FOURTH QUARTER FINANCIAL REPORT
FISCALYEAR 2024-2025
Public Safety, Finance and
Strategic Support Committee
Prepared by the Finance Department
July 28, 2025
COMMITTEE AGENDA: AUGUST 21, 2025
ITEM: (d)1.
FILE: CC 25-108
ATTACHMENT A
FOURTH QUARTER
DEBT MANAGEMENT REPORT
FISCAL YEAR 2024-2025
2 FY2024-25 Debt Issuance: $97.7 Million
3 ALL OUTSTANDING DEBT: $4.26 BILLION
(CITY AND ALL AGENCIES)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Annual Debt Issuance
($ million)
Outstanding Debt
($ million)
Fiscal Year Ended June 30
City and Related Entity Debt Outstanding Conduit Debt Outstanding Annual Debt Issuance 4 DIRECT OUTSTANDING DEBT: $3.42 BILLION
(EXCLUDING MULTIFAMILY HOUSING REVENUE BONDS)
CSJ GO Bonds,
$497,265,000, 14.53%
CSJFA Bonds/ CP Notes,
$632,677,000, 18.49%
Airport Revenue Bonds/
CP, $1,010,623,864,
29.53%
Wastewater Revenue Bonds/ RWF
Notes, $300,348,219, 8.78%
Successor Agency Tax
Allocation Bonds,
$981,260,000, 28.67%
DEBT ISSUANCE
5 • $20.7 million in CSJFA T/E Commercial Paper (Muni Water Building) • T o be closed in FY 2025-26
▪ $209.6 million CSJ General Obligation Bonds, Series 2025ABC ▪ $47.4 million CSJFA Lease Revenue Bonds, Series 2025A ▪ Multifamily Housing Revenue Bonds (MHRB)
o Arcade, Series 2025A,
o 525 North Capitol, Series 2025B
o La Moraga, Series 2025C
DEBT MANAGEMENT
6 • Renewed CSJFA CP LOC with TD Bank
• Received CP issuance authorization of $23 million for the Advanced Metering Infrastructure
• Tax Equity and Fiscal Responsibility Hearings for Arcade, 525 North Capitol, Paseo Senter I and La Moraga Apartments (refinancing) • Reduced SJCE Revolving Credit Agreement with JPMorgan by $75 million
• RFP solicitations for Debt Management Software and SARA Fiscal Consultant Services
10-year history of higher rated
(“AA+”) General Obligation debt
(20-year term) yield averaged
3.02% and is currently at 5.10%
(as of 6/26/2025).
7 BOND BUYER GO BOND YIELD INDEX
3.02%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Jun-24
Jun-25
Interest Rate
Bond Buyer 11-Bond GO Index ('AA+') avg. rating
Index Average 6/16 - 6/25 (AA+) avg. rating
• The Daily Secured
Overnight Financing Rate
(SOFR) interest rate is
4.32% (as of 6/30/25).
• The City uses SOFR as a
proxy for forecasting
interest rates for various
short-term debt
instruments.
8 SOFR RATES
4.2%
4.3%
4.4%
4.5%
4.6%
4.7%
4.8%
4.9%
5.0%
5.1%
5.2%
5.3%
5.4%
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
Jan-25
Feb-25
Mar-25
Apr-25
May-25
Jun-25
Interest Rate
Daily SOFR
GENERAL OBLIGATION CREDIT RATINGS
AS OF JUNE 30, 2025
The City’s GO Ratings are higher than the State of California’s ratings and analogous to Santa Clara County’s ratings, which is to be expected given the extent of the tax base and other credit fundamentals that the City and the County share:
9 Entity Moody’s S&P Fitch
City of San José Aa1 AA+ AAA
State of California Aa2 AA- AA
Santa Clara County (1) N/A AAA AAA
(1) Moody’s does not currently rate Santa Clara County’s General Obligation Bonds but maintains an Issuer rating of Aa1.
GENERAL CITY CREDIT RATINGS
AS OF JUNE 30, 2025
The City of San José continues to maintain very high credit ratings. 10 T ype of Rating Moody’s S&P Fitch
Issuer Rating Aa1
(stable)
AA+
(stable)
AA+
(stable)
General Obligation Bonds Aa1
(stable)
AA+
(stable)
AAA
(stable)
Lease Revenue Bonds
(Essential Assets)
Aa2
(stable)
AA
(stable)
AA
(stable)
Lease Revenue Bonds
(Less Essential Assets)
Aa3(1)
(stable)
AA
(stable)
AA-(2)
(stable)
(1) Moody’s assigns a rating of Aa3 to CSJFA 2020B and 2022A bonds which the rating agency considers less essential assets. (2) Fitch assigns a rating of AA- to CSJFA 2020B bonds which the rating agency considers less essential assets.
OTHER CITY CREDIT RATINGS
AS OF JUNE 30, 2025
11 T ype of Rating Moody’s S&P Fitch KBRA (Kroll) 1
San José Airport
Bonds
A2
(stable)
A
(stable)
A
(stable) N/A
Wastewater
Revenue Bonds N/A AAA
(stable)
AAA
(stable)
AAA(1)
(stable)
SARA Senior T ax
Allocation Bonds N/A AA
(stable)
AA+
(stable) N/A
SARA Subordinate
T ax Allocation Bonds N/A AA-
(stable)
AA+
(stable)2 N/A
San José Clean
Energy (Issuer)
A2
(stable)
A
(stable) N/A N/A
(1) KBRA (Kroll) has assigned a rating to the CSJFA Wastewater Revenue Bonds exclusively. (2) SARA Subordinate TABs were upgraded by Fitch to AA+ on 10/3/2024.
FOURTH QUARTER
INVESTMENT MANAGEMENT REPORT
FOR FISCAL YEAR 2024-2025
12 INVESTMENT POLICY
(COUNCIL POLICY 1-12)
• Investments meet the requirements of the City’s Investment Policy and conform with California Government Code section 53601 • Authorized investments are only highly-rated fixed income securities • Investment Policy is reviewed annually and was last adopted by resolution of the City Council on March 11, 2025
• Investment Program is audited semi-annually for compliance purposes 13 INVESTMENT OBJECTIVES & REPORTING
• Manage investments to meet the City’s Investment Policy objectives:
▪ Safety
▪ Liquidity
▪ Yield
• Quarterly reports are available to the public
▪ On-line
▪ In PSFSS Committee agenda packets
▪ In City Council agenda packets (for acceptance)
14 PORTFOLIO PERFORMANCE SUMMARY
Size of Total Portfolio $2,980,651,143
Earned Interest Yield 3.805%
Weighted Average Maturity 560 days
Fiscal Year-to-Date Net Income Recognized $95,819,164
Exceptions to the City Investment Policy this Quarter None 15 INVESTMENT POLICY
(COUNCIL POLICY 1-12)
• Investments meet the requirements of the City’s Investment Policy and conform with California Government Code section 53601 • Authorized investments are only highly-rated fixed income securities • Investment Policy is reviewed annually and was last adopted by resolution of the City Council on March 11, 2025
• Investment Program is audited semi-annually for compliance purposes 16 16
INVESTMENT OBJECTIVES & REPORTING
• Manage investments to meet the City’s Investment Policy objectives:
▪ Safety
▪ Liquidity
▪ Yield
• Quarterly reports are available to the public:
▪ On-line
▪ In PSFSS Committee agenda packets
▪ In City Council agenda packets (for acceptance)
17 17
GENERAL FUND BALANCE
• The General Fund balances increased by $275 million with the receipt of property taxes in June and ended with a balance of $781 million as of June 30, 2025. General Fund cash balances usually peak during the months of January and June, when the bulk of property taxes are received, and decline in the summer months due to retirement prefunding, debt service payments and operational expenditures.
• Projected investment maturities, cash and revenues are sufficient to cover anticipated expenditures for the next six months
18 19
COMPARISON OF CASH BALANCES
(BY SELECT FUNDS)
The following graph compares
monthly balances of the five largest
City funds as reported by FMS.
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1000
Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 Dollars in millions
Gerenal Fund Wastewater Airport Housing Special Revenue Fund • City refers to City's Portfolio, and
the yield data are month-end
weighted average yields.
• LAIF refers to the State of CA
Local Agency Investment Fund and
yield data are average monthly
effective yields.
• BAML refers to Bank of America
Merrill Lynch 1-3 Year AAA-A US
Corporate & Government Index
and yield data are rolling 2-year
effective yield.
20 BENCHMARK COMPARISONS
0.00 0.50
1.00 1.50
2.00 2.50
3.00 3.50
4.00 4.50
5.00 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 Yield (%)
City LAIF BAML
Yield WAM
BAML: 4.588% 683
LAIF: 4.269% 248
CITY: 4.046% 560
INVESTMENT STRATEGY
• Continue matching known expenditures with suitable investments within the 24-month horizon
• Extend a portion of the portfolio beyond two-year term, when appropriate, to provide income and structure to the portfolio • Maintain the diversification of the portfolio
• Focus on core objectives of safety, liquidity, and yield 21 FOURTH QUARTER
REVENUE MANAGEMENT REPORT
FOR FISCAL YEAR 2024-2025
22 REVENUE MANAGEMENT PROGRAMS
• Finance Department Revenue Management focuses on collecting outstanding receivables, with an emphasis on reducing delinquent accounts and enhancing revenue compliance, through four primary collection programs:
▪ Accounts Receivable
▪ Business Tax
▪ Compliance and Monitoring
▪ Utility Billing
• Efforts may span several reporting periods, and actual collections are reported as funds are received by the City.
23 T otal Revenue: $4.231B
Source: 2023-24 City Manager’s
Budget Office Annual Report
(Graph is updated annually)
24 REVENUE MANAGEMENT PORTFOLIO
FY 2023-24 REVENUE ($ IN MILLIONS)
Lodging Taxes
& Fees
$54.8M
3.8%
Franchise Fees
$52.5M
3.7%
Utility Users Tax
$129.8M
9.1%
Telephone Line Tax
$22.3M
1.6%
Real Property Transfer Tax
$50.7M
3.6%
Sales Tax
$333.4M
23.4%
Misc. Billing
$208.9M
14.6%
Business Taxes
$86.1M
6.0%
Utility Billings
$489.1M
34.3%
Revenue
Management
$1.4B
City-Wide Revenue
(excluding Revenue
Management)
$2.8B
Includes invoices billed through the
Business Tax System, the centralized
Accounts Receivable system (RevQ),
and the Utility Billing System.
(Graph is updated annually)
25 INVOICING AND PAYMENTS
FIVE-YEAR HISTORY (FY 2019-20 TO FY 2023-24)
96.5% 98.0% 96.1% 96.2% 95.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$-
$100
$200
$300
$400
$500
$600
$700
$800
FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24
In Millions
Payments Outstanding Percentage Collected
26 OUTSTANDING RECEIVABLES
THREE-YEAR HISTORY (FY 2022-23 Q1 TO FY 2024-25 Q4)
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
$-
$20
$40
$60
$80
$100
$120
22-23
Q1
22-23
Q2
22-23
Q3
22-23
Q4
23-24
Q1
23-24
Q2
23-24
Q3
23-24
Q4
24-25
Q1
24-25
Q2
24-25
Q3
24-25
Q4
Quarter to Quarter % Change
Millions
Revenue Mangement Aging
Total Receivables Delinquent (91+ days) Delinquency Percentage Change 27 FY 2024-25 Q4 DELINQUENT RECEIVABLES
COLLECTION STATUS SUMMARY ($ IN MILLIONS*)
*Rounded
As of June 30, 2025
Write-Off Pending (A/R Only)
$1.0M
584 Invoices
Liens (A/R Only)
$1.0M
285 Invoices
Restitution,
Payment Plan (A/R Only)
$1.0M
317 Invoices
Legal,
Bankruptcy
$5.1M
708 Invoices
Collection Agency
$21.3M
22,152 Invoices
Active
$37.9M
19,031 Invoices
Total Delinquent
$67.3M
Total Current
$36.1M
COLLECTIONS & RETURN ON INVESTMENT
REVENUE MANAGEMENT COLLECTIONS (FY 2023-24 Q1 TO FY 2024-25 Q4) Target ROI: 5.0
28 FY 24-25 ROI: 5.20
REVENUE COMPLIANCE REVENUE
RECOVERY
• Revenue Compliance and Monitoring conducts cyclical tax and fee audits and revenue collections for a variety of programs (e.g., Sales and Use Tax, Hotel Taxes/Lodging Fees, Utilities, T elecommunications, and Cannabis).
• In Q4, ~$1.6M was recovered in delinquent collections and audits (cannabis business tax, hotel tax, telecommunications user tax, utility user tax, and sales and use tax).
29 ACCOUNTS RECEIVABLE & UTILITY
BILLING AMNESTY PROGRAMS
• These Amnesty Programs offer an opportunity to have accumulated penalties and interest waived in exchange for payment of the principal amount due • Amnesty Program Application Period: April 1 – September 30, 2025 30 Accounts Receivable Amnesty
Program Target $675K
FY24-25 Payments $391K
Amnesty Waivers to Date $197K
FY25-26 Target $284K
Utility Billing Amnesty
Program Target N/A
FY24-25 Payments $278K
Amnesty Waivers to Date $675K
FY25-26 Target N/A
FOURTH QUARTER
PURCHASING AND
RISK MANAGEMENT REPORT
FOR FISCAL YEAR 2024-2025
31 PURCHASING PROGRAM
The Purchasing Division of the Finance Department is responsible for the centralized procurement of equipment, supplies, materials, Information T echnology (IT), and non-consulting services, pursuant to the City of San José Municipal Code Title 4, Chapter 4.12. 32 PURCHASING TRANSACTIONS COMPLETED
FOURTH QUARTER FY 2024-25
DESCRIPTION
FOURTH QUARTER
TRANSACTIONS
FISCAL YEAR
TO DATE
SOLICITATIONS COMPLETED (RFX) 39 159
PURCHASE ORDERS & PURCHASE ORDER ADJUSTMENTS EXECUTED 430 1,884 CONTRACTS NEGOTIATED & EXECUTED 3 13
AMENDMENTS, CHANGE ORDERS, SERVICE ORDERS, & OPTIONS EXECUTED 51 145 COUNCIL MEMORANDA ISSUED 29 82
PURCHASE ORDER DOLLARS PROCURED $59,525,113 $302,926,055 CONTRACT DOLLARS PROCURED $8,782,787 $22,286,485
33 RISK MANAGEMENT PROGRAM
The Division is responsible for the procurement and oversight of the City’s property and casualty insurance programs and providing contractual risk management services, property subrogation claims reporting and other key services to City Departments.
34 35
RISK MANAGEMENT TRANSACTIONS COMPLETED
FY 2024-25, FOURTH QUARTER
Transaction T ype Fourth Quarter
Transactions
Fiscal Y ear to
Date
Request for Contract Insurance Specifications 273 1,232 Request for Insurance Compliance Review 273 695
Request for Letters of Self-Insurance 32 83
Subrogation Dollars Billed to Responsible Third Parties $71,186 $271,236 Council and Committee Memorandums Issued 2 4
RECOMMENDATION
(1) Accept the Fourth Quarter (period ended June 30, 2025) Financial Reports for Fiscal Year 2024-2025 for the following programs:
▪ (a) Debt Management;
▪ (b) Investment Management;
▪ (c) Revenue Management; and
▪ (d) Purchasing and Risk Management;
(2) Refer and cross-reference the Fourth Quarter Financial Reports for Fiscal Year 2024-2025 to the September 9, 2025 City Council meeting for full adoption.
36