The Los Gatos Town Council and staff balanced next year’s budget amid a looming five-year projected deficit. The council is set to vote on confirmation of the final budget for fiscal year 2023-24 on June 6.
Town staff said Los Gatos’ revenue has not bounced back to pre-pandemic levels, and alongside rising costs and inflation, the town has a forecasted deficit of $2.8 to $4 million per year for the next five years.
That deficit can be resolved by cutting costs and using one-time funds, but if the revenue doesn’t bounce back as expected in the coming years, the town may have to reduce or outsource its services to cut costs.
Town staff balanced the $56.1 million budget for 2023-24 by setting an vacancy rate for town employees of 4.6%, which would generate an additional $1.6 million. The vacancy rate reflects the percentage of open positions on town staff.
“The cost of service is the cost of our employees, and those costs go up…that goes up faster than our revenue,” Mayor Maria Ristow said at a May 16 council meeting. “The services our community expects are delivered by human beings, and we do know we need to look at other ways to enhance our revenue.”
However, some councilmembers were worried that the decision could restrict hiring decisions in the next year.
The town’s current vacancy rate is 8%, and if the town hires more employees to fill its rolls, it can pull from its OPEB (Other Postemployment Benefits) fund of $22 million, though financial director Gita Unvari cautioned that it would be a onetime failsafe.
The council voted to maintain the 4.6% vacancy rate with the understanding that hiring would not be impacted by the decision and the town would dip into its OPEB fund if needed.
The town announced this week the hiring of Katy Nomura as assistant town manager. Nomura previously worked as deputy city manager for the City of Cupertino.
Councilmembers wanted to increase funding for the Los Gatos-Monte Sereno Police Department, which has been short on staff for more than a year. The department is advertising it’s hiring police officers, with a salary range of $114,940 to $164,162. The department is also offering lateral signing bonuses of $10,000 and education reimbursements of $17,427 a year.
Town manager Laurel Prevetti said Los Gatos is already looking at addressing the police staffing shortage and will present a potential solution later this year.
“We’re at the point where we do need to add to our police department. We’re adding population, so we do need to think strategically about how we’re going to do that,” Prevetti said. “We have some work to do, and I’m hoping that by the end of this fiscal year I’ll be able to bring an item for your consideration so we can start talking about how to address our future needs with the help of our community.”
The council is scheduled to decide how to spend the remainder of its American Rescue Plan Act funds in August.
Source: www.mercurynews.com