Cupertino City Council
May 17, 2023

CITY OF CUPERTINO
CI

TY COUNCIL
AGENDA
10350 Torre Avenue, Council Chamber and via Teleconference Wednesday, May 17, 2023
5:00 PM
Televised Special Meeting (Budget Study Session)

IN-PERSON AND TELECONFERENCE / PUBLIC PARTICIPATION INFORMATION Mem
bers of the public wishing to observe the meeting may do so in one of the following ways:
1) Attend in person at Cupertino Community Hall, 10350 Torre Avenue. 2) Tune to Comcast Channel 26 and AT&T U-Verse Channel 99 on your TV. 3) The meeting will also be streamed live on and online at www.Cupertino.org/youtube and www.Cupertino.org/webcast
Members of the public wishing to comment on an item on the agenda may do so in the following ways:
1) Appear in person at Cupertino Community Hall.
2) E-mail comments by 4:00 p.m. on Wednesday, May 17 to the Council at [email protected]. These e-mail comments will also be forwarded to Councilmembers by the City Clerk’s office before the meeting and posted to the City’s website after the meeting.

Members of the public may provide oral public comments during the Special Meeting as follows:

Oral public comments will be accepted during the meeting. Comments may be made during the public comment period for each agenda item.

Members of the audience who address the City Council must come to the lectern/microphone, and are requested to complete a Speaker Card and identify themselves.

Completion of Speaker Cards and identifying yourself is voluntary and not required to attend the meeting or provide comments.

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3) Teleconferencing Instructions
To address the City Council, click on the link below to register in advance and access the meeting:

Online
Register in advance for this webinar:
https://cityofcupertino.zoom.us/webinar/register/WN_sdAS46g5S5-LV25EIJJKqg Phone
Dial: 669-900-6833 and enter Webinar ID: 979 1579 6935 (Type *9 to raise hand to speak, *6 to unmute yourself). Unregistered participants will be called on by the last four digits of their phone number.

Or an H.323/SIP room system:

H.323:
162.255.37.11 (US West)
162.255.36.11 (US East)
Meeting ID: 979 1579 6935
SIP: [email protected]
After registering, you will receive a confirmation email containing information about joining the webinar.

Please read the following instructions carefully:

1. You can directly download the teleconference software or connect to the meeting in your internet browser. If you are using your browser, make sure you are using a current and up-to-date browser: Chrome 30+, Firefox 27+, Microsoft Edge 12+, Safari 7+. Certain functionality may be disabled in older browsers, including Internet Explorer.

2. You will be asked to enter an email address and a name, followed by an email with instructions on how to connect to the meeting. Your email address will not be disclosed to the public. If you wish to make an oral public comment but do not wish to provide your name, you may enter “Cupertino Resident” or similar designation.

3. When the Mayor calls for the item on which you wish to speak, click on “raise hand,” or, if you are calling in, press *9. Speakers will be notified shortly before they are called to speak.

4. When called, please limit your remarks to the time allotted and the specific agenda topic.

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5. Members of the public that wish to share a document must email [email protected] prior to speaking. These documents will posted to the City’s website after the meeting.

NOTICE AND CALL FOR A SPECIAL MEETING OF THE CUPERTINO CITY COUNCIL N
OTICE IS HEREBY GIVEN that a special meeting of the Cupertino City Council is hereby called for Wednesday, May 17, 2023, commencing at 5:00 p.m. in Community Hall Council Chamber, 10350 Torre Avenue, Cupertino, California 95014 and via teleconference. Said special meeting shall be for the purpose of conducting business on the subject matters listed below under the heading, “Special Meeting."

SPECIAL MEETING

CALL TO ORDER
P

LEDGE OF ALLEGIANCE

ROLL CALL

STUDY SESSION

1. Subject: Initial Study Session on Fiscal Year (FY) 2023-24 Proposed Operating and Capital Improvement Program Budgets
Recommended Action: Conduct initial Study Session on Fiscal Year (FY) 23-24 Proposed Operating and Capital Improvement Program Budgets and provide direction to staff
A - Table of Contents
B - Introduction
C - Budget Message
D - Budget Guide
E - Community Profile
F - Financial Policies
G - Financial Schedules
H - Council and Commissions
I - Administration
J - Law Enforcement
K - Innovation and Technology
L - Administrative Services
M - Parks and Recreation
N - Community Development
O - Public Works
P - Non-Departmental
Q - Appendix

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ADJOURNMENT
Lobbyist Registration and Reporting Requirements: Individuals who influence or attempt to influence l
egislative or administrative action may be required by the City of Cupertino’s lobbying ordinance (Cupertino Municipal Code Chapter 2.100) to register and report lobbying activity. Persons whose communications regarding any legislative or administrative are solely limited to appearing at or submitting testimony for any public meeting held by the City are not required to register as lobbyists.

For more information about the lobbying ordinance, please contact the City Clerk’s Office at 10300 Torre Avenue, Cupertino, CA 94107; telephone (408) 777-3223; email [email protected]; and website: www.cupertino.org/lobbyist.

The City of Cupertino has adopted the provisions of Code of Civil Procedure §1094.6; litigation challenging a final decision of the City Council must be brought within 90 days after a decision is announced unless a shorter time is required by State or Federal law.

Prior to seeking judicial review of any adjudicatory (quasi-judicial) decision, interested persons must file a petition for reconsideration within ten calendar days of the date the City Clerk mails notice of the City’s decision. Reconsideration petitions must comply with the requirements of Cupertino Municipal Code §2.08.096. Contact the City Clerk’s office for more information or go to http://www.cupertino.org/cityclerk for a reconsideration petition form.

In compliance with the Americans with Disabilities Act (ADA), anyone who is planning to attend this meeting who is visually or hearing impaired or has any disability that needs special assistance should call the City Clerk's Office at 408-777-3223, at least 48 hours in advance of the meeting to arrange for assistance. In addition, upon request, in advance, by a person with a disability, meeting agendas and writings distributed for the meeting that are public records will be made available in the appropriate alternative format.

Any writings or documents provided to a majority of the Cupertino City Council after publication of the packet will be made available for public inspection in the City Clerk’s Office located at City Hall, 10300 Torre Avenue, Cupertino, California 95014, during normal business hours; and in Council packet archives linked from the agenda/minutes page on the Cupertino web site.

IMPORTANT NOTICE: Please be advised that pursuant to Cupertino Municipal Code section

2.08.100 written communications sent to the Cupertino City Council, Commissioners or City staff concerning a matter on the agenda are included as supplemental material to the agendized item. These written communications are accessible to the public through the City’s website and kept in packet archives. Do not include any personal or private information in written communications to the City that you do not wish to make public, as written communications are considered public records and will be made publicly available on the City website.

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CITY OF CUPERTINO
Agenda Item
22-11783 Agenda Date: 5/17/2023
Agenda #: 1.

Subject: Initial Study Session on Fiscal Year (FY) 2023-24 Proposed Operating and Capital Improvement Program Budgets
Conduct initial Study Session on Fiscal Year (FY) 23-24 Proposed Operating and Capital Improvement Program Budgets and provide direction to staff CITY OF CUPERTINO Printed on 5/11/2023Page 1 of 1
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92 Table of Contents
Table of Contents
Introduction
City Organizational Chart
Directory of City Officials
Commissions and Committees
GFOA Distinguished Budget Presentation Award
CSMFO Operating Budget Excellence Award
Budget Message
Budget Message
Strategic Goals
Notable Accomplishments
New Initiatives
Budget Overview
Budget Guide
Our Mission
Elements of the Budget Document
Glossary of Budget Terminology
Commonly Used Acronyms
Revenues, Expenditures, and Fund Balance Table
Community Profile
History
Community Economic Profile
City Profile
Education
Programs and Applications
Community Statistics
Community and Recreation Services
Things To Do and See
Financial Policies
Annual Budget Process
Structure of City Finances
Fund Structure
Balanced Budget Policy
FY 2023-24 Proposed Budget Table of Contents 1
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Revenue Policies
Expenditure Policies
Capital Improvement Policy
Information Technology Replacement and Capitalization Policy Pension and Retirement Funding Policy
Long Term Financial Stability Policies
Committed, Unassigned Fund Balance, and Use of One Time Funds Policy Community Funding Policy
Investment Policy
Appropriations and Legal Debt Limit Margin
Financial Schedules
Financial Overview by Fund
Flow of Funds Chart (Sankey)
General Fund Contribution Schedule
Fund Balance Report
General Fund Summary
General Fund Revenues
General Fund Expenditures
General Fund Revenue Comparisons with Other Jurisdictions General Fund Transfers
General Fund Fund Balance
All Funds Summary
General Fund Forecast
Council and Commissions
Department Overview
City Council
Community Funding
Sister Cities
Technology, Information & Communications Commission
Library Commission
Arts and Culture Commission
Public Safety Commission
Bicycle and Pedestrian Commission
Parks and Recreation Commission
Teen Commission
Planning Commission
FY 2023-24 Proposed Budget Table of Contents 2
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Housing Commission
Sustainability Commission
Audit Committee
Administration
Department Overview
City Manager
Sustainability
Office of Communications
Multimedia
Public Access Support
Community Outreach and Neighborhood Watch
Office of Emergency Management
Economic Development
City Clerk
Duplicating and Mail Services
Elections
City Manager Contingency
City Attorney
Law Enforcement
Department Overview
Law Enforcement
Interoperability Project
Innovation and Technology
Department Overview
Innovation & Technology Administration
Video
Applications
Infrastructure
GIS
Administrative Services
Department Overview
Administrative Services Administration
Accounting
Business Licenses
Purchasing
Budget
FY 2023-24 Proposed Budget Table of Contents 3
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Human Resources
Retiree Benefits
Insurance Administration
Workers Compensation Insurance
Long Term Disability
Compensated Absences
Parks and Recreation
Department Overview
Recreation Administration
Library Services
Administration
Cultural Events
Facilities
Administration
Youth Teen Recreation
Senior Center
Teen Programs
Neighborhood Events
Park Facilities
Administration
Blackberry Farm Golf Course
Outdoor Recreation
Sports Center Operations
Community Development
Department Overview
Community Development Administration
Current Planning
Mid and Long Term Planning
Annexations
CDBG General Admin
CDBG Capital/Housing Projects
CDBG Public Service Grants
BMR Affordable Housing Fund
Human Service Grants
General Building
Building Plan Review
FY 2023-24 Proposed Budget Table of Contents 4
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Building Code Enforcement
Muni Code Enforcement
Code Enforcement
Public Works
Department Overview
Public Works Administration
Resource Recovery
Non-Point Source
Storm Drain Fee
General Fund Subsidy
Storm Drain Maintenance
Plan Review
CIP Administration
Service Center Administration
McClellan Ranch Park
Memorial Park
BBF Ground Maintenance
School Site Maintenance
Neighborhood Parks
Sport Fields Jollyman, Creekside
Civic Center Maintenance
Storm Drain Maintenance
Sidewalk Curb and Gutter
Street Pavement Maintenance
Street Sign Marking
Street Lighting
Equipment Maintenance
Environmental Materials
Trail Maintenance
Overpasses and Medians
Street Tree Maintenance
Sheriff Work Program
BBF Golf Maintenance
City Hall Maintenance
Library Maintenance
Service Center Maintenance
FY 2023-24 Proposed Budget Table of Contents 5
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Quinlan Community Center Maintenance
Senior Center Maintenance
McClellan Ranch Maintenance
Monta Vista Community Center Maintenance
Wilson Park Maintenance
Portal Park Maintenance
Sports Center Maintenance
Creekside Park Maintenance
Community Hall Maintenance
Teen Center Maintenance
Park Bathrooms Maintenance
Blackberry Farm Maintenance
Franco Traffic Operations Center
City Hall Annex
Community Shuttle
Traffic Engineering
Traffic Signal Maintenance
Safe Routes 2 School
Fixed Assets Acquisition
Non-Departmental
Department Overview
General Fund Non-Departmental
Tree Fund Non-Departmental
Debt Service Non-Departmental
Capital Reserve Non-Departmental
Facility Lease Debt Service
Appendix
All Funds Forecast Schedule
CIP Schedule
Personnel Schedule
FY 2023-24 Proposed Budget Table of Contents 6
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Introduction
FY 2023-24 Proposed Budget Introduction 7
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FY 2023-24 Proposed Budget Introduction 8
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City Organizational Chart
*The City Treasurer is the Director of Administrative Services FY 2023-24 Proposed Budget Introduction 9
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Directory of City Officials
City Council
Hung Wei Sheila Mohan
Mayor Vice Mayor
Liang Chao J.R. Fruen Kitty Moore
Council Member Council Member Council Member
Directory of City Officials
Pamela Wu – City Manager
Matt Morley – Assistant City Manager
Christopher Jensen – City Attorney
Kristina Alfaro – Director of Administrative Services
Ben Fu – Director of Community Development
Chad Mosley – Interim Director of Public Works
Rachelle Sander – Director of Parks and Recreation
Bill Mitchell – Chief Technology Officer
FY 2023-24 Proposed Budget Introduction 10
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Commissions and Committees

ARTS AND CULTURE

COMMISSION
Carol Maa
Dana Ford
David Wang
Kiran Varsshneya Rohra
Vacant

AUDIT COMMITTEE
Angela Chen
Sheila Mohan
J.R. Fruen
Sophie Song
Laura Hammer

BICYCLE PEDESTRIAN

COMMISSION
Herve Marcy
Grace John
Joel Wolf
John Zhao
Ilango Ganga

HOUSING COMMISSION
Govind Tatachari
Tessa Parish
Sue Bose
Connie Cunningham
Angan Das

LIBRARY COMMISSION
Archana Panda
Janki Chokshi
Liyan Zhao
Sheela Sreekanth
Qin Pan

PARKS AND RECREATION

COMMISSION
Carol Stanek
Hemant Buch
Jennifer Shearin
Seema Swamy
Sashikala Begur

PLANNING COMMISSION
Tejesh Mistry
David Fung
Seema Lindskog
Muni Madhdhipatla
Steven Scharf

PUBLIC SAFETY COMMISSION
Eric Shan
Rohan Pandit
Lakshminarasimha Ankireddipally
Tiffany Wang
Bobby Toda

SUSTAINABILITY

COMMISSION
Anna Weber
Sonali Padgaonkar
Meera Ramanathan
Steve Poon
Vignesh Swaminathan

TEEN COMMISSION
Rachael Ding
Geethikaa Tarra
Andrew Qin
Joyce Cheung
Dhruti Halambi
Elspeth Luu
Pranav Gupta
Rayna Shah
Sudisha Kumar
Adhya Kasamsetty

TECHNOLOGY, INFORMATION
& COMMUNICATIONS

COMMISSION
Eliza Du
Mukesh Garg
Emma Shearin
Rajaram Soundararajan
Prabir Mohanty
FY 2023-24 Proposed Budget Introduction 11
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GFOA Distinguished Budget Presentation Award
FY 2023-24 Proposed Budget Introduction 12
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CSMFO Operating Budget Excellence Award
FY 2023-24 Proposed Budget Introduction 13
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FY 2023-24 Proposed Budget Introduction 14
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Budget Message
FY 2023-24 Proposed Budget Budget Message 15
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FY 2023-24 Proposed Budget Budget Message 16
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Budget Message
May 5, 2023

To the residents of Cupertino, Honorable Mayor, and members of the City Council, Typically, a buHerfly is not the first thing that comes to mind when we think about the City budget, yet the life cycle of the buHerfly provides a strong analogy to what this year’s budget brings. The caterpillar, through focused efforts, undergoes a transformative change to something unexpected. Like the caterpillar, the City faces a necessary transformative period. Through its transformation, the buHerfly becomes a testament to the caterpillar’s perseverance and resilience in the face of adversity.

Similarly, while the City's budget situation for this year and beyond may feel like a dark and uncertain place, it presents an opportunity for transformation and innovation. To deal with a significant reduction in sales tax revenue, as described in greater detail below, the City must be nimble and adapt to change. We will need to reduce our expenditures to balance the budget. In the face of these challenges, I firmly believe that the best for Cupertino is yet to come, and that the commitment of the City’s residents, City Council, and employees will create a new and different Cupertino. We may even gain some new abilities as we move to right size the City’s resources to our new reality.

The proposed budget for FY 2023-2024 is $117,762,980, funded with $107,861,112 in revenue and $9,901,868 in the use of one-time funds. The General Fund, the City's largest tax-supported fund, is proposed at $86,311,553, funded with $80,281,054 in revenue and $6,030,049 in the use of one-time funds. The use of fund balance and reserves are necessary to close the structural deficit, which is an unprecedented situation. In previous years, unallocated funds were typically transferred to the Capital Reserve or other funds to support initiatives such as our 115 trust funds.

The uncertainty of the California Department of Tax and Fee Administration (CDTFA) audit has been looming in the City’s budget since the FY 2021-2022 Mid-Year Financial Report. In this report, the City staff informed the City Council and the community for the first time that one of the City's taxpayers was being audited by the State, and that the impacts on the budget were unknown but could potentially be significant.

The FY 2022-2023 Adopted Budget included staff’s best estimate of the impacts of the audit at that time, given the limited information available. The estimated impacts could be weathered with the City’s strong financial foundation that includes fully funded reserves and a significant unassigned fund balance in the General Fund. In addition, the City maintains well-funded 115 trusts for both retiree health and pension. Also, aOer budget adoption, the City Manager initiated a soO hiring freeze that primarily impacted new positions that had been added as part of the budget to limit expenses.

Fast forward to April 13 of this year, aOer staff had met with the impacted taxpayer and the CDTFA, we provided an updated financial forecast to the City Council and community. This impact was much larger than previously estimated. It included an estimated 73% drop in sales tax revenue, that translates to a $30 million ongoing decrease. This has put the City in a structural deficit, meaning ongoing expenses exceed ongoing revenue.

The Proposed Budget serves to inform what the impacts of the currently recommended budget reduction strategies will have on day-to-day operations and to the residents of Cupertino. Those strategies include:

Reduced spending across all categories
Reduced full time staffing over a 10-year period through elimination of vacant positions Use of both the pension trust and retiree health trust
FY 2023-24 Proposed Budget Budget Message 17
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Significant use of reserves
As a result of these revenue reductions, the City will need to reduce or eliminate some services. City leadership understands this will be difficult for residents and staff but will be necessary to ensure the City’s long-term success. Details of those proposed reductions are included in the Budget Message: Budget Overview and in each program budget. They include:

Elimination of some free events and reduced fee waivers for festivals A reduction in free Wi-Fi in parks
Fewer professional development opportunities due to reduced Citywide training and conference attendance
A decrease in technology purchases and fewer pilots of future tech, like augmented and virtual reality A reduction in services and longer response times for Cupertino 311 requests Decreased frequency of maintenance at City facilities, parks, streets, and trees Reduced pavement maintenance expenditures which may affect the pavement condition index (PCI) While the current situation may appear dire, the City Council’s and staff's advanced planning over the years have established an unparalleled solid financial foundation. As a result, even with necessary service reductions, this foundation is expected to significantly lessen the impact of navigating this challenge.

This is an ever-evolving situation, and this budget represents our best estimates. I am commiHed to continuing communication and feedback with our residents, City Council, and staff as we navigate these changes. I am confident that with our hard work, dedication, and innovative thinking, we will emerge from these difficult times even better than before.

Respectfully Submitted,
Pamela Wu
City Manager
FY 2023-24 Proposed Budget Budget Message 18
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Strategic Goals
On March 1, 2023, the City Council held a Goal SeHing Workshop to discuss City goals and priorities for the next two years. The City Council re-affirmed their commitment to the following five goals, which were formally adopted in February 2020:

Public Engagement and Transparency
Creating and maintaining key conversations and interactions with the Cupertino Community.

Sustainability and Fiscal Strategy
Continuing Cupertino's commitment to building a sustainable and resilient community for future generations.

Housing
Contributing meaningfully and in a balanced manner to the housing inventory in support of our community needs, including affordable housing (from extremely low-income to moderate-income level housing) and addressing homelessness.

Transportation
Providing access to an efficient, safe multi-modal transportation system for our community, and advocating for effective, equitable mass transit in the greater region.

Improving Traffic Flow and Alleviating Congestion
Quality of Life
Furthering the health and well-being of all Cupertino community members.

Air Quality
Public Safety
Recreation
Access to Goods and Services
While these are intended as multi-year goals, they are reviewed annually by the City Council. The Council may adopt the same goals or revised goals as the Council sees fit.

The strategic planning process and City Council goal-seHing are paramount as they drive the City's annual Work Program. The City has created an online dashboard to show the status and performance of the City Work Program in real-time ( gis.cupertino.org/webmap/CityWorkProgram/ ). Special Projects with budgetary impacts associated with the City Work Program are listed in the respective program budgets. Some City Work Program projects from prior fiscal years may be carried forward into FY 2023-24.

FY 2023-24 Proposed Budget Budget Message 19
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FY 2023-25 Proposed City Work Program
On April 4, 2023, the City Council approved the FY 2023-2025 City Work Program, which comprised a total of 24 projects requiring $2,340,000 in additional funding, in addition to $2,539,625 of previously allocated funds, totaling $4,879,625. As part of the City’s budget reduction strategy, staff is proposing the following list of 15 projects that only require $215,000 in additional funding. These 15 projects include all previously funded items and all high priority items that require additional funding. Additionally, staff is proposing to include one low- priority item aimed at supporting the unhoused, as Santa Clara County will be matching the funds for this project.

The remaining nine projects can be considered for funding next year when more special project funds are available.

FY 2022-23 Funded Work Program and FY 2023-24 Proposed Work Program FY 2023-24 Proposed Budget Budget Message 20
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FY 2024-25 Proposed City Work Program
FY 2023-24 Proposed Budget Budget Message 21
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Notable Accomplishments
Administration Department
Wildfire Protection and Local Hazard Mitigation Planning - Coordinated with Santa Clara County Fire and Santa Clara County Sheriff’s office to develop evacuation planning maps for residents. This initiative addresses the requirements of AB 747 and AB 1409. The Office is currently updating both the Local Hazard Mitigation Plan and the Community Wildfire Protection Plan, with a focus on incorporating projects identified in other City plans.

Integrating these plans provides the opportunity to meet additional legislative requirements related to hazards and land use planning.

Emergency Operation Training - Initiated a new training program for City Emergency Operations Center Staff and set completion dates for Disaster Service Worker training for all City staff. In April 2023, OEM worked with the Department of Parks and Recreation to train 25 City staff who have a role in staffing emergency shelters in a disaster. Finally, the Office developed a program to initiate and track emergency public messaging using volunteer units to share information with the community.

Cupertino Business Outreach Program - Further enhanced the quality working relationship with companies that choose Cupertino as their location, the Economic Development Division introduced the new Cupertino Business Outreach Program (or CBOP) - a program designed to facilitate a dialogue between the private and public sectors.

This program provides an opportunity to understand the unique needs of our local businesses and connect them with resources. CBOP incorporates an in-person (or virtual) visit to companies located within Cupertino for a conversation with the leadership team and an optional tour of the operations. With insights gained during these visits, the City hopes to double down on supporting programs that work or create new ones to fill gaps in addressing common business needs.

New Business Connect Newsletter - Enhanced the City’s business newsletter - Business Connect. The newsletter serves as another way for the City to stay in touch with and provide updates and resources to Cupertino businesses for growth and vitality. The Business Connect newsletter has grown exponentially to almost 8,000 subscribers and is another testament to the City’s desire to engage the business community as well as an unwavering commitment to their success.

Cupertino Online Store - Designed and launched an online store selling Cupertino-branded merchandise. The City team explored the design and technology platform options, launched an internal trial, and introduced the store to the public in February 2023. This pilot is expected to run through the current fiscal year.

Community Outreach and Events – Planned, executed, and supported various outreach efforts and community events, including: India Flag Raising Ceremony, Public Safety Forum, Swearing-In Ceremony, Tree Lighting Ceremony, 2023 State of the City, Housing Element, Spelling Bee Competition, Revitalize Memorial Park, Online Cupertino Store, Jollyman All-Inclusive Playground, Lawrence-Mitty Park and Trail, Regnart Creek Trail, ribbon cuttings, grand openings, Pizza and Politics, video montages of events played during regular City Council meetings, monthly Morning Chat with Cupertino Mayor meetings, Earth and Arbor Day Festival, Lehigh Town Hall with Supervisor Simitian, Safe Routes to School, Office of Emergency Management programs, Environmental Programs and Sustainability programs, and more.

Publications and Videos – Published eight monthly editions of The Scene (10 by end of the Fiscal Year (FY)), 19 editions of the Items of Interest newsletter (24 by end of the FY), and 16 editions of the Council Actions Newsletter (20 by end of the FY). The Video Division has shot and edited multiple video projects including: Cupertino 311 promotional video, Gridics instructional video, Cupertino City Staff introductory video, Upgraded Bike Lanes video, Pedestrian Scramble video, and have several ongoing currently.

FY 2023-24 Proposed Budget Budget Message 22
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Administrative Services Department
GFOA Distinguished Budget Presentation Award - GFOA awarded the City of Cupertino the 2022 GFOA Distinguished Budget Presentation Award with special recognition for Special Long Range Financial Plans Recognition & Special Financial Policies Recognition. The policies can be found under the Financial Policies section.

HR Hub – Continued collaboration with I&T to enhance and develop the City’s intranet, including digitizing forms, enhancing employee accessibility to HR tools and resources, and centralizing and maintaining HR information (MOUs, Policies & Procedures, COVID Information, etc.) and the City’s training management application.

BEST Training Program - Offered 70 training courses via a semester-based program with a variety of training programs to assist employees with their professional growth, health, and wellness as well as retirement and financial planning.

Coordinated the City’s participation in the Santa Clara and San Mateo County NextGen program and the Santa Clara County Leadership Academy to promote professional growth and succession planning within our agency.

COVID-19 – Continued to provide employee support across all City Departments through the COVID website, City Town Hall, and Department meetings. Researched, analyzed, and implemented Federal, State, and local rules and regulations such as leave programs, contact tracing, creation of new and revised OSHA policies, noticing and reporting requirements pursuant to AB685 and SB1159 and related health and safety trainings.

Diversity, Equity, and Inclusion (DEI) – Offered staff DEI training through webinars, onsite and virtual presentations, and activities as part of the City’s BEST program to increase cultural awareness, knowledge, and communication as well as promote a more inclusive and diverse work environment.

Recruitment and Retention – From 7/1/2021 - 6/30/2022, there were 22 Full Time (FT) separations, a 12% turnover rate. From 7/1/2022 – current, there have been 21 FT separations, an 11% turnover rate. In FY 2020-21 there were 43 FT recruitments. In FY 2021-22 there have been 24 FT recruitments thus far. Hosted a recruitment booth at the City’s Earth Day Event to promote City job opportunities within the community.

Benefits Administration – Continued to process a considerable number of employee onboarding and offboarding functions. From 7/1/2021 - 6/30/2022, there were 38 FT new hires and 22 separations. From 7/1/2022 - current, there have been 18 FT new hires and 21 separations.

Labor and Employee Relations- Successfully negotiated successor MOUS with both Labor Unions as well as updated the City’s Unrepresented and Elected Employee Compensation Programs and salary plans. Continued to work collaboratively with the City’s labor unions through monthly labor management meetings.

Risk Management and Worker’s Compensation - Continued to administer the City’s general liability and property insurance programs with the City Attorney’s Office. Administer the City’s Worker’s Compensation program and coordinate with the City’s third-party administrator. Managed and administered the City’s unemployment insurance program as well as the City’s DOT commercial driver program. Coordinated City’s OSHA safety and training programs and Risk Management Committee.

Community Development Department
Permit Activities – To date, 1,954 permits have been issued for a variety of projects. As a result, a total of 229 housing units were approved, a total of 280,320 square feet of office space were approved, and 44,129 square feet of retail space were approved.

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Update the Housing Element of the General Plan and concurrent rezoning – Ongoing updates to the Housing Element goals, policies, and strategies to address housing needs, constraints, both governmental and nongovernmental, and identify Priority Housing sites to accommodate the city’s Regional Housing Needs Allocation, as required by state law. Concurrent rezoning of the Priority Housing sites to ensure that sites are appropriately rezoned to allow for planned growth/capacity.

Process Improvement – 1) Streamlined the permitting process for minor permits such as Electric Vehicle, Air Conditioning, Photovoltaic, and Temp Power Pole by creating online permit applications and issuance processes. 2) Coordinated with Santa Clara County Fire to re-establish the in-person over-the-counter coverage. Fire Department staff is in the office on Tuesdays and Thursdays from 11am to 12pm to perform permit reviews in person. 3) Updated online application forms (public art, planning entitlements, Accessory Dwelling Unit, etc.) to reflect any changes in state laws and regulations and to facilitate an easier and smoother application process.

Housing Outreach and Coordination – 1) Drafted and finalized the U.S. Dept of Housing & Urban Development (HUD) National Environmental Policy Act (NEPA) Manual to improve the City’s Community Development Block Grant (CDBG) environmental processes and meet HUDs compliance requirements. 2) Established regular outreach efforts to homeless encampments with the Bill Wilson Center and the County. 3) Joined the West Valley Collaboration- Housing and Homelessness Group to address regional needs.

Innovation & Technology Department
Video Capture Camera Expansion - Successfully expanded video capture to public areas within City facilities by adding or replacing cameras in areas such as the lobby, entry, and exit points. Cameras were installed in Blackberry Farm, Quinlan Recreation Center, and McClellan Ranch Preserve, specifically around high-risk areas such as the pool to provide enhanced security to City residents.

Supplemental Wi-Fi Expansion in Public Areas - Continued expansion of the City’s Internet services to Wilson City Park. Members of the public can access Wi-Fi internet services at this park and City staff working at this park have a secure seamless connection to the City’s network.

Proactive Managed Risk and Security Monitoring – Procured Cybersecurity Professional Services to respond to active threats through proactive monitoring and management tools that scan, manage and resolve security vulnerabilities.

Quinlan Touch Screen – Replaced the existing 24-inch poster staff used to post calendar of events, building layout, and room booking info in the Quinlan lobby. The replacement is a state-of-the-art interactive display that allows customers to navigate through all that Parks & Recreation has to offer, e.g., classes, facilities, parks, events, and more.

Laserfiche Roadmap (Concluding Phase) – Accomplished the file plan design, Laserfiche template and metadata population, and reorganization of records for all departments. This endeavor also involved overseeing the commencement of scanning of all archival records, as well as developing the internal web-link portal and delivering training tailored to each Division.

Capital Improvement Plan (CIP) Management System – Implemented a CIP management system that will streamline how CIP projects are managed, bring consistency to CIP workflows and reporting, combine CIP and related financial data in one place, as well as provide an external portal for contractors and developers to upload CIP submittals and invoices in one consistent, reliable, and trackable platform.

Business Process Automation – Continued to pursue business process automation, having achieved the successful automation of 40 forms, workflows, approval processes, and routine tasks. Our aim is to enhance process and technology integration, facilitating the adoption of streamlined, digital workflows that optimize efficiency while FY 2023-24 Proposed Budget Budget Message 24
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minimizing risk exposure. Our dependable platform offers users a secure and easily configurable solution that can be scaled to meet evolving needs.

Drone Program – Integrated drone operations into emergency operations procedures and collaborate with city departments to identify opportunities for utilizing drones in routine workflows, thereby enabling our certified personnel to maintain their flying and image-processing skills while achieving enhanced efficiencies and benefits.

Disaster Preparedness – Through a collaborative effort with OES, we have successfully developed a suite of tools designed to aid in the aftermath of a disaster. The Quick Capture tool, specifically tailored for Cupertino staff and OES Volunteers, facilitates prompt and efficient reporting of issues to the EOC in the immediate aftermath of a disaster via a windshield survey. Additionally, we have designed a Building Damage Assessment Survey on the standard state form to gauge the extent of building damage. EOC Dashboards have been implemented to enable real-time monitoring of data being collected from the field, and a Reviewer Map has been configured for the GIS staff to review and edit reports as necessary as they come in. Furthermore, we have produced detailed evacuation maps for each evacuation zone to aid in emergency evacuations.

Enterprise Resource Planning (ERP) Phase I Need Analysis – Procured an external consultant to conduct an ERP Need Analysis and gap analysis in terms of business needs and functionality as a significant issue with the current system is the lack of security logs required for auditing.

Consolidation of Code Enforcement Services – Consolidated Code Enforcement operations under Accela Land Management System (LMS) and Cupertino 311 service request. The project consisted of automating Code Enforcement business processes under LMS. Working with one system creates a more efficient, trusted outcome.

Additionally, custom reports become an easier task due to one application – one database. Finally, code enforcement complaints and service requests are routed from Cupertino 311 system to Code Enforcement officers.

Resource Mapping Sofware – Implemented Startup Space platform to provide ecosystem mapping between resource providers and small and medium-sized businesses. Provide access to government, public, and privately sponsored resources for underrepresented and minority-owned small business owners.

Accela Roadmap – Developed strategic initiatives for achieving the maximum potential from the use of Accela platform pertaining to both its back-office systems and its public portal for Cupertino residents and external stakeholders.

Climate Monitoring and Noise Measurement extension – Installed four air quality sensors close to the quarries to monitor real-time air quality data 24/7 365 days a year. Together these solutions provide the Sustainability division with a good representation of air quality data for Cupertino – an important component to the City’s Climate Action Plan.

Cupertino Room Lectern Upgrade project – Upgraded the audiovisual system in the Cupertino Room to allow for better connection as well as updated infrastructure.

Social Room Audio Upgrade project – Upgraded audio system at the Quinlan Center Social Room to allow and support wireless/Bluetooth infrastructure.

Sports Center Audio system upgrade – Upgraded audio system in the Cupertino Sports Center to better facilitate Sports Center programs and classes such as Zumba, Pilates, cardio workout, etc. where mixed amplification of music and instructor microphone audio is an important feature.

Parks & Recreation Department
Camps - In the 2022 Summer Season, more than 500 kids enjoyed endless fun at the City’s camp programs run by the Parks and Recreation part-time staff at Quinlan Community Center and McClellan Ranch Preserve. To support the camp program, the Leaders in Training volunteer program is designed for teens aged 14 to 18 to learn FY 2023-24 Proposed Budget Budget Message 25
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valuable life skills. Leaders in Training are invaluable Parks and Recreation summer team members as they support our recreation leaders and are trained in supervision, safety, problem-solving, and leading camp activities.

Hidden Treasures 2022 - The Hidden Treasures event returned to the Cupertino Senior Center for the first time since 2019. The return was a great success, with more than $14,000 worth of donated items sold. Proceeds from this event go to support the Stay Active Fund, which helps pay for Senior Center memberships and programs for seniors in need of financial assistance. In addition to the monetary benefit of Hidden Treasures, the months of sorting, pricing, and preparation for the day of the sale provided members an opportunity to give back. More than 50 volunteers donated over 1,000 hours.

Winter Holiday Events – Parks and Recreation staff held the annual Tree Lighting event. This heartwarming event brought the community together to experience the joy and excitement of the holiday kickoff. Other sold-out, fee- based holiday programs include Breakfast with Santa with over 300 registrations, and Santa Visits in which Santa visited over 40 homes. One of the most heartwarming events of the year was Signing Santa. This event provides an opportunity for deaf and hard-of-hearing children to communicate with Santa using ASL.

Closing the Gap: An Intergenerational Mixer – More than 50 teens and adults 50+ attended an intergenerational engagement event at the Cupertino Senior Center, interacting through fun and enriching recreational activities.

The event opened with heartfelt speeches from the Parks and Recreation and Teen Commission representatives about the importance of connecting with different generations and its positive impact on their lives. Event participants enjoyed various activities, including hula dancing, chair volleyball, giant Jenga, and Connect-4. The City’s Geographic Information Services (GIS) department gave a very informative presentation about the City's useful applications available to residents. Topics included Cupertino 311, Service Finder, and Cupertino Augmented Reality Tour, also known as ARTour. The event concluded with a "Bingocize" demonstration led by Silicon Valley Healthy Aging Partnership.

Senior Strategy Survey – The City of Cupertino conducted a Community Assessment Survey for Older Adults (CASOA) to better understand the contributions that adults (50+) make to their communities, as well as the needs they have and challenges they experience. The feedback will help the City be sure that our policies and programs align with our residents’ values. This survey was conducted in partnership with Polco, an online civic engagement platform that enables residents to provide direct input to local government decision-making processes. The survey launched in March, with 2,800 randomly selected households receiving a postcard invitation to take the survey online. A week later, these same residents received a printed survey in the mail with a postage-paid return envelope. In April, the open participation outreach window opened allowing all members of the community a chance to complete the survey and share their input online. The survey closed on April 25 resulting in more than 630 responses.

Spring Swing Scramble at Blackberry Farm Golf Course - Hosted the first Spring Swing Scramble at Blackberry Farm Golf Course on Saturday, April 23. The 36-person tournament had filled up a month in advance. Participants were a mix of new and experienced golfers, including Blackberry Farm regulars and first-timers. At the conclusion of play, there was a three-way tie for first place. To break the tie, the three teams participated in a putting contest that went through three rounds before crowning a winner. Prizes were awarded to the first-place team and the contest hole winners for the closest to the pin and longest drive. The event was a success, with many participants inquiring about future tournaments.

Teens – Teen events which have come back for the first time in-person since Covid are Hack Cupertino, Pizza and Politics, and Summer Job Fair. HACK Cupertino was hosted by the Youth Activity Board and City staff. Almost 100 teens participated to de-stress, socialize, and flex their coding skills. Friday, October 21, more than 50 teens and guests attended Pizza and Politics. This youth political event for teens was jointly coordinated by the Cupertino Youth Activity Board, Campbell Youth Commission, and Saratoga Youth commission. The program had a mayor's roundtable, a forum panel with the Fremont Union High School District (FUHSD) board of trustee FY 2023-24 Proposed Budget Budget Message 26
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candidates, and a teen debate with teens from FUHSD. City staff hosted a Summer Job Fair, an event that gave the teen community an opportunity to come speak to staff about summer jobs and volunteer opportunities. In conjunction with the Job Fair, Teen Commission also hosted the City's first 'Spring Window Decorating,' which highlighted local youth-led organizations. The Wildfire Awareness Initiative Organization, Fremont Animation Club, Cupertino Teen Commission, and Youth Activity Board set the tone for spring with amazing window art! This teen day was topped off with the teen organization, Health Connect, running a spike ball tournament for teens attending the event.

Activities at McClellan Ranch Preserve - From March to May, City staff hosted third grade classes from the Cupertino Union School District and guided them on environmental educational tours around the preserve. The Creek Tours, which serve students across the Cupertino Union School District, are an essential component of the third-grade curriculum. The tours introduce students to the local watershed, the importance of keeping a healthy creek by reducing pollutants and promoting a healthy relationship with nature. Along with Creek Tours, McClellan Ranch Preserve hosted a variety of highly popular Park Ranger led activities including a night hike and flashlight tour, apex predator workshop, wildflower walk, and wildlife tracking class. Additionally, the Baer Blacksmith shop was open monthly for open houses and facilitated regular blacksmithing classes for adults and teens.

Festivals - City staff worked with several festival organizers to ensure festivals offered at Memorial Park met with all City policies and guidelines while providing large-scale events for the community in a fun and safe manner. In FY 23, the festivals were Dilli Haat, Day N' Night Fest, Diwali, Community Egg Hunt, Holi, Cherry Blossom, and Relay for Life. The Ikebana Show was also hosted at Quinlan Community Center presented by the Wafu School of Ikebana. On November 11 at 11 a.m. Cupertino Veteran’s Memorial held the Veteran's Day Ceremony at the Memorial in Memorial Park.

Events – City staff directly coordinated several fee-based events in FY 23. City Parks and Recreation staff hosted the Cupertino Campout. More than 190 campers from 80 families of all skill levels visited Creekside Park to camp under the stars. Participants enjoyed mobile recreation activities, the McClellan Ranch Preserve pop-up museum, crafts, and an outdoor movie. Scout troop members from Troop 688 volunteered as campsite attendants to assist families with setting up their tents. Staff also hosted a sold-out Halloween special event, Monster Mash. Families enjoyed a night of crafts, games, and trick-or-treating at the Quinlan Community Center. The first in-person spelling bee since 2020 returned for 2nd through 5th graders, hosted by the Cupertino Parks and Recreation Department and the Cupertino Youth Activity Board. Over 35 students battled in a fierce competition to be the best speller. This year’s Spelling Bee was moderated and judged by members of the Teen Commission and Youth Activity Board. The Parks and Recreation Department also hosted the second in-person Big Bunny 5K and Kids Run since 2019. This year's event had over 500 participants with 5K runners navigating the local streets around the Civic Center Plaza.

Public Works Department
11 consecutive Tree City USA Recognition – The Tree City USA program provides communities with a four- step framework to maintain and grow their tree cover. It also gives them an avenue to celebrate their work, showing residents, visitors, and the entire country that they’re committed to the mission of environmental change.

Received and reviewed applications for approximately 13 development projects and 400 encroachment permits between January 1, 2022 and December 31, 2022.

Reviewed and facilitated the approval of Vallco Parkway 1 for Apple and a 7 lot subdivision at 20860 McClellan Road.

Installed water-saving drip irrigation on Bandley Dr, between Mariani Ave and Lazaneo Dr.

Removed the dirt mound (for water conservation efforts) and re-landscaped the median on Stevens Creek Blvd, east of De Anza Blvd (completion expected in June 2023). th
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Completed the Memorial Park Ponds removal project and provided more usable open space area for Cupertino residents and visitors.

Completed Bicycle Boulevard Interim Improvements (Phase 2), Stelling and Alves Crosswalk Installation.

Completed and opened the Regnart Creek Trail and Fencing project.

Completed installation of the Creekside Tot Lot playground.

Renamed the I-280 trail to “Tamien Innu” through a successful community engagement process.

Passed a Single-Use Plastics ordinance effective September 2023 that will ban single-use plastic foodware, require fiber-based compostable alternatives, and require reusable foodware for dining on-site.

Provided organics service or exemptions as appropriate to all businesses in Cupertino to meet Senate Bill 1383 and Assembly Bill 1826 requirements for the diversion of organics.

Conducted over 200 site visits in 2022 to assist businesses with sorting and recycling issues.

Arranged installation of 23 full trash capture devices to keep trash out of our creeks.

Reviewed 693 building and demolition permits for debris management and stormwater compliance.

Conducted 109 preventative stormwater inspections
Responded to 98 reports of discharges and threats of discharge to the storm drain system Completion of Local Roadway Safety Plan, and subsequent initial development of Vision Zero Policy and Action Plan, to be completed late 2023.

Coordinated 2022 Fall Bike Fest, the largest and most attended Bike Fest to date. 10th Anniversary Fall Bike Fest in planning stages for 2023.

Substantial completion of School Walk Audit improvements and completion of crossing guard warrant analysis.

Completed the installation of hydration stations in city parks as part of the park amenities project.

Effective maintenance response and clean-up during the intensive 2023 winter storm season.

Replaced 68 fluted street light poles to provide enhanced lighting, power, and communication services to residents as well as sustainable infrastructure for the City.

Installed 15 new street lights in various neighborhoods as part of the annual new street light infill project.

Completed 356 bi-annual inspections/cleanings of storm drain inlets that have trash capture devices Completed installations for the way finding signage project. This project included 384 new signs.

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New Initiatives
Administration Department
Council/Commission Governance Reform Package – As part of the new FY 23-25 City Work Program, the City Manager’s Office and the City AHorney’s Office will be working to revise the Ethics Policy and address the Civil Grand Jury Report. Staff will also be updating the Commissioner’s Handbook to align it with the new Council Procedures Manual and realign terms of office and qualifications.

Public Safety Initiatives - As part of the new FY 23-25 City Work Program, the City Manager’s Office will strengthen the Block Leader/ Neighborhood Watch programs to ensure greater participation as well as explore best practices to deter crime in commercial areas.

Administrative Services Department
Fee Study and Cost Allocation Study – The City is working with Matrix Consulting Group to analyze the City’s fees and services to determine costs that can be allocated between City departments and costs that can be recovered through fees charged to the public.

Revenue Measures – The City is working with Urban Futures, Inc. (UFI) to analyze potential revenue measures, such as transient occupancy tax, sales tax, property tax, and utility users tax.

Community Development Department
Process Improvement – 1) Ongoing effort to create and update handouts to facilitate a more transparent and efficient review process, such as Accessory Dwelling Unit (ADU), planning inspections, etc. 2) Project review soOware updates for improved integration and access. 3) Review and establish new and updated policies and procedures for the permiHing, plan review, and inspection functions. 4) Collaboration for data migration from permitting softwares.

Environmental Protection Standards – Finalize a standardized plan review sheet to help applicants implement requirement of Chapter 17.04 (Standard Environmental Protection Requirements) as result of new Cupertino Municipal Code Chapter approved by City Council.

Tree List Update - Review and revise development tree list (per CMC Ch. 14.18: Protected Trees) with an emphasis on appropriate trees and native species.

Revise & Update Heart of the City Special Area - Prioritize following completion of Housing Element: 1) Address effect of AB 2011 and build on Housing Element goals to facilitate housing production in transit-oriented locations, 2) Tailor permissible uses to revitalize local public-facing commercial uses (retail/restaurant/entertainment/professional office, etc.).

Privacy Screening and Balconies Requirements - Prioritize following completion of Housing Element to update CMC Ch.19.28: R-1 Zones on Privacy Screening and Balconies and privacy planting list to be climate appropriate/native.

Support for the Unhoused - Collaborate and fund jointly with West Valley efforts to address regional needs and find workable support for the Unhoused.

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Innovation & Technology Department
Air-Gapped Backups – The main tool utilized to restore files from a successful cyber hack is backups. Recently, cyber criminals have learned how to navigate the network to not only corrupt active files, but to corrupt those files stored on backup. In essence, leaving organizations with no useful data. A solution is air-gapped backups.

These backups are only available to the network write operations during the actual backup routine – they are then removed from network access and/or wriHen to a WORM (write once read many) drive. A recent cyber survey conducted by our Cyber insurance noted this as a weakness in our cyber profile.

City Hall Enterprise Server & Storage Tech Refresh – Replace the current server environment that houses the City’s Financial ERP and Land Management business applications with a Cloud-based solution known as Infrastructure as a Service (IaaS). IaaS provides a secure, scalable solution that meets the IT strategic needs of the city.

Virtual Reality (VR) Decarb – Using the Silicon Valley Clean Energy (SVCE) awarded grant funds, Cupertino will develop a VR experience providing an engaging way to learn about decarbonization. The virtual environment will be a way to create familiarity with a zero-emissions home and ideally inspire residents to adopt these zero- emission options in their own homes. The VR DECARB system will be available at Cupertino festivals, Block Parties, and available as requested by the community.

FuelMaster (FM) upgrade to FMLive – Upgrade our FuelMaster (FM) SQL deployment to the FMLive cloud-based fuel management system. IT will no longer have to support a stand-alone system. The upgrade will give us customizable email alerts and report distribution for both fueling and tank management as well as a user-friendly interface from a GUI dashboard menu.

Enterprise Resource Planning (ERP) Phase II Request for Proposals (RFP) Development and Vendor Selection – Work with the Consultant for RFP development detailing all business and functional requirements and specifications that will come out of need analysis and meetings/surveys with various stakeholders. AOer RFP response, the final vendor selection meetings and other related processes will also be part of this project.

Enterprise Resource Planning (ERP) Phase III Implementation - ERP is the most important application for any business, including government. The goal of a new ERP system includes improved collaboration, beHer data analytics, improved productivity, beHer customer (internal & external) experience, and move to SaaS which aligns with IT Strategic Plan.

ProjectDox move to SaaS – The City currently utilizes ProjectDox for Plan Check reviews and approval of all permit applications since 2017. The system works to ensure that proposed construction plans meet life safety, accessibility, sustainability, and structural safety requirements of the code. Currently, the ProjectDox servers are an on-premises environment, and the maintenance and upgrades of the servers is the responsibility of the City IT Staff. Moving to the SaaS (SoOware as Service) model will shiO the responsibility of the day-to-day maintenance, upgrades, and back-ups will shift to the vendor.

City Website Redesign – Work with various departments and divisions to redesign the City of Cupertino website (cupertino.org). This project will involve building new wireframes, content audit, usability analysis, tracking current traffic patterns, and evaluating ADA compliance of city webpages.

Parks & Recreation Department
Senior Services and Youth Engagement – Connect seniors with youth and their families with inclusive activities.

Dogs Off-Leash Area (DOLA) Programs – Transition successful trial DOLA programs to permanent programs with a staff level permitting process housed in Parks and Rec.

Public Works Department
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Initiated the Storm Drain Outfall Inspection Project which is anticipated to be completed in Fall 2023.

Started construction of the Wilson Park Community Garden and Basketball projects.

Successful application for funding for McClellan Road Bridge from Evan Low’s office ($5M) and cleared initial stages of CPG funding from Ro Khanna’s office ($2.5M) for this project.

Successful application for funding for Jollyman All-Inclusive Playground through Evan Low’s office ($1M).

Negotiated a 2-year extension to the current landfill agreement (to November 2023) and have begun work toward negotiation of a new one. The current agreement, established in 1989, expires in November 2023.

Successfully awarded a $8.465 million grant to initiate a significant four-year expansion of the Via- Cupertino on-demand shuHle into City of Santa Clara, including electrification of fleet. Program rollout efforts underway, expanded service begins July 1.

Lawson Middle School Bikeway Study in progress, to evaluate alternatives to enhance safety for students riding bicycles to and from Lawson Middle School. Three community meetings and draO study completed to date, City Council meeting anticipated summer 2023.

Implementation and ongoing evaluation of pedestrian scramble traffic signal phasing at Bubb Rd/McClellan Rd intersection.

Implementation of traffic adaptive traffic signal operations along North De Anza Blvd. Acquisition of hardware for citywide traffic signal and communication upgrade. Installation and improvements in progress.

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Budget Overview
The Proposed Budget for the upcoming fiscal year highlights a decrease in both expenditures and revenues compared to the previous year's Adopted Budget. Total expenditures are proposed at $117.8 million, a $12.8 million or 9.8%, reduction from the previous year. Similarly, total revenues are anticipated to be $107.9 million, a $22.4 million or 17.2%, decrease from last year.

The General Fund, which supports the majority of City operations, is allocated $86.3 million in expenditures for the upcoming fiscal year. This reflects a decrease of $8.9 million or 9.3%, from the previous year's Adopted Budget. General Fund revenues are anticipated to be $80.3 million, which is a $14.4 million or 15.2%, decrease from the previous year's Adopted Budget.

As shown in the chart below, the largest fund is the General fund at 73%.

The graph below summarizes the changes in the City’s General Fund over the last five years:

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The FY 2023-24 Proposed Budget proposes funding for a total of 212 positions, representing a reduction of 14 positions from the FY 2022-23 Amended Budget. This reduction is due to revenue shortfalls resulting from the California Department of Taxes and Fee Administration (CDTFA) audit. It is important to note that the 14 positions being eliminated are vacant positions that have not been filled for various reasons such as resignation, retirement, or the positions being left unfilled.

To address the City's staffing levels in a responsible and sustainable manner, staff has developed a plan to gradually reduce staffing levels over the next decade through the elimination of vacant positions. The plan aims to eliminate 3-4 vacant positions annually until the City reaches a staffing level of 180 positions, which is consistent with the levels in FY 2015-16.

The City acknowledges that reducing staffing levels is difficult and may result in the elimination of some services.

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Nevertheless, the City is committed to balancing the budget responsibly while continuing to provide essential services to the community. By gradually reducing staffing levels, the City can avoid any significant disruptions and ensure that services are not compromised while also addressing the need for responsible fiscal management.

Changes to the Budget and Policies
Revised Fees
On May 19, 2022, the City Council approved the fee schedules for FY 2022-23. The City Council is expected to consider an updated fee schedule on July 18, 2023, with an update based on the Consumer Price Index (CPI) increase. Moreover, the Matrix Consulting Group is currently conducting a comprehensive fee study, which is expected to be considered for City Council adoption in late 2023.

Investment Policy
The City Council annually updates and adopts a City Investment Policy that is in compliance with State statutes on allowable investments. By policy, the Audit CommiHee reviews the policy and acts as an oversight commiHee on investments. The policy directs that an external auditor perform agreed-upon procedures to review City compliance with the policy. City Council approved the current City Investment Policy on May 19, 2022. The Audit CommiHee reviewed and accepted a revised Investment Policy on April 24, 2023, which will be considered for City Council adoption on May 16, 2023.

GANN Appropriations Limit
The City’s FY 2022-23 appropriations limit is $122,756,522, an increase of $8.1 million or 7.1%, from the FY 2021-22 limit of $114,666,491. If a city exceeds the legal limit, excess tax revenue must be returned to the State or citizens through refunds, rebates, or other means that may be determined at that time. For FY 2022-23, the City's estimated appropriations of proceeds from taxes, less statutory exclusions, do not appear to exceed the limit and are not expected to present a constraint on current or future deliberations. The California Department of Finance will publish the price and population data to calculate the City’s FY 2023-24 appropriations limit in May 2023. As a result, the FY 2023-24 Appropriations Limit will not be known until May 2023 and will be included in the Adopted Budget.

Budget Audit and Updated Policies
Moss Adams, the City's internal auditor, conducted a review of the City’s budget development and monitoring processes to improve workflows, communication, and alignment with industry standards. The review revealed that the City's budget process adheres to 76 out of 80 criteria established by the Government Finance Officers Association (GFOA). However, four elements lacked documentation to support alignment with best practices.

To address this, the report recommended developing a prioritized implementation plan to align the City's budget process with GFOA best practices in the four categories that are not aligned. Consequently, staff has taken several steps to ensure the City's alignment with GFOA best practices in these areas.

These steps include the following:

Developing a Balanced Budget Policy, which is included in the FY 2023-24 Proposed Budget.

Coordinating with departments to ensure each has a performance measure linked to City financial outcomes in the FY 2023-24 Proposed Budget.

Working with the City Manager's Office to resume the community survey in FY 2023-24 to monitor stakeholder satisfaction.

Updating the City's budget policies and procedures to describe the process for adjusting the City's broad goals, which are adjusted as part of the City Work Program.

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by Moss Adams during the Policies and Procedures Review.

Budget by Fund
General Fund
The General Fund is the primary source of funding for critical services in the community, including law enforcement, public works, community development, park maintenance, code enforcement, and administrative support services. These services are financed mainly by local taxes such as sales tax, property tax, and transient occupancy tax, as well as other discretionary sources. The General Fund is responsible for financing services that do not have dedicated funding sources, ensuring that essential public services are available to the community.

The City's General Fund revenues for the upcoming fiscal year are projected to be $80.3 million, representing a significant decrease of $14.4 million or 15.2% from the FY 2022-23 Adopted Budget. This decline is due to a California Department of Tax and Fee Administration (CDTFA) audit of one of the City's taxpayers, which is expected to result in a substantial reduction in sales tax revenue. The City is expected to experience a $30 million, or 73%, decrease in sales tax revenue from the original FY 2023-24 projections provided by its sales tax consultant, HdL. This corresponds to a decrease of $30 million, or 28%, in General Fund revenue.

The proposed General Fund expenditures for the next fiscal year are $86.3 million, indicating a $8.9 million, or

9.3% decrease from the FY 2022-23 Adopted Budget. This reduction is due to the implementation of several expenditure reduction strategies, which include:

Eliminating 14 vacant positions
Decreasing expenditures on materials and contract services Reducing spending on special projects and capital outlays Reducing the City Manager's Contingency Fund by $25,000 and contingencies by 50% Decreasing the amount of transfers to other funds
Utilizing the City's Section 115 Trusts to fund pension and OPEB (Other Post-Employment Benefits) costs Through these measures, the City aims to balance its budget while ensuring that essential services continue to be provided to the community.

The following chart shows four years of total revenue, expenditures, and changes to fund balance for the General Fund:

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In FY 2023-24, the General Fund's unassigned fund balance is projected to be $47.1 million, a decrease of $5.7 million, or 10.8%, from the FY 2022-23 Amended Budget. Total fund balance is estimated to be $107.5 million, a decrease of $6.0 million, or 5.3%, from the FY 2022-23 Amended Budget. The decrease is primarily aHributable to a $6.0 million deficit in FY 2023-24 due to a decrease in revenue resulting from the CDTFA audit. The deficit will be funded by unassigned fund balance.

As shown in the graph below, the majority of General Fund resources are used to support Public Works (28%), Law Enforcement (21%), Community Development (14%), Non-Departmental (8%), Administration (9%), and Parks and Recreation (7%). Non-Departmental expenditures are transfers to other funds.

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Special Revenue Funds
Special Revenue Funds are established to account for the proceeds of specific revenue sources that are legally restricted for expenditures for particular purposes. The largest Special Revenue Fund is allocated to streets, roads, and transportation, while other funds are designated for storm drain management, affordable housing programs, and park development.

For the upcoming fiscal year, the Proposed Budget for Special Revenue Funds is $10.4 million, which represents a decrease of $0.8 million or 7.4% compared to the FY 2022-23 Adopted Budget. This reduction is aHributed to a decrease in pavement expenditures.

The Special Revenue Funds receive funding from two sources: $10.2 million in restricted department revenue and $2.5 million in transfers, resulting in a total funding of $12.7 million. The Special Revenue Funds are expected to end the year with a fund balance of $31.6 million, reflecting an increase of $2.3 million from the previous year.

This increase in fund balance is mainly due to the housing mitigation revenue in the BMR Housing Fund.

Debt Service Funds
The Public Facilities Corporation Debt Service Fund provides for the payment of principal, interest, and associated administrative costs incurred with issuing debt instruments. On September 29, 2020, the City’s 2020A Certificates of Participation (2020 COPs) were successfully sold to refund the City’s 2012 Certificates of Participation for debt service savings. The refunding generated net present value savings of approximately $3.14 million, 11.61% of refunded par, and a True Interest Cost of 0.72%. Savings to the City’s General Fund amounts to approximately $494,000 per year for the next ten years or almost $5 million in total savings. The debt is expected to be fully paid by FY 2029-30.

The Proposed Budget for Debt Service Funds is $2.7 million, relatively unchanged from the FY 2022-23 Adopted Budget. The Debt Service Funds are funded by $2.7 million in transfers from the General Fund.

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Capital Projects Funds
Capital Projects Funds are used for the acquisition or construction of major capital facilities and infrastructure.

Capital Projects Funds include the Capital Improvement Projects Fund, Stevens Creek Corridor Park Fund, and Capital Reserve Fund. These funds are used to finance the implementation of projects identified in the City's five- year Capital Improvement Program (CIP).

While the Proposed Budget for Capital Projects Funds is only $175,000, a decrease of $3.5 million, or 95.2%, from last year's Adopted Budget, this is because the Capital Improvement Program budget is not included in the Proposed Budget. The City is currently working on an updated Capital Improvement Program, which will be presented to City Council on May 17 and added for Council consideration at the final budget hearing and adoption.

The Capital Projects Funds are primarily funded through a combination of transfers from the General Fund, grants, donations, development impact fees, and other dedicated revenue sources. As projects are completed, any remaining funds are typically rolled over into the Capital Reserve Fund to be used for future projects.

Enterprise Funds
Enterprise Funds are designed to support services that are funded directly by fees charged for goods or services.

The City's Enterprise Funds include Resource Recovery for the solid waste collection franchise, Blackberry Farm for the City-owned golf course, Sports Center for the Cupertino Sports Center, and Recreation Programs for cultural, youth, teen, sports, and physical recreation programs.

In the Proposed Budget, the Enterprise Funds are allocated $9.5 million, which represents an increase of $0.5 million or 5.0%, from the FY 2022-23 Adopted Budget. The Enterprise Funds are funded by $6.7 million in program revenue and $2.7 million in reserves. The Enterprise Funds are projected to end the year with $3.7 million in reserves, a decrease of $2.7 million. This decrease is due to the use of reserves, which were accumulated in previous years. During the pandemic, the Parks and Recreation funds accumulated reserves as revenues were higher than expenditures.

Internal Service Funds
Internal Service Funds are for goods or services provided to other City departments or governments on a cost- reimbursement basis. These funds include programs for innovation and technology, workers’ compensation, equipment, compensated absences, long-term disability, and retiree medical insurance.

The Proposed Budget for Internal Service Funds is $8.7 million, which is a slight decrease of $0.1 million or 1.5%, compared to last year's Adopted Budget. The Internal Service Funds are funded by $4.2 million in program revenue, $1.3 million in transfers from the General Fund, and $3.3 million in reserves. The Internal Service Funds are projected to end the fiscal year with $(0.1) million in reserves, decreasing by $3.3 million. Although the Internal Service Funds show a negative net position, it's important to note that retiree health expenses will be reimbursed by the Section 115 OPEB Trust at the close of each fiscal year.

This decrease in reserves is due to the City's decision to eliminate the General Fund transfer to the Retiree Medical Fund in FY 2022-23. Instead, the City plans to fund Other Post-Employment Benefits (OPEB) costs with the City's Section 115 OPEB Trust, as the City's OPEB plan is over 100% funded. The City will continue to monitor the Internal Service Funds to ensure they remain sustainable and effective in supporting City operations.

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Budget Reductions
The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Unfunded Needs
Departments have identified the following projects as unfunded needs, which refer to priority projects that lack sufficient funding to be implemented at this time.

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Special Projects
The FY 2023-24 Proposed Budget allocates funds for Special Projects, which are typically one-time operational projects. The Special Projects are detailed in the respective program's Special Project section and summarized in the table below. Some Special Projects' budgets from previous fiscal years may also be carried forward into FY 2023-24.

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Current Economic Update
National and State Economic Conditions
Real gross domestic product (GDP) increased at an annual rate of 2.6% in the fourth quarter of 2022, aOer increasing by 3.2% in the third quarter. The increase in the fourth quarter primarily reflected increases in inventory investment and consumer spending that were partly offset by a decrease in housing investment. The deceleration in the fourth quarter, compared to the third quarter, primarily reflected a downturn in exports and decelerations in consumer spending, business investment, and state and local government spending. These movements were partly offset by an upturn in inventory investment, a smaller decrease in housing investment, and an acceleration in federal government spending. Imports decreased less in the fourth quarter than in the third quarter.

Economic trends have been decelerating along with tighter financial conditions and restrictive monetary policy.

Recent data suggests positive but below-trend growth this year. Although the pace of job growth is moderating, labor markets remain solid, and the U.S. consumer has demonstrated resiliency.

At the end of March, the 2-year Treasury yield was 169 basis points higher, and the 10-Year Treasury yield was about 113 basis points higher, year-over-year. The inversion between the 2-year Treasury yield and 10-year Treasury yield narrowed to -56 basis points at March month-end versus -90 basis points at February month-end.

The average historical spread (since 2003) is about +130 basis points. The inversion between 3- month and 10-year Treasuries widened to -128 in March from -89 basis points in February. The shape of the yield curve indicates that the probability of recession is increasing.

As of March 2023, the U.S. unemployment rate stood at 3.5%, showing a slight decrease from 3.6% in March 2022.

This rate is comparable to the 3.5% reported in February 2020 before the start of the pandemic. The participation rate rose to 62.6%, up from 62.4% in the previous year but still below the February 2020 level of 63.4%. The U-6, a broader measure of unemployment that includes those marginally aHached to the labor force and employed part- time for economic reasons, declined to 6.7% from 6.9% in March 2022.

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Despite concerns over inflation, bank collapses, and a possible recession, American consumer confidence showed a slight increase in March following two consecutive monthly declines. According to the Conference Board, the consumer confidence index rose from 103.4 in February to 104.2 in March. However, while consumers expressed slightly more optimism about the short-term future, their confidence in current conditions decreased. This marks a reversal from recent surveys. The Conference Board notes that although there was an uptick in confidence, the index still remains below the 2022 average level of 104.5. The latest results also reveal that consumer expectations of inflation over the next 12 months remains elevated—at 6.3%.

According to the California Employment Development Department (EDD), the state's unemployment rate held steady at 4.4% in March 2023, the same as in March 2022. The EDD also reported that employers added 8,700 nonfarm payroll jobs to the economy in March 2023. Total employment reached 17,967,800, up by 2.5% (432,100 jobs) compared to the same period last year.

The California Association of Realtors (CAR) reported a 4.8% decline in median home prices and a 33.2% decrease in sales in February compared to the previous year. Similarly, Santa Clara County's growth rate also slowed down, with a 17.6% fall in prices of single-family homes and a 37.9% decrease in sales compared to the same period last year.

Cupertino Economic Conditions
The unemployment rate in the San Jose-Sunnyvale-Santa Clara MSA was 3.3% in March 2023, up from a revised

3.2% in February 2023, and above the year-ago estimate of 2.9%. This was below the unemployment rate for California and the nation during the same period. Between March 2022 and March 2023, combined employment in the South Bay counties of San Benito and Santa Clara, increased by 37,700 jobs, or 3.3%.

Housing prices remain relatively strong compared to the same period in 2022. Based on data from Redfin, the median sales price for an existing single-family home was $2,758,000 in March 2023 compared to $3,400,000 in March 2022. The City experienced a net taxable value increase of 7.24% for the 2022-23 tax roll.

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Key Budget Assumptions
Revenue Assumptions
The City's General Fund revenues heavily depend on property tax, sales tax, and transient occupancy tax (TOT).

However, the ongoing CDTFA audit is expected to alter the way sales tax is allocated to the City, leading to a significant reduction in sales tax revenue. As a result, the City anticipates General Fund revenues to decrease by $30 million, or 28%, from original projections.

Personnel Assumptions
FY 2023-24 salaries and benefits reflect the cost-of-living adjustments approved by the City Council in August 2022. The City is currently negotiating with its bargaining groups because the agreements, which expire on June 30, 2025, include a salary and benefits reopener. In the forecast, full-time salaries are expected to increase by the CalPERS payroll growth rate. On the other hand, part-time salaries are forecasted to grow at a rate of 1.5%, which is a slower rate than full-time salaries.

Employees who have yet to reach the top step in their classification’s salary range are eligible to receive a step increase on their anniversary date. Typically, classifications have five steps, with each increase equivalent to a 5% increase in salary. Currently, approximately 38% of employees are below Step 5.

Non-Personnel Assumptions
Non-Personnel budgets were developed based on previous year's actual expenditures and adjusted for the current year's needs. One-time projects were excluded to reflect ongoing expenditure needs. In response to the anticipated revenue shortfall resulting from the CDTFA audit, departments were asked to find ways to reduce the base budget. To balance the budget, various categories including materials, contract services, capital outlays, special projects, transfers to other funds, and contingencies were reduced in the Proposed Budget.

Ongoing Challenges
Retirement Benefits
Rising retirement costs are driving the increase in employee benefits. Cupertino offers retirement benefits to its employees through the California Public Employee’s Retirement System (CalPERS), which experienced a significant decline in its assets due to poor investment returns during the Great Recession. Moreover, changes in actuarial assumptions and enhanced benefits due to higher life expectancies have further increased the plan's liabilities. Consequently, the City's pension costs have escalated considerably and currently constitute one of the City's largest financial obligations.

The table below illustrates the City's CalPERS costs over the next few years.

In December 2016, the CalPERS Board of Administration implemented a three-year phase-in beginning in FY 2018-19 to lower the discount rate from 7.5% to 7.0%, resulting in significant increases in retirement costs. In FY 2021-22, the discount rate was further reduced to 6.8% due to the FY 2020-21 investment gain of 21.3%, which triggered the Funding Risk Mitigation Policy.

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To mitigate the impact of pension rate volatility on the City's budget, the City established a Section 115 Trust in May 2018. The Section 115 Pension Trust had a balance of $17.2 million as of June 30, 2022, which can be utilized to fund pension costs.

Revenue Volatility
The City of Cupertino heavily relies on business-to-business (B2B) sales taxes for its sales tax revenue, making it highly sensitive to economic fluctuations. The City experienced the impact of this volatility during the dot-com crash from 2000 to 2004. The heavy reliance on the high-tech industry makes the City vulnerable, and the loss of one of the top three sales tax producers in FY 2013-14 made the City more dependent on a single tax producer, further increasing its vulnerability to business volatility.

The COVID-19 outbreak in 2020 significantly impacted the City's revenues from sales and transient occupancy taxes. Although certain sectors, such as restaurants and hotels, brick-and-mortar retail and restaurants, were severely affected, the City experienced an increase in business-to-business sales tax revenues and County pool allocation share. The increase in sales tax revenue was aHributed to the rise in online sales due to statewide shelter-in-place mandates and the higher demand for computer and electronics equipment due to the shiO to remote work. While the City's sales tax revenues reached historic highs in FY 2020-21 and FY 2021-22, the City considers it a one-time event, and the recovery of the restaurant and hotel, general consumer goods, and automotive industry groups did not offset the declines in business-to-business sales tax and County pool allocation as online sales decreased from their recent historic highs. Transient occupancy tax revenue decreased due to reduced business travel during the pandemic but has begun to recover in FY 2022-23.

In December 2021, the CDTFA informed the City that an audit would be conducted on one of its taxpayers. The CDTFA verbally notified the City in March 2023 of its preliminary determination that tax dollars had been misallocated to the City, discussing the potential impacts on the City. The CDTFA is expected to issue a formal leHer to the City within the next four to six months, providing the final audit results and the actual amount of money lost. As a result of the audit, the City's sales tax revenue is expected to significantly decrease.

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Budget Guide
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Our Mission
The mission of the City of Cupertino is to provide exceptional service, encourage all members of the community to take responsibility for one another, and support the values of education, innovation, and collaboration.

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Elements of the Budget Document
The budget is the City’s fundamental policy document. It describes the City’s goals and details how resources are allocated to achieve these goals. The budget serves as the annual financial plan, an operations guide, and a communications tool.

The budget guide provides an overview of the elements of the budget document. It includes a glossary of budget terminology. The budget document includes the following key elements:

Budget Message: This section includes the City Manager’s transmiHal leHer submiHing the budget to the City Council. The Budget Message also summarizes the City’s current and long-term financial position, highlights new programs and organizational changes addressed in the budget, and outlines both short and long-term goals of our city government.

Budget Guide: This section includes the City’s Mission and other tools to assist the reader in identifying key terminology in the budget document.

Community Profile: This section describes Cupertino’s history, the economic and city profiles, community statistics, recreation and community services, education, and additional areas of interest in the city.

Financial Policies: This section provides financial policies.

Financial Schedules: This section provides financial information on projected revenues, expenditures, fund balances, and reserves. It includes the Financial Overview by Fund as well as detailed fund descriptions and information on all revenues and expenditures.

This section also includes a forecast of revenues, expenditures, and fund balance for the next ten years.

Additionally, this section includes an analysis of all City revenues by category. Revenue projections are based on trends, current economic indicators, and input from other agencies or consultants. Sales tax projections are based on input from our sales tax consultants, industry trends, and major company forecasts. Property tax revenues are projected by the county and adjusted by staff based on known trends.

Departmental Operating Budgets: This section details historical and proposed expenditures by operating department. The City is organized into eight key operating functions, including Council and Commissions, Administration, Law Enforcement, Innovation and Technology, Administrative Services, Parks and Recreation, Community Development, and Public Works. Each department budget includes a summary narrative, financial information for the department and each of its major divisions, and staffing information.

Expenditures for employee compensation and benefits are based on negotiated contracts. The materials categories of expenditures are based on a zero-base budget, with increases each year by the Consumer Price Index (CPI).

Contract services are also based on a zero-based budget, with increases each year based on negotiated increases or CPI. Capital outlays are justified each year by the departments. Special Projects include one-time operational projects.

Departmental expenditures are divided into the following categories:

Employee Compensation represents permanent full-time and part-time salary costs and overtime.

Employee Benefits represents CalPERS retirement, health insurance costs, and other benefits.

Materials and Supplies represent items purchased for repair and maintenance, operational activities such as books, uniforms and recreation supplies, office supplies, and conference and training costs.

Contract Services represents legal, consulting, and other professional services, contract repair and maintenance, utility charges, training and memberships, equipment rentals, insurance, and employment services.

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Cost Allocation represents Cost Allocation and Internal Service charges to user departments.

Contingencies, 1 .5% of budgeted materials and contract costs, are designed for unexpected expenditures and/or emergencies.

Capital Outlay represents expenditures for tangible fixed assets including land, buildings, furniture, equipment, and City vehicles.

Special Projects represent any one-time projects or costs.

Debt Service represents principal and interest payments on outstanding debt.

Other Financing Uses represent depreciation expenses.

Transfers Out represent transfers to other City funds.

Non-Departmental Operating Budgets: This section details historical and proposed expenditures for inter-fund transfers and debt service payments.

Capital Improvement Program (CIP): The Capital Improvement Program is in a separate document, called Capital Improvement Program, that details the proposed capital projects for the next five fiscal years. The five- year plan denotes funding sources and a description of each project. The City Council approves funding for capital projects yearly. The project may expend the funds over multiple years.

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Glossary of Budget Terminology
The City's budget contains specialized and technical terminology that is unique to public finance and budgeting.

To help the reader understand the terms, a glossary of budgetary terminology is found below.

Accrual – A basis of accounting in which revenues are recognized in the accounting period in which they are earned and expenses are recognized in the period in which they are incurred.

Adopted Budget – Revenues and appropriations approved by the City Council in June for the following fiscal year.

Allocated Costs – An expense charged by one department/division to another for services performed or expenditures of a general nature that are charged to one main account and allocated to other departments/divisions by a specified formula.

Amended Budget – The status of appropriations between July 1 and June 30 includes the adopted budget, budget amendments, prior year encumbrances, approved carryovers, and transfers between objects, divisions and departments.

Appropriation – An authorization made by the City Council that permits the City to incur obligations and to make expenditures of resources.

Balanced Budget – A balanced budget requires that budgeted expenditures be equal to or less than projected revenues for the budget year.

Budget – A financial plan for a specific period of time (fiscal year) that matches all planned revenues and expenditures with various municipal services.

Budget Amendment – A legal procedure to revise a budget appropriation. Adjustments to expenditures within or between departmental budgets may be accomplished administratively. City Council approval is required for additional appropriations from fund balances or from new revenue sources.

California Department of Tax and Fee Administration - A state agency responsible for administering various taxes, fees, and surcharges in California. This includes the collection and administration of sales and use taxes, which is a major revenue source for the state and local governments.

Capital Improvement Program – A plan for capital expenditures to provide for the acquisition, expansion, or rehabilitation of an element of the City's physical plant to be incurred over a fixed period of several future years.

Capital Outlay – Expenditures relating to the purchase of equipment, land, and other fixed assets.

Cost Allocation Plan – A plan that details how indirect costs are calculated and allocated to user departments.

Cost Recovery – The establishment of user fees that is equal to the full cost of providing services.

Deficit - Occurs when expenditures exceed revenues.

Department – A major administrative segment of the City that indicates overall management responsibility for an operation or a group of related operations within a functional area.

Division – A unit of organization that reports to a department.

Enterprise Fund – A fund established to account for activities that are financed and operated in a manner similar to private business enterprises, in which costs of providing services are primarily recovered through user fees.

Expenditure – Utilization of fund resources. Expenditures include operating expenses, debt service, and capital outlays.

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Expenditure Category – A basis for distinguishing types of expenditures. The major expenditure categories used by the City are employee compensation, employee benefits, materials, contract services, appropriations for contingency, special projects, capital outlay and debt service.

Fiscal Y ear – A twelve-month time period signifying the beginning and ending period for recording financial transactions. The City has specified July 1 through June 30 for its fiscal year.

Full-Time Equivalent (FTE) – The ratio of a position in comparison to the amount of time a regular, full-time employee normally works in a year. A full-time employee (1.00 FTE) is paid for 2,080 hours a year. Positions budgeted to work less than full-time are expressed as a percent of full-time.

Fund – A fiscal and accounting entity for which the recording of financial transactions is made for the purpose of carrying on specific activities in accordance with the requirements placed upon the use of financial resources.

Fund Balance – The net effect of assets less liabilities at any given point in time.

General Fund – The fund used to account for the major operating revenues and expenditures of the City, except for those financial resources that are required to be accounted for in another fund category. General Fund revenues are derived primarily from property and other taxes.

Goal – Broad mission statements that define the purpose of a department.

Governmental Fund – Account for activities that are primarily tax-supported operations or other mandatory payments. Reported using the current financial resources measurement focus and the modified accrual basis of accounting.

Infrastructure – Long-lived capital assets that normally are stationary in nature and can be preserved for a significantly greater number of years than most capital assets. Examples include roadways, bridges, and drainage systems.

Internal Service Fund – A fund used to account for the services provided by one department to other departments on a cost-reimbursement basis.

Modified Accrual – Under the modified accrual basis of accounting, revenues are recognized in the period in which they become available and measurable, and expenditures are recognized at the time a liability is incurred pursuant to appropriation authority.

Operating Budget – A financial plan for the provision of direct service and support functions that provide basic governmental services. The operating budget contains appropriations for such expenditures as employee compensation, materials, contract services, capital outlay, and debt service. It does not include Capital Improvement Project expenditures.

Program – A unit or organization that reports to a division.

Reserve – An account used to designate a portion of the fund balance for specific future use and is, therefore, not available for general appropriation.

Revenue – Increases in fund resources. Revenues include income from user fees, taxes, permits, and other sources.

Self-Supporting Activity – An enterprise activity where all service costs (including principal and interest debt payments) are primarily covered solely from the earnings of the enterprise.

Structural Deficit –The amount by which a government's expense is higher than its revenue received, regardless of the economic climate.

Subsidy – Supplemental resources provided to ensure adequate funding when anticipated expenditures exceed FY 2023-24 Proposed Budget Budget Guide 55
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revenues.

Transfer Out – Amounts transferred from one fund to another to assist in financing the services for the recipient fund.

User Fees – Fees charged to users of a particular service provided by the City.

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Commonly Used Acronyms
ABAG Association of Bay Area Governments
ACFR Annual Comprehensive Financial Report
ARPA American Rescue Plan Act
B/PAC Bicycle/Pedestrian Advisory Committee
BAAQMD Bay Area Air Quality Management District
BMR Below Market Rate
CAP Cost Allocation Plan
CARES Coronavirus Aid, Relief, and Economic Security Act CDTFA California Department of Tax and Fee Administration CMTA California Municipal Treasurers Association
CPI Consumer Price Index
CPUC California Public Utilities Commission
CSMFO California Society of Municipal Finance Officers
CWP City Work Program
EAP Employee Assistance Program
EIR Environmental Impact Statement
EOC Emergency Operations Center
ERAF Education Revenue Augmentation Fund
FEMA Federal Emergency Management Agency
FLSA Fair Labor Standards Act
FPPC Fair Political Practices Commission
FSA Flexible Spending Account
FY Fiscal Year
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GASB Governmental Accounting Standards Board
GFOA Governmental Finance Officers Association
HVAC Heating Ventilation and Air Conditioning
IPM Integrated Pest Management
JPA Joint Powers Authority
LAIF Local Agency Investment Fund
LTD Long Term Disability
MOU Memorandum of Understanding
MTC Metropolitan Transportation Commission
OES Office of Emergency Services
OPEB Other-Post Employment Benefits
PC Planning Commission
PEMHCA Public Employees’ Medical and Hospital Care Act
PERS (aka CalPERS) Public Employees’ Retirement System
PTA Parent Teacher Association
RDA Redevelopment Agency
RFP Request for Proposals
RFQ Requests for Qualifications
RHNA Regional Housing Needs Allocation
RMS Records Management System
RWQCB Regional Water Quality Control Board
UAL Unfunded Actuarial Liability
UBC Uniform Building Code
VSP Vision Service Plan
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Revenues, Expenditures, and Fund Balance Table
Taxes – Money received from tax revenue
Licenses and Permits – Money received from license and permit fees Use of Money and Property – Interest earnings, facility. and concession rents Intergovernmental Revenue – Funds received from federal, state, or local governments such as grants Charges for Services – Fees collected for services provided by the department Fines and Forfeitures – Money received from fines and penalties Miscellaneous Revenue – Money received from various sources such as donations, salvage, and legal settlements Interdepartmental Revenue – Interdepartmental service charges and transfers Other Financing Sources – Money received from bond proceeds, fixed asset proceeds, and refundable deposits FY 2023-24 Proposed Budget Budget Guide 59
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Total Revenues – Total of all revenue categories
Employee Compensation – Full-time and part-time salaries Employee Benefits – Employee benefits including health insurance and retirement Materials – All material, conference, and training costs Contract Services – All contracted goods and services
Cost Allocation – Cost of services from other City departments Capital Outlay – Land, buildings, vehicles, infrastructure, and assets used in operation beyond one year Special Projects – One-time projects or costs
Other Financing Uses – Depreciation and refundable deposit expenses Debt Service – Principal and interest payments for outstanding debt Transfers Out – Transfers out to other City funds
Contingencies – Funds for unexpected expenses and emergencies Total Expenditures – Total of all expenditure categories Change in Fund Balance – Total Revenues minus Total Expenditures plus General Fund Contribution. Fund balance is the difference between assets and liabilities.

General Fund Contribution – Use of General Fund fund balance, for programs in the General Fund, or use of transfers from the General Fund, for programs not in the General Fund.

The inclusion of current and historical "actual" and "budget" information is a necessary component of the Government Finance Officer's Association (GFOA) reporting requirements. Due to the extensive amount of financial data, it is important to understand the meaning of these tables. "Actual" data represents actual revenues or expenditures that have been recognized or incurred in the respective fiscal year. Although amounts were budgeted in those years, these actual amounts are irrespective of the budget which should be taken into account when comparing historical actuals with current budgeted figures. Historical budget versus actual information for the last 4 fiscal years at the account detail level is available in the Appendix on the City's budget website (cupertino.org/budget).

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Community Profile
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History
“This place of San Joseph Cupertino has good water and much firewood, but nothing suitable for a seBlement because it is among the hills very near to the range of cedars which I mentioned yesterday, and lacks level lands .” When Spanish explorer San Juan Bautista De Anza traveled through California in 1776, he and his party documented these words about the land surrounding Stevens Creek, named back then Arroyo San Joseph Cupertino. However, first impressions can oOen be misleading. Underneath the spiny, overgrown bush was a completely different land waiting to be uncovered. During this time, the area was populated by Native Americans who hunted and gathered, prospering from the abundant resources the land had to offer.

It wasn’t until 1848 when the first American seHler, Elijah Stephens, a blacksmith from South Carolina, moved to the area—at this time, named simply ‘West Side’ and primarily owned by the government. AOer crossing over the Sierra Nevada in wagons, he discovered the true value of the land underneath the bush and proceeded to purchase over 300 acres of farmland to grow grapes and blackberries. Stephens pioneered the way for farmers, which established West Side as an agricultural hot spot. The land Stephens owned eventually became Blackberry Farm, and the road, creek, and reservoir were all named after him, although misspelled.

In the early West Side, many of the newest advances in agriculture were being developed. SeHlers were drawn to the land because of its rich earth, where they were able to grow products that competed on the world market.

Once the bush had been cleared, they grew grapes, which covered the West Valley area with vineyards by the late 1800s. By the 1900s, a plant louse called Phylloxera spread throughout the vineyards, aHacking the roots of the grapevines, killing the grapes, and puHing a halt to wine production. As a solution, nearly everything was replanted with fruit orchards. When the fruit trees blossomed, visitors would come to the orchards for “The Valley of Heart’s Delight” festivals, which celebrated the prosperous agriculture of the West Valley area.

Apart from the farmland, West Side was primarily known as a crossroads, an intersection between Saratoga- Sunnyvale Road and Stevens Creek. This served as a way station for travelers to pass through while going from town to town. As more people came to West Side to take advantage of the rich farmland, more family holdings gathered around the crossroads. Starting off as just a post office and home union store, West Side’s humble crossroads brought many diverse communities, all aHracted by the preferable climate and profitable market for crops.

As more people were drawn to the area around the crossroads, the orchards were gradually replaced with modern houses for workers. The population steadily grew, and the face of West Side changed, progressing into a more modern town. The community wanted to rename the city, so as to not confuse it with other cities, as well as establish a unique identity. John T. Doyle, a lawyer from San Francisco, and writer of historical anthologies on the area chose the name “Cupertino” after the original name of the creek.

AOer the post-World War II population boom, the growing community petitioned for Cupertino to become an incorporated town. Members of the community were worried that the alternative to incorporation was to have parts of Cupertino annexed by surrounding cities, spliHing up the community and erasing the local culture. To preserve the rural atmosphere, lower taxes for farmers, start a local government, and prepare for growth, Cupertino voted for incorporation. In 1955, Cupertino officially became the 13th city in Santa Clara County.

By the 1970s, Cupertino once again began to undergo dramatic changes. The growing community aHracted several large technology corporations. Lockheed Martin, HP , Intel, and many other big names established themselves in Silicon Valley. Apple Inc. was founded in Cupertino in 1976 and quickly grew into the tech giant it’s known for today.

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Apple Park Visitor Center
In the late 20th century, Cupertino and the surrounding areas experienced another surge in population growth, this time due to the immigration of people from Asian countries. Immigration laws at the time were in the favor of families looking to move to Silicon Valley. People immigrated here for a variety of reasons—whether they were aspiring for career prospects with major tech companies, or striving for quality education for their children, everyone who immigrated here had a common goal: to find opportunities to work hard for a beHer life for themselves and their families.

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Community Economic Profile
Cupertino, with a population of 60,869 and City limits stretching across 13 square miles, is considered one of the most prestigious cities to live and work in the Bay Area.

Economic health is an essential component to maintaining a balanced city, which provides high-level opportunities and services that create and help sustain a sense of community and quality of life. Public and private interests must be mutual so that success as a partnership is a direct reflection of success as a community.

The cornerstone of this partnership is a cooperative and responsive government that fosters residential and business prosperity and strengthens working relationships among all sectors of the community.

Because Cupertino is a mature, 93% built-out city, the City of Cupertino focuses on business retention and revitalization, while at the same time, being supportive of redevelopment projects to bring in new investment.

Cupertino is world-renowned as the home to high-tech giant Apple, Inc., and as a community with stellar public schools. De Anza College, one of the largest single-campus community colleges in the country, is another major employer and a magnet for aHracting local and international students. The City’s proactive economic development efforts and a high-touch approach has resulted in an innovative environment for start-ups and growing companies to thrive, including Bromium, Moxo Cupertino, DURECT, Xisilicon Semiconductor Inc, Claspp, Panasonic Venture Group, Altia Systems, Mirapath, Aemetis Inc, Mist Systems, and many more. The City strives to retain our companies and aHract new ones through active outreach and a responsive, streamlined, and customer-oriented entitlement process.

Cupertino has a number of mixed-use development projects offering diverse retail and dining options, as well as providing additional housing opportunities to meet the needs of the growing community. There are also quite a few development projects underway including: Westport Cupertino, Marina Plaza, Alan Row, and Canyon Crossing. Further, City Council recently approved the 283,000 square foot mixed Office/Commercial Apple development at 19191 Vallco Parkway.

Main Street
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The Main Street and Nineteen800 mixed-use developments have created a vibrant downtown area for Cupertino, offering a large selection of restaurants and retailers, including Alexander’s Steakhouse, Eureka!, Oren’s Hummus, Lazy Dog, Ippudo, Pasta Armellino, HaiDiLao Hot Pot Restaurant, Pineapple Thai, Pressed Juicery, Orangetheory, 85 Degree Bakery, SomiSomi, Sul & Beans, Kura Sushi, Vitality Bowls, La Pizzeria, Tan-cha, Koja Kitchen, Bishops Cuts & Colors, Capezio, Howard’s Shoes, and Meet Fresh. Housing, office, and the Residence Inn by Marriott are available to support the thriving area.

Serving as a long-time retail anchor for the community, The Marketplace has a variety of stores and restaurants popular with students, families, and working professionals. They include Galpao Gaucho, Daiso, Marukai Groceries, Harumi Sushi, La Patisserie Bakery, Beard Papa’s, Legend’s Pizza, Icicles, Kong’s Tofu & BBQ, Rori Rice, One Pot Shabu Shabu, Olarn Thai, and Erik’s DeliCafé to name a few.

Cupertino Village, a shopping center located in the northeast portion of the City, is home to 99 Ranch Market, Duke of Edinburgh Pub & Restaurant, MOD Pizza, Ten Ren Tea, Fantasia Coffee & Tea, Kee Wah Bakery, Happy Lemon, and many other Asian restaurants, bakeries, and shops. The property owners have received approval to construct a new full-service boutique hotel with 185 rooms to accommodate business and leisure travelers.

Cupertino features many other retail opportunities, including TJ Maxx and Home Goods, Whole Foods, Target, Party City, and over 180 restaurants to serve residents and the local workforce. There are now seven hotels providing over 1,000 rooms, to serve the area: The AloO Cupertino, Cupertino Hotel, Hilton Garden Inn, HyaH House, Juniper Hotel operated by Curio, Marriott Courtyard, and Residence Inn by Marriott.

Another longtime retail anchor in north Cupertino is Homestead Square Shopping Center, located at Homestead Road and De Anza Boulevard. This shopping center includes a 24-hour Safeway, Ulta Beauty, Ross Stores, Pet Club, Michael’s, Rite Aid, FedEx, and numerous restaurants, such as Fish’s Wild, Pho Hoa Noodle Soup, Yayoi Teishoku Japanese Restaurant, Starbucks, Chipotle, and financial institutions.

Recently approved is the redevelopment of The Oaks Shopping Center site, located off of State Route 85 freeway and across from De Anza College. The Westport Cupertino project will be a mixed-used development consisting of 259 housing units (Rowhouse/Townhomes, senior apartments) 35 memory care rooms, and 20,000 square feet of commercial space.

Apple Park Retail Store
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Apple Park, Apple’s newest corporate campus, features approximately 2.8 million square feet of office and R&D space north of Highway 280 between Wolfe Road and Tantau Avenue. A state-of-the-art Visitors Center, Observation Deck, flagship retail store, and café are open to the public.

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City Profile
The City of Cupertino operates as a general law city with a City Council-City Manager form of government. Five council members serve four-year, overlapping terms, with elections held every two years. The Council meets twice a month on the first and third Tuesday at 6:45 p.m. in Cupertino Community Hall. The meeting schedule is available on the City’s website, and public participation for the Council meetings is in-person and online.

The City has over 200 authorized full-time benefited employee positions. Departments include:

Administration
Administrative Services
Community Development
Council and Commissions
Innovation and Technology
Parks and Recreation
Public Works
Public Safety services are provided by the Santa Clara County Sheriff’s Department and the Santa Clara County Fire District.

Assisting the City Council are several citizen advisory commissions and committees, including:

Arts and Culture Commission
Audit Committee
Bicycle Pedestrian Commission
Housing Commission
Library Commission
Parks and Recreation Commission
Planning Commission
Public Safety Commission
Sustainability Commission
Teen Commission
Technology, Information and Communications Commission
The Commissioners are appointed by Council, and vacancies are announced so interested residents can apply for the positions. For more information, visit cupertino.org/commissions.

Housing
Based on data from Redfin, the median sales price for an existing single-family home was $2,758,000 for March 2023. For housing programs in Cupertino, please see “Programs & Applications.” Community Health Care Facilities
Cupertino is served by a number of private medical practitioners and El Camino Health Urgent Care. Nearby hospitals include Kaiser Permanente Medical Center in Santa Clara, Valley Health Center in Sunnyvale, El Camino Hospital in Mountain View, O’Connor Hospital in San Jose, Community Hospital of Los Gatos, Stanford Hospital in Palo Alto, and the Saratoga Walk-in Clinic in Saratoga.

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Utilities
Utility Company Phone Number
Gas & Electric Pacific Gas and Electric 800-743-5000
Phone AT&T residential service 800-894-2355
Phone AT&T business service 800-750-2355
Cable Comcast 800- 945-2288
Solid Waste & Recycling Recology 408-588-7200
Water San Jose Water Company 408-279-7900
Water California Water Service 650-917-0152
Sewer Service Cupertino Sanitary District 408-253-7071
Tax Rates and Government Services
Residential, commercial, and industrial property is appraised at full market value as it existed on March 1, 1975, with increases limited to a maximum of 2% annually. Property created or sold since March 1, 1975, bears full cash value as of the time created or sold, plus the 2% annual increase. The basic tax rate is $1.00 per $100 (full cash value) plus any tax levied to cover bonded indebtedness for the county, city, school, and other taxing agencies.

Assessed valuations and tax rates are published annually after July 1.

Assessed Valuation (Secured and Unsecured) as reported in the Santa Clara County 2022-2023 Annual Report:

Cupertino: $30,892,117,995
County: $619,953,385,583
Retail Sales Tax Distribution
Agency Sales Tax Distribution
State 6.000%
VTA 1.125%
City of Cupertino 1.000%
County General Purpose 0.750%
County Transportation 0.250%
Total 9.125%
Transportation
Rail: The CalTrain station is four miles north of Cupertino. The Amtrak station is 10 miles south.

Air: The San Francisco International Airport is located roughly 30 miles north, and the Mineta San Jose International Airport is located approximately 11 miles south.

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Bus: Cupertino is served by the Santa Clara Valley Transportation Authority. The routes listed below pass through the City. For Cupertino-specific schedules and maps visit their online website:

Route 23 San Jose – Mountain View/Palo Alto
Route 25 San Jose – De Anza College
Route 26 Eastridge – Lockheed
Route 36 East San Jose – Vallco
Route 51 Vallco – Moffett/Ames
Route 53 Westgate – Sunnyvale
Route 55 De Anza – Great America
Route 81 East San Jose – Vallco
Express 101 Camden/Branham – Palo Alto
Express 501 Palo Alto – I.B.M Bailey
Car: The City of Cupertino is in the heart of the world-renowned Silicon Valley. The major highway transportation facilities are Interstate Route 280 and State Route 85 freeways. The City is linked internally by several principal arterials and Santa Clara County expressways. Principal arterials are De Anza Boulevard, Stevens Creek Boulevard, and Wolfe Road. Nearby expressways are Lawrence Expressway and Foothill Expressway.

Sister Cities
The City of Cupertino recognizes the value of developing people-to-people contacts by strengthening the partnerships between the city and its four sister cities of Copertino, Italy; Hsinchu, Taiwan; Toyokawa, Japan, and Bhubaneswar, India. Cupertino’s Sister City partnerships have proven successful in fostering educational, technical, economic, and cultural exchanges. Over the years, there have been many delegations visiting both the cities as well as many local students participating in annual student exchange programs.

Cupertino Sister Cities Sign
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Education
Winners of numerous state and national awards for excellence, Cupertino’s schools are widely acknowledged as models of quality instruction.

Cupertino Union School District serves over 18,000 students in a 26 square mile area that includes Cupertino and portions of five other cities. The district has 20 elementary schools and five middle schools, including several choice programs. Eighteen schools have received state and/or national awards for educational excellence.

Student achievement is exceptionally high. Historically, district test scores place Cupertino among the premier public school districts in California. The district is a leader in the development of standards-based system of education and is nationally recognized for leadership in the use of technology as an effective tool for learning.

Quality teaching and parent involvement are the keys to the district’s success.

The Fremont Union High School District serves 10,000 students in a 42 square mile area covering all of Cupertino, most of Sunnyvale, and portions of San Jose, Los Altos, Saratoga, and Santa Clara. The five high schools of the district have garnered many awards and recognition based on both the achievement of students and the programs designed to support student achievements. Many high schools in the district exceed their established achievement targets for the State Academic Performance Index. District students are encouraged to volunteer and provide service to organizations within the community. During their senior year, if students complete 80 hours of service to a non-profit community organization, they are recognized with a “Community Service Award” medal that may be worn at their graduation ceremonies.

Building on its tradition of excellence and innovation, De Anza College challenges students of every background to develop their intellect, character, and abilities; to achieve their educational goals; and to serve their community in a diverse and changing world.

De Anza College Campus
De Anza College offers a wide range of quality programs and services to meet the workforce development needs of our region. The college prepares current and future employees of Silicon Valley in traditional classroom seHings and customized training arranged by employers. Several De Anza programs encourage economic development through college credit courses, short-term programs, services for manufacturers, technical FY 2023-24 Proposed Budget Community Profile 71
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assistance, and/or recruitment and retention services. De Anza College is the top Silicon Valley college in numbers of students transferring to four-year schools, and is always at or near the top statewide, earning it the distinction of, “Tops in Transfer.”
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Programs and Applications
Community Outreach Programs
Neighborhood Block Leader Program
A connected community is a safer and more resilient community. Block Leaders are engaged Cupertino residents who go the extra mile to build a sense of trust and community in their neighborhoods. The program shares City news, hazards, and events with Block Leaders, provides support for community building, and organizes quarterly meetings. Meeting topics include crime prevention, emergency preparedness, and presentations from City Divisions to help residents learn more about their City. Leaders facilitate information sharing between the City and residents, host community gatherings, and build a sense of trust and safety in their neighborhoods. To become a Cupertino Block Leader, please contact the Block Leader Coordinator at [email protected].

Neighborhood Block Leader Program
Neighborhood Watch
Stay safe, get connected, and learn how to prevent crime with Cupertino Neighborhood Watch. Neighborhood Watch is a partnership between residents, the City, and the Sheriff’s Office to reduce crime in our communities through education. The program involves: neighbors working together in a program of mutual assistance; citizens being trained to recognize and report suspicious activities in their neighborhoods; and implementation of crime prevention techniques such as home security. To organize a Neighborhood Watch program in your neighborhood, please contact the Neighborhood Watch Coordinator at [email protected].

Affordable Housing: BMR (Below Market Rate) Program
The City of Cupertino requires that 15% of all new rental construction and 20% of ownership construction be affordable to households below 120% of the County median income. Rental units are made available to very low and low-income households, while ownership units are made available to median and moderate-income households.

The City of Cupertino contracts with Rise Housing to screen and place qualified households in BMR units. Rise Housing maintains a waitlist of interested persons for these BMR units. For more information visit Rise Housing at www.risehousing.com, email [email protected], or call (415) 301-5448 (messages returned within 36- 48 hours).

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Smart Phone Applications
Cupertino Connect: One App for Everything
Are you looking for the latest Cupertino news, events, and important updates? Do you need to apply for a permit or submit a service request? Look no further than Cupertino Connect—a new app that gives you a one-stop app where all the City’s services are at your fingertips. Phone screen space is limited, and this update consolidates all the City apps on your phone into one.

With the Cupertino Connect app, you can find exactly the information you’re looking for. From COVID-19 updates, to election information, and even data on the trees in your neighborhood, you can find it all in one place.

Notice an issue that you want to bring to the City’s aHention? Whether it’s a roadway concern, landscape issue, or complaint, you can now submit Cupertino 311 requests through the Cupertino Connect app! It’s easier than ever to select the type of issue, select a location, attach any photos, and submit your request for service.

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Community Statistics
Facts and Figures
Population in City Limits 60,869
Average Household Income $218,571
Average Age 40.7
Registered Voters 33,147
Democrats 15,384
Republicans 4,386
American Independent 525
Other 333
No Political Party Designated 12,519
Claritas 2023 Estimates and County of Santa Clara Registrar of Voters as of April 27, 2023 Top 25 Sales Tax Producers 2022 (in Alphabetical Order) 99 Ranch Market
Alexander’s Steak House
Alliance
Apple
Argonaut Window & Door
Benihana
BJ's Restaurant & Brewhouse
California Dental Arts
Chevron
De Anza Car & Gas
Galpao Gaucho
Haidilao Hot Pot
Insight Direct
Insight Public Sector
Keysight Technologies
Kura Revolving Sushi Bar
Lazy Dog Cafe
Mirapath
Rotten Robbie
Safeway
Shane Company
Target
TJ Maxx
Valero
Whole Foods Market
HdL Companies 3Q 2022 (July - September) Sales Tax Update 1 1
2 2
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Community and Recreation Services
Blackberry Farm
Blackberry Farm is centrally located within the Stevens Creek corridor and has natural habitat for native trees, animals, and fish. The park includes an on-site café, pools, bocce ball, horseshoe courts, volleyball courts, and picnic areas with multiple sites for groups up to 400 people. The park is located at 21979 San Fernando Avenue.

Telephone: 408-777-3140.

Blackberry Farm Golf Course
The Blackberry Farm Golf Course is a nine-hole facility with a Par of 29 and is set along the bank of Stevens Creek with narrow tree lined fairways and small greens. The course is located at 22100 Stevens Creek Boulevard.

Telephone: 408-253-9200.

Quinlan Community Center
The Quinlan Community Center is a 27,000 square foot facility that provides a variety of recreational opportunities, rental spaces, hosts classes and programs for all ages, and houses the Cupertino Historical Museum. The center is located at 10185 North Stelling Road. Telephone: 408-777-3120.

Cupertino Sports Center
The Sports Center features 17 tennis courts, two racquetball courts, complete locker room facilities, teen center, and a fully-equipped fitness center featuring free weights, strength training equipment, and cardio equipment.

The center is located at 21111 Stevens Creek Boulevard. Telephone: 408-777-3160.

Cupertino Senior Center
The Senior Center provides opportunities for adults over the age of 50, including volunteering and various classes such as exercise, computer, English as a second language, and cultural and special interest. The center also coordinates trips and socials. The Senior Center is located at 21251 Stevens Creek Boulevard. Telephone: 408-777- 3150.

Civic Center and Library
The Civic Center complex has a 6,000 square foot Community Hall, plaza with fountain, trees, and seating areas.

City Council meetings, Planning Commission sessions, and Parks and Recreation Commission sessions are held in the Community Hall. The center is located at 10350 Torre Avenue. Telephone: 408-777-3120.

The Cupertino Library continues to be one of the busiest libraries in the Santa Clara County Library system. The library is located at 10800 Torre Avenue. Telephone: 408-446-1677.

McClellan Ranch Preserve
McClellan Ranch is an 18-acre preserve that houses the original ranch house, milk barn, livestock barn, and two historic buildings, including the Baer's Blacksmith Shop and the old water tower from the Parish Ranch, Environmental Education Center, and Community Gardens. The preserve is located at 22221 McClellan Road.

Telephone: 408-777-3149.

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Things To Do and See
Euphrat Museum of Art
The highly regarded Euphrat Museum of Art, at its new location next to the new Visual Arts and Performance Center at De Anza College, presents one-of-a-kind exhibitions, publications, and events reflecting the rich diverse heritage of our area. The Museum prides itself on its changing exhibitions of national and international stature emphasizing Bay Area artists. Museum hours are 10 a.m. – 3 p.m. Monday through Thursday. Telephone: 408- 864-5464
Euphrat Museum of Art
Apple Park Visitor Center, Store & Café
A state-of-the-art Visitors Center, Observation Deck, flagship retail store, and café are open to the public seven days a week. The Visitor Center is located at 10600 N Tantau Avenue.

Free parking is available. For more information, visit the website at www.apple.com/retail/appleparkvisitorcenter or call 408-961-1560.

Fujitsu Planetarium
The Fujitsu Planetarium on the De Anza College campus is a must-visit Cupertino facility for stargazers. It hosts a variety of planetarium shows and events, including educational programs for school groups and family astronomy evenings. For more information, visit the website at hHp://planetarium.deanza.edu or call 408-864- 8814.

Cupertino Historical Society
The Cupertino Historical Society was founded in 1966 by a group of 177 longtime residents and is dedicated to the preservation and exhibition of the city’s history. Their museum, located at the Quinlan Community Center, develops and expands the learning opportunities that it offers to the ethnically diverse community of the City of Cupertino. Telephone: 408-973-1495.

Farmers’ Markets
There are two farmers’ markets located in the City of Cupertino. One is held on Fridays from 8:30 a.m. to 1:00 p.m. at Creekside Park located at 10455 Miller Avenue, and the other is held every Sunday from 9:00 a.m. to 1:00 p.m. at the Senior Center/Memorial Park parking lot, behind 21251 Stevens Creek Blvd.

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California History Center
The California History Center and Foundation is located on the De Anza College campus. The center has published 37 volumes on California history and has a changing exhibit program. The center’s Stocklmeir Library Archives boast a large collection of books, pamphlet files, oral history tapes, videotapes, and a couple of thousand student research papers. The library’s collection is for reference only. Heritage events focusing on California’s cultural and/or natural history are offered by the center each quarter. For more information, call 408-864-8987. The center is open Tuesday through Thursday, from 10:00 a.m. to 4:00 p.m.

Local Wineries
The Santa Cruz Mountains have played a pivotal role in the history of winemaking in California, with roots going back over 100 years, and including legendary winemakers such as Paul Masson, Martin Ray, David Bennion (Ridge), and David Bruce. The Santa Clara Valley Wine Trail features wineries in the southern portion of Santa Clara County, including Cupertino.

Take some time to enjoy Cupertino-based wineries: Fellom Ranch Vineyards, Naumann Vineyards, PiccheHi Winery, R&W Vineyards, Ridge Vineyards, and Vidovich Vineyards, as well as the breathtaking scenery of the surrounding foothills.

Photo courtesy of Ridge Vineyards
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Financial Policies
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Annual Budget Process
Adopted Budget
The City Council annually adopts a budget by resolution for the upcoming fiscal year. The adopted budget – a policy document, financial plan, operations guide, and communications tool – authorizes expenditures for the activities and funds specified in the budget. It is the basis of the City’s financial planning and control.

Budget Process
The City’s annual budget follows a July 1 to June 30 fiscal year. However, the budget process continues throughout the year, including phases of:

Development
Proposal
Adoption
Monitoring
Amendment
Carryover
Development
Budget development begins in December with the base budget, where departments review and adjust ongoing operational costs. The base budget does not include any one-time initiatives. Departments must justify all new costs each year.

Proposal
Every year in March, departments prepare budget proposals for new ongoing or one-time initiatives. These proposals are reviewed by Finance staff, who use data from current and past years to evaluate their feasibility.

The city's long-term financial forecast is also taken into account to ensure that budget decisions align with the city's financial goals.

The City Manager, with the assistance of the Director of Administrative Services and Budget Team, reviews the proposals and selects the proposals to be included in the Proposed Budget. The Proposed Budget is published by May 1st.

In May, staff presents the Proposed Budget to the City Council during a proposed budget study session.

Commissions, commiHees, community organizations, and the public are all welcome to review and provide feedback on the Proposed Budget. During the session, City Council members have the opportunity to ask questions, offer suggestions, and provide recommendations to staff on the Proposed Budget.

Adoption
In June, the City Council holds a public hearing to consider the Proposed Budget presented by staff. At this hearing, an updated version of the Proposed Budget is presented, and staff addresses any questions or concerns that were raised during the study session.

AOer the presentation, City Council members deliberate and vote to adopt the budget. Once the budget is adopted, it authorizes expenditures for the specific activities and funds outlined in the budget. This ensures that the city has a clear plan for how to allocate its resources in the upcoming fiscal year.

The adopted budget goes into effect on July 1st, marking the beginning of the new fiscal year.

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Monitoring
AOer the budget is adopted, the City enters the budget monitoring phase. Throughout the year, departments monitor their budgets to ensure spending does not exceed the budget.

In addition to the annual proposed and adopted budget, staff reports to the City Council quarterly. Quarterly reports update City Council on any changes from July 1 through the end of the quarter. Quarterly reports help:

Compare budget versus actuals.

Forecast year-end results.

Demonstrate the City is on track to end the year within budget.

Update City Council on any changes to the budget.

Amend the budget to account for any unforeseen changes.

If amendments to the budget are required outside of this cycle, staff can seek approval through the budget amendment process (see next section).

Amendment
AOer the budget is adopted, a department may request a change through a budget amendment. A budget amendment is required to:

Allocate additional appropriations during the fiscal year Reallocate appropriations between line items during the fiscal year Adjustments to expenditures within or between departmental budgets are accomplished on an as-needed basis administratively throughout the year. The City Manager and Department Heads can transfer funds between their accounts and/or programs as needed. Transfers between fund types need approval by City Council.

City Council approval is also required for additional appropriations from fund balances or from new revenue sources.

Carryover
Unexpended and unencumbered appropriations expire at the end of the fiscal year. A budget carryover allows an unspent appropriation to be carried over into the next fiscal year. A department may request a budget carryover for a project or purchase that is not expected to be completed in the current fiscal year. The department may only use the budget carryover for its original purpose.

Budget Reporting Cycle
The following chart illustrates the City’s budget reporting cycle.

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Citizen Participation
The budget study session and budget hearings are public meetings where citizens are allowed to comment on the budget. The public can also provide feedback on budget format to the Audit Committee.

Additionally, the City utilizes OpenGov, an interactive financial transparency portal, to allow the public to view budget and financial data. OpenGov allows the public to search budget and financial data, view trends in revenues and expenditures over time, and drill down into revenues and expenditures by fund, department, or account type. OpenGov can be accessed at cupertino.org/opengov.

The City's annual community budget workshop is held every April. However, this year, City staff are hosting a variety of budget outreach events by educating the community on budget related topics at local farmer's markets, Cupertino festivals, and in front of the Cupertino Library. Additionally, the City is hosting a Budget Town Hall event on May 18, 2023. These outreach efforts will educate the community about the City's current budget challenges and budget reduction strategies.

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Structure of City Finances
Cost Accounting
Fund costs are allocated to user departments or operating funds based on salaries, equipment and soOware purchase price, actuarial studies, and actual and projected service level. The City of Cupertino has five internal service funds: Innovation & Technology, Vehicle & Equipment Replacement, Workers' Compensation, Compensated Absences & Long-Term Disability, and Retiree Medical, whose costs are allocated to City departments. Please view the Cost Allocation Plan and Internal Service Fund section of this document for details.

Other employee fringe benefits such as medical, dental, life insurance, and pensions are directly added to department costs as a percentage of salaries. Staff salary and benefit costs are split among departments and related funds based on the anticipated percentage of time spent working in various departments.

Cost Allocation Plan
All overhead costs are allocated to the appropriate program within the limits of local, state, and federal laws.

Beginning in FY 2013-14, the City allocated indirect and overhead costs based on a Cost Allocation Plan (CAP). In FY 2015-16, Matrix Consulting Group developed a full CAP for the City. Matrix Consulting Group developed the plan based on "Generally Accepted Accounting Principles" (GAAP) and indirect cost allocation methods defined by the federal Office of Management and Budget's (OMB) Circular A-87.

In addition to the direct cost of providing services, the City has indirect costs. Indirect costs include shared expenses where a department provides support to other departments (e.g., legal, finance, human resources, IT, facilities, and maintenance). The CAP allows the City to understand the full cost of providing specific services to the community more accurately. For example, the full cost of the Quinlan Community Center includes its direct costs (e.g., salaries, benefits, materials, and contracts) plus its indirect costs (e.g., finance, human resources, and IT). The CAP helps the City analyze the full cost of the Quinlan Community Center as if it were a stand-alone business that had costs for services such as finance, human resources, and IT.

The CAP distributes the allowable costs of central service programs to receiving programs. Central service programs (e.g., City Manager's Office, City AHorney's Office, Finance, Human Resources, Innovation and Technology, and City Hall building maintenance) provide support to other programs. Receiving programs, also known as grantees, receive support from central service programs.

Method
The CAP follows the double step-down method, which uses two steps to allocate costs fully. In the first step, the costs of central service programs are allocated to other central service programs and receiving programs. In the second step, the total costs (including costs allocated in the first step) of central service programs are allocated to the receiving programs only. Revenues are allocated directly to the central service program providing the service.

The CAP allocates costs to receiving programs based on an allocation base, which quantifies the use of each service. For example,
Human Resources benefits costs are allocated based on each program's number of FTE.

Accounting costs are allocated based on each program's number of financial transactions.

IT costs are allocated based on the number of computer and mobile devices assigned to each program.

The CAP is updated annually. The FY 2023-24 CAP was prepared using data from FY 2021-22.

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Basis of Budgeting
The basis of budgeting refers to the method used to recognize revenues and expenditures in the budget. For the City of Cupertino, the basis of budgeting is the same as the basis of accounting.

Governmental Funds
The Governmental Funds, which include the General, Special Revenue, Debt Service, and Capital Projects funds, use a modified accrual basis. The modified accrual basis uses a current financial resources measurement focus. As a result, only current assets and current liabilities and deferred outflows of resources and deferred inflows of resources generally are included. Under the modified accrual basis, revenues are recognized when they become "susceptible to accrual," which means they are both measurable and available. Measurable means the transaction can be determined. Available means collectible within the current period or soon enough thereaOer to be used to pay liabilities of the current period. For example, revenues from property taxes are determined to be available if collectible within 60 days.

Proprietary Funds
The Proprietary Funds, which include Enterprise and Internal Service Funds, use a full accrual basis. The full accrual basis uses an economic resources measurement focus. Under the accrual basis of accounting, revenues are recognized when earned, and expenses are recognized when incurred, regardless of the timing of related cash flows. For example, property taxes are recognized as revenue in the year they are levied. Grants are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Departments, Divisions, and Programs
The budget is split into ten departments: Council and Commissions, Administration, Law Enforcement, Innovation and Technology, Administrative Services, Parks and Recreation, Community Development, Public Works, Non-Departmental (includes budgets that are not aHributable to any specific division), and Capital Improvement Program. These departments are further split into divisions and then programs. The programs within the divisions are balanced at the department level within a given fund.

Annual Comprehensive Financial Report (ACFR)
The Annual Comprehensive Financial Report (ACFR) is prepared by Crowe LLP , the City's auditors, according to generally accepted accounting principles (GAAP) set by the Governmental Accounting Standards Board (GASB).

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Fund Structure
In governmental accounting, a state or local government is not considered a single entity but is instead viewed as a collection of individual business units known as 'funds.' This approach is known as fund accounting, which emphasizes accountability rather than profitability.

Under fund accounting, each fund is a self-contained set of accounts that are segregated for specific purposes in accordance with laws, regulations, or other limitations. This system ensures that funds are used for their intended purpose and that there is transparency in the use of public funds.

The City's finances are structured into a range of funds that serve as the primary accounting and reporting entities in governmental accounting. These funds are broadly categorized into two groups: Governmental Funds and Proprietary Funds.

Governmental Funds
Governmental Funds are used to account for the City's general operations and other activities financed by taxes, grants, and other governmental resources. These funds include the General Fund, Special Revenue Funds, Capital Projects Funds, and Debt Service Funds. They are accounted for under the modified accrual basis of accounting.

General Fund
The General Fund is the primary operating fund for governmental services. The General Fund is a tax-supported fund.

General Fund Purpose
100 General The General Fund is used to pay for core services such as public safety, parks and recreation, community development, public works, and a host of other vital services. The revenue used to pay for these services comes primarily from local taxes such as sales tax, property tax, franchise fees, charges for services, and a variety of other discretionary sources.
130 Investment Accounts for activities related to the City's investment portfolio.

Special Revenue Funds
Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. Special Revenue Funds include the Storm Drain, Environmental Management/Clean Creek, Community Development Block Grant, BMR Housing, Transportation, and Park Dedication funds.

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Special Revenue Funds Purpose
210 Storm Drain
Improvement
Accounts for the construction and maintenance of storm drain facilities, including drainage and sanitary sewer facilities. Projects are funded by the Capital Reserve.
215 Storm Drain AB1600 Accounts for AB1600 revenue from development impact fees. Revenues were collected from developers as a result of connections to the storm drainage sewer system.
230 Environmental
Management/Clean
Creek/Storm Drain
Accounts for activities related to operating the Non-Point Source Pollution Program. Revenues are from parcel taxes.
260 Community
Development Block Grant
Accounts for the Federal Housing and Community Development Block Grant (CDBG) Program activities. CDBG is a federally funded program for housing assistance and public improvements.
261 HCD Loan Rehab Accounts for activities related to Community Development Block Grant (CDBG) rehabilitation loans.
265 BMR Housing Accounts for activities related to the Below Market Rate (BMR) Housing Program. Revenues include BMR Housing Mitigation Fees collected from developers to mitigate the impact of housing needs. Monies in this fund are governed by the program's rules.
270 Transportation Accounts for the City's gas tax, vehicle registration fees, and grant revenues and expenditures related to the maintenance and construction of City streets. All revenue in this fund is restricted exclusively for street and road purposes, including related engineering and administrative expenditures. 271 Traffic Impact Accounts for development impact fees to ensure that new development and redevelopment projects pay their "fair share" to mitigate traffic impacts. 280 Park Dedication Accounts for the activity granted by the business and professions code of the State of California in accordance with the open space and conservation element of the City’s General Plan. Revenues are restricted for the acquisition, improvement, expansion, and implementation of the City's parks and recreation facilities.
281 Tree Accounts for revenues from in-lieu tree replacement fees and tree damage and removal fees. The revenues are transferred to the Street Tree Maintenance program to pay for new and replacement trees.

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Debt Service Funds
Debt Service Funds account for financial resources that are restricted, commiHed, or assigned to expenditures for and payment of principal and interest.

Debt Service Funds Purpose
365 Public Facilities
Corporation
Accounts for the payments of principal and interest on certificates of participation issued to provide for the financing of the Civic Center, Library, Wilson Park, Memorial Park, and other City facilities.

Capital Projects Funds
Capital Projects Funds account for the acquisition and/or construction of major capital facilities.

Capital Projects Funds Purpose
420 Capital Improvement
Projects
Accounts for activities related to the acquisition or construction of major capital facilities.
427 Stevens Creek Corridor
Park
Accounts for the design and construction of the Stevens Creek Corridor Park projects.
429 Capital Reserve Reserves to fund future capital improvement projects.

Proprietary Funds
Proprietary Funds are used to account for the City's ongoing business activities that are similar to those of a private enterprise. These funds include the Enterprise Funds and Internal Service Funds. They are accounted for under the full accrual basis of accounting.

Enterprise Funds
Enterprise Funds are for specific services funded directly by fees charged for goods or services. Enterprise Funds include the Resource Recovery, Blackberry Farm, Sports Center, and Recreation Program funds.

Enterprise Funds Purpose
520 Resource Recovery Accounts for activity related to the collection, disposal, and recycling of solid waste. A private company has been issued an exclusive franchise to perform the services.
560 Blackberry Farm Accounts for activities related to operating the City-owned golf course. 570 Sports Center Accounts for the operation and maintenance of the Cupertino Sports Center. 580 Recreation Program Accounts for activities of the City's community center and park facilities.

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Internal Service Funds
Internal Service Funds are for areas where goods or services are provided to other departments or governments on a cost-reimbursement basis. Internal Service Funds include the Innovation & Technology, Workers’ Compensation, Vehicle and Equipment Replacement, Compensated Absences & Long-Term Disability, and Retiree Medical funds.

Internal Service Funds Purpose
610 Innovation & Technology Accounts for the activities related to the maintenance and replacement of the City's technology infrastructure. Equipment is depreciated based on the acquisition or historical costs for the useful life of the asset using the straight-line method.
620 Workers' Compensation Accounts for claims and insurance premiums related to workers' compensation. 630 Vehicle/Equipment
Replacement
Accounts for the purchase and maintenance of fleet and general equipment having a value greater than $5,000 and an expected life of more than one year.

Assets are depreciated based on the acquisition or historical costs for the useful life of the asset and using the straight-line method.
641 Compensated Absences &
Long-Term Disability
Accounts for accrued leave payouts and the long-term disability insurance program.
642 Retiree Medical Accounts for funds set aside for Other Post-Employment Benefits (OPEB).

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Balanced Budget Policy

PURPOSE
The purpose of this policy is to ensure that the City has a balanced budget that is sustainable in the long term. It aims to establish a clear definition of a balanced budget, promote a commitment to achieving this balance, and ensure transparency and disclosure when there is deviation from the balanced operating budget.

SCOPE
This policy applies to all operating funds of the City. This policy excludes Capital Projects Funds and Debt Service Funds.

POLICY
Statutory Balanced Budget
At a minimum, the City shall adopt a statutory balanced budget, where the City’s use of resources for operating purposes does not exceed available resources for the fiscal year.

Structurally Balanced Budget
The City shall adopt a balanced budget where operating expenditures do not exceed operating revenues in the ten-year forecast. The budget must be balanced not only during the current operating period but also in the future, which is referred to as a structurally balanced budget.

Recurring revenues are the portion of a government's revenues that can reasonably be expected to continue year to year, with some degree of predictability. Property taxes are an example of recurring revenue. Proceeds from the sale of property are an example of non-recurring revenue. Recurring expenditures appear in the budget each year.

Salaries, benefits, materials and services, and maintenance costs are examples of recurring expenditures. Capital asset acquisitions are typically non-recurring.

Balanced Budget Calculation
To calculate a balanced budget, the following factors shall be included: operating revenues, operating expenditures, and interfund transfers. However, capital costs shall be excluded from the calculation. The use of reserves and fund balance may be considered.

The accrual basis will be used to define revenues and expenditures.

Use of Fund Balance
If a structurally balanced budget is not possible for the City at a given time, reserves and fund balance may be used to balance the budget. However, this should only be done in the context of a plan to return to structural balance, replenish fund balance, and remediate the negative impacts of any short-term balancing actions that may be taken. The plan should clearly specify the time period over which these actions will occur.

Noncompliance with Balanced Budget Policy
The policy permits noncompliance during the early stages of an economic downturn so that services can be reduced in an orderly fashion.

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Responsibility for a Balanced Budget
The City Manager is responsible for making any necessary decisions on whether or not a budget is in balance.

They shall take appropriate action to bring the budget into balance if adjustments are needed during the fiscal period.

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Revenue Policies

PURPOSE
To establish revenue policies that assist the City in striving for and maintaining a diversified and stable revenue system to prevent undue or unbalanced reliance on any one source of funds. This revenue diversity will shelter the City from short-run fluctuations in any one revenue source.

SCOPE
All revenue sources across all funds.

POLICY
To the extent possible, maximize investment yield while maintaining a high level of liquidity for the City’s anticipated capital costs;
Identify and recommend sources of revenue necessary to maintain the services desired by the community and to maintain the City's quality of life;
Perform ongoing evaluations of existing sources of revenue to maximize the City's revenue base; Recover costs of special services through user fees;
Pursue full cost recovery and reduce the General Fund fee subsidy to the degree feasible; Allocate all internal service and Cost Allocation Plan charges to appropriate user departments; and Monitor Enterprise activities remain self-supporting in the long term.

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Expenditure Policies

PURPOSE
To establish expenditure control policies through the appropriate internal controls and procedures. Management must ensure expenditures comply with the legally adopted or amended budget.

SCOPE
All expenditure categories across all funds.

POLICY
Each Department or Division Manager will be responsible for the administration of their department/division budget. This includes accomplishing the goals and objectives incorporated into the budget and monitoring each department/division budget for compliance with spending limits; Accurately charge expenditures to the appropriate chart of accounts; Maintain operating activities at levels which are offset by revenues; The City will make every effort to control expenditures to ensure City services and programs provided to its citizens and tax payers are cost effective and efficient; Evaluate expenditures at the department and project levels to ensure control; Before the City purchases any major asset or undertakes any operating or capital arrangements that create fixed assets or ongoing operational expenses, the implications of such purchases or arrangements will be fully determined for current and future years;
All compensation planning and collective bargaining will include an analysis of the total cost of compensation which includes analysis of salary increases, health benefits, pension contributions, fringe benefits and other personnel costs. The City will only propose operating personnel costs which can be sustained by ongoing operating revenues;
Reduce costs and improve productivity through the use of efficiency and effective measures; and Structure debt financing to provide the necessary capital while minimizing future debt service costs.

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Capital Improvement Policy

PURPOSE
To establish a Capital Improvement Programs (CIP) Policy to assist in future budget projections.

SCOPE
All anticipated CIP projects for the current fiscal year plus four additional fiscal years.

POLICY
The City will prepare an annual CIP for the current fiscal year that includes a projection of anticipated programming and funding for a total of five fiscal years.

Projects included in the CIP will have information on the need for the project (project justification), description and scope of work, total cost estimates, future operating and maintenance impacts, and funding sources.

The project justification will incorporate information on the factors that affect the prioritization of the project. The factors to be considered include (but are not limited to) the Health & Safety of the community, continuation of ongoing work, Community requests, General Plan and Master Plans' directives, staffing and operational demands, sustainability and resiliency, and internal and external funding viability.

Changes to the CIP such as addition of new projects, significant changes in scope and costs of a project or reprioritization of projects will require City Manager and City Council approval.

The City will maintain its physical assets at a level adequate to protect the City’s capital investment and to minimize future operating maintenance and replacement costs. The City recognizes that deferred maintenance increases future capital costs, thus placing a burden on future residents. Therefore, the budget will provide for adequate maintenance and the orderly replacement of capital facilities from current revenues when possible.

The City will determine the least costly funding method for its capital projects and will obtain grants, contributions and low cost state or federal loans whenever possible.

The City will utilize “pay-as-you-go” funding for capital improvement expenditures considered recurring, operating or maintenance in nature. The City may also utilize “pay-as-you-go” funding for capital improvements when current revenues and adequate fund balances are available or when issuing debt would adversely affect the City’s credit rating.

The City will consider the use of debt financing for capital projects under the following circumstances:

When the project’s useful life will exceed the terms of the financing When resources are deemed sufficient and reliable to service the long-term debt When market conditions present favorable interest rates for City financing When the issuance of debt will not adversely affect the City’s credit rating and debt coverage ratios.

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Information Technology Replacement and
Capitalization Policy

PURPOSE
The purpose of this policy is to establish guidelines for replacing and capitalizing technology equipment and systems. Replacement is indicated when a product has run its useful life and updating/upgrading is no longer an option. Capitalization of equipment requires the set aside of funding for future replacement.

Generally, technology equipment with a life expectancy of at least 5 years and a total cost of over $5,000 shall be capitalized. SoOware with an expected life of at least 7 years or a cost of over $10,000 shall also be capitalized.

Software-as-a-Service (SaaS) contracts are not capitalizable and are expensed as incurred.

Technology upgrades are determined by the Innovation Technology Department and user departments based on functionality, vendor support, and industry standards.

SCOPE
This policy covers the City of Cupertino:
network infrastructure (routers, switches, firewalls, security appliances); server infrastructure (files servers, database servers, mail servers, web servers, etc); enterprise software;
workgroup software; and
broadcast video and audiovisual equipment.

Laptops and associated peripherals, desktop soOware not being utilized across a workgroup or enterprise, cell phones, printers, and tablet devices are not covered by this policy as these items do not meet the minimum criteria for capitalization. Replacement of these items are at the discretion of the Innovation Technology Department in concert with the user Department.

POLICY
All technology shall be replaced according to the following:

Network infrastructure (routers, switches, firewalls) shall be replaced when no longer functional, as determined by the Innovation Technology Department Division (IT), or when parts or support are no longer available from the manufacturer. Replacement needs will be determined by IT annually as part of the operating budget process.

Network infrastructure with a life expectancy of at least 5 years and a total cost of over $5,000 shall be capitalized.

Server infrastructure shall be replaced when it is no longer functional (defined as not being able to meet its intended purpose), or when parts or support are no longer available from the manufacturer. These needs are evaluated annually by IT and user departments as part of the operating budget process. Servers are evaluated as they approach 3 years in service, and placed on the schedule accordingly. Server lifetime may be extended by the purchase of additional memory or disk. Server infrastructure with a life expectancy of at least 5 years and a total cost of over $5,000 shall be capitalized.

Interoperable systems are defined as a group of interdependent and/or interoperable components that together form a single functional unit. These components may be interconnected by their structural relationships, their common functional behavior, or by both. Generally, for a system to be eligible for capitalization, the cumulative FY 2023-24 Proposed Budget Financial Policies 97
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value of its components should be at least $5,000 and have a life expectancy of five years or more. A common example of such system would be a telephone system or network. Individual component or replacement costs are not capitalizable unless they are greater than $5,000 and increase the value of the asset.

Enterprise SoCware replacement shall be determined individually by IT and the end users. Only those large (based on license count) enterprise systems (on-site or on premise) with an expected life of at least 7 years or a cost of over $10,000 shall be capitalized. SaaS contracts are not capitalizable and are to be expenses as incurred.

Broadcast Video and Audiovisual Equipment/Systems shall be repaired or replaced when determined no longer functional. Replacement will occur on average after 10 years. Broadcast video and audiovisual equipment/systems with a life expectancy of at least 5 years and a total cost of over $5,000 shall be capitalized. Equipment that does not meet these criteria may still be capitalized if the item is a component of interoperable systems.

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Pension and Retirement Funding Policy

PURPOSE
To establish a policy for the funding of Retirement and Retiree health.

SCOPE
Retirement and Retiree Health costs citywide, across all funds.

POLICY
Fund all current pension liabilities on an annual basis; and Monitor certain health and dental care benefits for retired employees. Funding the liability for future retiree benefits will be determined by City Council action.

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Long Term Financial Stability Policies

PURPOSE
To establish a policy for Long Term Financial Stability SCOPE
All programs across all funds
POLICY
Ensure ongoing productivity through employee training and retention programs; Pursue consolidation of resources and activities with other agencies and jurisdictions where beneficial; Ensure financial planning flexibility by maintaining adequate fund balances and reserves; Provide for major maintenance and repair of City buildings and facilities on a timely basis; Provide for infrastructure asset preservation that maximizes the performance of these assets at minimum life- cycle costs; and
Continually evaluate and implement long-term financial planning including technology automation, multiple year capital improvement programs, revenue and expenditure forecasting, automating and streamlining service delivery, stabilizing and repositioning revenue sources, and decreasing expenditures and risk exposure.

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Committed, Unassigned Fund Balance, and Use of One
Time Funds Policy
Purpose
To establish assigned and unassigned fund balance and one-time use policies.

Scope
The General Fund and Capital Funds.

Policy
To maintain sufficient commiHed and unassigned fund balance (General Fund only) in each fund for the ability to meet the following economic uncertainties:

Economic Uncertainty – $24,000,000 and represents two months of General Fund (GF) expenditures excluding transfers out plus a two year drop in total general fund revenue of 13% or approximately 1.5 months, excluding the use of reserves. Transfers out are primarily used to fund Capital Projects and do not represent on-going expenditures. This assignment will change from year to year based on budgeted general fund expenditures and revenues.

Mitigate short-term economic downturns and volatility in revenues (2 years or less) Sustain city services in the event of an emergency
Meet requirements for debt reserves
Meet operating cash flow requirements as a result of delay in the receipt of taxes, grant proceeds and other operating revenues
PERS – $17,240,051 and represents the funds restricted for the City's pension obligations. In response to the increasing retirement costs based on actuarial forecasts, the City created a secondary pension trust to help stabilize the impact of pension cost volatility on the City's operating budget. To fund this secondary trust, the City made an initial contribution. AOer that, the annual contributions are determined based on the difference between CalPERS' current discount rate and a more conservative rate determined by the City. This difference will then be transferred to the pension trust and used exclusively for the benefit of members in the plan.

The primary goal of establishing this secondary trust is to ensure that the City can continue to provide its employees with the retirement benefits they have earned while maintaining fiscal responsibility. By using a more conservative rate for calculating contributions, the City can beHer anticipate and manage pension costs and mitigate potential negative impacts on the City's budget.

Funds in this trust are technically “restricted” under Governmental Accounting Standards Board (GASB) Statement No. 54 in that the funds are legally restricted to be used for retirement costs; however, the timing for which these funds may be used is only at the discretion of City Council.

Capital Projects – $10,000,000 and represents the amount of General Fund resources readily available to fund future capital projects in the City’s Capital Improvement Program (CIP). The City’s Capital Projects Funds has a $5,000,000 reserve threshold; however, establishing a secondary reserve in the City’s General Fund will enable more efficient and accurate short- and long-term capital budgeting and planning.

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transportation and other sustainable actions. The City receives rebates for projects that successfully meet the eligibility requirements such as energy or water efficiency. If the rebates were not initially budgeted, they are categorized as commiHed fund balance in the General Fund. The purpose of this reserve is to help support future sustainability projects/programs.

Unassigned – $500,000 and represents 1% of the total general fund operating budget . This assignment may change from year to year based on budgeted general fund expenditures.

Absorb unanticipated operating needs that arise during the fiscal year that were not anticipated during the budget process
Absorb unexpected claims or litigation settlements
Capital Improvement – $5,000,000 and represents average dollars spent for capital projects in the last three fiscal years. This assignment may change from year to year based on actuals dollars spent on capital projects and anticipated future capital project needs.

Meet future capital project needs so as to minimize future debt obligations The City shall not use fund balances/reserves in lieu of revenues to pay for ongoing expenses except as specifically provided in the City’s reserve policy.

The chart below summarizes reserve policy levels as described above:

Funding Priority Reserve Reserve Level Escalator Description

GENERAL FUND
1 Economic Uncertainty $24,000,000
GF Budgeted
Operating
Expenditures GF
Budgeted
Revenue
For economic
downturns and major
revenue changes.
2 PERS $17,240,051 Budgeted Citywide
Retirement Costs For pension costs.
3 Capital Projects $10,000,000 None For future capital
projects funding.
4 Sustainability Reserve $127,891 GF Budget
Revenue
For future
sustainability
projects/programs.
5 Unassigned $500,000
Budgeted GF
Operating
Expenditures
For mid-year budget
adjustments and
redeployment into the
five year budget.

CAPITAL PROJECTS FUNDS
6 Capital Improvement $5,000,000 None Reserves set aside for future capital projects.
1 2
3 4
4 3
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As of June 30, 2022
Rounded to the nearest hundred thousand
Excludes Transfers Out
Excludes the use of reserves

Changes to Committed Fund Balance – All reserves listed in this policy, with the exception of the PERS restricted reserve, are classified as CommiHed Fund Balance under GASB Statement No. 54. CommiHed fund balance is comprised of amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority. Changes to commiHed fund balances must be approved by City Council. This policy will be reviewed annually as part of the budget process.

Replenishment process – Should the City need to utilize any of the commiHed fund balances listed in this policy, a recommendation will be brought to City Council for approval and a plan to replenish the commiHed balance will be developed in conjunction with its use.

Excess – Funding of these reserves will come generally from one-time revenues, annual net income, and transfers from other reserves that exceed policy levels. They will be funded in the following priority order with any remaining funds to be placed in the Capital Reserve:
1) Economic Uncertainty
2) PERS
3) Capital Projects
4) Sustainability Reserve
5) Unassigned
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1 2
3 4
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Community Funding Policy

PURPOSE
The City of Cupertino currently provides funding to local non-profit organizations in the areas of social services, fine arts, and other programs for the general public. The policy provides a framework for the City's Community Funding Grant Program and guides the administration of the program and decision-making process. It also provides guidance on key aspects of the City's Community Funding Grant Program processes including Eligibility, Evaluation Criteria, Restrictions/Guidelines, and Procedure.

SCOPE
All requests for funding must comply with this policy.

POLICY
The City has established the Community Funding Grant Program, subject to availability of funds, with a range of $70,000 to $90,000 in total funding available. Community Funding Grants shall not exceed $20,000 per applicant, per year. City Council will determine the organizations to be awarded funds through the Community Funding Grant Program. City Staff shall review applications for completeness and review the qualifications and accuracy based upon the eligibility criteria set forth below. In all cases, the City reserves the right to reject any and all applications in the event staff identifies a potential conflict of interest or the appearance of a conflict of interest.

Submission of an application in no way obligates the City to award a grant and the City reserves the right to reject any or all applications, for any reason, at any time.

Eligibility
To receive consideration for a Community Funding Grant, grant requests must:

Be made or sponsored by a 501(c)(3) non-profit organization with experienced members capable of implementing and managing the program/project/event.

Identify how the funds will be used to benefit the Cupertino community.

Be awarded only once per project.

For specific needs, not ongoing, operational costs, or endowment funds.

Have more than 75% of the requested funds allocated for direct service costs versus administrative costs.

Be complete and submitted by the application deadline.

Evaluation Criteria
Impact on and benefit to the Cupertino community
Number of Cupertino residents served vs. number of non-Cupertino residents served Availability of the program/project/event to the entire Cupertino community Community need for the program/project/event
Alignment with Cupertino General Plan Principles
Uniqueness of the program/project/event
Lack of duplication in service in Cupertino
Level of collaboration if a duplicated service
Qualifications and experience of the organization and its members Reasonable cost
Demonstrated effort to secure funding from other sources and/or establishing partnerships with other community or city organizations
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Past performance and compliance with requirements if a recurring applicant Applications will be sorted into two categories:

New applicants
Past recipients
Applications in each category will be evaluated using a tiered structure based on the dollar amount requested for award as follows:
< $999.99
$1,000.00 - $4,999.99
$5,000.00 - $9,999.99
$10,000.00 - $20,000.00
Restrictions/Guidelines
An organization that is applying for multiple grants shall only submit one application.

If requested, recipients must provide full financial statements for the organization.

Festivals currently receiving funding through Festival Fee waivers may not apply for funding through the Community Funding Grant Process for the same festival
Admission to or participation in the event must be "free of charge" If an applicant makes a grant request directly to a member of the City Council, whether individually or as a group, the Council shall refer the applicant to the Parks and Recreation Department for a Grant application to be reviewed in accordance with this policy.

Grant recipients shall acknowledge the City contribution in formal promotional materials and efforts related to the funded activity. Any use of the City logo must be approved by the City’s Communications Officer.

Procedure

1. Applicants submit timely and complete grant applications by February 1.

2. City Staff reviews application for completeness and compliance eligibility.

3. Applications will then be forwarded to the Parks and Recreation Commission to be evaluated and sorted into the tiered funding structure. All applicants will be notified and invited to aHend the Parks and Recreation Commission Meeting where their applications will be discussed. This meeting typically takes place in Spring.

4. City Council will make the final decision on grant amounts for each applicant as part of the budget adoption which typically happens in June. All applicants will be notified and invited to aHend the City Council Meeting where their applications will be discussed.

5. Grant recipients shall submit a wriHen report to the Parks and Recreation Department to show proof that the grant funds have been spent in the manner and for the purposes stated on the application, including information about the number of persons served and other results that benefit Cupertino.

Due by the 15th business day of July following the Fiscal Year in which grant funds are disbursed.

Failure to submit a wriHen report by the July deadline could result in the loss of grant funding eligibility in the future.

Applicants will be expected to reimburse the City any funding awarded and not used for their program/project/event.

Revised November 15, 2022
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Investment Policy
The City Council annually updates and adopts a City Investment Policy that is in compliance with State statutes on allowable investments. By policy, the Audit CommiHee reviews the policy and acts as an oversight commiHee on investments. The policy directs that an external auditor perform agreed-upon procedures to review City compliance with the policy. City Council approved the current City Investment Policy on May 19, 2022. The Audit CommiHee reviewed and accepted the revised Investment Policy on April 24, 2023, which will be considered for City Council adoption on May 16, 2023.

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Appropriations and Legal Debt Limit Margin
Gann Appropriations Limit
In 1979, California voters approved Proposition 4, the Gann Initiative, and added Article XIIIB to the California State Constitution. Article XIIIB mandates a limit on the amount of proceeds of taxes that state and local governments can receive and appropriate (authorize to spend) each year. The purpose of this law is to limit government spending by puHing a cap on the total proceeds of taxes that may be appropriated each year.

Proposition 111 and Senate Bill 88, approved by California voters in June of 1990, offered cities more flexibility in choosing inflation and population factors to calculate the limit.

The limit is different for each agency and changes annually. It is calculated by taking the amount of tax proceeds that were authorized to be spent in FY 1978-79 and adjusting for changes in inflation and population each subsequent year.

Proposition 111 changed the way the limit is calculated and allowed a City to increase its limit annually in two ways:

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By the percent change in per capita personal income in California or the percent change in the assessment roll the preceding year due to the addition of local non-residential new construction; or By the percent change in county or city population.

The City used the following factors from the California Department of Finance.

Price Factor
(A) Percent Change in California Per Capita Personal Income: 7.55% Population Factor
(B) Percent Change in County Population: -0.69%
(C) Percent Change in City Population: -0.46%
The City multiplied the FY 2021-22 appropriations limit by Price Factor (A) and Population Factor (C) to calculate the FY 2022-23 appropriations limit, as shown below:

FY 2021-22 Appropriations Limit $114,666,491
Price Factor (A) 1.0755
Population Factor (B) 0.9954
FY 2022-23 Appropriations Limit $122,756,522
The City’s FY 2022-23 appropriations limit is $122,756,522, $8.1 million or 7.1% higher than the FY 2021-22 limit of $114,666,491. The California Department of Finance will publish the price and population data to calculate the City’s FY 2023-24 appropriations limit in May 2023. As a result, the FY 2023-24 appropriations limit will not be known until May 2023 and will be included in the Adopted Budget.

Legal Debt Margin
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation.

However, this provision was enacted when the assessed valuation was based upon 25% of market value. Effective FY 1981-82, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computation shown below reflects a conversion of assessed valuation data for FY 2021-22 from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the State.

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Description Amount Formula
Secured Property Assessed Value, Net of Exempt Real Property (1) $29,822,398,085 Adjusted Valuation - 25% of Assessed Valuation (2) $7,455,599,521 (1) x 25% Debt Limit - 15% of Adjusted Valuation $1,118,339,928 (2) x 15% Total City Bonded Debt (3) $18,020,000
Less: Certificates of Participation Not Subject to Debt Limit (4) $(18,020,000) Amount of Debt Subject to Limit - (3) - (4) Legal Debt Margin $1,118,339,928
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Financial Schedules
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Financial Overview by Fund
The chart above demonstrates how revenues (left to right) and expenditures (right to left) flow out of and into each FY 2023-24 Proposed Budget Financial Schedules 113
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Flow of Funds Chart (Sankey)
The three most important things to learn from this chart:

1. The chart above demonstrates how revenues (left to right) and expenditures (right to left) flow out of and into each type of City fund.

2. Where revenues meet expenditures at the center of the chart (fund line type), a gap to the left is indicative of expenditures exceeding revenue and a decrease in fund balance/savings for that type of fund.

3. A gap to the right is indicative of an increase in fund balance/savings for that type of fund.

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General Fund Contribution Schedule
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No Department budget units reflect revenue from interest earnings for Special Revenue, Enterprise, and Internal Service Funds. In previous years, interest earnings were not budgeted for these funds.

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Fund Balance Report
Although the Retiree Medical Fund shows a negative balance, it's important to note that retiree health expensess will be reimbursed by the Section 115 OPEB Trust at the close of each fiscal year.

For descriptions of funds, see Financial Policies: Fund Structure.

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General Fund Summary
The General Fund is the City's main operating fund, responsible for providing essential services such as law enforcement, public works, community development, park maintenance, code enforcement, and administrative support. It is funded by discretionary sources such as property tax, sales tax, transient occupancy tax, and utility tax. The General Fund is typically reserved for operations that lack other dedicated funding sources, while operations such as street maintenance, solid waste collection, and recreation are funded from other sources, detailed in the All Funds Summary section of this document.

For FY 2023-24, General Fund revenue estimates are $80.3 million, reflecting a $14.4 million or 15.2% decrease from the previous fiscal year's Adopted Budget, mainly due to a sales tax decrease resulting from a CDTFA audit.

General Fund expenditure estimates for the current fiscal year are $86.3 million, an $8.9 million or 9.3% decrease from the previous year's Adopted Budget. The General Fund's ending balance is projected to decrease to $107.5 million.

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General Fund Revenues
FY 2023-24 General Fund revenue sources have been carefully evaluated by considering collection history, seasonal paHerns, and economic performance. These estimates are based on projected increases or decreases in activity and receipts in the upcoming year. It is important to note that each revenue source can be affected by external or internal factors beyond the City's control.

As shown in the chart below, FY 2023-24 revenues are estimated at $80.3 million, a 15.2% decrease from the FY 2022-23 Adopted Budget.

The majority of Cupertino's General Fund operating revenues are generated by property taxes (40%), charges for services (15%), sales taxes (14%), and transient occupancy taxes (9%). The chart below illustrates the sources of General Fund revenue by category.

The FY 2023-24 General Fund revenue estimates are discussed by category below.

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Sales Tax
Sales and Use Tax, commonly known as the "sales tax," consists of two components: an excise tax levied on retailers for selling tangible personal property, and an excise tax applied to purchases from out-of-state vendors that are not required to collect tax on their sales. The revenue generated from sales and use taxes collected within Cupertino's boundaries is allocated by the State to various agencies, with the City receiving one percent, as depicted in the chart to the right. The City is exploring a potential new source of revenue by monitoring competing interests for the ¼ cent sales tax imposed on local governments. If a similar ballot measure is presented to the voters in the future, the City could maintain local control over the additional sales tax proceeds.

The City's sales tax revenue comes from five primary economic categories: business-to-business (including electronic equipment and soOware manufacturers and distributors), state and county pools, restaurants and hotels, general consumer goods, and fuel and service stations and other. The California Department of Tax and Fee Administration (CDTFA) manages the collection and administration of sales and use taxes, which is a significant source of revenue for the state and local governments. Businesses are required to register for a sales tax permit and collect taxes from their customers, and the collected taxes are then remiHed to the CDTFA for distribution to the relevant local governments. In addition, the CDTFA conducts audits to ensure tax compliance by businesses. The City receives a portion of the sales tax revenue generated within its boundaries, which funds a wide range of City services and programs.

In December 2021, the CDTFA informed the City of an audit that would be conducted on one of its taxpayers.

The City was verbally informed in March 2023 of the CDTFA's preliminary determination that tax dollars had been misallocated to the City, and potential impacts on City funds were provided. The CDTFA is expected to provide the City with a formal leHer in the next four to six months, including the final results of the audit and the actual amount of money lost.

As a result, the City is expected to experience a $30 million, or 73%, decrease in sales tax revenue from the original FY 2023-24 projections provided by its sales tax consultant, HdL. This corresponds to an overall revenue decrease of $30 million, or 28%. In particular, sales tax revenues, which were expected to generate $31.9 million in the FY 2022-23 Adopted Budget, are now anticipated to amount to only $11.4 million in FY 2023-24, marking a decline of 64%.

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Property Tax
Under current law, property is assessed at actual full cash value, with the maximum levy being 1% of the assessed valuation. The assessed value of real property that has not changed ownership can be adjusted by the change in the California Consumer Price Index (CCPI) up to a maximum of 2% per year. Property that changes ownership, property that is substantially altered, newly-constructed property, State-assessed property, and personal property are assessed at the full market value in the first year and subject to the two percent cap thereafter.

In 1978, voters approved the passage of Proposition 13, which froze property tax rates and limited the amount that rates could increase each year. Cupertino had one of the lowest property tax rates in Santa Clara County, receiving only $0.02 for every $1.00 paid. Subsequent legislation required Counties to provide "no/low tax" cities with a Tax Equity Allocation (TEA) equal to 7% of the property tax share. However, the property tax distribution for the no/low tax cities in Santa Clara County was limited to 55% of what other TEA cities in the State received.

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In FY 2006-07, West Valley cities won the passage of State legislation which restored a portion of TEA property tax revenue. This TEA change provided an additional $1.35 million in property tax annually and increased the City's share of property taxes to 5.6%. In conjunction with three other West Valley cities, Cupertino continued legislative efforts to gain parity with other no/low property tax cities in the State. In FY 2015-16, Governor Brown agreed to restore TEA revenues over a five-year period. In FY 2019-20 TEA was fully restored, and Cupertino kept approximately 7.0% of property tax revenues in FY 2019-20 compared to 6.72% in FY 2018-19. Additionally, the Educational Revenue Augmentation Fund (ERAF), enacted in July of 1992 by the State Legislature to shiO local tax revenues from cities, counties, and special districts to a State control ERAF, absorbs the shift-back of the TEA.

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The City experienced a net taxable value increase of 7.2% for the FY 2022-23 tax roll. The bulk of the increase was due to increases in residential properties by $1.3 billion, or 7.2%. This category makes up 61.1% of the net taxable value. Unsecured property tax decreased by $655 million, or 38%. This category makes up 3.5% of the net taxable value. Lastly, commercial property values increased by $1.1 billion, or 13.1%. This category makes up 29.8% of the net taxable value. According to the City's property tax consultant HdL, there were fewer sale transactions of single-family residential homes sales and a flaHening in median sale prices during calendar year 2022. This reduction in sales numbers were mainly driven by interest rate hikes. In most cities the median prices are still higher overall than last year, but the month-over-month median price changes started trailing negatively towards the end of 2022. Staff will continue to monitor the potential impact of long-term and even permanent remote work in the City and region.

Transient Occupancy Taxes
Transient occupancy taxes (TOT) are levied on hotels and short-term room rentals located in the City at 12% of room revenues. In November 2011, 83% of voters approved increasing the rate from 10% to 12%. This rate increase contributed to the upward trend shown in the TOT Historical Trend graph.

TOT is originally budgeted to end FY 2022-23 at $5 million, a 14% increase from FY 2021-22 actuals. However, staff expects to exceed the estimated $5 million in the current fiscal year. The anticipated increase is due to the relaxation of prior pandemic-based restrictions, allowing for increased travel and the return of employees to their places of work. A recovery to a $7.5 million level is anticipated in FY 2023-24, up 50% from FY 2022-23 Adopted Budget. Staff will continue to monitor these activities and bring forward adjustments and recommendations as necessary.

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Utility Tax
The utility user tax (UUT), approved by voters in 1990, is assessed on gas, electricity, and telecommunication services provided within the City's jurisdiction at a rate of 2.4% of billed charges. Revenues generated from this tax can be used for general City purposes.

The City's tax rate is generally lower than that of other cities within Santa Clara County, as shown in the chart above. In March 2002, voters approved extending the utility tax's sunset date from 2015 to 2030. This extension corresponded with the extended debt maturity date resulting from the refinancing of debt for capital improvement projects. To maintain tax revenues received from telecom services, voters passed a measure in 2009 to update the ordinance to the changing technology in this area.

Budgeted revenues are expected to increase 11.8% to $3.3 million in FY 2023-24. This revenue source will be monitored closely as the fiscal year progresses.

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Franchise Fees
Franchise fees are received from cable, solid waste, water, gas, and electricity franchisees that operate in the City.

The fees range from 1% to 12% of the franchisee's gross revenues, depending on each agreement. As shown in the graph below, these revenues are relatively steady and not sensitive to economic fluctuations.

In FY 2022-23, franchise fee revenues are trending down 7.2% from FY 2021-22 actuals primarily due to a decrease in usage for cable, solid waste, and telecommunication costs, offset by an increase in electricity usage. Budgeted revenues are expected to increase approximately 6.7% in FY 2023-24. This revenue source will be monitored closely as the fiscal year progresses.

Other Taxes
Other taxes are comprised mainly of business license taxes, construction taxes, and property transfer taxes. As shown in the graph, business license and property transfer taxes are relatively steady, while construction taxes are extremely volatile and sensitive to economic fluctuations.

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With the influx of several major construction projects beginning in 2012, revenues began increasing. The largest of the projects included the Apple Park and Main Street developments. These projects, coupled with a strong housing recovery, created a record year for revenues in FY 2013-14. These revenues have since returned to historic levels. In FY 2023-24, these revenues are expected to decrease by 8.2% from the prior year to $1.6 million. The projected decrease is based on a 3-year historical trend of actuals for property tax transfers. The recent hikes in interest rates have caused a reduction in home sales numbers, having direct impact on property tax transfers. For FY 2024-25 and later, a growth rate is applied that is representative of the historical average rate of real property growth due to properties that have transferred ownership.

Charges for Services
Charges for Services account for charges to users of City services funded by the General Fund as well as internal City-wide overhead. The City aHempts to recover the cost of the services, including planning, zoning, and engineering permit processing for new property development, as well as some recreation-related fees. As such, this revenue source is sensitive to economic fluctuations, as shown in the graph below.

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Apple Park and other large developments generated large one-time revenues in FY 2013-14 as well as FY 2015-16 and FY 2016-17. In addition, beginning in FY 2013-14, enterprise funds, internal service funds, and special funds began charging for overhead services previously subsidized by the General Fund. Some internal strategic support services (Human Resources, Finance, City Clerk, etc.) also began charging internal departments to capture the true cost of providing various programs and services within City operations. AOer a comprehensive Cost Allocation Plan was approved by Council in April 2016, internal strategic support services (City Council, Facilities, Maintenance, etc.) were included. In FY 2015-16, the City's administration changed its methodology for tracking developer deposits driven by increased developer activity, and, as a result, both budgets for revenues and expenses were increased by anticipated deposit amounts leading to another large increase in revenue.

In FY 2022-23, the estimated amount is expected to come in roughly $2 million higher compared to budgeted levels due to the Vallco Town Center (renamed the Rise) and its scheduled commencement in FY 2022-23.

However, due to the developer's need to hire a new architect to complete the buildout plans and to value engineer the original design, the $2.3 million for plan review, inspection, and engineering fee revenues will be carried forward and recognized in FY 2023-24.

License and Permits
Licenses and permits include fees for reviewing building plans, building inspections, construction, tenant improvements, and commercial/residential installations for compliance with state and municipal building codes.

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Apple Park and large residential projects (Rosebowl, Biltmore expansion, Main Street) generated significant permiHing revenues in FY 2013-14. Since then, activity has slowed until FY 2018-19, when revenues came in 48.8% higher. Although this revenue source is relatively consistent from year to year, fluctuations may occur depending on the timing of projects being completed. The $34 million estimated amount in FY 2022-23 is due to Vallco Town Center (renamed The Rise) and its scheduled commencement in FY 2022-23. However, due to the developer's need to hire a new architect to complete the buildout plans and to value engineer the original design, the $30 million plan check fee revenues will be carried forward and recognized in FY 2023-24.

Use of Money and Property
The use of money and property category is comprised of General Fund interest earnings as well as facility and concession rental income of City-owned property. As of March 31, 2023, the City's portfolio included $21.3 million invested with the Local Agency Investment Fund (LAIF) and $149.7 million invested with Chandler Asset Management. As of March 31, 2023, the City also had $18.3 million in its Section 115 Pension Trust.

Fluctuations in this revenue category are a result of investment earnings, as rental income is fairly steady.

Investment earnings were higher in FY 2019-20 and FY 2020-21 due to investment gains in the City's Section 115 Pension Trust. Investment earnings fell in FY 2021-22 due to mark-to-market adjustments to account for unrealized losses in the City's portfolio.

The portfolio's market value fluctuates depending on interest rates. When interest rates decrease aOer an investment is purchased, the market value of the investment increases. In contrast, when interest rates increase aOer an investment is purchased, the market value of the investment decreases. At the time of purchase, the City FY 2023-24 Proposed Budget Financial Schedules 130
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intends to hold all investments until maturity, meaning that changes in market value will not impact the City's investment principal. If the market value decreases, the City will incur an unrealized loss. However, the loss will only be realized if the City sells its investments before their maturity.

Investment earnings are a function of the amount of cash available for investment, current interest rates, and the composition of investments. The City's investment objectives, in order of priority, are:

Safety to ensure the preservation of capital
Sufficient liquidity for cash needs
A market rate of return consistent with the investment program Economic trends have been decelerating along with tighter financial conditions and restrictive monetary policy.

Recent data suggests positive but below-trend growth this year. Although the pace of job growth is moderating, labor markets remain solid, and the U.S. consumer has demonstrated resiliency.

At the end of March, the 2-year Treasury yield was 169 basis points higher, and the 10-Year Treasury yield was about 113 basis points higher, year-over-year. The inversion between the 2-year Treasury yield and 10-year Treasury yield narrowed to -56 basis points at March month-end versus -90 basis points at February month-end.

The average historical spread (since 2003) is about +130 basis points. The inversion between 3- month and 10-year Treasuries widened to -128 in March from -89 basis points in February. The shape of the yield curve indicates that the probability of recession is increasing.

City staff will continue to monitor interest rates as well as economic factors in both the local as well as national economies.

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Fines and Forfeitures
Fines and forfeitures account for revenues generated from vehicle, parking, and miscellaneous code violations issued by the County Sheriff and the City's Code Enforcement officers. Revenues in this category dropped significantly in FY 2020-21 due to pandemic related restrictions and have increased over the next few years as society continued to rebound from the pandemic. In FY 2022-23, this revenue source is expected to reach $427,000. Revenues in FY 2023-24 are expected to remain relatively consistent to FY 2022-23 Adopted Budget.

Intergovernmental
Intergovernmental revenues are made up of federal, state, and regional grants, including miscellaneous intergovernmental revenue.

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FY 2022-23 actuals are estimated to come in significantly higher than budgeted levels due to the recognition of COVID-19 relief dollars as part of the American Rescue Plan Act of 2021. The City recorded revenues of $3,594,028 in FY 2021-22 and $6,100,745 in FY 2022-23. FY 2023-24 revenues in this category are anticipated to be 44% lower than the prior year Adopted Budget due to an anticipated decrease in grants or miscellaneous intergovernmental revenue received.

Miscellaneous Revenue
Miscellaneous revenues account for unanticipated revenues such as donations and administrative fees.

In FY 2022-23, miscellaneous revenues are trending down 39% from FY 2021-22 actuals due to a restitution payment related to the 2014 embezzlement and also a payment received for fees in-lieu of public art. The proposed funds will be used for the all-inclusive playground at Jollyman Park. The majority of the General Fund's miscellaneous revenues are due to an annual donation for additional sheriff services at Apple Park.

Other Financing Sources
Other Financing Sources generally account for refundable deposit revenues within the Community Development Department. With significant fluctuations, year-over-year, staff conservatively estimate these revenues. In FY 2023-24, revenues are projected to be higher than the prior year adopted budget due to an increase in cost of services from 3rd party consultants therefore increasing refundable deposit revenues.

This revenue source is expected to increase to $367,000 in FY 2023-24.

Transfers In
Transfers In represent the movement of funds from one City fund to another, the General Fund in this case.

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In FY 2021-22, actual transfers were high due to $4.8 million in transfers related to the American Rescue Plan Act. In FY 2023-24, the City plans to transfer $15,000 from the City's Tree Fund to the General Fund to support ongoing tree maintenance operations.

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General Fund Expenditures
The estimates for FY 2023-24 General Fund expenditures are based on a thorough analysis of anticipated personnel and non-personnel costs. To create a more fiscally responsible budget, department budgets reflect a base budget with only justified ongoing expenses. This accounts for changes in personnel costs as well as any other anticipated or known increased costs in FY 2023-24.

FY 2023-24 expenditures are estimated at $86.3 million, which represents a 9.3% decrease compared to the adopted budget from the previous year. This decrease is primarily aHributed to expenditure-reduction strategies that include:

Eliminating 14 vacant positions.

Decreasing expenditure on materials and contract services.

Reducing spending on special projects and capital outlays.

Reducing the City Manager's Contingency Fund by $25,000 and contingencies by 50%.

Reducing transfers and General Fund subsidies to other funds.

As a result, expenditures were reduced by $20.3 million, or 19.5%, from the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

The largest General Fund operating expenditure categories include Employee Compensation and Benefits (42%), Contract Services (29%), Cost Allocation (12%), and Transfers Out (8%) as illustrated in the FY 2023-24 General Fund Expenditures by Category chart.

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Personnel Costs
In FY 2023-24, personnel costs are expected to reach $35.9 million, accounting for 43% of the General Fund expenditures. These costs include salaries and compensation for benefiHed and part-time staff (69%), retirement benefits (20%), and other fringe benefits (10%), such as health coverage.

To obtain these figures, the City extracted data from the payroll system and made necessary updates to account for vacant positions, new hires, salary adjustments, and reallocated positions. Furthermore, the projected costs of benefits for the upcoming year, such as retirement and health plans, were taken into consideration. It's worth noting that the contribution for retiree healthcare, which is an ongoing expense, is not factored into personnel costs as it will be funded separately through the Section 115 OPEB Trust.

The City expects CalPERS retirement rates to rise to $7.1 million, with the normal cost rate increasing to 10.7%, based on the latest actuarial valuation report from CalPERS. These projections are reflected in the General Fund forecast section of the budget.

The Proposed Budget includes funding for a total of 212 positions, which is 14 positions less than the FY 2022-23 Amended Budget. This reduction is aHributed to projected decreases in revenue following the CDTFA audit. As a result, 14 vacant positions have been eliminated from the budget. These positions were vacant due to reasons such as resignations, retirements, or not being filled at all.

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To address the City's staffing levels in a responsible and sustainable manner, staff has devised a plan to gradually reduce staffing levels over the next decade through the elimination of vacant positions. The plan aims to eliminate 3-4 vacant positions annually until the City reaches a staffing level of 180 positions, which is consistent with the levels in FY 2015-16. This gradual reduction approach will help ensure that essential services to the community are maintained without significant disruptions.

Non-Personnel
In the General Fund budgeted appropriations for FY 2023-24, non-personnel costs make up 51% of the total at $44.0 million. Contract services are the largest component at 29%, followed by cost allocation charges at 12%, materials at 7%, and capital outlays and special projects at 1%.

One-time projects were separated into a different category in FY 2013-14 to ensure expenditure trends reflect ongoing needs. In FY 2017-18, special projects and capital outlays were categorized separately from other costs.

Non-Personnel budgets were developed based on previous year's base budget and adjusted for the current year's needs. One-time projects were excluded to reflect ongoing expenditure needs. Materials and contract services were adjusted by CPI, where applicable. In response to the anticipated revenue shortfall resulting from the CDTFA audit, departments were asked to find ways to reduce the base budget. To balance the budget, various categories including materials, contract services, capital outlays, special projects, transfers to other funds, and contingencies were reduced in the Proposed Budget.

Contingencies
In FY 2013-14, a contingencies expenditure category was added to each program to provide a cushion for any unforeseen expenses. In FY 2020-21, the program contingencies and City Manager Contingency were reduced from 5% to 2.5%. To further reduce expenditures, in FY 2021-22, the City Manager Contingency was reduced to $75,000, and in FY 2022-23, program contingencies are proposed to be reduced to 1.25%, and the City Manager Contingency is proposed to be reduced to $50,000. The City has a track record of underspending in this category.

The program contingency budget may be used by departments to cover unanticipated expenses at their discretion, while the City Manager Contingency requires the approval of the City Manager and is reported to the City Council quarterly for transparency and accountability.

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General Fund Revenue Comparisons with Other
Jurisdictions
The table below shows General Fund Revenue Comparisons with neighboring jurisdictions for FY 2018-19 through FY 2022-23. It shows general fund revenue totals and population. Population data is from the California Department of Finance. Revenue information for other cities in FY 2023-24 is not yet available. Revenue comparisons for FY 2023-24 will be included in the Adopted Budget.

The charts below compares sales tax, property tax, transient occupancy tax, franchise fees, and building permits revenues with other jurisdictions in dollars per capita.FY 2023-24 Proposed Budget Financial Schedules 138 144
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* Palo Alto - Only cable franchise fees are included. Franchise fees are not part of the General Fund but are included for comparison purposes.
*Santa Clara - Building-related revenues are not reflected in the General Fund. Fremont - Building permits are not part of the General Fund but are included for comparison purposes. Mountain View - Building permit revenues are not part of the General Fund, but are included for comparison purposes.

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General Fund Transfers
Transfers out represent transfers of monies out of the General Fund to various other funds. These transfers provide resources to the receiving fund to support operating and capital expenditures. Transfers from the General Fund are as follows:

For descriptions of funds, see Financial Policies: Fund Structure.

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General Fund Fund Balance
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. Fund balances for governmental funds are made up of the following:

Nonspendable Fund Balance – includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example, prepaid items, property held for resale, and long-term notes receivable.

Restricted Fund Balance – includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers.

CommiLed Fund Balance – includes amounts that can only be used for the specific purposes determined by formal action of the City’s highest level of decision-making authority, the City Council. Commitments may be changed or liOed only by the City taking the same formal action (resolution) that imposed the constraint originally.

Assigned Fund Balance – comprises amounts intended to be used by the City for specific purposes that are neither restricted nor commiHed. The intent is expressed by the City Council or official to which the City Council has delegated the authority to assign amounts to be used for specific purposes. Through the adopted budget, the City Council establishes assigned fund balance policy levels and also sets the means and priority for the City Manager to fund these levels.

Unassigned Fund Balance – is the residual classification for the General Fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. Only the General Fund reports a positive unassigned fund balance. A governmental fund other than the General Fund may report a negative unassigned fund balance if expenditures incurred for a specific purpose exceed the amounts that are restricted, committed, or assigned to those purposes.

In circumstances when an expenditure may be made for which amounts are available in multiple fund balance classifications, the fund balance in General Fund will generally be used in the order of restricted, unassigned, and then assigned reserves. In other governmental funds, the order will generally be restricted and then assigned.

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General Fund Classification of Fund Balance
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All Funds Summary
This section provides information on the FY 2023-24 Special Revenue, Debt Service, Capital Project, Enterprise, and Internal Service Funds budgets including, expenditure and revenue highlights, transfers to other funds, reserve funds, and the financial forecast. For desciptions of funds, see Financial Policies: Fund Structure.

Revenue Estimates
Estimates for FY 2023-24 fund balance and individual revenue accounts are based upon a careful examination of the collection history and paHerns as they relate to such factors as seasonality and performance in the economic environment that the City is most likely to encounter in the coming year. Each source of revenue can be influenced by external and/or internal factors outside of the City's control.

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Special Revenue Funds
Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. Special Revenue Funds include the Park Dedication, Transportation, Storm Drain, and Environmental Management/Clean Creeks funds.

Revenue
Revenue sources are projected to decrease by $3.6 million. Other Taxes is decreasing due to a decrease in BMR housing mitigation revenue. Use of Money & Property is increasing due to budgeting for interest earnings in each fund. Fines and Forfeitures decreased due to decreased admin citations for Non-Point Source. As a result of anticipated revenue shortfalls due to the CDTFA audit, transfers from the General Fund to the Special Revenue Funds have been reduced as part of an expenditure reduction strategy aimed at decreasing General Fund subsidies of Special Revenue Funds.

Expenditures
Expenditure uses are projected to decrease by $23.1 million primarily due to a decrease in Capital Outlays and Contract Services. Capital Outlays are lower as Capital Improvement Program (CIP) projects are not budgeted.

The City is currently working on an updated Capital Improvement Program, which will be presented to City Council on May 17 and added for Council consideration at the final budget hearing and adoption. As part of an expenditure reduction strategy, departments decreased their materials and contract services.

Fund Balance
Fund balance represents fund savings and is calculated by taking the beginning balance and then adding the difference between revenue and expenditures to arrive at the ending fund balance. It is projected to increase by $2.3 million due to BMR housing mitigation revenue for Aloft and 19191 Vallco Parkway.

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Debt Service Fund
The Debt Service Fund provides for the payment of principal, interest, and associated administrative costs incurred with the issuance of debt instruments for the City’s Public Facilities Corporation. The budget funds the Corporation’s annual payment of principal and interest on the City Hall/Community Hall/Library Certificates of Participation (COP) that will be paid off by July 1, 2030.

On September 29, 2020, the City’s 2020A Certificates of Participation (2020 COPs) were successfully sold in order to refund the City’s 2012 Certificates of Participation for debt service savings. The refunding generated net present value savings of approximately $3.14 million, 11.61% of refunded par, and a True Interest Cost of 0.72%. Savings to the City’s General Fund amounts to approximately $494,000 per year for the next ten years or almost $5 million in total savings.

Revenue
Revenue sources are relatively unchanged from the last fiscal year. The $2.7 million transfer from the General Fund funds the annual payment of principal and interest for the City’s debt.

Expenditures
Expenditure uses are relatively unchanged from the last fiscal year. The $2.7 million in expenditures represents the annual payment of principal and interest for the City’s debt.

Fund Balance
Fund balance represents fund savings and is calculated by taking the beginning balance and then adding the difference between revenue and expenditures to arrive at the ending fund balance. Fund balance is relatively unchanged from the last fiscal year.

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Capital Project Funds
This fund pays for the acquisition of major capital facilities and/or construction of major capital projects.

Revenue
Revenue sources are projected to decrease by $9.0 million because Capital Improvement Program (CIP) projects are not budgeted. The City is currently working on an updated Capital Improvement Program, which will be presented to City Council on May 17 and added for Council consideration at the final budget hearing and adoption. As a result of the revenue shortfalls stemming from the CDTFA audit, the annual transfers from the General Fund to the Capital Reserve have been eliminated.

Expenditures
Expenditure uses are projected to decrease by $30.3 million because Capital Improvement Program (CIP) projects are not budgeted. The City is currently working on an updated Capital Improvement Program, which will be presented to City Council on May 17 and added for Council consideration at the final budget hearing and adoption.

Fund Balance
Fund balance represents fund savings and is calculated by taking the beginning balance and then adding the difference between revenue and expenditures to arrive at the ending fund balance.

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Enterprise Funds
Enterprise Funds are set up for the provision of specific services that are funded directly by fees charged for those goods or services. Enterprise Funds include the Resource Recovery, Sports Center, Blackberry Farm Golf Course, and Recreation funds.

Revenue
Projected revenue sources are expected to rise by $0.6 million, driven by an increase in fees and Use of Money & Property. However, as a result of anticipated revenue shortfalls due to the CDTFA audit, transfers from the General Fund to the Enterprise Funds have been reduced as part of an expenditure reduction strategy aimed at decreasing General Fund subsidies of Enterprise Funds.

Expenditures
Expenditure uses are projected to decrease by $0.9 million due to a decrease in contract services, contingencies, and special projects resulting from expenditure-reduction strategies.

Net Position
Enterprise funds carry net position instead of fund balance. Net position is calculated by taking the beginning balance and then adding the difference between revenue and expenditures to arrive at the ending net position.

However, some of these resources are not liquid and represent capital assets. These monies are generally accumulated to support capital replacement and/or expansion needs. It is projected to decrease due to revenues being lower than expenditures.

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Internal Service Funds
Internal Service Funds are used for areas where goods or services are provided to other departments or governments on a cost-reimbursement basis. Internal Service Funds include Information & Technology, Vehicle & Equipment Replacement, Workers' Compensation, Compensated Absences & Long-Term Disability, and Retiree Medical funds.

Revenue
Revenue sources are projected to decrease by $2.5 million as a result of reduced transfers from the General Fund for IT, Workers' Compensation, and Compensated Absences. Furthermore, starting in FY 2022-23, the City will be funding Other Post-Employment Benefits (OPEB) costs with the City’s Section 115 OPEB Trust, as the City’s OPEB plan is over 100% funded. This has led to the elimination of transfers from the General Fund to the Retiree Medical Fund.

Expenditures
Expenditure uses are projected to decrease by $2.1 million mainly due to a decrease in Special Projects.

Net Position
Internal Service Funds carry net position instead of fund balance. Net position is calculated in the same manner as fund balance, taking the beginning balance and then adding the difference between revenue and expenditures to arrive at the ending net position. However, some of the resources are not liquid and represent capital assets.

These monies are generally accumulated to support capital replacement and/or expansion needs. It is projected to decrease by $3.3 million due to revenues being lower than expenditures. Although the Internal Service Funds show a negative balance, it's important to note that retiree health expenses will be reimbursed by the Section 115 OPEB Trust at the close of each fiscal year.

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General Fund Forecast
Overview
City staff prepares medium-term (5-year) and long-term (10-year and 20-year) forecasts as part of the budget process. While long-term projections may be less precise than short-term projections, they can help identify potential structural budget issues in advance. However, given the unpredictability of the CDTFA audit, this budget only includes a 10-year forecast.

The California Department of Tax and Fee Administration (CDTFA) is currently conducting an audit on one of the City's taxpayers. This is expected to have a substantial impact on the City's finances, with a projected decline of $30 million, or 73%, in its sales tax revenues from the initial FY 2023-24 forecast provided by HdL, the City's sales tax consultant. As a result, the City's total revenues are also anticipated to decrease by $30 million, or 28%, from the original FY 2023-24 forecast.

The City recognizes the importance of fiscal prudence and responsible financial management in light of this significant revenue loss. To address the potential shortfall resulting from the CDTFA audit, City staff has updated the financial forecast and is actively exploring various strategies to balance the budget. Unfortunately, these strategies will result in service level reductions for the community, and the impacts will be shared across all areas.

The City is also evaluating different revenue-generating options to mitigate the budget shortfalls caused by the audit.

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To address the structural deficit caused by recurring expenditures consistently surpassing recurring revenues, the City has been implementing cost-cuHing measures while ensuring that essential services continue to be provided to the community.

The City is taking a proactive approach to minimize the impact on its staff and residents, and City staff will continue to keep the Council informed of any new developments related to the audit and its impact on the City's finances. It is crucial to note that the CDTFA audit has resulted in a structural deficit, and the City will need to continue implementing long-term solutions to address this ongoing challenge.

Despite the challenging times, the City's financial position remains strong, and it has a number of advantages that will help it weather the storm without having to resort to more painful cuts. These advantages include an unassigned General Fund balance of over $50 million, a fully funded retiree healthcare program, and a Section 115 Pension Trust of over $17 million that can be used to offset the impact of revenue losses. These reserves can be utilized to offset deficits until the City can align its ongoing expenditures with its revenues. It's important to note that these reserves are one-time funding, which cannot be relied upon to sustain the City's finances in the long run.

These resources give the City a buffer and more options to manage its finances effectively. With a solid financial footing and prudent planning, the City is well-positioned to navigate these uncertain times and maintain its commitment to its staff and community.

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Forecast Methodology
A financial forecast is a crucial tool for planning and budgeting, allowing staff to analyze trends and anticipate the long-term impacts of budget decisions. It plays a vital role in modeling the effects of various factors, such as retirement costs, employee compensation, and revenues, on the City's budget.

It is important to note that the forecast is not a plan but rather a model that relies on revenue and cost assumptions, which are updated regularly as new information becomes available. While cost projections, which are based on known costs, are relatively reliable, revenue forecasts are subject to uncertainties related to future economic conditions. Economic forecasts can change frequently, making it difficult to commit to a particular prediction of the future. As such, staff must update the forecast regularly to ensure it reflects the latest information and trends.

While economic conditions are the primary drivers for economically sensitive revenues such as sales tax and property tax, other factors drive non-economically sensitive categories such as utility user taxes and franchise fees. These revenue categories are more heavily impacted by utility rate changes, energy prices, and consumption levels. Revenues from local, state, and federal agencies are primarily driven by grant and reimbursement funding.

As a result, these revenues experience no significant net gain or loss during economic expansions or slowdowns.

All revenue projections are based upon a careful examination of the collection history and paHerns related to seasonality and the economic environment the City is most likely to encounter in the future. Staff also considered the potential impacts of the CDTFA audit in determining the most reasonable estimated figures.

A discussion of the national and local economic outlooks used to develop the revenue estimates for the FY 2023- 24 forecast is included below. To create the revenue forecasts, the City reviewed national, state, and regional economic forecasts from multiple sources, including the Congressional Budget Office, California’s Legislative Analyst’s Office (LAO), and the Center for Continuing Study of the California Economy (CCSCE). To develop the sales tax, property tax, and transient occupancy tax (TOT) revenue projections, the City worked with HdL Companies, a tax consultant.

The City's Consumer Price Index (CPI) forecasts are an average of State and County CPI from:

UCLA Anderson Forecast for the Nation and California
California Department of Transportation’s California County-Level Economic Forecast In 2019, the City worked with UFI (Urban Futures, Inc.), a financial advisory and consulting firm, to:

Review, update, and enhance the City’s baseline financial forecast.

Evaluate fiscal strategies, including potential local revenue measures.

Develop capital financing options, structures, and estimates for identified projects.

Prepare an analysis of city charter costs/benefits related to fiscal activities.

This forecast includes the updates and enhancements that UFI has made to the City’s baseline financial forecast.

National Economic Outlook
Real gross domestic product (GDP) increased at an annual rate of 2.6% in the fourth quarter of 2022, aOer increasing by 3.2% in the third quarter. The increase in the fourth quarter primarily reflected increases in inventory investment and consumer spending that were partly offset by a decrease in housing investment. The deceleration in the fourth quarter, compared to the third quarter, primarily reflected a downturn in exports and decelerations in consumer spending, business investment, and state and local government spending. These movements were partly offset by an upturn in inventory investment, a smaller decrease in housing investment, and an acceleration in federal government spending. Imports decreased less in the fourth quarter than in the third quarter.

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Economic trends have been decelerating along with tighter financial conditions and restrictive monetary policy.

Recent data suggests positive but below-trend growth this year. Although the pace of job growth is moderating, labor markets remain solid, and the U.S. consumer has demonstrated resiliency.

At the end of March, the 2-year Treasury yield was 169 basis points higher, and the 10-Year Treasury yield was about 113 basis points higher, year-over-year. The inversion between the 2-year Treasury yield and 10-year Treasury yield narrowed to -56 basis points at March month-end versus -90 basis points at February month-end.

The average historical spread (since 2003) is about +130 basis points. The inversion between 3- month and 10-year Treasuries widened to -128 in March from -89 basis points in February. The shape of the yield curve indicates that the probability of recession is increasing.

Cupertino Economic Outlook
The City does not anticipate significant impacts on property tax revenues in FY 2023-24. The City is optimistic about the future of transient occupancy tax (TOT) revenues, as the relaxation of pandemic-related restrictions has boosted business travel. Although strong in previous years, construction activity will continue to flaHen out as recent large development projects, notably Apple Park, are now complete.

As more information becomes available, staff will bring forward updates and adjustments to City Council regularly as necessary.

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Revenues
The City relies heavily on three revenue sources: property tax, sales tax, and transient occupancy tax (TOT), which together make up the majority of its General Fund revenues. However, the City is facing a significant drop in revenue due to the impact of the CDTFA audit, which is expected to reduce revenues by $30 million, or 28%, from original projections.

The City's General Fund revenues are projected to be $80.3 million in FY 2023-24, and are expected to increase over the forecast period. Property tax and transient occupancy tax are expected to continue to be strong revenue sources, with projected increases. However, sales tax is projected to decrease significantly due to the CDTFA audit.

The National Bureau of Economic Research (NBER), an American private nonprofit research organization, defines the beginning and ending dates of recessions. The NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than two quarters which is six months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales. Since World War II, recessions have lasted an average of 11.1 months and have occurred, on average, about every 58.4 months (4.8 years). As a result, the forecast assumes a recession every four years where revenues remain flat while expenditures continue to increase.

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Sales Tax
Prior to FY 2023-24, sales tax has been the City’s largest revenue source. Sales taxes are collected at the point of sale and remiHed to the California Department of Tax and Fee Administration (CDTFA), formerly the Board of Equalization. The CDTFA allocates tax revenue owed to the City in monthly payments. Each quarterly payment is divided into three monthly payments: two advance payments and a final reconciliatory payment that reconciles the actual revenue collected with the CDTFA's projected revenue for that quarter.

Sales tax revenues experienced a significant increase in FY 2020-21 and FY 2021-22. The City's business-to- business (B2B) industry and online sales were the primary drivers of this growth. The pandemic contributed to the surge in B2B revenues as businesses transitioned to remote work. Meanwhile, brick-and-mortar retail sales decreased due to Shelter-in-Place orders, resulting in an increase in online sales. However, the City believes this increase was a one-time event due to the pandemic.

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In FY 2023-24, sales tax revenues are projected to be $11.4 million, a decrease of $30 million, or 73%, from the original forecast due to the CDTFA audit. Sales tax revenues are projected to increase by an average annual growth rate of 1.6% in the forecast. Staff used conservative estimates for business and industry, general consumer goods, restaurants and hotels, and state and county pools.

The City faces a concentration risk due to the dependence on a single industry, particularly the B2B sector, which is sensitive to economic forces. Two technology companies account for a significant portion of the City's total sales tax revenue.

To mitigate the volatility of B2B revenue, the City's long-term fiscal, strategic plan aims to diversify its sales tax sources. Recently completed development projects, such as Nineteen800 and Main Street, have boosted retail sales and can help reduce the City's reliance on B2B revenue.

Property Tax
Property taxes are projected to remain stable in the near term. However, the impact of potential remote work on property taxes in the long term is uncertain. The trend towards remote work has caused people to reconsider where they choose to live, which could lead to a decrease in demand for residential real estate. Additionally, companies may need less office space if fewer employees are working at the office, which could decrease demand for commercial office space. This could result in a reduction of property tax revenue for the City.

In FY 2023-24, property tax revenues are expected to reach $31.7 million and increase at an average annual growth rate of 3.1% in the forecast. The moderate forecast is based on a range of factors, including historical trends for the City and projections for the region. While property tax has grown at an average annual rate of 11% historically, this projection assumes a lower growth rate due to the absence of significant development projects.

It is essential to note that major development projects, such as Main Street and Apple Park, have been significant contributors to the historical growth in property tax revenues. However, the current projection does not assume any such developments in the near future, resulting in a more modest growth rate forecast.

The City will continue to monitor economic and market trends to ensure that property tax revenue projections remain accurate.

Transient Occupancy Tax
The COVID-19 pandemic had a significant impact on Transient Occupancy Tax (TOT) revenues, with a dramatic decline in revenues due to the reduction in travel. The City experienced a decrease in TOT revenues from $8.9 FY 2023-24 Proposed Budget Financial Schedules 157
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million in FY 2018-19 to $2.1 million in FY 2020-21, with a partial recovery to $4.4 million in FY 2021-22. TOT revenues are heavily reliant on business travel, which may be affected by remote work or economic conditions.

Although leisure travel has recovered faster than expected, business travel has been slower to recover. The City is cautiously optimistic that business travel will continue to increase in FY 2023-24.

The City's current forecast assumes that TOT revenues will recover to $7.5 million in FY 2023-24, and gradually increase from the new normal. The forecast projects an average annual growth rate of 1.9% for TOT revenues. This moderate forecast is based on historical tax collections and assumes slower growth than historical trends.

The TOT revenues are affected by the tax rate charged on hotels, occupancy rates, and average daily room rates (ADR). Given that TOT revenues in Cupertino are mainly driven by business travel, any shiO in travel habits or economic conditions could significantly impact this revenue source.

Licenses and Permits
Licenses and permits revenue is expected to decrease in FY 2023-24 due to the slowdown in development activity, but is expected to increase slightly in the out-years. The City's forecast projects an average annual growth rate of

0.3% for licenses and permits revenue, based on forecasts of California residential building permits, non- residential building permits, and construction payrolls from the UCLA Anderson Forecast for the Nation and California.

It is important to note that this forecast does not take into account any significant development projects that are awaiting approval. In the event that new development projects are approved, staff will update this forecast accordingly.

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Charges for Services
Revenues from charges for services have decreased from their FY 2016-17 levels, primarily due to a decrease in development activity.

Charges for services revenues are projected to increase at an average annual growth rate of 2.0%. Other Service Fees, Cost Allocation Plan Charges for Services, and General Service Fees are expected to increase by 2.75%, reflecting full-time salary growth. Planning Fees and Engineering Fees are forecasted based on construction and development factors, such as California residential and non-residential building permits, and construction payrolls from the UCLA Anderson Forecast for the Nation and California.

This forecast does not consider any significant development projects awaiting approval. The City will update the forecast if new projects are approved.

Other Revenue
Utility taxes are forecasted to increase by an annual average growth rate of 0.5% based on historical trends. In recent years, increases in rates have been offset by decreases in consumption.

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Franchise fees are projected to increase by an average annual growth rate of 1.2% based on a trend of historical data.

Other taxes are made up of construction, property transfer, and business license tax revenue. Revenue is projected to increase by an average of State and County CPI.

Use of money and property is expected to grow at a rate of 0.4% each year based on the City’s current conservative investment strategy and low-interest rates. The Section 115 Pension Trust is expected to grow at the discount rate of 6.25%.

Intergovernmental revenues are projected to grow at a rate of 0.4% each year.

Fines and Forfeitures are forecasted to remain constant in the forecast.

Miscellaneous revenues are forecasted to increase by CPI each year.

Non-operational revenues (Transfers and Other Financing Sources) are not assumed in the forecast.

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Expenditures
In FY 2019-20, the City developed a zero-based budget, which involved analyzing every function of the City for its needs and costs. As a result, all costs were justified, and base budget savings were achieved.

However, for FY 2023-24, the City is facing an expected revenue shortfall due to the CDTFA audit. To address this, departments have been asked to reduce their base budget expenditures by reducing materials and contract services by 40% and 20%, respectively. These efforts will help balance the City's budget.

In addition to these cost-saving measures, the City is proposing several budget-balancing strategies, including:

Eliminating 14 vacant positions
Decreasing expenditure on materials and contract services Reducing spending on special projects and capital outlays Reducing the City Manager's Discretionary Fund by $25,000 and contingencies by 50% Decreasing the amount of transfers to other funds
Utilizing the City's Section 115 Trusts to fund pension and OPEB (Other Post-Employment Benefits) costs To inform these decisions, the City developed a forecast based on actual expenditures in prior years and FY 2023- 24 projections. The forecast also considered factors such as CPI, construction and development activity, and CalPERS Normal Cost and Unfunded Liability projections. The forecast will be adjusted throughout the year to account for one-time changes and budget adjustments.

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The chart above illustrates the projected General Fund expenditures, which are estimated to be $86.3 million in FY 2023-24, with an expected increase over the forecast period. The forecasted expenditure growth is primarily driven by increasing Law Enforcement costs. To provide an in-depth understanding of the estimated expenditure categories in the General Fund Forecast, the following discussion focuses on the assumptions made for each category.

Personnel Expenditures
Salaries
FY 2023-24 salaries and benefits reflect the cost-of-living adjustments approved by the City Council in August 2022. The City is currently negotiating with its bargaining groups because the agreements, which expire on June 30, 2025, include a salary and benefits reopener. In the forecast, full-time salaries are expected to increase by the CalPERS payroll growth rate. On the other hand, part-time salaries are forecasted to grow at a rate of 1.5%, because historically, part-time salaries have tended to grow at a slower rate than full-time salaries.

Employees who have yet to reach the top step in their classification’s salary range are eligible to receive a step increase on their anniversary date. Typically, classifications have five steps, with each increase equivalent to a 5% increase in salary. Currently, approximately 38% of employees are below Step 5.

Health Benefits
In FY 2023-24, health benefits account for about 7% of all personnel costs in the General Fund, primarily due to health insurance costs. The City pays employees a fixed amount for health and dental insurance costs instead of covering a percentage of premiums. In October 2016, City Council approved labor contracts that significantly increased the City’s health insurance contributions to align the City with the median offerings of our comparator cities. For the duration of the contract, cost increases in health and dental premiums above the negotiated amounts were fully absorbed by employees. The City is in negotiations with its bargaining groups, CEA and OE3.

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Retirement Benefits
Rising retirement costs are driving the increase in employee benefits. Cupertino offers retirement benefits to its employees through the California Public Employee’s Retirement System (CalPERS), which experienced a significant decline in its assets due to poor investment returns during the Great Recession. Moreover, changes in actuarial assumptions and enhanced benefits due to higher life expectancies have further increased the plan's liabilities. Consequently, the City's pension costs have escalated considerably and currently constitute one of the City's largest financial obligations.

The table below illustrates the City's CalPERS costs over the next few years.

In December 2016, the CalPERS Board of Administration implemented a three-year phase-in beginning in FY 2018-19 to lower the discount rate from 7.5% to 7.0%. This was done to enhance the financial stability of the pension system, resulting in significant increases in retirement costs. Additionally, in FY 2021-22, the discount rate was further lowered from 7.0% to 6.8% due to the FY 2020-21 investment gain of 21.3%, which triggered the Funding Risk Mitigation Policy.

The City’s retirement rates are based on a blend of all three tiers (2.7% @ 55, 2% @ 60, and 2% @ 62). Although employees pay a different rate depending on their tier, the City’s costs are the same for all three tiers. The table below shows the current breakdown of City employees amongst the three retirement tiers. The majority of employees in the City are currently covered under Tier 3.

A retiree's highest monthly pension benefits are calculated by multiplying:

Service credit: the number of years of CalPERS service.

Benefit Factor: percentage of pay based on age.

Compensation Basis: the highest monthly average salary for a defined period.

Other Benefits
The forecast assumes health insurance, dental insurance, and vision insurance increase by CPI. No increases were forecasted for the following benefits: internet allowance, standby pay, Employee Assistance Program, and Deferred Compensation. Rec Bucks are assumed to increase at a 0.5% growth rate.FY 2023-24 Proposed Budget Financial Schedules 163 169
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Non-Personnel Expenditures
Non-Personnel budgets were developed based on previous year's base budget and adjusted for the current year's needs. One-time projects were excluded to reflect ongoing expenditure needs. Materials and contract services were adjusted by CPI, where applicable. In response to the anticipated revenue shortfall resulting from the CDTFA audit, departments were asked to find ways to reduce the base budget. To balance the budget, various categories including materials, contract services, capital outlays, special projects, transfers to other funds, and contingencies were reduced in the Proposed Budget.

Materials costs are forecasted to increase by CPI.

Contract Services costs are projected to grow by CPI except for the Law Enforcement contract with the Santa Clara County Sheriff’s Office. Law Enforcement costs are projected to grow by CPI plus 2%. Per the terms of the contract, the annual increase is limited to the lesser of:

Percentage increase in total compensation and annual CalPERS cost increase Annual CPI plus 2% and annual CalPERS cost increase
The City's current agreement with the Santa Clara County Sheriff's Office is set to expire in June 2024, and negotiations are ongoing for a new agreement. In anticipation of potential increases in Law Enforcement costs, a placeholder increase has been included in the forecast. These costs have been a significant driver of the City's expenditure growth in recent years, and it is expected that they will continue to increase in the coming years.

Cost Allocation is projected to grow by 2.8%.

Capital Outlays and Special Projects are projected to increase by CPI. In the last five years, the City has spent about $5 million per year on capital outlays and special projects, excluding development projects that include pass-through revenue. Capital Outlays and Special Projects are proposed to be reduced as an expenditure- reduction strategy.

Contingencies are projected to increase by CPI. Program contingencies are proposed to be reduced to 1.25%, while the City Manager's Contingency Fund is proposed to be reduced to $50,000 in FY 2023-24. Program contingencies were cut in half to 2.5% in FY 2020-21, and the City Manager’s Contingency Fund was reduced to $75,000 in FY 2021-22. In prior years, program contingencies were 5% of Materials and Contract Services, and the City Manager’s Contingency was 5% of General Fund Materials and Contract Services, excluding the law enforcement contract. It's worth noting that the City has historically underutilized contingencies, and the use of these funds would require pre-approval by the City Manager or their designee.

Transfers represent the General Fund’s contributions to other City funds to support debt payments, pay retiree health costs, finance capital projects, replenish capital project reserves, acquire new equipment, and subsidize enterprises and operations. AOer the implementation of a comprehensive Cost Allocation Plan in FY 2015-16, General Fund expenses have been shiOed to other City funds, causing some of those funds’ revenues to fall short of expenses and necessitating the use of fund balances to cover expenses. The General Fund benefits in the near term from the cost shiO; however, aOer fund balances in those other funds are drawn down to minimum levels and absent aggressive revenue or cost actions in those other funds, General Fund subsidies are necessary to maintain fund balance minimums.

Projected General Fund subsidies to each fund are based on the following assumptions:

Special Revenue Funds: $2.5 million annually.

Debt Service Funds: $2.7 million based on the 2012 COPS debt service schedule.

Capital Reserve: $0 million.

Retiree Medical Fund: $0 million.

Compensated Absences Fund: $0.8 million and increases at a rate of 2.8% per year.

FY 2023-24 Proposed Budget Financial Schedules 164
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Innovation and Technology Fund: $1 million and increases at CPI annually.

Enterprise Funds: $0.5 million and increases at CPI per year.

Transfers from the General Fund to other funds have been reduced as part of an expenditure reduction strategy aimed at decreasing General Fund subsidies of other funds.

The City is expected to complete its debt payments for city facilities by FY 2029-30. Until then, the City will pay approximately $2.7 million annually in principal and interest on its Certificates of Participation for City Hall, Community Hall, and Library. These funds will be transferred from the General Fund to the Debt Service Funds.

Starting in FY 2022-23, the City funds Other Post-Employment Benefits (OPEB) costs with the City’s Section 115 OPEB Trust because the City’s OPEB plan is over 100% funded. The OPEB Trust had a balance of $36.1 million as of March 31, 2022. Funding OPEB costs with the OPEB Trust will eliminate the transfers from the General Fund to the Retiree Medical Fund.

FY 2023-24 Proposed Budget Financial Schedules 165
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Pension
CalPERS
The City provides a defined benefit pension to its employees through the California Public Employees' Retirement System (CalPERS). Retirement benefits are calculated using a formula based on an employee’s age, earnings, and years of service. The retirement benefits are funded by:

Investment earnings (60%)
Employer contributions (29%)
Employee contributions (11%)
Each year, CalPERS determines an employer's contributions based on actual investment returns and actuarial assumptions, including:

Expected investment returns (discount rates)
Inflation rates
Salaries
Retirement ages
Life expectancies
Contributions to fund the pension plan are comprised of two components:

Normal cost (the cost of the benefits earned in a respective year) Amortization of the unfunded accrued liability (UAL)
CalPERS Discount Rate
Defined benefit plans are highly sensitive to the discount rate assumption. The discount rate is the expected rate of return of the plan's assets over the long term. The discount rate will depend on the plan's size, asset allocation, time horizon, and other considerations.

From the City's perspective, the discount rate is important as it is used to determine the City's annual contributions to the plan, the plan's unfunded liability, and the plan's funded status. In other words, the discount rate is used to determine whether a plan has enough assets to meet its future obligations. The discount rate must be realistic to allow the City to foresee funding issues that may impact future operating budgets and future generations of retirees and plan members. If the discount rate assumption is too high and investments earn less than expected, a funding shortfall may result, requiring the City or CalPERS members to make greater contributions than expected.

CalPERS Investment Earnings
The City's pension plan heavily relies on investment earnings, which fund nearly 60% of retirement benefits.

Thus, the plan is sensitive to the investment returns of CalPERS. When investment returns fall below the discount rate, contributions must increase to cover the shortfall.

Currently, CalPERS assumes an annual investment return of 6.8%. However, the investment returns earned by CalPERS have fallen short of the discount rate assumption approximately half the time over the past 20 years, as shown in the chart below. Investment returns for individual fiscal years have ranged between -24.0% and +21.7%.

For instance, CalPERS suffered negative investment returns in 2001 and 2002 due to the dot-com crash and in 2008 and 2009 due to the Great Recession.

FY 2023-24 Proposed Budget Financial Schedules 166
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Note: Beginning in 2002, investment returns are reported as gross of fees.

For FY 2021-22, CalPERS reported an investment return of -6.1%. The average investment return is 6.7% for a 5- year period, 7.7% for a 10-year period, 6.9% for a 20-year period, and 7.7% for a 30-year period. As returns in a given year are volatile, it can be more instructive to look at returns over longer time horizons.

CalPERS Update
Asset Liability Management Process
In November 2021, CalPERS completed its quadrennial Asset Liability Management (ALM) process, which reviewed investment strategies and actuarial assumptions. At the November 15-17, 2021, meetings, the CalPERS Board approved a 6.8% discount rate, selected a new asset allocation for the fund's investment portfolio, and adopted new actuarial assumptions.

During the ALM process, the board examined different potential portfolios and their impact on the CalPERS fund.

Ultimately, the board selected the portfolio with an assumed investment return of 6.8%.

The new portfolio includes a 5% allocation to leverage.

FY 2023-24 Proposed Budget Financial Schedules 167
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CalPERS Plan Status
As of the most recent actuarial valuation on June 30, 2021, the City’s pension plan had assets of $127.1 million and liabilities of $168.4 million, resulting in an unfunded liability of $41.3 million and a funded ratio of 75.5%. The unfunded liability is the difference between assets and liabilities, while the funded ratio is the ratio of assets to liabilities.

A defined-benefit plan is considered adequately funded if its assets equal or exceed the value of its future liabilities. When the funded ratio is lower than 100%, the plan has insufficient assets to pay all future liabilities.

The funded status of the system decreased because:

Poor investment returns during the Great Recession significantly decreased the plan’s assets.

Enhanced benefits and actuarial assumption changes due to increased life expectancies increased the plan's liabilities.

Over the past few years, CalPERS has taken steps to improve the long-term financial sustainability of the system.

In December 2016, the CalPERS board voted to reduce the discount rate, also known as the assumed rate of return for investments, from 7.5% to 7.0% over three years from FY 2018-19 to FY 2020-21. In February 2018, the CalPERS board also voted to decrease the amortization period for new pension liabilities from 30 years to 20 years, effective July 1, 2019. While these changes will provide long-term benefits to the pension plan, they will also increase the City’s pension contributions.

Impact of CalPERS Investment Returns
CalPERS assumes it will earn investment returns of 6.8% each year. If investment returns are higher than 6.8%, the City's contributions decrease. On the other hand, if investment returns are lower than 6.8%, the City's contributions increase.

Challenging and volatile financial markets impacted CalPERS investment returns for FY 2021-22. During this period, CalPERS earned an investment return of -6.1%, which is lower than the assumed rate. The investment performance is expected to affect the City's pension contributions starting in FY 2024-25. In 2022, financial market volatility increased due to heightened geopolitical risk, supply chain boHlenecks and persistent inflation, and the Federal Reserve’s pivot to a less accommodative monetary policy.

Impact of CalPERS Discount Rate Changes
Due to lower-than-historical interest rates and economic growth, market experts project lower returns for the next several decades. The Pew Research Center forecasts a long-term investment return of 6.5% for typical pension fund portfolios.

During its Asset Management Liability Process, CalPERS considered discount rates between 6.25% and 7%.

Ultimately, CalPERS approved a discount rate of 6.8%, a decrease from the previous discount rate of 7%.

The discount rate has a significant effect on the City's CalPERS contributions. If the discount rate is less than the discount rate assumption, the City's CalPERS contributions will increase. If CalPERS lowers the discount rate by one percentage point, the City's contributions will increase by up to $2.9 million per year. This analysis would show the potential contribution impact if CalPERS were to lower the discount rate.

FY 2023-24 Proposed Budget Financial Schedules 168
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Section 115 Trust
A Section 115 Trust is a tax-exempt investment tool that allows local governments to pre-fund pension and retiree health costs. Once contributions are placed into the trust, the City can only use assets from the trust for retirement plan purposes. The City may make withdrawals to either reimburse the City for retirement system contributions or to pay CalPERS directly. The benefits of a Section 115 Trust include the following:

Local control over assets: The City controls the contributions, withdrawals, investment strategy, and risk level of assets in the Trust.

Pension rate stabilization: Assets can be transferred to CalPERS at the City’s discretion to pay for Normal Cost or UAL contributions and can be used to reduce or eliminate large fluctuations in the City’s pension costs.

Potential for higher investment returns than General Fund: Investment requirements applicable to the City’s General Fund assets under Government Code 53601 do not apply to Trust assets.

Diversification: Trust assets will be diversified from CalPERS investments.

FY 2023-24 Proposed Budget Financial Schedules 169
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City Strategies
Given that pension obligations are one of the City’s largest financial obligations, the City has taken proactive steps to reduce the impact of pension cost volatility. In March 2018, the City provided options to Council to address rising pension costs. In April 2018, the City presented a long-term pension funding strategy to the Fiscal Strategic Plan CommiHee. In May 2018, the City established a Section 115 Pension Trust to reduce the effect of pension rate volatility on the City’s budget. The Section 115 Pension Trust helps the City to:

Grow assets for future pension contributions.

Invest assets over appropriate time horizons.

Earn higher investment returns than the General Fund.

Reduce pension contribution volatility.

Diversify funds from CalPERS investments.

As a fiscal sustainability measure, the City funds the Section 115 Pension Trust using a more conservative discount rate of 6.25%. The City's pension funding goal is to accumulate sufficient funds in the Pension Trust to fund the difference between a 6.25% and a 7% discount rate and achieve a funded ratio of 80% over 20 years. The City's projections indicated that the City would need to accumulate over $42 million in the Pension Trust within 20 years to achieve its pension funding goal.

As a result, the funding strategy proposed $8.0 million in initial funding, along with additional funding of $10.0 million over the first five years. The City has contributed $16.0 million, including:
$8 million in FY 2018-19
$4 million in FY 2019-20
$2 million in FY 2020-21
$2 million in FY 2021-22
As of June 30, 2022, the Section 115 Pension Trust had a balance of $17.2 million and had earned an annualized investment return of 3.94% gross of fees since inception.

FY 2023-24 Proposed Budget Financial Schedules 170
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Fund Balance
The foresight of the City Council and staff in previous years to focus on ensuring healthy reserves is paying off in full. Increases in sales tax revenues and budget reductions in FY 2020-21 have contributed to this planning strategy and will provide additional resources for the City in the future.

The General Fund’s Unassigned fund balance remains healthy and will be able to assist in addressing funding gaps. In addition, the General Fund's Committed and Restricted fund balance includes:

Economic Uncertainty Reserve: may be used to mitigate potential shortfalls.

Capital Projects Reserve: may be used to fund capital projects.

Section 115 Pension Trust: may be used to fund pension costs. Funds in the Section 115 Pension Trust are restricted and can only be used to pay CalPERS or reimburse the City for pension contributions.

In FY 2023-24, the General Fund’s total fund balance is projected to be $107.5 million, and the General Fund's Unassigned fund balance is projected to be $47.1 million. Fund balance is decreasing due to a persistent structural deficit, resulting from ongoing expenses exceeding ongoing revenues. To address this, the City intends to utilize the fund balance to cover the shortfall until revenue and expenditure can be brought into alignment.

FY 2023-24 Proposed Budget Financial Schedules 171
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FY 2023-24 Proposed Budget Financial Schedules 172
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Potential Budget-Balancing Strategies
Historically, the City has maintained a structurally sound budget, with revenues surpassing expenditures in most fiscal years. During periods of excess revenue, the City has transferred the surplus fund balance to the Capital Reserve Fund in accordance with the City's Fund Balance and Use of One-Time Funds Policy.

However, the forecast shows a potential structural deficit resulting from the anticipated decrease in sales tax revenue due to the CDTFA audit. A structural deficit occurs when recurring expenditures consistently surpass recurring revenues, leading to an ongoing imbalance that cannot be remedied through short-term solutions.

Potential Strategy Description Potential Impact Currently Recommended
Section 115 Pension
Trust
In FY 2017-18, the City established a
Section 115 Pension Trust to mitigate
pension rate volatility when CalPERS
investment returns are below the
discount rate or when CalPERS
changes assumptions. The City can
also use it to offset pension costs in
any given year.

The City established a Section 115
Trust to reduce pension rate volatility
when CalPERS investment returns
are below the discount rate or when
CalPERS changes assumptions. The
City can also use it to offset pension
costs.

The fund has a balance of $17.2
million. Yes
Section 115 OPEB
Trust
In FY 2009-10, the City established a
Section 115 OPEB Trust to help fund
its retiree health obligations, also
known as other post-employment
benefits (OPEB).

The OPEB plan is fully funded.

Starting in FY 2022-23, retiree health
costs will be funded by the OPEB
Trust rather than the General Fund.

The fund has a balance of $33.3
million. Yes
Capital Projects
Reserve
The General Fund Capital Projects
Reserve may be used to fund capital
projects.

The reserve has a balance of $10
million. Yes
Economic
Uncertainty Reserve
The General Fund Economic
Uncertainty Reserve may be used to
mitigate potential shortfalls.

The reserve has a balance of $24
million. No
As of June 30, 2022
1 1
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Expenditure Reduction Strategies
Potential Strategy Description Potential Impact Currently Recommended
No new positions Cost containment strategy $0 Yes
Vacancy control Keep non-essential positions unfilled as they become vacant.

Approximately
$186,000 per
position on
average
Yes
Employee cost-sharing of
increases to CalPERS
Negotiate to share costs of increases to
CalPERS employer rates with employees.

Would be subject to bargaining unit
agreement.
$250,000
approximate based
on a 5% rate
increase
No
Defer or eliminate
negotiated increases
Would be subject to bargaining unit
agreement.

Approximately
$0.3 million
savings based on a
1% decrease
No
Furloughs
Employees would take up to a 10% decrease
in pay in exchange for 1 unpaid furlough day
per pay period. Would be subject to
bargaining unit agreement.

Approximately $3
million savings
based on a 10%
decrease
No
Reduction in force
Identify positions to be reduced (laid off)
based on MOU provisions and service level
needs.

Approximately
$186,000 per
position on
average
No
Reduction in capital
outlays and special
projects
Cost containment strategy Up to $4 million Yes
Reduction in
contingencies Cost containment strategy Up to $400,000 Yes Defer or cancel capital
projects Cost reduction strategy Varies Yes
Reduction of Community
Funding and Historical
Society Funding
Cost reduction strategy Up to $110,000 Yes
Reduction of festival fee
waivers Cost reduction strategy Varies Yes
FY 2023-24 Proposed Budget Financial Schedules 174
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Revenue Generation Strategies
Potential Strategy Description Potential Impact Currently Recommended
¼ Cent Transaction and
Use Tax (TUT)
Voter approval is required
Could increase sales tax from 9.125% to 9.375%
$5.2 million No
Transient Occupancy Tax
(2% increase)
Voter approval is required
Could increase transient occupancy tax from
12% to 14%
$1.7M @ $10M
base
$1.25M at $7.5M
base
$833k at $5M base
No
Parcel Tax Voter approval is required
$3.5M flat rate per
parcel
$3.6M variable
rate per SF
No
Other Revenue Tax
Measures
Urban Futures, Inc. (UFI) has been contracted
to analyze potential revenue tax measures. Varies No
Increase fees and cost-
recovery
Matrix Consulting Group has been contracted
to conduct a fee study, which is scheduled to
take place from April to July 2023. The study
aims to assess the potential for fee increases
and cost recovery.

Varies Yes
Sale of City-owned
Properties or Assets
The sale of city-owned assets would generate
one-time revenue. Varies No
FY 2023-24 Proposed Budget Financial Schedules 175
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Council and Commissions
FY 2023-24 Proposed Budget Council and Commissions 177
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Department Overview
Budget Units
Budget Unit Program 2024 Proposed Budget
City Council $ 572,943
100-10-100 City Council $ 432,215
100-10-101 Community Funding $ 67,573
100-10-110 Sister Cities $ 73,155
Commissions $ 588,882
100-11-131 Technology, Information & Communications Commission $ 35,695 100-11-140 Library Commission $ 43,025
100-11-142 Arts and Culture Commission $ 41,598
100-11-150 Public Safety Commission $ 46,001
100-11-155 Bicycle and Pedestrian Commission $ 62,864
100-11-160 Parks and Recreation Commission $ 38,916
100-11-165 Teen Commission $ 42,506
100-11-170 Planning Commission $ 117,855
100-11-175 Housing Commission $ 61,513
100-11-180 Sustainability Commission $ 58,238
100-11-190 Audit Committee $ 40,671
Total $ 1,161,825
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Budget at a Glance
2024 Proposed Budget
Total Revenues $ 827,983
Total Expenditures $ 1,161,825
Fund Balance $ -
General Fund Costs $ 333,842
% Funded by General Fund 28.7%
Total Staffing 7.2 FTE
Organization
Hung Wei, Mayor
Sheila Mohan, Vice Mayor
Liang Chao, Council Member
J.R. Fruen, Council Member
Kitty Moore, Council Member
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Proposed Budget
It is recommended that City Council approve a budget of $1,161,825 for the Council and Commissions department. This represents a decrease of $144,551 (-11.1%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2022-23 Original
Budget
FY 2023-24 Proposed
Budget Reduction Service Impact
Materials $286,824 $161,258 $125,566
Reduced meeting
expenses, general
supplies, and food
and drink for
Council meetings.FY 2023-24 Proposed Budget Council and Commissions 182 188
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Proposed Expenditures by Division
Department Expenditure History
Revenues and Expenditures

50.7%49.3%
Commissions
City Council
$957k
$1.06M
$1.31M
$1.16M
2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget FY 2023-24 Proposed Budget Council and Commissions 183
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 954,826 $ 1,054,877 $ 830,532 $ 827,983 Miscellaneous Revenue $ 10,986 $ 1,251 $ - $ -
Transfers In $ - $ 82,396 $ - $ -
Total Revenues $ 965,812 $ 1,138,524 $ 830,532 $ 827,983 Expenditures
Employee Compensation $ 327,344 $ 328,386 $ 352,312 $ 358,173 Employee Benefits $ 191,185 $ 214,198 $ 262,391 $ 239,920 Materials $ 101,704 $ 121,075 $ 256,738 $ 161,259
Contract Services $ 128,698 $ 137,954 $ 155,114 $ 125,320 Cost Allocation $ 206,675 $ 260,845 $ 271,261 $ 273,620 Special Projects $ 1,155 $ - $ - $ -
Contingencies $ - $ 7 $ 8,560 $ 3,533
Total Expenditures $ 956,761 $ 1,062,465 $ 1,306,376 $ 1,161,825 Fund Balance $ - $ - $ - $ -
General Fund Costs $ (9,049) $ (76,059) $ 475,844 $ 333,842 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget
ADMINISTRATIVE ASSISTANT 0.50 0.50 0.50 0.40
ASST DIR RECREATION COMM SVCS 0.05 0.05 0.15 0
CHIEF TECHNOLOGY OFFICER 0.02 0.02 0.02 0.02

COMMUNITY OUTREACH

SPECIALIST

0.10 0.10 0.10 0.10
COUNCIL MEMBER 5.00 5.00 5.00 5.00
DIRECTOR OF COMM DEVELOPMENT 0.06 0.06 0.06 0.06
DIRECTOR OF PARKS REC 0.05 0.05 0.05 0

EMERGENCY SERVICES

COORDINATOR

0.05 0.05 0.05 0.05
EXEC ASST TO THE CITY COUNCIL 0.50 0.50 0.50 0.50
FINANCE MANAGER 0.05 0.05 0.05 0.05
MANAGEMENT ANALYST 0.10 0.10 0.10 0.20
PLANNING MANAGER 0.10 0.10 0.10 0.10
PUBLIC INFORMATION OFFICER 0.15 0.15 0.15 0.15
RECREATION COORDINATOR 0.45 0.45 0 0
RECREATION MANAGER 0 0 0.10 0.15
RECREATION SUPERVISOR 0.05 0.05 0 0
SENIOR PLANNER 0 0 0 0.10
SR OFFICE ASSISTANT 0.20 0.20 0.20 0.20
SUSTAINABILITY MANAGER 0.05 0.05 0.05 0.05
TRANSPORTATION MANAGER 0.10 0.10 0.10 0.10
Total 7.58 7.58 7.28 7.23
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City Council
Budget Unit 100-10-100
General Fund - City Council - City Council
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 827,983
Total Expenditures $ 432,215
Fund Balance $ -
General Fund Costs $ (395,768)
% Funded by General Fund -91.6%
Total Staffing 5.9 FTE
Program Overview
The Mayor and councilmembers, acting as the elected representatives of the residents of Cupertino, establish public policies to meet the community needs of the City. This budget includes funding of $15,000 for the Mayor's Fund and $5,000 for fee waivers for the City Council members.

Service Objectives
The City Council objectives are carried out by City staff under the sole direction of the City Manager.

Proposed Budget
It is recommended that City Council approve a budget of $432,215 for the City Council program. This represents a decrease of $67,412 (-13.5%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24 Original
Budget
FY 2023-24 Proposed
Budget Reduction Service Impact
Materials $191,999 $108,303 $83,696
Reduced meeting
expenses such as
food and coffee,
conference and
meetings, and tech
reimbursements.

Councilmembers
now use City
devices.

Revenues and Expenditures
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 954,826 $ 1,054,877 $ 830,532 $ 827,983 Miscellaneous Revenue $ 2,625 $ 1,251 $ - $ -
Total Revenues $ 957,451 $ 1,056,128 $ 830,532 $ 827,983 Expenditures
Employee Compensation $ 115,634 $ 118,793 $ 140,075 $ 149,862 Employee Benefits $ 99,883 $ 121,999 $ 158,879 $ 144,123 Materials $ 88,650 $ 92,438 $ 177,126 $ 108,303
Contract Services $ 8,626 $ 7,086 $ 18,653 $ 28,220
Special Projects $ 1,155 $ - $ - $ -
Contingencies $ - $ - $ 4,894 $ 1,707
Total Expenditures $ 313,948 $ 340,316 $ 499,627 $ 432,215 Fund Balance $ - $ - $ - $ -
General Fund Costs $ (643,502) $ (715,812) $ (330,905) $ (395,768) Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget

COMMUNITY OUTREACH

SPECIALIST

0.10 0.10 0.10 0.10
COUNCIL MEMBER 5.00 5.00 5.00 5.00
EXEC ASST TO THE CITY COUNCIL 0.50 0.50 0.50 0.50
PUBLIC INFORMATION OFFICER 0.10 0.10 0.10 0.10
SR OFFICE ASSISTANT 0.15 0.15 0.15 0.15
Total 5.85 5.85 5.85 5.85
There are no changes to the current level of staffing.

FY 2023-24 Proposed Budget Council and Commissions 187
193
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Community Funding
Budget Unit 100-10-101
General Fund - City Council - Community Funding
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 67,573
Fund Balance $ -
General Fund Costs $ 67,573
% Funded by General Fund 100.0%
Total Staffing FTE
Program Overview
The Community Funding program provides funding for various community activities and community-based organizations throughout the fiscal year.

Service Objectives
Provide funding to local non-profit organizations in the areas of social services, fine arts and other programs for the general public.

Grant funding requests in a fair and equitable manner.

Grant funding requests per the updated Community Funding Policy adopted by City Council on December 1, 2020.

Proposed Budget
It is recommended that City Council approve a budget of $67,573 for the Community Funding program. This represents a decrease of $24,658 (-26.7%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24 Original
Budget
FY 2023-24 Proposed
Budget Reduction Service Impact
Contract Services $72,500 $64,500 $8,000
Reduced Council
funding for
community activities
and Community-
Based
Organizations.

Revenues and Expenditures
FY 2023-24 Proposed Budget Council and Commissions 188
194
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Miscellaneous Revenue $ 8,361 $ - $ - $ -
Transfers In $ - $ 82,396 $ - $ -
Total Revenues $ 8,361 $ 82,396 $ - $ -
Expenditures
Contract Services $ 110,000 $ 115,900 $ 89,461 $ 64,500 Cost Allocation $ 1,240 $ 2,259 $ 2,270 $ 2,267
Contingencies $ - $ - $ 500 $ 806
Total Expenditures $ 111,240 $ 118,159 $ 92,231 $ 67,573 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 102,879 $ 35,763 $ 92,231 $ 67,573 Staffing
There is no staffing associated with this program.

FY 2023-24 Proposed Budget Council and Commissions 189
195
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Sister Cities
Budget Unit 100-10-110
General Fund - City Council - Sister Cities
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 73,155
Fund Balance $ -
General Fund Costs $ 73,155
% Funded by General Fund 100.0%
Total Staffing 0.1 FTE
Program Overview
Cupertino has four active sister cities registered with Sister Cities International; Toyokawa, Japan; Hsinchu, Taiwan; Copertino, Italy; and Bhubaneswar, India.

Service Objectives
To further international communication and understanding through the Sister City Program To foster educational, technical, economic and cultural exchanges To encourage student exchange programs to promote communication and understanding among people of different cultures
Proposed Budget
It is recommended that City Council approve a budget of $73,155 for the Sister Cities program. This represents an increase of $9,149 (14.3%) from the FY 2022-23 Adopted Budget.

Funding for this program includes Sister Cities membership and visits, delegation swag, and giOs as outlined in the Sister Cities Policy.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 12,301 $ 11,095 $ 12,005 $ 12,533 Employee Benefits $ 5,727 $ 4,320 $ 6,066 $ 6,026
Materials $ 768 $ 1,210 $ 5,830 $ 15,680
Contract Services $ 4,235 $ 2,825 $ 20,000 $ 20,000
Cost Allocation $ 37,129 $ 31,921 $ 19,459 $ 18,520
Contingencies $ - $ - $ 646 $ 396
Total Expenditures $ 60,160 $ 51,371 $ 64,006 $ 73,155
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 60,160 $ 51,371 $ 64,006 $ 73,155
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget PUBLIC INFORMATION OFFICER 0.05 0.05 0.05 0.05
SR OFFICE ASSISTANT 0.05 0.05 0.05 0.05
Total 0.10 0.10 0.10 0.10
There are no changes to the current level of staffing.

FY 2023-24 Proposed Budget Council and Commissions 191
197
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Technology, Information & Communications
Commission
Budget Unit 100-11-131
General Fund - Commissions - Technology, Information & Communications Commission Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 35,695
Fund Balance $ -
General Fund Costs $ 35,695
% Funded by General Fund 100.0%
Total Staffing 0.1 FTE
Program Overview
The Technology, Information & Communications Commission (TICC) advises the City Council and informs the community about issues relating to the rapidly changing fields of communication and technology. Commissioners also serve as a resource for the Planning Commission in offering technical guidance for antenna sightings. The Chief Technology Officer serves as staff liaison. The commission also supports public and educational access to cable services.

Service Objectives
Continue to work with appropriate companies in bringing advanced services to interested residents.

Monitor AT&T and Comcast services and revenue.

Negotiate and manage public access provider KMVT to ensure maximum programming value for Cupertino residents.

Work with Community Development and Public Works regarding antenna placement and negotiate agreements for communication services that serve Cupertino.

Proposed Budget
It is recommended that City Council approve a budget of $35,695 for the Technology, Information & Communications Commission program. This represents a decrease of $3,786 (-9.6%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

FY 2023-24 Proposed Budget Council and Commissions 192
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Description FY 2023-24 Original
Budget
FY 2023-24 Proposed
Budget Reduction Service Impact
Materials $1,429 $318 $1,111
Reduced supplies for
commissioners (i.e. business cards)
and meeting expenses such as food
and coffee.

Contracts $5,000 $0 $5,000 Removal of Cybersecurity
education funding.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 9,860 $ 10,365 $ 10,116 $ 11,795 Employee Benefits $ 3,476 $ 3,748 $ 4,675 $ 5,091
Materials $ - $ 740 $ 1,348 $ 318
Contract Services $ - $ - $ 5,000 $ -
Cost Allocation $ 3,650 $ 16,056 $ 18,183 $ 18,487
Contingencies $ - $ - $ 159 $ 4
Total Expenditures $ 16,986 $ 30,909 $ 39,481 $ 35,695
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 16,986 $ 30,909 $ 39,481 $ 35,695
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ADMINISTRATIVE ASSISTANT 0.05 0.05 0.05 0
CHIEF TECHNOLOGY OFFICER 0.02 0.02 0.02 0.02
MANAGEMENT ANALYST 0 0 0 0.05
Total 0.07 0.07 0.07 0.07
FY 2023-24 Proposed Budget Council and Commissions 193
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The Administrative Assistant was reclassified as a Management Analyst based on the current duties and tasks assigned to that position.

FY 2023-24 Proposed Budget Council and Commissions 194
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Library Commission
Budget Unit 100-11-140
General Fund - Commissions - Library Commission
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 43,025
Fund Balance $ -
General Fund Costs $ 43,025
% Funded by General Fund 100.0%
Total Staffing 0.1 FTE
Program Overview
The Library Commission is a five-member commission appointed by the City Council to review and make recommendations related to the operations and services of the Cupertino Library. The Cupertino Library is operated by Santa Clara County Library Services. The building is provided by the City of Cupertino. County Library management serve as Commission staff and a Parks and Recreation Department Recreation Manager serves as the City staff liaison.

Service Objectives
Monitor the various service activities of the library and make recommendations for improvements to appropriate bodies.

Support library advocacy groups, including Friends of the Cupertino Library and Cupertino Library Foundation.

Consult with and act as liaison with private community groups supportive of Library programs.

Represent the Cupertino library in the local community.

Participate in state and local library workshops and conferences.

Participate in the long-range planning of quality library services for the City.

Investigate ways to expand access to non-traditional media.

Continue library advocacy in Cupertino activities and with other organizations.

Coordinate and implement the annual Cupertino Poet Laureate program and provide staff support and City resources to sustain the program.

Continue emphasis on integrating additional technology into library services.

Proposed Budget
It is recommended that City Council approve a budget of $43,025 for the Library Commission program. This represents a decrease of $8,346 (-16.2%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

FY 2023-24 Proposed Budget Council and Commissions 195
201
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Description FY 2023-24
Original Budget
FY 2023-24
Reduced Budget Reduction Service Impact
Materials $389 $68 $321
Removed funds for
business cards and
parting gift for Poet
Laureate.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 6,612 $ 15,404 $ 10,563 $ 12,526 Employee Benefits $ 3,040 $ 6,887 $ 5,465 $ 6,126
Materials $ 137 $ 307 $ 389 $ 68
Contract Services $ 366 $ 2,143 $ 2,000 $ 2,000
Cost Allocation $ 14,126 $ 15,562 $ 32,894 $ 22,279
Contingencies $ - $ - $ 60 $ 26
Total Expenditures $ 24,281 $ 40,303 $ 51,371 $ 43,025
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 24,281 $ 40,303 $ 51,371 $ 43,025
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget
ADMINISTRATIVE ASSISTANT 0.05 0.05 0.05 0.05

ASST DIR RECREATION COMM
SVCS

0.05 0.05 0 0
RECREATION MANAGER 0 0 0.05 0.05
RECREATION SUPERVISOR 0.05 0.05 0 0
Total 0.15 0.15 0.10 0.10
FY 2023-24 Proposed Budget Council and Commissions 196
202
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There are no changes to the current level of staffing.

FY 2023-24 Proposed Budget Council and Commissions 197
203
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Arts and Culture Commission
Budget Unit 100-11-142
General Fund - Commissions - Arts and Culture Commission Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 41,598
Fund Balance $ -
General Fund Costs $ 41,598
% Funded by General Fund 100.0%
Total Staffing 0.1 FTE
Program Overview
The Arts and Culture Commission is a five member commission appointed by the City Council to foster, encourage and assist the realization, preservation and advancement of fine arts for the benefit of the citizens of Cupertino. At the end of Fiscal Year 2022-2023, the Senior Planner of Community Development serves as the staff liaison.

Service Objectives
Act as a catalyst for the promotion of fine arts activities and provide liaison and coordination between fine arts activities, groups, and facilities.

Enhance the interaction between arts and businesses through personal outreach.

Review and approve public art proposals and Art in Lieu fees.

Review and select deserving artists in recognition of local talent through the Distinguished, Emerging, and Young Artist Awards.

Encourage and facilitate "art in unexpected places" throughout the City.

Proposed Budget
It is recommended that City Council approve a budget of $41,598 for the Arts and Culture Commission program.

This represents a decrease of $32,026 (-43.5%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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204
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Description FY 2023-24
Original Budget
FY 2023-24
Reduced Budget Reduction Service Impact
Materials $10,470 $4,089 $6,381
Reduced unused
funds for the Artist
Awards and
business cards.

Contract Services $7,000 $0 $7,000
Removed budget
for Art in
Unexpected Places.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 14,378 $ 8,751 $ 28,378 $ 15,613 Employee Benefits $ 8,531 $ 5,784 $ 11,769 $ 6,000
Materials $ 2,949 $ 3,249 $ 6,926 $ 4,089
Contract Services $ 3,671 $ - $ 10,000 $ -
Cost Allocation $ 22,787 $ 25,149 $ 16,128 $ 15,845
Contingencies $ - $ 7 $ 423 $ 51
Total Expenditures $ 52,316 $ 42,940 $ 73,624 $ 41,598
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 52,316 $ 42,939 $ 73,624 $ 41,598
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

FY 2023-24 Proposed Budget Council and Commissions 199
205
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Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget

ASST DIR RECREATION COMM
SVCS
0 0 0.15 0
RECREATION COORDINATOR 0.15 0.15 0 0
SENIOR PLANNER 0 0 0 0.10
Total 0.15 0.15 0.15 0.10
Staff time has been reallocated from this account, with Community Development now serving as the liaison to the Commission.

FY 2023-24 Proposed Budget Council and Commissions 200
206
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Public Safety Commission
Budget Unit 100-11-150
General Fund - Commissions - Public Safety Commission
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 46,001
Fund Balance $ -
General Fund Costs $ 46,001
% Funded by General Fund 100.0%
Total Staffing 0.1 FTE
Program Overview
The Public Safety Commission (PSC), a five-member board appointed by the City Council, assists the Council by advising on maHers pertaining to safety, traffic, police, fire and other areas wherein the maHer of public safety may be of concern.

Service Objectives
Advise the City Council on safety issues and concerns.

Promote public education programs concerning safety issues.

Provide assistance in implementing public safety programs approved by the City Council.

Proposed Budget
It is recommended that City Council approve a budget of $46,001 for the Public Safety Commission program. This represents an increase of $809 (1.8%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24 Original
Budget
FY 2023-24 Proposed
Budget Reduction Service Impact
Materials $10,288 $6,143 $4,145
Reduced supplies, printing and
graphic design, and professional
memberships. The reduction
eliminates contingency planning
for an outdoor Public Safety
Forum event and reduces the
catering budget.

Revenues and Expenditures
FY 2023-24 Proposed Budget Council and Commissions 201
207
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 5,148 $ 7,227 $ 7,785 $ 8,503
Employee Benefits $ 2,475 $ 3,801 $ 4,116 $ 4,247
Materials $ 100 $ 1,454 $ 10,288 $ 6,143
Contract Services $ - $ 10,000 $ 10,000 $ 10,600
Cost Allocation $ 8,514 $ 8,933 $ 12,496 $ 16,299
Contingencies $ - $ - $ 507 $ 209
Total Expenditures $ 16,237 $ 31,415 $ 45,192 $ 46,001
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 16,238 $ 31,415 $ 45,192 $ 46,001
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget

EMERGENCY SERVICES

COORDINATOR

0.05 0.05 0.05 0.05
Total 0.05 0.05 0.05 0.05
There are no changes to the current level of staffing.

FY 2023-24 Proposed Budget Council and Commissions 202
208
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Bicycle and Pedestrian Commission
Budget Unit 100-11-155
General Fund - Commissions - Bicycle and Pedestrian Commission Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 62,864
Fund Balance $ -
General Fund Costs $ 62,864
% Funded by General Fund 100.0%
Total Staffing 0.2 FTE
Program Overview
The Bicycle and Pedestrian Commission (BPC) is a five-member board appointed by the City Council, which assists the Council by reviewing, monitoring, and making recommendations on City transportation maHers pertaining to bicycle and pedestrian traffic, parking, education, and recreation within Cupertino. The City’s Transportation Manager serves as staff liaison.

Service Objectives
Review and make recommendations on City transportation infrastructure, development standards, public and private development projects, and citizen outreach and education efforts as they affect bicycle and pedestrian traffic in the City of Cupertino.

Promote safe, efficient, and enjoyable travel for bicycle and pedestrian traffic within Cupertino.

Proposed Budget
It is recommended that City Council approve a budget of $62,864 for the Bicycle and Pedestrian Commission program. This represents an increase of $634 (1.0%) from the FY 2022-23 Adopted Budget.

The budget is relatively unchanged.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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209
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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 21,519 $ 24,762 $ 24,704 $ 27,282 Employee Benefits $ 8,638 $ 12,022 $ 12,502 $ 11,583
Materials $ - $ 131 $ 210 $ 223
Cost Allocation $ 825 $ 10,706 $ 24,809 $ 23,773
Contingencies $ - $ - $ 5 $ 3
Total Expenditures $ 30,982 $ 47,621 $ 62,230 $ 62,864
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 30,982 $ 47,621 $ 62,230 $ 62,864
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ADMINISTRATIVE ASSISTANT 0.05 0.05 0.05 0.05
TRANSPORTATION MANAGER 0.10 0.10 0.10 0.10
Total 0.15 0.15 0.15 0.15
There are no changes to the current level of staffing.

FY 2023-24 Proposed Budget Council and Commissions 204
210
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Parks and Recreation Commission
Budget Unit 100-11-160
General Fund - Commissions - Parks and Recreation Commission Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 38,916
Fund Balance $ -
General Fund Costs $ 38,916
% Funded by General Fund 100.0%
Total Staffing 0.1 FTE
Program Overview
The Parks and Recreation Commission is a five-member commission appointed by the City Council to make recommendations pertaining to parks, recreation, and community services. A Parks and Recreation Department Recreation Manager serves as staff liaison.

Service Objectives
Engage the public in dialog regarding the design of new facilities.

Make recommendations regarding these projects to the City Council.

Work with staff and the public to draft and/or revise policies for use of Parks and Recreation facilities.

Consider public input regarding the operation of Parks and Recreation facilities and make recommendations for their improvement.

Participate in special committees dealing with Parks and Recreation.

Serve as ambassadors for the Parks and Recreation Department.

Proposed Budget
It is recommended that City Council approve a budget of $38,916 for the Parks and Recreation Commission program. This represents a decrease of $14,169 (-26.7%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24
Original Budget
FY 2023-24
Reduced Budget Reduction Service Impact
Materials $8,187 $11 $8,176
Removed funds for
meeting expenses
such as food and
for conferences.

FY 2023-24 Proposed Budget Council and Commissions 205
211
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 15,968 $ 14,314 $ 17,531 $ 12,603 Employee Benefits $ 6,403 $ 4,407 $ 7,455 $ 5,135
Materials $ - $ 90 $ 7,724 $ 11
Cost Allocation $ 19,376 $ 24,945 $ 20,182 $ 21,167
Contingencies $ - $ - $ 193 $ -
Total Expenditures $ 41,747 $ 43,756 $ 53,085 $ 38,916
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 41,747 $ 43,756 $ 53,085 $ 38,916
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ADMINISTRATIVE ASSISTANT 0.05 0.05 0.05 0.05
DIRECTOR OF PARKS REC 0.05 0.05 0.05 0
RECREATION MANAGER 0 0 0 0.05
Total 0.10 0.10 0.10 0.10
Staff time is being reallocated to this program, with a Recreation Manager taking over as liaison for the Commission.

FY 2023-24 Proposed Budget Council and Commissions 206
212
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Teen Commission
Budget Unit 100-11-165
General Fund - Commissions - Teen Commission
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 42,506
Fund Balance $ -
General Fund Costs $ 42,506
% Funded by General Fund 100.0%
Total Staffing 0.1 FTE
Program Overview
The Teen Commission is comprised of nine teens representing grades 8-11. The Teen Commission advises the City Council and staff on teen issues. A Parks and Recreation Department Recreation Manager serves as the staff liaison.

Service Objectives
Engage the public in dialogue regarding the design of new teen programs and make recommendations regarding these projects to City staff.

Assist staff with the programming and promotion of the Teen Center.

Assist staff with the evaluation of teen programming.

Work with staff and the public to create new avenues to interact with teens.

Proposed Budget
It is recommended that City Council approve a budget of $42,506 for the Teen Commission program. This represents a decrease of $3,570 (-7.7%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24
Original Budget
FY 2023-24
Reduced Budget Reduction Service Impact
Materials $4,590 $2,140 $2,450
Reduced funds for
materials and
supplies and
removed budget for
conferences and
trainings.

FY 2023-24 Proposed Budget Council and Commissions 207
213
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 32,154 $ 31,766 $ 6,300 $ 7,343 Employee Benefits $ 13,118 $ 14,694 $ 5,748 $ 2,807
Materials $ 49 $ 220 $ 4,685 $ 2,140
Cost Allocation $ 28,449 $ 31,971 $ 29,226 $ 30,189
Contingencies $ - $ - $ 117 $ 27
Total Expenditures $ 73,770 $ 78,651 $ 46,076 $ 42,506
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 73,771 $ 78,652 $ 46,076 $ 42,506
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget RECREATION COORDINATOR 0.30 0.30 0 0
RECREATION MANAGER 0 0 0.05 0.05
Total 0.30 0.30 0.05 0.05
There are no changes to the current level of staffing.

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214
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Planning Commission
Budget Unit 100-11-170
General Fund - Commissions - Planning Commission
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 117,855
Fund Balance $ -
General Fund Costs $ 117,855
% Funded by General Fund 100.0%
Total Staffing 0.3 FTE
Program Overview
The Planning Commission is a five-member citizen board appointed by the City Council. The functions of the Planning Commission are as follows:

Advise the City Council on land use and development policy related to the General Plan; Implement the General Plan through review and administration of specific plans and related ordinances; Review land use applications for conformance with the General Plan and ordinances; and Promote the coordination of local plans and programs with regional and other agencies.

Service Objectives
Conduct periodic reviews of the General Plan. These reviews test the fundamental goals and measure the performance of short-term objectives.

Conduct public hearings for approximately 80 land development applications every year. Ensure that decisions are made fairly and expeditiously in accordance with adopted General Plan policies, zoning ordinances, development plans, and design guidelines.

Review specific plans, zoning ordinance amendments, and amendments to the General Plan and make recommendations to Council.

Serve on the Planning Commission Design Review CommiHee, the Environmental Review CommiHee, and in an advisory role to the Housing Commission and Economic Development Committee.

Proposed Budget
It is recommended that City Council approve a budget of $117,855 for the Planning Commission program. This represents a decrease of $3,641 (-3.0%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $37,097 $22,215 $14,882
Reduced meeting
expenses such as
food and coffee,
conferences and
meetings.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 39,547 $ 33,901 $ 34,949 $ 36,403 Employee Benefits $ 14,806 $ 12,208 $ 15,248 $ 18,246
Materials $ 8,488 $ 20,172 $ 34,997 $ 22,215
Cost Allocation $ 30,715 $ 37,520 $ 35,427 $ 40,713
Contingencies $ - $ - $ 875 $ 278
Total Expenditures $ 93,556 $ 103,801 $ 121,496 $ 117,855 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 93,556 $ 103,801 $ 121,496 $ 117,855 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget
ADMINISTRATIVE ASSISTANT 0.20 0.20 0.20 0.20

DIRECTOR OF COMM

DEVELOPMENT

0.06 0.06 0.06 0.06
Total 0.26 0.26 0.26 0.26
There are no changes to the current level of staffing.

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Housing Commission
Budget Unit 100-11-175
General Fund - Commissions - Housing Commission
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 61,513
Fund Balance $ -
General Fund Costs $ 61,513
% Funded by General Fund 100.0%
Total Staffing 0.2 FTE
Program Overview
The Cupertino Housing Commission (CHC) is a five-member board appointed by the City Council to assist the Planning Commission and the City Council in developing housing policies and strategies for implementation of General Plan Housing Element goals. The Commission also oversees the Community Development Block Grant (CDBG) program.

Service Objectives
Assist the Planning Commission and the City Council in developing housing policies and strategies for implementation of general plan housing element goals;
Recommend policies for implementation and monitoring of affordable housing projects; Facilitate innovative approaches to affordable housing development and to generate ideas and interest in pursuing a variety of housing options;
When requested by the Director of Community Development or the City Council, to make recommendations to the Planning Commission and the City Council regarding affordable housing proposals in connection with applications for development.

Make recommendations regarding requests for money from the CDBG and Affordable Housing Funds; Provide information about affordable housing;
Meet with neighborhood, community, regional and business groups as necessary to receive input and assist in generating affordable housing;
Help identify sources of funds to develop and build affordable housing; and Perform any other advisory functions authorized by the City Council.

Proposed Budget
It is recommended that City Council approve a budget of $61,513 for the Housing Commission program. This represents an increase of $45 (0.1%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Proposed
Budget Reduction Service Impact
Materials $1,088 $229 $859
Reduced meeting
expenses and general
supplies (i.e.
business cards).

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 22,012 $ 22,098 $ 24,783 $ 24,595 Employee Benefits $ 10,366 $ 10,469 $ 12,135 $ 11,574
Materials $ 163 $ - $ 1,027 $ 229
Cost Allocation $ 21,610 $ 24,838 $ 23,497 $ 25,112
Contingencies $ - $ - $ 26 $ 3
Total Expenditures $ 54,151 $ 57,405 $ 61,468 $ 61,513
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 54,150 $ 57,405 $ 61,468 $ 61,513
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ADMINISTRATIVE ASSISTANT 0.05 0.05 0.05 0.05
PLANNING MANAGER 0.10 0.10 0.10 0.10
Total 0.15 0.15 0.15 0.15
There are no changes to the current level of staffing.

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Sustainability Commission
Budget Unit 100-11-180
General Fund - Commissions - Sustainability Commission
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 58,238
Fund Balance $ -
General Fund Costs $ 58,238
% Funded by General Fund 100.0%
Total Staffing 0.2 FTE
Program Overview
The Sustainability Commission is a five-member board appointed by the City Council to serve in an advisory capacity by providing expertise and guidance on major policy and programmatic areas related to the environmental, economic and societal goals noted within Cupertino’s Climate Action Plan and General Plan Environmental Resources/Sustainability Element.

Service Objectives
Monitor implementation of the Climate Action Plan based upon quantified metrics to measure and evaluate mitigated impacts and community benefits.

Suggest recommendations, review, and monitor the City’s General Plan Environmental Resources/Sustainability Element and its intersections with the CAP.

Advise the City Council how to strategically accelerate Cupertino’s progress towards sustainability and recommend priorities to promote continued regional leadership in sustainability.

Periodically review policies governing specific practices and programs, such as greenhouse gas emissions reduction, water conservation, renewable energy, energy efficiency, materials management, and urban forestry. Illustrative examples include the creation of infrastructure for low emissions vehicles, installation of renewable energy or energy efficiency technologies, draOing of water conservation or waste reduction policies, delivery of habitat restoration and conservation programs, design and roll-out of pollution prevention campaigns, etc.

Make recommendations regarding the allocation of funds for infrastructure and technology improvements to elevate the operational performance of City facilities, businesses, educational institutions, and homes by reducing costs, improving public health, and serving community needs.

Accept public input on the subject areas noted above and advise the City Council on ways to drive community awareness, behavior change, education and participation in City programs modeled upon the field’s best practices.

Review and make recommendations to the City Council on Federal, State and regional policies related to sustainability that have the potential to impact City Council’s goals and policies.

Pursue any other activity or scope that may be deemed appropriate and necessary by the City Council.

Proposed Budget
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Proposed Budget
It is recommended that City Council approve a budget of $58,238 for the Sustainability Commission program.

This represents a decrease of $2,745 (-4.5%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2022-23 Original
Budget
FY 2023-24 Proposed
Budget Reduction Service Impact
Materials $6,188 $1,840 $4,348
Eliminated funding
for old programs
(School Waste Audit,
Grant Programs for
Students) that have
not been active in
recent years.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 18,431 $ 20,574 $ 21,648 $ 23,264 Employee Benefits $ 9,704 $ 10,723 $ 11,776 $ 11,424
Materials $ 400 $ 1,064 $ 6,188 $ 1,840
Contract Services $ 1,800 $ - $ - $ -
Cost Allocation $ 18,254 $ 25,122 $ 21,216 $ 21,687
Contingencies $ - $ - $ 155 $ 23
Total Expenditures $ 48,589 $ 57,483 $ 60,983 $ 58,238
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 48,589 $ 57,483 $ 60,983 $ 58,238
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget MANAGEMENT ANALYST 0.10 0.10 0.10 0.10
SUSTAINABILITY MANAGER 0.05 0.05 0.05 0.05
Total 0.15 0.15 0.15 0.15
There are no changes to the current level of staffing.

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Audit Committee
Budget Unit 100-11-190
General Fund - Commissions - Audit Committee
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 40,671
Fund Balance $ -
General Fund Costs $ 40,671
% Funded by General Fund 100.0%
Total Staffing 0.1 FTE
Program Overview
The Audit CommiHee, consisting of two City Council members and a minimum of two and a maximum of three at large members, holds the following powers and functions:

To review the annual audit report and management letter.

To recommend appointment of internal/external auditors.

To review the quarterly Treasurer's Investment report.

To recommend a budget format.

To review City investment policies and internal controls of such policies.

To review internal audit reports.

To review quarterly Fraud, Waste, and Abuse Program reports.

The Audit Committee meets quarterly. The Finance Manager serves as staff liaison.

Proposed Budget
It is recommended that City Council approve a budget of $40,671 for the Audit CommiHee program. This represents an increase of $5,165 (14.5%) from the FY 2022-23 Adopted Budget.

This increase is due to increases in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 13,780 $ 9,336 $ 13,475 $ 15,851 Employee Benefits $ 5,018 $ 3,136 $ 6,557 $ 7,538
Cost Allocation $ - $ 5,863 $ 15,474 $ 17,282
Total Expenditures $ 18,798 $ 18,335 $ 35,506 $ 40,671
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 18,798 $ 18,335 $ 35,506 $ 40,671
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ADMINISTRATIVE ASSISTANT 0.05 0.05 0.05 0
FINANCE MANAGER 0.05 0.05 0.05 0.05
MANAGEMENT ANALYST 0 0 0 0.05
Total 0.10 0.10 0.10 0.10
There is a reduction of 0.05 FTE of an Administrative Assistant position to meet the position elimination target as part of the City's budget-balancing strategies. 0.05 FTE of a Management Analyst position is being allocated to the Audit Committee.

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Administration
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Department Overview
Budget Units
Budget Unit Program 2024 Proposed Budget
City Manager $ 5,291,715
100-12-120 City Manager $ 2,390,876
100-12-122 Sustainability $ 705,617
100-12-126 Office of Communications $ 682,026
100-12-305 Multimedia $ 16,752
100-12-307 Public Access Support $ 47,732
100-12-632 Community Outreach and Neighborhood Watch $ 252,691 100-12-633 Office of Emergency Management $ 728,067
100-12-705 Economic Development $ 467,954
City Clerk $ 818,808
100-13-130 City Clerk $ 777,023
100-13-132 Duplicating and Mail Services $ 40,808
100-13-133 Elections $ 977
City Manager Discretionary $ 50,000
100-14-123 City Manager Contingency $ 50,000
City Attorney $ 1,593,033
100-15-141 City Attorney $ 1,593,033
Total $ 7,753,556
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Budget at a Glance
2024 Proposed Budget
Total Revenues $ 1,261,357
Total Expenditures $ 7,753,556
Fund Balance $ -
General Fund Costs $ 6,492,199
% Funded by General Fund 83.7%
Total Staffing 21.8 FTE
Organization
Pamela Wu, City Manager
Matt Morley, Assistant City Manager
Christopher Jensen, City Attorney
Kirsten Squarcia, City Clerk
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City Manager's Office
As part of an expenditure reduction strategy, the following vacant positions are being removed from the budget:

Assistant City Manager
Communications Analyst
City Attorney's Office
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Performance Measures
City Clerk Division
Goal: Streamline information processing for Council, staff, and community members for compliance with State requirements and facilitate independent and transparent access to public information.

Benefit: All can fully participate in local government to achieve the community & organizational goals.

Performance Measure
FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Ongoing
Target
City Council minutes for meetings
presented for Council approval by the
following regular meeting
100% 100% 100% 100%
Adopted City Council resolutions and
ordinances processed and scanned to
Laserfiche within a week of Clerk’s
office receipt of final, signed document
60% 80% 80% 100%
Public Record Act requests responded
to by the Statutory deadline date 100% 100% 100% 100%
Office of Communications
Goal: Promote and increase interest and participation in City services, programs, initiatives, and projects while building community pride and positive identification with the City among its residents.

Benefit: Residents have access to timely, engaging, and important information.

Performance Measure
FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Ongoing
Target
Social media engagement: total number
of followers including City Hall
Nextdoor, Facebook, Twitter, and
Instagram accounts
35,177 N/A 40,294 10% annual
increase
Social media engagement: average
number of engagements (reactions,
comments, shares, and clicks) per post
on City Hall Facebook account

66.5 27.6 20.6 10% annual
increase
Cupertino 311: Average response time
to customers organization-wide (in
days):

3.5 Days 2.7 Days 2.6 Days Average Close
Time 5 Days
Sustainability Division
Goal: Implement Cupertino's Climate Action Plan and General Plan Sustainability Element to achieve quantifiable emissions reductions, conserve finite resources, and achieve utility cost avoidance and savings across municipal operations and community partners.

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Benefit: Cupertino is a healthy, resilient, environmentally-vibrant city for current and future residents to live, work, learn and play.

Performance Measure FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Ongoing
Target
% community-wide emissions reduced
from baseline of 307,288 MT CO2e/yr 2018 inventory: 24% decrease in emissions from baseline (258,659 MT CO2e/yr)
15% reduction by
2020 (261,195 MT
CO2e/yr)
Initiate and implement all Climate
Action Plan near-term measures:
% initiated
% complete or ongoing
100%
79%
100%
79%
6%
4%
100%
100%
% municipal operations emissions
reduced from baseline of 1,865 MT
CO2e/yr
2018 inventory: 66% reduction in emissions from
baseline: 642 MTCO2e
15% reduction by
2020
Cupertino's GHG inventories are conducted roughly every 3-5 years.

Economic Development Division
Goal: To actively pursue opportunities in the areas of business aHraction, retention, and expansion as a means of promoting economic vitality, and strengthening the City's sales tax base to support Cupertino's excellent quality of life for its residents, businesses, and daytime population.

Benefit: Cupertino's economy and sales tax revenue base are diversified to further enhance the City's financial stability and its ability to provide quality amenities to the community.

Performance Measure
FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Ongoing
Target
Maintain Economic Development
Business Connect Subscribers 2,500 3,000 4,000 4,000
Economic Development Business
Workshops & Events 3* 3 3 10 per year
*limited due to COVID
Multimedia Division
Multimedia Division has been moved under the Innovation & Technology Department. 1 1
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Workload Indicators
City Clerk Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
City Council minutes for regular meetings
presented for Council approval by the
following regular meeting
15/15 21/21 11/11
Adopted City Council resolutions and
ordinances processed and scanned to
Laserfiche within a week of Clerk’s office
receipt of final, signed document
148/185; 10/12 71/77;
7/7
74;
4 Public Record Act requests responded to by the
Statutory deadline date 94/94 124/103 119
Office of Communications
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Social Media Engagement: Post per year
(Facebook, Nextdoor, Twitter, Instagram) 1,634 1,161 563 Number of Projects Created on Engage
Cupertino N/A 35 8
Number of Community Information and
Outreach Program products provided
(newsletters, press releases, website news
postings)
248 185 121
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Sustainability Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Climate Action Plan 2.0 Actions initiated or in
Progress N/A 3 8
Climate Action Plan 2.0 Actions Completed N/A 2 5
Community Education and Outreach Activities
Held 7 26 5
Cross-Departmental Projects Supporting 5 6 9
Number of municipal and community
programs leading or supporting 8 8 8
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Economic Development Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Meetings with large groups/organizations;
appointments with brokers, prospective
business owners, business owners and
operators, City staff, etc.
20*
Special events, including small business
workshops and seminars, ICSC conferences
and events, ribbon cuttings and grand
openings, and Small Business Saturday
Celebration
7* 7 2
Number of Business Connect Newsletter
editions 4 4 2
* This is an estimate based on the best information available Multimedia Division
Multimedia Division has been moved under the Innovation & Technology Department.

Proposed Budget
It is recommended that City Council approve a budget of $7,753,556 for the Administration department. This represents a decrease of $1,894,863 (-19.6%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impacts
Materials $535,812 $400,223 $135,589
This reduction is
primarily related to
savings in supplies,
meeting expenses,
and conference and
travel. This should
have minimal impact
on services
throughout the
department.

Contract Services $1,362,790 $941,380 $421,410
This reduction is
primarily related to
contract negotiations
to reduce cost for
services throughout
the department.

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Proposed Expenditures by Division
Department Expenditure History
Revenues and Expenditures

68.2%

20.5%

10.6%
City Manager
City Attorney
City Clerk
City Manager Discretionary
$6.70M $6.39M
$9.65M
$7.75M
2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget FY 2023-24 Proposed Budget Administration 230
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Intergovernmental Revenue $ 45,516 $ 6,074 $ 1,000,000 $ 111,500 Charges for Services $ 1,399,287 $ 1,739,136 $ 1,469,823 $ 1,149,857 Miscellaneous Revenue $ 19,634 $ 11,326 $ - $ -
Transfers In $ - $ 477,507 $ - $ -
Total Revenues $ 1,464,437 $ 2,234,043 $ 2,469,823 $ 1,261,357 Expenditures
Employee Compensation $ 2,606,217 $ 3,301,226 $ 4,091,919 $ 4,048,775 Employee Benefits $ 1,061,161 $ 1,297,532 $ 1,777,576 $ 1,768,356 Materials $ 327,504 $ 311,781 $ 535,812 $ 400,223
Contract Services $ 1,973,653 $ 649,787 $ 1,362,790 $ 941,380 Cost Allocation $ 481,712 $ 526,940 $ 468,859 $ 518,051 Special Projects $ 247,344 $ 299,938 $ 1,289,000 $ 10,000 Contingencies $ - $ 135 $ 122,463 $ 66,771
Total Expenditures $ 6,697,591 $ 6,387,339 $ 9,648,419 $ 7,753,556 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 5,233,153 $ 4,153,294 $ 7,178,596 $ 6,492,199 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget
ADMINISTRATIVE ASSISTANT 0 0 1.00 1.00
ASSISTANT CITY MANAGER 1.00 1.00 2.00 1.00
ASSIST TO THE CITY MNGR 1.00 1.00 0 0
CITY ATTORNEY 0 0 1.00 1.00
CITY CLERK 1.00 1.00 1.00 1.00
CITY MANAGER 1.00 1.00 1.00 1.00
COMMUNICATIONS ANALYST 0 0 1.00 0
COMMUNITY OUTREACH SPECIALIST 1.20 1.20 0.90 0.90
COMMUNITY RELATIONS COORD 0.75 0.75 1.00 1.00
DEPUTY CITY CLERK 1.00 1.00 1.00 1.00
DEPUTY CITY MANAGER 0 0 1.00 1.00
ECONOMIC DEVELOPMENT MANAGER 0 1.00 1.00 1.00
EMERGENCY SERVICES COORDINATOR 0.95 0.95 0.95 0.95

ENVIRONMENTAL PROGRAMS

ASSISTANT

0.35 0.35 0.35 0.35
EXEC ASST TO THE CITY COUNCIL 0.50 0.50 0.50 0.50
LEGAL SERVICES MANAGER 1.00 1.00 1.00 1.00
LEGISLATIVE AIDE 0 0 1.00 0
MANAGEMENT ANALYST 1.70 2.70 2.70 2.70

MULTIMEDIA COMMUNICATIONS
SPEC

3.00 3.00 1.50 0
PUBLIC INFORMATION OFFICER 0.85 0.85 0.85 0.85
SENIOR ASSISTANT CITY ATTORNEY 0 0 1.00 1.00
SENIOR MANAGEMENT ANALYST 0 0 0 1.00
SPECIAL PROJECT EXECUTIVE 0 0 0 1.00
SR OFFICE ASSISTANT 1.80 1.80 1.80 1.80
SUSTAINABILITY MANAGER 0.75 0.75 0.75 0.75
Total 17.85 19.85 24.30 21.80
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City Manager
Budget Unit 100-12-120
General Fund - City Manager - City Manager
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 617,164
Total Expenditures $ 2,390,876
Fund Balance $ -
General Fund Costs $ 1,773,712
% Funded by General Fund 74.2%
Total Staffing 6.9 FTE
Program Overview
The City Manager is responsible to the City Council for the effective and efficient operation of the City. Under the direction of the City Council as a whole, the City Manager carries out the City’s goals and objectives.

Service Objectives
Accomplish the Council-approved City Work Program.

Manage City operations.

Ensure all laws and ordinances of the City are duly enforced and that all franchises, permits, licenses, and privileges granted by the City are faithfully performed and observed.

Advise the City Council on policy, and the financial conditions and needs of the City.

Investigate all complaints concerning the operation of the City.

Prepare reports and initiate recommendations as may be desirable or as requested by the City Council.

Ensure that the City’s policies and procedures provide a foundation for a secure financial position.

Proposed Budget
It is recommended that City Council approve a budget of $2,390,876 for the City Manager program. This represents an increase of $171,154 (7.7%) from the FY 2022-23 Adopted Budget.

This increase is due to increases in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impacts
Materials $71,573 $ 54,628 $16,945
Reduced funding for
supplies, meeting
expenses,
conferences and
travel, and
memberships.

Contract Services $83,572 $72,008 $11,564
Reduced lobbyist
contract and removal
of language
translations which
will be done in
house.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Intergovernmental Revenue $ 36,716 $ - $ - $ -
Charges for Services $ 452,422 $ 637,444 $ 631,098 $ 617,164 Total Revenues $ 489,138 $ 637,444 $ 631,098 $ 617,164
Expenditures
Employee Compensation $ 885,438 $ 968,245 $ 1,427,444 $ 1,579,939 Employee Benefits $ 310,212 $ 304,009 $ 590,183 $ 682,718 Materials $ 14,328 $ 16,993 $ 53,887 $ 54,628
Contract Services $ 137,342 $ 70,416 $ 131,572 $ 72,008 Special Projects $ 17,432 $ - $ 12,000 $ -
Contingencies $ - $ - $ 4,636 $ 1,583
Total Expenditures $ 1,364,752 $ 1,359,663 $ 2,219,722 $ 2,390,876 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 875,614 $ 722,219 $ 1,588,624 $ 1,773,712 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ASSISTANT CITY MANAGER 1.00 1.00 2.00 1.00
ASSIST TO THE CITY MNGR 1.00 1.00 0 0
CITY MANAGER 1.00 1.00 1.00 1.00
DEPUTY CITY MANAGER 0 0 1.00 1.00
EXEC ASST TO THE CITY COUNCIL 0.50 0.50 0.50 0.50
LEGISLATIVE AIDE 0 0 1.00 0
MANAGEMENT ANALYST 1.00 1.00 1.00 1.00
SENIOR MANAGEMENT ANALYST 0 0 0 1.00
SPECIAL PROJECT EXECUTIVE 0 0 0 1.00
SR OFFICE ASSISTANT 0.40 0.40 0.40 0.40
Total 4.90 4.90 6.90 6.90
As part of an expenditure reduction strategy, the vacant Assistant City Manager position is being removed from the budget.

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Sustainability
Budget Unit 100-12-122
General Fund - City Manager - Sustainability
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 111,500
Total Expenditures $ 705,617
Fund Balance $ -
General Fund Costs $ 594,117
% Funded by General Fund 84.2%
Total Staffing 1.8 FTE
Program Overview
The Sustainability Division works to implement the City's Climate Action Plan, provides subject maHer expertise and coordinates across departments in building public good through activities that reduce greenhouse gas emissions, conserves scarce resources, prioritize public health and prepare for the impacts of climate change. In this capacity, the program teams with regional partners and adjacent jurisdictions, and seeks grant funding to develop collective approaches to implement the City's ambitious Climate Action Plan.

Service Objectives
Collect and analyze relevant data to demonstrate municipal compliance with current and increasing state and federal regulations.

Support the City's Sustainability Commission, a citizen advisory body that helps the City Council to implement effective climate actions.

Serve as a technical resource on sustainability initiatives by preparing staff reports, developing local policies and ordinances, coordinating educational events, and making presentations to Council, City departments, and applicable outside organizations.

Coordinate municipal and community-wide greenhouse gas emissions inventories, develop emissions targets, execute a community-wide climate action plan, and track progress to achieve emissions reductions over time.

Expand existing compliance-focused environmental services to offer innovative energy, water, and resource conservation programs that effectively engage employees and community members.

Evaluate existing departmental programs and benchmark environmental achievements on an ongoing basis.

Research tools and best practices for efficient utility management and conservation and adapt these to the City’s organizational culture, operations, and budgets.

Manage or perform resource audits, identify energy conservation and renewable energy generation opportunities, calculate feasibility and develop projects that are cost-effective and conserve resources.

Develop effective partnerships that empower students and community members as environmental leaders.

Proposed Budget
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Proposed Budget
It is recommended that City Council approve a budget of $705,617 for the Sustainability program. This represents a decrease of $107,847 (-13.3%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $33,709 $20,366 $13,343
Reduced marketing and
outreach for programs such
as GreenBiz, reduced
conferences and
professional training,
Reduced meeting expenses,
printing and graphic
design, technology supplies,
Earth Day festival expenses,
and eliminate cell service
for outreach events/tablets.

Contract Services $101,529 $52,850 $48,679
Reduced maintenance
expenses for bicycle fleet
and contract services for
Earth Day festival.

The following project/s have been identified as unfunded needs, which refer to priority projects that lack sufficient funding to be implemented at this time.

Service Description Estimated
Cost
Funding
Status
Enhanced water
conservation
incentives for
Cupertino
residents
Cupertino provides additional incentives to promote water conservation activities by community members. Residents have leveraged these enhanced incentives since 2015 resulting in approximately 80,000 square feet of grass removed and replaced with drought-tolerant gardens each year.
$45,000

Unfunded
Employee
Alternative
Commute
program
Program to manage parking impacts, reduce traffic, and encourage use of local public transit and carpooling for staff as they return back to the office. The fund would pay for three years of operation of this program.
$35,000 Unfunded
Climate Victory
Gardens
A program to support residents to remove grass from their property by providing direct technical support, landscape design services, and assistance with filling out rebate paperwork.
$175,000 Unfunded
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Intergovernmental Revenue $ - $ - $ - $ 111,500
Miscellaneous Revenue $ 1,450 $ 11,326 $ - $ -
Transfers In $ - $ 327,106 $ - $ -
Total Revenues $ 1,450 $ 338,432 $ - $ 111,500
Expenditures
Employee Compensation $ 221,141 $ 257,523 $ 291,223 $ 315,081 Employee Benefits $ 112,596 $ 126,271 $ 137,241 $ 138,009 Materials $ 7,581 $ 12,899 $ 34,755 $ 20,366
Contract Services $ 48,853 $ 64,815 $ 104,379 $ 52,850
Cost Allocation $ 208,182 $ 249,106 $ 182,388 $ 178,396 Special Projects $ 63,299 $ 265,652 $ 60,000 $ -
Contingencies $ - $ - $ 3,478 $ 915
Total Expenditures $ 661,652 $ 976,266 $ 813,464 $ 705,617 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 660,201 $ 637,833 $ 813,464 $ 594,117 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget

ENVIRONMENTAL PROGRAMS

ASSISTANT

0.35 0.35 0.35 0.35
MANAGEMENT ANALYST 0.70 0.70 0.70 0.70
SUSTAINABILITY MANAGER 0.75 0.75 0.75 0.75
Total 1.80 1.80 1.80 1.80
There are no changes to the current level of staffing.

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Office of Communications
Budget Unit 100-12-126
General Fund - City Manager - Office of Communications
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 682,026
Fund Balance $ -
General Fund Costs $ 682,026
% Funded by General Fund 100.0%
Total Staffing 2.7 FTE
Program Overview
The Office of Communications is responsible for community outreach to ensure that residents have access to timely, useful, and important information. The Office of Communications oversees and maintains many of the City’s lines of communication with residents, including the City’s website, social media accounts, monthly newsleHer, videos, event tabling, flyers, and press releases. The Office of Communications also acts as a liaison between various City departments and the community when it comes to communicating information about projects and events.

Service Objectives
Serve as the communications link between the City of Cupertino and residents Ensure that the community has easy access to important, useful, and timely information through various forms of media including print, online, and video
Build community pride and positive identification with the City among residents Increase interest and participation in City services, projects, and activities Promote City Council and departmental goals, initiatives, programs, and services Assist in creating better internal and external communication Enhance the City’s relationship with the news media
Proposed Budget
It is recommended that City Council approve a budget of $682,026 for the Office of Communications program.

This represents a decrease of $337,491 (-33.1%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24
Original Budget
FY 2023-24
Reduced Budget Reduction Service Impact
Materials $189,812 $152,134 $37,678
Reduced funding for City
branded swag for outreach
events, paid social media
ads, food and supplies for
CREST and State of the
City.

Contract Services $120,000 $25,000 $95,000
Removed funding for
Leadership 95014 program.

Funds for the Community
Survey ($75k) were not
used in FY 23 and will be
carried over to FY 24.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 318,479 $ 300,055 $ 449,061 $ 350,688 Employee Benefits $ 135,743 $ 127,829 $ 212,471 $ 151,990 Materials $ 137,495 $ 141,280 $ 187,478 $ 152,134
Contract Services $ 18,827 $ 23,731 $ 120,800 $ 25,000
Special Projects $ - $ - $ 42,000 $ -
Contingencies $ - $ - $ 7,707 $ 2,214
Total Expenditures $ 610,544 $ 592,895 $ 1,019,517 $ 682,026 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 610,544 $ 592,894 $ 1,019,517 $ 682,026 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget
COMMUNICATIONS ANALYST 0 0 1.00 0

COMMUNITY OUTREACH

SPECIALIST

1.20 1.20 0.90 0.90
PUBLIC INFORMATION OFFICER 0.85 0.85 0.85 0.85
SR OFFICE ASSISTANT 0.90 0.90 0.90 0.90
Total 2.95 2.95 3.65 2.65
As part of an expenditure reduction strategy, the vacant Communications Analyst position is being removed from the budget.

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Multimedia
Budget Unit 100-12-305
General Fund - City Manager - Multimedia
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 167,188
Total Expenditures $ 16,752
Fund Balance $ -
General Fund Costs $ (150,436)
% Funded by General Fund -898.0%
Total Staffing 0.0 FTE
Program Overview
For FY 2023-24, this program transferred from the City Manager’s Office to Innovation Technology. Historical data can be found under Budget Unit 100-31-305 & 100-12-305. The primary goal of the Multimedia Division is to increase public awareness, interest, understanding, and participation in the issues, programs, and services presented by the City of Cupertino. The staff promotes City services and programs through its 24/7 government access channel, radio station, digital signage network, City website, and numerous online video platforms. In addition, the video staff provides multimedia production services and technical support for all City departments.

Multimedia staff also oversees the design, maintenance, and engineering of the City’s broadcast and audiovisual systems.

Service Objectives
Multimedia staff works together to manage and maintain the following city services:

City Channel, the government access television channel which provides 24/7 information to Cupertino residents, includes full coverage of city meetings, community events, town hall forums, press conferences, election coverage, and local speaker series, as well as educational programming and state government affairs programming
Webcasting and video on demand services for live streaming city meetings, events, and other programs of interest
Radio Cupertino for emergency and community information for public service announcements, traffic alerts, and weather forecasts
Digital signage to promote city programs and events via electronic displays in city facilities Multimedia production services and maintenance of city video equipment Proposed Budget
It is recommended that City Council approve a budget of $16,752 for the Multimedia program. This represents a decrease of $422,040 (-96.2%) from the FY 2022-23 Adopted Budget.

For FY 2023-24, this program transferred from the City Manager’s Office to Innovation Technology.

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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Intergovernmental Revenue $ 8,800 $ 6,074 $ - $ -
Charges for Services $ 293,110 $ 414,196 $ 354,821 $ 167,188 Total Revenues $ 301,910 $ 420,270 $ 354,821 $ 167,188
Expenditures
Employee Compensation $ 465,372 $ 495,765 $ 303,932 $ - Employee Benefits $ 196,887 $ 217,343 $ 101,391 $ -
Materials $ 60,650 $ 46,049 $ 1,406 $ 2,745
Contract Services $ 74,066 $ 73,083 $ 21,491 $ 13,800
Special Projects $ 104,963 $ 19,541 $ 10,000 $ -
Contingencies $ - $ - $ 572 $ 207
Total Expenditures $ 901,938 $ 851,781 $ 438,792 $ 16,752 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 600,027 $ 431,510 $ 83,971 $ (150,436) Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget

MULTIMEDIA COMMUNICATIONS
SPEC

3.00 3.00 1.50 0
Total 3.00 3.00 1.50 0
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Public Access Support
Budget Unit 100-12-307
General Fund - City Manager - Public Access Support
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 47,732
Fund Balance $ -
General Fund Costs $ 47,732
% Funded by General Fund 100.0%
Total Staffing FTE
Program Overview
The City assists in the funding of the KMVT Community Access Television Program.

Service Objectives
Encourage Cupertino-based individuals and groups to use the community television production facilities for the purpose of expressing their interests, concerns, and ideas in a socially responsible manner.

Provide professional training in hands-on video production by providing access to television equipment, computers, and software that would be otherwise out of reach of the average person.

Provide workshops on all aspects of television production--including how to run a video camera, photography, editing, visual effects, social media, podcasting, and video blogging.

Assist individuals and community groups to develop and produce programs for broadcast on the community access channel.

Proposed Budget
It is recommended that City Council approve a budget of $47,732 for the Public Access Support program. This represents a decrease of $31,517 (-39.8%) from the FY 2022-23 Adopted Budget.

Contract Services is expected to be lower through current negotiations.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Contract Services $ 70,961 $ 69,815 $ 75,120 $ 45,000
Cost Allocation $ 3,022 $ 2,533 $ 2,251 $ 2,169
Contingencies $ - $ - $ 1,878 $ 563
Total Expenditures $ 73,983 $ 72,348 $ 79,249 $ 47,732
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 73,983 $ 72,348 $ 79,249 $ 47,732
Staffing
There is no staffing associated with this program.

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Community Outreach and Neighborhood Watch
Budget Unit 100-12-632
General Fund - City Manager - Community Outreach and Neighborhood Watch Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 252,691
Fund Balance $ -
General Fund Costs $ 252,691
% Funded by General Fund 100.0%
Total Staffing 1.0 FTE
Program Overview
Community Outreach programs facilitate communication and enhance cultural understanding in Cupertino neighborhoods. Block Leaders are instrumental in building connected communities, delivering timely and pertinent information to neighbors, and providing input to the City. Neighborhood Watch enhances public safety by providing crime prevention information to local businesses and residents. The program promotes an active relationship between the community and the Sheriff’s Office.

Service Objectives
Aid in the development, implementation, and coordination of City programs and community-building activities designed to bring Cupertino neighborhoods together.

Coordinate and disseminate useful and important information to Cupertino residents through regular meetings and communications that build relationships and strengthen neighborhoods.

Facilitate collaboration with Emergency Preparedness and Neighborhood Watch programs.

Train residents to connect and organize neighbors and neighborhoods.

Get Block Leaders involved in the Parks and Recreation System Master Plan.

Create and implement Neighborhood Watch meetings and groups.

Disseminate important City news and safety information.

Organize and conduct annual National Night Out initiative.

Proposed Budget
It is recommended that City Council approve a budget of $252,691 for the Community Outreach and Neighborhood Watch program. This represents an increase of $38,868 (18.2%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $14,541 $8,290 $6,251
Reduced funding for
supplies, printing and
graphic design, and
reduced professional
memberships.

Special Projects
The following table shows the special projects for the fiscal year.

Project Appropriations Revenue Funding
Source Description Strategic Goal
Public Safety in
Both Residential
and Commercial
Areas - License
Plate Readers
$10,000 $0 General Fund
City Work Program:

Strengthen Block
Leader/Neighborhood
Watch programs to
ensure the leaders are
active and expand the
coverage of active
neighborhoods.

Quality of Life
Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Transfers In $ - $ 1,500 $ - $ -
Total Revenues $ - $ 1,500 $ - $ -
Expenditures
Employee Compensation $ 83,627 $ 40,018 $ 92,579 $ 106,151 Employee Benefits $ 38,468 $ 20,309 $ 47,518 $ 50,029
Materials $ 5,971 $ 1,964 $ 14,818 $ 8,290
Cost Allocation $ 56,874 $ 68,769 $ 58,538 $ 78,117
Special Projects $ - $ - $ - $ 10,000
Contingencies $ - $ - $ 370 $ 104
Total Expenditures $ 184,940 $ 131,060 $ 213,823 $ 252,691 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 184,940 $ 129,560 $ 213,823 $ 252,691 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget COMMUNITY RELATIONS COORD 0.75 0.75 1.00 1.00
Total 0.75 0.75 1.00 1.00
There are no changes to the current level of staffing.

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Office of Emergency Management
Budget Unit 100-12-633
General Fund - City Manager - Office of Emergency Management Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 728,067
Fund Balance $ -
General Fund Costs $ 728,067
% Funded by General Fund 100.0%
Total Staffing 2.0 FTE
Program Overview
The mission of the Office of Emergency Management is to lead and direct the City in prevention, preparation, mitigation, response, and recovery from all emergencies, hazards, incidents, and events.

Service Objectives
Develop and implement the goals and objectives of Cupertino's Office of Emergency Management.

Maintain the City’s Emergency Operations Center (EOC) in a perpetual state of operational readiness.

Support Citizen Corps including the Block Leader Program, Neighborhood Watch, Community Emergency Response Team (CERT), Cupertino Amateur Radio Emergency Service (CARES), and Medical Reserve Corps (MRC).

Prepare, test, and revise emergency response and recovery policies, plans, and procedures in compliance with the California Emergency Services Act, the Standardized Emergency Management System (SEMS), and the National Incident Management System (NIMS).

Coordinate training of City staff in personal preparedness, SEMS/NIMS, and EOC functions.

Maintain effective liaison with local, state, and national emergency management organizations and/or allied disaster preparedness and response agencies.

Manage the City's Contract for Law Enforcement Services with the Santa Clara County Sheriff's Office Proposed Budget
It is recommended that City Council approve a budget of $728,067 for the Office of Emergency Management program. This represents a decrease of $978,426 (-57.3%) from the FY 2022-23 Adopted Budget.

There is an increase in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $50,348 $29,925 $20,423
Reduced emergency
preparedness supplies,
conferences, meeting
expenses, printing and
graphic design, and
reduced professional
memberships.

Contract Services $14,200 $2,120 $12,080 Reduced contracted training services.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Intergovernmental Revenue $ - $ - $ 1,000,000 $ -
Transfers In $ - $ 144,039 $ - $ -
Total Revenues $ - $ 144,039 $ 1,000,000 $ -
Expenditures
Employee Compensation $ 171,115 $ 239,898 $ 302,775 $ 334,517 Employee Benefits $ 72,593 $ 106,987 $ 148,923 $ 155,168 Materials $ 11,595 $ 8,384 $ 61,108 $ 29,925
Contract Services $ - $ 4,544 $ 14,200 $ 2,120
Cost Allocation $ 128,820 $ 188,792 $ 177,604 $ 205,936 Special Projects $ 61,650 $ 4,745 $ 1,000,000 $ -
Contingencies $ - $ - $ 1,883 $ 401
Total Expenditures $ 445,773 $ 553,350 $ 1,706,493 $ 728,067 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 445,773 $ 409,312 $ 706,493 $ 728,067 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget

EMERGENCY SERVICES

COORDINATOR

0.95 0.95 0.95 0.95
MANAGEMENT ANALYST 0 1.00 1.00 1.00
Total 0.95 1.95 1.95 1.95
There are no changes to the current level of staffing.

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Economic Development
Budget Unit 100-12-705
General Fund - City Manager - Economic Development
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 467,954
Fund Balance $ -
General Fund Costs $ 467,954
% Funded by General Fund 100.0%
Total Staffing 1.0 FTE
Program Overview
In FY 2021-22, this program was transferred to the City Manager's Office. Historical data can be found in Budget Unit 100-71-705 in Community Development. The Economic Development program specifically targets business retention, expansion, and aHraction with a focus on small business development, in order to support the City's financial stability.

Service Objectives
Provide assistance and support to businesses to enable job creation, new business formation, private investment, and industry evolution.

Conduct outreach to existing small businesses to create strong working relationships.

Collaborate with internal city team members to keep the needs of businesses in the forefront when reviewing applications and projects.

Partner with local business associations, agencies, and organizations to create a strong and cohesive network offering business support and assistance.

Provide the public with current data and information easily accessible online or in printed format. Assist with policy formation to align with business and community goals.

Proposed Budget
It is recommended that City Council approve a budget of $467,954 for the Economic Development program. This represents a decrease of $130,939 (-21.9%) from the FY 2022-23 Adopted Budget.

There is an increase in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $57,113 $39,236 $17,877
Reduced funding in
supplies, meeting
expenses, and costs
of attending and
hosting business
workshops.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Transfers In $ - $ 4,862 $ - $ -
Total Revenues $ - $ 4,862 $ - $ -
Expenditures
Employee Compensation $ - $ 125,701 $ 180,045 $ 206,441 Employee Benefits $ 1,221 $ 46,931 $ 76,832 $ 83,467
Materials $ 33,890 $ 21,189 $ 69,629 $ 39,236
Contract Services $ 149,994 $ 69,780 $ 62,308 $ 87,646
Cost Allocation $ 50,406 $ 13,227 $ 41,781 $ 49,578
Special Projects $ - $ 10,000 $ 165,000 $ -
Contingencies $ - $ 135 $ 3,298 $ 1,586
Total Expenditures $ 235,511 $ 286,963 $ 598,893 $ 467,954 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 235,511 $ 282,100 $ 598,893 $ 467,954 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget

ECONOMIC DEVELOPMENT

MANAGER
0 1.00 1.00 1.00
Total 0 1.00 1.00 1.00
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There are no changes to the current level of staffing.

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City Clerk
Budget Unit 100-13-130
General Fund - City Clerk - City Clerk
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 87,435
Total Expenditures $ 777,023
Fund Balance $ -
General Fund Costs $ 689,588
% Funded by General Fund 88.7%
Total Staffing 3.5 FTE
Program Overview
The City Clerk’s office responsibilities include administrative duties associated with the City Council’s agenda and actions; publishing legal notices; posting notice of all commission vacancies; processing codification of City’s Municipal Code; records management; compliance with Public Records Act requests; managing official elections; and providing partial mail service for all City Departments.

Service Objectives
Ensure compliance with the Brown Act open meetings requirements, Maddy Act Commission vacancy requirements and the Public Records Act, to accurately process documents and maintain a records management system that facilitates timely access to information, including digital access to City records.

Provide complete, accurate and timely information to the public, staff and City Council.

Respond to internal routing requests within two working days; respond to internal requests requiring archival research within five working days.

Respond to Public Record Act requests within the time specified by State law.

Provide a digital City Council packet to members of the City Council and staff.

Process and sort routine incoming and outgoing mail for each department.

Proposed Budget
It is recommended that City Council approve a budget of $777,023 for the City Clerk program. This represents an increase of $57,604 (8.0%) from the FY 2022-23 Adopted Budget.

This increase is due to increases in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $44,445 $42,301 $2,144 Reduced funding in supplies, printing, and conferences.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 91,584 $ 144,551 $ 121,651 $ 87,435 Total Revenues $ 91,584 $ 144,551 $ 121,651 $ 87,435
Expenditures
Employee Compensation $ 351,929 $ 352,315 $ 434,265 $ 476,192 Employee Benefits $ 139,725 $ 139,124 $ 198,878 $ 210,132 Materials $ 35,000 $ 23,445 $ 46,172 $ 42,301
Contract Services $ 27,822 $ 45,355 $ 38,000 $ 47,278
Contingencies $ - $ - $ 2,104 $ 1,120
Total Expenditures $ 554,476 $ 560,239 $ 719,419 $ 777,023 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 462,893 $ 415,688 $ 597,768 $ 689,588 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ADMINISTRATIVE ASSISTANT 0 0 1.00 1.00
CITY CLERK 1.00 1.00 1.00 1.00
DEPUTY CITY CLERK 1.00 1.00 1.00 1.00
SR OFFICE ASSISTANT 0.50 0.50 0.50 0.50
Total 2.50 2.50 3.50 3.50
There are no changes to the current level of staffing.

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Duplicating and Mail Services
Budget Unit 100-13-132
General Fund - City Clerk - Duplicating and Mail Services Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 40,808
Fund Balance $ -
General Fund Costs $ 40,808
% Funded by General Fund 100.0%
Total Staffing FTE
Program Overview
The Duplicating and Mail budget provides paper, envelope, and postage supplies Citywide, and is responsible for the maintenance costs of the postage and folder-inserter machines.

Service Objectives
Supply paper, envelopes, and postage Citywide and maintain postage and folder-inserter machines.

Proposed Budget
It is recommended that City Council approve a budget of $40,808 for the Duplicating and Mail Services program.

This represents a decrease of $8,267 (-16.8%) from the FY 2022-23 Adopted Budget.

The decrease is due to a decrease in general office supplies.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Materials $ 18,551 $ 23,733 $ 37,794 $ 30,471
Contract Services $ 5,271 $ 3,738 $ 6,500 $ 6,500
Cost Allocation $ 32,813 $ 4,366 $ 3,674 $ 3,375
Contingencies $ - $ - $ 1,107 $ 462
Total Expenditures $ 56,635 $ 31,837 $ 49,075 $ 40,808
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 56,635 $ 31,838 $ 49,075 $ 40,808
Staffing
There is no staffing associated with this program.

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Elections
Budget Unit 100-13-133
General Fund - City Clerk - Elections
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 977
Fund Balance $ -
General Fund Costs $ 977
% Funded by General Fund 100.0%
Total Staffing FTE
Program Overview
The City Clerk’s office administers the legislative process including management of local elections and filings of Fair Political Practices Commission documents.

Service Objectives
Administer elections and Fair Political Practices Commission filings in compliance with State law.

Conduct a local election in even-numbered years and ballot measure elections as necessary, in compliance with the California Elections Code.

Facilitate timely filing of required and voluntary documentation from candidates and election commiHees, including Nomination Papers, Candidate Statements of Qualification, Campaign Financial Disclosure Statements, and Statements of Economic Interest, as well as candidate biographies and photographs.

Make election-related information available to the public and news media in a timely manner.

Proposed Budget
It is recommended that City Council approve a budget of $977 for the Elections program. This represents a decrease of $139,862 (-99.3%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $4,845 $491 $4,354
Reduced advertising
and legal or contract
services. This
reduction will not
have any service
impacts as next year
is not an election
year.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Miscellaneous Revenue $ 14,300 $ - $ - $ -
Total Revenues $ 14,300 $ - $ - $ -
Expenditures
Materials $ 600 $ 847 $ 4,845 $ 491
Contract Services $ 113,261 $ - $ 130,000 $ -
Cost Allocation $ 1,595 $ 147 $ 2,623 $ 480
Contingencies $ - $ - $ 3,371 $ 6
Total Expenditures $ 115,456 $ 994 $ 140,839 $ 977
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 101,156 $ 994 $ 140,839 $ 977
Staffing
There is no staffing associated with this program.

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City Manager Contingency
Budget Unit 100-14-123
General Fund - City Manager Discretionary - City Manager Contingency Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 50,000
Fund Balance $ -
General Fund Costs $ 50,000
% Funded by General Fund 100.0%
Total Staffing FTE
Program Overview
The City Manager Contingency program is designed to address unforeseen citywide expenses that may arise during the year. To provide a cushion for any unexpected expenses, a contingencies expenditure category was added to each program in FY 2013-14. This category was established to cover any unforeseen expenses that may arise during the year. However, in FY 2020-21, the program contingencies were reduced from 5% of budgeted materials and contract services to 2.5%.

To provide a second layer of contingency for any unexpected expenditures, the City Manager Contingency was established. This contingency is in addition to the program contingency and is used for unexpected expenditures that exceed the program contingency. In FY 2020-21, the City Manager Contingency was also reduced from 5% of budgeted General Fund materials and contract services to 2.5%.

To further reduce expenditures, in FY 2021-22, the City Manager Contingency was reduced to $75,000. In FY 2022- 23, as part of an expenditure-reduction strategy, program contingencies are proposed to be reduced to 1.25%, and the City Manager Contingency is proposed to be reduced to $50,000. These measures are aimed at maintaining fiscal responsibility while ensuring that unexpected expenses can still be addressed.

The City has a track record of underspending in this category. The program contingency budget may be used by departments to cover unanticipated expenses at their discretion. On the other hand, the City Manager Contingency requires the approval of the City Manager before it can be used. Any usage of the City Manager Contingency is reported by staff to the City Council as part of the quarterly financial report. This reporting ensures transparency and accountability in the use of contingency funds.

Proposed Budget
It is recommended that City Council approve a budget of $50,000 for the City Manager Contingency program.

This represents a decrease of $25,000 (-33.3%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Contract Services $75,000 $50,000 $25,000
This will limit the
ability for the City
Manager to cover
unanticipated City
expenses.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Contingencies $ - $ - $ 75,000 $ 50,000
Total Expenditures $ - $ - $ 75,000 $ 50,000
Fund Balance $ - $ - $ - $ -
General Fund Costs $ - $ - $ 75,000 $ 50,000
Staffing
There is no staffing associated with this program.

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City Attorney
Budget Unit 100-15-141
General Fund - City Attorney - City Attorney
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 278,070
Total Expenditures $ 1,593,033
Fund Balance $ -
General Fund Costs $ 1,314,963
% Funded by General Fund 82.5%
Total Staffing 3.0 FTE
Program Overview
The City AHorney is appointed by the City Council to manage the legal affairs of the City, including the operation of the City AHorney’s Office. The City AHorney’s Office provides all legal services that are needed to support the City Council, City Commissions and Committees, City Manager, department directors, and City staff.

Service Objectives
The mission of the City AHorney’s Office is to protect and defend the City by all legal and ethical means and to provide the municipal corporation with high-quality legal service and advice. These legal services include the following:

Prosecute and defend the City in any legal action such as civil maHers involving personal injury or property damage, code enforcement, or any administrative action arising out of City business.

Manage all liability claims filed against the City including investigation and disposition.

Attend City Council, Planning Commission, and other public meetings as requested.

Prepare and review proposed legislation including ordinances and resolutions.

Draft and/or review contracts, agreements, and other legal documents.

Conduct legal research and analysis, and prepare legal memoranda.

Provide legal support for special projects.

Proposed Budget
It is recommended that City Council approve a budget of $1,593,033 for the City AHorney program. This represents an increase of $18,900 (1.2%) from the FY 2022-23 Adopted Budget.

This increase is due to increases in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Service FY 2023-24 Original
Budget
FY 2023-24
Reduced Budget
Reduction Service Impact
Materials $25,356 $19,636 $5,720 Reduced training for CAO staff, office supplies and
meeting expenses.

Contract Services $742,000 $589,178 $152,822 Reduced funds for new/unexpected litigation and
other legal-related issues.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 562,171 $ 542,945 $ 362,253 $ 278,070 Miscellaneous Revenue $ 3,884 $ - $ - $ -
Total Revenues $ 566,055 $ 542,945 $ 362,253 $ 278,070
Expenditures
Employee Compensation $ 109,116 $ 521,706 $ 610,595 $ 679,766 Employee Benefits $ 53,716 $ 208,729 $ 264,139 $ 296,843 Materials $ 1,843 $ 14,998 $ 23,920 $ 19,636
Contract Services $ 1,327,256 $ 224,510 $ 658,420 $ 589,178 Contingencies $ - $ - $ 17,059 $ 7,610
Total Expenditures $ 1,491,931 $ 969,943 $ 1,574,133 $ 1,593,033 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 925,876 $ 426,998 $ 1,211,880 $ 1,314,963 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget
CITY ATTORNEY 0 0 1.00 1.00
LEGAL SERVICES MANAGER 1.00 1.00 1.00 1.00

SENIOR ASSISTANT CITY

ATTORNEY
0 0 1.00 1.00
Total 1.00 1.00 3.00 3.00
There are no changes to the current level of staffing.

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Law Enforcement
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Department Overview
Budget Units
Budget Unit Program 2024 Proposed Budget
Law Enforcement $ 17,812,608
100-20-200 Law Enforcement $ 17,812,608
100-20-201 Interoperability Project $ -
Total $ 17,812,608
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Budget at a Glance
2024 Proposed Budget
Total Revenues $ 1,462,646
Total Expenditures $ 17,812,608
Fund Balance $ -
General Fund Costs $ 16,349,962
% Funded by General Fund 91.8%
Total Staffing FTE
Organization
Captain Neil Valenzuela, Office of the Sheriff
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Performance Measures
Goal: Maintain a safe environment to live, work, learn and play.

Benefit: All members of the community are safe, informed, empowered and supported.

Performance Measure
FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Ongoing
Target
Response time for emergency calls
Priority 1 3.40 3.27 6.98 5 minutes
Priority 2 6.07 6.66 7.07 9 minutes
Priority 3 11.80 11.73 11.28 20 minutes
% programs maintaining minimum
attendance
Teen Academy 92% 98% 75% 80%
Citizen Academy N/A N/A N/A 80%
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Workload Indicators
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Total Priority 1 Calls 31 76 35
Total Priority 2 Calls 3,107 4,027 2,144
Total Priority 3 Calls 4,254 3,624 1,639
Total Teen/Community Academy Participants 23 39 15
Proposed Budget
It is recommended that City Council approve a budget of $17,812,608 for the Law Enforcement department. This represents an increase of $998,089 (5.9%) from the FY 2022-23 Adopted Budget.

The increase is due to contractually agreed-upon increases in salary and benefits for Sheriff's Deputies and increases in the West Valley Substation facility lease agreement.

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Proposed Expenditures by Division
Department Expenditure History
Revenues and Expenditures
100.0%
Law Enforcement
$14.8M
$15.7M
$16.8M
$17.8M
2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget FY 2023-24 Proposed Budget Law Enforcement 273
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Intergovernmental Revenue $ 156,727 $ 161,285 $ 156,000 $ 161,094 Charges for Services $ 410,824 $ 558,777 $ 61,000 $ 115,000 Fines and Forfeitures $ 102,396 $ 188,053 $ 202,000 $ 180,000 Miscellaneous Revenue $ 837,329 $ 887,259 $ 948,721 $ 1,006,552 Transfers In $ - $ 972,987 $ - $ -
Total Revenues $ 1,507,276 $ 2,768,361 $ 1,367,721 $ 1,462,646 Expenditures
Materials $ 158 $ 222 $ 53,891 $ 408
Contract Services $ 14,652,520 $ 15,547,160 $ 16,606,737 $ 17,667,516 Cost Allocation $ 123,731 $ 168,433 $ 153,891 $ 144,684 Total Expenditures $ 14,776,409 $ 15,715,815 $ 16,814,519 $ 17,812,608 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 13,269,134 $ 12,947,454 $ 15,446,798 $ 16,349,962 Staffing
There is no staffing associated with this department.

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Law Enforcement
Budget Unit 100-20-200
General Fund - Law Enforcement - Law Enforcement
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 1,462,646
Total Expenditures $ 17,812,608
Fund Balance $ -
General Fund Costs $ 16,349,962
% Funded by General Fund 91.8%
Total Staffing FTE
Program Overview
The Law Enforcement program provides law enforcement, emergency communications, and School Resource Officers. Law enforcement services are provided by the Santa Clara County Sheriff’s Office, while communications services are provided by the Santa Clara County General Services Administration. Other services include general law enforcement (patrol), traffic enforcement and investigation, detective services, and additional resources from specialized units.

The State allocates the Citizens Option for Public Safety (COPS) grant to cities and counties for front-line law enforcement purposes. Funding is allocated proportionately based on population size with a minimum allocation of $100,000 per jurisdiction. This grant will be used to partially offset the cost of a second School Resource Officer that was added in the FY 2016-17 school year. Furthermore, the City receives an annual donation for enhanced law enforcement services (two additional deputies) in the C5 beat.

Service Objectives
Protect life and property through innovative and progressive policing methods.

Respond to Priority 1 emergency situations within an average of fewer than five minutes.

Enforce the vehicle code with the goal of increasing traffic safety.

Divert first time/minor youth offenders from the juvenile justice system.

Provide daily on-site interaction with our youth.

Provide annual Teen Academy during summer months providing community engagement and an introduction to law enforcement for youth (budgeted in the Public Safety Commission).

Proposed Budget
It is recommended that City Council approve a budget of $17,812,608 for the Law Enforcement program. This represents an increase of $1,047,512 (6.2%) from the FY 2022-23 Adopted Budget.

The increase in Contract Services funding is due to contractually agreed-upon increases in salary and benefits for Sheriff's Deputies and increases in the West Valley Substation facility lease agreement.

Revenues and Expenditures
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Intergovernmental Revenue $ 156,727 $ 161,285 $ 156,000 $ 161,094 Charges for Services $ 410,824 $ 558,777 $ 61,000 $ 115,000 Fines and Forfeitures $ 102,396 $ 188,053 $ 202,000 $ 180,000 Miscellaneous Revenue $ 837,329 $ 887,259 $ 948,721 $ 1,006,552 Transfers In $ - $ 972,987 $ - $ -
Total Revenues $ 1,507,276 $ 2,768,361 $ 1,367,721 $ 1,462,646 Expenditures
Materials $ 158 $ 222 $ 53,891 $ 408
Contract Services $ 14,652,520 $ 15,547,160 $ 16,558,198 $ 17,667,516 Cost Allocation $ 123,003 $ 167,594 $ 153,007 $ 144,684 Total Expenditures $ 14,775,681 $ 15,714,976 $ 16,765,096 $ 17,812,608 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 13,268,406 $ 12,946,615 $ 15,397,375 $ 16,349,962 Staffing
There is no staffing associated with this program.

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Interoperability Project
Budget Unit 100-20-201
General Fund - Law Enforcement - Interoperability Project Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ -
Fund Balance $ -
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing FTE
Program Overview
The Silicon Valley Regional Interoperability Authority (SVRIA) was formed under the Joint Exercise of Powers Act (JPA) to provide interoperable communications solutions to its members. The SVRIA represents the interests of all public safety agencies in Santa Clara County through its members. It services the Santa Clara Operational Area which includes the County of Santa Clara, its fifteen cities and towns, and all special districts.

Service Objectives
SVRIA exists to identify, coordinate, and implement communications interoperability solutions to its member agencies. The purpose of these projects is to seamlessly integrate voice and data communications between law enforcement, the fire and rescue service, emergency medical services, and emergency management for routine operations, critical incidents, and disaster response and recovery.

Proposed Budget
There is no budget requested for this program.

The decrease is due to the elimination of the contract for this project.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Contract Services $ - $ - $ 48,539 $ -
Cost Allocation $ 728 $ 839 $ 884 $ -
Total Expenditures $ 728 $ 839 $ 49,423 $ -
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 728 $ 839 $ 49,423 $ -
Staffing
There is no staffing associated with this program.

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Innovation and Technology
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Department Overview
Budget Units
Budget Unit Program 2024 Proposed Budget
I&T Administration $ 190,420
610-30-300 Innovation & Technology Administration $ 190,420 Video $ 928,452
100-31-305 Video $ 928,452
Applications $ 2,710,361
100-32-308 Applications $ 2,710,361
Infrastructure $ 2,249,231
610-34-310 Infrastructure $ 2,249,231
GIS $ 1,492,885
610-35-986 GIS $ 1,492,885
Total $ 7,571,349
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Budget at a Glance
2024 Proposed Budget
Total Revenues $ 4,145,863
Total Expenditures $ 7,571,349
Fund Balance $ (485,678)
General Fund Costs $ 2,939,808
% Funded by General Fund 38.8%
Total Staffing 14.9 FTE
Organization
Bill Mitchell, Chief Technology Officer
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Performance Measures
Goal: Provide superior delivery of information and technology services to city employees and constituents while continually enhancing levels of engagement.

Benefit: Integrated information services enable customer access to the tools and information they need, when and where they need it.

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Performance Measure
FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Ongoing
Target
GIS: % of time spent Developing Application 25% 40% 35% 35% GIS: % of time Maintaining applications 75% 60% 65% 65% GIS: Met Requests within SLA (map, data,
Web maps, Cityworks, schema, other)
completed
98% 99% 100% 100%
GIS: Increase Property Information
(Internal/External) site visits per month 691/533 3,344/616 1,176/229 900/600 GIS: Cityworks utilization - # of assets
Cupertino maintains vs # of assets maintained
in Cityworks. Also the % increase of work
units completed (WOs, INSP,SRs)
45/31
20%
45/31
68%
45/31
10%
45/45
20%
Infrastructure: Percentage based upon number
of scheduled projects/Number of projects
completed on time
86% 89% 64% 100%
Infrastructure: Percentage based upon number
of HelpDesk tickets/SLA measurements 94% 93% 89% 90%
Infrastructure: % Customer satisfaction based
upon Satisfaction Rate from helpdesk tickets 98.7% 98.0% 96.9% 85% Infrastructure: % of network uptime (not
including planned maintenance) 99.9% 99.9% 99.9% 99%
Applications: % of citywide-enterprise
application project management performed on
time and on budget
95% 96% 98% 95%
Applications: Number of website site
visits/Number of site hits 800,164 886,899 578,462 5% annual increase
Applications: Number of support request for
the applications support per month 65 870 490 20
Applications: Actual grant Revenue vs.

Adopted budget 46% 0 2% 15%
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Multimedia Division
Performance Measure FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Ongoing
Target
Percentage of total video productions
performed vs scheduled productions (city
meetings excluded)₁
522%
47/9
356%
57/16
245%
27/11 100%
Percentage of total engineering projects vs
scheduled projects₂
250%
15/6
275%
11/4
100%
2/2 100%
Total video views on YouTube and Granicus
platforms combined*₃ 246,313 158,300 60,249 5% annual
increase
* Percentage skewed due to pandemic - more overall views due to daily press conference postings FY 2023-24 Proposed Budget Innovation and Technology 285 291
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Workload Indicators
Applications Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Enterprise Programs Support & Maintenance 1,900 hours 2,500 hours 1,950 hours Application Development 800 hours 1,600 hours 850 hours Percentage of Project Management Performed
on Time and Budget for Citywide Applications 95% 95% 94% FY 2023-24 Proposed Budget Innovation and Technology 286 292
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Infrastructure Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Percentage of helpdesk requests completed 48
hours or less 94% 93% 89%
% of network uptime 99.9% 99.9% 99.8%
Number of IT Projects Completed 100%
7/7

88.89%
9/8

64.28%
9/14
GIS Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Hours Spent Web Application Development
540/tracking is still
being refined. This
is not an accurate
account.
876/tracking is still
being refined. This
is not an accurate
account.
582/ tracking is still
being refined. This
is not an accurate
account
Map, Data, Analysis, Report, Application
Configuration Requests, Workflow
Enhancements Completed Requests
882/tracking is still
being refined. This
is not an accurate
account.
1272/tracking is still
being refined. This
is not an accurate
account.
821/tracking is still
being refined. This
is not an accurate
account.

Number of I&T workplan projects completed
100%
8/8 After budget
reduction
90%
9/10
20%
2/10
Multimedia Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Percentage of total video productions
performed vs scheduled productions (city
meetings excluded)
522%
47/9
356%
57/16
245%
27/11
Percentage of total engineering projects vs
scheduled projects
250%
15/6
275%
11/4
100%
2/2
Total video views on YouTube and Granicus
platforms combined* 246,313 158,300 60,249
* Percentage skewed due to pandemic - more overall views due to daily press conference postings Proposed Budget
It is recommended that City Council approve a budget of $7,571,349 for the Innovation and Technology department. This represents a decrease of $428,630 (-5.4%) from the FY 2022-23 Adopted Budget.

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The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Service FY 2023-24 Original
Budget
FY 2023-24
Reduced Budget Reduction Service Impact
Materials $2,794,442 $1,812,505 $981,937
Reduced applications utilized by
staff, residents, and customers.

Commissioners and part time
staff limited to E-mail; Prolonged
tech refresh cycles and significant
reduction in replacement parts
and supplies.

Reduced Training and
Conferences for department.

Drone program and training
reduced, and eliminate Wi-Fi in
parks.

Contract Services $791,240 $620,119 $171,121
Reduce expert technical training;
less outside technical support,
and reduced LaserFiche
document scanning.

Reduced maintenance of
equipment.

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Proposed Expenditures by Division
Department Expenditure History
Revenues and Expenditures

35.8%

29.7%

19.7%

12.3%
Applications
Infrastructure
GIS
Video
I&T Administration
$5.16M $5.41M
$8.00M
$7.57M
2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget FY 2023-24 Proposed Budget Innovation and Technology 289 295
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Intergovernmental Revenue $ 15,000 $ 242,900 $ - $ 60,000 Charges for Services $ 3,996,438 $ 4,572,658 $ 3,916,540 $ 4,085,863 Miscellaneous Revenue $ 67,130 $ - $ - $ -
Transfers In $ - $ 146,308 $ - $ -
Total Revenues $ 4,078,568 $ 4,961,866 $ 3,916,540 $ 4,145,863 Expenditures
Employee Compensation $ 2,028,109 $ 2,030,751 $ 2,434,120 $ 2,953,284 Employee Benefits $ 729,278 $ 611,750 $ 991,799 $ 1,177,598 Materials $ 1,385,735 $ 1,705,614 $ 2,416,519 $ 1,812,505 Contract Services $ 516,877 $ 456,178 $ 835,469 $ 620,119 Special Projects $ 198,377 $ 322,675 $ 941,028 $ 691,475 Other Financing Uses $ 299,745 $ 285,961 $ 299,745 $ 285,961 Contingencies $ - $ - $ 81,299 $ 30,407
Total Expenditures $ 5,158,121 $ 5,412,929 $ 7,999,979 $ 7,571,349 Fund Balance $ (394,967) $ (198,074) $ 412,601 $ (485,678) General Fund Costs $ 684,587 $ 252,990 $ 4,496,040 $ 2,939,808 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget
ADMINISTRATIVE ASSISTANT 0.95 0.95 0.95 0
APPLICATIONS MANAGER 1.00 1.00 1.00 1.00
ASSET MANAGEMENT TECHNCIAN 1.00 1.00 0 0
BUSINESS SYSTEMS ANALYST 3.00 3.00 3.00 3.00
CHIEF TECHNOLOGY OFFICER 0.98 0.98 0.98 0.98
GIS ANALYST 1.00 1.00 1.00 1.00
GIS MANAGER 1.00 1.00 1.00 1.00
INFRASTRUCTURE MANAGER 1.00 1.00 1.00 1.00
I.T. ASSISTANT 2.00 2.00 2.00 0
MANAGEMENT ANALYST 0 0 1.00 1.95

MULTIMEDIA COMMUNICATIONS
SPEC
0 0 1.50 3.00
NETWORK SPECIALIST 0 0 0 2.00
Total 11.93 11.93 13.43 14.93
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Innovation & Technology Administration
Budget Unit 610-30-300
Information Technology - I&T Administration - Innovation & Technology Administration Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 190,420
Fund Balance $ (190,420)
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing 0.5 FTE
Program Overview
The Innovation & Technology Department Administration Division is responsible for the strategic planning, governance, policy seHing, and leadership in the use of digital services for the City. The services include a state of the art network which provides transport for best of class business applications, e.g., financial, land management, recreation, asset management, HR, e-commerce and work order management. Additionally, Administration ensures oversight of budget, tactical plans, succession planning, partnership development (internal/external) and staffing. Procurement and budget monitoring are also responsibilities of Administration.

Service Objectives
Develop a roadmap to effectively leverage existing technology and adopt emerging technology to meet business needs.

Create and sustain a workplace atmosphere that promotes a balance between employee innovation, accountability and business needs.

Ensure two-way communication between and among the City organization and stakeholders.

Improve user experience including ease of use, availability, and accessibility within the context of compliance with industry standards.

Ensure transparent and easy access to City information and services via multiple technologies, e.g. social media, TV, web, and radio.

Proposed Budget
It is recommended that City Council approve a budget of $190,420 for the Innovation & Technology Administration program. This represents a decrease of $151,514 (-44.3%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $13,103 $6,071 $7,032
Reduced training and
conferences for Chief
Technology Officer and
Management Analyst,
these tools assist in
developing future plans.

Contract Services $17,200 $2,500 $14,700
Less review of future
technologies as they
apply to Cupertino.

The following project/s have been identified as unfunded needs, which refer to priority projects that lack sufficient funding to be implemented at this time.

Project Description Estimated Cost Funding Status
IT Strategic Plan
Partner with Departments to develop a three-year FY25-
FY27 Strategic Plan to provide guidance/governance to
future IT Projects
$75,000 one-
time Unfunded
Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 120,302 $ 114,941 $ 115,790 $ 128,598 Employee Benefits $ 33,205 $ 23,024 $ 50,019 $ 53,144
Materials $ 5,178 $ 3,787 $ 11,451 $ 6,071
Contract Services $ 21,613 $ 14,107 $ 15,500 $ 2,500
Special Projects $ 140,684 $ 29,100 $ 148,500 $ -
Contingencies $ - $ - $ 674 $ 107
Total Expenditures $ 320,982 $ 184,959 $ 341,934 $ 190,420 Fund Balance $ (320,982) $ (184,959) $ (259,434) $ (190,420) General Fund Costs $ - $ - $ 82,500 $ -
Staffing
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Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ADMINISTRATIVE ASSISTANT 0.15 0.15 0.15 0
CHIEF TECHNOLOGY OFFICER 0.38 0.38 0.38 0.38
MANAGEMENT ANALYST 0 0 0 0.15
Total 0.53 0.53 0.53 0.53
Reclassification of Administrative Assistant to Management Analyst.

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Video
Budget Unit 100-31-305
General Fund - Video - Video
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 928,452
Fund Balance $ -
General Fund Costs $ 928,452
% Funded by General Fund 100.0%
Total Staffing 3.0 FTE
Program Overview
The primary goal of the Multimedia Division is to increase public awareness, interest, understanding, and participation in the issues, programs, and services presented by the City of Cupertino. The staff promotes City services and programs through its 24/7 government access channel, radio station, digital signage network, City website, and numerous online video platforms. In addition, the video staff provides multimedia production services and technical support for all City departments. Multimedia staff also oversees the design, maintenance, and engineering of the City’s broadcast and audiovisual systems.

Service Objectives
Multimedia staff works together to manage and maintain the following city services:

City Channel, the government access television channel which provides 24/7 information to Cupertino residents, includes full coverage of city meetings, community events, town hall forums, press conferences, election coverage, and local speaker series, as well as educational programming and state government affairs programming
Webcasting and video on demand services for live streaming city meetings, events and other programs of interest
Radio Cupertino for emergency and community information for public service announcements, traffic alerts, and weather forecasts
Digital signage to promote city programs and events via electronic displays in city facilities Multimedia production services and maintenance of city video equipment Proposed Budget
It is recommended that City Council approve a budget of $928,452 for the Video program. This represents an increase of $353,848 (61.6%) from the FY 2022-23 Adopted Budget.

Increase in Compensation and Benefits is due to a transfer of 1.5 positions from the City Manager's Office.

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The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Service FY2023-24 Original
Budget
FY2023-24 Reduced
Budget Reduction Service Impact
Materials $64,776 $38,579 $26,197
Significant reduction
in replacement parts
and supplies.

Contract Services $80,090 $63,463 $16,627
Less outside
technical support
assistance on
preventative
maintenance and
repairs
The following project/s have been identified as unfunded needs, which refer to priority projects that lack sufficient funding to be implemented at this time.

Projects Description Estimated
Cost
Funding
Status
Community Hall Portable
Projector
Procurement of a portable projector for revenue generating public and private events
$6,000
one-time Unfunded
Monta Vista Recreation
Center Portable Projection
System
Procurement of portable projector for revenue generating classroom rentals
$6,000
one-time Unfunded
Quinlan Craft Room
Display System
Installation of a large 98 inch flat panel display for revenue generating room
$10,000
one-time Unfunded
Quinlan Social Room
Projection System and
Screen
Procurement of a ceiling-mounted video projection system and motorized retractable screen for revenue generating room
$25,000
one-time Unfunded
Senior Center Digital
Signage Displays
Procurement of two 50-inch displays at revenue generating Senior Center Lobby for displaying Electronic Activity
Calendar
$5,000
one-time Unfunded
Senior Center Tech Lab
Projection System
Installation of a ceiling-mounted video projector for
revenue generating room
$15,000
one-time Unfunded
Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 7,204 $ - $ - $ -
Total Revenues $ 7,204 $ - $ - $ -
Expenditures
Employee Compensation $ - $ - $ 246,871 $ 591,230
Employee Benefits $ - $ - $ 99,404 $ 233,904
Materials $ 76 $ - $ 61,417 $ 38,579
Contract Services $ - $ - $ 95,002 $ 63,463
Special Projects $ - $ - $ 68,000 $ -
Contingencies $ - $ - $ 3,910 $ 1,276
Total Expenditures $ 76 $ - $ 574,604 $ 928,452
Fund Balance $ - $ - $ - $ -
General Fund Costs $ (7,128) $ - $ 574,604 $ 928,452
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget

MULTIMEDIA COMMUNICATIONS
SPEC
0 0 1.50 3.00
Total 0 0 1.50 3.00
Transfer of 1.5 FTE from the City Manager's Office.

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Applications
Budget Unit 100-32-308
General Fund - Applications - Applications
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 1,599,005
Total Expenditures $ 2,710,361
Fund Balance $ -
General Fund Costs $ 1,111,356
% Funded by General Fund 41.0%
Total Staffing 3.5 FTE
Program Overview
The Applications Division manages business requirements gathering, design, development, procurement, project management, implementation and ongoing maintenance and support of all enterprise-wide business systems and programs. These systems include Financial Enterprise Resource Planning (ERP), Land-use Management System, Recreation Management System and their related customer facing portals. Additionally, Applications division is responsible for electronic content management (records retention) system and city’s procurement management system.

The Applications Division manages the City's website, Intranet, and mobile apps development. The division staff supports e-service programs and services like permiHing, licensing and enforcement. Applications division is responsible for creating custom SoOware-as-a-Service (SaaS) soOware platforms like bid management solution and residential parking permit solution. Staff is also responsible for application integrations so critical business data can flow between enterprise platforms. Applications division staff also generate critical business analytics and reports to aid city staff in geHing insight through data visualization and helps department supervisors and managers in decision making and measurements of key performance index and goals.

Service Objectives
Deliver business solutions that meet customer requirements and integrate within the City's application framework.

Assist departments in developing streamlined and effective business processes that are easy to understand and translate into existing and new enterprise applications.

Work closely with City staff and members of the community to ensure that the City's enterprise application platforms are relevant and provide value to all the stakeholders.

Collaborate with various City departments to determine that the City's enterprise soOware solutions meet the functional requirements and long-term application implementation strategy of the organization.

Create and maintain effective online and mobile user access to municipal information and services.

Enable and facilitate the use of communication and technical resources by nontechnical staff and customers.

Generate business data dashboards to city staff and external stakeholders.

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Proposed Budget
It is recommended that City Council approve a budget of $2,710,361 for the Applications program. This represents a decrease of $104,897 (-3.7%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $1,317,411 $966,999 $350,412
Reduced applications
utilized by staff and
subscription licensing
count.

Contract Services $177,051 $126,151 $50,900 Reduced outside expert technical support.

The following project/s have been identified as unfunded needs, which refer to priority projects that lack sufficient funding to be implemented at this time.

Project Description Estimated Cost Funding Status
Debtbook
for GASB 96
Application required for accounting and
financial reporting for subscription-based
information technology arrangements
(SBITAs) for government end users
(governments).
$15,000 one-time, $13,000
ongoing Unfunded
Special Projects
The following table shows the special projects for the fiscal year.

Special Project Appropriation Revenue Funding Source Description Enterprise
Resource Planning
(ERP) Phase III
FY24 $450,000;
$300,000
ongoing
FY24 $450,000;
$300,000 ongoing General Fund
Implementation of new ERP for
Financials and Human Resources.

Funding will cover interim staff
required for implementation.

ProjectDox move
to
Software-as-a-
Service (SaaS)
$129,475 one-
time; $117,100
ongoing
$129,475 one-
time; $117,100
ongoing
General Fund
Move to SaaS model to shift the
responsibility of the day-to-day
maintenance, upgrades and back-
ups to Vendor.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Intergovernmental Revenue $ 15,000 $ 242,900 $ - $ 60,000 Charges for Services $ 1,307,803 $ 1,613,055 $ 1,431,322 $ 1,539,005 Miscellaneous Revenue $ 67,130 $ - $ - $ -
Transfers In $ - $ 146,308 $ - $ -
Total Revenues $ 1,389,933 $ 2,002,263 $ 1,431,322 $ 1,599,005 Expenditures
Employee Compensation $ 635,662 $ 670,756 $ 722,798 $ 754,882 Employee Benefits $ 206,339 $ 232,154 $ 254,426 $ 269,190 Materials $ 749,988 $ 895,294 $ 1,254,233 $ 966,999
Contract Services $ 186,966 $ 129,333 $ 215,139 $ 126,151 Special Projects $ 57,693 $ 135,638 $ 331,928 $ 579,475 Contingencies $ - $ - $ 36,734 $ 13,664
Total Expenditures $ 1,836,648 $ 2,063,175 $ 2,815,258 $ 2,710,361 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 446,715 $ 60,912 $ 1,383,936 $ 1,111,356 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ADMINISTRATIVE ASSISTANT 0.30 0.30 0.30 0
APPLICATIONS MANAGER 1.00 1.00 1.00 1.00
BUSINESS SYSTEMS ANALYST 2.00 2.00 2.00 2.00
CHIEF TECHNOLOGY OFFICER 0.20 0.20 0.20 0.20
MANAGEMENT ANALYST 0 0 0 0.30
Total 3.50 3.50 3.50 3.50
There are no changes to current level of staffing.

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Infrastructure
Budget Unit 610-34-310
Information Technology - Infrastructure - Infrastructure Budget at a Glance
2024 Proposed Budget
Total Revenues $ 1,591,722
Total Expenditures $ 2,249,231
Fund Balance $ 242,491
General Fund Costs $ 900,000
% Funded by General Fund 40.0%
Total Staffing 4.5 FTE
Program Overview
The IT Infrastructure Division is responsible for technology-related expenses for the citywide management of information technology services. The Infrastructure Manager and staff are responsible for computer helpdesk, network availability, and performance, security and compliance, incident response, disaster recovery and business continuity, project management of implementations and upgrades, purchasing and inventory control, technical training, and maintenance of systems. Infrastructure is also tasked with ensuring that the City continues to follow best practices in technology adoption and security practices.

Service Objectives
Provide and continuously improve helpdesk support as this function is oOen the face of IT that staff interacts with on a daily basis.

Maintain standards and procedures for the replacement, support, and maintenance of all City-owned computing devices, printers, networks, peripherals and systems defined by City policy.

Continue innovation and outreach to ensure the City follows best IT practices relating to equipment, policy, and security practices.

Proposed Budget
It is recommended that City Council approve a budget of $2,249,231 for the Infrastructure program. This represents a decrease of $472,726 (-17.4%) from the FY 2022-23 Adopted Budget.

Increase in Compensation and Benefits is due to reclassification of 2 Infrastructure Technicians to Network Specialists.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $1,010,941 $566,688 $445,253
Commissioners and Part
Time staff limited to Email,
prolonged tech refresh
cycles; reduce license count
to minimum, eliminate Wi-
Fi in Parks
Contract
Services $288,299 $265,905 $22,394 Reduced outside expert technical support
The following project/s have been identified as unfunded needs, which refer to priority projects that lack sufficient funding to be implemented at this time.

Projects Description Estimated
Cost
Funding
Status
Air
Gapped
Backups
As part of a network backup and recovery strategy, Air Gapped backups provide a copy of the Organizations data that is offline and inaccessible to cyber criminals.
$45,000 one-
time Unfunded
Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 1,767,098 $ 1,882,195 $ 1,556,269 $ 1,591,722 Total Revenues $ 1,767,098 $ 1,882,195 $ 1,556,269 $ 1,591,722 Expenditures
Employee Compensation $ 660,555 $ 629,802 $ 683,644 $ 789,572 Employee Benefits $ 270,305 $ 192,068 $ 314,130 $ 330,698 Materials $ 470,005 $ 611,350 $ 793,929 $ 566,688
Contract Services $ 212,752 $ 195,656 $ 305,328 $ 265,905 Special Projects $ - $ 78,960 $ 297,700 $ -
Other Financing Uses $ 299,745 $ 285,961 $ 299,745 $ 285,961 Contingencies $ - $ - $ 27,481 $ 10,407
Total Expenditures $ 1,913,362 $ 1,993,797 $ 2,721,957 $ 2,249,231 Fund Balance $ 98,735 $ 80,476 $ 1,289,312 $ 242,491
General Fund Costs $ 245,000 $ 192,078 $ 2,455,000 $ 900,000 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ADMINISTRATIVE ASSISTANT 0.30 0.30 0.30 0
BUSINESS SYSTEMS ANALYST 1.00 1.00 1.00 1.00
CHIEF TECHNOLOGY OFFICER 0.20 0.20 0.20 0.20
INFRASTRUCTURE MANAGER 1.00 1.00 1.00 1.00
I.T. ASSISTANT 2.00 2.00 2.00 0
MANAGEMENT ANALYST 0 0 0 0.30
NETWORK SPECIALIST 0 0 0 2.00
Total 4.50 4.50 4.50 4.50
The Administrative Assistant was reclassified as a Management Analyst and Infrastructure Technicians to Network Specialists based on the current duties and tasks assigned to that position.

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GIS
Budget Unit 610-35-986
Information Technology - GIS - GIS
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 955,136
Total Expenditures $ 1,492,885
Fund Balance $ (537,749)
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing 3.4 FTE
Program Overview
The Geographic Information Systems (GIS) program captures, manages, analyzes, and displays all forms of geographically referenced information for the City of Cupertino. Through maps, reports, dashboards, and charts we provide ways to view, understand, question, interpret, and visualize, our City in ways that reveal relationships, paHerns, and trends. The GIS Program works to help our staff, citizens, business, and development communities answer questions and solve problems by looking at our data in a way that is quickly understood and easily shared – on a map!
Service Objectives
Cupertino GIS works to provide and support state-of-the-art GIS mapping services and applications in the rapidly evolving and expanding field of geospatial technology.

Create, collect, maintain, and distribute high quality, up-to-date, and complete geospatial data.

Ensure that the City’s GIS systems and data are available for day-to-day City and regional purposes.

Share the City’s GIS data and services as widely as possible.

Raise the awareness of GIS.

Integrate spatial technology into Cupertino’s business processes and applications.

Support emergency planning, response, and recovery.

Proposed Budget
It is recommended that City Council approve a budget of $1,492,885 for the GIS program. This represents a decrease of $53,341 (-3.4%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $388,211 $234,168 $154,043
Removal of applications used
by residents and customers,
reduced Emergency
Management System (EMS)
application and Drone
program as well as
conferences and training.

Contract Services $228,600 $162,100 $66,500
Reduced outside technical
support, reduced Aerial
Acquisition, and Laserfiche
document scanning.

The following project/s have been identified as unfunded needs, which refer to priority projects that lack sufficient funding to be implemented at this time.

Project Description Estimated
Cost
Funding
Status
GPS Rental Equipment
Creating topological deliverables requires renting
GPS equipment to achieve the positional accuracy
required to produce contours, a service we would
like to bring in-house for cost savings.
$5,000 one-
time; $5,000
ongoing
Unfunded
FuelMaster Live
Update our existing FuelMaster SQL deployment to
the updated FMLive cloud-based fuel management
system.
$22,000 one-
time; $5,000
ongoing
Unfunded
Special Projects
The following table shows the special projects for the fiscal year.

Project Appropriation Revenue Funding Source Description VR Decarb $112,000 one-time $112,000 one-time General Fund Virtual reality simulation to help
engage the community and promote
all-electric household appliances.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 914,333 $ 1,077,408 $ 928,949 $ 955,136 Total Revenues $ 914,333 $ 1,077,408 $ 928,949 $ 955,136 Expenditures
Employee Compensation $ 611,590 $ 615,252 $ 665,017 $ 689,002 Employee Benefits $ 219,429 $ 164,504 $ 273,820 $ 290,662 Materials $ 160,488 $ 195,183 $ 295,489 $ 234,168
Contract Services $ 95,546 $ 117,082 $ 204,500 $ 162,100 Special Projects $ - $ 78,977 $ 94,900 $ 112,000
Contingencies $ - $ - $ 12,500 $ 4,953
Total Expenditures $ 1,087,053 $ 1,170,998 $ 1,546,226 $ 1,492,885 Fund Balance $ (172,720) $ (93,591) $ (617,277) $ (537,749) General Fund Costs $ - $ - $ - $ -
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed Budget
ADMINISTRATIVE ASSISTANT 0.20 0.20 0.20 0

ASSET MANAGEMENT

TECHNCIAN

1.00 1.00 0 0
CHIEF TECHNOLOGY OFFICER 0.20 0.20 0.20 0.20
GIS ANALYST 1.00 1.00 1.00 1.00
GIS MANAGER 1.00 1.00 1.00 1.00
MANAGEMENT ANALYST 0 0 1.00 1.20
Total 3.40 3.40 3.40 3.40
There are no changes to the current level of staffing.

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Administrative Services
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Department Overview
Budget Units
Budget Unit Program 2024 Proposed Budget
Administrative Services $ 369,022
100-40-400 Administrative Services Administration $ 369,022 Finance $ 3,142,703
100-41-405 Accounting $ 1,823,581
100-41-406 Business Licenses $ 424,145
100-41-425 Purchasing $ 370,890
100-41-426 Budget $ 524,087
Human Resources $ 6,527,737
100-44-412 Human Resources $ 1,399,766
642-44-414 Retiree Benefits $ 1,486,988
100-44-417 Insurance Administration $ 2,297,558
620-44-418 Workers Compensation Insurance $ 582,954
641-44-419 Long Term Disability $ 102,381
641-44-420 Compensated Absences $ 658,090
Total $ 10,039,462
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Budget at a Glance
2024 Proposed Budget
Total Revenues $ 4,159,392
Total Expenditures $ 10,039,462
Fund Balance $ (2,450,413)
General Fund Costs $ 3,429,657
% Funded by General Fund 34.2%
Total Staffing 17.9 FTE
Organization
Kristina Alfaro, Director of Administrative Services
As part of an expenditure reduction strategy, the vacant Administrative Assistant position is being removed from the budget.

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Performance Measures
Finance Division
Goal: Financial Stability - Provide a sustainable level of core services that are funded from ongoing and stable revenue sources.

Benefit: Citizens can enjoy high quality of services that meet community priorities.

Performance Measure
FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Ongoing
Target
General Fund fund balance as a % of
budgeted appropriations 103% 104% 96% 35%
Credit Rating AA+ AA+ AA+ AA+
Actual revenue vs. budget (% below
budget) 19% 24% 34% 10%
Actual expenditures (% below budget) 15% 9% 30% 5%
Funding allocated to high priority
services (Public Works, Community
Development, Law Enforcement)
53% 52% 66% 63%
Human Resources Division
Goal: To create a thriving organization with meaningful careers in public service.

Benefit: The agency supports a professional and engaged workforce offering diverse and quality community services.

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Performance Measure
FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Ongoing
Target
# of Worker’s Compensation Cases 10 11 3 0
Total recordable Injury Rate YTD N/A 4.3% 1.0% 0%
% absenteeism (% of total annual work
hours) 2% 2% 3% 2%
% turnover rate 5% 9% 5% 1%
% Employee participation in wellness
activities 43% 48% 37% 75%
Average # of applications received per
recruitment 70 49 38 50
Recruitment timeline - # days from
hiring request to offer letter 78 88 70 60
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Workload Indicators
Finance Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
# of vendor checks processed 4,457 4,993 2,509
# of payroll checks processed 7,816 8,119 4,936
# of business license applications 1,061 884 444
# of business license renewals 2,467 1,521 854
# of journal entries posted 3,915 3,635 1,772
# of purchase orders approved 534 563 315
# of receipts processed 10,367 9,353 4,460
Human Resources Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
# of regular recruitments 24 33 16
# of regular new hires 22 38 10
# of temporary new hires 18 77 13
# of personnel payroll changes 834 787 378
# of full-time employee exits processed 30 24 14
# of mandated training classes offered* 18 20 20
# of employees participating in the wellness
program 90 104 74
* some trainings mandated every other year, however not on the same annual schedule Proposed Budget
It is recommended that City Council approve a budget of $10,039,462 for the Administrative Services department.

This represents an increase of $2,998 (0.0%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.FY 2023-24 Proposed Budget Administrative Services 313 319
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Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget
Reduction Service Impact
Materials $186,223 $108,808 $77,415 Reduced conference attendance, office and general supplies,
recruitment advertisements,
printing, citywide coffee and tea
and reduced citywide employee
events.

Contract
Services
$4,152,414 $4,020,746 $131,668 Reduced citywide trainings, reduced executive recruitments and
reduced consultant costs.

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Proposed Expenditures by Division
Department Expenditure History
Revenues and Expenditures

65.0%

31.3%
Human Resources
Finance
Administrative Services
$7.36M
$7.86M
$10.0M $10.0M
2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget FY 2023-24 Proposed Budget Administrative Services 315
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 3,910,403 $ 4,484,822 $ 3,967,516 $ 4,159,392 Miscellaneous Revenue $ 8,775 $ 44,002 $ - $ -
Other Financing Sources $ 246,381 $ 356,830 $ 436,145 $ - Transfers In $ - $ 332,112 $ - $ -
Total Revenues $ 4,165,559 $ 5,217,766 $ 4,403,661 $ 4,159,392 Expenditures
Employee Compensation $ 2,229,343 $ 2,240,233 $ 2,688,101 $ 2,808,263 Employee Benefits $ 2,191,476 $ 2,401,776 $ 2,660,698 $ 2,750,489 Materials $ 83,977 $ 136,581 $ 191,213 $ 108,808
Contract Services $ 2,513,838 $ 2,740,443 $ 3,719,161 $ 4,020,746 Cost Allocation $ 341,705 $ 341,693 $ 349,530 $ 308,962 Special Projects $ - $ - $ 330,000 $ -
Contingencies $ - $ - $ 97,761 $ 42,194
Total Expenditures $ 7,360,339 $ 7,860,726 $ 10,036,464 $ 10,039,462 Fund Balance $ (1,678,654) $ (735,233) $ (1,332,250) $ (2,450,413) General Fund Costs $ 1,516,125 $ 1,907,727 $ 4,300,553 $ 3,429,657 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ACCOUNTANT II 1.00 2.00 2.00 2.00
ACCOUNT CLERK II 3.00 3.00 3.00 3.00
ACCOUNTING TECHNICIAN 1.00 1.00 1.00 1.00
ADMINISTRATIVE ASSISTANT 0.95 0.95 0.95 0
BUDGET MANAGER 0 0 1.00 1.00
DIRECTOR OF ADMIN SERVICES 1.00 1.00 1.00 1.00
FINANCE MANAGER 0.95 0.95 0.95 0.95
HUMAN RESOURCES ANALYST II 2.00 2.00 2.00 2.00
HUMAN RESOURCES MANAGER 1.00 1.00 1.00 1.00
HUMAN RESOURCES TECH 2.00 2.00 2.00 2.00
MANAGEMENT ANALYST 0 0 0 0.95
PURCHASING MANAGER 0 0 1.00 1.00
SENIOR ACCOUNTANT 1.00 1.00 1.00 1.00
SENIOR MANAGEMENT ANALYST 2.00 2.00 2.00 1.00
Total 15.90 16.90 18.90 17.90
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Administrative Services Administration
Budget Unit 100-40-400
General Fund - Administrative Services - Administrative Services Administration Budget at a Glance
2024 Proposed Budget
Total Revenues $ 154,333
Total Expenditures $ 369,022
Fund Balance $ -
General Fund Costs $ 214,689
% Funded by General Fund 58.2%
Total Staffing 1.4 FTE
Program Overview
The Administrative Services Administration program oversees and coordinates Human Resources/Risk Management, Finance, Purchasing, Budget, and Treasury. In Fall 2022, City Council adopted the City's Fraud, Waste, and Abuse (FWA) Program which is administered by the City's Internal Auditor. The Internal Auditor monitors the hotline, triages complaints received, recommends action to the appropriate City personnel, and conducts investigations, as appropriate. Costs associated with supporting the FWA hotline are expensed in this program. Additionally, staff support from this program is provided to the Fiscal Strategic and Audit CommiHees.

Service Objectives
Manage the City's investment portfolio to obtain safety of funds, liquidity, and a reasonable rate of return.

Perform special projects for the City Manager.

Manage contract for the City's Fraud, Waste, Abuse Program.

Provide staff support to Fiscal Strategic and Audit Committees.

Proposed Budget
It is recommended that City Council approve a budget of $369,022 for the Administrative Services Administration program. This represents a decrease of $532,858 (-59.1%) from the FY 2022-23 Adopted Budget.

The decrease is primarily due to the reduction of one Administrative Assistant position and the reallocation of the Director of Administrative Services position among the department's budgets. The work associated with the Administrative Assistant will be re-evaluated and then redistributed among existing staff.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget
Reduction Service Impact
Materials $32,241 $17,628 $14,613 Reduced conference attendance, trainings, meeting expenses, and
general and office supplies.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 185,799 $ 183,169 $ 156,003 $ 154,333 Miscellaneous Revenue $ (2,800) $ 36,300 $ - $ -
Total Revenues $ 182,999 $ 219,469 $ 156,003 $ 154,333
Expenditures
Employee Compensation $ 593,523 $ 562,571 $ 588,164 $ 240,749 Employee Benefits $ 249,510 $ 242,833 $ 282,451 $ 104,851 Materials $ 17,077 $ 47,865 $ 29,841 $ 17,628
Contract Services $ 8,323 $ - $ 661 $ 5,505
Contingencies $ - $ - $ 763 $ 289
Total Expenditures $ 868,433 $ 853,269 $ 901,880 $ 369,022 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 685,434 $ 633,800 $ 745,877 $ 214,689 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ADMINISTRATIVE ASSISTANT 0.95 0.95 0.95 0
DIRECTOR OF ADMIN SERVICES 0.80 0.80 0.80 0.20
MANAGEMENT ANALYST 0 0 0 0.20
SENIOR MANAGEMENT ANALYST 2.00 2.00 2.00 1.00
Total 3.75 3.75 3.75 1.40
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There is a reduction of .95 FTE of an Administrative Assistant position to meet position elimination targets as part of the City's budget-balancing strategies. In addition, the Director of Administrative Services has been reallocated among the department's budgets.

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Accounting
Budget Unit 100-41-405
General Fund - Finance - Accounting
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 2,120,939
Total Expenditures $ 1,823,581
Fund Balance $ -
General Fund Costs $ (297,358)
% Funded by General Fund -16.3%
Total Staffing 7.1 FTE
Program Overview
The Finance Division oversees all financial accounting and treasury functions for the City. Accurate and timely maintenance of all City financial records, including financial reporting, revenue collection, banking and investments, disbursement of all funds, and payroll processing are handled by the Finance Division. All required Federal, State and other regulatory reporting with respect to the City's financial condition are prepared in the Accounting program of Finance. In addition, Finance monitors the City's two investment policies, manages budget-to-actual activities for both operational and capital budgets, performs all financial analyses, conducts research, and prepares reports on all fiscal matters of the City for internal and external customers.

Service Objectives
Process all financial transactions of the City of Cupertino, including general ledger accounting, cash management and investment of City funds, payroll, accounts payable, revenue collections, banking, and miscellaneous billing.

Record all City financial transactions prudently and within all regulatory requirements.

Produce timely and accurate financial reports.

Maintain a high level of professionalism when fulfilling the City’s financial policies, processing its financial transactions, and representing the City to its residents.

Respond promptly to inquiries from the public and other City departments.

Proposed Budget
It is recommended that City Council approve a budget of $1,823,581 for the Accounting program. This represents an increase of $77,629 (4.4%) from the FY 2022-23 Adopted Budget.

The increase is primarily due to the reallocation of the Director of Administrative Services to this budget to beHer reflect actual time spent in this program.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget
Reduction Service Impact
Materials $25,942 $14,987 $10,955 Reduced conference
attendance, trainings and
printing costs.

Contracts
Services
$378,942 $310,620 $68,322 Reduced tax consultant
contracts.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 2,114,792 $ 2,179,273 $ 2,105,135 $ 2,120,939 Miscellaneous Revenue $ 11,553 $ 7,702 $ - $ -
Transfers In $ - $ 150,000 $ - $ -
Total Revenues $ 2,126,345 $ 2,336,975 $ 2,105,135 $ 2,120,939 Expenditures
Employee Compensation $ 858,215 $ 813,499 $ 875,847 $ 1,017,729 Employee Benefits $ 370,373 $ 371,524 $ 428,205 $ 476,175 Materials $ 8,487 $ 13,248 $ 24,009 $ 14,987
Contract Services $ 248,303 $ 337,405 $ 333,942 $ 310,620 Special Projects $ - $ - $ 75,000 $ -
Contingencies $ - $ - $ 8,949 $ 4,070
Total Expenditures $ 1,485,378 $ 1,535,676 $ 1,745,952 $ 1,823,581 Fund Balance $ - $ - $ - $ -
General Fund Costs $ (640,967) $ (801,299) $ (359,183) $ (297,358) Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ACCOUNTANT II 1.00 1.90 1.90 1.90
ACCOUNT CLERK II 2.00 2.00 2.00 2.00
ACCOUNTING TECHNICIAN 1.00 1.00 1.00 1.00
DIRECTOR OF ADMIN SERVICES 0 0 0 0.20
FINANCE MANAGER 0.95 0.95 0.95 0.95
SENIOR ACCOUNTANT 1.00 1.00 1.00 1.00
Total 5.95 6.85 6.85 7.05
A portion of the Director of Administrative Services has been allocated to this budget to beHer reflect actual time spent in this program.

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Business Licenses
Budget Unit 100-41-406
General Fund - Finance - Business Licenses
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 424,145
Fund Balance $ -
General Fund Costs $ 424,145
% Funded by General Fund 100.0%
Total Staffing 1.1 FTE
Program Overview
The Business Licenses program monitors business licensing activity for compliance with the City Municipal Code and applicable state law.

Service Objectives
Issue business licenses to entities conducting business within the city limits of Cupertino.

Collect appropriate business license fees.

Monitor compliance with the Business License Tax Code and provide useful information related to business activity to City departments.

Identify non-compliant business activity.

Proposed Budget
It is recommended that City Council approve a budget of $424,145 for the Business Licenses program. This represents a decrease of $49,300 (-10.4%) from the FY 2022-23 Adopted Budget.

There is an increase in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget
Reduction Service Impact
Contract
Services
$65,000 $39,000 $26,000 Reduced bank charges related to business licenses to reflect prior
year costs. Funding will be
evaluated as part of the fee study.

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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 97,527 $ 103,915 $ 101,611 $ 110,981 Employee Benefits $ 52,727 $ 57,777 $ 64,279 $ 65,164
Materials $ 83 $ 173 $ - $ -
Contract Services $ 61,787 $ 38,832 $ 65,000 $ 39,000
Cost Allocation $ 252,034 $ 239,885 $ 240,930 $ 208,512 Contingencies $ - $ - $ 1,625 $ 488
Total Expenditures $ 464,158 $ 440,582 $ 473,445 $ 424,145 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 464,157 $ 440,581 $ 473,445 $ 424,145 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget ACCOUNTANT II 0 0.10 0.10 0.10
ACCOUNT CLERK II 1.00 1.00 1.00 1.00
Total 1.00 1.10 1.10 1.10
There are no changes to the current level of staffing.

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Purchasing
Budget Unit 100-41-425
General Fund - Finance - Purchasing
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 370,890
Fund Balance $ -
General Fund Costs $ 370,890
% Funded by General Fund 100.0%
Total Staffing 1.2 FTE
Program Overview
The Purchasing program provides centralized oversight and management over the City's procurement of goods and services. Centralized procurement assures fair and open acquisition processes that seek to obtain maximum value for each dollar spent. Major activities include soliciting formal competitive bids and proposals, obtaining quotes, and participating in cooperative procurements with other governmental agencies. In addition, the Purchasing program assists City employees in complying with all legal and ethical requirements.

Service Objectives
Oversee and manage the procurement of goods and services by the City while ensuring compliance with applicable federal, state, and local laws, ordinances, rules, and regulations.

Develop and implement strategic procurement planning, procurement policies and procedures, quality control, procurement training, electronic procurement systems, and procurement card administration.

Provide professional support and contractual advice to all stakeholders involving contractual services, consultants, equipment, supplies, construction, capital improvements, and other applicable activities.

Keep informed of current developments in the field of purchasing, prices, market conditions, and new products.

Proposed Budget
It is recommended that City Council approve a budget of $370,890 for the Purchasing program. This represents an increase of $1,650 (0.4%) from the FY 2022-23 Adopted Budget.

There is an increase in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget
Reduction Service Impact
Materials $3,401 $1,752 $1,649 Reduced conferences, trainings, and memberships.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ - $ - $ 180,955 $ 255,899
Employee Benefits $ - $ - $ 84,996 $ 113,217
Materials $ - $ - $ 3,209 $ 1,752
Special Projects $ - $ - $ 100,000 $ -
Contingencies $ - $ - $ 80 $ 22
Total Expenditures $ - $ - $ 369,240 $ 370,890
Fund Balance $ - $ - $ - $ -
General Fund Costs $ - $ - $ 369,240 $ 370,890
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget DIRECTOR OF ADMIN SERVICES 0 0 0 0.20
PURCHASING MANAGER 0 0 1.00 1.00
Total 0 0 1.00 1.20
A portion of the Director of Administrative Services has been allocated to this budget to beHer reflect actual time spent in this program.

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Budget
Budget Unit 100-41-426
General Fund - Finance - Budget
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 524,087
Fund Balance $ -
General Fund Costs $ 524,087
% Funded by General Fund 100.0%
Total Staffing 2.0 FTE
Program Overview
The Budget program develops, delivers, and manages the annual operating budget. The Budget program also develops and updates the twenty-year long-term financial forecast and revenue and expenditure projections.

Additionally, the Budget program provides financial planning and fiscal analysis on City issues and complex business decisions.

Service Objectives
Develops the annual operating budget.

Coordinates the preparation and publication of the operating budget document.

Communicates the budget through the City's interactive financial transparency portal.

Engages residents in the budgeting process.

Develops the Twenty-Year General Fund Financial Forecast.

Prepares and updates revenue and expenditure forecasts.

Analyze budget performance during the year and prepare Quarterly Financial Reports.

Provides departments with timely and accurate financial reports to assist them in their daily decision- making.

Assists departments with any necessary budget amendments during the year.

Advises the City in the areas of short and long-term financial planning and fiscal analysis.

Advises the City in developing and implementing sound financial policies.

Proposed Budget
It is recommended that City Council approve a budget of $524,087 for the Budget program. This represents an increase of $183,487 (53.9%) from the FY 2022-23 Adopted Budget.

The increase is primarily due to the reallocation of the Director of Administrative Services to this budget to beHer reflect actual time spent in this program.

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The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget
Reduction Service Impact
Materials $24,318 $14,249 $10,069 Reduced printing costs for the Budget Book and Budget at a
Glance.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ - $ - $ 180,955 $ 352,271
Employee Benefits $ - $ - $ 84,996 $ 154,395
Materials $ - $ - $ 21,091 $ 14,249
Contract Services $ - $ - $ 2,957 $ 2,957
Special Projects $ - $ - $ 50,000 $ -
Contingencies $ - $ - $ 601 $ 215
Total Expenditures $ - $ - $ 340,600 $ 524,087
Fund Balance $ - $ - $ - $ -
General Fund Costs $ - $ - $ 340,600 $ 524,087
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget BUDGET MANAGER 0 0 1.00 1.00
DIRECTOR OF ADMIN SERVICES 0 0 0 0.20
MANAGEMENT ANALYST 0 0 0 0.75
Total 0 0 1.00 1.95
A portion of the Director of Administrative Services has been allocated to this budget to beHer reflect actual time spent in this program.

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Human Resources
Budget Unit 100-44-412
General Fund - Human Resources - Human Resources
Budget at a Glance
2024 Proposed Budget
Total Revenues $ 1,884,120
Total Expenditures $ 1,399,766
Fund Balance $ -
General Fund Costs $ (484,354)
% Funded by General Fund -34.6%
Total Staffing 4.9 FTE
Program Overview
The Human Resources Division is responsible for the administration of human resources programs, employee benefits, and labor relation programs including personnel selection, classification, compensation, equal employment opportunity, labor negotiations, employee relations, employee training and development, benefits, HRIS and retirement. In addition, Human Resources administers risk management, safety and wellness programs, and a self-insured workers’ compensation program. Funding for retiree medical insurance is also covered in the Human Resources budget.

Service Objectives
Provide a working environment where respect for the individual is encouraged and safeguarded.

Provide timely personnel services to departments and divisions in a fair, objective, and equitable manner.

Enter into agreements with employee groups concerning terms and conditions of employment.

Provide an employee development program addressing immediate and long-term training needs.

Provide departments a listing of qualified persons for employment consideration within sixty days of an authorized vacant position.

Ensure equal employment opportunities.

Administer classification plan.

Administer employee benefits.

Provide personnel services consistent with the operational needs of the user department.

Proposed Budget
It is recommended that City Council approve a budget of $1,399,766 for the Human Resources program. This represents a decrease of $120,775 (-7.9%) from the FY 2022-23 Adopted Budget.

There is an increase in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

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The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget
Reduction Service Impact
Materials $100,321 $60,192 $40,129 Reduced citywide coffee and tea, recruitment
advertising, and
conference attendance.

Combines years of service
BBQ and Holiday Party
into one event.

Contract Services $272,493 $217,944 $54,499 Reduced citywide training opportunities and reduced
base executive recruitment
from two annually to one.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 1,609,812 $ 2,122,380 $ 1,706,378 $ 1,884,120 Miscellaneous Revenue $ 22 $ - $ - $ -
Transfers In $ - $ 182,112 $ - $ -
Total Revenues $ 1,609,834 $ 2,304,492 $ 1,706,378 $ 1,884,120 Expenditures
Employee Compensation $ 635,667 $ 709,499 $ 711,571 $ 777,118 Employee Benefits $ 281,792 $ 370,729 $ 320,794 $ 340,985 Materials $ 58,330 $ 75,295 $ 113,063 $ 60,192
Contract Services $ 568,564 $ 360,707 $ 260,767 $ 217,994 Special Projects $ - $ - $ 105,000 $ -
Contingencies $ - $ - $ 9,346 $ 3,477
Total Expenditures $ 1,544,353 $ 1,516,230 $ 1,520,541 $ 1,399,766 Fund Balance $ - $ - $ - $ -
General Fund Costs $ (65,481) $ (788,262) $ (185,837) $ (484,354) Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget DIRECTOR OF ADMIN SERVICES 0.20 0.20 0.20 0.20
HUMAN RESOURCES ANALYST II 1.70 1.70 1.70 1.70
HUMAN RESOURCES MANAGER 1.00 1.00 1.00 1.00
HUMAN RESOURCES TECH 1.95 1.95 1.95 1.95
Total 4.85 4.85 4.85 4.85
There are no changes to the current level of staffing.FY 2023-24 Proposed Budget Administrative Services 333 339
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Retiree Benefits
Budget Unit 642-44-414
Retiree Medical - Human Resources - Retiree Benefits
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 1,486,988
Fund Balance $ (1,486,988)
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing FTE
Program Overview
The Retiree Benefits program administers the City’s Other Post-Employment Benefits (OPEB).

Service Objectives
Provide investment oversight and appropriate funding for the City’s retiree medical liability. The City established a trust account with Public Agency Retirement Services (PARS) that will fund the future liability. Annual contributions from the City are deposited into the trust and invested in a portfolio of equity, bond, and money market funds.

Proposed Budget
It is recommended that City Council approve a budget of $1,486,988 for the Retiree Benefits program. This represents an increase of $98,712 (7.1%) from the FY 2022-23 Adopted Budget.

The increase is primarily due to increased costs based on the actuarial valuation for this benefit. Cost related to retiree benefits also known as Other Post Employment Benefits (OPEB) are being funded by the 115 OPEB Trust instead of a transfer in from the General fund as had been done prior years. This funding change began in Fiscal Year 2022-23.

The budget for this program is exempt from reductions as it provides required services that cannot be reduced.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Benefits $ 1,220,074 $ 1,342,158 $ 1,373,494 $ 1,473,000 Cost Allocation $ 10,982 $ 14,881 $ 14,782 $ 13,988
Total Expenditures $ 1,231,056 $ 1,357,039 $ 1,388,276 $ 1,486,988 Fund Balance $ (1,185,056) $ (135,835) $ (1,388,276) $ (1,486,988) General Fund Costs $ 46,000 $ 1,221,204 $ - $ -
Staffing
There is no staffing associated with this program.

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Insurance Administration
Budget Unit 100-44-417
General Fund - Human Resources - Insurance Administration Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 2,297,558
Fund Balance $ -
General Fund Costs $ 2,297,558
% Funded by General Fund 100.0%
Total Staffing 0.2 FTE
Program Overview
The Insurance Administration General Liability and Property programs and Employment Practices Law insurance.

Service Objectives
Provide the City with General Liability and Property Insurance Provide the City with Employment Practices Law Insurance Proposed Budget
It is recommended that City Council approve a budget of $2,297,558 for the Insurance Administration program.

This represents an increase of $263,147 (12.9%) from the FY 2022-23 Adopted Budget.

The increase is primarily driven by increases in premiums and claim costs for general liability and property insurance. Providing general liability and property insurance is required and no reductions can be made in this budget.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 16,053 $ 19,680 $ 19,953 $ 21,793 Employee Benefits $ 6,943 $ 8,689 $ 9,000 $ 9,524
Contract Services $ 764,636 $ 1,101,955 $ 1,903,469 $ 2,188,193 Cost Allocation $ 46,350 $ 49,808 $ 54,402 $ 50,696
Contingencies $ - $ - $ 47,587 $ 27,352
Total Expenditures $ 833,982 $ 1,180,132 $ 2,034,411 $ 2,297,558 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 833,982 $ 1,180,133 $ 2,034,411 $ 2,297,558 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget HUMAN RESOURCES ANALYST II 0.10 0.10 0.10 0.10
HUMAN RESOURCES TECH 0.05 0.05 0.05 0.05
Total 0.15 0.15 0.15 0.15
There are no changes to the current level of staffing.

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Workers Compensation Insurance
Budget Unit 620-44-418
Workers' Compensation - Human Resources - Workers Compensation Insurance Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 582,954
Fund Balance $ (582,954)
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing 0.2 FTE
Program Overview
This program provides oversight of the Workers’ Compensation program, including claims, proactive Risk Management, return to work accommodations and excess workers compensation insurance. Additionally, this program is responsible for the administration of the City's self-insured unemployment insurance benefit account.

Service Objectives
Manage employee industrial injury and/or illness and provide proactive risk management programs to ensure employee safety in the workplace.

Monitor costs associated with claims.

Analyze and implement proactive measures to curtail costs.

Implement a return to work policy.

Manage and administer the City's unemployment insurance benefit account with the State of CA.

Proposed Budget
It is recommended that City Council approve a budget of $582,954 for the Workers Compensation Insurance program. This represents an increase of $66,008 (12.8%) from the FY 2022-23 Adopted Budget.

The increase is primarily driven by increased workers compensation and excess workers compensation premiums and claims costs. Providing workers' compensation benefits is required and no reductions can be made in this budget.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Other Financing Sources $ 246,381 $ 356,830 $ 436,145 $ - Total Revenues $ 246,381 $ 356,830 $ 436,145 $ -
Expenditures
Employee Compensation $ 28,358 $ 31,069 $ 29,045 $ 31,723 Employee Benefits $ 10,057 $ 8,066 $ 12,483 $ 13,178
Contract Services $ 35,105 $ 476,344 $ 436,145 $ 502,477 Cost Allocation $ 24,572 $ 28,167 $ 28,369 $ 29,295
Contingencies $ - $ - $ 10,904 $ 6,281
Total Expenditures $ 98,092 $ 543,646 $ 516,946 $ 582,954 Fund Balance $ 148,289 $ (186,816) $ (80,801) $ (582,954) General Fund Costs $ - $ - $ - $ -
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget HUMAN RESOURCES ANALYST II 0.20 0.20 0.20 0.20
Total 0.20 0.20 0.20 0.20
There are no changes to the current level of staffing.

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Long Term Disability
Budget Unit 641-44-419
Compensated Absence/LTD - Human Resources - Long Term Disability Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 102,381
Fund Balance $ (102,381)
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing FTE
Program Overview
This program oversees claims and premiums associated with Long Term Disability.

Service Objectives
Obtain and manage insurance policies
Negotiate rates
Coordinate claims
Proposed Budget
It is recommended that City Council approve a budget of $102,381 for the Long Term Disability program. This represents an increase of $3,858 (3.9%) from the FY 2022-23 Adopted Budget.

This budget in relatively unchanged from the prior year. Providing long-term disability benefits is required and no reductions can be made in this budget.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Contract Services $ 121,910 $ 92,612 $ 93,420 $ 100,000 Cost Allocation $ 2,712 $ 3,362 $ 2,767 $ 2,381
Contingencies $ - $ - $ 2,336 $ -
Total Expenditures $ 124,622 $ 95,974 $ 98,523 $ 102,381 Fund Balance $ (124,622) $ (95,974) $ (98,523) $ (102,381) General Fund Costs $ - $ - $ - $ -
Staffing
There is no staffing associated with this program.

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Compensated Absences
Budget Unit 641-44-420
Compensated Absence/LTD - Human Resources - Compensated Absences Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 658,090
Fund Balance $ (278,090)
General Fund Costs $ 380,000
% Funded by General Fund 57.7%
Total Staffing FTE
Program Overview
This program provides for payment of liabilities associated with employees retiring or leaving service.

Service Objectives
Properly account and disburse benefits as set forth in the employee contracts.

Proposed Budget
It is recommended that City Council approve a budget of $658,090 for the Compensated Absences program. This represents an increase of $11,440 (1.8%) from the FY 2022-23 Adopted Budget.

This budget is relatively unchanged from last year. The Compensated Absences program is responsible for paying out earned benefits to employees and cannot be reduced.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Contract Services $ 705,210 $ 332,588 $ 622,800 $ 654,000 Cost Allocation $ 5,055 $ 5,590 $ 8,280 $ 4,090
Contingencies $ - $ - $ 15,570 $ -
Total Expenditures $ 710,265 $ 338,178 $ 646,650 $ 658,090 Fund Balance $ (517,265) $ (316,608) $ 235,350 $ (278,090) General Fund Costs $ 193,000 $ 21,570 $ 882,000 $ 380,000 Staffing
There is no staffing associated with this program.

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Parks and Recreation
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Department Overview
Budget Units
Budget Unit Program 2024 Proposed Budget
Parks and Recreation $ 1,692,042
100-60-601 Recreation Administration $ 1,362,344
100-60-636 Library Services $ 329,698
Business and Community Services $ 1,351,677
100-61-602 Administration $ 587,782
100-61-605 Cultural Events $ 373,395
100-61-630 Facilities $ 390,500
Recreation and Education $ 3,566,783
100-62-608 Administration $ 685,123
580-62-613 Youth Teen Recreation $ 1,704,199
100-62-623 Senior Center $ 813,480
100-62-639 Teen Programs $ 279,358
100-62-640 Neighborhood Events $ 84,623
Sports, Safety and Outdoor Recreation $ 5,617,740
100-63-612 Park Facilities $ 1,269,657
100-63-615 Administration $ -
560-63-616 Blackberry Farm Golf Course $ 418,040
580-63-620 Outdoor Recreation $ 1,088,365
570-63-621 Sports Center Operations $ 2,841,678
Total $ 12,228,242
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Budget at a Glance
2024 Proposed Budget
Total Revenues $ 5,718,574
Total Expenditures $ 12,228,242
Fund Balance $ (1,008,457)
General Fund Costs $ 5,501,211
% Funded by General Fund 45.0%
Total Staffing 27.6 FTE
Organization
Rachelle Sander, Director of Parks and Recreation
As part of an expenditure reduction strategy, the following vacant positions are being removed from the budget:

Recreation Manager
Community Outreach Specialist
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Three positions are being reclassified based on the current duties assigned to them:

Two Recreation Supervisors to Recreation Managers
Management Analyst to Senior Management Analyst
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Performance Measures
Goal: Create a positive, healthy and connected community.

Benefit: Cupertino has an exceptional system of parks and services that align with community values.

Performance Measure
FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Ongoing
Target
% of Parks and Recreation Department
customers surveyed who rate services
as good or excellent
94% 95% 97% 85%
% of programs maintaining minimum
registration 46% 73% 80% 80%
% Department's total cost recovery for
all (direct and indirect) costs 39% 53% 60% 40%
% change in participants* -39% 119% 37% +1%
# of new programs or events offered 37 9 2 50
*Increase due to more programs offered and partial reopening of services.

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Workload Indicators
Business and Community Services Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Number of reservations at Quinlan Center 8 260 205
Number of festival applications received 12 9 10
Recreation and Education Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Number of registrations 1,194 2,736 2,507
Number of survey respondents 171 85 78
Number of Senior Center classes offered 100 183 103
Number of Senior Center trips offered 0 3 3
Sports, Safety, and Outdoor Recreation Division
Workload Indicator FY 2021
July-June
FY 2022
July-June
FY 2023
July-Dec
Number of programs offered 888 1445 692
Number of picnic reservations at BBF 9 123 94
Rounds of golf at BBF Golf Course 43,650 45,367 18,603
Sports Center Memberships 1,655 1,186 1,342
Proposed Budget
It is recommended that City Council approve a budget of $12,228,242 for the Parks and Recreation department.

This represents a decrease of $1,155,198 (-8.6%) from the FY 2022-23 Adopted Budget.

As part of an expenditure reduction strategy, the budget has been reduced as follows:

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Service FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Part-Time
Staffing -
Department
Wide
$1,606,998 $1,381,602 $225,396
Reduced PT Staff
budgets to minimum
levels necessary to
operate currently open
Recreational facilities
and ongoing programs.

Materials $779,829 $457,723 $322,106
Simplification or
streamlining of current
programs and events
and fewer marketing
efforts and printed
materials thereof.

Removed budgets for
nonessential trainings
and conferences in the
Department and
additional savings from
reduced expenditures
for meetings and events
for staff.

Contract
Services $4,532,489 $3,953,917 $578,572
Reduced expansion of
current or new
offerings for contracted
programs, camps, and
classes. Reduction of
free events offered and
removed budget to
cover fees for festivals.

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Proposed Expenditures by Division
Department Expenditure History
Revenues and Expenditures

45.9%

29.2%

13.8%

11.1%
Sports, Safety and Outdoor Recreation
Recreation and Education
Parks and Recreation
Business and Community Services
$8.28M
$9.76M
$13.4M
$12.2M
2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget FY 2023-24 Proposed Budget Parks and Recreation 353
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Use of Money and Property $ 432,447 $ 758,156 $ 950,157 $ 821,007 Charges for Services $ 2,708,714 $ 4,405,909 $ 4,260,210 $ 4,867,067 Miscellaneous Revenue $ 1,250 $ 2,521 $ 31,000 $ 30,500 Transfers In $ - $ 452,304 $ - $ -
Total Revenues $ 3,142,411 $ 5,618,890 $ 5,241,367 $ 5,718,574 Expenditures
Employee Compensation $ 2,856,246 $ 2,818,650 $ 4,654,234 $ 4,448,849 Employee Benefits $ 1,233,077 $ 1,043,311 $ 1,652,215 $ 1,483,526 Materials $ 232,871 $ 343,553 $ 712,625 $ 457,723
Contract Services $ 1,845,424 $ 3,409,853 $ 4,504,330 $ 3,953,917 Cost Allocation $ 1,986,514 $ 2,018,870 $ 1,559,137 $ 1,681,979 Special Projects $ 9,432 $ 2,947 $ 65,000 $ 25,000
Other Financing Uses $ 116,174 $ 124,102 $ 116,174 $ 124,102 Contingencies $ - $ - $ 119,725 $ 53,146
Total Expenditures $ 8,279,738 $ 9,761,286 $ 13,383,440 $ 12,228,242 Fund Balance $ 1,791,839 $ 548,188 $ (971,602) $ (1,008,457) General Fund Costs $ 6,929,168 $ 4,690,584 $ 7,170,471 $ 5,501,211 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget
ADMINISTRATIVE ASSISTANT 0.90 0.90 0.90 0.90
ASST DIR RECREATION COMM SVCS 0.95 0.95 0.85 0

COMMUNITY OUTREACH

SPECIALIST

0.70 0.70 2.00 1.00
DIRECTOR OF PARKS REC 0.95 0.95 0.95 1.00
FACILITY ATTENDANT 3.00 3.00 3.00 3.00
MANAGEMENT ANALYST 1.00 1.00 2.00 1.00
OFFICE ASSISTANT 2.00 2.00 2.00 2.00
RECREATION COORDINATOR 11.43 11.43 9.88 9.88
RECREATION MANAGER 0 0 1.90 3.85
RECREATION SUPERVISOR 3.95 3.95 2.00 0
SENIOR MANAGEMENT ANALYST 0 0 0 1.00
SR OFFICE ASSISTANT 3.00 3.00 4.00 4.00
Total 27.88 27.88 29.48 27.63
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Recreation Administration
Budget Unit 100-60-601
General Fund - Parks and Recreation - Recreation Administration Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 1,362,344
Fund Balance $ -
General Fund Costs $ 1,362,344
% Funded by General Fund 100.0%
Total Staffing 4.9 FTE
Program Overview
The Recreation Administration program provides overall department administration, project management, community outreach, support to the Parks and Recreation and Library Commissions, and administration of recreation management software.

Service Objectives
Provide overall department administration, budget control, contract support, policy development, administration of recreation management software, and employee development and evaluation.

Support the Planning and Public Works Departments in the development, renovation, and improvements of parks and open spaces.

Implementation of recommendations from the Parks and Recreation System Master Plan.

Monitor and facilitate partnerships in regards to Library and other community organizations.

Outreach to the community in conjunction with programs and the Parks and Recreation System Master Plan.

Promote partnerships with Cupertino Union School District, Fremont Union High School District, and De Anza College.

Proposed Budget
It is recommended that City Council approve a budget of $1,362,344 for the Recreation Administration program.

This represents a decrease of $407,401 (-23.0%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $237,441 $149,173 $88,268
Reduced funds for
conferences and travel,
materials and supplies,
meeting expenses,
marketing efforts, and
printing services for
Summer Camp Guide and
Recreation Brochure.

Contract
Services $84,157 $72,988 $11,169
Cancelled Commissioner's
Dinner event and removed
budget for ergonomic
evaluations for staff.

Special Projects
The following table shows the special projects for the fiscal year.

Special
Projects Appropriation Revenue Funding
Source Description Strategic
Goal
Senior
Services and
Youth
Engagement
$20,000 $0 General Fund
City Work Program -Connect seniors with
youth and their families with inclusive
activities.

Public
Engagement
and
Transparency
Dogs Off-
Leash Area
(DOLA)
Programs
$5,000 $0 General Fund
City Work Program -Transition successful
trial DOLA programs to permanent
programs with a staff level permitting
process house in Parks and Rec.

Quality of
Life
Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Transfers In $ - $ 49,000 $ - $ -
Total Revenues $ - $ 49,000 $ - $ -
Expenditures
Employee Compensation $ 559,798 $ 648,472 $ 972,240 $ 793,876 Employee Benefits $ 234,509 $ 237,781 $ 440,265 $ 318,530 Materials $ 38,274 $ 85,470 $ 209,269 $ 149,173
Contract Services $ 40,307 $ 46,505 $ 75,843 $ 72,988
Special Projects $ - $ 2,947 $ 65,000 $ 25,000
Contingencies $ - $ - $ 7,128 $ 2,777
Total Expenditures $ 872,888 $ 1,021,175 $ 1,769,745 $ 1,362,344 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 872,887 $ 972,176 $ 1,769,745 $ 1,362,344 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021
Actual
2022
Actual
2023 Adopted
Budget
2024 Proposed
Budget
ADMINISTRATIVE ASSISTANT 0.90 0.90 0.90 0.90
ASST DIR RECREATION COMM SVCS 0.95 0.95 0.85 0

COMMUNITY OUTREACH

SPECIALIST

0.70 0.70 2.00 1.00
DIRECTOR OF PARKS REC 0.95 0.95 0.95 1.00
MANAGEMENT ANALYST 1.00 1.00 2.00 1.00
SENIOR MANAGEMENT ANALYST 0 0 0 1.00
Total 4.50 4.50 6.70 4.90
Staffing has decreased due to the reclassification and reallocation of an Assistant Director position to a Recreation Manager position. A Management Analyst position was reclassified as a Senior Management Analyst based on the duties and tasks assigned to that position.

As part of an expenditure reduction strategy, the following vacant positions are being removed from the budget:

Recreation Manager
Community Outreach Specialist
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Library Services
Budget Unit 100-60-636
General Fund - Parks and Recreation - Library Services
Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 329,698
Fund Balance $ -
General Fund Costs $ 329,698
% Funded by General Fund 100.0%
Total Staffing FTE
Program Overview
This budget augments the existing library service currently provided to our community through the Santa Clara County (SCC) Library Joint Powers Authority.

Service Objectives
Provide increased library service for our constituents through support of 12 additional operational hours per week.

Explore partnerships with the SCC Library for recreation and community programs.

Proposed Budget
It is recommended that City Council approve a budget of $329,698 for the Library Services program. This represents a decrease of $270,568 (-45.1%) from the FY 2022-23 Adopted Budget.

The cost for additional operational hours is confirmed from the Santa Clara County Library District and estimated lower due to reimbursements received from the State.

There were no actual expenses in FY 2020-21. The budget was intended to fund the GoGoBiblio Program, which was a two-year commitment approved in 2019. However, the program didn't run due to the pandemic and the Santa Clara County Library District didn't ask for the funds that fiscal year.

There were also no actual expenses in FY 2021-22. The pandemic caused a delay in the completion of the Cupertino Library Expansion project, which delayed the resumption of full operating hours more than halfway through the fiscal year. For this reason, and additional funding available elsewhere, the Santa Clara County Library District also didn't ask for the funds that fiscal year.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Transfers In $ - $ 403,304 $ - $ -
Total Revenues $ - $ 403,304 $ - $ -
Expenditures
Contract Services $ - $ - $ 419,452 $ 160,000
Cost Allocation $ 198,415 $ 233,790 $ 180,814 $ 169,698 Total Expenditures $ 198,415 $ 233,790 $ 600,266 $ 329,698 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 198,415 $ (169,514) $ 600,266 $ 329,698 Staffing
There is no staffing associated with this program.

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Administration
Budget Unit 100-61-602
General Fund - Business and Community Services - Administration Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ 587,782
Fund Balance $ -
General Fund Costs $ 587,782
% Funded by General Fund 100.0%
Total Staffing 3.0 FTE
Program Overview
The Business Division supports department programs and services through the provision of customer service and analytical support, development, and administration of policies. The division is also responsible for the department's front line communication with the public for classes, programs, and facility information. This division also manages Quinlan Community Center (QCC) and Community Hall, as well as facility and park picnic rentals.

Service Objectives
Provide first-rate customer service through the implementation of consistent policies, procedures, and performance standards.

Administer recreation soOware system for customer registration, memberships, point-of-sale, and facility rentals.

Collect and analyze data from customer satisfaction surveys and program and revenue reports to improve programs and services.

Ensure the delivery of clear and up to date communication on current programs and events to community members.

Issue parks and facilities permits for individual customers as well as community festivals and events that promote our diverse culture and connected community.

Maintain a positive relationship with neighborhoods adjacent to our facilities and parks.

Proposed Budget
It is recommended that City Council approve a budget of $587,782 for the Administration program. This represents a decrease of $54,286 (-8.5%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $2,746 $1,151 $1,595
Reduced funding for staff
memberships, training, and
general supplies.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 308,484 $ 239,347 $ 280,090 $ 259,139 Employee Benefits $ 173,798 $ 150,189 $ 172,255 $ 142,933 Materials $ 476 $ 839 $ 2,440 $ 1,151
Cost Allocation $ 254,093 $ 227,216 $ 187,222 $ 184,545 Contingencies $ - $ - $ 61 $ 14
Total Expenditures $ 736,851 $ 617,591 $ 642,068 $ 587,782 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 736,851 $ 617,592 $ 642,068 $ 587,782 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget OFFICE ASSISTANT 1.00 1.00 1.00 1.00
RECREATION COORDINATOR 0.35 0.35 0.35 0
RECREATION SUPERVISOR 0.40 0.20 0 0
SR OFFICE ASSISTANT 2.00 2.00 2.00 2.00
Total 3.75 3.55 3.35 3.00
Staff time has been reallocated to better reflect actual time spent in this program.

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Cultural Events
Budget Unit 100-61-605
General Fund - Business and Community Services - Cultural Events Budget at a Glance
2024 Proposed Budget
Total Revenues $ 30,500
Total Expenditures $ 373,395
Fund Balance $ -
General Fund Costs $ 342,895
% Funded by General Fund 91.8%
Total Staffing 1.0 FTE
Program Overview
The Business and Community Service Division's events program produces the City's special events including 4th of July festivities and Big Bunny 5K, and those hosted at Memorial Park and Quinlan Community Center including the Summer Concert Series, Movies in the Park, Shakespeare in the Park, and Tree Lighting. This staff also serves as liaison and issues permits for community festivals at Memorial Park including the Cherry Blossom Festival, Rotary Fall Festival, Veteran's Day Memorial Ceremony, Diwali Festival, Bhubaneswar Sister City's India Heritage Fair, Dilli Haat, Holi, Relay for Life, Egg Hunt, and more.

Service Objectives
Provide a summer concert series at Memorial Park.

Produce a summer movie series at Memorial Park.

Partner with the San Francisco Shakespeare Company to produce Free Shakespeare in the Park in Cupertino.

Organize and facilitate the 4th of July Independence Day celebration and fireworks show.

Organize and facilitate the Big Bunny 5K fun run.

Bring the community together with the annual Tree Lighting celebration.

Serve as liaison and issue special event permits to nonprofit organization event producers to ensure successful community and cultural festivals in Memorial Park and Civic Center Plaza.

Proposed Budget
It is recommended that City Council approve a budget of $373,395 for the Cultural Events program. This represents a decrease of $119,748 (-24.3%) from the FY 2022-23 Adopted Budget.

There is an increase due to increases in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $38,222 $17,763 $20,459
Reduced funding for 4th of
July, Big Bunny 5K, and Tree
Lighting events.

Contract
Services $229,856 $87,456 $142,400
Removed contract services
funds for 4th of July evening
fireworks, Shakespeare in the
Park, Movies in the Park, and
City paid expenses to cover
Sheriff's costs for festivals.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Miscellaneous Revenue $ - $ 1,221 $ 31,000 $ 30,500
Total Revenues $ - $ 1,221 $ 31,000 $ 30,500
Expenditures
Employee Compensation $ 47,926 $ 60,544 $ 130,441 $ 135,799 Employee Benefits $ 28,554 $ 31,004 $ 47,977 $ 49,092
Materials $ 17,436 $ 11,501 $ 36,058 $ 17,763
Contract Services $ 8,265 $ 147,282 $ 217,784 $ 87,456
Cost Allocation $ 58,947 $ 52,995 $ 54,537 $ 81,970
Contingencies $ - $ - $ 6,346 $ 1,315
Total Expenditures $ 161,128 $ 303,326 $ 493,143 $ 373,395 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 161,129 $ 302,105 $ 462,143 $ 342,895 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget RECREATION COORDINATOR 0.50 0.50 0.65 0.75
RECREATION MANAGER 0 0 0.25 0.25
Total 0.50 0.50 0.90 1.00
Staff time is being reallocated to better reflect actual time spent in this program.

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Facilities
Budget Unit 100-61-630
General Fund - Business and Community Services - Facilities Budget at a Glance
2024 Proposed Budget
Total Revenues $ 190,992
Total Expenditures $ 390,500
Fund Balance $ -
General Fund Costs $ 199,508
% Funded by General Fund 51.1%
Total Staffing 2.3 FTE
Program Overview
Community Hall provides space for City Council meetings and various Commission meetings, as well as facility rental space available for a variety of activities including business meetings, community events, and Cupertino Library programs. The Quinlan Community Center houses the administrative office of the Parks and Recreation Department and serves as facility space for rentals and a variety of recreational, social, and community activities.

The Creekside Park building provides community members with facility space which can be used for a variety of activities.

Service Objectives
Quinlan Community Center
Provide a rental facility for community meetings, business functions, social events, and other similar activities.

Offer in-person and online registration for recreation programs.

Schedule facility space for contractual and staff-run classes and camps.

House the Cupertino Historical Society.

Serve as an Emergency Operations Shelter in case of disasters.

Community Hall
Provide a rental facility for community meetings, business functions, social events, and other similar activities.

Provide a facility for City Channel programming, and City Council, Planning Commission, Parks and Recreation Commission and other City meetings.

Creekside Park Building:

Provide a park or picnic facility for nonprofit board meetings, birthday parties, school group picnics, and other similar activities.

Schedule facility space for contractual and staff-run classes and camps.

Provide space for a year-round farmers' market.

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Proposed Budget
It is recommended that City Council approve a budget of $390,500 for the Facilities program. This represents a decrease of $16,506 (-4.1%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $30,092 $19,585 $10,507
Reduced funding for materials,
supplies, and meeting
expenses. Reduced summer
staff event for part-time staff.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Use of Money and Property $ 12,061 $ 149,113 $ 145,000 $ 151,500 Charges for Services $ 37,055 $ 54,060 $ 58,660 $ 39,492 Total Revenues $ 49,116 $ 203,173 $ 203,660 $ 190,992
Expenditures
Employee Compensation $ 185,667 $ 179,174 $ 263,790 $ 263,714 Employee Benefits $ 90,201 $ 78,350 $ 103,297 $ 97,525
Materials $ 9,722 $ 6,303 $ 29,105 $ 19,585
Contract Services $ 210 $ 3,437 $ 9,840 $ 9,315
Contingencies $ - $ - $ 974 $ 361
Total Expenditures $ 285,800 $ 267,264 $ 407,006 $ 390,500 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 236,685 $ 64,089 $ 203,346 $ 199,508 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget FACILITY ATTENDANT 2.00 2.00 2.00 2.00
RECREATION MANAGER 0 0 0.25 0.25
RECREATION SUPERVISOR 0.50 0.20 0 0
Total 2.50 2.20 2.25 2.25
There are no changes to the current level of staffing.

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Administration
Budget Unit 100-62-608
General Fund - Recreation and Education - Administration Budget at a Glance
2024 Proposed Budget
Total Revenues $ 28,000
Total Expenditures $ 685,123
Fund Balance $ -
General Fund Costs $ 657,123
% Funded by General Fund 95.9%
Total Staffing 3.0 FTE
Program Overview
This program includes administrative support of senior programs offered at the Senior Center. Administrative duties support the facility and senior programs that focus on enhancing a healthy lifestyle through quality education, recreation, travel, socials, community resources, volunteer opportunities, and facility rentals.

Service Objectives
Provide management and supervision of all programs, activities, personnel, and facilities within the senior services division.

Establish program goals and priorities.

Ensure operational hours accommodate community desires.

Provide first-rate customer service and manage customer registration, memberships, point-of-sale, and facility rentals at the Senior Center.

Proposed Budget
It is recommended that City Council approve a budget of $685,123 for the Administration program. This represents a decrease of $28,710 (-4.0%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $14,969 $11,480 $3,489
Reduced funding for staff
expenses, training, and general
supplies.

Revenues and Expenditures
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Use of Money and Property $ (320) $ 3,620 $ 12,500 $ 28,000 Miscellaneous Revenue $ 1,125 $ - $ - $ -
Total Revenues $ 805 $ 3,620 $ 12,500 $ 28,000
Expenditures
Employee Compensation $ 264,940 $ 214,498 $ 369,426 $ 368,351 Employee Benefits $ 122,697 $ 98,575 $ 155,590 $ 142,241 Materials $ 4,457 $ 3,238 $ 14,813 $ 11,480
Contract Services $ 1,074 $ 154 $ 3,640 $ 4,490
Cost Allocation $ 240,121 $ 192,579 $ 169,903 $ 158,361 Contingencies $ - $ - $ 461 $ 200
Total Expenditures $ 633,289 $ 509,044 $ 713,833 $ 685,123 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 632,484 $ 505,425 $ 701,333 $ 657,123 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget FACILITY ATTENDANT 1.00 1.00 1.00 1.00
RECREATION COORDINATOR 0.30 0.30 0.30 0.20
RECREATION MANAGER 0 0 0 0.75
RECREATION SUPERVISOR 0.75 0.75 0.75 0
SR OFFICE ASSISTANT 1.00 1.00 1.00 1.00
Total 3.05 3.05 3.05 2.95
Staff time is being reallocated to beHer reflect actual time spent in this program and the Recreation Supervisor position was reclassified as a Recreation Manager based on the current duties and tasks assigned to that position.

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Youth Teen Recreation
Budget Unit 580-62-613
Recreation Program - Recreation and Education - Youth Teen Recreation Budget at a Glance
2024 Proposed Budget
Total Revenues $ 1,258,800
Total Expenditures $ 1,704,199
Fund Balance $ (445,399)
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing 1.7 FTE
Program Overview
This program encompasses fee-based youth and teen programs such as academic and enrichment classes, STEAM programming, recreational camps, preschool, and special events, enrichment classes for adults, and special interest programming.

Service Objectives
Provide a preschool program, summer camps, and an extensive variety of contract classes for youth, teens, and adults.

Promote programs through social media to increase community awareness and interest in programs.

Increase the number of youth and teen Science, Technology, Engineering, Art, and Math (STEAM) programs offered.

Expand all-day summer camp offerings to meet daycare needs of working families.

Provide family-oriented programs designed to increase community engagement.

Provide safe, fun, life-long learning activities that promote the foundations of self-confidence, skill development, and personal growth.

Provide programs that enhance cultural awareness to youth and teens.

Proposed Budget
It is recommended that City Council approve a budget of $1,704,199 for the Youth Teen Recreation program. This represents an increase of $199,990 (13.3%) from the FY 2022-23 Adopted Budget.

This is mainly due to an increase in contract services from the rising need of in-person programs, classes, and camps. Since the reopening of recreational facilities from the pandemic, there's been a steady increase in participation of several current contracted programs. The increase is in response to the current demand.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $34,601 $25,547 $9,054
Reduced funding for
Preschool (i.e. snacks and
paid trips), City run
summer camps, job fairs,
and school events for part-
time staff.

Contract Services $1,068,555 $943,555 $125,000
Removed contract services
funds for new and
prospective youth and teen
program instructors.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 351,184 $ 854,411 $ 674,550 $ 1,258,800 Total Revenues $ 351,184 $ 854,411 $ 674,550 $ 1,258,800 Expenditures
Employee Compensation $ 131,866 $ 228,842 $ 394,702 $ 400,718 Employee Benefits $ 59,981 $ 46,063 $ 101,525 $ 100,423 Materials $ 1,252 $ 8,431 $ 33,396 $ 25,547
Contract Services $ 172,604 $ 504,134 $ 790,249 $ 943,555 Cost Allocation $ 141,704 $ 176,360 $ 111,417 $ 168,316 Other Financing Uses $ 52,329 $ 53,526 $ 52,329 $ 53,526 Contingencies $ - $ - $ 20,591 $ 12,114
Total Expenditures $ 559,736 $ 1,017,356 $ 1,504,209 $ 1,704,199 Fund Balance $ (208,552) $ (162,944) $ (829,659) $ (445,399) General Fund Costs $ - $ - $ - $ -
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget RECREATION COORDINATOR 1.35 1.35 1.50 1.50
RECREATION MANAGER 0 0 0.20 0.20
RECREATION SUPERVISOR 0.25 0.35 0 0
Total 1.60 1.70 1.70 1.70
There are no changes to the current level of staffing.

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Senior Center
Budget Unit 100-62-623
General Fund - Recreation and Education - Senior Center Budget at a Glance
2024 Proposed Budget
Total Revenues $ 240,000
Total Expenditures $ 813,480
Fund Balance $ -
General Fund Costs $ 573,480
% Funded by General Fund 70.5%
Total Staffing 2.1 FTE
Program Overview
This program includes the coordination and delivery of program services for seniors at the Senior Center. Staff coordinates a well-maintained Senior Center for adults age 50+ including senior adult recreation programs such as enrichment classes, educational presentations, group trips and tours, and social events. In addition, the Senior Center team leverages members to support programs and services through volunteer opportunities. Staff provides referrals for resources available to seniors.

Service Objectives
Enhance partnerships with the Santa Clara County Library District, De Anza College, and other local nonprofit agencies.

Provide appreciation event for senior volunteers who support the Parks and Recreation Department throughout the year.

Offer fitness and enrichment courses, educational presentations, group trips and tours, and socialization opportunities to adults age 50+.

Provide volunteer service opportunities for adults age 50+.

Provide a senior-focused annual health fair and senior resource referrals.

Proposed Budget
It is recommended that City Council approve a budget of $813,480 for the Senior Center program. This represents a decrease of $262,815 (-24.4%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $147,814 $97,324 $50,490
Removed funding for the
50+ Scene and Volunteer
Fair event and reduced
funding for general
supplies (i.e. materials for
bingo program, volunteer
gifts, and friday lunch
program).

Contract
Services $168,667 $128,190 $40,477
Removed contract services
funds for new and
prospective senior adult
recreation instructors and
rentals for the Volunteer
Fair.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ 38,081 $ 68,829 $ 154,500 $ 240,000 Miscellaneous Revenue $ 125 $ 1,300 $ - $ -
Total Revenues $ 38,206 $ 70,129 $ 154,500 $ 240,000
Expenditures
Employee Compensation $ 332,944 $ 127,258 $ 414,263 $ 302,172 Employee Benefits $ 160,139 $ 125,249 $ 158,309 $ 99,245 Materials $ 5,718 $ 32,840 $ 116,673 $ 97,324
Contract Services $ (86,272) $ 27,134 $ 151,492 $ 128,190 Cost Allocation $ 356,195 $ 294,244 $ 228,854 $ 183,730 Contingencies $ - $ - $ 6,704 $ 2,819
Total Expenditures $ 768,724 $ 606,725 $ 1,076,295 $ 813,480 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 730,517 $ 536,596 $ 921,795 $ 573,480 Staffing
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Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget RECREATION COORDINATOR 2.70 2.70 2.70 1.80
RECREATION MANAGER 0 0 0 0.25
RECREATION SUPERVISOR 0.25 0.25 0.25 0
Total 2.95 2.95 2.95 2.05
Staffing has decreased due to the reallocation of a Recreation Coordinator position to the Outdoor Recreation program. The Recreation Supervisor position was reclassified as a Recreation Manager based on the current duties and tasks assigned to that position.

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Teen Programs
Budget Unit 100-62-639
General Fund - Recreation and Education - Teen Programs Budget at a Glance
2024 Proposed Budget
Total Revenues $ 14,000
Total Expenditures $ 279,358
Fund Balance $ -
General Fund Costs $ 265,358
% Funded by General Fund 95.0%
Total Staffing 0.8 FTE
Program Overview
This program supports teen programs and services for the Recreation and Education Division. It provides for the supervision and support for the Youth Activity Board and the teen summer volunteer program and also produces teen events, such as the Cupertino Café, <hack> Cupertino, and the teen movie nights. This program also oversees the Monta Vista Recreation Center, which provides additional facility space for youth and teen programs and is home to a diverse array of recreation activities including gymnastics classes.

Service Objectives
Empower youth by creating enriching and stress-free programs that foster physical, mental, and social development.

Provide space for Cupertino Teens to de-stress, create, study, and to socially develop.

Create opportunities for youth and teens to build their leadership abilities by creating activities, events, and programs by teens for teens.

Create reciprocal engagement and outreach efforts between the City of Cupertino and Cupertino teens.

Provide the opportunity for teens to gain applied skills and develop leadership abilities by participating in the Leader in Training program.

Create programs that support mental health and wellness in youth and teens.

Monta Vista Recreation Center:

Provide space to host gymnastics, class, and camps.

Provide space to host additional youth and teen programs, classes, and camps.

Make space available for co-sponsored clubs and rentals.

Proposed Budget
It is recommended that City Council approve a budget of $279,358 for the Teen Programs program. This represents a decrease of $51,153 (-15.5%) from the FY 2022-23 Adopted Budget.

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The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $54,629 $16,715 $37,914
Continued closure of the
Teen Center and reduced
funding for free Youth and
Teen events and programs
and end of season events for
part time staff. Removed
conferences and trainings.

Contract
Services $4,000 $2,800 $1,200
Removed contract services
funds for the Youth Activity
Board and Bobateeno event.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Use of Money and Property $ - $ - $ 1,900 $ 14,000
Charges for Services $ - $ - $ 1,900 $ -
Total Revenues $ - $ - $ 3,800 $ 14,000
Expenditures
Employee Compensation $ 38,112 $ 61,336 $ 183,394 $ 145,290 Employee Benefits $ 15,322 $ 24,010 $ 39,807 $ 38,818
Materials $ 3,513 $ 11,978 $ 51,506 $ 16,715
Contract Services $ 40,841 $ - $ 7,800 $ 2,800
Cost Allocation $ 28,397 $ 67,715 $ 46,734 $ 75,491
Contingencies $ - $ - $ 1,270 $ 244
Total Expenditures $ 126,185 $ 165,039 $ 330,511 $ 279,358 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 126,185 $ 165,039 $ 326,711 $ 265,358 Staffing
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Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget RECREATION COORDINATOR 0.35 0.35 0.50 0.50
RECREATION MANAGER 0 0 0.25 0.25
RECREATION SUPERVISOR 0.20 0.40 0 0
Total 0.55 0.75 0.75 0.75
There are no changes to the current level of staffing.

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Neighborhood Events
Budget Unit 100-62-640
General Fund - Recreation and Education - Neighborhood Events Budget at a Glance
2024 Proposed Budget
Total Revenues $ 4,000
Total Expenditures $ 84,623
Fund Balance $ -
General Fund Costs $ 80,623
% Funded by General Fund 95.3%
Total Staffing 0.3 FTE
Program Overview
The Neighborhood Programs provide a varied schedule of summer events in neighborhood parks. Events include outdoor concerts, outdoor movies, performances, and free arts and fitness programs in the parks. These programs are designed to engage new customers and to promote current programs.

Service Objectives
To provide outdoor summer concerts in neighborhood parks.

To provide outdoor summer movies in neighborhood parks.

To provide outdoor summer fitness opportunities in neighborhood parks.

To provide outdoor summer arts opportunities in neighborhood parks.

To provide an array of outdoor cultural special events in neighborhood parks.

To provide activities for kids and families of all ages.

Proposed Budget
It is recommended that City Council approve a budget of $84,623 for the Neighborhood Events program. This represents a decrease of $69,684 (-45.2%) from the FY 2022-23 Adopted Budget.

The decrease is due to the cancellation of most summer events including part-time staffing.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $17,323 $3,377 $13,946
Removed materials and
supplies budget for most
Summer Events, except for
concerts at the parks and the
Cupertino Campout.

Contract
Services $62,827 $10,237 $52,590
Removed contract services
funds for most Summer
Events, except for concerts
at the parks and the
Cupertino Campout.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Charges for Services $ - $ - $ - $ 4,000
Total Revenues $ - $ - $ - $ 4,000
Expenditures
Employee Compensation $ 9,544 $ - $ 60,080 $ 43,321
Employee Benefits $ 3,967 $ 176 $ 1,652 $ 12,077
Materials $ - $ 422 $ 15,318 $ 3,377
Contract Services $ 460 $ - $ 59,800 $ 10,237
Cost Allocation $ 12,683 $ 27,411 $ 15,579 $ 15,441
Contingencies $ - $ - $ 1,878 $ 170
Total Expenditures $ 26,654 $ 28,009 $ 154,307 $ 84,623 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 26,654 $ 28,009 $ 154,307 $ 80,623 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget RECREATION COORDINATOR 0 0 0 0.25
RECREATION SUPERVISOR 0.10 0.10 0 0
Total 0.10 0.10 0 0.25
Staff time is being reallocated to better reflect actual time spent in this program.

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Park Facilities
Budget Unit 100-63-612
General Fund - Sports, Safety and Outdoor Recreation - Park Facilities Budget at a Glance
2024 Proposed Budget
Total Revenues $ 167,257
Total Expenditures $ 1,269,657
Fund Balance $ -
General Fund Costs $ 1,102,400
% Funded by General Fund 86.8%
Total Staffing 3.2 FTE
Program Overview
Blackberry Farm provides the community with recreational space to swim, picnic, enjoy ranger-led activities, and the Stevens Creek Trail. McClellan Ranch Preserve offers environmental education classes/creek tours to school groups, nature programs, and is the location of the Community Garden program and non-profit operations such as Grassroots Ecology, Santa Clara Valley Audubon Society, UCCE Master Gardeners, and Rolling Hills 4-H Club.

Service Objectives
Blackberry Farm Picnic Grounds and Pools:

Provide the community with two pools for recreation use and swim lessons.

Engage and provide the community with annual 4th of July and Pooch Plunge events.

Partner with the Audubon Society to provide Wildlife & Harvest Day at Blackberry Farm.

Increase residential usage of the facility.

Continue to offer Park Ranger-led activities such as interpretive walks, star-gazing events, and implement a Stevens Creek Corridor volunteer program.

McClellan Ranch Preserve:

Continue to offer drop-in visitor hours at the Environmental Education Center and Blacksmith Shop.

Partner with SCVAS, Grassroots Ecology, Watershed Stewardship Program Members, Santa Clara Valley Audubon Society, Rolling Hills 4H and UCCE Master Gardeners in providing public education programs.

Expand programming opportunities for youth and families.

Increase volunteer/docent opportunities at McClellan Ranch.

Continue to develop the community garden programming.

Proposed Budget
It is recommended that City Council approve a budget of $1,269,657 for the Park Facilities program. This represents an increase of $50,811 (4.2%) from the FY 2022-23 Adopted Budget.

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This increase is due to increases in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $97,335 $44,354 $52,981
Reduced hours and meals
at the BBF Café. Reduced
funding for general
supplies, meeting expenses
(i.e. gear and meals), and
removed budget for the
Harvest Day event.

Contract
Services $104,289 $97,669 $6,620
Removed contract services
funds for the Corridor
Stroll event, Harvest Day
event, and nonessential
trainings for staff.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Use of Money and Property $ 19,389 $ 66,690 $ 90,757 $ 51,257 Charges for Services $ 23,227 $ 128,517 $ 175,000 $ 116,000 Total Revenues $ 42,616 $ 195,207 $ 265,757 $ 167,257
Expenditures
Employee Compensation $ 414,084 $ 432,890 $ 678,976 $ 726,452 Employee Benefits $ 154,064 $ 100,094 $ 172,107 $ 177,923 Materials $ 29,835 $ 36,806 $ 94,202 $ 44,354
Contract Services $ 80,076 $ 81,244 $ 102,503 $ 97,669
Cost Allocation $ 229,792 $ 261,016 $ 166,140 $ 221,484 Special Projects $ 3,218 $ - $ - $ -
Contingencies $ - $ - $ 4,918 $ 1,775
Total Expenditures $ 911,069 $ 912,050 $ 1,218,846 $ 1,269,657 Fund Balance $ - $ - $ - $ -
General Fund Costs $ 868,454 $ 716,843 $ 953,089 $ 1,102,400 Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget RECREATION COORDINATOR 2.18 2.18 1.98 1.98
RECREATION MANAGER 0 0 0.35 0.35
RECREATION SUPERVISOR 0.50 0.50 0 0
SR OFFICE ASSISTANT 0 0 0.85 0.85
Total 2.68 2.68 3.18 3.18
There are no changes to the current level of staffing.FY 2023-24 Proposed Budget Parks and Recreation 385 391
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Administration
Budget Unit 100-63-615
General Fund - Sports, Safety and Outdoor Recreation - Administration Budget at a Glance
2024 Proposed Budget
Total Revenues $ -
Total Expenditures $ -
Fund Balance $ -
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing 0.0 FTE
Program Overview
In FY 2022-2023, this program was divided and absorbed into the Sports, Safety, and Outdoor Recreation - Park Facilities and Outdoor Recreation programs. A complete discussion of the program can be found under Budget Unit 100-63-612 and 580-63-620. This program will remain in order to maintain historical data, however once all prior year data as listed in the table below is $0, this program will be removed.

Proposed Budget
There is no budget requested for this program.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Total Revenues $ - $ - $ - $ -
Expenditures
Employee Compensation $ 25,152 $ 19,660 $ 26,058 $ -
Employee Benefits $ 9,821 $ 8,547 $ 9,665 $ -
Materials $ 145 $ 145 $ 284 $ -
Cost Allocation $ 31,790 $ 37,070 $ 23,654 $ -
Contingencies $ - $ - $ 7 $ -
Total Expenditures $ 66,908 $ 65,422 $ 59,668 $ -
Fund Balance $ - $ - $ - $ -
General Fund Costs $ 66,907 $ 65,423 $ 59,668 $ -
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget RECREATION SUPERVISOR 0.45 0.45 0 0
Total 0.45 0.45 0 0
There is no staffing associated with this program.

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Blackberry Farm Golf Course
Budget Unit 560-63-616
Blackberry Farm - Sports, Safety and Outdoor Recreation - Blackberry Farm Golf Course Budget at a Glance
2024 Proposed Budget
Total Revenues $ 520,250
Total Expenditures $ 418,040
Fund Balance $ 102,210
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing 1.1 FTE
Program Overview
Blackberry Farm Golf Course provides a nine-hole golf facility to the community that serves all ages.

Service Objectives
Increase the golfer base through golf instruction, family events, high school golf team partnerships, and leagues.

Continue to operate a golf course pro shop where customers may purchase golfing accessories and concessions.

Proposed Budget
It is recommended that City Council approve a budget of $418,040 for the Blackberry Farm Golf Course program.

This represents a decrease of $250,406 (-37.5%) from the FY 2022-23 Adopted Budget.

There is an increase in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

Contract services decreased due to the reallocation of the funds for the golf course maintenance contract from Parks and Recreation to Public Works. The amount can be found in 100-84-811 700-702.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $18,090 $17,952 $138 Reduced funding for general supplies.

Revenues and Expenditures
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Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Use of Money and Property $ 46,477 $ 47,675 $ 33,000 $ 51,250 Charges for Services $ 564,126 $ 555,104 $ 400,600 $ 469,000 Total Revenues $ 610,603 $ 602,779 $ 433,600 $ 520,250
Expenditures
Employee Compensation $ 99,697 $ 139,339 $ 205,806 $ 224,345 Employee Benefits $ 7,871 $ 6,297 $ 61,909 $ 64,869
Materials $ 101,977 $ 116,539 $ 24,302 $ 17,952
Contract Services $ 248,691 $ 281,992 $ 278,428 $ 22,111 Cost Allocation $ 71,599 $ 47,903 $ 87,601 $ 85,430
Other Financing Uses $ 2,832 $ 2,832 $ 2,832 $ 2,832
Contingencies $ - $ - $ 7,568 $ 501
Total Expenditures $ 532,667 $ 594,902 $ 668,446 $ 418,040 Fund Balance $ 527,935 $ 87,870 $ (234,846) $ 102,210
General Fund Costs $ 450,000 $ 79,992 $ - $ -
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget RECREATION COORDINATOR 1.00 1.00 0.65 0.65
RECREATION MANAGER 0 0 0.30 0.30
RECREATION SUPERVISOR 0.15 0.15 0 0
SR OFFICE ASSISTANT 0 0 0.15 0.15
Total 1.15 1.15 1.10 1.10
There are no changes to the current level of staffing.

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Outdoor Recreation
Budget Unit 580-63-620
Recreation Program - Sports, Safety and Outdoor Recreation - Outdoor Recreation Budget at a Glance
2024 Proposed Budget
Total Revenues $ 639,775
Total Expenditures $ 1,088,365
Fund Balance $ (448,590)
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing 2.1 FTE
Program Overview
This program encompasses the coordination and delivery of a wide range of sports, fitness, and outdoor activities for youth and adults.

Service Objectives
Operate a summer learn-to-swim program for infants, children, teens, and adults.

Coordinate spring, summer, and fall adult softball leagues.

Increase adult sports league programming.

Provide sports, dance, fitness, and wellness classes for youth, teens, and adults.

Provide sports, fitness, and outdoor camps for youth and teens.

Provide a summer nature and science program.

Manage user group field rentals under the Cupertino Union School District/City Joint Use Agreement.

Increase nature, blacksmithing, and environmental classes for parent/child, teens, and adults.

Offer fee-based gardening programs for youth and adults.

Proposed Budget
It is recommended that City Council approve a budget of $1,088,365 for the Outdoor Recreation program. This represents an increase of $219,350 (25.2%) from the FY 2022-23 Adopted Budget.

This increase is due to increases in employee compensation and benefits, which reflect the cost-of-living adjustments approved by the City Council in August 2022.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $21,788 $15,158 $6,630
Reduced funding for
general supplies and
meeting expenses.

Removed paid trips
for summer camps
and end of summer
events for part-time
staff. Cancellation of
FitFest program.

Contract
Services $535,239 $375,123 $160,116
Reduced contract
services funds for
new and prospective
outdoor recreation
instructors and
nonessential
trainings for staff.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

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Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Use of Money and Property $ 82,033 $ 145,878 $ 317,000 $ 150,000 Charges for Services $ 157,654 $ 293,839 $ 545,000 $ 489,775 Total Revenues $ 239,687 $ 439,717 $ 862,000 $ 639,775
Expenditures
Employee Compensation $ 180,493 $ 195,015 $ 254,081 $ 381,115 Employee Benefits $ 89,657 $ 70,281 $ 61,291 $ 113,597
Materials $ 3,573 $ 4,746 $ 22,172 $ 15,158
Contract Services $ 50,436 $ 123,485 $ 354,179 $ 375,123 Cost Allocation $ 172,743 $ 170,677 $ 115,554 $ 144,967 Special Projects $ 6,214 $ - $ - $ -
Other Financing Uses $ 52,329 $ 53,526 $ 52,329 $ 53,526 Contingencies $ - $ - $ 9,409 $ 4,879
Total Expenditures $ 555,445 $ 617,730 $ 869,015 $ 1,088,365 Fund Balance $ 846,242 $ 628,795 $ 368,985 $ (448,590)
General Fund Costs $ 1,162,000 $ 806,809 $ 376,000 $ -
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget RECREATION COORDINATOR 1.70 1.70 0.45 1.40
RECREATION MANAGER 0 0 0.30 0.70
RECREATION SUPERVISOR 0.15 0.15 0.30 0
Total 1.85 1.85 1.05 2.10
Staffing has increased due to the reallocation of a Recreation Coordinator position from the Senior Center program. The Recreation Supervisor position was reclassified as a Recreation Manager based on the current duties and tasks assigned to that position.

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Sports Center Operations
Budget Unit 570-63-621
Sports Center - Sports, Safety and Outdoor Recreation - Sports Center Operations Budget at a Glance
2024 Proposed Budget
Total Revenues $ 2,625,000
Total Expenditures $ 2,841,678
Fund Balance $ (216,678)
General Fund Costs $ -
% Funded by General Fund 0.0%
Total Staffing 2.4 FTE
Program Overview
The Cupertino Sports Center offers a variety of health and wellness activities including a full fitness center, and a wide assortment of fitness classes, youth sports classes, and a variety of racquet sports, including tennis, table tennis, pickle ball, and badminton classes, camps, and programs.

Service Objectives
Increase memberships, participation in fitness classes, and enrollment in contract camps and classes.

Market programs through social media, the recreation schedule, electronic sign on Stevens Creek Blvd., and the City website.

Collaborate with Public Works to ensure successful implementation of Capital Improvement Projects.

Explore new program offerings.

Proposed Budget
It is recommended that City Council approve a budget of $2,841,678 for the Sports Center Operations program.

This represents a decrease of $34,404 (-1.2%) from the FY 2022-23 Adopted Budget.

The table below illustrates the reductions made to the original FY 2023-24 Budget. This budget was developed by taking the previous year's base budget and incorporating additional ongoing costs, while also adjusting material and contract expenses based on the Consumer Price Index (CPI), where applicable.

FY 2023-24 Proposed Budget Parks and Recreation 393
399
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Description FY 2023-24 Original
Budget
FY 2023-24 Reduced
Budget Reduction Service Impact
Materials $64,779 $38,144 $26,635
Reduced funding for new
fitness equipment, general
supplies, marketing, and
meeting expenses.

Contract
Services $2,078,983 $2,039,983 $39,000
Reduced contract services
funds for new and
prospective sports
instructors.

Revenues and Expenditures
The following table details revenues, expenditures, changes in fund balance and General Fund costs by category.

It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

Category 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget Revenues
Use of Money and Property $ 272,807 $ 345,180 $ 350,000 $ 375,000 Charges for Services $ 1,537,387 $ 2,451,149 $ 2,250,000 $ 2,250,000 Total Revenues $ 1,810,194 $ 2,796,329 $ 2,600,000 $ 2,625,000 Expenditures
Employee Compensation $ 257,539 $ 272,275 $ 420,887 $ 404,557 Employee Benefits $ 82,496 $ 66,695 $ 126,566 $ 126,253 Materials $ 16,493 $ 24,295 $ 63,087 $ 38,144
Contract Services $ 1,288,732 $ 2,194,486 $ 2,033,320 $ 2,039,983 Cost Allocation $ 190,035 $ 229,894 $ 171,128 $ 192,546 Other Financing Uses $ 8,684 $ 14,218 $ 8,684 $ 14,218
Contingencies $ - $ - $ 52,410 $ 25,977
Total Expenditures $ 1,843,979 $ 2,801,863 $ 2,876,082 $ 2,841,678 Fund Balance $ 626,214 $ (5,533) $ (276,082) $ (216,678) General Fund Costs $ 660,000 $ - $ - $ -
Staffing
The following table lists full-time equivalents (FTE) by position. It includes actuals for two prior fiscal years, the Adopted Budget for the prior fiscal year, and the Proposed Budget for the current fiscal year.

FY 2023-24 Proposed Budget Parks and Recreation 394
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Position Title 2021 Actual 2022 Actual 2023 Adopted Budget 2024 Proposed Budget OFFICE ASSISTANT 1.00 1.00 1.00 1.00
RECREATION COORDINATOR 1.00 1.00 0.80 0.85
RECREATION MANAGER 0 0 0 0.55
RECREATION SUPERVISOR 0.25 0.45 0.70 0
Total 2.25 2.45 2.50 2.40
Staff time is being reallocated to beHer reflect actual time spent in this program. The Recreation Supervisor position was reclassified as a Recreation Manager based on the current duties and tasks assigned to that position.

FY 2023-24 Proposed Budget Parks and Recreation 395
401
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FY 2023-24 Proposed Budget Parks and Recreation 396
402
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Community Development
FY 2023-24 Proposed Budget Community Development 397
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