Despite gloomy projections, the Los Gatos Town Council Tuesday night unanimously approved a balanced budget for the 2024-25 fiscal year.
Town staff called the $59.6 million budget “status quo,” meaning services will continue at current levels.
“Even with areas of continued uncertainty, this budget positions the organization well for continued excellence in service delivery to the community,” the summary budget reads.
Earlier this year, staff forecasted a budget deficit of about $2 million a year for the next five fiscal years. The projected deficit can be addressed in 2024-25 with “expenditure controls and the use of one-time funds,” according to a staff report.
These expenditure controls include leaving the town’s employee vacancy rate at 4.6%, which allows for roughly $1.8 million in savings.
“Providing current service levels to the community in future fiscal years will require a strong return to pre-pandemic performance of the town’s economically sensitive revenues and/or revenue enhancements,” the summary budget reads.
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The $2 million projected deficit, however, marks a drop compared to last year’s forecast, which set the annual deficit at $2.8 million to $4 million.
The budget approval on Tuesday night comes after the council voted on May 21 to redirect $150,000 from the downtown streetscape revitalization project, which helped fund the town’s economic recovery from the pandemic, to further support services provided by local nonprofits
The council also voted on May 21 to begin the process of putting a one-eighth cent sales tax hike on the ballot this fall, a specific tax that would raise roughly $1 million in annual revenues to fund specific services like police, improved traffic flow or protection against wildfires.
