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Background
On June 3, 2025, the City Council adopted the FY 2025-26 Adopted Budget, a $136.1 million spending plan funded by $133.7 million in revenue and $2.4 million in fundbalance. The adopted budget reflected a $68,966 increase from the proposed budget as illustrated below. The FY 2025-26 Amended Budget as of March 31, 2026, is $229.7 million across all funds, increasing from an adopted budget of $136.1 million due to carryovers andencumbrances from the last fiscal year, in addition to Council-approved budget adjustments in the first three quarters of the fiscal year. As of Third Quarter FY 2025-26, revenue was $2.5 million, or 3%, lower than Third Quarter 2024-25, primarily due to a decrease in reported sales tax this period comparedto the prior third-quarter period, and also due to the reversal of the $2.8 million mark-to-market adjustment recorded as a year-end entry in FY 2023-24, resulting in atemporary positive revenue impact in the prior third-quarter period FY 2024-25. Third Quarter expenditures were $0.5 million, or 1% lower than last year, primarily due to a City Council approved one-time Additional Discretionary Payment to CalPERS toaddress the City’s Unfunded Accrued Liability retirement costs.
CITY OF CUPERTINO
FY 2025-26 Third Quarter ReportThe Administrative Services Department is pleased to present the Third Quarter Financial Report forFiscal Year 2025-26, covering the period from January 1, 2026 to March 31, 2026. This report servesas an update on the City's financial standing, providing the City Council, City leadership, and thepublic with important insights on the City's fiscal status. The City is committed to providing accurate and timely financial information, and this report reflects itsongoing efforts to maintain transparency and accountability.
Amended Budget
Cupertino's budgets: cupertino.org/budget
Updated On 13 May, 2026
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2025-26AmendedBudget Q1
2025-26AmendedBudget Q3
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General Fund Classification of Fund Balance
As of third quarter, staff anticipate the General Fund will end FY 2025-26 with $178.0 million in fund balance, an increase of $22.0 million from the FY 2025-26 AdoptedBudget fund balance projection. The increase from the Adopted Budget is a result of both year-end revenues exceeding expenditures and budget savings achieved in theprior fiscal year. It’s important to note that the only portion available for use, according to City policy, is unassigned funds. Committed funds are set aside for specificpurposes determined by City Council resolution. Restricted funds, such as the Section 115 Pension Trust, are allocated for specific purposes stipulated by external resourceproviders. Assigned funds are reserved for encumbrances. Of the total fund balance, $63.5 million is unassigned and available to be used. Approximately $10.7 million of unassigned fund balance is attributed to Vallco Town Center plan check and building inspection revenues that were carried over. Theserevenues will continue to be carried over each year until the services are rendered, and the revenues are recognized.
Recommended Adjustments
The City's departments regularly evaluate their budget expenditures throughout the fiscal year to ensure they stay within their budget appropriations. In case of any variance,they can request budget adjustments as necessary as part of the quarterly reports. The budget adjustment requests are summarized in the table below.
Summary
The Third Quarter Financial Report shows the City is positioned as anticipated. City staff recommends adjustments of $526,184 in new appropriations, funded by $372,500in revenues and $153,684 in one-time fund balance. The City will continue to monitor its revenue and expenditure trends closely to ensure it remains on track towardachieving its budgetary goals and objectives.
City of Cupertino, California
Cupertino City Hall10300 Torre AvenueCupertino, CA 95014-3202 View the City Council Meeting AgendasView the City's BudgetsView the City's Financial Transparency Portal Powered by OpenGov