Item #7=# 8
6/10/25
City Council Meeting
Item #7 - RTC 25-272
Improvement Program Changes
1852 Item #8 - RTC 25-538
Action Establishing the City's FY
THE MISSION CIT 2025/26 Appropriations Limit
June 10, 2025
Agenda
• FY 2025/26 and 2026/27 Proposed Budget
- Budget Overview
- Amendments to the Proposed Budget
- Follow-up from Budget Study Sessions
• FY 2025/26 Appropriations Limit
• Recommendations
City of
Santa Clara
POST MEETING MATERIAL
1 Proposed Budget Overview
• Proposed Budget allows for targeted
Priority Areas of Focus*
investments
• Close alignment with City Council Excellent City Reliable Outstandin hrivil Services Infrastructure Quality of Lif ommun
Priority Areas of Focus/identified needs
Mainlaining quality Business growil
of llle i core Climale Action and expansion
Bond Measure
• Proposals to enhance City services services Plan Process implementation
improvements
(e.g., Fire and Police, development Financial
Parks and Downtown
sustain doll Mainlam existing
Recrealion Master revilalizalion
Priorilize services
services, housing & homelessness, Plan
Small business
for those in need retention
sustainability, library materials)
2026 Major Event Planning: 1) Super Bowl and FIFA Planning and 2) Showcase Santa Clara • GO Bond implementation (project
management oversight and delivery) * Priorities identified as part of the 2025 Council • Staffing and resources to support major Priority Setting Session held on April 3, 2025 events
City of
Santa Clara
The Cantar of Whats Possite
Proposed Budget Overview
Prudent fiscal approach
• Restore Budget Stabilization Reserve to 25% of expenditures - Important tool to address economic downturns or other financial impacts to the organization - Reserves used to address COVID-related impacts and lessened cuts throughout the organization • Use one-time funds for one-time uses
• Fiscal Sustainability Plan
- In-depth analysis of the City's financial condition
- Develop a blueprint for moving forward to ensure fiscal stability, address service/infrastructure needs, and plan for future growth
- Revenue and fee options/economic development
- Expenditure/service review
• Begin annual contributions to support capital infrastructure maintenance/replacement City of
Santa Clara
2 Proposed Budget Overview
Expenditure Budget by Fund Type
FY 2025/26 and FY 2026/27 Proposed Budget
FY 2024/25 FY 2025/26 FY 2026/27
Adopted Budget Proposed Budget Proposed Budget
$310,698,189 $335,374,572| $342,972,517
Special Revenue Funds 41,458,963 52,037,355 38,806,836
Enterprise Funds 945,192,918 1,012,631,859 1,100.414,703 45,724,215 51,672,525 48,281,729
152,273,904 273,236,049 27,245,993
Less (Transfers, Contributions, and Reserves)* (416,866,269) (529,425,156) (302,635,147) $1,078,481,920 $1,195,527,204 $1,255,086,631
568,932,159 777.527,724 150,763,062
Less (Transfers, Contributions, and Reserves)* (1,818,315) (1,454,000) (1,454,000) Subtotal Capital Budget $567,113,844 $776,073,724| $149,309,062 Total Budget $1,645,595,764 $1,971,600,928 $1,404, 395,693 * Adjusts for transfers, contributions and reserves to avoid double counting of the same funds (e.g., internal services funds are excluded)
City of
Santa Clara
The Centered WAs Posite
Proposed Budget Overview
Summary of Position Changes
Summary of Position Changes (All Funds)
• FY 2025/26 addition of 39.25 FY 2024/25 Adopted Budget 1,159.25 Base Budget Changes (SVP Funded) 15.00
positions from FY 2024/25 Adopted
Budget Base Budget (Other Changes) 3.25
Proposed Budget Changes (General Fund) 10.35
- Base Adds - 18.25 positions
Proposed Budget Changes (General Fund - Reimbursed) 3.75 - Proposed Adds - 21.0 positions 5.90
Proposed Budget Changes (Development Fee Funded)
Proposed Budget Changes (Other Funds) 1.00
• FY 2026/27 net reduction of 2.0 FY 2025/26 Budgeted Positions 1,198.50 positions
FY 2026/27 Proposed Additional Positions 4.00
FY 2026/27 Proposed Position Reduction (SAFER grant expiration) (6.00) FY 2026/27 Budgeted Positions 1,196.50
City of
Santa Clara 6
3 Proposed Budget Overview
Expenditures by Department Type
FY 2025/26 Proposed Budget
• SVP and Water & Sewer Community Development General Goverment Departments Library Parks d
account for 70% of the 1.8% Recreatior
5.4%
Weparmen
37%
expenditure budget
Pubie Safety
8.3%
• Police and Fire account for
8% of the budget
Department of
• Public Works accounts for Poorewoke
10% of the budget
• Other departments account
for 12% of the budget Unity Cosments.
City of
Santa Clara
Proposed Budget Overview
Outstanding Quality of Life
• Public Safety Investments:
• Continue 12.0 relief firefighter positions that were
originally unfrozen with the Staffing for Adequate Fire and Emergency Response (SAFER) grant
• Unfreeze 2.0 Police Officer and 1.0 Police Sergeant
positions in FY 2026/27 aligning with recruitment of
existing vacancies and future vacancies, offset by an
increase in the vacancy rate, to increase capacity in Field Operations and Special Operations Divisions (traffic,
regional task forces, and the Aerial Response Team)
• Fire Department training on new Tiller Truck apparatus City of
Santa Clara
The Center of What Pasto
4 Proposed Budget Overview
Outstanding Quality of Life
• Add 1.0 Management Analyst to help manage the
Homelessness Response Plan, set up pilot Safe Parking
rogram, assist with managing Overnight Warming Locatior or a hotel respite program, seek out grant funding, manag the City's outreach team
• Add 1.0 Recreation Manager to provide Parks capital
projects, GO Bond, and program support
• Arts Master Plan ($120K for study)
• Adds funding in Non-Departmental for staffing resources to plan and support major events at the stadium (Super Bowl LX and FIFA World Cup events); City costs to be reimbursed City of
Santa Clara
Proposed Budget Overview
Excellent City Government
• Restore library materials ($290K) in FY 2025/26 and FY 2026/27 (additional funding of $145K each year recommended in the Proposed to Adopted changes)
• Add 1.0 Management Analyst for sustainability programming; Climate Action Plan
• Add 1.0 Staff Analyst to support the implementation of the Housing Element
• Add 1.0 Sr. Information Technology Services Manager to support numerous technology projects underway; add funding to update the City's website to ensure ADA compliance
City of
Santa Clara
10 5
Proposed Budget Overview
Excellent City Government
• Administration:
• Unfreeze 1.0 Legal Office Specialist position
• Add funding for election costs for a potential Charter amendment measure • Human Resources Neogov improvements (performance management and recruiting tool) • Add 1.0 Accountant in Finance and 1.0 Management Analyst in Public Works to revise capital project accounting/tracking to improve transparency • Add 1.0 Business Analyst to support development technology efforts (funded by Technology Fee/Building Development Fee Fund)
• Utility Customer Service: add 1.0 Utility Field Service Worker, 1.0 Customer Service Rep, 1.0 Meter Reader, and 1.0 Accounting Tech in Finance (funded by City utilities) • Add funding for the Fiscal Sustainability Plan
City of
Santa Clara
Proposed Budget Overview
Excellent City Government
• Development Services
• Building Division - Add 1.0 Plans Examiner and 1.0
Senior Inspector
• Fire Department - Add 1.0 Fire Protection Engineer, 1.0 Fire Prevention Specialist, 1.0 Management Analyst and
contractual plan review and inspection services funding • Additional excess liability insurance to protect the City from large potential claims in FY 2025/26 (does not cover claims at the Stadium)
City of
Santa Clara 12
Tweed sharone
6 Proposed Budget Overview
Reliable Infrastructure
GO Bond Implementation
• Support for Infrastructure Bond Measure approved in November 2024 • Phased delivery of expenditure plan and coordination with Bond Compliance Oversight Committee
• Add funding of $1.0 million in FY 2025/26 and $2.0 million in FY 2026/27 to support positions and maximize Bond project capacity (5% restriction in bond) • Staffing Additions: 1.0 Bond Projects Manager/DCM; 1.0 Principal Engineer, 1.0 Senior Civil Engineer, and 1.0 Management Analyst
City of
Santa Clara
Proposed Budget Overview
Reliable Infrastructure
• Expand City fiber network throughout the City for internet equity and collaborate with private providers ($500K for study)
• Feasibility Study for walkway/stairway from Tasman to Lafayette with carve- out under bridge for rideshare ($200K for study)
• Add ongoing funding for capital infrastructure maintenance/replacement ($1 million in FY 2025/26 and $2 million in FY 2026/27)
City of
Santa Clara
7 Proposed Budget Overview
FY 2025/26 Capital Budget Amendments
• FY 2025/26 - Second Year of Biennial Capital Budget
• Adjustments in Proposed Budget to reflect changes in
estimated project costs / timelines
• Carryover of FY 2025/26 funds brought forward as part of budget adoption (included in the recommended
budget actions and described in Attachment 3 to RTC
• G.O. Bond updates and timeline to be provided
separately
City of
Santa Clara 15
Select General Fund Reserves
Current Balance FY 2025/26
General Fund FY 2024/25 Proposed
Reserve Target Budget Budget Notes
Budget $69.1 M (23.4% of $80.9 M Meets Council Policy level of Stabilization 25% of Expenses 25% of expenses
expenditures)
$1 M added (increase by an
Capital $5 M minimum $7.8 M $8.8 M additional $1M annually to Projects build ongoing funding)
Pension Add 1% of Add at year-end; any
Unfunded Liability $34.6 M $34.6 M additional amount would Stabilization Annually decrease the liability
Reflects the temporary use of
Land Sale $10.3 M $10.3 M $8.1 M for the ISC to be
repaid once GO bonds issued
City of
Santa Clara 16
The C entered When Postel
8 Amendments to the Proposed
Budget
City of
17 Santa Clara
Amendments to the Proposed Budget
• Attachment 3 to the RTC
• Capital project carryovers from FY 2024/25 to FY 2025/26 • Actions occurring after Proposed Budget issued
- Library Materials - fully restore library materials funding - Housing Annual Action Plan (May 13th) - align with adopted plan - Sewer Utility/Sewer Utility Capital Funds - latest information on the Regional Wastewater Facility costs
- SV Hopper - third year of funding
- Electric Utility Capital Projects - adds limited project funding (substation projects/ Northwest Loop) funded by FY 2024/25 unexpended projects and developer contributions • Limited operating carryovers (e.g., safety evaluation/implementation, labor negotiations, employee recognition, bond implementation, community grants, library grants, computer replacements, IT service evaluation, Benton/Lawrence Project, tenant-based rental assistance and supportive services, Bill Wilson Center support, affordable rental housing) City of
Santa Clara 18
9 Follow-up from the Study
Sessions
City of
19 Santa Clara
Follow-Up from Budget Study Sessions
Summary of Feedback
• Importance of fiscal sustainability
Desire for understanding of the City's fiscal condition given the strong tundamentals in tr ty (SVP contributions, solid jobs to housing ratio, etc - Need for ongoing funds for capital infrastructure and potential change in reserve policy - Budget Stabilization Reserve at 25%
• Interest in fully restoring library materials funding • Interest in major 2026 events and scorecard on expenditures/reimbursements • Understanding of how Council priorities fit into budget, are tracked, and balanced within the City's workload demands; interest in scorecard
• Responses to budget questions provided in Attachments 5 and 6 to RTC; responses to the May 27in Study Session on the following slides
City of
Santa Clara
20 10
May 27th Study Session Responses
• Question: Without adding nev Response: The impact of special events is expected to be minimal. ositions, how can the City support th While the proposed budget does not add funding for new positions, it major special events without impact does add more resources in the form of as-needed staff, overtime, existing City services? and funding for staffing from other agencies (police staffing Additionally, the City Manager's Office is looking to add temporary staffing to advance City Council priorities, organizational improvements, and community engagement in 2025 and 2026 within existing resources and salary savings, without an increase to the General Fund budget. To the extent that any permanent or temporary staff are used to support the major special events directly, those costs will be billed to the events and fully reimbursed, in compliance with Measure J.
2. Question: When will the special events Response: Information will be provided through an online dashboard dashboard be available and will it include reflecting the actual costs and reimbursements on a quarterly basis data from FY 2024/25? Will the for the major events. This will include all City costs billed to the Bay dashboard include all staff time, not solely Area Host Committee starting in FY 2024/25. The dashboard will be public safety? available by August 2025.
City of
Santa Clara
May 27th Study Session Responses
3. Question: For the firefighter positions Response: The SAFER grant allowed for the restoration of 12.0 currently funded from the Staffing for previously frozen firefighter positions and the addition of 6.0 Adequate Fire and Emergency Response firefighter positions based on the existing vacancies at the time of the (SAFER) grant, can we retain all the grant application for a total of 18.0 grant-funded positions over the positions once the grant ends? three-year grant period ending in FY 2025/26. This budget recommends the continuation of the 12.0 restored firefighter positions starting in FY 2026/27. The 6.0 positions that were requested due to vacancies were temporary and no longer funded after the grant.
4. Question: On average, how much Response: Staff found that the cities in the County have different annual funding do other jurisdictions policies for allocating funds for capital purposes. The fiscal policies allocate to their Capital Projects Reserve for several cities specified the use of a portion of General Fund year- and/or dedicate to capital infrastructure? end surplus funds for capital projects. A few cities set a minimum goal of $5.0 million for a capital reserve. A few cities have dedicated funding sources for capital, such as Construction and Conveyance Toront, ra elor Tax docketed artist of the transient cupancy Storm Sewer Fees. The City of Palo Alto budgets a base transfer from the General Fund.
City of
Santa Clara
22 11
May 27th Study Session Responses
Response: The goal each year is to end the year with a General Fund surplus equal to fiscal years, how close 2% of revenues and 2% of expenditures for a total of approximately 4% of the budget. are the year-end actuals At the end of the last five fiscal years, surpluses ranged from $2.1 million (0.8%) to to the budgets for those $36.4 million (12.8%). These surpluses were comprised of excess revenues and years? expenditure savings from the budgeted levels.
6. Question: For the Response: The City partners with the County to offer specific services including support for the homelessness prevention and project-based case management. CDD and CMO staff also dedicated significant time on the Homelessness Point in Time Count in January 2025 in partnership with the County and this will be a continued partnership. The City the County? directly funds the WeHope mobile shower and laundry program, NextDoor Solutions domestic violence survivor support, and tenant-based rental and deposit assistance (TBRA) with case management. Staff is in the process of expanding the TBRA program using HOME ARP funding. The City also received a $1.8 million grant from the State for the Santa Clara Overnight Care Locations pilot program that will come back to Council for approval in summer 2025. The City is planning a Study Session on July 8th on a citywide plan to reduce homelessness and its impacts.
City of
Santa Clara
23 May 27th Study Session Responses
7. Question: How will special events be Response:. The FY 2025/26 proposed budget includes $11.4 million covered with as-needed staff and for personnel and non-personnel costs (e.g., equipment, training) overtime and how are they funded in the associated with Super Bowl LX and FIFA World Cup 2026 events, budget? while the FY 2026/27 proposed budget includes $1.2 million for salary costs associated with the FIFA World Cup events. These costs are budgeted to be reimbursed. The $11.4 million budget in Non- Departmental includes $5.3 million for overtime, $1.0 million for as- needed costs, and $2.1 million for sworn staffing from other agencies.
8. Question: How much Stadium Response: The anticipated performance rent assumed in the performance rent is anticipated in the Proposed budget is $2.15 million in FY 2025/26 and $2.85 million in FY 2026/27. These amounts are also assumed in the Santa Clara Stadium Authority (SCSA) budget approved on March 11, 2025.
City of
Santa Clara
12 May 27th Study Session Responses
9. Question: When the year-end Response: Staff plans to bring forward recommendations to add funding to budgetary report is presented, the Pension Stabilization Reserve and CPR. Under the City's Budget and should the anticipated surplus funds Fiscal Policies, the target annual funding contribution to the Pension in the General Fund be allocated to Stabilization Reserve is 1% of the City's unfunded pension liability; funds the Pension Stabilization Reserve are typically added as part of the year-end report. Surplus funds are also or the Capital Projects Reserve expected to be added to the CPR. Historically, year-end surplus funds are the primary funding source for capital projects that rely on the General Fund and are the main funding source for the subsequent biennial capital budget.
10. Question: How can the City Response: CDD is working on a Short-Term Rental (STR) program. The capitalize on the major events? City is partnering with a consultant to develop a website to register STRs Should the City hire a consultant to and an outreach campaign. The consultant will monitor internet listings and maximize TOT revenues from short- cross-reference them with the City's registered STRs to program term rentals (VRBO and Airbnb) compliance. The STR registration portal is expected to go live in July 2025, with an outreach campaign following in August 2025. The City has a voluntary compliance agreement (VCA) with Airbnb. The City also receives TOT from other smaller STR websites. VCAs with other STR websites will be pursued ahead of the large events.
City of
Santa Clara
25 May 27th Study Session Responses
11. Question: Can staff verify that the Response:. Yes, the 51% of the General Fund allocated to public 51% of the General Fund budget safety excludes Stadium work. The Stadium budget is included under allocated to public safety excludes the Non-Departmental budget, which includes both standard Stadium Stadium work? items and special event related items.
12. Question: For the $6.7 million Response: The Proposed Budget allocates $6.7 million over the two- proposed in the General Fund for FY year period ($3.8 million in FY 2025/26 and $2.9 million in FY 2025/26 and FY 2026/27 for City Council 2026/27) to the various budget proposals in the budget that support riorities and City services, are thes City Council priorities and City services (e.g., library materials; Fiscal inds earmarked for specific purposes Sustainability Plan; explore potential expansion of the City's fiber network; staffing to support housing and homelessness response, sustainability/Climate Action Plan, administrative support for the City Attorney's Office, and parks and recreation capital project and program support; the continuation of the 12.0 firefighter positions (partially offset by a reduction in overtime); general obligation bond implementation; and capital funding for the Public Art Master Plan and the feasibility study for the walkway from Tasman to Lafayette).
City of
Santa Clara
13 May 27th Study Session Responses
Response: The City Council priorities are currently not prioritized. A prioritization process can be evaluated as part of future priority setting how the funding is aligned to the
priorities?
14. Question: What are the 7.35 Response: The 7.35 positions include 1.0 Management Analyst to help ongoing positions funded with one- nanage the Homelessness Response Plan; 1.0 Staff Analyst for Housing time funds, and how would we Element implementation; 1.0 Accountant and 1.0 Management Analyst to forecast for those positions? support a revision to the charging of public works staff directly to projects;
1.0 Recreation Manager to support Parks and Recreation; 1.0 Management Analyst to support sustainability / Climate Action Plan; unfreezing 1.0 Legal Office Specialist; and 0.35 portions of positions in Finance and Fire. These positions were identified as the highest needs to deliver current City Council priorities and support operations in key areas. The ongoing cost (if approved) will be included in the next 10-year forecast and will be factored into the solutions needed through the Fiscal Sustainability Plan project.
City of
Santa Clara
27 May 27th Study Session Responses
15. Question: What will be the scope of Response: There has not been a consultant report prepared in work for the Fiscal Sustainability Project? recent history examining the City's fiscal position. Staff is developing Was a similar report prepared in the past a request for proposal to obtain a consultant for the Fiscal that can be used as a model? Sustainability Project. As part of this process, staff is reviewing reports from other jurisdictions to inform the scope. While the scope of work is still under development, it is expected to include an analysis of City funding sources, infrastructure needs, services, and reserve levels (e.g., Budget Stabilization Reserve, Pension Stabilization Reserve, Capital Projects Reserve). The analysis will also review the City's current position as well as provide benchmarks from local / comparable jurisdictions. One of the expected project deliverables is an Implementation Action Plan that presents actionable strategies for the City Council and community to consider that would address projected budget shortfalls, enhance the City's capacity to fund services and infrastructure, and plan for future service demands and population changes.
City of
Santa Clara
28 14
FY 2025/26
Appropriations Limit
City of
29 Santa Clara
Appropriations (Gann) Limit (Item 8)
• In compliance with Propositions 4 (Gann Initiative) and 111 (Spending Limitation Act of 1990), State constitution limits the amount of revenue that can be spent by governmental agencies.
• Beginning with FY 1990/91 appropriations limit, Cities can use the following as an adjustment factor:
- Annual growth in City's population or County's population - Annual growth in California Per Capital Income or non-residential assessed valuation
• FY 2025/26 appropriations subject to the limit of $697,292,626 • Revenue subject to Appropriations $254,040,417 or 36.4% of limit City of
Santa Clara 30
15 Recommendations
City of
31 Santa Clara
Recommendations
Agenda Item 7 - Budget Adoption
1. Approve the Proposed FY 2025/26 and FY 2026/27 Biennial Operating Budget and FY 2025/26 Capital Budget changes, including the recommended revisions detailed in Attachment 3;
2. Approve the Appropriation Schedule for operating funds totaling $1,724,952,360 in FY 2025/26 and $1,557,721,778 million in FY 2026/27 and the FY 2025/26 Appropriation Schedule for capital funds totaling $777,527,724 as detailed in Attachment 4;
3. Approve the Housing Authority FY 2025/26 expenditure budget of $459,878 and FY 2026/27 expenditure budget of $471,936 as presented in the Operating Budget;
4. Approve the Sports and Open Space Authority FY 2025/26 expenditure budget of $11,404 and FY 2026/27 expenditure budget of $11,612 as presented in the Operating Budget; and
5. Direct staff to bring forward recommended revisions to the Capital Projects Reserve funding target included the City's Budget and Fiscal Policies informed by results of the Fiscal Sustainability Plan.
City of
Santa Clara
16 Recommendations
Agenda Item 8 - Appropriation Limit
1. Adopt a Resolution Establishing the City's Fiscal Year 2025/26 Appropriations Limit of $697,292,626 Pursuant to Article XIIIB of the California State Constitution
City of
Santa Clara
The Center of WAists Paito
City Council Meeting
ATTA CLARA CURL Public Hearing: Action on the
Adoption of the Proposed FY 2025/26
FY 2026/27 Biennial Operating
CITY OF Budaet and FY 2025/26 Capital
Improvement Program Changes
1852 Item #8 - RTC 25-538
Iction Establishing the City's F)
THE MISSION GIN 025/26 Appropriations Limi
June 10, 2025
17