FY 2020/21 Budget at a Glance
The Town Council of Los Gatos unanimously adopted a balanced budget for the Fiscal Year 2020/21. The Town’s fiscal year runs from July 1, 2020 through June 30, 2021. Each fiscal year the budget is adopted in June following a discussion of Council Strategic Priorities and a public hearing process. You can view the Town Budgets on our website.
For Fiscal Year 2020/21, the General Fund Expenditures by Department is programmed at $47.9 million, excluding debt payments and transfers out. In addition to the Operating Budget, the Council annually approves the Capital Improvement Budget which has $13.2 million in new funding. The Operating Budget funds day-to-day Town services while the Capital Improvement Budget funds street maintenance, park improvements, and other facility upgrades.
Where Does the Money Go?
FY 2020/21 General Fund Operating Expenditures $47.9 Million
(Excluding Debt Payments & Transfers)
The allocation of funding for key Town services aligns with the Town goals of Public Safety, Quality Public Infrastructure, Community Character, Good Governance, Fiscal Stability, and Civil Enrichment. The delivery of Town services is highly dependent on labor which comprises 59.5% of budgeted General Fund expenditures for FY 2020/21. However, as the table below illustrates, since 2001 the Town has reduced its full-time equivalent (FTE) employees by 16.7% to 150 FTE employees.
In FY 2019/20, the Town continued to endeavor to find cost containment strategies. One of the major cost drivers affecting the Town over the past decade has been increases in pension and Other Post-Employment Benefits (OPEB). During the year the Town Council Pension and OPEB Oversight Committee initiated additional discretionary payments directly to CalPERS to help mitigate pension costs and reduce the Unfunded Actuarial Liability (UAL). To date, the Town has allocated or programmed approximately $35.0 million in additional discretionary payments towards its pension and OPEB obligations. Further details regarding Town Pension and OPEB Plans is available on the Finance Department’s webpage.
Where Does the Money Come From?
FY 2020/21 General Fund Revenue by Category- $45.1 million
The Town identified early on the threats that economic downturns could pose to the Town’s primary revenue sources and service stability. In March 2018, the Town Council received a presentation from staff entitled “Preparing for the Next Recession.” Among other things, that presentation precipitated the voters of Los Gatos approving an 1/8 cent sales tax in 2018 which generates approximately $1.0 million in additional ongoing sales tax revenue annually.
Additionally, in 2019, the Town Council initiated the annexation of 24 unincorporated urban islands within the Town of Los Gatos. In addition to the efficiencies associated with the uniform provision of municipal services to island residents, the annexation ended the diversion of property tax revenue generated within Town limits to the County. The Council initiated annexation resulted in approximately $1.0 million in ongoing annual property tax revenue for the Town.
The combined effect of retaining a tradition of conservative budgeting practices, maintaining reduced staffing levels, and enhancing ongoing revenue sources prepared the Town well for this pending recession.
How Is Property Tax Distributed?
- The Town receives $9.30 of every $100 collected in property tax paid by property owners.
- The Town receives 1.125 cents of the 9.125 cents of sales tax paid per dollar of taxable sales generated in Town.