Los Gatos Weekly-Times

Town Manager: David Knapp

Focus is on capital improvements as council approves $17 million budget

Separate departments consolidated into Parks and Public Works, and car tax creates uncertainty

By Jeff Kearns

The budget for the upcoming fiscal year sailed through the Town Council virtually unchanged last week. After making only one minor change to the document, councilmembers approved spending $17,046,810--a 3 percent increase over last year's budget.

The current proposal, which the council is expected to adopt June 15, is a balanced budget, but finance director Michele Braucht says the town's biggest worry at this point is losing the state vehicle-license fee money.

Gov. Pete Wilson and many Assembly Republicans are pushing for a repeal of the tax, which is a major source of funding for local governments. Los Gatos currently receives about $1 million per year from the state tax.

"Nobody really knows what the state's going to do," Braucht says.

Aside from the looming questions about the car tax, the town's budget is balanced and healthy, Braucht says, with no funding cuts and all town services surviving intact.

In a memo to the council, Town Manager Dave Knapp warns that things aren't always going to be so economically rosy.

"Even as area economic performance continues to increase, there are indications of market constraints that will lead to a slowdown in economic activity," Knapp writes, citing statistics compiled by Joint Venture: Silicon Valley that show "that employment has grown faster than the local labor supply since 1994."

This results in commuting increases and housing that is out of reach for most families, and is reflected in a budget that emphasizes capital improvements, which took about $3 million, most of it for street repairs.

The only funding change councilmembers made to the budget was to bump up funding for the Chamber of Commerce, which actually restores the Chamber's $20,000 allocation for the current fiscal year, which ends June 30.

The council voted unanimously on a motion by Steve Blanton to increase the Chamber's funding from $15,500. Due to miscommunication between the town and the Chamber, the Chamber requested less than it intended.

Blanton also made a motion to increase the budget for A Place for Teens by $5,000 and to give an extra $1,000 to the Art Docents of Los Gatos, but couldn't get the rest of the council behind him. The Outhouse had petitioned the town for an increase in funding, citing support from the town as a crucial factor when petitioning other organizations for funding, but the nonprofit teen center walked away with its original allocation of $3,330.

The art docents group also took home $4,000, as recommended by the Community Services Commission.

Joanne Benjamin argued that while it may be easy to fund popular organizations during economic boom times, it's much harder to come back in subsequent years and pull the same funding when the economy weakens.

"Local government shouldn't be the deep pocket for lots of organizations," she said.

In all, the commission allocated $97,330 in grants to nonprofit community agencies.

The town will also be consolidating the Parks, Forestry and Maintenance and the Building and Engineering Services departments into a single department: Parks and Public Works.

Several budget categories will be consolidated in the next fiscal year as the town prepares for its first year of full-cost accounting. This should give the town a better idea how its money is being spent, Braucht said. The move should make things simpler for people to read, but at the same time, a more complicated computer system can also produce more detailed reports and audits.

A study of full-cost accounting will be done during the upcoming fiscal year and will be fully implemented for 1999-2000.

The town currently performs cost analyses of how many expenditures are covered by related fees, such as those for building permits or plan checking, but the new system should give town officials a more accurate picture of how costs are recovered.

The town will hire an outside cost-accounting consultant, probably later this year, to help make the transformation.

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