Town Manager, Town Attorney, Human Resources, Information Technology, and Finance) that provide information technology, executive management, economic vitality, legal services, records management, risk management, human resources, finance, and accounting services. The Town’s Police Department (public safety) provides general law enforcement, crime prevention, dispatch, and responses to emergency and non-emergency calls for service. The Parks and Public Works Department provides engineering, construction, and maintenance of public streets, street lighting, Town-owned buildings, parks, and related infrastructure, as well as traffic engineering and engineering evaluation of private development proposals. Community Development provides planning and zoning services; building plan checks and inspections; and code compliance services. The Library Department provides library, local history, and cultural services to the community.

Total expenses for the year, as reported in the Statement of Activities, were $62.7 million, an increase of $4.1 million from the prior year’s total of $58.6 million. The primary driver of this increase was in $3.5 million expenses in the capital program that is not capitalizable and reported under Parks and Public Works expenses in the Statement of Activities. These expenditures included costs related to vegetation management, implementation of the parking program, and the creation of storm drain system maps.

Governmental Funds
Recognizing the financial resources measurement focus, the Town’s Governmental Funds provide information on near-term inflows and outflows, and balances of spendable resources. This information is useful in assessing the Town’s financing requirements and may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. Unlike the Statement of Activities which does not include transfers, the Governmental Funds Balance Sheet does include transfers in and out. $0 $10 $20 $30
General government
Public safety
Parks and public works
Community development
Library services
Sanitation
Interest and fees
Millions
Government Wide Expenses
2025 2024

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As discussed below, the Town’s Governmental Funds Balance Sheet reports the following fund balances:

Restricted Fund Balance – The Town has $12.8 million in fund balance classified as restricted to indicate that it has an externally imposed restrictions on how the money may be spent. Of the $12.8 million restricted fund balance, $9.0 million is restricted for capital projects, $3.1 million for pension, $0.6 million for Library special revenue trust accounts, and $0.2 million for maintenance and repairs.

Committed Fund Balance – The Town has $19.6 million in fund balance classified as committed to indicate that the Town Council previously committed how the money will be spent. Of the $19.3 million, $15.8 million is for budget stabilization ($7.9 million) and catastrophe response ($7.9 million).

Assigned Fund Balance – The Town has $20.5 million in fund balance which is not restricted or committed and is classified as assigned to indicate the Town Council’s intent to be used for specific purposes. The largest assignments of fund balance are the Reserve for Capital/Special Projects with a balance of approximately $2.0 million and the Capital Projects Reserve of $16.7 million which are the primary funding sources for the Town’s five-year capital improvement plan and special projects as budgeted by the Town.

Unassigned Fund Balance – The Town has $10.2 million in fund balance is available for spending at the Government’s discretion.

The chart below shows the Town’s governmental fund balances for the fiscal year ended June 30, 2024 and 2025.

Additional information on the Town’s Fund Balance can be found in Note 10 of the Notes to the Financial Statements. $0 $10 $20 $30
Nonspendable
Restricted
Committed
Assigned
Unassigned
Millions
Governmental Funds
Components of Fund Balances
2025 2024

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Total Governmental Funds results for the year included the following:

REVENUES 2025 2024
Property Taxes $ 25,305,515 $ 24,265,603
Sales Taxes 8,330,978 8,071,735
Transient Occupancy Taxes 2,417,630 2,367,653
Other Taxes 27,520 30,358
Licenses & Permits (1) 10,077,688 6,227,298
Intergovernmental 11,038,323 6,317,644
Charges for Services 6,648,503 7,051,179
Fines and Forfeitures 420,127 480,634
Franchise Fees (1) 1,057,483 2,547,011
Developer Assessment - 12,880
Interest 3,783,218 3,108,100
Use of Property 442,078 297,501
Other 748,259 604,493
Total Revenues $ 70,297,322 $ 61,382,089

EXPENDITURES
Current:

Public Safety $ 20,827,888 $ 20,718,781
General Government 10,884,414 9,573,022
Parks and Public Works 10,828,974 9,899,083
Community Development 5,637,742 5,246,729
Library Services 3,651,358 3,335,389
Sanitation and Other 274,188 252,605
Capital Outlay 15,545,674 12,366,255
Debt Service
Principal 206,380 225,370
Interest and Fees 41,403 3,716
Total Expenditures $ 67,898,021 $ 61,620,950
Excess Revenues over Expenditures $ 2,399,301 $ (238,861) Subscriptions - 706,713
Proceeds from sales of assets - 223
Transfers in 2,595,491 3,666,235
Tranfers out (2,655,491) (4,317,235)
Total Other Financing Sources (Uses) $ (60,000) $ 55,936 Net Changes in Fund Balances 2,339,301 (182,925)
Beginning/Ending Fund Balances $ 61,002,603 $ 61,185,528 Ending Fund Balances $ 63,341,904 $ 61,002,603

TOWN OF LOS GATOS

TOTAL GOVERNMENTAL FUNDS REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2025
(1) Starting in March 2024, due to a change in the JPA agreement, Garbage Franchise Fees were categorized as Licenses and Permits. The total amount of the Encroachment Fee was $2.3 million in FY 2024-25 and $0.8 million in FY 2023-24

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Total Governmental Funds revenues increased by $8.9 million, or 14.5%, compared to the prior year, primarily due to higher capital grant activity and increased collections from property taxes, interest income, sales taxes, and business license taxes. On the expenditure side, total spending rose by $6.3 million, or 10.2%, mainly driven by a $3.2 million increase in capital outlay, a $2.3 million rise in salaries ($0.8 million) and benefits ($1.5 million) costs, and $0.9 million in additional internal service charges combined with operational changes.

General Fund revenues totaled $57.7 million, or nearly 82.1% of the total $70.3 million in Total Governmental Fund revenues, compared to $53.5 million of General Fund revenues and total Governmental Funds revenues of $61.3 million in the prior year.

General Fund expenditures represent approximately $51.9 million or 76.5% of the Total Governmental Fund expenditures of $67.9 million compared to $49.5 million of General Fund expenditures and total Governmental Funds expenditures of $61.6 million in the prior year.

Public Safety expenditures increased by approximately $0.1 million compared to the prior year. The net increase is the result of a $0.6 million decrease in salaries, offset by a $0.4 million increase in pension costs and a $0.3 million increase in non-pension benefits, such as health insurance.

General Government, Public Works, Community Development, and Library services expenditures increased by $2.9 million compared to the prior year, primarily due to higher personnel and operational costs. This included $0.8 million in salaries and $1.5 million in benefits increases, $0.3 million in legal service expenses, and $0.3 million in post-retirement benefit obligations.

Appropriated Reserves Fund capital projects fund balances decreased $2.2 million from the prior year to $16.9 million, reflecting increased capital activity during the fiscal year. The $3.3 million general government and capital outlay expenditures above operating revenues was offset by $1.1 million from other financing sources.

Proprietary Funds
The Town’s Proprietary Funds (Internal Service Funds) presented in the Fund Financial Statements section provide similar information to the Government-Wide Financial Statements and include individual segment information.

Total net position in the Internal Service Funds increased by $1.2 million due to increases in general fund support and program charges for services to cover workers’ compensation, information technology, and general liability costs including administration, insurance premiums, and claims expense.

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GENERAL FUND BUDGETARY HIGHLIGHTS
The graphs below represent the revenue and expenditure variances between the original budget, final budget, and actuals.

Changes to the Original Budget
As noted in the above chart, comparing the FY 2024-25 original budget (i.e., the Adopted Budget) General Fund revenues of $53.1 million to the final adjusted budget of $53.9 million indicates a net increase of approximately $0.8 million or 1.4%. Additions to the original revenue budget included adjustments approved by Town Council throughout the fiscal year.

The increase in General Fund revenue appropriations occurred primarily from the following sample of revenue budget adjustments made during the fiscal year:
• $0.4 million revenue increases for charges for services including $0.3 million for plan check fees; $0
$5
$10
$15
$20
$25
$30
Millions
Variances between the Original Budget, Final Budget, and Actuals - General Fund Revenues Original Budget
Final Budget
Actual
$0
$5
$10
$15
$20
$25
Millions
Variances between the Original Budget, Final Budget, and Actuals - General Fund Expenditures Original Budget
Final Budget
Actual

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• $0.8 million revenue budget for licenses & permits including $0.4 million for business license taxes and $0.3 million for planning permit fees;
• $0.3 million revenue budget for grant receipts with matching expenditures.

As shown in the chart on the previous page, comparing the FY 2024-25 original budget (i.e. the Adopted Budget) General Fund expenditures of $52.5 million (excluding budgeted transfers-out and debt payments that are reimbursed) to the final adjusted budget of $55.6 million indicates a net increase of approximately $3.1 million or

6.0%. Additions to the original expenditure budget included adjustments approved by Town Council throughout the fiscal year.

The increase in General Fund expense appropriations occurred primarily from the following sample of budget adjustments made during the fiscal year.
• $1.0 million increase in expenditure budget related cost increases to legal, labor and employee relation services, post-employment benefit, recruitment services, special studies, property damage repair, utilities and other operating expenditures;
• $1.9 million expenditure increase for salaries and benefits related charges including budget restoration of $0.3 million for individual departments that were fully staffed and did not experience the full preplanned

4.6% salary savings factor and $1.6 million for negotiated salaries and benefits and temporary staff augmentation, since agreements were finalized after the budget adoption; and • $0.3 million grant activity with matching revenues.

Variance with the Final General Fund Budget
The General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual (GAAP) for Fiscal Year Ended June 30, 2025, reports an approximate favorable variance overall with the final budget of approximately $7.4 million. During FY 2024-25, the General Fund had an excess of revenues over expenditures of $5.7 million, excluding transfers. This favorable variance was created largely by the net effect of the following factors:
• Actual revenues for the fiscal year ended June 30, 2025, exceeded final budgeted projections by $3.8 million.

This favorable variance was primarily driven by high interest rates and unrealized gains resulting from the requirement to value current investments at market value as of June 30, as well as stronger-than-anticipated sales tax and business license collections reflecting increased consumer spending. Additionally, the Town experienced higher revenues from licenses, permits, and related service charges, largely due to a surge in development-related activity and an increase in engineering, building, and planning permit submittals. • On the expenditure side, actual spending was $3.6 million below the final budgeted amounts, mainly due to $1.8 million in Town-wide savings on salaries and benefits resulting from short-term vacancies, especially in the Police ($1.5 million) and Parks and Public Works ($0.2 million), and Administrative Services ($0.1 million) Departments. Additional savings of $1.8 million were achieved across various expenditure categories townwide, reflecting ongoing fiscal discipline and effective budget management.

CAPITAL ASSETS
As of June 30, 2025, the Town’s investment in capital assets for its governmental activity is recorded at $146.8 million(net of accumulated depreciation/amortization). The investment in capital assets includes land, buildings and improvements, infrastructure, construction in progress, subscription right of use asset, machinery and equipment.

Net capital assets increased by $7.5 million, reflecting $16.5 million in capital additions which were offset by $5.3 million in net depreciation and $3.7 million in deletions for the year.

Notable additions include:
• $8.5 million addition to construction in progress
• $4.2 million in street repair and resurfacing, and curb and gutter work; and

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• $2.5 million in other infrastructure, including $2.3 million in traffic signal work; and • $1.3 million in land, building improvements, and equipment acquisitions.

The $8.5 million addition to construction in progress is comprised of $4.7 million for pathways projects, $2.2 million for streets and curbs improvements, $0.6 million for land and building improvements, $0.6 million for bridges, $0.4 million for equipment, retaining walls, traffic signals, parking lots, and park improvements.

Additional information on the Town’s capital assets is found in Note 6 of this Financial Report.

LONG-TERM DEBT
The Town generally incurs long-term debt to finance projects or purchase assets, which will have useful lives equal to or greater than the related debt. The Town long-term debt is related to the PG&E on-bill financing loan used for facility efficiency project updates, totaling $0.9 million at 6/30/2025. The long-term debt in the Successor Agency Trust Fund is related to the 2002 COP and 2010 COP, totaling $8.5 million. Additional information on the Town’s Long-Term Debt is found in Note 7 of this Financial Report.

ECONOMIC FACTORS, NEXT YEAR’S BUDGET, AND RATES
Purpose of the Budget and Annual Comprehensive Financial Report Our Town’s budget is more than just numbers, it is a plan that ensures we use our resources efficiently and effectively, prioritizing our most important goals. Through this budget, the Town Council shapes our community's direction and priorities by allocating financial resources. The Annual Comprehensive Financial Report reflects the activities and financial condition of the previous year, serving as an essential document for residents, taxpayers, and other stakeholders to assess the Town’s financial standing. While both documents are critical, they do not provide the complete picture of the financial or operational reality of the Town.

Forecasting Our Finances
The FY 2025-26 budget projections are based on economic trends and forecasts specific to the Town Geographic area. These estimates, informed by local data from the County of Santa Clara and consultants such as Avenu Insights & Analytics and HdL Coren & Cone help predict revenue from sources like taxes and government grants. Expenditures are carefully reviewed by departments and the Finance Department and are incorporated into the budget with a vacancy savings factor of 4.6%, reflecting the Town’s historical trend of not fully expending predicted salaries and benefit costs.

Capital Assets
Accumulated
Depreciation
Capital
Asstes, Net
Infrastructure - Streets $ 89,745,124 $ 43,187,417 $ 46,557,707 Infrastructure - All Other 31,619,016 11,431,646 20,187,370 Subscription Right of Use Assets 1,622,573 695,605 926,968 Buildings 43,021,401 13,259,105 29,762,296
Land 26,105,392 - 26,105,392
Equipment 13,515,875 11,078,952 2,436,923
Construction in Progress 20,858,183 - 20,858,183
$226,487,564 $ 79,652,725 $146,834,839
Capital Assets
Town of Los Gatos
For the Year Ended June 30, 2025

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Overall, the Town is financially stable and secure for the foreseeable future. During the FY 2024-25 fiscal year, the Town-wide Statement of Activities reported an increase in net position of $7.3 million, a measure of the change in the value of assets impacted by Town operations during the year. This net position includes $3.8 million from investment earnings, driven by higher than usual interest rates and including $1.2 million unrealized gains, which are not available to spend, due to the requirement to value current investments at market value as of June 30.

Additionally, conservative budgeting and operations resulted in revenue exceeding budget estimates and expenditures coming in below projections contributing to this positive change.

While encouraging, the increase in net position can be significantly influenced by market interest rate fluctuations, liability payments (including pension costs), and operational and capital expenditures. Additionally, accounting standards do not account for future capital costs beyond depreciation, meaning deferred capital needs as well as needs to address wildfire risk will substantially impact future financial performance. Further, the potential consolidation of the police department is also not considered in standards or the Town’s Capital Improvement Program. Rising costs in key Town operations and contracted services also pose challenges that could outpace revenue growth. Despite our stable current position and financial cushion, maintaining this stability will require fiscal prudence and foresight to address future challenges.

Emerging Financial Challenges
Although we have experienced financial gains this year, we are facing significant cost pressures. Rising costs for basic services, including salaries, benefits, and contracting, are compounded by volatile pension costs, which have fluctuated in recent years. The competitive Silicon Valley market and increasing regulatory requirements on local governments also drive up the cost of services and materials.

Additionally, the region's economy is heavily influenced by industries affected by geopolitical dynamics. These dynamics could impact employment, property and transfer tax revenue, fees, occupancy taxes, and sales taxes, further adding uncertainty to the financial outlook. While the Town is benefiting today, an economic reversal can have the same negative impact.

Proactive Financial Strategies and Sustainable Financial Planning It is essential for us to continuously monitor and evaluate our long-term financial sustainability, balancing major capital needs with the provision of essential services. Los Gatos is currently in a relatively good financial position, supported by significant reserves. However, we must remain vigilant and prepared to address rising operational and capital costs that could outpace revenue growth as well as address future capital, wildfire, and other capital needs not currently scheduled in a five-year Capital Improvement Program. Our goal is to preserve the exceptional quality of life in our community through prudent and strategic financial management. To strengthen the Town’s long-term financial sustainability and provide strategic insights to the Council, the Town is collaborating with an independent consultant to perform a Fiscal Condition Analysis, Fiscal Impact Analysis, and Asset-Liability Management Studies." To achieve this, the Town must work to fully identify the true costs of basic operations as well as additional programs and services, comparing these costs to our capacity to sustain such activities over the long term. While our overall financial position is balanced, our focus must shift to achieving a sustainably balanced budget that ensures efficient

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and effective delivery of services at a level supported by available resources. In considering the capital intensive needs of buildings, infrastructure, and disaster mitigation, a longer view of financial condition and outlook is necessary.

Key efforts in this direction should include:
• Establishing a shared understanding of our current and projected financial condition. • Defining the basic and enhanced services provided to residents and businesses. • Taking deliberate steps toward long-term financial sustainability. • Identifying system and process improvements that reflect careful planning in how Town activities are delivered, ensuring accountability to those who fund these services.

These initiatives require a multi-year approach, and I am confident we can make meaningful progress in the years ahead.

REQUESTS FOR INFORMATION
This financial report is designed to provide residents, taxpayers, customers, investors, and creditors with a general overview of the Town’s finances and to demonstrate the Town’s accountability for the money it receives.

Questions about this report or requests for any additional information, should be directed to Gitta Ungvari, Finance Director, at 110 East Main Street, Los Gatos, California, 95030; email at [email protected]; or phone at (408) 354-6805.

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Basic Financial Statements

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

GOVERNMENT-WIDE FINANCIAL STATEMENTS

STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES

Page 33 ends

The Statement of Net Position, Statement of Activities, fund financial statements, and the notes to financial statements comprise the Basic Financial Statements of the Town.

The purpose of the Statement of Net Position and the Statement of Activities is to summarize the entire financial activities and financial position of the Town. They are prepared on the same basis of accounting (accrual) used by most businesses, which means they include all the Town’s assets and liabilities, as well as its revenues and expenses. The effect of the entire Town’s transactions is accounted for, regardless of when cash changes hands, and all material internal transactions between funds have been eliminated.

The Statement of Net Position report the Town’s total assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets and long-term debt, and presents similar information to the old balance sheet format while focusing the reader on the composition of the Town’s net position (assets minus liabilities). The Statement of Net Position summarizes the financial position of the Town’s governmental activities in a single column.

The Town’s governmental activities include the activities of the General Fund, Special Revenue Funds, Capital Projects Funds, and Debt Service Funds. These funds are serviced by the Town’s Internal Service Funds; therefore internal service activities are consolidated with governmental activities after eliminating inter-fund transactions and balances.

The Statement of Activities reports increases and decreases in the Town’s net position and is prepared on the full accrual basis of accounting, which means it includes all the Town’s revenues and expenses regardless of when cash changed hands. This differs from the “modified accrual” basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.

The format of the Statement of Activities presents the Town’s expenses before revenues and by program. Program revenues (revenues generated directly by specific programs) are deducted from program expenses to arrive at the net expense of each governmental program, which is offset by general revenues as listed before the change in net position. From these components, the change in net position is computed and reconciled to the Statement of Net Position.

Both of these statements include the financial activities of the Town.

Page 114 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

STATEMENT OF NET POSITION
JUNE 30, 2025

Page 34 ends

Governmental
ASSETS Activities
Cash and investments $ 80,767,941
Restricted cash and investments 3,255,657
Receivables:

Accounts 2,572,019
Interest 608,320
Intergovernmental 4,528,496
Other assets 160,769
Long-term leases receivable 1,498,888
Long-term notes receivables 1,137,752
Capital Assets:

Nondepreciable 46,963,575
Depreciable, net of accumulated depreciation 99,871,264 Total Assets $ 241,364,681

DEFERRED OUTFLOWS OF RESOURCES
Pension adjustments $ 16,912,258
OPEB adjustments 4,275,959
Total Deferred Outflows of Resources $ 21,188,217

LIABILITIES
Accounts payable $ 3,931,301
Accrued payroll and benefits 915,225
Interest payable 12,795
Due to other governments 94,423
Unearned Revenue 7,764,914
Deposits 5,568,952
Claims payable 1,367,929
Long-term liabilities:

Due within one year
Compensated absences 484,551
Subscription liabilities 226,457
Loans payable 156,034
Due in more than one year
Net OPEB liability 7,489,653
Net pension liabilities 61,403,352
Compensated absences 2,463,793
Subscription liabilities 645,022
Loans payable 728,156
Total Liabilities $ 93,252,557

DEFERRED INFLOWS OF RESOURCES
Leases 880,290
Pension adjustments 809,411
OPEB adjustments 921,930
Total Deferred Inflows of Resources $ 2,611,631

NET POSITION
Net investment in capital assets $ 145,079,170
Restricted for:

Library 559,744
Capital projects 8,719,695
Lighting and landscape repairs and maintenance 193,606
Pensions 3,090,731
VTA 263,061
Worker's compensation claims 106,582
Total Restricted Net Position 12,933,419
Unrestricted 8,676,121
Total Net Position $ 166,688,710
The notes to the financial statements are an integral part of this statement.

Page 115 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

Page 35 ends

Net (Expense)
Revenues and
Changes in
Net Position
Operating Capital
Charges for Grants and Grants and Governmental
Functions/Programs Expenses Services Contributions Contributions Total Activities Governmental Activities:

General government $ 11,122,319 $ 5,809,508 $ 112,216 $ - $ 5,921,724 $ (5,200,595) Public safety 24,095,151 1,793,058 869,926 - 2,662,984 (21,432,167) Parks and public works 17,745,141 4,095,474 1,902,414 6,710,310 12,708,198 (5,036,943) Community development 5,734,087 6,055,131 95,126 - 6,150,257 416,170 Library services 3,716,806 2,515 118,472 - 120,987 (3,595,819) Sanitation 276,528 163,690 - - 163,690 (112,838)
Interest 41,403 - - - - (41,403)
Total Governmental Activities $ 62,731,435 $ 17,919,376 $ 3,098,154 $ 6,710,310 $ 27,727,840 (35,003,595) General revenues:

Taxes:

Property taxes 25,252,782
Sales taxes 8,330,978
Franchise taxes 1,057,483
Transient occupancy taxes 2,417,630
Other taxes 50,036
Motor vehicle in lieu 52,733
Investment earnings:

Investment earnings 2,581,393
Unrealized gains (losses) 1,201,824
Miscellaneous 1,341,229
Total general revenues 42,286,088
Change in Net Position 7,282,493
Net Position - Beginning 159,406,217
Net Position - Ending $ 166,688,710
The notes to the financial statements are an integral part of this statement.

Program Revenues

Page 116 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

FUND FINANCIAL STATEMENTS &

MAJOR GOVERNMENTAL FUNDS

Page 36 ends

Fund Financial Statements:

The Fund Financial Statements only present major funds individually while nonmajor funds are combined in a single column. Major funds are generally defined as having significant activities or balances in the current year.

Major Governmental Funds:

The Town determined that the following funds were major funds for the year ended June 30, 2025.

Individual non-major funds can be found in the supplemental section.

General Fund is the general operating fund of the Town and is used to account for all financial resources except those required to be accounted for in another fund.

Appropriated Reserves Fund is used to account for resources provided for capital projects not fully funded from other sources.

Page 117 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

GOVERNMENTAL FUNDS

BALANCE SHEET
JUNE 30, 2025

Page 37 ends

Other
Nonmajor Total
Appropriated Governmental Governmental
General Reserves Funds Funds
ASSETS
Cash & investments $ 38,724,248 $ 21,849,987 $ 10,521,798 $ 71,096,033 Restricted cash & investments 3,090,731 - 58,344 3,149,075 Receivables:

Accounts 1,842,977 423,390 211,164 2,477,531
Interest 608,320 - - 608,320
Intergovernmental 2,162,657 2,281,498 84,341 4,528,496
Other assets 160,769 - - 160,769
Leases receivable - 55,629 225,652 281,281
Long term note receivable 1,059,000 - 78,752 1,137,752
Total Assets $ 47,648,702 $ 24,610,504 $ 11,180,051 $ 83,439,257

LIABILITIES
Accounts payable $ 1,280,057 $ 2,080,943 $ 292,940 $ 3,653,940 Accrued payroll and benefits 912,732 - 2,493 915,225
Due to other governments 94,337 - - 94,337
Unearned revenue 4,029,308 3,670,811 64,795 7,764,914
Deposits 5,568,952 - - 5,568,952
Total Liabilities 11,885,386 5,751,754 360,228 17,997,368

DEFERRED INFLOWS OF RESOURCES
Leases - 53,248 134,835 188,083
Total Deferred Inflows of Resources - 1,965,150 134,835 2,099,985

FUND BALANCE
Nonspendable:

Loans receivable 159,000 - - 159,000
Restricted for:

Library - - 559,744 559,744
Capital projects - - 8,719,695 8,719,695
Repairs and maintenance - - 193,606 193,606
Pensions 3,090,731 - - 3,090,731
VTA - 263,061 - 263,061
Committed to:

Budget stabilization 7,870,639 - - 7,870,639
Catastrophic 7,870,639 - - 7,870,639
Pensions/OPEB 1,300,000 - - 1,300,000
Measure G 2018 district sales tax - 1,376,181 - 1,376,181 Special revenue funds - - 1,211,943 1,211,943
Assigned to:

Open Space 410,000 152,000 - 562,000
Parking - 292,000 - 292,000
Sustainability 140,553 - - 140,553
Capital improvements 1,983,271 14,760,358 - 16,743,629
Carryover encumbrances 6,367 - - 6,367
Comcast PEG - 50,000 - 50,000
Compensated absences 1,519,243 - - 1,519,243
Market fluctuations 1,201,824 - - 1,201,824
Unassigned 10,211,049 - - 10,211,049
Total Fund Balances 35,763,316 16,893,600 10,684,988 63,341,904 Total Liabilities, Deferred Inflows
of Resources and Fund Balances $ 47,648,702 $ 24,610,504 $ 11,180,051 $ 83,439,257 The notes to the financial statements are an integral part of this statement.

Page 118 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE GOVERNMENT-WIDE STATEMENT OF NET
POSITION – GOVERNMENTAL ACTIVITIES
JUNE 30, 2025

Page 38 ends

Fund Balance - Total Governmental Funds $ 63,341,904
Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds because of the following:

CAPITAL ASSETS
Capital assets used in the Governmental Activities are not financial resources and, therefore, are not reported in the Governmental Funds. 146,526,246

ALLOCATION OF INTERNAL SERVICE FUND NET POSITION
Internal service funds are used by management to charge the cost of management of certain activities such as insurance, central services and maintenance to individual governmental funds. The net current assets of the internal service funds are therefore included as Governmental Activities in the Statement of Net Position. 8,764,351

DEFERED OUTFLOWS AND INFLOWS OF RESOURCES
The differences from benefit plan assumptions and estimates versus actuals are not included in the plan's actuarial study until the next fiscal year and are reported as deferred inflows or deferred outflows of resources in the statement of net position.

Deferred outflows of resources:

PERS Miscellaneous Plan adjustments $ 7,066,321
PERS Safety Plan adjustments 9,845,937
OPEB plan adjustments 4,275,959 21,188,217
Deferred Inflows of resources:

PERS Safety Plan adjustments $ (809,411)
OPEB plan adjustments (921,930) (1,731,341)

DEFERRED INFLOWS OF RESOURCES
Revenues from grants that are funded in this fiscal year that will not be collected for several months after the Town's fiscal year end are not considered available and are classified as deferreed inflows of resources in the governmental funds. 1,911,902

LONG-TERM LIABILITIES
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the Governmental Funds.

Subscription liabilities $ (587,030)
Loans payable (884,190)
Net Pension Liabilities (61,403,352)
Net OPEB Liability (7,489,653)
Compensated absences (2,948,344) (73,312,569)
Net Position - Governmental Activities $ 166,688,710
The notes to the financial statements are an integral part of this statement.

Page 119 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

Page 39 ends

Other
Nonmajor Total
Appropriated Governmental Governmental
General Reserves Funds Funds

REVENUES
Property Taxes $ 25,266,865 $ - $ 38,650 $ 25,305,515
Sales Taxes 8,330,978 - - 8,330,978
Transient Occupancy Taxes 2,417,630 - - 2,417,630
Other Taxes 5,004 - 22,516 27,520
Licenses & Permits 9,657,327 158,732 261,629 10,077,688 Intergovernmental 1,357,594 7,830,241 1,850,488 11,038,323 Charges for Services 5,749,950 898,553 - 6,648,503
Fines and Forfeitures 420,127 - - 420,127
Franchise Fees 1,057,483 - - 1,057,483
Interest 3,151,243 200,349 431,626 3,783,218
Use of Property 76,161 91,284 274,633 442,078
Other 190,105 477,300 80,854 748,259
Total Revenues 57,680,467 9,656,459 2,960,396 70,297,322

EXPENDITURES
Current:

General Government 10,884,414 - - 10,884,414
Public Safety 20,827,888 - - 20,827,888
Parks and Public Works 10,717,231 - 111,743 10,828,974
Community Development 5,637,742 - - 5,637,742
Library Services 3,568,496 - 82,862 3,651,358
Sanitation and Other - - 274,188 274,188
Capital Outlay 65,000 12,910,018 2,570,656 15,545,674
Debt service:

Principal 206,380 - - 206,380
Interest 41,403 - - 41,403
Total Expenditures 51,948,554 12,910,018 3,039,449 67,898,021

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 5,731,913 (3,253,559) (79,053) 2,399,301

OTHER FINANCING SOURCES (USES)
Transfers in 812,411 1,783,080 - 2,595,491
Transfers (out) (1,843,080) (701,491) (110,920) (2,655,491) Total Other Financing Sources (Uses) (1,030,669) 1,081,589 (110,920) (60,000) NET CHANGES IN FUND BALANCES 4,701,244 (2,171,970) (189,973) 2,339,301 BEGINNING FUND BALANCES 31,062,072 19,065,570 10,874,961 61,002,603 ENDING FUND BALANCES $ 35,763,316 $ 16,893,600 $ 10,684,988 $ 63,341,904 The notes to the financial statements are an integral part of this statement.

Page 120 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

RECONCILIATION OF THE GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES TO THE GOVERNMENT-WIDE
STATEMENT OF ACTIVITIES – GOVERNMENTAL ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

Page 40 ends

NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 2,339,301 Amounts reported for Governmental Activities in the Statement of Activities are different because of the following:

CAPITAL ASSET TRANSACTIONS
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.

Expenditures for capital assets (additions) $ 13,404,632 Current year depreciation (5,743,441) 7,661,191
Gains and losses from the disposal of capital assets are not considered current financial resources and are not recorded in the governmental fund statement of revenues and expenditures but are recorded in the government-wide statement of activities because they are economic resources. (892)

LONG-TERM DEBT PROCEEDS AND PAYMENTS
Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position.

Subscription Liabilities Principal Payments 50,347
PG&E Loan 156,033

UNAVAILABLE REVENUE
Revenues from grants that are funded in this fiscal year that will not be collected for several months after the Town's fiscal year end are not considered available and are classified as deferred inflows of resources in the governmental funds. (1,152,891)

COMPENSATED ABSENCES
In governmental funds, compensated absences such as vacations and sick leave are expenditures 162,613

OPEB PLAN CONTRIBUTIONS AND EXPENSE
In governmental funds, actual contributions to OPEB plans are reported as expenditures in the year incurred. However, in the Government-Wide Statement of Activities, only the current year OPEB expense as noted in the plans' valuation reports is reported as an expense, as adjusted for deferred inflows and outflows of resources. 582,395

PENSION PLAN CONTRIBUTIONS AND EXPENSE
In governmental funds, actual contributions to pension plans are reported as expenditures in the year incurred. However, in the Government-Wide Statement of Activities, only the current year pension expense as noted in the plans' valuation reports is reported as an expense, as adjusted for deferred inflows and outflows of resources. (3,745,405)

ALLOCATION ON INTERNAL SERVICE FUND ACTIVITY
Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of the internal service fund is reported with governmental activities. 1,229,801 CHANGE IN NET POSITION - GOVERNMENTAL ACTIVITIES $ 7,282,493 The notes to the financial statements are an integral part of this statement. when taken. However, in the Government Wide Statement of Activities, the current year change in the compensated absences liability is reported.

Page 121 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

GENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL (GAAP)
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

Page 41 ends

Variance With
Final Budget
Original Final Positive
Budget Budget Actual (Negative)

REVENUES
Property Taxes $ 25,204,691 $ 25,102,070 $ 25,266,865 $ 164,795 Sales Taxes 7,885,517 7,841,645 8,330,978 489,333
Transient Occupancy Taxes 2,332,419 2,332,419 2,417,630 85,211 Other Taxes 7,000 7,000 5,004 (1,996)
Licenses & Permits 8,253,715 9,087,746 9,657,327 569,581 Intergovernmental 1,015,439 1,265,444 1,357,594 92,150
Charges for Services 4,786,513 5,168,358 5,749,950 581,592 Fines and Forfeitures 315,200 325,200 420,127 94,927
Franchise Fees 1,041,330 1,013,330 1,057,483 44,153
Interest 1,764,425 1,427,333 3,151,243 1,723,910
Use of Property 55,143 55,143 76,161 21,018
Other 485,273 248,413 190,105 (58,308)
Total Revenues 53,146,665 53,874,101 57,680,467 3,806,366

EXPENDITURES
Current:

General Government:

Town Council 206,235 219,813 222,953 (3,140)
Town Attorney 943,589 1,085,157 1,076,252 8,905
Administrative Services 6,397,313 6,942,452 6,428,015 514,437 Non-Departmental 3,440,213 3,773,154 3,157,194 615,960
Total General Government 10,987,350 12,020,576 10,884,414 1,136,162 Public Safety 21,956,480 22,832,439 20,827,888 2,004,551 Parks & Public Works 10,394,397 11,210,625 10,717,231 493,394 Community Development 5,577,310 5,706,062 5,637,742 68,320 Library Services 3,398,711 3,591,990 3,568,496 23,494
Capital Outlay - 65,000 65,000 -
Debt Service:

Principal 156,034 156,034 206,380 (50,346)
Interest - - 41,403 (41,403)
Total Expenditures 52,470,282 55,582,726 51,948,554 3,634,172

EXCESS (DEFICIT) OF REVENUES
OVER EXPENDITURES 676,383 (1,708,625) 5,731,913 7,440,538

OTHER FINANCING SOURCES (USES)
Transfers In 595,411 812,411 812,411 -
Transfers Out (1,754,083) (1,782,575) (1,843,080) (60,505) Total Other Financing Sources (Uses) (1,158,672) (970,164) (1,030,669) (60,505) NET CHANGES IN FUND BALANCE $ (482,289) $ (2,678,789) 4,701,244 $ 7,380,033 BEGINNING FUND BALANCE 31,062,072
ENDING FUND BALANCE $ 35,763,316
The notes to the financial statements are an integral part of this statement.

Page 122 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

PROPRIETARY FUNDS -

INTERNAL SERVICE FUNDS

Page 42 ends

Internal service funds account for Town operations financed and operated in a manner similar to a private business enterprise. The intent of the Town is that the cost of providing goods and services to other Town funds be financed through user charges to those funds.

The concept of major funds does not extend to internal service funds because they are used for internal activities only. In the Government-Wide Statement of Activities, the net revenues and expenses of the internal service funds are allocated to the Town Departments or programs that generated them, thus eliminating internal service funds.

Page 123 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

PROPRIETARY FUNDS -

STATEMENT OF NET POSITION
JUNE 30, 2025

Page 43 ends

Governmental
Activities
Internal Service
Funds
ASSETS
Current Assets:

Cash & investments $ 9,671,908
Restricted cash & investments 106,582
Accounts Receivable 94,488
Total current assets 9,872,978
Noncurrent Assets:

Leases receivable 1,217,607
Subscription assets, net 308,593
Total noncurrent assets 1,526,200
Total Assets $ 11,399,178

LIABILITIES
Current Liabilities:

Accounts payable $ 277,361
Due to other governments 86
Interest payable 12,795
Subscription liabilities - Current 172,839
Total current liabilities 463,081
Noncurrent liabilities:

Claims payable 1,367,929
Subscription liabilities 111,610
Total noncurrent liabilities 1,479,539
Total Liabilities $ 1,942,620

DEFERRED INFLOWS OF RESOURCES
Leases $ 692,207

NET POSITION
Net Investment in capital assets $ 24,144
Restricted for workers compensation claims 106,582
Unrestricted 8,633,625
Total Net Position $ 8,764,351
The notes to the financial statements are an integral part of this statement.

Page 124 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

PROPRIETARY FUNDS -

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN NET POSITION
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

Page 44 ends

Governmental
Activities
Internal Service
Funds

OPERATING REVENUES
Charges for services $ 5,891,269
Use of money and property 137,633
Other local taxes 22,516
Other revenue and reimbursements 374,198
Total Operating Revenues 6,425,616

OPERATING EXPENSES
Insurance expenses 1,846,975
Services and Supplies 2,918,143
Insurance claims 373,944
Depreciation/amortization 202,422
Total Operating Expenses 5,341,484
Operating Income (Loss) 1,084,132

NONOPERATING REVENUE (EXPENSES)
Investment earnings 85,669
Income (loss) before transfers 1,169,801
Transfers in 60,000
Change in Net Position 1,229,801
BEGINNING NET POSITION 7,534,550
ENDING NET POSITION $ 8,764,351
The notes to the financial statements are an integral part of this statement.

Page 125 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

PROPRIETARY FUNDS -

STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

Page 45 ends

Governmental
Activities
Internal Service
Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 6,100,761
Payments to suppliers (5,089,089)
Insurance reimbursements 330,789
Claims paid (512,165)
Net cash provided (used) by operating activities 830,296

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers In 60,000
Net cash provided (used) by noncapital financing activities 60,000

CASH FLOWS FROM CAPITAL RELATED FINANCING ACTIVITIES
Interest paid (7,148)
Principal paid (161,332)
Net cash provided (used) by capital related financing activities (168,480)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash collected from investment eanings 85,669
Net cash provided (used) Investing Activities 85,669
Net Increase(Decrease) in Cash and Investments 807,485
Cash and investments - beginning of year 8,971,005
Cash and investments - end of year $ 9,778,490
Reconciliation of Operating Income to Cash Flows
from Operating Activities:

Operating Income $ 1,084,132
Adjustments to reconcile operating income to cash flows from operating activities:

Depreciation/amortization 202,422
Change in assets and liabilities:

Accounts receivables (55,077)
Leases receivable 190,076
Deferred inflows of resources (129,065)
Accounts payable 59,844
Claims payable (522,063)
Cash Flows From Operating Activities $ 830,296
Cash and cash equivalents:

Cash and investments $ 9,671,908
Restricted cash and investments 106,582
Total cash and cash equivalents $ 9,778,490
The notes to the financial statements are an integral part of this statement.

Page 126 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

FIDUCIARY FUNDS

Page 46 ends

Trust funds are used to account for assets held by the Town as a trustee agent for individuals, private organizations and other governments. The financial activities of these funds are excluded from the government-wide financial statements but are presented in separate Fiduciary Fund financial statements.

RDA Successor Agency Private Purpose Trust Fund was established to account for the assets and liabilities transferred from the dissolution of the Town’s former Redevelopment Agency and the continuing operations related to existing Redevelopment Agency obligations.

Page 127 ends

ITEM NO. 7.

Page 47 ends

RDA
Successor
Agency
ASSETS
Cash and investments $ 2,132,669
Restricted cash and investments 2,167,505
Loans receivable 645,410
Capital assets:

Depreciable, net of accumulated depreciation 896,107
Total Assets $ 5,841,691

LIABILITIES
Accounts payable $ 36
Interest payable 160,530
Long-term debt:

Due within one year 1,550,000
Due in more than one year 7,168,270
Total Liabilities $ 8,878,836

NET POSITION
Restricted for RDA $ (3,037,145)
Total Net Position $ (3,037,145)
The notes to the financial statements are an integral part of this statement.

TOWN OF LOS GATOS

FIDUCIARY FUNDS

STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2025

Page 128 ends

ITEM NO. 7.

Page 48 ends

RDA
Successor
Agency

ADDITIONS
Property taxes $ 1,951,721
Investment earnings 130,367
Total Additions 2,082,088

DEDUCTIONS
Program expenses of former RDA 1,718
Payments to other governments 5,394
Interest and fiscal agency expenses of RDA 359,258
Depreciation expense 120,823
Total Deductions 487,193
CHANGE IN NET POSITION 1,594,895
NET POSITION - BEGINNING OF YEAR (4,632,040)
NET POSITION - END OF YEAR $ (3,037,145)
The notes to the financial statements are an integral part of this statement.

TOWN OF LOS GATOS

PRIVATE PURPOSE TRUST FUNDS

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

Page 129 ends

ITEM NO. 7.

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This Page Left Intentionally Blank

Page 130 ends

ITEM NO. 7.

Page 50 ends

Notes to Basic Financial Statements

Page 131 ends

ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

Page 51 ends

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of the Financial Reporting Entity
The Town of Los Gatos (the “Town”) operates under a Council-Manager form of government and provides the following services; public safety (including police and emergency management), parks and public works, community development, library, public improvements, planning and zoning, and general administration services. Redevelopment services were provided primary through the Redevelopment Agency of the Town which was dissolved on February 1, 2012.

The Town is largely a residential community located in the foothills of the Santa Cruz Mountains and was incorporated as a municipal corporation in 1887. The Town’s population as of January 1, 2025, was 33,355.

As required by generally accepted accounting principles, these financial statements present the Town as the Primary Government and any component units for which the Town is considered financially accountable.

B. Description of Blended Component Units
The Town did not report any component units as a part of the primary government because the Town Council was not the governing body of any entities and no separate entity provided services entirely to the Town.

C. Description of Joint Ventures and Public Entity Risk Pool As described in Note 13, the Town participates in two joint ventures and public entity risk pool activities through formally organized separate legal entities. The financial activities of the Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA) and the Local Agency Workers’ Compensation Excess Joint Powers Authority (“LAWCX”) are not included in the accompanying basic financial statements as boards separate from and independent of the Town administer them.

D. Basis of Presentation
The Town’s Basic Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board (“GASB”) is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the U.S.A.

The accompanying financial statements are presented on the basis set forth in Government Accounting Standards Board Statements No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, No. 36, Recipient Reporting for Certain Non-exchange Revenues, an Amendment of GASB Statement No. 33, No. 37, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments; Omnibus, and No. 38, Certain Financial Statement Note Disclosures.

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

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These Statements require that the financial statements described below be presented.

Government-wide Statements: The Statement of Net Position and the Statement of Activities display information about the primary government (the Town). These statements include the financial activities of the overall Town government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements present governmental activities of the Town. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.

The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the Town’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meet the operational needs of a particular program, and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements: The fund financial statements provide information about the Town's funds, including fiduciary funds and blended component units. Separate statements for each fund category—governmental, proprietary and fiduciary—are presented. The emphasis of fund financial statements is on major individual governmental funds, each of which is displayed in a separate column. All remaining governmental are aggregated and reported as nonmajor funds.

Internal service funds of the Town (which provide services primarily to other funds of the Town) are presented, in summary form, as part of the proprietary fund financial statements. Since the principal users of the internal services are the Town’s governmental activities, financial activities of the internal service funds are presented in the governmental activities column when presented at the government-wide level. The costs of these services are allocated to the appropriate function/program in the Statement of Activities.

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities.

E. Major Funds
GASB defines major funds and requires that the Town’s major governmental funds be identified and presented separately in the fund financial statements. All other funds, called nonmajor funds, are combined and reported in a single column, regardless of their fund-type.

Major funds are defined as funds that have assets, deferred outflows of resources, liabilities, deferred outflows of resources, revenues or expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand total. The General Fund is always a major fund. The Town may also select other funds it believes should be presented as major funds.

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

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The Town reported the following major governmental funds in the accompanying financial statements:

General Fund is the general operating fund of the Town and is used to account for all financial resources except those required to be accounted for in another fund.

Appropriated Reserves Fund is used to account for resources provided for capital projects not fully funded from other sources.

The Town also reports the following fund types:

Internal Service Funds are used to account for services that are provided to other departments on a cost-reimbursement basis. Those services include workers compensation, self-insurance, facilities maintenance, information technology, and equipment.

Fiduciary Funds include Private-Purpose Trust Funds used to account for assets held by the Town as an agent for individuals, private organizations, and other governments. The financial activities of this fund are excluded from the government-wide financial statement but are presented in separate Fiduciary Fund financial statements. Fiduciary Fund Financial Statements include a statement of net position and a statement of changes in net position. Fiduciary funds are presented using the “economic resources measurement focus” using the accrual basis of accounting.

The Town reported the following Fiduciary Funds in the accompanying financial statements:

RDA Successor Agency Private Purpose Trust Fund accounts for the assets, liabilities, and operations transferred from the dissolution of the Town’s Redevelopment Agency, which includes the following:
• Certificates of Participation issued to finance several capital improvement projects throughout the Town.
• Redevelopment projects and related property tax revenue. • Affordable Housing Set-Aside Program obligations.
• Repayment of obligations incurred by the Town’s Redevelopment Agency prior to its dissolution.

F. Basis of Accounting
The government-wide and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The Town considers property tax revenues reported in the governmental funds to be

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

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available if the revenues are collected or are reasonably expected to be collected within sixty days after year-end. For revenues other than property taxes, the Town generally applies the sixty-day period rule when considering the measurable and available criteria. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which is recognized upon becoming due and payable; and except for claims, judgments, and compensated absences, which are recognized when estimable and probable. Governmental capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of governmental long-term debt and acquisitions under leases are reported as other financing sources.

Those revenues susceptible to accrual are property and sales taxes, certain intergovernmental revenues, and interest revenue. Fines, forfeitures, licenses and permits, and charges for services are not susceptible to accrual because they are not measurable until received in cash.

Non-exchange transactions, in which the Town gives or receives value without directly, receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed.

Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

The Town may fund programs with a combination of cost-reimbursement grants, categorical block grants and/or general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The Town’s policy is to first apply restricted grant resources to such programs followed by general revenues as necessary.

Certain indirect costs are included in program expenses reported for individual functions and activities.

The Town applies all applicable GASB pronouncements for certain accounting and financial reporting guidance including those applicable to accounting and reporting for proprietary operations.

In December of 2010, GASB issued GASB No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. This statement incorporates pronouncements issued on or before November 30, 1989 into GASB authoritative literature. This includes pronouncements by the Financial Accounting Standards Board (FASB), Accounting Principles Board Opinions (APB), and the Accounting Research Bulletins of the American Institute of Certified Public Accountants' (AICPA) Committee on Accounting Procedure, unless those pronouncements conflict with or contradict with GASB pronouncements.

Pensions - For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Town’s California Public Employees’ Retirement System (CalPERS) plans (the Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.

Investments are reported at fair value.

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

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Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
Other Postemployment Benefit (OPEB) Expense
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense information about the fiduciary net position of the Town’s Retiree Benefits Plan (the OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis as they are reported by the OPEB Plan. For this purpose, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value. Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
Cash and Cash Equivalents - The Town’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

State of California statutes and the Town’s investment policy authorize the Town to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, collateralized, non-negotiable certificates of deposits, commercial paper rated A-1/P-1, medium-term corporate notes rated A or its equivalent or better by Moody’s or Standard & Poor’s, asset backed corporate notes, bankers’ acceptances, mutual funds, and the State Treasurer’s investment pool (Local Agency Investment Fund).

The Town does not enter into repurchase or reverse repurchase agreements.

Restricted Cash and Investments - Certain restricted cash and investments are held by fiscal agents for pension stabilization, worker’s compensation insurance, and Successor Agency debt service obligations.

Investments - Investments are recorded at fair value in accordance with GASB Statement No. 72, Fair Value Measurement and Application. Accordingly, the change in fair value of investments is recognized as an increase or decrease to investment assets and investment income.

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction. In determining this amount, three valuation techniques are available:
• Market approach - This approach uses prices generated for identical or similar assets or liabilities.

The most common example is an investment in a public security traded in an active exchange such as the NYSE.
• Cost approach - This technique determines the amount required to replace the current asset. This approach may be ideal for valuing donations of capital assets or historical treasures. • Income approach - This approach converts future amounts (such as cash flows) into a current discounted amount.

Each of these valuation techniques requires inputs to calculate a fair value. Observable inputs have been maximized in fair value measures, and unobservable inputs have been minimized.

Materials, Supplies and Deposits (Other Assets) - These assets are held for consumption and are stated at cost using the first-in, first-out method. The costs are recorded as expenditures at the time the item is consumed.

Interfund Receivables and Payables - Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “advances to/advances from other funds.” All other outstanding balances between funds are reported as “due to/from other funds.”
Advances - Advances between funds and due from/to other funds are offset by a nonspendable fund balance in applicable Town funds to indicate the extent to which they are not available for appropriation and are not expendable available financial resources.

Capital Assets - Capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets or donated works of art and similar items should be reported at acquisition value rather than fair value. Also, note that capital assets received in a service concession arrangement should be reported at acquisition value rather than fair value.

Capital assets, including infrastructure, are recorded if acquisition or construction costs exceeds $10,000.

As required by GASB, the Town depreciates and amortizes capital assets with limited useful lives over their estimated useful lives. The purpose of depreciation/amortization is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each year represents that year’s pro rata share of the cost of capital assets. The Town depreciates/amortizes using the straight-line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated.

Intangible right-to-use lease assets are amortized over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the Town has determined is reasonably certain of being exercised, then the lease asset is amortized over the useful life of the

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

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underlying asset. Intangible right-to-use subscription assets are amortized over the shorter of the subscription term or the useful life of the underlying IT asset.

The Town has assigned the useful lives listed below to capital assets:

Buildings 25-40 years
Improvements 25-40 years
Machinery and equipment 2-20 years
Furniture and fixtures 5-12 years
Software 5-7 years
Infrastructure 20-40 years
Major capital outlay for capital assets and improvements are capitalized as projects are constructed.

Capital assets may be acquired using federal and state grants, contributions from developers, and contributions or grants from other governments. GASB 34 requires that these contributed assets be accounted for as revenue at the time they are contributed.

Leases Receivable - The Town’s leases receivable are measured at the present value of lease payments expected to be received during the lease terms. The present value, net of accumulated amortization, is reported as deferred inflows of resources is recorded for leases. Deferred inflows of resources are recorded at the initiation of the leases in an amount equal to the initial recording of the leases receivable, plus incentive payments received. Amounts recorded as deferred inflows of resources from the leases are amortized on a straight-line basis over the term of the lease.

Deferred Compensation Plan - The Town established a deferred compensation plan created in accordance with California Government Code Section 53212 and Internal Revenue Code Section 457. The plan, available to all Town employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Deferred compensation plans are not reported as part of the Town’s assets or liabilities, as the deferred compensation plan trustees hold those funds in trust on behalf of employees until the employees are eligible to receive the benefits.

Compensated Absences - The Town recognizes a liability for compensated absences for leave time that (1) has been earned for services previously rendered by employees, (2) accumulates and is allowed to be carried over to subsequent years, and (3) is more likely than not to be used as time off or settled during or upon separation from employment. Based on the criteria listed, two types of leave qualify for liability recognition for compensated absences – vacation and sick leave. The liability for compensated absences is reported as incurred in the government-wide and proprietary fund financial statements. The liability for compensated absences includes salary-related taxes and benefits, where applicable.

Accumulated vacation, sick pay, and other employee benefits are accrued as earned. Upon termination, employees are paid for all unused vacation at their current hourly rates. Sick leave

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

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earned is cashed out based on the following schedule for employees with at least 150 hours accrued and up to a maximum amount as specified under labor contract provisions:

For employees under contract 1-59 months 25.0%
For employees under contract 60-119 months 37.5%
For employees under contract 120 months or more 50.0%
The Town’s liability for compensated absences is determined annually. For all governmental funds, amounts expected to be paid out of current financial resources are recorded as liabilities of each fund; the long-term portion is recorded in the Statement of Net Position. The changes of the compensated absences were as follows:

Compensated absences are liquidated by the fund that has recorded the liability. The long-term portion of governmental activities compensated absences is liquidated primarily by the General Fund. Only compensated absences related to terminated employees are reported in the fund financial statements.

Unearned Revenue - Unearned revenue arises when assets are received before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are recorded as deferred inflows from unearned revenue. In the governmental fund financial statements, receivables associated with non-exchange transactions that will not be collected within the availability period have been recorded as deferred inflows from unavailable revenue.

Long-Term Liabilities - In the government-wide financial statements and private-purpose trust funds long-term debt and other long-term obligations are reported as liabilities in the applicable statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Subscription Based Information Technology Arrangements - The Town recognizes subscription liabilities with an initial, individual value of $100,000 or more. The Town uses its estimated incremental borrowing rate to measure subscription liabilities unless it can readily determine the Beginning Balance $ 3,110,957
Net change (72,470)
Ending Balance $ 3,038,487
Compensated Absences Current Portion $ 484,551

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

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interest rate in the arrangement. The Town's estimated incremental borrowing rate is calculated as described above. The Town’s estimated incremental borrowing rate is based on its most recent public debt issuance.

Deferred Outflows/Deferred Inflows of Resources - Deferred outflows of resources is a consumption of net assets by the Town that is applicable to a future reporting period, for example, contributions to pension and OPEB plans that are after the actuarial measurement date.

Deferred inflows of resources is an acquisition of net assets by the Town that is applicable to a future reporting period, for example, unavailable revenue.

Net Position - In the government-wide financial statements, net position is classified in the following categories:

Net Investment in Capital Assets - This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the assets. In addition, deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt also are included in the net investment in capital assets component of net position.

Restricted Net Position - This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.

Unrestricted Net Position - This amount is all net position that does not meet the definition of "net investment in capital assets" or "restricted net position." Fund Balances - The Town does not have a policy identifying a minimum unassigned fund balance.

Because amounts in the nonspendable, restricted, committed, and assigned categories are subject to varying constraints on their use, the remaining fund balances are otherwise unassigned.

In accordance with Government Accounting Standards Board 54, Fund Balance Reporting and Governmental Fund Type Definitions, the Town classifies governmental fund balances as follows:

Nonspendable includes fund balance amounts that cannot be spent either because it is not in spendable form or because of legal or contractual constraints.

Restricted includes fund balance amounts that are constrained for specific purposes which are externally imposed by providers, such as creditors or amounts constrained due to constitutional provisions or enabling legislation.

Committed includes fund balance amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority and does not lapse at year-end. Committed fund balances are imposed by the Town Council.

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

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Assigned includes fund balance amounts that are intended to be used for specific purposes that are neither considered restricted or committed. Fund balance may be assigned by the Town Manager or the Finance Director.

Unassigned includes fund balances within the funds which have not been classified within the above-mentioned categories. The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

The Town uses restricted/committed amounts to be spent first when both restricted and unrestricted fund balance is available unless there are legal documents/contracts that prohibit doing this, such as a grant agreement requiring dollar for dollar spending. Additionally, the Town would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made.

Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the dates of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting periods. Actual results could differ from those estimates.

Subsequent Events - Management has considered subsequent events through November 19, 2025, the date which the financial statements were available to be issued. The financial statements include all events or transactions, including estimates, required to be recognized in accordance with generally accepted accounting principles. Management has determined that there are no non-recognized subsequent events that require disclosure.

Property Tax Levy, Collection and Maximum Rates - State of California Constitution Article XIII A provides that the combined maximum property tax rate on any given property may not exceed 1% of its assessed value unless an additional amount for general obligation debt has been approved by voters. Assessed value is calculated at 100% of market value as defined by Article XIII A and may be adjusted by no more than 2% per year unless the property is sold, transferred, or substantially improved. The State Legislature has determined the method of distribution of receipts from a 1% tax levy among the counties, cities, school districts and other districts.

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ITEM NO. 7.

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2025

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The County of Santa Clara assesses properties, bills for and collects property taxes on the following schedule:

Secured Unsecured
Valuation/lien dates January 1 January 1
Levy dates January 1 January 1
Due dates (delinquent as of) 50% on November 1 (December 10) March 1 (August 31) 50% on February 1 (April 10)
The term "unsecured" refers to taxes on personal property other than land and buildings. These taxes are secured by liens on the property being taxed. Property taxes levied are recorded as revenue and receivables when they are collected during the fiscal year of levy or within 60 days of year-end.

Budgets and Budgetary Accounting - The Town follows the procedures below when establishing the budgetary data reflected in the financial statements:

1. The Town Manager submits to the Town Council a proposed operating and capital improvement budget for the fiscal year commencing the following July 1. The budgets include the proposed expenditures and the means of financing them.

2. Public hearings are conducted to obtain taxpayer comments.

3. The budget is legally enacted through adoption of Town resolution by Council.

4. The Town Manager is authorized to implement the programs as approved in the adopted budget.

Within a specific fund, the Town Manager may transfer appropriations between categories, departments, projects and programs as needed to implement the adopted budget, whereas the Town Council must authorize budget increases and decreases, and transfers between funds.

5. Budgets are adopted on a basis consistent with generally accepted accounting principles except for proprietary funds which budget for capital outlays but not depreciation. Budgets were adopted for the General Fund, Special Revenue Funds, Internal Service Funds, and Capital Projects Funds.

6. Budgeted amounts are as originally adopted or as amended by Town Council. Individual amendments were not material in relation to original appropriations.

Excess of Expenditures over Appropriations - There were no significant expenditures in excess of budget during for the year ended June 30, 2025.

Encumbrances - Under encumbrance accounting, purchase orders, contract and other commitments for expenditures are recorded in order to reserve that portion of the applicable appropriation.

Encumbrance accounting is employed as an extension of formal budgetary integration in all funds.

Encumbrances outstanding at year-end are reported as commitments or assignments of fund balances since they do not constitute expenditures or liabilities; unexpended and unencumbered appropriations lapse at year end in all funds. Encumbered appropriations are carried forward to the following year.

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Los Gatos City CouncilDecember 16, 2025

Los Gatos City Council
December 16, 2025