Budget-in-Brief
FY 2023/24 and FY 2024/25
Proposed Operating
Budget
To Our Santa Clara Residents:
The Proposed Biennial Operating Budget for fiscal years (FY) 2023/24 and 2024/25 continues the biennial budget process that alternates between an operating and capital budget. This year’s budget focuses on our day-to-day operations that support vital City services. Amendments to the FY 2023/24 capital budget are also included.
As part of the budget deliberation process, two City Council study sessions are scheduled for May 9, 2023 and June 6, 2023 before the public hearing and planned budget adoption on June 27, 2023.
Over the past few years, there have been significant financial challenges stemming from COVID-19. This necessitated
General Fund budget balancing actions starting in FY 2020/21 and continued over the past three years. A combination of strategies has been used to address the budget deficits, including the use of one-time reserves and federal stimulus funds, new revenues, and expenditure reductions. This multi- pronged approach has balanced the competing goals of
aligning ongoing revenues and expenditures and minimizing the service delivery impacts to the community. It has also allowed time for General Fund revenues to recover. This strategy has positioned the City well for the FY 2023/24 and FY 2024/25 Proposed Budget that solves a smaller projected General Fund deficit.
The City’s financial position has significantly improved since the adoption of the FY 2022/23 budget. The latest Ten-Year General Fund Forecast shows smaller deficits of $8.0 million and $8.9 million in FY 2023/24 and FY 2024/25. This is well below the $27 million deficit projected in June 2022 and reflects stronger revenue growth. While the financial picture is much better, it is important to note that significant economic uncertainty and the risk of a recession persist.
Based on the improved financial position, this budget
preserves services with fewer reductions necessary. The expenditure reductions limit direct service impacts, with the goal of stabilizing the services residents access on a regular basis as the organization continues to recover from the COVID-19 service disruptions. As part of this recovery, the City continues to fill vacant positions, which will result in an overall improvement to the services the City provides with the funding included in this budget.
City of Santa Clara Budget-in-Brief
FY 2023/24 and FY 2024/25
Proposed Biennial Operating Budget
Where the City Gets Its Money
FY 2023/24 and FY 2024/25 Funding Sources
FY 2023/24 and FY 2024/25 City Expenditure Budget
1.0 2.0
4.0 8.0
16.0 32.0
64.0 128.0
256.0
512.0
1,024.0$ in millions
FY 2023/24 Proposed FY 2024/25 Proposed
*FY 2022/23 Capital Improvement Program budget includes CIP carryover. **Excludes contributions, reserves, and transfers to avoid double counting.
User Fee Detail FY 2023/24 FY 2024/25
• Electric Utility Fees $ 692.6 M $ 775.7 M
• Water Utility Fees 65.4 M 71.9 M
• Sewer Utility Fees 42.5 M 46.4 M
• Solid Waste Fees 39.0 M 40.5 M
Fund Type
FY 2022/23
Adopted
Budget
FY 2023/24
Proposed
Budget
%
Change
FY 2024/25
Proposed
Budget
%
Change
General Fund $272,355,355 $280,773,558 3.1% $287,458,968 2.4% Special Revenue 28,469,289 38,411,889 34.9% 37,111,226 (3.4%) Enterprise 815,864,620 872,344,414 6.9% 968,035,945 11.0% Internal Service 42,429,153 38,850,861 (8.4%) 41,629,602 7.2% Debt/Other 19,846,647 374,983,049 1,789.4% 40,658,134 (89.2%) Capital Improvement
Program*
357,380,666 396,879,114 11.1% 108,385,754 (72.7%)
Less (Contributions,
Transfers and Reserves)**
(204,596,482) (511,297,774) 149.9% (249,234,561) (51.3%) Total Budget $1,331,749,248 $1,490,945,111 12.0% $1,234,045,068 (17.2%) City of Santa Clara Budget-in-Brief
FY 2023/24 and FY 2024/25
Proposed Biennial Operating Budget
Property Tax
Sales Tax
Per $100 Collected Sales Tax Generators
Santa Clara
Unified School
District, $38.36 County of
Santa Clara,
$18.71
County Office
of Education,
$3.97
City of Santa
Clara, $10.17
West Valley
College,
$11.09
Other Special
Districts, $2.51 ERAF (Other School
Districts), $15.19
Office Equipment,
17.2%
Auto Sales -
New, 13.6%
Restaurants
, 9.0%
Bldg Matls -
Wholesale,
6.3%Light Industry,
5.2%Department
Stores, 4.7%
Electronic Equipment,
3.6%
Heavy Industry,
3.4%
Service
Stations
, 3.1%
IT
Infrastructure,
2.3%
Other Categories,
31.6%
When you pay your property tax bill to the County,
the City of Santa Clara General Fund receives
$10.17 for every $100 collected. The City
anticipates receiving $85.9 million in FY 2023/24
and $89.6 million in FY 2024/25.
Sales tax revenue in the City of Santa Clara comes
from multiple sources. Office equipment, new
vehicles, restaurants, wholesale building materials,
lights, and department stores were the City’s leading
economic sales categories in the fourth quarter of
2022, making up almost 56% of sales tax collections.
Where Your Sales Tax Goes Based on Purchase of $100
Sales Tax Paid is $9.125
State, $6.00
County
Transportation/VTA/
Caltrain, including
Measure B and
BART, $2.00
Santa Clara County –
General Purpose,
$0.125
City of Santa
Clara, $1.00
For every dollar you spend in Santa Clara on
taxable purchases, you pay 9.125% in sales tax
or $9.125 for each $100 purchased.
Cities throughout the State receive a portion of the sales tax collected based on sales made within their respective city. For every $100 purchase you make within the City of Santa Clara, which is subject to sales tax, the City receives $1.00. The City anticipates receiving $60.5 million in FY 2023/24 and $62.4 million in FY 2024/25.
California statewide sales tax rate is 7.25%, of which the City of Santa Clara receives 1.00%. The total countywide sales tax rate 9.125%. Santa Clara County has the following six voter-approved add-on tax measures:
• 0.125% for County Retail Sales Transactions and Use
• 0.125% for VTA BART
• 0.125% for Peninsula Corridor Joint Powers Board (Caltrain) • 0.500% for Silicon Valley Transportation Solutions Tax • 0.500% for Santa Clara County Transit District (SCCT) • 0.500% for Santa Clara County Valley Transportation Authority (SCVT) City of Santa Clara Budget-in-Brief
FY 2023/24 and FY 2024/25
Proposed Biennial Operating Budget
FY 2023/24 Proposed Budget
FY 2023/24 Positions by Department **
7.00 2.00 7.00 10.00 11.30 5.70
75.00 222.00
70.75 173.50
15.00 6.00
42.75 77.75
231.00
119.50
73.00 0.00
50.00 100.00
150.00
200.00
250.00
Total Positions: 1,149.25
Operating Budget Expenditures by Department *
General
Government
Departments/Other,
$98.5 M, 8.1%
Utility Departments,
$815.4 M, 66.9%
Public Safety
Departments,
$156.4 M, 12.8%
Library, Parks &
Recreation
Departments,
$34.7 M, 2.9%
Department of
Public Works,
$87.3 M, 7.2%
Community
Development
Department, $25.7 M,
2.1%
$ 1.218
Billion*
* Excludes internal service funds not tied to a particular department and debt service.
General
Government
Departments/Other,
$99.1 M, 7.5%
Utility Departments,
$907.4 M, 68.7%
Public Safety
Departments,
$162.4 M, 12.3%
Library, Parks &
Recreation
Departments,
$36.1 M, 2.7%
Department of
Public Works,
$90.9 M, 6.9%
Community
Development
Department, $25.3 M,
1.9%
$ 1.321
Billion*
FY 2024/25 Proposed Budget
City of Santa Clara Budget-in-Brief
FY 2023/24 and FY 2024/25
Proposed Biennial Operating Budget
** In FY 2024/25, 4.0 positions added to the Community Development Department, for a total position count of 1,153.25.
Budget Highlights by Strategic Pillar
City of Santa Clara Budget-in-Brief
FY 2023/24 and FY 2024/25
Proposed Biennial Operating Budget
Promote and Enhance Economic, Housing and Transportation Development • The FY 2023/24 budget includes over $2.0 million of CDBG funds for various public service activities (e.g. family therapy advocacy, educational services, senior adult legal assistance, meals to seniors and adults with disabilities) along with funding for capital projects for affordable housing and public facility improvements. One-time funding from the HOME American Rescue Plan is programmed to provide additional funding for Tenant-Based Rental Assistance and homelessness outreach. • In FY 2023/24, the Convention Center is projected to have 220 events, with approximately 246,196 in attendance, which reflects over 100% growth in attendance when compared to FY 2022/23 projected attendance.
• Launch and operate a grant-funded on-demand shuttle program with the City of Cupertino. • Complete several transportation projects, begin work on Vision Zero Study, and continue responding to traffic calming and traffic safety-related public inquiries. • Add Electric Utility funding to support the Large
Customer Renewable Energy Program and various
initiatives to expedite Greenhouse Gas emission
reduction (e.g., new solar installations, and solar
combined with electric vehicle (EV) infrastructure for
City facilities and neighborhood school locations).
• Optimize the recycled water system and increase
supply while focusing on expansion opportunities with
regional partners.
• Continue outreach regarding water conservation and
overall environmental sustainability.
Manage Strategically Our Workforce Capacity and Resources • Generate one-time savings from aligning the Police
Department’s vacancy factor to historical vacancy rates, which will allow for the pace of department hiring to continue as experienced before the pandemic, with no service
delivery impacts expected.
• Temporarily reduce the Fire Department’s overtime budget as a result of the Department’s receipt of the three-year Staffing for Adequate Fire and Emergency Response grant. • Freeze 3.0 vacant positions in the City Manager’s Office, City Attorney’s Office, and City Auditor’s Office and eliminate
1.0 vacant position in the Human Resources Department.
• Reduce funding for library books and materials; partner with Foundation and Friends to fundraise for materials.
Promote Sustainability and Environmental Protection
City of Santa Clara Budget-in-Brief
FY 2023/24 and FY 2024/25
Proposed Biennial Operating Budget
Deliver and Enhance High-Quality Efficient
Services and Infrastructure
• Add positions and other resources in the Community
Development Department to support the high volume
of development activity funded via development fees.
• Add funding for increased substation maintenance and
outage response and repair to ensure reliability of
substations in the Electric Utility Department.
• Align resources with expected activity in the City
utilities, including adjustments to account for resource and production costs, operating and maintenance
costs, and planned debt issuances in FY 2023/24.
Enhance Community Engagement and Transparency
• Library will initiate strategic planning efforts to identify community-based goals for service and align with City Council priorities.
• Community Development Department will continue to engage with the community to inform and involve community members in both long-range and current land use planning activities. • The FY 2023/24 Stadium Authority Adopted Budget includes funding for the Neighborhood Stadium Relations Committee.
Ensure Compliance with Measure J and Manage Levi’s Stadium • The Stadium Authority’s stand-alone Fiscal Year 2023/24 Operating, Debt and Capital Budget was adopted by the Stadium Authority Board on March 7, 2023. • The $81.3 million budget provides the necessary funding to administer the duties of the Stadium Authority, including support for operating the Stadium for Non-NFL events through a management company, advancement of the FY 2023/24 work plan, payment of debt service obligations, and maintenance of a five-year capital plan.
Enhance Community Sports and Recreational
and Arts Assets
• Rehabilitate and expand park facilities, amenities and playgrounds for all ages and abilities at Warburton
Park, Henry Schmidt Park, Westwood Oaks Park
playground, Montague Park and Central Park Magical
Bridge Playground.
• Acquire, develop and open new buildings at
Lawrence Station Area (Nuevo Community Buildings)
and a community arts center at Patrick Henry Drive
Specific Plan Area.
Budget Highlights by Strategic Pillar
General Fund Budget Balancing Strategy
The budget balancing strategy for FY 2023/24 and FY 2024/25 incorporates a combination of increased revenues, one-time and ongoing expenditure reductions, and use of reserves to address the General Fund shortfall of $8.0 million in FY 2023/24 and $8.9 million in FY 2024/25 as shown below. This table also includes an ongoing shortfall figure that reflects the average of the projected shortfalls in years three through five of the Ten-Year General Fund Forecast along with the ongoing balancing actions. • Revenue Solutions - phase in the remaining voter-approved Transient Occupancy Tax increase in FY 2023/24 (1 percent in January 2024) and in FY 2024/25 (1 percent in January 2025), which would increase the rate from 11.5% to 13.5%; incorporate fee adjustments approved by the City Council on April 18, 2023 as part of the adoption of the FY 2023/24 Municipal Fee Schedule. • Expenditure Reductions – one-time expenditure savings in the Fire and Police Departments with no service delivery impacts; other departmental reductions limit direct service impacts, and the 4.0 position reductions are in strategic support areas (City Attorney’s Office, City Manager’s Office, City Auditor’s Office, and the Human Resources Department)
• Use of Reserves - uses $1.1 million of the Budget Balancing Reserve in FY 2023/24 and replenishes the amount in FY 2024/25.
The proposed balancing strategy addresses approximately half of the budget deficit with ongoing solutions. After the biennial budget period, the use of additional budget balancing solutions are expected to be brought forward depending on the fiscal situation at that time.
City of Santa Clara Budget-in-Brief
FY 2023/24 and FY 2024/25
Proposed Biennial Operating Budget
FY 2023/24 and FY 2024/25 Proposed Biennial Operating Budget General Fund Balancing
($ in millions)
FY 2023/24 FY 2024/25 Ongoing
Forecast Shortfall ($8.0 M) ($8.9 M) ($11.4 M)
Increased Revenues
– Increase TOT Rate: phased 2% 0.9 1.7 3.4
– Fee Adjustments 0.5 0.8 0.8
– One-Time Revenues 0.2 0.0 0.0
Total Revenue Solutions 1.6 2.5 4.2
Expenditure Reductions
– Fire SAFER Grant 1.0 3.1 0.0
– Police Vacancy Savings 1.6 1.7 0.0
– Other Departmental Proposals 2.7 2.7 2.0
Total Expenditure Solutions 5.3 7.5 2.0
Use of Reserves
– Budget Balancing Reserve 1.1 (1.1) 0.0
Use of Reserves 1.1 (1.1) 0.0
Future Unidentified Solutions 5.2
General Fund Balancing Total $8.0 M $8.9 M $11.4 M
City Councilmembers
Mayor Lisa M. Gillmor
Councilmember District 1 Kathy Watanabe
Councilmember District 2 Raj Chahal
Councilmember District 3 Karen Hardy
Councilmember District 4 Kevin Park
Councilmember District 5 Sudhanshu Jain
Councilmember District 6 Anthony J. Becker
City Department Contact Information
City Attorney’s Office (408) 615-2230
City Clerk’s Office (408) 615-2220
City Manager’s Office (408) 615-2210
Community Development Department
Building Division
Permit Center
Planning Division
Housing & Community Services
(408) 615-2440
(408) 615-2420
(408) 615-2450
(408) 615-2490
Electric Utility Department (408) 615-2300
Finance Department (408) 615-2340
Fire Department (408) 615-4900
Human Resources Department (408) 615-2080
Information Technology Department (408) 615-2022
Library Department (408) 615-2900
Parks & Recreation Department (408) 615-2260
Police Department (408) 615-4700
Department of Public Works
Engineering Office
Corporation Yard
(408) 615-3000
(408) 615-3080
Water & Sewer Utilities Department (408) 615-2000
City of Santa Clara Budget-in-Brief
FY 2023/24 and FY 2024/25
Proposed Biennial Operating Budget
The Budget-in-Brief is intended to provide an overview of the City of Santa Clara’s FY 2023/24 and FY 2024/25 Proposed Biennial Operating Budget. The complete budget document can be accessed on the Finance Department’s website at: SantaClaraCA.gov/Finance Questions about this report should be directed to:
City of Santa Clara - Finance Department
1500 Warburton Avenue
Santa Clara, CA 95050
(408) 615-2340