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MONTHLY FINANCIAL STATUS REPORT
May 2023
2 City of Santa Clara
Financial Status Report as of May 31, 2023
This report summarizes the City’s financial performance for the month ended May 31, 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 continues to be uncertainty regarding the economic outlook.
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 down too slowly if 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 In its August 2023 forecast, The Conference Board predicts a short and shallow recession with a contraction in the fourth quarter 2023 and the first quarter 2024. “This outlook is associated with numerous factors, including, elevated inflation, high interest rates, dissipating pandemic savings, lower government spending, and the resumption of mandatory student loan repayments”. Factors that positively impacted the forecast were stronger than anticipated real GDP growth, monthly personal consumption expenditure growth, and improvements in consumer confidence. In its recession/no
1 UCLA Anderson Forecast, June 2023, “The More Things Change the More They Stay the Same: Recession or No Recession is Still the Question”
3 City of Santa Clara
Financial Status Report as of May 31, 2023
recession assessment, it acknowledges “that the likelihood of a ‘soft landing’ for the economy is rising, but we continue to believe that a very short and shallow recession in the more likely scenario.”2 In the “advance” estimate for the second quarter 2023, the Gross Domestic Product (GDP) increased at an annual rate of 2.4%, following a GDP increase of 2.0% in the first quarter 2023. Based on early data, the GDP increase in the second quarter reflects “increases in consumer spending, nonresidential fixed investment, state and local government spending, private inventory investment, and federal government spending that were partially offset by decreases in exports and residential fixed investment”.3 The “second” estimate for the second quarter, based on more complete data, will be released on August 30, 2023.
On a national level, the unemployment rate changed little from 3.7% in May 2023 to 3.6% in June 2023.
The unemployment rate has ranged from 3.4% to 3.7% since March 2022, which is in line with the pre- pandemic unemployment rate of 3.5%. In June, the number of unemployed persons increased slightly to 6.0 million, which is marginally higher than the pre-pandemic level of 5.7 million.4
2 https://www.conference-board.org/research/us-forecast 3 https://www.bea.gov/news/2023/gross-domestic-product-second-quarter-2023-advance-estimate 4 https://www.bls.gov/news.release/pdf/empsit.pdf
4 City of Santa Clara
Financial Status Report as of May 31, 2023
The California unemployment rate increased slightly from 4.5% in May 2023 to 4.6% in June 2023 and was up from 3.9% in June 2022. Between June 2022 and June 2023, total nonfarm jobs in California increased by 397,400 jobs (a 2.2% increase), with the largest increases in private educational and health services (up 167,300 jobs), leisure and hospitality (up 120,100 jobs), professional and business services (up 49,000), and government (up 43,400).5
The unadjusted unemployment rate in the San José-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) was 3.7% in June 2023, up from a revised 3.3% in May 2023, and above the June 2022 level of 2.7% and the February 2020 pre-pandemic level of 2.6%. Between June 2022 and June 2023, employment in this region increased by 32,900 jobs, or 2.8%. The largest increases were in private educational and health services (up 12,200 jobs), leisure and hospitality (up 11,800 jobs), and professional and business services (up by 3,400 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 $301.5 million to reflect various budget amendments approved by the City Council through May 2023.
General Fund revenues are tracking to end the year above the budgeted level due to strong performance in several categories as discussed below. Departmental expenditures are projected to end the year below budget as departments continue to experience vacancies and control expenditures through various cost control measures.
5 https://edd.ca.gov/en/about_edd/news_releases_and_announcements/unemployment-june-2023/ 6 https://labormarketinfo.edd.ca.gov/file/lfmonth/sjos$pds.pdf
5 City of Santa Clara
Financial Status Report as of May 31, 2023
General Fund Revenues
As of May 31, 2023, $228.7 million, or 91.1% 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
05/31/2023
Percentage
Received
Actual Through
05/31/2022
$
Change From
Prior Year
Percentage
Change
TAXES
Sales Tax 60,173,000$ 60,173,000$ 48,295,862$ 80.26% 43,166,427$ 5,129,435$ 11.88% Property Tax 75,261,000 84,125,000 73,165,896 86.97% 61,231,446 11,934,450 19.49% Transient Occupancy Tax 12,600,000 12,600,000 14,035,693 111.39% 6,265,731 7,769,962 124.01% Other Taxes 6,260,000 6,260,000 5,474,030 87.44% 5,664,326 (190,296) -3.36% Total Taxes 154,294,000 163,158,000 140,971,481 86.40% 116,327,930 24,643,551 21.18%
LICENSES & PERMITS
Business Licenses 900,000 900,000 778,260 86.47% 752,875 25,385 3.37% Fire Operation Permits 2,100,000 2,100,000 1,774,577 84.50% 1,727,810 46,767 2.71% Miscellaneous Permits 72,000 72,000 40,719 56.55% 74,716 (33,997) -45.50% Total Licenses & Permits 3,072,000 3,072,000 2,593,556 84.43% 2,555,401 38,155 1.49% FINES & PENALTIES 1,465,000 1,615,000 968,713 59.98% 356,703 612,010 171.57% INTERGOVERNMENTAL 310,000 891,638 1,168,229 131.02% 2,840,893 (1,672,664) -58.88% CHARGES FOR SERVICES 31,258,098 31,543,491 29,930,716 94.89% 28,017,221 1,913,496 6.83% TRANSFER FROM CITY UTILITIES 26,170,000 26,170,000 26,256,896 100.33% 23,625,595 2,631,301 11.14%
USE OF MONEY & PROPERTY
Interest 2,532,000 2,532,000 2,589,403 102.27% 1,565,380 1,024,023 65.42% Rent 10,584,266 10,584,266 10,710,726 101.19% 8,906,545 1,804,181 20.26% Total Use of Money & Property 13,116,266 13,116,266 13,300,129 101.40% 10,471,925 2,828,204 27.01% MISCELLANEOUS REVENUES 150,000 215,761 2,841,514 1316.97% 644,555 2,196,959 340.85%
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% 5,651,151 2,317,438 41.01% Total Other Financing Sources 33,878,344 50,626,394 50,626,394 100.00% 44,681,628 5,944,765 13.30%
STADIUM OPERATION
Charges for Services 7,889,147 10,339,147 9,967,090 96.40% 2,463,515 7,503,575 304.59% Rent and Licensing 752,500 752,500 710,000 94.35% 297,359 412,641 138.77% Total Stadium Operation 8,641,647 11,091,647 10,677,090 96.26% 2,760,874 7,916,216 286.73% TOTAL GENERAL FUND 272,355,355$ 301,500,197$ 279,334,718$ 92.65% 232,282,725$ 47,051,994$ 20.26% (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 May 31, 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 May 31, 2023, approximately $48.3 million has been collected. This reflects an increase of $5.1 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, 2.4% in the second quarter, and 20.2% in the third quarter when compared to the same quarters last fiscal year. In the third quarter, growth was experienced in all local business sectors: business-to-business up 12.7%; general retail up 1.1%, transportation up 9.6%, construction up 23.6%, and food products up 28.2%. 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 May, 87% of the property tax budgeted estimate has been received, and revenues are expected to meet the budgeted estimate by year end. A budget amendment was approved on May 23, 2023 (RTC 23-337) as part of the February/March Monthly Financial Report to increase the revenue estimate from $75.3 million to $84.1 million based on the latest estimate from the County of Santa Clara. This collection level is well above the prior year collections of $74.6 million. This reflects strong growth in the secured, supplemental, and unsecured property tax categories. Property tax collections of $1.65 million have been 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 May 31, 2023, $14.0 million has been received, which is significantly higher than receipts through the same period last fiscal year of $6.3 million. While businesses continue to recover from COVID-19 impacts, activity has not yet reached pre-pandemic levels. TOT receipts through May 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. 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 $5.5 million through May, which is slightly 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 category. While receipts are tracking slightly below last year, collections are projected to meet the budgeted estimate of $6.3 million.
7 City of Santa Clara
Financial Status Report as of May 31, 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 $2.6 million, or 84.4% of the budget of $3.1 million, through May. 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. Please note that the amended budget has been revised downward from the prior Monthly Financial Report to reflect a correction in the classification of a $258,000 revenue adjustment for Fire Construction Permits to the Charges for Services revenue category.
Fines & Penalties: Includes vehicle, parking, court fines, library fines, and miscellaneous penalty fines.
The revenue of approximately $1.0 million collected through May is tracking to end the year below the budgeted estimate of $1.6 million largely due to the lower traffic and vehicle code fines. Collections in this category are tracking well above the prior year due to the resumption of the assessment of late fees that had been waived during COVID-19.
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 May, $1.2 million has been received, which is lower than the prior year collection level but above the budgeted estimate of $0.9 million. The fire mutual aid revenue and department budget adjustments totaling $0.6 million, approved as part of the January 2023 and February/March 2023 Monthly Financial Reports, are 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 May, collections are tracking within the budgeted estimate at $29.9 million, or 94.9% of the budget. This reflects a 6.8% increase compared to last year’s collections through the same period of $28.0 million.
This increase is a result of higher collections for parks and recreation fees, the 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 May 31, 2023, $26.3 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 $13.3 million, exceeding the budgeted estimate of $13.1 million. These collections are higher than collections through last fiscal year of $10.5 million. The increase in the interest income reflects the higher investment yield, while rents are higher primarily due to the collections for the Commerce Plaza and Hyatt Regency at 5101 Great America properties.
8 City of Santa Clara
Financial Status Report as of May 31, 2023
Miscellaneous Revenues: Includes developer fees, donations, damage recovery, sale of surplus, and one-time miscellaneous revenues. Through May 31, 2023, collections of $2.8 million are higher than collections through the same period last fiscal year of $0.6 million. This increase is primarily attributable to the $2.32 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). Of this settlement amount, $1.67 million was received in September 2022, while the remaining $0.65 million was received in March 2023.
Stadium Operation: As of May 31, 2023, charges for services collected through the Stadium totaled $10.7 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 amended budget also reflects $2.4 million in adjustments as part of the January 2023 and February/March 2023 Monthly Financial Reports approved on March 21, 2023 and May 23, 2023, respectively, to account for the higher activity level.
9 City of Santa Clara
Financial Status Report as of May 31, 2023
General Fund Expenditures
As of May 3 1, 2023, $ 257.2 million or 85.3% of the Gener al Fund operating budget had been expended. Overall, expenditures in the General Fund are tracking below budgeted levels through May.
Departmental expenditures totaled $221.3 million, or 84% of the budget, which is below the par level of
91.7% of the budget. This reflects savings from vacant posit ions 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
05/31/2023
Percentage
Use d
Actual Through
05/31/2022
$
Change From
Prior Year
Percentage
Change
GENERAL GOVERNMENT
Non-Departmental 7,514,334$ 7,821,394$ 3,932,223$ 50.28% 3,740,875$ 191,348$ 5.12% City Council 861,105 862,396 609,936 70.73% 719,358 (109,422) -15.21% City Clerk 2,076,112 2,093,661 1,773,324 84.70% 1,206,163 567,161 47.02% City Manager 6,085,321 6,292,428 4,627,658 73.54% 4,503,148 124,510 2.76% City Attorney 3,202,735 3,690,974 2,973,565 80.56% 2,224,952 748,613 33.65% Human Resources 4,508,710 4,828,451 3,315,156 68.66% 3,361,205 (46,049) -1.37% Finance 19,045,131 20,272,300 16,416,860 80.98% 14,655,473 1,761,387 12.02% Total General Government 43,293,448 45,861,604 33,648,722 73.37% 30,411,174 3,237,548 10.65% PUBLIC WORKS 24,021,840 25,092,840 20,282,529 80.83% 20,173,587 108,942 0.54% COMMUNITY DEVELOPMENT 5,398,007 5,665,420 4,186,097 73.89% 4,221,200 (35,103) -0.83% PARKS AND RECREATION 21,695,302 22,268,627 18,167,045 81.58% 16,533,474 1,633,571 9.88%
PUBLIC SAFETY
Fire 62,298,852 66,599,007 61,408,676 92.21% 43,414,806 17,993,870 41.45% Police 84,615,023 85,779,549 74,148,942 86.44% 53,147,505 21,001,437 39.52% Total Public Safety 146,913,875 152,378,556 135,557,618 88.96% 96,562,311 38,995,307 40.38% LIBRARY 11,889,451 12,277,870 9,449,185 76.96% 8,124,638 1,324,547 16.30% DEPARTMENTAL TOTAL 253,211,923 263,544,917 221,291,196 83.97% 176,026,383 45,264,813 25.71%
OTHER FINANCING USES
Operating Transfer Out - Miscellaneous 38,809 64,933 64,933 100.00% 24,665,526 (24,600,593) -99.74% 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 8,886,818 8,886,818 100.00% 11,773,925 (2,887,107) -24.52% Operating Transfer Out - Reserves - 16,058,886 16,058,886 100.00% 3,511,009 12,547,877 357.39% Total Other Financing Uses 11,779,285 28,125,612 28,125,612 100.00% 44,073,248 (15,947,636) -36.18% STADIUM OPERATION 7,364,147 9,829,668 7,740,057 78.74% 5,874,848 1,865,209 31.75% TOTAL GENERAL FUND 272,355,355$ 301,500,197$ 257,156,865$ 85.29% 225,974,479$ 31,182,386$ 13.80% 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 May 31, 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 May 31, 2023, expenditures totaled $3.9 million, or 50.3% 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. Non-Departmental includes $1.8 million for separation payouts; these funds are transferred to departments as necessary to address these costs. Budget actions were approved on June 27, 2023 as part of the April 2023 Monthly Financial Report to allocate a portion of these funds to the Fire Department to cover the separation payouts in that department. This action is not yet reflected.
City Attorney: Through May, actual expenditures totaled approximately $3.0 million, which is below expected levels at 80.6% of the budget. Spending is 33.7% 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 May, actual expenditures were tracking above budget at $1.8 million or approximately 84.7% of the budget. This reflects a 47% 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 May 31, 2023, expenditures were at 70.7% of budget, which is below par.
Compared to the same period through last fiscal year, this reflects a spending decrease of approximately 15.2%, which is primarily the result of savings due to vacancies within the department.
City Manager: Expenditures through May totaled $4.6 million, or 73.5% of the budget, which is below par for this time of the year. Expenditures are 2.8% 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 May, General Fund expenditures for the Planning and Housing and Community Services divisions totaled $4.2 million, or 73.9% of budget, which is below the par level of 91.7%. Expenditures were slightly below the spending through the same period last fiscal year due to lower contractual services expenses.
Finance Department: Through May, the Department’s expenditures totaled $16.4 million, or 81% of the budget, which is below par. This expenditure level was approximately 12% higher than the prior year primarily as a result of higher salaries and benefits costs.
Fire Department: Through May 31, 2023, expenditures totaled $61.4 million, or 92.2% of the budget, which is slightly above par. These expenditures reflect a 41.5% increase from expenditures through the
11 City of Santa Clara
Financial Status Report as of May 31, 2023
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 119%. 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 adjustments appropriating $0.6 million for Cal OES reimbursements from the January 2023 and February/March 2023 Monthly Financial Reports. Additional budget amendments were approved as part of the April 2023 Monthly Financial 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 and are not yet reflected.
Library Department: Through May, actual expenditures totaled $9.4 million, or 77% of the budget, which is below par, but nearly 16.3% 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 May, actual expenditures totaled approximately $18.2 million, or 81.6% of the budget, which is below par, but above the prior year actuals of $16.5 million.
This is due to the department resuming activities that were previously impacted by COVID-19 restrictions.
Police Department: Expenditures through May are tracking below expected levels at $74.1 million, or
86.4% of the budget. This is approximately 39.5% 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 $7.7 million through May and are tracking below budgeted levels at 78.7%. This is 31.8% 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 adjustments totaling $2.4 million approved as part of the January 2023 and February/March 2023 Monthly Financial Reports.
12 City of Santa Clara
Financial Status Report as of May 31, 2023
Special Revenue Funds
The table below is a summary of revenues and expenditures of select Special Revenue Funds as of May 31, 2023. The amended budget reflects carryover encumbrances from fiscal year 2021/22 and budget amendments approved by the City Council through May 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 $27.0 million, or 99.4% of budget, while expenditures totaled $26.8 million, or 65.3% of budget through the end of May. 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 91.7%. 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.
Actual Actual $
Fund Adopted Amended Through Percentage Through Change From Percent Description Budget Budget 5/31/2023 received 5/31/2022 Prior Year Change Housing Authority Fund 280,000$ 277,495$ 397,268$ 143.16% 520,662$ (123,394)$ -23.70% City Affordable Housing Fund 682,000 7,162,700 6,993,499 97.64% 4,483,700 2,509,799 55.98% Housing Successor Fund 350,000 1,306,326 950,252 72.74% 6,187,165 (5,236,913) -84.64% Housing and Urban Development 1,810,000 3,924,461 1,049,963 26.75% 2,973,735 (1,923,772) -64.69% Building Development Services Fee
Fund
14,112,000 14,464,458 17,580,299 121.54% 16,355,098 1,225,201 7.49% American Rescue Plan Act Fund - - - 0.00% 13,283,413 (13,283,413) -100.00% TOTAL 17,234,000$ 27,135,440$ 26,971,281$ 99.40% 43,803,773$ (16,832,492)$ -38.43% Actual Actual $
Fund Adopted Amended through Percentage through Change From Percent Description Budget Budget 5/31/2023 use d 5/31/2022 Prior Year Change Housing Authority Fund 380,363$ 584,503$ 183,211$ 31.34% 139,702$ 43,509$ 31.14% City Affordable Housing Fund 1,685,731 11,499,145 6,784,743 59.00% 929,754 5,854,989 629.74% Housing Successor Fund 1,242,599 6,049,148 5,520,836 91.27% 12,380,972 (6,860,136) -55.41% Housing and Urban Development 2,355,815 5,223,984 1,720,536 32.94% 3,129,428 (1,408,892) -45.02% Building Development Services Fee
Fund
13,360,809 17,682,237 12,568,883 71.08% 9,870,363 2,698,520 27.34% American Rescue Plan Act Fund - - - 0.00% 26,231,326 (26,231,326) -100.00% TOTAL 19,025,317$ 41,039,017$ 26,778,209$ 65.25% 52,681,545$ (25,903,336)$ -49.17%
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 May 31, 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 May 2023. As of May 31, 2023, the capital fund revenue totaled $35.1 million. In the Parks and Recreation Capital Fund, $26.4 million has been collected, which includes $25.2 million in Mitigation Fee Act revenue. In the Streets and Highways Fund, revenues are tracking well below budget due to the timing of projects and associated reimbursements.
REVENUES - FISCAL YEAR 2022/23
Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 5/31/2023 Use d Parks & Recreation 24,277,760$ 3,301,620$ 27,579,380$ 26,353,723$ 95.56% Streets & Highways 6,634,174 15,921,680 22,555,854 2,992,842 13.27% Storm Drain 1,454,000 - 1,454,000 1,326,849 91.26% 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 1,277,059 31.25% Patrick Henry Drive
Infrastructure Improvement
Fund
- - - - NA Tasman East Specific
Infrastructure Improvement
Fund
2,413,605 - 2,413,605 2,419,501 100.24% TOTAL 37,747,856$ 20,441,324$ 58,189,180$ 35,100,116$ 60.32%
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 May 2023. As of May 31, 2023, capital fund expenditures totaled $34.0 million, or 21.5% of the amended budget.
As part of the adoption of the FY 2022/23 and FY 2023/24 capital improvement program budget, some capital funds were carried over for projects that were not anticipated to be completed by June 30, 2022.
Necessary additional adjustments to the capital carryover amounts were included as part of the Budgetary Year-End Report for FY 2021/22 approved on December 6, 2022. These adjustments are reflected in the table below.
14 City of Santa Clara
Financial Status Report as of May 31, 2023
The carryover of prior year budget amounts is necessary when services or projects are started but not completed at the end of the fiscal year. This is especially true for the Capital Improvement Program (CIP) that typically spans several years. The table below displays the expenditure budget for the General Government capital funds excluding transfers.
EXPENDITURES - FISCAL YEAR 2022/23
Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 5/31/2023 Use d Parks & Recreation 20,631,295$ 20,913,971$ 41,545,266$ 8,070,274$ 19.43% Streets & Highways 28,126,833 53,175,624 81,302,457 15,950,657 19.62% Storm Drain 5,181,209 2,745,531 7,926,740 3,122,031 39.39% Fire 1,580,091 395,077 1,975,168 554,609 28.08% Library 355,811 35,747 391,558 89,717 22.91% Public Buildings 4,638,636 2,439,492 7,078,128 697,080 9.85% General Gov't - Other 3,687,314 6,158,460 9,845,774 1,801,313 18.30% City Affordable Housing Capital - 1,600,000 1,600,000 - 0.00% Related Santa Clara Developer 3,566,699 - 3,566,699 1,862,544 52.22% Patrick Henry Drive
Infrastructure Improvement
Fund
69,205 - 69,205 69,205 100.00% Tasman East Specific
Infrastructure Improvement
Fund
3,221,395 - 3,221,395 1,798,250 55.82% TOTAL 71,058,488$ 87,463,902$ 158,522,390$ 34,015,680$ 21.46%
EXPENDITURE - OVERVIEW AND COMPARISON BY FUND
CITY OF SANTA CLARA
GOVERNMENTAL CAPITAL IMPROVEMENT FUNDS
15 City of Santa Clara
Financial Status Report as of May 31, 2023
Enterprise Funds
The table below is a summary of revenues and expenses for the Enterprise Operating Funds as of May 31, 2023.
Actual Actual $
Fund Adopted Amended Through Percentage Through Change From Percent Description Budget Budget 5/31/2023 received 5/31/2022 Prior Year Change Electric Utility Fund 615,818,445$ 629,425,236$ 559,557,084$ 88.90% 474,939,962$ 84,617,122$ 17.82% Water Utility Fund 48,358,520 48,358,520 42,856,980 88.62% 43,862,224 (1,005,244) -2.29% Sewer Utility Fund 40,459,345 40,459,345 40,678,022 100.54% 47,838,824 (7,160,802) -14.97% Cemetery Fund 600,000 600,000 611,942 101.99% 688,424 (76,482) -11.11% Solid Waste Utility Fund 37,245,092 37,245,092 31,386,355 84.27% 29,418,589 1,967,766 6.69% Water Recycling Fund 5,708,446 5,708,446 5,197,415 91.05% 5,324,939 (127,524) -2.39% TOTAL REVENUE 748,189,848$ 761,796,639$ 680,287,798$ 89.30% 602,072,962$ 78,214,836$ 12.99% Actual Actual $
Fund Adopted Amended through Percentage through Change From Percent Description Budget Budget 5/31/2023 Use d 5/31/2022 Prior Year Change Electric Utility Fund 603,681,580$ 606,557,830$ 528,149,158$ 87.07% 452,143,455$ 76,005,703$ 16.81% Water Utility Fund 46,797,065 48,768,438 40,533,838 83.11% 37,061,187 3,472,651 9.37% Sewer Utility Fund 30,825,023 33,220,466 29,802,459 89.71% 27,949,605 1,852,854 6.63% Cemetery Fund 1,539,796 1,545,944 1,371,277 88.70% 1,277,348 93,929 7.35% Solid Waste Utility Fund 36,626,118 40,169,992 28,962,392 72.10% 27,412,248 1,550,144 5.65% Water Recycling Fund 5,729,413 7,489,135 6,387,757 85.29% 4,756,485 1,631,272 34.30% TOTAL - Operating
Appropriations
725,198,995$ 737,751,805$ 635,206,881$ 86.10% 550,600,328$ 84,606,553$ 15.37% 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 were approved as part of the April 2023 Monthly Financial Report but are not yet reflected here.
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 José related to the co-owned Regional Wastewater Facility. Expenditures are tracking higher in the Water Recycling
16 City of Santa Clara
Financial Status Report as of May 31, 2023
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 as part of the February/ March 2023 Monthly Financial Report to account for the significantly higher spend in the resource category; this adjustment is reflected in the table.
A summary of revenue and expenses in the Enterprise Capital Improvement Funds are detailed in the tables below. Actual revenue through May 31, 2023 totaled $42.6 million, consisting primarily of developer contributions in the Electric Utility Fund. Enterprise capital fund expenses totaled $62.2 million, or 22.4% of the amended budget. Similar to the general government capital funds, capital funds were carried over into next fiscal year as part of the FY 2022/23 and FY 2023/24 budget adoption process for those projects that have not yet been completed. Adjustments to the capital carryover amounts based on actual year-end expenditures were approved as part of the Budgetary Year-End Report for FY 2021/22 on December 6, 2022 and are reflected below.
Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 5/31/2023 Use d Electric Utility Fund 40,950,870$ 14,554,461$ 55,505,331$ 30,772,137$ 55.44% Street Lighting (1) - - - 41,442 N/A Sewer Utility Fund - - - 11,777,395 N/A Solid Waste Utility Fund 250,000 65,000 315,000 11,646 3.70%
TOTAL - CIP
Appropriations
41,200,870$ 14,619,461$ 55,820,331$ 42,602,620$ 76.32% Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 5/31/2023 Use d Electric Utility Fund 131,429,732$ 80,191,903$ 211,621,635$ 42,098,258$ 19.89% Street Lighting (1) (1,835,662) 5,637,312 3,801,650 245,208 6.45% Water Utility Fund 8,012,986 - 8,012,986 3,242,441 40.46% Sewer Utility Fund 26,645,486 23,316,657 49,962,143 15,494,160 31.01% Cemetery Fund 53,642 233,980 287,622 20,936 7.28% Solid Waste Utility Fund 891,521 4,488 896,009 580,882 64.83% 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$ 62,229,434$ 22.44% 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
17 City of Santa Clara
Financial Status Report as of May 31, 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.
18 City of Santa Clara
Financial Status Report as of May 31, 2023
DETAIL OF SELECTED FUND RESERVE BALANCES:
GENERAL
FUND ELECTRIC WATER
Budget Stabilization Reserve 48,038,975$
Capital Projects Reserve 11,810,451
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 80,256,254$ 167,542,169$ 303,090$
CITY OF SANTA CLARA
RESERVE BALANCES
May 31, 2023
19 City of Santa Clara
Financial Status Report as of May 31, 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 May 2023 and for fiscal year 2022/23 are shown in the table below.
Department May-23
Fis cal Year
2022/23
Year To Date Designated Use
City Manager's Office -$ 100$ Help Your Neighbor Parks & Recreation 3,500 6,271 Case Management Parks & Recreation - 2,184 Roberta Jones Jr. Theatre Parks & Recreation - 30,600 Wade Brummal TOTALS 3,500$ 39,155$