_____________________________________________________________________
MONTHLY FINANCIAL STATUS REPORT
April 2023
City of
Santa Clara
The Center of What 's Possible
2 City of Santa Clara
Financial Status Report as of April 30, 2023
This report summarizes the City’s financial performance for the month ended April 30, 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, the December 2022, March 2023 and June 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 come own too slowly in not for the continued Federal Reserve rate hikes. 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 slacken mildly, just enough to quell wage inflation, and the Federal Reserve eases its approach to monetary policy tightening”.1
Real GDP Levels, US$ Trillions, Chained 2012 Prices, Seasonally Adjusted Rates
Source: UCLA Anderson Forecast and U.S. Bureau of Economic Analysis “Consumer confidence declined in May as consumers’ view of current conditions became somewhat less upbeat while their expectations remained gloomy,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board. “Their assessment of current employment conditions saw the most significant deterioration, with the proportion of consumers reporting jobs are ‘plentiful’ falling 4 ppts from 47.5 percent in April to 43.5 percent in May. Consumers also became more downbeat about future business conditions, weighing on the expectations index. However, expectations for jobs and incomes over the next six months held relatively steady. While consumer confidence has fallen across
1 UCLA Anderson Forecast, June 2023, “The More Things Change the More They Stay the Same: Recession or No Recession is Still the Question”
US$ Trillions
21.2 21.0
20.8 20.6
20.4 20.2
20.0 19.92 19.90
0.0 20.0S
Ql Q2 Q3
2022
Forecast ➔
Q4 Ql Q2 Q3
2023
2U6
No-Recession
Recession
20.13 20.13
Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4
2024 2025
3 City of Santa Clara
Financial Status Report as of April 30, 2023
all age and income categories over the past three months, May’s decline reflects a particularly notable worsening in the outlook among consumers over 55 years of age.”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 O
n a national level, the unemployment rate changed little from 3.5% in March 2023 to 3.4% in April 2023. This rate was well below the record setting high of 14.7% in April 2020, and close to the pre- pandemic unemployment rate of 3.5%. In April, the number of unemployed persons dropped slightly to
5.7 million, which is consistent with the pre-pandemic level of 5.7 million.4 The Ca
lifornia unemployment rate was 4.5% in April 2023, up from 4.4% in March 2023 and 4.1% in April 2022. Between April 2022 and April 2023, total nonfarm jobs in California increased by 426,000 jobs (a 2.4 percent increase), with the largest increases in private educational and health services (up 2 US Consumer Confidence (conference-board.org)
3 https://www.bea.gov/sites/default/files/2023-04/tech1q23_adv.pdf 4 https://www.bls.gov/news.release/pdf/empsit.pdf
Real GDP: Percent change from preceding quarter
40 30
20 10
0 -10
-20
-30
-40
Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql
2019 2020
U.S. Bureau of Economic Analy sis
Chart 1. Unemployme nt rate, season ally adj usted,
April 2021 - April 2023
Peroent
7.0 6.5
6.0 ----------------------<
5.5 5.0
4.5 4.0
3.5 3.0
Ap<-21 Jul-2 1 Oct-21 Jen-22 Apr-22 Jul-22 Oct-22 JBn-23 Apr-23 2021 2022 2023
Seasonally adjusted annua l rates
Chart 2. Nonfar m payroll emp loym ent over-the-month change, seasonally adj usted, April 2021 - Apri l 2023
Thousan ds
1,000
900
800
700
600
500
400
300
200
100
0 -100
■ . ■ ■
I I I I I
I I I I I
Apr-21 Jul-2 1 Oct-21 Jan-22 Ap<-22 Jul'-22 Oct-22 Jan-23 Apr-23
4 City of Santa Clara
Financial Status Report as of April 30, 2023
159,300 jobs), leisure and hospitality (up 132,400 jobs), government (up 54,700), and professional and business services (up 42,200). Since April 2020, California has gained 3.12 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 3.0% in April 2023, down slightly from a revised 3.3% in March 2023 but is above the April 2022 level of 2.5% and the February 2020 pre-pandemic level of 2.6%. Between April 2022 and April 2023, employment in this region increased by 32,200 jobs, or 2.8%. The largest increases were in private educational and health services (up 9,700 jobs), leisure and hospitality (up 9,600 jobs), professional and business services (up by 7,500 jobs), and manufacturing (up 4,500 jobs). 6 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 $290.9 million to reflect various budget amendments approved by the City Council through April 2023.
General Fund revenues are currently tracking to end the year above the budgeted level. Through April, departmental expenditures are tracking below budget and this trend is expected to continue as departments continue to experience vacancies and control expenditures through various cost control measures.
5 edd.ca.gov/en/about_edd/news_releases_and_announcements/unemployment-april-2023/ 6 labormarketinfo.edd.ca.gov/file/lfmonth/sjos$pds.pdf
5 City of Santa Clara
Financial Status Report as of April 30, 2023
General Fund Revenues
As of April 30, 2023, $210.3 million, or 87.5% of the General Fund estimated revenue (excluding transfers) was received. Transfers and use of reserves of $50.6 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
04/30/2023
Percentage
Received
Actual Through
04/30/2022
$
Change From
Prior Year
Percentage
Change
TAXES
Sales Tax 60,173,000$ 60,173,000$ 40,966,901$ 68.08% 37,231,047$ 3,735,854$ 10.03% Property Tax 75,261,000 75,261,000 72,706,598 96.61% 61,104,202 11,602,396 18.99% Transient Occupancy Tax 12,600,000 12,600,000 13,084,947 103.85% 5,144,581 7,940,366 154.34% Other Taxes 6,260,000 6,260,000 4,743,025 75.77% 4,906,609 (163,584) -3.33% Total Taxes 154,294,000 154,294,000 131,501,471 85.23% 108,386,439 23,115,032 21.33%
LICENSES & PERMITS
Business Licenses 900,000 900,000 701,261 77.92% 685,784 15,477 2.26% Fire Operation Permits 2,100,000 2,358,000 1,567,554 66.48% 1,570,522 (2,968) -0.19% Miscellaneous Permits 72,000 72,000 40,719 56.55% 74,229 (33,510) -45.14% Total Licenses & Permits 3,072,000 3,330,000 2,309,534 69.36% 2,330,535 (21,001) -0.90% FINES & PENALTIES 1,465,000 1,615,000 569,706 35.28% 310,120 259,586 83.71% INTERGOVERNMENTAL 310,000 609,286 1,112,320 182.56% 2,435,967 (1,323,647) -54.34% CHARGES FOR SERVICES 31,258,098 31,239,098 26,727,974 85.56% 25,161,215 1,566,759 6.23% TRANSFER FROM CITY UTILITIES 26,170,000 26,170,000 23,869,906 91.21% 21,477,813 2,392,093 11.14%
USE OF MONEY & PROPERTY
Interest 2,532,000 2,532,000 2,091,994 82.62% 1,235,905 856,089 69.27% Rent 10,584,266 10,584,266 9,813,484 92.72% 8,188,523 1,624,961 19.84% Total Use of Money & Property 13,116,266 13,116,266 11,905,478 90.77% 9,424,428 2,481,050 26.33% MISCELLANEOUS REVENUES 150,000 189,611 2,672,294 1409.36% 592,966 2,079,328 350.67%
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 7,968,589 7,968,589 100.00% 5,593,917 2,374,672 42.45% Total Other Financing Sources 33,878,344 50,626,394 50,626,394 100.00% 44,624,394 6,001,999 13.45%
STADIUM OPERATION
Charges for Services 7,889,147 8,939,147 8,888,626 99.43% 2,361,867 6,526,759 276.34% Rent and Licensing 752,500 752,500 710,000 94.35% 297,359 412,641 138.77% Total Stadium Operation 8,641,647 9,691,647 9,598,626 99.04% 2,659,226 6,939,400 260.96% TOTAL GENERAL FUND 272,355,355$ 290,881,302$ 260,893,703$ 89.69% 217,403,103$ 43,490,599$ 20.00% (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 April 30, 2023
General Fund Revenues
Sales Tax: The City of Santa Clara sales tax rate is 9.0%, of which the City receives 1.0%. As of April 30, 2023, approximately $41.0 million has been collected. This reflects an increase of $3.7 million when compared to collections through the same period last fiscal year. In this fiscal year, sales tax receipts increased 15.7% in the first quarter and 2.4% in the second quarter when compared to the same quarters last fiscal year. While not yet fully reflected in the data through April given the timing of payments, the third quarter experienced growth of 20.2%. Based on the strong performance in the third quarter, receipts are now expected to exceed the budgeted estimate of $59.4 million. For instance, if growth of 3% is realized in the last quarter, sales tax collection will exceed the budget by approximately $2 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 April, 96.6% 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 collections of $74.6 million. This reflects strong growth in the secured, supplemental, and unsecured property tax categories. A budget amendment was approved on May 23rd (RTC 23-337) as part of the February/March Monthly Financial Report to recognize the additional projected revenue of $8.86 million. Of this amount, $1.65 million was 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 April 30, 2023, $13.1 million has been received, which is significantly higher than receipts through the same period last fiscal year of $5.1 million. While businesses continue to recover from COVID-19 impacts, activity has not yet reached pre-pandemic levels. TOT receipts through April are tracking close to 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 approximately 80% 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 $4.7 million through April, which is lower than 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
7 City of Santa Clara
Financial Status Report as of April 30, 2023
category. While receipts are tracking slightly below last year, collections are projected to meet the budgeted estimate of $6.3 million.
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 $2.3 million, or 69.4% of the budget of $3.3 million, through April. 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 $0.6 million collected through April is tracking to end the year 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 April 30, 2023, $1.1 million has been received, which is lower than the prior year collection level but above the budgeted estimate. The fire mutual aid revenue and department budget adjustment of $0.3 million, approved as part of the January 2023 Monthly Financial Report, are reflected. A second adjustment of $0.3 million to the same categories was approved on May 23, 2023 as part of the February/March 2023 Monthly Financial Report, which is not yet reflected.
Charges for Services: Includes various plan check and zoning-related fees, engineering fees, administrative fees, and community service revenue from various recreational activities. Through April 30, 2023, collections are tracking within the budgeted estimate at $26.7 million, or 85.6% of the budget.
This reflects a 6% increase compared to last year’s collections through the same period of $25.2 million. This increase is a result of higher collections for technology fee, Fire construction permits, 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 April 30, 2023, $23.9 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 $11.9 million, or 90.8% of the budget. These collections are higher than collections through last fiscal year of $8.5 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.
8 City of Santa Clara
Financial Status Report as of April 30, 2023
Miscellaneous Revenues: Includes developer fees, donations, damage recovery, sale of surplus, and one-time miscellaneous revenues. Through April 30, 2023, collections of $2.7 million are higher than collections through the same period last fiscal year of $0.6 million. This increase is primarily attributable to the $1.67 million settlement between the City, the Santa Clara Stadium Authority, and the Forty- Niners SC Stadium Company LLC and Forty Niners Stadium Management Company LLC (collectively, the Forty-Niners).
Stadium Operation: As of April 30, 2023, charges for services collected through the Stadium totaled $9.6 million, which is 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 and two additional NFL playoff games held at the Stadium. The revenue estimate also reflects the $1.0 million adjustment approved as part of the January 2023 Monthly Financial Report on March 21, 2023. A second budget amendment approved on May 23, 2023 as part of the February/March 2023 Monthly Financial Report to recognize and allocate additional reimbursements of $1.4 million is not yet reflected in this report.
9 City of Santa Clara
Financial Status Report as of April 30, 2023
General Fund Expenditures
As of April 30 , 2023, $ 225.2 million or 77.4% of the Gener al Fund operating budget had been expended. Overall, expenditures in the General Fund are tracking below budgeted levels through April.
Departmental expenditures totaled $207.6 million, or 76% of the budget, which is below the par level of
83.3% of the budget. This reflects savings from vacant positions as w ell as sav ings generated from cost-control measures that were implemented in FY 2 019/20. Expenditures ar e expected to end the year below budget.
Adopted Budget
Amended
Budget
Actual Through
04/30/2023
Percentage
Use d
Actual Through
04/30/2022
$
Change From
Prior Year
Percentage
Change
GENERAL GOVERNMENT
Non-Departmental 7,514,334$ 9,513,394$ 3,815,202$ 40.10% 3,537,127$ 278,075$ 7.86% City Council 861,105 862,396 553,351 64.16% 660,598 (107,247) -16.23% City Clerk 2,076,112 2,093,661 1,655,618 79.08% 1,114,721 540,897 48.52% City Manager 6,085,321 6,292,428 4,262,582 67.74% 4,118,831 143,751 3.49% City Attorney 3,202,735 3,690,974 2,661,949 72.12% 1,994,902 667,047 33.44% Human Resources 4,508,710 4,828,451 3,020,325 62.55% 3,060,811 (40,486) -1.32% Finance 19,045,131 20,272,300 14,812,761 73.07% 13,387,572 1,425,189 10.65% Total General Government 43,293,448 47,553,604 30,781,788 64.73% 27,874,562 2,907,226 10.43% PUBLIC WORKS 24,021,840 25,092,840 17,999,915 71.73% 18,208,968 (209,053) -1.15% COMMUNITY DEVELOPMENT 5,398,007 5,665,420 3,698,027 65.27% 3,850,697 (152,670) -3.96% PARKS AND RECREATION 21,695,302 22,268,627 16,437,472 73.81% 14,944,925 1,492,547 9.99%
PUBLIC SAFETY
Fire 62,298,852 66,244,112 55,688,674 84.07% 38,405,097 17,283,577 45.00% Police 84,615,023 85,779,549 67,015,288 78.13% 46,909,196 20,106,092 42.86% Total Public Safety 146,913,875 152,023,661 122,703,962 80.71% 85,314,293 37,389,669 43.83% LIBRARY 11,889,451 12,277,870 8,582,377 69.90% 7,307,700 1,274,677 17.44% DEPARTMENTAL TOTAL 253,211,923 264,882,022 200,203,541 75.58% 157,501,145 42,702,396 27.11%
OTHER FINANCING USES
Operating Transfer Out - Miscellaneous 38,809 38,809 38,809 100.00% 24,561,216 (24,522,407) -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 - 5,598,215 5,598,215 100.00% 3,309,009 2,289,206 69.18% Total Other Financing Uses 11,779,285 17,569,612 17,569,612 100.00% 43,766,938 (26,197,326) -59.86% STADIUM OPERATION 7,364,147 8,429,668 7,393,974 87.71% 5,541,384 1,852,590 33.43% TOTAL GENERAL FUND 272,355,355$ 290,881,302$ 225,167,127$ 77.41% 206,809,467$ 18,357,660$ 8.88% 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 April 30, 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 April 30, 2023, expenditures totaled $3.8 million, or 40.1% 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. The budget for this category includes $1.7 million for the Education Revenue Augmentation Fund (ERAF) 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 the excess ERAF funds. As part of the February/March Monthly Financial Report approved on May 23, 2023, budget actions were approved to move these funds, along with additional funds from FY 2022/23, to a new Property Tax Excess ERAF Reserve. Excluding these ERAF funds, non- departmental expenditures would have tracked at 48.8% of the budget through April. 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. Budget actions are recommended in this report to allocate a portion of these funds to the Fire Department to cover the separation payouts in that department.
City Attorney: Through April, actual expenditures totaled approximately $2.7 million, which is below expected levels at 72.1% 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 April, actual expenditures were tracking above budget at $1.7 million or approximately 79.1% of the budget. This reflects a 48.5% increase in spending compared to prior year spend levels; however, is still within budgeted levels. This is a result of one-time special election costs, higher salaries and benefits costs, and Granicus costs that are paid every other year.
City Council: Through April 30, 2023, expenditures were at 64.2% of budget, which is below par.
Compared to the same period through last fiscal year, this reflects a spending decrease of approximately 16.2%, which is primarily the result of savings due to vacancies within the department.
City Manager: Expenditures through April totaled $4.3 million, or 67.7% of the budget, which is below par for this time of the year. Expenditures are 3.5% 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 partially offset by lower spending in salaries and benefits and advertising.
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 April, General Fund expenditures for the Planning and Housing and Community Services divisions totaled $3.7 million, or 65.3% of budget, which is below the par level of 83%. Expenditures
11 City of Santa Clara
Financial Status Report as of April 30, 2023
were slightly below the spending through the same period last fiscal year due to lower non-personnel expenditures.
Finance Department: Through April, the Department’s expenditures totaled $14.8 million, or 73.1% of the budget, which is below par. This expenditure level was approximately 10.7% higher than the prior year primarily as a result of higher salaries and benefits costs.
Fire Department: Through April, expenditures totaled $55.7 million, or 84.1% of the budget, which is at par. These expenditures reflect a 45% 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 116.8%. 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. The Department’s budget now reflects an adjustment appropriating $0.3 million for Cal OES reimbursements from the January 2023 monthly financial report.
The budget does not yet reflect the second adjustment of $0.3 million for Cal OES reimbursements that was approved on May 23, 2023 as part of the February/March 2023 Monthly Financial Report.
Additional budget amendments are recommended in this report to recognize fire-related revenue from fees and various reimbursements and allocate those funds to cover Fire Department salary, overtime and non-personnel costs.
Library Department: Through April, actual expenditures totaled $8.6 million, or 70% of the budget, which is below par, but nearly 17.4% 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 April, actual expenditures totaled approximately $16.4 million, or 73.8% of the budget, which is below par, but above the prior year actuals of $14.9 million.
This is due to the department resuming activities that were previously impacted by COVID-19 restrictions.
Police Department: Expenditures through April are tracking below expected levels at $67.0 million, or
78.1% of the budget. This is approximately 43% 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 on a one-time basis. 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 $7.4 million through April and are tracking above budgeted levels at 87.7%. This is 33.4% higher than expenditures through the same period last year, as a direct result of the reopening of the Stadium for events and two additional NFL playoff games held at the Stadium. The budget incorporates the $1.0
12 City of Santa Clara
Financial Status Report as of April 30, 2023
million adjustment approved on March 21, 2023 as part of the January 2023 Monthly Financial Report.
Another budget amendment was approved on May 23, 2023 as part of the February/March 2023 Monthly Financial Report to recognize and allocate additional projected reimbursements of $1.4 million.
This adjustment is not yet reflected.
Special Revenue Funds
The table below is a summary of revenues and expenditures of select Special Revenue Funds as of April 30, 2023. The amended budget reflects carryover encumbrances from fiscal year 2021/22 and budget amendments approved by the City Council through April 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 $24.4 million, or 89.8% of budget, while expenditures totaled $24.9 million, or 60.8% of budget through the end of April. Overall, revenues are tracking above budget due primarily to strong performance in the Building Development Services Fee Fund which has exceeded the annual revenue estimate. Expenditures in almost all funds are tracking below the par level of 83%. The Housing Successor Agency Fund expenditures are tracking above budgeted levels; however, this is the result of a loan disbursement being expended in full. Spending for the remainder of the year is expected to level off and end within budget. Revenue and expenses are tracking lower in the Housing and Urban Development Fund due to less activity in the Neighborhood Conservation and Improvement Program (NCIP) and the Affordable Rental Housing program. Projects under both of these programs have been delayed due to limited staff capacity; however, they are anticipated to be completed by the end of next fiscal year.
13 City of Santa Clara
Financial Status Report as of April 30, 2023
Actual Actual $
Fund Adopted Amended Through Percentage Through Change From Percent Description Budget Budget 4/30/2023 received 4/30/2022 Prior Year Change Housing Authority Fund 280,000$ 277,495$ 390,403$ 140.69% 513,407$ (123,004)$ -23.96% City Affordable Housing Fund 682,000 7,162,700 6,290,674 87.83% 2,624,876 3,665,798 139.66% Housing Successor Fund 350,000 1,306,326 619,706 47.44% 5,841,997 (5,222,291) -89.39% Housing and Urban Development 1,810,000 3,924,461 964,270 24.57% 2,500,639 (1,536,369) -61.44% Building Development Services Fee
Fund
14,112,000 14,464,458 16,098,227 111.30% 14,881,545 1,216,682 8.18% American Rescue Plan Act Fund - - - 0.00% 13,264,822 (13,264,822) -100.00% TOTAL 17,234,000$ 27,135,440$ 24,363,280$ 89.78% 39,627,286$ (15,264,006)$ -38.52% Actual Actual $
Fund Adopted Amended through Percentage through Change From Percent Description Budget Budget 4/30/2023 use d 4/30/2022 Prior Year Change Housing Authority Fund 380,363$ 584,503$ 183,604$ 31.41% 131,083$ 52,521$ 40.07% City Affordable Housing Fund 1,685,731 11,499,145 6,777,826 58.94% 753,840 6,023,986 799.11% Housing Successor Fund 1,242,599 6,049,148 5,432,420 89.80% 12,319,888 (6,887,468) -55.91% Housing and Urban Development 2,355,815 5,223,984 1,495,705 28.63% 2,735,311 (1,239,606) -45.32% Building Development Services Fee
Fund
13,360,809 17,682,237 11,059,318 62.54% 8,970,792 2,088,526 23.28% American Rescue Plan Act Fund - - - 0.00% 25,921,801 (25,921,801) -100.00% TOTAL 19,025,317$ 41,039,017$ 24,948,873$ 60.79% 50,832,715$ (25,883,842)$ -50.92%
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
14 City of Santa Clara
Financial Status Report as of April 30, 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 April 2023. As of April 30, 2023, the capital fund revenue totaled $32.7 million. In the Parks and Recreation Capital Fund, $24.4 million has been collected, which includes $23.2 million in Mitigation Fee Act revenue. In the Streets & Highways Fund, revenues are tracking well below budget due to the timing of projects and associated reimbursements.
REVENUES - FISCAL YEAR 2022/23
Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 4/30/2023 Use d Parks & Recreation 26,256,378$ 3,301,620$ 29,557,998$ 24,360,827$ 82.42% Streets & Highways 6,634,174 15,921,680 22,555,854 2,988,943 13.25% Storm Drain 1,454,000 - 1,454,000 1,205,717 82.92% Public Buildings - 100,000 100,000 100,000 100.00% City Affordable Housing Capital - - - 630,142 NA Related Santa Clara Developer 2,968,317 1,118,024 4,086,341 998,739 24.44% 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 39,795,679$ 20,441,324$ 60,237,003$ 32,703,869$ 54.29%
CITY OF SANTA CLARA
REVENUE - OVERVIEW AND COMPARISON BY SELECTED FUND
GOVERNMENTAL CAPITAL IMPROVEMENT FUNDS
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 April 2023. As of April 30, 2023, capital fund expenditures totaled $29.1 million, or 18.6% of the amended budget.
As part of the adoption of the FY 2022/23 and FY 2023/24 capital improvement program budget, some capital funds were carried over for projects that were not anticipated to be completed by June 30, 2022.
Necessary additional adjustments to the capital carryover amounts were included as part of the Budgetary Year-End Report for FY 2021/22 approved on December 6, 2022. These adjustments are reflected in the table below.
15 City of Santa Clara
Financial Status Report as of April 30, 2023
The carryover of prior year budget amounts is necessary when services or projects are started but not completed at the end of the fiscal year. This is especially true for the Capital Improvement Program (CIP) that typically spans several years. The table below displays the expenditure budget for the General Government capital funds excluding transfers.
EXPENDITURES - FISCAL YEAR 2022/23
Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 4/30/2023 Use d Parks & Recreation 20,141,514$ 20,913,971$ 41,055,485$ 6,152,608$ 14.99% Streets & Highways 27,334,386 53,175,624 80,510,010 13,070,178 16.23% Storm Drain 5,181,209 2,745,531 7,926,740 3,082,060 38.88% Fire 1,580,091 395,077 1,975,168 551,439 27.92% Library 413,111 35,747 448,858 88,981 19.82% Public Buildings 4,378,736 2,439,492 6,818,228 672,376 9.86% General Gov't - Other 3,687,314 6,158,460 9,845,774 1,624,081 16.50% City Affordable Housing Capital - 1,600,000 1,600,000 - 0.00% Related Santa Clara Developer 3,566,699 - 3,566,699 2,035,794 57.08% 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 69,573,660$ 87,463,902$ 157,037,562$ 29,128,723$ 18.55%
EXPENDITURE - OVERVIEW AND COMPARISON BY FUND
CITY OF SANTA CLARA
GOVERNMENTAL CAPITAL IMPROVEMENT FUNDS
16 City of Santa Clara
Financial Status Report as of April 30, 2023
Enterprise Funds
The table below is a summary of revenues and expenses for the Enterprise Operating Funds as of April 30, 2023.
Actual Actual $
Fund Adopted Amended Through Percentage Through Change From Percent Description Budget Budget 4/30/2023 received 4/30/2022 Prior Year Change Electric Utility Fund 615,818,445$ 629,425,236$ 487,337,579$ 77.43% 427,169,652$ 60,167,927$ 14.09% Water Utility Fund 48,358,520 48,358,520 38,696,918 80.02% 39,580,268 (883,350) -2.23% Sewer Utility Fund 40,459,345 40,459,345 37,232,331 92.02% 44,397,398 (7,165,067) -16.14% Cemetery Fund 600,000 600,000 515,690 85.95% 606,786 (91,096) -15.01% Solid Waste Utility Fund 37,245,092 37,245,092 28,323,184 76.05% 26,516,507 1,806,677 6.81% Water Recycling Fund 5,708,446 5,708,446 4,888,206 85.63% 4,962,225 (74,019) -1.49% TOTAL REVENUE 748,189,848$ 761,796,639$ 596,993,908$ 78.37% 543,232,836$ 53,761,072$ 9.90% Actual Actual $
Fund Adopted Amended through Percentage through Change From Percent Description Budget Budget 4/30/2023 Use d 4/30/2022 Prior Year Change Electric Utility Fund 603,681,580$ 606,426,798$ 474,903,194$ 78.31% 410,417,960$ 64,485,234$ 15.71% Water Utility Fund 46,797,065 48,768,438 36,979,737 75.83% 34,705,410 2,274,327 6.55% Sewer Utility Fund 30,825,023 33,220,466 23,870,779 71.86% 22,485,506 1,385,273 6.16% Cemetery Fund 1,539,796 1,545,944 1,276,193 82.55% 1,152,286 123,907 10.75% Solid Waste Utility Fund 36,626,118 40,169,992 26,137,141 65.07% 24,245,872 1,891,269 7.80% Water Recycling Fund 5,729,413 5,739,135 5,498,838 95.81% 4,685,864 812,974 17.35% TOTAL - Operating
Appropriations
725,198,995$ 735,870,773$ 568,665,882$ 77.28% 497,692,898$ 70,972,984$ 14.26% 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. Budget balancing amendments are recommended in this report.
In the Cemetery Fund, revenue is tracking below the prior year 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 in the Water Recycling Fund was approved on May 23, 2023 as part of the February/ March
17 City of Santa Clara
Financial Status Report as of April 30, 2023
2023 Monthly Financial Report to account for the significantly higher spend in the resource category; this adjustment is not reflected in the budget figures through April.
A summary of revenue and expenses in the Enterprise Capital Improvement Funds are detailed in the tables below. Actual revenue through April 30, 2023 totaled $39.1 million, consisting primarily of developer contributions in the Electric Utility Fund and transfers from customer services charges in the Sewer Utility Fund. Enterprise capital fund expenses totaled $45.2 million, or 16.3% of the amended budget. Similar to the general government capital funds, capital funds were carried over into next fiscal year as part of the FY 2022/23 and FY 2023/24 budget adoption process for those projects that have not yet been completed. Adjustments to the capital carryover amounts based on actual year-end expenditures were approved as part of the Budgetary Year-End Report for FY 2021/22 on December 6, 2022 and are reflected below.
Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 4/30/2023 Use d Electric Utility Fund 40,950,870$ 14,554,461$ 55,505,331$ 28,427,014$ 51.21% Street Lighting (1) - - - 41,442 N/A Sewer Utility Fund - - - 10,650,724 N/A Solid Waste Utility Fund 250,000 65,000 315,000 9,364 2.97%
TOTAL - CIP
Appropriations
41,200,870$ 14,619,461$ 55,820,331$ 39,128,544$ 70.10% Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 4/30/2023 Use d Electric Utility Fund 131,429,732$ 80,191,903$ 211,621,635$ 35,503,193$ 16.78% Street Lighting (1) (1,835,662) 5,637,312 3,801,650 185,100 4.87% Water Utility Fund 8,012,986 - 8,012,986 2,588,457 32.30% Sewer Utility Fund 26,645,486 23,316,657 49,962,143 5,914,110 11.84% Cemetery Fund 53,642 233,980 287,622 20,167 7.01% Solid Waste Utility Fund 891,521 4,488 896,009 482,554 53.86% Water Recycling Fund 29,774 - 29,774 15,225 51.14% Convention Center
Capital Fund
- 2,691,883 2,691,883 532,324 19.78%
TOTAL - CIP
Appropriations
165,227,479$ 112,076,223$ 277,303,702$ 45,241,130$ 16.31% 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 April 30, 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 April 30, 2023
DETAIL OF SELECTED FUND RESERVE BALANCES:
GENERAL
FUND ELECTRIC WATER
Budget Stabilization Reserve 40,851,099$
Capital Projects Reserve 11,879,656
Land Sale Reserve 18,481,037
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 73,137,583$ 167,542,169$ 303,090$
CITY OF SANTA CLARA
RESERVE BALANCES
April 30, 2023
20 City of Santa Clara
Financial Status Report as of April 30, 2023
Long-Term Interfund Advances
On March 21, 2023, as part of the January Monthly Financial Report, the City Council approved a budget action transferring the remaining balance of the Parks and Recreation Facilities loan for the Reed and Grant Sports Park to the Land Sale Reserve. There are currently no outstanding balances for interfund advances.
Donations to the City of Santa Clara
Donations received by department during the month of April 2023 and for fiscal year 2022/23 are shown in the table below.
Department Apr-23
Fis cal Year
2022/23
Year To Date Designated Use
City Manager's Office 25$ 100$ Help Your Neighbor Parks & Recreation - 2,771 Case Management Parks & Recreation 287 2,184 Roberta Jones Jr. Theatre Parks & Recreation - 30,600 Wade Brummal TOTALS 312$ 35,655$