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MONTHLY FINANCIAL STATUS REPORT
February 2023
2 City of Santa Clara
Financial Status Report as of February 28, 2023
This report summarizes the City’s financial performance for the month ended February 28, 2023.
Financial analysis for the report is provided for the General Fund, select Special Revenue Funds, Enterprise Operating Funds, and Capital Improvement Funds. Financial information included in this report is unaudited.
Economic Overview
Economic indicators are mixed, and there is a tremendous amount of uncertainty. Given this level of uncertainty, both the December 2022 and March 2023 UCLA Anderson Forecasts presented a two- scenario approach: recession scenario and no recession scenario. The recession scenario predicts a recession occurring at the end of 2023, where “inflation would have continued to run hot if not for aggressive Federal Reserve action. In this scenario, the Federal Reserve forces a mild recession and accepts an economic contraction and higher unemployment to combat inflation.” In the no recession scenario, “economic growth slows but remains positive, inflation ebbs, labor markets remain robust, and the Federal Reserve takes a less aggressive approach to monetary policy tightening”.1
The Conference Board Consumer Confidence Index decreased in April. “While consumers’ relatively favorable assessment of the current business environment improved somewhat in April, their expectations fell and remain below the level which often signals a recession looming in the short- term,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board. “Consumers became more pessimistic about the outlook for both business conditions and labor markets. Compared
1 UCLA Anderson Forecast, March 2023, Recession or No Recession? That is the Question
3 City of Santa Clara
Financial Status Report as of February 28, 2023
to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months. They also expect fewer jobs to be available over the short term.
April’s decline in consumer confidence reflects particular deterioration in expectations for consumers under 55 years of age and for households earning $50,000 and over.”2 In the first quarter 2023 advance estimate, the Gross Domestic Product (GDP) increased by 1.1%, following a GDP increase of 2.6% in the fourth quarter 2022. The GDP increase in the first quarter reflects higher consumer spending, exports, federal, State and local spending.3
On a national level, the unemployment rate remained unchanged in March 2023 at 3.5% from February 2023. This rate was well below the record setting high of 14.7% in April 2020, and consistent with the pre-pandemic unemployment rate of 3.5%. In March, the number of unemployed persons stayed at 5.8 million, which is slightly higher than the pre-pandemic level of 5.7 million.4
2 US Consumer Confidence (conference-board.org)
3 https://www.bea.gov/sites/default/files/2023-04/tech1q23_adv.pdf 4https://www.bls.gov/news.release/pdf/empsit.pdf
4 City of Santa Clara
Financial Status Report as of February 28, 2023
The State and local employment levels remain strong. The California unemployment rate slightly increased from 4.2% in January 2023 to 4.3% in February 2023. This rate is lower compared to the
4.7% rate in February 2022. Since April 2020, California has gained 3.05 million jobs; regaining all of the 2.76 million nonfarm jobs lost due to COVID-19 in March and April 2020.5 The unadjusted unemployment rate in the San José-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) was 3.3% in March 2023, up slightly from a revised 3.2% in February 2023 and is above the March 2022 level of 2.9% and the February 2020 pre-pandemic level of 2.6%. Between March 2022 and March 2023, employment in this region increased by 37,700 jobs, or 3.3%.6 The largest increases were in leisure and hospitality (up 12,000 jobs), private educational and health services (up 9,600 jobs), and professional and business services (up by 8,500 jobs).
General Fund
The General Fund is the major operating fund for the City and includes multiple programs, services, and activities for the residents and businesses of the City. The adopted budget for operating revenues and expenditures for fiscal year 2022/23 was $272.4 million. The amended budget for revenues and expenditures was adjusted to $284.0 million to reflect various budget amendments approved by the City Council through February 2023.
General Fund revenues are currently tracking to end the year above the budgeted level. Through February, departmental expenditures are tracking below budget and this trend is expected to continue as departments continue to control expenditures through various cost control measures.
5 https://edd.ca.gov/en/about_edd/news_releases_and_announcements/unemployment-february-2023/ 6 https://labormarketinfo.edd.ca.gov/file/lfmonth/sjos$pds.pdf
5 City of Santa Clara
Financial Status Report as of February 28, 2023
General Fund Revenues
As of February 28, 2023, $151.3 million, or 63.3% of the General Fund estimated revenue (excluding transfers) was received. Transfers and use of reserves of $45.0 million have occurred as budgeted.
Revenue collections are tracking to end the year above budget and are higher when compared to collections last fiscal year.
Adopted Budget
Amended
Budget
Actual Through
02/28/2023
Percentage
Received
Actual Through
02/28/2022
$
Change From
Prior Year
Percentage
Change
TAXES
Sales Tax 60,173,000$ 60,173,000$ 32,771,154$ 54.46% 30,205,907$ 2,565,247$ 8.49% Property Tax 75,261,000 75,261,000 43,544,139 57.86% 37,857,769 5,686,370 15.02% Transient Occupancy Tax 12,600,000 12,600,000 10,672,774 84.70% 4,132,301 6,540,473 158.28% Other Taxes 6,260,000 6,260,000 3,296,767 52.66% 3,440,736 (143,969) -4.18% Total Taxes 154,294,000 154,294,000 90,284,834 58.51% 75,636,713 14,648,121 19.37%
LICENSES & PERMITS
Business Licenses 900,000 900,000 562,972 62.55% 547,241 15,731 2.87% Fire Operation Permits 2,100,000 2,358,000 1,258,036 53.35% 1,272,174 (14,138) -1.11% Miscellaneous Permits 72,000 72,000 37,239 51.72% 40,685 (3,446) -8.47% Total Licenses & Permits 3,072,000 3,330,000 1,858,247 55.80% 1,860,100 (1,853) -0.10% FINES & PENALTIES 1,465,000 1,615,000 220,541 13.66% 238,018 (17,477) -7.34% INTERGOVERNMENTAL 310,000 310,000 897,220 289.43% 2,164,125 (1,266,905) -58.54% CHARGES FOR SERVICES 31,258,098 31,239,098 21,453,395 68.67% 19,153,379 2,300,016 12.01% SILICON VALLEY POWER TRANSFER 26,170,000 26,170,000 19,095,925 72.97% 17,182,251 1,913,674 11.14%
USE OF MONEY & PROPERTY
Interest 2,532,000 2,532,000 1,521,524 60.09% 992,819 528,705 53.25% Rent 10,584,266 10,584,266 8,024,760 75.82% 6,416,946 1,607,814 25.06% Total Use of Money & Property 13,116,266 13,116,266 9,546,284 72.78% 7,409,765 2,136,519 28.83% MISCELLANEOUS REVENUES 150,000 189,099 1,973,302 1043.53% 429,338 1,543,964 359.62%
OTHER FINANCING SOURCES
Operating Transfer In - Storm Drain 1,454,000 1,454,000 1,454,000 100.00% 1,454,000 - 0.00% Operating Transfer In - Reserves 25,812,244 36,719,079 36,719,079 100.00% 32,758,819 3,960,260 12.09% Operating Transfer In - Fund Balances(2) 4,484,726 4,484,726 4,484,726 100.00% 4,817,658 (332,933) -6.91% Operating Transfer In - Miscellaneous 2,127,374 2,370,374 2,370,374 100.00% 5,427,399 (3,057,025) -56.33% Total Other Financing Sources 33,878,344 45,028,179 45,028,179 100.00% 44,457,876 570,302 1.28%
STADIUM OPERATION
Charges for Services 7,889,147 7,889,147 5,293,669 67.10% 2,083,080 3,210,589 154.13% Rent and Licensing 752,500 752,500 710,000 94.35% 293,299 416,701 142.07% Total Stadium Operation 8,641,647 8,641,647 6,003,669 69.47% 2,376,379 3,627,290 152.64% TOTAL GENERAL FUND 272,355,355$ 283,933,289$ 196,361,596$ 69.16% 170,907,944$ 25,453,652$ 14.89% (1) The Operating Transfer In - Fund Balances includes the carryover encumbrances of open purchase orders as of June 30, 2022 and mid year budget amendment from reserves.
Function
CITY OF SANTA CLARA
GENERAL FUND
REVENUES OVERVIEW AND COMPARISON BY TYPE
FISCAL YEAR 2022/23 PY REVENUE COMPARISON
6 City of Santa Clara
Financial Status Report as of February 28, 2023
General Fund Revenues
Sales Tax: The City of Santa Clara sales tax rate is 9.125%, of which the City receives 1.0%. As of February, $32.8 million has been collected. This reflects an increase of $2.6 million when compared to collections through the same period last fiscal year. In this fiscal year, sales tax receipts increased
15.7% in the July – September 2022 quarter, 2.4% in the October – December 2022 quarter when compared to the same quarters last fiscal year. Growth of 3% is needed in the remaining two quarters of Fiscal Year 2022/23 to meet the budgeted estimate of $59.4 million. Internet sales represents a sizeable amount of the City’s sales tax revenue. The County pool, which includes internet sales, accounts for approximately 20% of the sales tax the City receives.
Property Tax: Through February, 57.9% of the property tax budgeted estimate has been received. The majority of property tax revenue is collected in February and April each year. Based on information from the County of Santa Clara, property tax receipts are projected to end the year at $84.1 million, well above the Adopted Budget estimate of $75.3 million and the prior year actuals of $74.6 million. This reflects strong growth in the secured, supplemental, and unsecured property tax categories. A budget amendment is recommended to recognize the projected revenue above the Adopted Budget of $8.86 million. Of this amount, $1.65 million is recommended to be set aside in a new Property Tax Excess Education Augmentation Revenue Fund (ERAF) Reserve to address potential legal challenges associated with these funds. In FY 2022/23, an estimated $5.5 million is projected from excess ERAF distributions (under Proposition 98, a portion of property tax receipts have been allocated to the ERAF beginning in 1992, and once there are sufficient funds in ERAF to fulfill the obligation to the school districts, excess funds are returned to the taxing entities that contributed the funding). The California School Boards Association has filed a lawsuit against the Controller of the State of California on the disbursement of the excess ERAF funds. Given this lawsuit, the County of Santa Clara has estimated that approximately 30% of the excess ERAF distribution is at risk (estimated $1.65 million in FY 2022/23).
Transient Occupancy Tax (TOT): TOT is calculated as a percentage of City hotel/motel room charges. The City’s TOT rate is 11.5%. Through February, $10.7 million has been received, which is significantly higher than receipts through the same period last fiscal year of $4.1 million. While businesses continue to recover from COVID-19 impacts, activity has not yet reached pre-pandemic levels. TOT receipts through February are tracking at 90% of pre-pandemic levels; however, this is due in part to the TOT rate increase that went into effect in January 2022. Factoring out the rate increase, TOT activity is tracking at 74% of pre-pandemic levels. Based on current collection trends, TOT receipts are expected to end the year at approximately $19 - $20 million, exceeding the budgeted estimate of $12.6 million.
Other Taxes: Includes franchise tax and documentary transfer tax. The City has collected $3.3 million through February, which is slightly below the prior year collection levels. This reflects lower collections in the documentary transfer tax category that are partially offset by higher collections in the franchise tax category. Even though receipts are tracking slightly below the prior year, they are projected to exceed the budgeted estimate of $6.3 million based on current collection trends.
7 City of Santa Clara
Financial Status Report as of February 28, 2023
Licenses & Permits: Includes business licenses, fire operation permits, and miscellaneous permits and fees. Effective FY 2021/22, building, electric, plumbing, and mechanical permits are budgeted in the Building Development Services Fund, which is reflected in the Special Revenue section of this report. Licenses and permits revenue collections are tracking below par with receipts totaling $1.8 million, or 56% of the budget of $3.3 million, through February. This collection level is consistent with the prior fiscal year collection level. Based on current collections trends, revenues in this category are tracking to end the year below the budgeted estimate.
Fines & Penalties: Includes vehicle, parking, court fines, and miscellaneous penalty fines. The revenue of approximately $0.2 million collected through February is tracking to end the year well below the budgeted estimate of $1.6 million largely due to the waiving of late fees implemented in response to COVID-19. The late fees are no longer being waived as of April 1, 2023.
Intergovernmental: Includes motor vehicle fees, state homeowner tax relief, fire mutual aid, state mandated reimbursement and redistribution of land sale proceeds and ground leases from the Successor Agency. Through February, $0.9 million has been received, which is lower than the prior year collection level but above the budgeted estimate. Fire mutual aid revenues of $0.3 million are recommended to be recognized and appropriated to the Fire Department to support their operations in this report.
Charges for Services: Includes various plan check and zoning-related fees, engineering fees, administrative fees, and community service revenue from various recreational activities. Through February, collections are tracking within the budgeted estimate at $21.5 million, or 68.7% of the budget.
This reflects a 12% increase compared to last year’s collections through the same period of $19.2 million. This increase is a result of higher collections for planning and zoning fees, technology fee, engineering fees, and Fire EMS fees.
Transfer from City Utilities: In accordance with the City’s charter, Silicon Valley Power pays 5.0% of gross revenues to the General Fund. As of February, $19.1 million has been received. Transfers throughout the year are based on the budgeted estimate and will be trued up at the end of the fiscal year based on actual performance.
Use of Money & Property: Includes realized interest income and rental income. Interest income and rent revenue collections totaled $9.5 million, or 72.8% of the budget. These collections are higher than collections through last fiscal year of $7.4 million. The increase in the interest income reflects the higher investment yield, while rents are higher primarily due to the Commerce Plaza and Hyatt Regency at 5101 Great America properties. Collections are expected to exceed the budgeted estimate of $13.1 million.
Miscellaneous Revenues: Includes developer fees, donations, damage recovery, sale of surplus, and one-time miscellaneous revenues. Through February 28, 2023, collections of $2.0 million are higher than collections through the same period last fiscal year of $0.4 million. This increase is primarily attributable to the $1.67 million settlement between the City, the Santa Clara Stadium Authority, and the
8 City of Santa Clara
Financial Status Report as of February 28, 2023
Forty-Niners SC Stadium Company LLC and Forty Niners Stadium Management Company LLC (collectively, the Forty-Niners).
Stadium Operation: As of February 28, 2023, charges for services collected through the Stadium totaled $6.0 million, which is slightly above par for this time of year. This is significantly higher than collections through the same period last year resulting from the reopening of Stadium for events. A budget amendment was included in the January 2023 monthly financial report to increase both the charges for services estimate and appropriations for Stadium as a result of higher expenses related to the additional playoff games held at Levi’s Stadium. This adjustment will be reflected in the March 2023 monthly financial report.
9 City of Santa Clara
Financial Status Report as of February 28, 2023
General Fund Expenditures
As of February 28, 2023, $ 178.2 million or 62.8% of the Gener al Fund operating budget had been expended. Overall, expenditures i n the G eneral Fund are tracking below budgeted levels through February. Departmental expenditures totaled $159.3 million, or 60.2% of the budget, which is below the par level of 66.7% o f the budget . This reflects savings from vacant positions as well as savings generated from cost-control measures that were implemented in FY 2019/20 remain in place to generate expenditure savings. These measures include a hiring freeze and contro ls around overtime, as-needed staff, mark eting, t ravel, te chnology a nd vehi cle purchases. With th ese m easures, expenditures are expected to end the year below budget.
Adopted Budget
Amended
Budget
Actual Through
02/28/2023
Percentage
Use d
Actual Through
02/28/2022
$
Change From
Prior Year
Percentage
Change
GENERAL GOVERNMENT
Non-Departmental 7,514,334$ 9,513,394$ 3,158,084$ 33.20% 2,859,889$ 298,194$ 10.43% City Council 861,105 862,396 436,469 50.61% 541,994 (105,525) -19.47% City Clerk 2,076,112 2,093,661 1,438,688 68.72% 889,060 549,628 61.82% City Manager 6,085,321 6,292,428 3,552,663 56.46% 3,272,909 279,754 8.55% City Attorney 3,202,735 3,690,974 2,074,953 56.22% 1,559,818 515,135 33.03% Human Resources 4,508,710 4,828,451 2,398,435 49.67% 2,372,135 26,300 1.11% Finance 19,045,131 20,272,300 11,215,496 55.32% 10,256,485 959,011 9.35% Total General Government 43,293,448 47,553,604 24,274,788 51.05% 21,752,290 2,522,497 11.60% PUBLIC WORKS 24,021,840 25,092,840 14,178,287 56.50% 14,409,715 (231,428) -1.61% COMMUNITY DEVELOPMENT 5,398,007 5,665,420 2,920,551 51.55% 3,033,657 (113,106) -3.73% PARKS AND RECREATION 21,695,302 22,268,115 13,102,102 58.84% 11,854,397 1,247,705 10.53%
PUBLIC SAFETY
Fire 62,298,852 65,944,826 44,495,241 67.47% 29,859,881 14,635,360 49.01% Police 84,615,023 85,779,549 53,416,667 62.27% 35,496,168 17,920,499 50.49% Total Public Safety 146,913,875 151,724,375 97,911,908 64.53% 65,356,049 32,555,859 49.81% LIBRARY 11,889,451 12,277,870 6,866,721 55.93% 5,783,830 1,082,891 18.72% DEPARTMENTAL TOTAL 253,211,923 264,582,224 159,254,357 60.19% 122,189,938 37,064,418 30.33%
OTHER FINANCING USES
Operating Transfer Out - Miscellaneous 38,809 38,809 38,809 100.00% 23,851,216 (23,812,407) -99.84% Operating Transfer Out - Debt Services 1,402,275 1,402,275 1,402,275 100.00% 2,501,439 (1,099,164) -43.94% Operating Transfer Out - Maintenance Dtrct 842,700 842,700 842,700 100.00% 771,349 71,351 9.25% Operating Transfer Out - Cemetery 870,000 870,000 870,000 100.00% 850,000 20,000 2.35% Operating Transfer Out - CIP 8,625,501 8,817,613 8,817,613 100.00% 11,773,925 (2,956,312) -25.11% Operating Transfer Out - Reserves - - - N/A 3,309,009 (3,309,009) -100.00% Total Other Financing Uses 11,779,285 11,971,397 11,971,397 100.00% 43,056,938 (31,085,541) -72.20% STADIUM OPERATION 7,364,147 7,379,668 7,015,387 95.06% 5,271,118 1,744,269 33.09% TOTAL GENERAL FUND 272,355,355$ 283,933,289$ 178,241,141$ 62.78% 170,517,994$ 7,723,146$ 4.53% Function
CITY OF SANTA CLARA
GENERAL FUND
EXPENDITURES OVERVIEW AND COMPARISON BY FUNCTION
FISCAL YEAR 2022/23 PY EXPENDITURES COMPARISON
10 City of Santa Clara
Financial Status Report as of February 28, 2023
General Fund Expenditures
Below is an explanation of certain budget to actual expenditure variances by department.
Non-Departmental: Includes expenditures that are not attributable to a single department, but a function of the City in general. As of February,, expenditures totaled $3.2 million, or 33.2% of the budget. These expenditures are tracking below budget but are higher than the prior year levels, primarily as a result of higher expenditures in the contractual services as well as salaries and benefits categories. This category includes $1.7 million for the Education Revenue Augmentation Fund Property Tax contingency that was set aside as part of the FY 2021/22 Year-End Budgetary Report due to a legal challenge from the California School Boards regarding the distribution of these funds. Budget actions are recommended to move these funds, along with additional funds from FY 2022/23, to a new Property Tax Excess ERAF Reserve. This category also includes $1.8 million for separation payouts that has not been expended; these funds are transferred to departments as necessary to address these costs.
City Attorney: Through February, actual expenditures totaled approximately $2.1 million, which is below expected levels at 56.2% of the budget. Spending is 33% above the total expenditures through the same time last fiscal year due to higher costs for contractual legal services and salaries and benefits.
City Clerk: Through February, actual expenditures were tracking above budget at $1.4 million or approximately 68.7% of the budget. This reflects a 62% increase in spending compared to prior year spend levels. This is a result of higher salaries and benefits costs in addition to one-time special election costs, and Granicus costs that are paid every other year. Although expenditures are tracking above par, it is still anticipated that the Department will end the year within budget.
City Council: Through February, expenditures were at 50.6% of budget, which is below par. Compared to the same period through last fiscal year, this reflects a spending decrease of approximately 19.5%, which is primarily the result of savings due to vacancies within the department.
City Manager: Expenditures through February totaled $3.6 million, or 56.5% of the budget, which is below par for this time of the year. Expenditures are 8.5% higher compared with the spending level through the same period last fiscal year. This increase reflects higher property management maintenance costs and as-needed spending. This increase is offset by lower spending in contractual services and salaries and benefits.
Community Development Department: This department consists of three divisions: Planning, Building, and Housing and Community Services. The Building division of this department is reflected in the Building Development Services Fund, which falls under the special revenue section of this report.
Through February, General Fund expenditures for the Planning and Housing and Community Services divisions totaled $2.9 million, or 51.6% of budget, which is below the par level of 66.7%. Expenditures were slightly below the spending through the same period last fiscal year due to lower non-personnel expenditures.
11 City of Santa Clara
Financial Status Report as of February 28, 2023
Finance Department: Through February, the Department’s expenditures totaled $11.2 million, or
55.3% of the budget, which is below par. This expenditure level was approximately 9.4% higher than expenditure levels through the same period last year. This is a result of higher expenditures primarily in the salaries and benefits categories.
Fire Department: Through February, expenditures totaled $44.5 million, or 67.5% of the budget, which is at par. These expenditures reflect a 49% increase from expenditures through the same period last fiscal year. This large increase compared to the prior year is a result of the shifting of $11.3 million of Fire’s operating budget to the American Rescue Plan Act (ARPA) Fund last year on a one-time basis.
As the ARPA was one-time funding, this year’s tracking reflects all of the Department’s expenditures.
Spending is higher in the salaries and benefits, as-needed, contractual services, maintenance, and capital outlay categories. Overtime expenditures are tracking above the budget at 106%. While this overtime figure is high, it is important to note that overtime is used to backfill for vacant positions and the vacancy savings offset a portion of the overtime costs. In addition, overtime costs are higher due to mutual aid efforts that will be reimbursed. A budget amendment was included in the January 2023 monthly financial report to recognize and appropriate $0.3 million for Cal OES reimbursements. This adjustment will be reflected in the next month’s report. An additional $0.3 million of Cal OES reimbursements is recommended to be recognized and appropriated in this report.
Library Department: Through February, actual expenditures totaled $6.9 million, or 56% of the budget, which is below par, but nearly 18.7% higher than expenditure levels last fiscal year. This is a result of resuming operations which began earlier this calendar year.
Parks and Recreation Department: Through February, actual expenditures totaled approximately $13.1 million, or 58.8% of the budget, which is below par, but above the prior year actuals of $11.8 million. This is due to the department resuming activities that were previously impacted by COVID-19 restrictions.
Police Department: Expenditures through February are tracking below expected levels at $53.4 million, or 62.3% of the budget. This is approximately 50% higher when compared to spending levels through the same period last fiscal year. Similar to the Fire Department, this large increase compared to the prior year is a result of the shifting of $14.9 million of Police’s operating budget to the American Rescue Plan Act Fund last year. As this was one-time funding, this year’s tracking reflects all of the Department’s expenditures.
Stadium Operation: Stadium operating expenditures are incurred first and billed on a reimbursement basis creating a timing difference in revenue recognition. Stadium expenditures totaled approximately $7.0 million through February and are tracking above budgeted levels at 95.1%. This is 33% higher than expenditures through the same period last year, as a direct result of the reopening of the Stadium for events. A budget amendment was included in the January 2023 monthly financial report to increase both the charges for services estimate and appropriations for Stadium as a result of higher expenses related to the additional playoff games held at Levi’s Stadium. This adjustment will be reflected in the March 2023 monthly financial report.
12 City of Santa Clara
Financial Status Report as of February 28, 2023
Special Revenue Funds
The table below is a summary of revenues and expenditures of select Special Revenue Funds as of February 28, 2023. The amended budget reflects carryover encumbrances from fiscal year 2021/22 and budget amendments approved by the City Council through February 2023. Effective July 1, 2021, all Building Division revenues and expenditures are budgeted and accounted for in the Building Development Services Fund, which is included in the table below.
Revenues totaled $21.4 million, or 78.8% of budget, while expenditures totaled $21.9 million, or 62.7% of budget through the end of February. Overall, revenues are tracking above budget due primarily to strong performance in the Building Development Services Fee Fund while expenditures are tracking below par of 66.7%. The expenditures in the City Affordable Housing Fund are tracking over due to a special disbursement loan for the 2302 Calle Del Mundo project. A budget amendment was included in the last monthly financial report to adjust the special disbursements budget to account for this project.
This adjustment will be reflected in the next month’s report.
Actual Actual $
Fund Adopted Amended Through Percentage Through Change From Percent Description Budget Budget 2/28/2023 received 2/28/2022 Prior Year Change Housing Authority Fund 280,000$ 252,495$ 58,124$ 23.02% 240,167$ (182,043)$ -75.80% City Affordable Housing Fund 682,000 7,162,700 6,262,565 87.43% 2,076,854 4,185,711 201.54% Housing Successor Fund 350,000 1,306,326 482,700 36.95% 511,106 (28,406) -5.56% Housing and Urban Development 1,810,000 3,924,461 655,425 16.70% 1,559,417 (903,992) -57.97% Building Development Services Fee
Fund
14,112,000 14,464,458 13,912,940 96.19% 10,732,472 3,180,468 29.63% American Rescue Plan Act Fund - - - 0.00% 13,254,067 (13,254,067) -100.00% TOTAL 17,234,000$ 27,110,440$ 21,371,754$ 78.83% 28,374,083$ (7,002,329)$ -24.68% Actual Actual $
Fund Adopted Amended through Percentage through Change From Percent Description Budget Budget 2/28/2023 use d 2/28/2022 Prior Year Change Housing Authority Fund 380,363$ 559,503$ 134,423$ 24.03% 78,264$ 56,159$ 71.76% City Affordable Housing Fund 1,685,731 5,499,145 6,603,822 120.09% 609,947 5,993,875 982.69% Housing Successor Fund 1,242,599 6,049,148 5,380,413 88.94% 469,055 4,911,358 1047.08% Housing and Urban Development 2,355,815 5,223,984 1,156,305 22.13% 2,287,085 (1,130,780) -49.44% Building Development Services Fee
Fund
13,360,809 17,682,237 8,669,703 49.03% 6,976,549 1,693,154 24.27% American Rescue Plan Act Fund - - - 0.00% 23,041,601 (23,041,601) -100.00% TOTAL 19,025,317$ 35,014,017$ 21,944,666$ 62.67% 33,462,501$ (11,517,835)$ -34.42%
PRIOR YEAR EXPENDITURE COMPARISON
CITY OF SANTA CLARA
SPECIAL REVENUE FUNDS
REVENUE AND EXPENDITURE - OVERVIEW AND COMPARISON BY FUND REVENUES - FISCAL YEAR 2022/23 PRIOR YEAR REVENUE COMPARISON EXPENDITURES - FISCAL YEAR 2022/23
13 City of Santa Clara
Financial Status Report as of February 28, 2023
Governmental Capital Improvement Funds
The table below lists the revenue for selected capital improvement funds. The amended budget reflects current year appropriations, prior year carryover, and budget amendments approved through February 2023. As of February 28, 2023, the capital fund revenue totaled $31.3 million. In the Parks and Recreation Capital Fund, $23.8 million has been collected, which includes $23.2 million in Mitigation Fee Act revenue. This reflects a decrease from last month’s financial report as a transaction was miscategorized and was corrected.
REVENUES - FISCAL YEAR 2022/23
Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 2/28/2023 Use d Parks & Recreation 5,438,500$ 3,301,620$ 8,740,120$ 23,802,759$ 272.34% Streets & Highways 6,634,174 15,921,680 22,555,854 2,919,806 12.94% Storm Drain 1,454,000 - 1,454,000 966,260 66.46% Public Buildings - 100,000 100,000 - 0.00% City Affordable Housing Capital - - - 194,810 NA Related Santa Clara Developer 2,968,317 1,118,024 4,086,341 997,362 24.41% Patrick Henry Drive
Infrastructure Improvement
Fund
69,205 - 69,205 - 0.00% Tasman East Specific
Infrastructure Improvement
Fund
2,413,605 - 2,413,605 2,419,501 100.24% -
TOTAL 18,977,801$ 20,441,324$ 39,419,125$ 31,300,498$ 79.40%
CITY OF SANTA CLARA
REVENUE - OVERVIEW AND COMPARISON BY SELECTED FUND
GOVERNMENTAL CAPITAL IMPROVEMENT FUNDS
14 City of Santa Clara
Financial Status Report as of February 28, 2023
The table below lists the total amended budgeted amounts for expenditures in the Capital Improvement Funds. Similar to the revenue table, the amended expenditure budgets consist of current year appropriations, prior year carryover encumbrance balances in Governmental Capital Improvement Funds, and budget amendments approved through February 2023. As of February 28, 2023, capital fund expenditures totaled $24.2 million, or 16% of the amended budget.
As part of the adoption of the FY 2022/23 and FY 2023/24 capital improvement program budget, some capital funds were carried over for projects that were not anticipated to be completed by June 30, 2022.
Necessary additional adjustments to the capital carryover amounts were included as part of the Budgetary Year-End Report for FY 2021/22 approved on December 6, 2022. These adjustments are reflected in the table below.
The carryover of prior year budget amounts is necessary when services or projects are started but not completed at the end of the fiscal year. This is especially true for the Capital Improvement Program (CIP) that typically spans several years. The table below displays the expenditure budget for the General Government capital funds excluding transfers.
EXPENDITURES - FISCAL YEAR 2022/23
Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 2/28/2023 Use d Parks & Recreation 13,528,319$ 20,913,971$ 34,442,290$ 4,510,278$ 13.10% Streets & Highways 27,334,386 53,175,624 80,510,010 11,131,017 13.83% Storm Drain 5,181,209 2,745,531 7,926,740 2,896,168 36.54% Fire 1,580,091 395,077 1,975,168 213,947 10.83% Library 413,111 35,747 448,858 78,093 17.40% Public Buildings 4,378,736 2,439,492 6,818,228 542,239 7.95% General Gov't - Other 3,687,314 6,158,460 9,845,774 1,319,231 13.40% City Affordable Housing Capital - 1,600,000 1,600,000 - 0.00% Related Santa Clara Developer 3,566,699 - 3,566,699 1,613,458 45.24% Patrick Henry Drive
Infrastructure Improvement
Fund
69,205 - 69,205 57,459 83.03% Tasman East Specific
Infrastructure Improvement
Fund
3,221,395 - 3,221,395 1,793,747 55.68% TOTAL 62,960,465$ 87,463,902$ 150,424,367$ 24,155,637$ 16.06%
EXPENDITURE - OVERVIEW AND COMPARISON BY FUND
CITY OF SANTA CLARA
GOVERNMENTAL CAPITAL IMPROVEMENT FUNDS
15 City of Santa Clara
Financial Status Report as of February 28, 2023
Enterprise Funds
The table below is a summary of revenues and expenses for the Enterprise Operating Funds as of February 28, 2023.
Actual Actual $
Fund Adopted Amended Through Percentage Through Change From Percent Description Budget Budget 2/28/2023 received 2/28/2022 Prior Year Change Electric Utility Fund 615,818,445$ 629,425,236$ 378,563,754$ 60.14% 335,400,522$ 43,163,232$ 12.87% Water Utility Fund 48,358,520 48,358,520 31,625,634 65.40% 31,856,314 (230,680) -0.72% Sewer Utility Fund 40,459,345 40,459,345 30,566,863 75.55% 35,962,100 (5,395,237) -15.00% Cemetery Fund 600,000 600,000 389,946 64.99% 520,278 (130,332) -25.05% Solid Waste Utility Fund 37,245,092 37,245,092 22,273,279 59.80% 20,859,932 1,413,347 6.78% Water Recycling Fund 5,708,446 5,708,446 4,213,861 73.82% 3,970,451 243,410 6.13% TOTAL REVENUE 748,189,848$ 761,796,639$ 467,633,337$ 61.39% 428,569,597$ 39,063,740$ 9.11% Actual Actual $
Fund Adopted Amended through Percentage through Change From Percent Description Budget Budget 2/28/2023 Use d 2/28/2022 Prior Year Change Electric Utility Fund 603,681,580$ 606,426,798$ 388,156,615$ 64.01% 326,257,657$ 61,898,958$ 18.97% Water Utility Fund 46,797,065 48,768,438 30,100,122 61.72% 26,144,724 3,955,398 15.13% Sewer Utility Fund 30,825,023 33,220,466 22,084,324 66.48% 20,980,858 1,103,466 5.26% Cemetery Fund 1,539,796 1,545,944 953,904 61.70% 929,353 24,551 2.64% Solid Waste Utility Fund 36,626,118 40,169,992 19,894,443 49.53% 19,196,704 697,739 3.63% Water Recycling Fund 5,729,413 5,739,135 5,346,148 93.15% 4,532,007 814,141 17.96% TOTAL - Operating
Appropriations
725,198,995$ 735,870,773$ 466,535,556$ 63.40% 398,041,303$ 68,494,253$ 17.21% PRIOR YEAR EXPENSE COMPARISONEXPENSES - FISCAL YEAR 2022/23
CITY OF SANTA CLARA
ENTERPRISE OPERATING FUNDS
REVENUES AND EXPENSES - OVERVIEW AND COMPARISON BY FUND REVENUES - FISCAL YEAR 2022/23 PRIOR YEAR REVENUE COMPARISON
Revenues in the electric (which also includes the Electric Debt Service Fund), water, and sewer utility (which also includes the Sewer Debt Service Fund) and water recycling funds are primarily from customer service charges. The activity levels for these customer service charges also impact the resource and production costs on the expenditure side for these funds.
Expenditures in the Electric Utility Fund are tracking to end the year above the budget due to higher power purchase and production costs which are driven by the extreme spikes in natural gas prices. It is anticipated that higher revenues will partially offset these higher costs with the remainder addressed with the use of fund balance. SVP will continue to closely monitor the power purchase and production costs and will bring forward appropriate budget balancing actions in FY 2022/23 to address budget needs.
16 City of Santa Clara
Financial Status Report as of February 28, 2023
In the Cemetery Fund, revenue is tracking lower due to lower sales, while the decrease in Sewer revenue reflects the amount of reimbursements received from the City of San Jose related to the co- owned Regional Wastewater Facility. Expenditures are tracking higher in the Water Recycling Fund and Water Utility Fund as a result of higher spending in the resources category. A budget adjustment is recommended in this report in the Water Recycling Fund to account for the significantly higher spend in the resource category.
17 City of Santa Clara
Financial Status Report as of February 28, 2023
A summary of revenue and expenses in the Enterprise Capital Improvement Funds are detailed in the tables below. Actual revenue through February 28, 2023 totaled $23.7 million, consisting primarily of developer contributions in the Electric Utility Fund and transfers from operating in the Sewer Utility Fund. Enterprise capital fund expenses totaled $39.1 million, or 13.8% of the amended budget. Similar to the general government capital funds, capital funds were carried over into next fiscal year as part of the FY 2022/23 and FY 2023/24 budget adoption process for those projects that have not yet been completed. Adjustments to the capital carryover amounts based on actual year-end expenditures were approved as part of the Budgetary Year-End Report for FY 2021/22 on December 6, 2022 and are reflected below.
Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 2/28/2023 Use d Electric Utility Fund 37,850,877$ 14,554,461$ 52,405,338$ 13,019,239$ 24.84% Street Lighting (1) - - - 41,442 N/A Sewer Utility Fund - - - 10,595,376 N/A Solid Waste Utility Fund 250,000 65,000 315,000 8,164 2.59%
TOTAL - CIP
Appropriations
38,100,877$ 14,619,461$ 52,720,338$ 23,664,221$ 44.89% Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 2/28/2023 Use d Electric Utility Fund 139,091,189$ 80,191,903$ 219,283,092$ 30,454,128$ 13.89% Street Lighting (1) 239,338 5,637,312 5,876,650 86,000 1.46% Water Utility Fund 8,012,986 - 8,012,986 2,240,265 27.96% Sewer Utility Fund 22,399,877 23,316,657 45,716,534 5,448,473 11.92% Cemetery Fund 53,642 233,980 287,622 18,630 6.48% Solid Waste Utility Fund 891,521 4,488 896,009 387,189 43.21% Water Recycling Fund 29,774 - 29,774 209 0 Convention Center
Capital Fund
- 2,691,883 2,691,883 455,401 0
TOTAL - CIP
Appropriations
170,718,327$ 112,076,223$ 282,794,550$ 39,090,295$ 13.82% EXPENSES - FISCAL YEAR 2022/23
REVENUES - FISCAL YEAR 2022/23
REVENUE - OVERVIEW AND COMPARISON BY SELECTED FUND
ENTERPRISE CAPITAL IMPROVEMENT FUNDS
CITY OF SANTA CLARA
CITY OF SANTA CLARA
ENTERPRISE CAPITAL IMPROVEMENT FUNDS
EXPENDITURE - OVERVIEW AND COMPARISON BY FUND
(1) Street Lighting fund is part of Electric Capital Improvement Funds
18 City of Santa Clara
Financial Status Report as of February 28, 2023
Fund Reserves
By policy, City Council established the City’s General Contingency Reserve, under which reserves for Budget Stabilization and Capital Projects were established. • Budget Stabilization Reserve is set aside for weathering economic downturns, emergency financial crisis, or disaster situations. The reserve target is equal to the expenditures of the City’s General Fund operations for three months (90-day or 25% General Fund Adopted Operating Budget). In FY 2022/23, the City Council approved an exception to the policy to allow the Reserve to drop below the 25% level.
• Capital Projects Reserve earmarks funds for the Capital Improvement Program.
Other General Reserves and Enterprise Fund Reserves included in this report are highlighted as follows:
• Technology Fee Reserve is set aside to update and/or replace the City’s aging technology and to ensure internal controls are in compliance with current business standard and legal requirements.
• Land Sale Reserve is net proceeds from the sale of City-owned land, with interest earned on these funds available to be appropriated for General Fund operating expenditures. This reserve is available for appropriation by City Council action.
• The Electric Utility Rate Stabilization Reserve and Operations and Maintenance Reserve ensure sufficient operating cash is available to cover day-to-day expenses, address unforeseen cost increases or revenue shortfalls, and ensure debt service coverage. • The Replacement and Improvement Reserve in the Water and Sewer Utility Funds is for future capital improvement.
The table below summarizes select reserve balances.
19 City of Santa Clara
Financial Status Report as of February 28, 2023
DETAIL OF SELECTED FUND RESERVE BALANCES:
GENERAL
FUND ELECTRIC WATER
Budget Stabilization Reserve 40,843,152$
Capital Projects Reserve 11,879,656
Land Sale Reserve 12,882,822
Technology Fee Reserve 1,925,791
Electric Rate Stabilization Fund Reserve 48,776,613$
Electric Operations and Maintenance Reserve 118,765,556 Replacement & Improvement 303,090$
TOTALS 67,531,421$ 167,542,169$ 303,090$
CITY OF SANTA CLARA
RESERVE BALANCES
February 28, 2023
20 City of Santa Clara
Financial Status Report as of February 28, 2023
Long-Term Interfund Advances
The funds below have made advances/loans which are not expected to be repaid within the next year.
The balances reflected in the table are through February 2023. The loan from the General Fund to Parks and Recreation Facilities reflects proceeds from the Land Sale Reserve for the purchase of property at the Reed and Grant Sports Park. This loan is anticipated to be repaid by 25% of future Mitigation Fee Act revenue until the loan is paid in full.
DETAIL OF LONG TERM INTERFUND ADVANCE BALANCES:
Fund Receiving Advance/Loan
Fund Making
Advance/Loan Type
Amount of
Advance/
Commitment
Parks and Recreation Facilities General Fund Loan 5,539,540 TOTALS 5,539,540$
Note: The full loan repayment from Mitigation Fee Act revenue was approved by City Council on March 21, 2023 (RTC 23-316).
Donations to the City of Santa Clara
Donations received by department during the month of February 2023 and for fiscal year 2022/23 are shown in the table below.
Department Feb-23
Fis cal Year
2022/23
Year To Date Designated Use
City Manager's Office 25$ 75$ Help Your Neighbor Parks & Recreation 1,010 2,771 Case Management Parks & Recreation - 1,748 Roberta Jones Jr. Theatre Parks & Recreation - 30,600 Wade Brummal TOTALS 1,035$ 35,194$