1 CITY COUNCIL STAFF REPORT
Meeting: June 3, 2025
Subject
Staff responses to questions received from Councilmembers during Proposed Budget Study Session.
Recommended Action
Receive staff responses to questions received from Councilmembers during Proposed Budget Study Session.
Background:
Staff’s responses to questions received from councilmembers are shown in italics.
Q1. As mentioned, Transfers in does not match transfers out
Staff response: Transfers In and Transfers Out in the Financial Overview by Fund (page 58) should net to zero, as they represent internal movements of funds. However, Transfers In total $14,109,653 while Transfers Out total $12,609,653, resulting in a $1,500,000 variance.
This discrepancy is due to two incorrect entries:
- $500,000 in Fund 580 – Recreation Program (Enterprise Fund) - $1,000,000 in Fund 610 – Innovation & Technology (Internal Service Fund)
Both funds had sufficient fund balance and should not have received transfers In.
The corrected Financial Overview by Fund reduces Transfers In for the Enterprise Funds (A) by $500,000
and for the Internal Service Funds (B) . This increases the use of fund balance for these two fund types and raises the total use of fund balance across all funds from $843,062 to $2,343,062. With these adjustments, Transfers In and Out now balance
(C).
There is no impact to the General Fund as a result of this correction.
2 Q2. General Fund Transfers out is exactly $1M higher than the total shown on p. 93 – which is correct? The correct number $10,594,653.
Staff response: The discrepancy on page 93 is due to two errors in the table. First, the list omits a $2 million transfer to Fund 429 – CIP Reserve, which represents the annual General Fund contribution reinstated as part of the Mid -Year Financial Report. Second, the table incorrectly lists the transfer to Fund 270 – Transportation Fund as $2.5 million instead of the correct amount of $1.5 million.
Q3. Both amounts were correctly updated in the budget system but were inadvertently not reflected in the published table. The $1.5 million transfer satisfies the City's Maintenance of Effort (MOE) requirement for street and sidewalk maintenance. In prior years, this program was funded at $2.5 million, but the amount was reduced to MOE minimum as a budget balancing measure.
Enterprise Funds “Other Financing Uses” is shown as “Transfers Out” on p. 64 – should it be moved up to the Transfers Out line on p 58? This is $222,567 and appears to have been copied to the wrong category line.
Revenue Categories General Fund Special
Revenue Fund
Debt Service
Fund
Capital Project
Funds
Enterprise
Funds
Internal Service
Funds All Funds
Sales Tax 11,983,958 - - - - - 11,983,958 Property Tax 35,413,310 - - - - - 35,413,310 Transient Occupancy 7,500,000 - - - - - 7,500,000 Utility Tax 4,206,907 - - - - - 4,206,907 Franchise Fees 4,394,563 - - - - - 4,394,563 Other Taxes 1,736,718 4,637,703 - - - - 6,374,421 Licenses & Permits 4,261,859 - - - - - 4,261,859 Use of Money & Property 6,538,880 749,830 - - 531,450 99,701 7,919,861 Intergovernmental 3,569,332 5,351,721 - - 14,812 - 8,935,865 Charges for Services 15,162,032 1,504,373 - - 5,044,822 5,331,124 27,042,351 Fines & Forfeitures 410,760 10,000 - - - - 420,760 Miscellaneous 1,668,815 1,519 - - - - 1,670,334 Other Financing Sources 367,000 - - - - 553,531 920,531 Transfers In 15,000 2,067,000 2,676,600 4,000,000 1,235,000 2,616,053 12,609,653 TOTAL REVENUES 97,229,134$ 14,322,146$ 2,676,600$ 4,000,000$ 6,826,084$ 8,600,409$ 133,654,373$ Appropriation Categories General Fund Special
Revenue Fund
Debt Service
Fund
Capital Project
Funds
Enterprise
Funds
Internal Service
Funds All Funds
Employee Compensation 24,182,741 1,602,256 - - 2,010,726 1,720,661 29,516,384 Employee Benefits 10,595,638 797,878 - - 746,937 2,347,371 14,487,824 Materials 6,174,481 1,013,894 - - 758,663 1,297,849 9,244,887 Contract Services 31,496,502 692,575 - 225,000 3,578,026 1,730,697 37,722,800 Cost Allocation 11,993,327 2,197,032 - - 1,676,251 949,737 16,816,347 Capital Outlays 274,433 1,583,075 - 2,000,000 - - 3,857,508 Special Projects 2,694,000 2,908,412 - - 160,000 1,039,000 6,801,412 Contingencies 50,000 - - - - - 50,000 Debt Service - - 2,676,600 - - - 2,676,600 Transfers Out 10,594,653 15,000 - 2,000,000 - - 12,609,653 Other Financing Uses 1,065,000 - - - 222,567 926,453 2,214,020 TOTAL EXPENDITURES 99,120,775$ 10,810,122$ 2,676,600$ 4,225,000$ 9,153,170$ 10,011,768$ 135,997,435$
CHANGE IN FUND
BALANCE/ (1,891,641)$ 3,512,024$ -$ (225,000)$ (2,327,086)$ (1,411,359)$ (2,343,062)$ 2025-26 Proposed Budget
2025-26 Proposed Budget
A B
C
C
3 Staff Response: That is correct. The amounts should have been in Other Financing Uses. The table has been updated to reflect the change. In addition, we added the Other Financing Uses and broken out prior year transfers out and other financing uses separately. See table below.
Q4: Exploring a citywide traffic study; requested an informational memorandum evaluating process to collect data such as traffic counts, flow, and speed surveys, along with proposed scope and cost.
Staff response: Information memorandum will be provided by Public Works staff in June.
Q5: Requested historical data on the City's vacancy rates.
Staff response: Over the last 10 years, the City’s vacancy rate has averaged 11% including years when the City had added positions at Mid -Year or had been in a soft hiring freeze, when removing these anomalies the City’s salary savings has average 6%. The City’s long-term financial forecast has been updated to increase the vacancy rate to 6% in the first two years of the forecast but has kept 4% vacancy savings in the remaining years. The table below shows historical salary savings.
EXPENDITURE USES 2022-23 2023-24 2024-25 2025-26
Actual Actual Adopted Proposed
Employee Compensation 1,612,325 1,742,135 1,922,348 2,010,726 Employee Benefits (54,532) 1,020,726 839,347 746,937 Materials 412,827 363,986 691,338 758,663 Contract Services 4,736,292 3,870,517 3,661,846 3,578,026 Contingencies - - 54,339 - Cost Allocation 789,939 939,358 1,577,430 1,676,251 Special Projects 297,015 286,326 362,733 160,000 Transfers Out 103,119 20,000 - - Other Financing Uses 161,840 185,989 161,841 222,567 Total Expenditure Uses $ 8,058,825 $ 8,429,036 $ 9,271,222 $ 9,153,170
4 The following table shows historical vacancy rates.
2014-15
Amended
B
udget Q4
2014-15
Actual
2015-16
Amended
B
udget Q4
2015-16
Actual
2016-17
Amended
B
udget Q4
2016-17
Actual
2017-18
Amended
B
udget Q4
2017-18
Actual
2018-19
Amended
B
udget Q4
2018-19
Actual
Employee
Compensation 16,649,412 16,084,209 18, 898,886 17,046,311 20,906,746 12,950,812 22,349,844 21,125,390 23,326,442 21,439,003 Employee
Benefits 7,962,846 7,641,603 8, 830,262 7,750,646 9,412,024 9,579,239 10,168,849 10,015,266 10,708,420 9,744,962 Total 24,612,258 23,725,812 27,729,148 24,796,956 30,318,770 22,530,051 32,518,693 31,140,656 34,034,862 31,183,966 Budget vs
Actuals 886,446 2,932,192 7, 788,719 1,378,037 2,850,896 Salary Savings 4% 11% 26% 4% 8%
2019-20
Amended
B
udget Q4
2019-20
Actual
2020-21
Amended
B
udget Q4
2020-21
Actual
2021-22
Amended
B
udget Q4
2021-22
Actual
2022-23
Amended
B
udget Q4
2022-23
Actual
2023-24
Amended
B
udget Q4
2023-24
Actual
Employee
Compensation 24,713,544 22,794,896 25, 264,213 23,003,729 27,694,272 24,412,868 31,681,411 27,087,509 30,293,262 26,716,216 Employee
Benefits 10,922,818 11,191,891 12,156,039 11,412,966 13,923,946 12,023,510 15,437,830 11,561,176 14,884,120 13,795,206 Total 35,636,362 33, 986,787 37,420,252 34,416,694 41,618,218 36,436,378 47,119,241 38,648,685 45,177,382 40,511,422 Budget vs
Actuals 1,649,575 3,003,558 5, 181,840 8,470,556 4,665,960 Salary Savings 5% 8% 12% 18% 10%
Average 11%
Source: OpenGov
5 Q6: Requested information about staffing trends, historical vs. current staffing levels.
Staff response: See ten-year staffing chart below.
Q7: Look into discontinuing the remaining $100k in funding for Rise engagement project Work Program item.
Staff response: Will be discussed as part of the special projects item at the June 3 rd City Council meeting.
Q8: Requested clearer accounting on Sister City Program, facility use, and free use of City facilities; also requested review of agreements governing use of City property.
Staff response: Staff will provide an informational memo on all of these items.
Q9: Requested consideration of adding a "Nonprofit Support" section in the budget to show the actual costs associated with each supported nonprofit.
Staff response: Nonprofit support details can be added to the budget, as follows:
Community Fee Waivers Fiscal Year 2025-2026
Community Funding
Community Funding information can be found here
6 Applicant Award
Amount
No Time to Waste $5,000
ElderAid $5,000
Active Circle $2,000
Special Olympics Northern California $5,000
AINAK $4,000
Cupertino Symphonic Band $3,000
Remember the ToothFairy $1,000
Friends of Deer Hollow Farm $2,000
iTalented $900
Via Rehabilitation Services $1,000
Rotary Club of Cupertino $1,600
West Valley Community Services $2,000
$32,500
Sister Cities
A Sister City relationship is a long -term, formal agreement that may include cultural, educational, business, and technical exchanges. Cupertino has four established Sister City relationships:
• Copertino, Italy, formalized in 1963
• Toyokawa, Japan, formalized in 1978
• Hsinchu, Taiwan, formalized in 2007
• Bhubaneswar, India, formalized in 2012
The support the City of Cupertino gives Sister Cities is as follows:
City of Cupertino Responsibilities (With regard to City supported Sister City Committees):
Coordinated through the City Manager’s Office, the City will serve as a support for programs and activities by:
• Providing for set-up and complimentary access to a large City facility for three community events per Sister City per fiscal year. All cost of food, drinks, and materials are the responsibility of the Sister City Committee.
7 • The City shall accept gifts from the Sister City, which will be considered the property of the City and may be displayed at a City facility or offered to the Sister City Committee at City’s discretion.
• The City will establish and maintain a written record of said gifts, regardless of actual or perceived monetary value. The written gift log will include: donation City, gift date, gift occasion (if applicable), and whether they are being offered to the Sister City Committee. • Providing up to $2,500 per year for a Sister City with a student exchange program of 4 to 9 student delegates and up to $5,000 per year for a Sister City with a student exchange program of 10 or more student delegates.
Coordinated through the City Manager's Office, the City will serve as a support for Sister City programs and activities by:
• Providing access to postage, fax, copying and printing equipment to Sister City Committee members for support of Sister City events in which the City is participating. City staff is not responsible for preparing mailings or printed materials. • Providing the use of meeting room space (up to 18 per calendar year) at no cost to the Sister City Committee for related activities. Meeting room space does not include Cupertino Community Hall or the Quinlan Community Center’s Cupertino Room. • Providing City promotional gift items, when budget allows, typically given at community events to government representatives and student delegations from visiting countries. These include but are not limited to: branded t -shirts, pens, reusable bags, and lapel pins. The cost of each promotional gift or gift bag shall not exceed $25. Additional gifts presented to members of a Sister City delegation are the responsibility of the Sister City Committee. • Facilitating participation of City officials.
City of Cupertino Responsibilities (With regard to non -City supported Sister City Committees):
• The City shall maintain registration with the Sister Cities International organization. • Provide the use of meeting room space (up to 4 per calendar year) at no cost to the Sister City Committee for related activities. For additional meeting room uses, non-City supported Sister City Committees shall be charged the facility use resident rate on the rental of any City facility. Meeting room space does not include Cupertino Community Hall or the Quinlan Community Center’s Cupertino Room
The full agreement for Sister Cities and Friendship Cities can be found here Fees for facility rentals can be found here.
8 Sister City Festival Fee Waivers
Festival Date Organizati
on
Waived
Fees
City Paid
Expenses
Totals
Bhubanes
war Sister
City
City
Initiative
(CBSCI)
Saturda
y,
Septemb
er 20,
2025
Cupertino
Bhubanes
war Sister
City
$12,200 $3,720 $15,920
Cherry
Blossom
Sat.-
Sun.,
April
25-26,
2026
Toyokawa
Sister City
$39,282 $11,780 $51,06
TOTAL $66,982
Friendship Cities
All proposed Friendship City relationships must have Councilmember or community sponsorship and be approved by the City Council. The Friendship City will submit a Friendship City application to the City of Cupertino, which requires sponsorship from a Council Member and a citizen's committee to ensure the new affiliation is successful. If approved, the City will issue a signed Letter of Intent establishing the Friendship City relationship. A Friendship City affiliation will be effective for two years and may be renewed administratively every two years.
Friendship City Committee Responsibilities:
• Identify, manage, coordinate, and implement all activities related to the Friendship City program.
• Maintain communication with the affiliate Friendship City, ensuring the counterpart is equally committed.
• Work with City staff at least one month in advance in arranging official promotional gifts and meetings for foreign delegations. For local groups traveling abroad and bringing city gifts, similar notice is required, unless waived by the City Manager.
City of Cupertino Responsibilities:
Coordinated through the City Manager’s Office, the City will:
• Issue a signed Letter of Intent establishing a new Friendship City relationship in an effort to assist international delegation visits from the Friendship City. • Provide City promotional items typically given at community events to government representatives from visiting countries as the budget allows. These may include, but are not
9 limited to: City t -shirts, pens, reusable bags, and lapel pins, to the extent there remains a budgeted amount to purchase such gifts and promotional items. • Facilitate meetings with City officials.
• Conduct tours of city facilities.
Chamber of Commerce
Services Include, but not limited to, the following:
1. Technical Assistance
2. Marketing & Promotion/Information Dissemination
3. Events/Meetings
4. Other Provisions
Payment of up to $52,000 a year for work designated in the agreement.
Full agreement can be found here
Chamber Festival Fee Waivers
Festival Date Organizati
on
Waived
Fees
City Paid
Expenses
Totals
Diwali
Festival
Saturday,
October
11, 2025
Cupertino
Chamber
of
Commerce
$10,946 $4,805 $15,751
Holi Date TBD
for 25/26
Cupertino
Chamber
of
Commerce
$6,081 $3,410 $9,491
TOTAL $25,242
Cupertino Historical Society
City Council approved a license agreement and $40,000 a year grant for the Cupertino Historical Society on October 4, 2022.
• License agreement is for the Museum space at Quinlan Community Center Full agreement can be found here
10 Rotary Club of Cupertino
Funding of $1,600 through the Fiscal Year 2025-2026 Community Funding program.
Rotary Club Festival Fee Waiver
Festival Date Organizat
ion
Waived
Fees
City Paid
Expenses
Totals
Day N
Night Fun
Fest
Saturday,
Septembe
r 13, 2025
Rotary
Club of
Cupertino
$15,942 $4,495 $20,437
TOTAL $20,437
Friends of the Cupertino Library
Three weekend book sales per year. Funding Approximately $5,880. This is an ongoing permanent fee waiver.
Approved at City Council Meeting Monday, July 8, 2019
Pacific Coast Farmer’s Market Association
License agreement to use the Creekside Park North Parking Lot for the Friday Farmer’s Market, for most Fridays from 7:00 a.m. to 2:00 p.m., unless otherwise notified by the City.
Full agreement and amendments can be found here
Regents of the University of California - Rolling Hills 4-H Club Lease agreement for space at the McClellan Ranch Preserve, including but not limited to a four-pen pole barn with corrals, a three-pen pole barn with corrals, a three-run chicken coop, and a tack room. Also includes space for monthly club meetings at either the Environmental Education Center and Monta Vista Recreation Center at no additional charge. In exchange, 4- H will leave tours for school youth groups and community groups/classes, as discussed and agreed to by Recreation Staff.
Approved at City Council Meeting Tuesday, May 21, 2024
Full agreement can be found here
Regents of the University of California – UCCE Master Gardener Program
Five garden beds, including water, receptables for trash, recyclables, and compostable waste, and community space for gardening classes, workshops, or meetings up to 12 times per calendar year. In exchange, UCCE will offer no fewer than four gardening classes or workshops annually, including a Cupertino Community Garden 101 orientation and no fewer than four hours per week, thirty -two weeks per year of Master Gardener office hours to answer questions from participants and Cupertino residents.
Full agreement can be found here
11 Other organization Festival Fee Waivers
Festival application process can be found here
Festival Date Organization Waived
Fees
City Paid
Expenses
Totals
Kids N Fun
Festival
Saturday,
August23,
2025
Taiwanese Cultural and
Sports Association
$10,485 $4,495 $14,980
Ikebana Sat. October
18 and Sun.
October 19
WAFU Ikebana Society $28,475 $28,475
Veteran’s
Day
November 11,
2025
Veteran’s Memorial $1,312 $1,500
$2,812
Dilli Haat Saturday,
June 6, 2026
Empower Uplift Inc. $9,200 $4,030 $13,230
TOTAL $59,497
Q10: Requested clearer distinctions between resident and non -resident benefits in the fee schedule; requested a report/informational memo on the fee schedule’s history and structure, with comparisons.
Staff response: In general, resident fees are about 20% lower than non-resident fees. Staff will provide an informational memo on the fee schedule’s history and structure, with comparisons at a future date.
Q11: Requested information on Blackberry Farm Pool summer staffing for potential reopening for July 4 and impacts of decreased part- time staffing; and whether the staffing shortage is due to reduced summer programs.
Staff response: The City previously had multiple staff run camps and two pools with lifeguards (one at a high school and one at Blackberry Farm), we now have 3 staff run camps and one pool with lifeguards.
Fewer staff run camps and one less pool means we are hiring less part-time staff each summer. The staff run camps were seeing low enrollment, so they were changed to more specialized contractor run camps that are more popular with our customers.
The staffing shortage is due to a reduction in staff run programs due to enrollment. Programs were replaced in summer offerings, but they were replaced with more specialized contractor run programs.
Q12: Requested an update on Active Transportation Plan (ATP) progress and expenditures; provide spending data and bring back to Council for an update.
Staff response: Staff anticipates providing City Council an update on the ATP in September.
12 Q13: Requested information on how to discontinue outdated work program items; review policies, including carryover policy, to evaluate ongoing project funding.
Staff response: Staff surveyed Santa Clara County agencies an d received direct responses, or online research was conducted by staff. Staff surveyed 11 comp arable cities, with most cities ‘carrying over encumbrances to the next fiscal year with out City Council approval and unencumbered carryovers requiring Council approval. The following cities did not provide a response, Saratoga, Campbell, and Los Altos and no information was available online. Staff may consider a change in policy as part of broader policy work. Direction from Council is needed.