Budget adjustments, the creation of a business improvement district, the re-use of the old library building and the process for crafting a vision statement for the North 40 Specific Plan were among the top priorities of the Los Gatos Town Council Saturday morning as it gathered for its annual retreat at the Los Gatos Police Operations Building.

According to a memo prepared by Town Manager Greg Larson, the Council holds a half-day retreat early in the year to review strategic goals and budget priorities for the next two years.

Larson and Mayor Steve Rice, who serves on the Council Finance Committee, presented the council with a list of $12 million worth of potential budget adjustments, each around $100,000 that were rank ordered by and within each town department and categorized into three different tiers of importance.

The town is facing a projected $4 million budget shortfall for the next fiscal year. Town officials predict that number will likely drop based on restoration of Netflix sales tax revenues, decreases to anticipated CalPERS pension costs and other refined revenue and expense calculations.

The most severe service impacts presented include the option of contracting out for town planning operations and parks maintenance, eliminating a vacant police officer position, outsourcing police services to the Santa Clara County Sheriff’s Office or the San Jose Police Department and having town employees contribute a portion into their pension funds.

The Council then discussed the possibility of creating a business improvement district to enhance the town’s economic vitality and help downtown businesses sustain themselves.

Councilmember Diane McNutt said downtown businesses need to wholeheartedly participate in the process if the project is to be successful.

“They have to be enthusiastic and rise up,” said McNutt. “They need to be the champions.”

Vice Mayor Barbara Spector said she would like to form a partnership with the Los Gatos Chamber of Commerce to help consult businesses to form the new district and help them to continue to flourish.

Mayor Rice then shifted the retreat to focus on the process for selecting the re-use of the old Los Gatos Library, which has recently been emptied to transfer all materials to the new library at 100 Villa Ave. that will be celebrating its grand opening Feb. 11.

The possible use options for the building include office and meeting space for town departments, community meetings and events, Council closed sessions or meetings' overflow space and a centralized customer service center.

Looking at the options, McNutt stressed the importance of making the best decision that would benefit the community the most.

“Every discussion that we have on this topic will be about how we can make this community’s quality of life better,” McNutt said. “This isn’t a matter of arranging around, it’s how to take advantage and leverage this opportunity because we’re never going to get it again.”

An action item for the decision on the re-use of the old library will take place at a later Council meeting.

The process for developing a vision statement for the North 40 Specific Plan, which establishes the framework to guide future decisions regarding land use in the mostly orchard area, was then considered.

A long debate took place as the Council struggled to identify its responsibilities, those of the Los Gatos Planning Commission and the North 40 Advisory Committee.

The Council finally decided to host a study session to indentify guidelines, language and responsibilities of all stakeholder committees involved in the ambitious plan at a later date.