million hole—an 11.5% improvement—but let's be real: that's still a massive IOU from pre-2012 bonds hanging over us taxpayers.
Here's a snapshot of the basics:
Category Amount (in
thousands)
My Take
Total Assets $141,518 Good liquidity in cash/loans, but capital assets ($2.6M) feel underutilized—could we sell more to chip away at debt?
Deferred
Outflows
$18,000 Refunding losses from bonds; smart move back in 2017, but interest is eating us alive.
Total Liabilities $1,015,534 $887M long-term debt dominates—mostly those tax allocation bonds maturing into 2035.
Net Position
(Deficit)
($856,017) Progress, but we're light years from zero.
Additions
(Revenues)
$204,480 RPTTF windfall ($202M) is our lifeline—99% of inflows—but it's volatile with property values.
Deductions
(Expenses)
$93,031 Pass-throughs to the county ($59M) for housing are noble, but $34M in bond interest? Ouch.
Change in Net
Position
+$111,449 Solid step forward, fueled by tax revenues outpacing costs.
From my review of city archives, this deficit has shrunk steadily:
Fiscal Year Ended Net Position (Deficit, in millions) Change from Prior Year June 30, 2020 (~$1,050) N/A
June 30, 2021 ($1,020) +$30M
June 30, 2022 ($980) +$40M
June 30, 2023 ($950) +$30M
June 30, 2024 ($967) -$17M (interest spike)
June 30, 2025 ($856) +$111M
As a resident who's seen property taxes climb with Silicon Valley booms, I'm grateful for the RPTTF growth covering 70-80% of needs per DOF norms. But accrual accounting here—recognizing revenues when levied, 12/9/25, 8:51 AM Mail - Agendadesk - Outlook
https://outlook.office365.com/mail/[email protected]/inbox/id/AAQkADUxOWI4ZjE3LTRkNDEtNGUzMS04MjAwLTIzNzdiYTdkMjc5NAAQA… 2/4 expenses when due—highlights a truth: we're accruing wins slowly while interest accrues fast.
Section 2: Operational and Compliance Observations
SARA's role, born from AB X1 26's 2012 dissolution, is laser-focused: wind down assets to pay enforceable obligations under your oversight (as City Council) and the county's consolidated Oversight Board. The audit confirms no hiccups—full ROPS compliance, no internal control issues, and adherence to bond covenants.
Admin costs are a bargain at $89K (0.04% of revenues), staying under DOF's 3% cap, and the $59M housing pass-through supports our low-income families, up 5% year-over-year as required by state law.
That said, the omission of the Management's Discussion and Analysis (MD&A) per GASB 34 irks me—it's like getting a report card without the teacher's notes. The auditors shrugged it off, but as a citizen, I want that context to understand risks like RPTTF shortfalls. New GASB 101 on leave liabilities? No impact here, given SARA's lean staff, which is efficient but underscores how this agency's a shadow of its former self.
Statewide, DOF data shows SARA's ROPS approvals are spotless—unlike the 5% of agencies dinged for asset mishaps. With 80% of projects wrapped, we're on track, but those 2017 refunding bonds ($981M principal) loom large. Personally, I appreciate how this fiduciary setup protects us from new debts, but it also ties up funds that could fix potholes or expand bike lanes in Willow Glen.
Section 3: Comparisons to Broader Practices with My
Recommendations
In my digging through DOF reports and peer audits, SARA holds up well against GAAP fiduciary standards— accrual basis for trust funds is spot-on, unlike simpler cash methods elsewhere. Clean opinions like this are the norm (95% per the State Controller), but skipping MD&A is a nitpick echoed in other wind-down entities.
Compared to peers, San José's scale bites: Our $856M deficit dwarfs Santa Cruz County's $150M (dissolving by 2026) but trails LA's $1.2B drag. State medians show 7-8% annual reductions; SARA's 11.5% beats that, thanks to 4.2% RPTTF growth vs. 3.1% statewide. Yet, with bonds to 2035, we're behind faster closers— frustrating when housing waits.
As a citizen, my viewpoint is clear: Celebrate the progress, and continue it. Here are some suggestions. :
1. 2.
3. Boost Transparency:
4. Mandate MD&A next year use DOF templates to explain trends simply on the city website.
5. 6.
7. 8. Speed Up Assets:
9. Hustle those $4M loans and underused properties to market; aim for 10% more deficit cut in FY2026.
10. 11.
12. 13. Strengthen Oversight:
14. Partner deeper with the county board for benchmarks; eye SB 107 tweaks if RPTTF dips.
15. 16.
17. 18. Hedge Risks:
19. Model scenarios for tax volatility keep that $75M reserve, but earmark surpluses for community reinvestment.
20. 12/9/25, 8:51 AM Mail - Agendadesk - Outlook
https://outlook.office365.com/mail/[email protected]/inbox/id/AAQkADUxOWI4ZjE3LTRkNDEtNGUzMS04MjAwLTIzNzdiYTdkMjc5NAAQA… 3/4 This message is from outside the City email system. Do not open links or attachments from untrusted sources.
21. 22.
23. Engage Us:
24. Host resident forums on the wind down; post plain English summaries so folks like me feel in the loop.
25. Thank you for your service,
Brian Darby
12/9/25, 8:51 AM Mail - Agendadesk - Outlook
https://outlook.office365.com/mail/[email protected]/inbox/id/AAQkADUxOWI4ZjE3LTRkNDEtNGUzMS04MjAwLTIzNzdiYTdkMjc5NAAQA… 4/4