Item # I.B
6/4/24
City Council Meeting
Item# 1.B - Study Session:
Review of the Proposed
FY 2024/25 & FY 2025/26
Biennial Capital Improvement
Program Budget and FY 2024/25
1852
Operating Budget Changes
THE MISSION CIT
June 4, 2024
Agenda
• Proposed Budget Overview
• Capital Budget for FY 2024/25 and FY 2025/26 and Five-Year CIP • Operating Budget Amendments to FY 2024/25
• Responses from May 7th Study Session
• Questions and Answers
City of
Santa Clara
The Censer of What's Possible
POST MEETING MATERIAL
1 Proposed Budget Overview
City of
Santa Clara
Budget Calendar
• Oct - Nov 2023 - Departments submit CIP Project requests; turn over Operating Budget and begin work on proposed Municipal Fee Schedule
• December - March - Review of CIP and Operating Budget requests; prepare Ten-Year General Fund Forecast, complete review of Proposed Municipal Fee Schedule • April 9 - City Council Study Session on the Proposed Municipal Fee Schedule • April 23 - Public Hearing and Adoption of the Proposed Municipal Fee Schedule • April 29 - Proposed Capital Budget Released
• May 7 - City Council Study Session on Capital Budget and Operating Budget Changes • June 4 - Second City Council Study Session on Capital Budget and Operating Budget Changes
• June 25 - City Council Adoption of Capital Budget, Gann limit, Operating Budget Changes and CIP Carryovers
City of
Santa Clara
2 Capital Budget Overview
• 00
• This two-year budget cycle focuses on the capital budget with amendments to the FY 2024/25 Operating Budget
• FY 2024/25 and FY 2025/26 Capital Budget ($642.6 M) and Five-Year Capital Improvement Program (CIP) ($1.04 B)
• Capital program is a mixed bag: well-funded for the utilities (88% of the CIP), investments in projects with dedicated funding (e.g., transportation), but falls well short in other areas
• Insufficient funding to address unfunded needs of over $600 M; General Fund Capital Projects Reserve of $23.9 M to support projects; recommended use of $15.0 M in this CIP and $1.0 M from last CIP • Project carryover requests (from FY 2023/24 to FY 2024/25) will be brought forward with the June 25th budget adoption
City of
Santa Clara
The Center of What's Possible
Operating Budget Overview
• Updates to the FY 2024/25 Adopted Operating Budget
- Updates to revenue, labor, non-personnel,
resource/production costs for General Fund and all
operating funds
- General Fund structural deficit remains
- No capacity for restorations, service expansion,
ongoing capital maintenance, reserve contributions
- Unknown impact of ongoing labor negotiations
• Small FY 2024/25 General Fund shortfall balanced with FY 2023/24 and FY 2024/25
use of reserves; additional budget balancing actions
Adopted Operating
expected in next Biennial Operating Budget Budget
City of
• Limited budget actions supported by current year Santa Clara savings
City of
Santa Clara
3 City Budget
City of Santa Clara Budget*
FY 2023/24 FY 2024/25 FY 2024/25
Fund Type Adopted Budget Adopted Budget Amended Budget
General Fund $ 281,795,558 $287,458,968 $306,591,330
Special Revenue Funds 48,639,709 37,111,226 41,458,963
Enterprise Funds 872,344,414 968.035.945 940,385,745
Internal Service Funds 39,606.414 41,304,602 45,524.215 Debt/Other* 374,983,049 40,658,134 152,273,904
Less (Transfers, Contributions, and Reserves)** (515,319,491) (247,455,561) (416,463,413) Subtotal Operating Budget $1,102,049,653 $1,127,113,314 $1,069,770,744 Capital Funds $657,486,151 $108,385,754 $286,566,592
Less (Transfers, Contributions, and Reserves)** (3,188,205) (1,454,000) (1,818,315) Subtotal Capital Budget $654,297,946 $106,931,754 $284,748,277 Total Budget $1,756,347,599 $1,234,045,068 $1,354,519,021 * Does not include the Stadium Authority Budget
** Adjusts for transfers, contributions and reserves to avoid double counting of the same funds (e.g., internal service funds are excluded)
City of
Santa Clara
The Center of What's Possible
General Fund Ten-Year Forecast
FY 2025-2035 General Fund Ten-Year Financial Forecast
$ in millions
2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/35 Projected $297.4 $309.9 $321.6 $333.8 $346.6 $360.2 $373.9 $388.4 $403.2 $418.8 $434.9 Revenues
Projected $315.9 $364.9 $378.3 $393.2 $404.0 $418.6 $432.5 $448.9 $298.3 $333.5 $348.5
Expenditures
Cumulative ($14.0)
($0.9) ($6.0) ($11.9) ($14.7) ($18.3) ($18.1) ($19.3) ($15.6) ($15.4) ($13.7) (Shortfall) Surplus
• Use of reserves to balance FY 2024/25
• Structural deficit remains, future budget actions will continue to address budget challenges • No capacity for service restorations/expansion and deferred/unmet capital infrastructure needs • Forecast does not include potential additional revenue from Stadium (performance rent/excess revenue) and Related (future project phases)
City of
Santa Clara
4 Capital Budget for FY 2024/25
and 2025/26 and Five-Year CIP
City of
Santa Clara
The Carter a What & Possible
Capital Budget - Accomplishments
• Fairway Glen Neighborhood Park - completed the restroom in March 2024 • Montague Park - added a new play area, group picnic areas, fitness areas, a half-size basketball court and renovated the community building • Magical Bridge Playground - groundbreaking occurred in May 2023 and the park is slated to open in the summer of 2024
• Phase I of the Stationary Standby Generators (9 emergency generators) • Enhanced public spaces in the Convention Center with interior furniture, patio furniture for the second-floor terrace, and more food offerings • In 2023, replaced 4.2 miles of transmission line serving the Grizzly Hydroelectric power plant that was severed during the 2021 Dixie Fire • Oaks Junction Substation was completed and energized in July 2022 • In December 2023, Council certified the Environmental Impact Report and adopted the Downtown Precise Plan and Form Based Zoning Code City of
Santa Clara
5 Capital Budget - Accomplishments
• Completed 167,000 linear feet of CCTV sewer inspection and over 507,000 linear feet of flushing/jetting
• Completed repairs to approx. 12,000 linear feet of sanitary sewer main • $3 million grant for the Anna Drive Neighborhood Flood Protection Project and began the design phase
• Completed Laurelwood Pump Station Rehabilitation project • Installed trash capture devices to reduce trash loads entering waterways • In November 2023, launched a new on-demand rideshare service in the southern half of Santa Clara called Silicon Valley (SV) Hopper • Completed approx. 42 lane miles of street pavement in 2022 and 2023 • Completed construction work for the Santa Clara School Access Improvements and Uncontrolled Crosswalks Phase 1 projects • American Public Works Assoc. Project of the Year for Serra Tanks Rehab City of
Santa Clara
The Center of What's Possible
CIP Projects by Theme
• 00
2024/25 2025/26 Biennial Five-Year
Budget Budget Budget CIP
Theme
Administrative Facilities $2,343,000 $310,000 $2,653,000 $2,653,000 Community Facilities 2,771,934 500,000 3,271,934 3,271,934 Convention Center 2,150,000 2,150,000 2,150,000
Electric Utility 217,697,515 304,154,500 521,852,015 751,516,215 Other Community Projects 6,080,775 5,411,998 11,492,773 24,281,792 Parks and Trails 3,550,760 2,158,838 5,709,598 10,209,598 Sewer Utility 19,570,472 22,216,632 41,787,104 132,647,325 Solid Waste 788,000 812,000 1,600,000 4,180,000
Storm Drain 2,404,365 480,750 2,885,115 4,685,115
Technology and Equipment 2,993,823 751,000 3,744,823 6,213,623 Transportation 18,566,948 14,470,938 33,037,886 74,122,562 Water and Recycled Water Utilities 6,195,000 6,225,000 12,420,000 26,320,000 TOTAL $285,112,592 $357,491,656 $642,604,248 $1,042,251,164 City of
Santa Clara 12
6 General Fund Capital Projects Reserve
(CPR) 000
• General Fund CPR funded from CPR Funding in Five-Year CIP = $16.0 M excess revenues and expenditure
Storm Drain,
savings at the end of a fiscal year Parks and $ 4.7 M, 29.4% Trails, $ 0.9 M,
• Used to fund capital projects with no 5.6%
other funding source
Community Facilities,
• Current balance of $23.9 M proposed $ 1.6 M, 10.0% Technology & Equipment,
to be reduced by $15.0 M to $8.9 M; $ 2.7 M, 16.9%
additional $1.0 M funded from CPR
funds set aside in last CIP
Administrative
Facilities, $ 2.7 M,
• Address high priority needs across 16.9%
program areas Transportation,
$ 3.4 M, 21.2%
City of
Santa Clara
13 The Center of Whats Possible
Proposed CIP - Administrative Facilities
Theme • • 0
Five-Year CIP: $2.7 million
• Fire Training Tower Renovation ($504 K)
• Emergency Operations Center Security Upgrades ($294K) • City Hall Gutter and Waterproofing Repair ($485 K)
• City Buildings - Upgrade Lighting to LED ($500 K)
• Electric Vehicle Charging (Fleet) ($200K)
• Maintenance and Repair of City and Historic Buildings ($670 K) Major Funding Sources: General Fund CPR
City of
Santa Clara
7 Proposed CIP - Community Facilities Theme
• 00
Five-Year CIP: $3.3 million
• Planning and Construction of Temporary and/or Permanent International Swim Center (ISC) Replacement Facility ($1.0 M) • Bowers Roof/Building Replacement Project ($1.2 M)
• Northside Branch Library - Automated Materials Handling System ($332 K)
• Parks Service Center Improvements ($235 K)
• Lawn Bowls Improvements ($175 K)
• Senior Center Natatorium HVAC- Phase ($173 K)
• Central Park Library - Radio Coverage ($120 K)
Major Funding Sources: General Fund CPR, Mitigation Fee Act & Quimby Act fees, developer contributions
City of
Santa Clara
The Center ef What's Possible
Proposed CIP - Convention Center Theme
Five-Year CIP: $2.2 million
• Santa Clara Convention Center Condition Assessment
Repair ($2.2 M); replacement of air wall system in the
Grand Ballroom and various upgrades to bathrooms
• Complete the indoor digital signage
project (wayfinding, event/meeting
Main
announcements, and advertising) and Kitchen
update the kitchens using existing funds
Major Funding Sources: Convention
Mission
Center Enterprise Fund, OVG360 and Kitchen
Levy Contributions
City of
Santa Clara
The Center of What's Possible
8 Proposed CIP - Electric Utility Theme
Five-Year CIP: $751.5 million
• Northern Receiving Station (NRS) Upgrades and Expansion ($134.0 M) Santa Clara
• Kifer Receiving Station (KRS) Rebuild and Replacement ($107.0 M) • Scott Receiving Station (SRS) Rebuild and Replacement ($98.0 M) • Transmission Loop 1 ($76.3 M)
• Homestead Substation Rebuild ($75.1 M)
• New Business Estimate Work ($54.6 M)
• NRS-KRS 115kV Line ($38.1 M)
Major Funding Sources: Transfer from Electric Utility Fund (customer service charges), debt financing, developer
contributions, load development fees
City of
Santa Clara
Proposed CIP - Parks and Trails Theme
0 00
Five-Year CIP: $10.2 million
• Community Park North - Phase 1 ($5.0 M)
• Central Park Access & Parking Improvements ($3.0 M)
• Park Improvements ($949 K)
• Earl Carmichael Park Playground Rehabilitation ($508 K) • Mary Gomez Park Playground Rehabilitation ($414 K)
• Maywood Park Playground Rehabilitation ($338 K)
Major Funding Sources: Mitigation Fee Act & Quimby Act
fees, developer contributions, General Fund CPR
City of
Santa Clara
ThA CAMB MATH BANN 18
Proposed CIP - Sewer Utility Theme
Five-Year CIP: $132.6 million
• San Jose-Santa Clara Wastewater Facility ($86 M)
• Sanitary Sewer Improvements ($10.2 M)
• Sanitary Sewer Capacity Improvements ($30.0 M)
• Sanitary Sewer Condition Assessment ($5.0 M)
• Sanitary Sewer Hydraulic Modeling ($1.4 M)
Major Funding Sources: Transfer from Sewer Utility
Fund (customer service charges), debt financing
City of
Santa Clara
The Center of What's Possible
Proposed CIP - Storm Drain Theme
Five-Year CIP: $4.7 million
• Storm Drain Pump Station Remote Terminal Unit (RTU)
Upgrade ($2.5 M)
• Green Stormwater Infrastructure Design and
Construction ($748 K)
• Storm Drain Pump Station Motor and Control
Maintenance, Repair and Replacement ($646 K)
• Storm SCADA Fiber Ready ($364 K)
• Storm Drain Repairs and Maintenance ($300 K)
Major Funding Sources: General Fund CPR, grants
City of
Santa Clara
10 Proposed CIP - Transportation Theme
• 00
Five-Year CIP: $74.1 million
• Annual Street Maintenance and Rehabilitation ($46.2 M) • Tasman Complete Streets Plan 2021 Improvements Phase 1 - North San Jose Settlement ($6.3 M)
• Traffic Signal Enhancements ($3.3 M)
• Uncontrolled Crosswalks Improvements ($2.8 M)
• Sidewalk, Curb and Gutter Repair ($2.6 M)
• Pedestrian and Bicycle Enhancement Facilities ($2.0 M) • Street Tree Services ($1.4 M)
• Cupertino-Santa Clara On-Demand Shuttle ($1.3 M)
Major Funding Sources: gas tax, vehicle registration fees, SB1-Road Repair and Accountability Act, County Measure B, traffic mitigation fees, grants, General Fund CPR
City of
Santa Clara
The Cente CloTS POSSIO
Proposed CIP - Water & Recycled Water
Utilities Theme
Five-Year CIP: $26.3 million
• Distribution System Replacement/Restoration ($15.3 M) • New and Replacement Wells ($5.7 M)
• Building and Grounds ($3.4 M)
• SCADA Improvements ($1.3 M)
• Recycled Water System Mains and Services ($600 K)
Major Funding Sources: Transfer from Water
Utility and Recycled Water Utility Operating Funds
(customer service charges)
City of
Santa Clara
11 Proposed CIP - Technology and Equipment
Theme • •0
Five-Year CIP: $6.2 million
• Geospatial Information System (GIS) Enterprise System ($1.5 M) • Utility Management Information System Enhancements ($1.5 M) • FHRMS Update Project ($1.2 M)
• Fire Protective Equipment Replacement ($592 K) and Fire Defibrillator Replacement ($70K); shifted to operating starting in FY 2025/26 • Police Vehicle Mobile Data Center Computer Replacement ($350 K) • Cyber Security Risk Mitigation ($410 K); shifted to operating starting in FY 2025/26 • City Hall Data Center HVAC Remediation ($350 K)
Major Funding Sources: General Fund CPR
City of
Santa Clara
Unfunded Capital Needs
• 0
CAUTION
City of
Santa Clara
12 Unfunded Capital Needs
• 00
• Unfunded needs across several themes Five-Year CIP Unfunded Needs = $626 M* • Identified unfunded projects in CIP represent Community only a portion of the unmet/deferred Facilities, $ 211.6 M,
33.8%
infrastructure. Other needs include:
Administrative
- Storm Drain Master Plan - $290 million (in Facilities, $ 202.6 M, 2018 dollars) 32.4% Convention
- Santa Clara Bicycle Plan Update 2018 - Center,$ 15.8 M,
2.5%
$39.3 million (in 2018 dollars)
- Santa Clara Pedestrian Master Plan - $194.0
Parks and Trails,
million (in 2019 dollars) $ 117.6 M, 18.8%
- Americans with Disabilities Act Self-
Evaluation and Transition Plan (Draft)- Transportation, Storm Drain,
$758.5 million (in 2024 dollars) $ 32.4 M, 5.2%. $ 45.0 M, 7.2% Technology &
- Public buildings (e.g., new City Hall, existing Equipment, City Hall, historic buildings, corporation yard) $ 1.2 M, 0.2% * $624 M General Fund need City of
Santa Clara
The Center of What's Possible
Operating Budget Amendments
to FY 2024/25
City of
26 Santa Clara
13 FY 2024/25 Operating Budget
Amendments
• FY 2023/24 and FY 2024/25 Adopted Operating Budget approved June 2023 • FY 2024/25 Operating Budget amendments necessary to:
- update revenue estimates for the General Fund and other funds - make adjustments to account for updated labor and non-personnel costs in the General Fund and other funds
- Update resources and production costs in Enterprise Funds - Update positions to reflect adjustments and reclassifications • Described in the Appendices section of the Proposed Budget City of
Santa Clara
The Center of What's Possible
General Fund Budget Actions
• Use of the Budget Balancing Reserve ($0.4 M) and the Budget Stabilization Reserve ($0.5 M) addresses the FY 2024/25 General Fund shortfall of $0.9 M • Limited budget actions using current year savings to support key areas:
- Police Park Patrols: adds reserve officer funding of $230,000 for parks patrols on weekdays from 3 p.m. to 11 p.m., Saturdays from 7 a.m. to 8 p.m., and Sundays from 11 a.m. to 7 p.m. - Library Hours: adds four hours of library service at Central Library on Sundays - Senior Center Trips: restores funding for approximately 10 local trips annually that would be partially offset by revenue; the net cost is estimated at $13,100 • Structural Deficit remains - Additional budget balancing actions expected in next FY Biennial Operating Budget (June 2025) to address projected General Fund shortfalls City of
Santa Clara 28
14 General Fund Reserves
FY 2023/24 FY 2024/25
Reserve Type Current Balance Proposed Balance
General Fund Budget Stabilization $54.3 M $53.8 M*
(BSR)
General Fund Capital Projects $23.9 M $8.9 M
Land Sale Reserve $18.5 M $18.5 M
Pension Trust (General Fund) $27.5 M $27.5 M
* The BSR reserve is at 17.6% of the FY 2024/25 expenditure budget City of
Santa Clara
The Center of What's Possible
Responses to May 7th
Study Session Questions
City of
30 Santa Clara
15 May 7th Study Session Responses
Question: What is the difference between Response: The $45 million is a subset of the $290 million in the the $45 million of unfunded Strom Drain Storm Drain Master Plan and reflects the most urgent needs over the projects listed in the CIP and the five-year CIP cycle. Given the size of the needs, they are phased in unfunded projects in the Storm Drain with only a portion reflected based on urgent needs identified over Master Plan of $290 million? the five-year CIP period.
Question: Will the potential bond get the Response: The City is evaluating a $598 million bond. While that City through the $626 million of unfunded would not address all unfunded projects, it would make a sizable needs? Please reconcile the timing of the dent. This would be a substantial investment and provide dedicated bond (30-year bond vs. five-years of one-time funding to address the City's capital needs. unfunded needs).
If voters approve a bond measure, the dollar amount would be issued in phases to align with the capital project delivery schedules; projects are expected to be delivered over three to eight years. Typically, the bond issuances have a term of 30 years, allowing the projects to be paid off over time.
City of
Santa Clara
Questions and Answers
City of
32 Santa Clara
16 City Council Meeting
Item# 1.B - Study Session:
Review of the Proposed
FY 2024/25 & FY 2025/26
Biennial Capital Improvement
Program Budget and FY 2024/25
1852
Operating Budget Changes
THE MISSION CITY
June 4, 2024
17