ITEM #5
12/12/2023
Council and
Authorities
Concurrent Meeting
Item 5. Action on FY 2022/23
Budget Year-End Report and
1852
Approve the Related Budget
THE MISSION GIN Amendments
December 12, 2023
1 Agenda
• Overview
• General Fund Performance
• Distribution of General Fund Balance
• Other Funds
• Recommended Adjustments
• RTC Recommendations
City of
Santa Clara
The Central Was Basin 2
2 POST MEETING MATERIAL
1 Overview
2022/23 Year-End Budget Review
• Analyze year-end performance of every fund
• Adjust the FY 2023/24 budget in all funds to account for actual FY 2022/23 results
• Distribute fund balance in the General Fund
- Informed by Council policies regarding reserves and the use of one-time funding for one-time needs
- Year-end fund balance is the funding source for many of the City's capital projects with the pay-as-you-go approach
City of
Santa Clara
The Center of What's Possible
3 Overview
June 2023 Dec 2023 June 2024 › Dec 2024 June 2025
Operating Budget
• Adopt Biennial • Amend Budget • Adopt Biennial
Budget (2nd Year) Budget
Capital Budget
• Amend Budget • Adopt Biennial • Amend Budget
(2nd Year) Budget (2nd Year)
Budget Monitoring/Year-End Report
• Close and • Close and
reconcile FY reconcile FY
2022/23 2023/24
City of
Santa Clara
The Center of What Possible
4 2
Overview
Budget and Fiscal Policies
• Balanced Budget - one-time sources are used to cover one-time uses • Reserves
- Budget Stabilization Reserve - reserve target is three months (25%); In FY 2023/24, the Council approved a lower minimum of 15% of expenditures - Capital Projects Reserve - minimum target of $5.0 million; goal of having sufficient funds for capital projects included in CIP
- Pension Stabilization Reserve - set aside funds to address the City's unfunded pension liability; target annual contribution is 1% of the unfunded liability City of
Santa Clara
The Cootero What Possible
5 Overview
• Ended FY 2022/23 in a stronger fiscal position as the City continued to recover from the pandemic-related impacts
• Stronger performance factored into General Fund Forecast in March 2023; reduced deficit from $27 million to $9 million based on improved revenues
• General Fund ended the year with available fund balance to distribute of $36.4 million due to higher revenues and expenditure savings • Other funds generally ended FY 2022/23 within estimated levels with some adjustments necessary
City of
Santa Clara
6 3
Year-End Results - General Fund
• Revenues of $286.7 million ended 9.7% ($25.3 million) above budget; portion of the excess revenue allocated to Advanced Planning Fee, Technology Fee and Pension Stabilization Reserves ($3.1 million)
• Expenditures of $271.4 million were 6.0% ($17.2 million) below budget; $1.0 million carried over to FY 2023/24 in Adopted Budget
• After technical adjustments ($1.9 million), additional fund balance of $36.4 million over the estimate used to develop FY 2023/24 Adopted Budget • Police and fire radio replacements ($3.5 million)
• Public and Workspace Improvements Project ($0.75 million) • Commerce / Peddler's Plaza ($0.74 million)
• Reserves ($31.4 million)
City of
Santa Clara
The Center of What's Possible
7 General Fund Revenues
Category Variance
• Revenues above budget by
$25.3 million (9.7%) Transient Occupancy Tax $6.39 M
Sales Tax $4.32 M
• Higher revenue collections
were assumed in the FY SVP Transfer $3.41 M
2023/24 and FY 2024/25 Interest $2.85 M
Adopted Budget
Other Revenue (mostly 49ers Settlement) $2.71 M
• Portions of the higher revenues Other Fees (Tech Fee, Planning, Fire) $1.82 M allocated to the Advanced
Rents (Peddler's Plaza/Commerce, ROW) $1.55 M
Planning and Fire Fees,
Pension Stabilization, and the Remaining Revenue Variance $2.22 M Technology Fee Reserves Total Revenue Variance $25.27 M City of
Santa Clara
The Center of Whats Possible
8 4
General Fund Revenue History
FY FY FY FY FY Growth
2018/19 2019/20 2020/21 2021/22 2022/23 from
Actual Actual Actual Actual Actual FY 2018/19
Property Tax $58.4 M $65.5 M $68.8 M $74.6 M $84.6 M 45% Sales Tax $58.5 M $55.3 M $56.2 M $56.9 M $64.5 M 10%
Transient Occupancy Tax $22.5 M $16.0 M $2.9 M $10.8 M $19.0 M (16%) Silicon Valley Power $21.3 M $22.7 M $24.5 M $27.3 M $29.6 M 39% Transfer
City of
Santa Clara
The Center of What's Possible
9 General Fund Expenditures
Expenditures below budget by $17.2 million (6.0%)
• All departments remained within budget
• Salaries and Benefits generated savings of $13.75 million (6.5%) - Cost control measures and vacancy savings; hiring freeze has been lifted • Non-personnel generated savings of $3.45 million (5.7%) - Savings in the materials/services/supplies category
- Adopted budget assumed carryover of unspent funds ($1.0 million) - Three additional carryovers recommended ($0.6 million) City of
Santa Clara
The Centerol Whats Possible
10 5
General Fund Expenditures
I Want to Work in Santa Clara
Hiring Efforts Underway WHAT MISSION WILL
• Currently 141.5 vacancies (vacancy rate of 12.31%);
down from June 2023 rate of 15.69%; anticipated to
increase in December due to retirements
Hundreds of thousands of people meet in Santa Clara every day to dream, create and buld what's possible. If you are looking to work for • Active recruitments for 81.5 positions (52 classifications) the City of Santa Clara or work in Santa Clara at the many companies located here, you can find your mission here in Santa Clara. and 18 As Needed classifications (multiple hires) in
acon Valery Ladle Chamber o
progress
• Classification/compensation projects for 14 classifications Santa Clara Fire Department Jobs
(34 positions)
Sticon Va VArmal Contro NOVA Works Job Center
• July - Mid-November Hiring: 60 new hires/rehires and
25 promotions versus 26 separations
Santa Clara Convention Center
City of
Santa Clara
The Center of Whats Possible
11 Proposed General Fund Allocations
Impact on
General Fund Fund
Recommended Use of Fund Balance Balance
Recommended Adjustments
Police and Fire Radios (Total $6.2 M; excludes State funds of $3.50 M $1.75 M, fund balance of $0.75 M)
Public and Workspace Improvement Project (City Hall campus, $0.75 M
meeting rooms, cafeteria)
Commerce/Peddler's Plaza (net impact of revenue and
expenditure adjustments based on projected activity; HVAC) $0.74 M City of 12
Santa Clara
Tha Cooter What Porta
12 6
Proposed General Fund Allocations
Impact on
General Fund Fund
Recommended Use of Fund Balance Balance
Recommended Adjustments (Cont d.)
Capital Projects Reserve $20.00 M
Budget Stabilization Reserve $6.27 M
Pension Trust Reserve (1% of General Fund unfunded liability) $5.17 M Total Recommended Adjustments $36.43 M
City of 13
Santa Clara
The Contero What Possible
13 Summary of Select General Fund Reserves
FY 2023/24
General Fund Reserve Amended Balance
Budget Stabilization Reserve (19% of expenditures) $54.3 M Capital Projects Reserve (up from $3.5 M; 4% of $23.9 M unfunded backlog of $571 M identified in CIP
Pension Stabilization Reserve (5.3% of unfunded $27.5 M liability)
City of 14
Santa Clara
The Centerof Whats Possible
14 7
Other Funds
• Electric Utility Operating Fund: Ended the year revenues matched expenses however required mid-year re-balancing/one-time solutions • Sewer Utility Operating Fund: Expenditures were $1.1 million above budget due to higher legal costs; overage offset by higher revenues • Water Utility Operating Fund: Expenditures were $1.5 million above budget due to higher wholesale water costs; overage offset by higher water sales • Convention Center Fund: FY 2022/23 ending balance of $5.6 million exceeded expectations by $3.6 million; expenditures were $0.3 M above budget due to increased activity levels, overage offset by revenue
• Related Santa Clara Fund: FY 2022/23 negative ending fund of $1.7 million; working with Related on reimbursements and landfill costs City of
Santa Clara
The Catero What's Posse
15 Recommended Adjustments
FY 2022/23 Budget Ratifications (Attachment 1)
• 15 appropriations totaling $4.4 million in 13 funds
• $3.2 million in water and sewer operating and capital funds (5 appropriations)
• $0.8 million in Electric Utility Capital Fund for New Business Estimate Work Project (additional customer requests)
• $0.3 million in Convention Center Enterprise Fund for Event Expense (higher activity level)
• $0.1 million for 6 appropriations in various funds (e.g., allocate additional interest earnings/revenues)
City of
Santa Clara
The Centerof Whats Possible
16 8
Recommended Adjustments
FY 2023/24 Budget Adjustments (Attachment 2)
• Adjustment of Beginning and Ending Fund Balances for all funds • General Fund Adjustments to close out FY 2022/23 and allocate $36.4 million in available fund balance
• CIP carryover true-up - reduction of $7.1 million (bringing total CIP carryovers to $251.9 million); other CIP amendments of $3.7 million • Grants carryover - $4.3 million
• Donations and reimbursements carryover funds - $2.3 million • True-up revenues/appropriations to reflect anticipated activity levels City of
Santa Clara
The Centerof Whats Possible
17 Recommendations
1. Note and file the FY 2022/23 Budget Year-End Report
2. Approve the FY 2022/23 Budget Amendments to address
necessary budget ratifications totaling $4,416,920 in 13 funds as set forth in Attachment 1 of this report (five affirmative Council votes required for revenue actions and use of unused balances) City of
Santa Clara
the Centero Wasis Possible
18 9
Recommendations
3. Approve the FY 2023/24 Budget Amendments in the General Fund to distribute excess funding from the close-out of FY 2022/23 as set forth in Attachment 2 of this report:
a) Increase the Capital Projects Reserve in the amount of $20,000,000, offset by an increase to the Beginning Fund Balance (five affirmative Council votes required for the use of unused balances
b) Increase the Budget Stabilization Reserve in the amount of $6,276,323, offset by an increase to the Beginning Fund Balance (five affirmative Council votes required for the use of unused balances
c) Increase the Pension Stabilization Reserve in the amount of $5, 168,000, offset by an increase to the Beginning Fund Balance (five affirmative Council votes required for the use of unused balances
City of
19 Santa Clara
The Chokero What Possi
19 Recommendations
3. (Cont'd.)
d) Increase the Transfer to the Communications Acquisitions Fund for public safety radios in the amount of $3,500,000, offset by an increase in Beginning Fund Balance (five affirmative Council votes required for the use of unused balances) e) Increase the Transfer to the Public Buildings Capital Fund for the Public and Workspace Improvement Project in the amount of $750,000, offset by an increase to the Beginning Fund Balance (five affirmative Council votes required for the use of unused balances
f) Increase the City Manager's Office budget for maintenance and necessary HVAC repairs and replacement at 900 Lafayette Street, known as Commerce Plaza, and 1000 Lafayette Street, known as Peddler's Plaza properties in the amount of $1,770,760, offset by an increase in rent revenue in the amount of $1,034,300 and an increase to the Beginning Fund Balance in the amount of $736,460 (five affirmative Council votes required for revenue actions and the use of unused balances City of
Santa Clara
The Center of Whats Possible
20 10
Recommendations
4. Approve the FY 2023/24 Budget Amendments totaling $99,765,963 in 65 funds as set forth in Attachment 2 of this report (five affirmative Council votes required for revenue actions and the use of unused balances as noted for each item in Attachment 2)
City of
Santa Clara
The Contero Whits Possibk
21 Council and
Authorities
Concurrent Meeting
CITY OF
Item 5. Action on FY 2022/23
Budget Year-End Report and
1852
Approve the Related Budget
THE MISSION CIT Amendments
December 12, 2023
22 11