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Consultants warn Los Gatos of a manageable but growing structural deficit; pension, impact fees and capital priorities highlighted
Summary
Consultants presented a 10‑year financial model showing expenditures growing faster than revenue under the base case, producing a structural deficit that rises from about $200,000 in FY26 to several million by 2036; consultants urged the town to model scenarios using pension/OPEB trusts, development impact fees and capital prioritization.
Los Gatos — Consultants retained to evaluate the town’s fiscal condition delivered a detailed long‑term forecast and fiscal‑impact analysis, telling the council the town faces a manageable structural deficit unless policy changes are made.
Jonathan Ingram of Raftelis and Mark Northcross of NHA Advisors presented a base‑case model that anticipates general fund revenues growing roughly 3.6% per year and expenditures growing roughly 4.1% per year. In the model the gap produces an initial shortfall of about $200,000 in fiscal year 2026 that grows over time; by 2036 the cumulative annual shortfall could reach several million dollars under current assumptions.
Key drivers are personnel costs (salaries, overtime and benefits), pension and OPEB obligations, and long‑term capital needs. Ingram said the base case holds authorized staffing flat (152.5 FTEs) so the…
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