Some of Los Gatos’ key services could be cut as the town contends with looming multimillion-dollar shortfalls.
The Los Gatos Finance Commission unanimously recommended the Town Council cut expenses and increase revenues, rather than pulling from its reserves, to address its $2 million budget deficit for fiscal year 2025-26. The commission also recommended a temporary hiring freeze until the projected deficits for the next five years are studied. Those range from $5 million to $6.5 million. The financial fragility is largely due to employee benefits and costs outpacing cash flow in a town heavily reliant on property and sales tax revenue for its $60 million budget in the upcoming fiscal year.
The Town Council will consider using the $590,581 available in Measure G funding — a 1/8 percent sales tax increase voters approved in 2018 — to boost revenues at its May 20 budget hearing. It will consider cutting $17,500 in annual commission costs; $84,000 in library materials like physical newspapers and audiobooks; $26,000 in homeless services, including overnight hotel stays and the downtown portable bathroom; and $500,000 in emergency management funding.
Commissioner Phil Koen said he wants to instill a sense of urgency regarding the town’s unstable finances. He said a conservative approach is necessary to help Los Gatos’ future.
“I’m trying to build as much financial flexibility today as we possibly can, because tomorrow you’ll have less, (and) the day after less,” he said at the meeting.
Town Manager Chris Constantin said he’ll likely propose a more balanced approach to the town council, pulling from some reserve dollars and implementing a cautious hiring process to avoid unnecessary cuts. He previously helped pull Chico out of bankruptcy when he served as its finance and administrative services director.
“What I’m concerned about is if we engage in reductions, and are wrong, that we’ve reduced and impacted services that have a tangible impact to the community, only to result with (a budget) surplus,” Constantin said at the meeting.
Some advocates are worried about the potential cuts.
Jo Greiner, founder of St. Luke’s Episcopal Church’s food pantry program many unhoused residents use, plans to advocate for homeless services at the upcoming council meeting. She said the hotel program, which allows unhoused residents to stay overnight during cold weather and bad air quality, has saved the life of someone with hypothermia.
The program will still run if the council cuts its funds, but could have fewer stays. Greiner wants the service levels to stay the same for the unhoused older adults she helps.
“With health issues, both physical and mental, the program, when it’s been cold, has been a godsend for them,” she told San José Spotlight.
The council could also cut emergency preparedness funding in a town with high fire risk. The council allocated $1 million toward emergency initiatives in January. About half of that could be slashed.
Peter Hertan, a resident involved in the town’s Community Emergency Response Team, said he’s not concerned about the cut because Los Gatos may not need the full $1 million. He said the budget for emergency management needs to be studied more, and he trusts the town will move money around for critical fire safety measures.
“The town council is (and) the town leadership is very dedicated to, especially, wildfire,” Hertan told San José Spotlight. “As particular projects come up that show this (cut) would have a big impact on the safety of our residents, I’m sure they’ll go ahead and find (money).
The May 20 meeting will begin at 7 p.m. in the council’s chambers at 110 E. Main St.
Contact Annalise Freimarck at [email protected] or follow @annalise_ellen on X.
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