Town Council
Town Hall in a stylized image. (Drew Penner / Los Gatan)

In order to finalize the budget for the upcoming year, the Town of Los Gatos needs to solve a variety of puzzles.

And on May 21, at their regularly-scheduled meeting, Council members had a hand in fitting pieces—of various shapes and sizes—into place.

This included aiming to complete the Capital Improvement Program (CIP) picture.

With nine items having been closed-out over the last year, and $7 million in new funding (plus $25.7 million to be carried forward), staff had pitched seven new projects (for a total of 65).

This list featured Blossom Hill Road traffic-calming improvements at the high end (a grant-funded, $800,000 plan), to Overlook Road tree work at the low end ($40,000).

Staff also proposed storm drainage mapping ($450,000), roof repairs for the Town Manager Office ($80,000) and sport court surfacing ($100,000), among other renovations.

In a report, staff said the Town continues to struggle to find a reliable source of revenue for the CIP.

“This year, the challenge is increasingly evident as the five-year CIP shows very little fund balance remaining in year five,” it reads. “The proposed five-year CIP reflects $10.1 million in ongoing Gas Tax dedicated sources to help fund the proposed $53.7 million of planned capital improvements.”

Outgoing Town Manager Laurel Prevetti, who announced she would be staying through the summer as the search continues for her replacement, presided over a process that seeks to balance Los Gatos’ budget by maintaining a 4.6% vacancy rate.

The meeting followed the May 13 Finance Commission meeting, where polling by Gene Bregman & Associates about a possible 1/8th-cent sales tax increase was discussed.

And it arrived on the heels of a message sent to the Town by Finance Commission Chair Phil Koen.

“A concern of the Commission was the lack of transparency regarding the use of the sales tax proceeds,” he stated. “Because of this lack of transparency, the Finance Commission recommended if the Town Council wished to proceed with a 1/8 sales tax increase, the use of proceeds should be tied to specific needs so voters clearly understood how the proceeds would be spent. By doing this, however, the sales tax measure would have to be a specific sales tax requiring two-thirds vote to pass as opposed to a general sales tax.”

Bergman & Associates found 92% of people polled rate Los Gatos as a “Good” or “Excellent” place to live, with 8% saying “Only Fair.”

When considering “very serious issues/problems” in town, “High cost of living” came in at the top, with 60% of people noting this issue, followed by “Traffic congestion” at 45%, “Need for more affordable housing” at 42%, “Need for more programs to protect against wildfires” at 31% and “Need to maintain police and emergency public safety programs” at 24%.

The majority of respondents said they were supportive of an 1/8th cent sales tax increase, however none of the “Very Important Problems That Could Be Addressed by a Sales Tax” reached the 2/3rds threshold needed for a specific tax. 

The Finance Commission looked at the City of Merced’s successful ballot measure, which renewed an existing .5% sales tax, which uses 95% of the revenue for police and fire protection and 5% for road and street maintenance. It passed with 68.5% support.

Councilmember Rob Moore said he did not prefer the specific tax option.

“—just because I think it seems unlikely to pass,” he said, questioning whether members of the Finance Commission would help campaign for a tax if a specific levy is proposed.

Councilmember Rob Rennie said if the Town goes with a general tax, members of the Finance Commission might campaign against it.

Mayor Mary Badame said she wasn’t a fan of the survey methodology.

“The questions that were asked led the responders to respond the way that they did,” she said. “They thought it was going towards police and fire services, not that it might go into a General Fund…or even wildfire management. So, to me, there’s a problem with the poll.”

Ultimately, Council 4-1 for the specific tax option, with Vice Mayor Matthew Hudes opposed.

Councilmember Rennie proposed directing new tax revenue to three specific areas the poll identified as popular—fire safety programs and emergency services; improving traffic flow; and policing. This passed unanimously.

The vote to increase the agreement with NBS Government Finance Group to $105,000 (an increase of $60,400) passed 4-1 with Vice Mayor Hudes opposed.

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Drew Penner is an award-winning Canadian journalist whose reporting has appeared in the Globe and Mail, Good Times Santa Cruz, Los Angeles Times, Scotts Valley Press Banner, San Diego Union-Tribune, KCRW and the Vancouver Sun. Please send your Los Gatos and Santa Cruz County news tips to [email protected].


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