December 17, 2025
1 Agenda
• Overview
• General Fund Performance
Item #3.B
Council and
Authorities
Concurrent Meeting
Item 3.B. Action on FY 2024/25
Budget Year-End Report and
Approve the Related Budget
Amendments
{Deferred from December 9, 2025)
• Distribution of General Fund Balance/Other Sources
• Other Funds
• Recommended Adjustments
• RTC Recommendations
2 POST MEETING MATERIAL
1 December 17, 2025
3 4
Overview
June 2025
Operating Budget
• Adopt Biennial
Budget
Capital Budget
• Amend Budget
(2nd Year)
June 2026
• Amend Budget
{2nd Year)
• Adopt Biennial
Budget
Budget MonitoringNear-End Report
• Close and
reconcile FY
2024/25
Overview (Cont'd.)
FY 2024/25 Year-End Budget Review
• Close and
reconcile FY
2025/26
• Analyze year-end performance of every fund
• Adopt Biennial
Budget
• Amend Budget
(2nd Year)
• Bring forward budget ratifications due to over-expended appropriations in FY 2024/25
• Adjust the FY 2025/26 budget in all funds to account for actual FY 2024/25 results
- Fund Balance/Reserves reconciliations
- Project/program/grants carryovers and adjustments
• General Fund budget actions: Distribute additional fund balance Item #3.B
2 December 17, 2025 Item #3.B
Overview (Cont'd.)
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 of budgeted expenditures (25%)
- Pension Stabilization Reserve - set aside funds to address the City's unfunded pension liability; target annual contribution is 1 % of the unfunded liability - Capital Projects Reserve - minimum target of $5.0 million; goal of having sufficient funds for capital projects included in CIP: reviewing ongoing target level ~ - -- ~ ---· ~--
5 6
~) City of
li~ / Santa Clara s
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Overview (Cont'd.)
Budget and Fiscal Policies
• Utility Funds Reserves
- Operations and Maintenance Reserve - reserve target is three months of budgeted expenditures (90-day working capital reserve), Electric Utility target ranging from 90 to 180 days of operations
- Rate Stabilization Reserve - this reserve is used to absorb short-term revenue shortfalls and is designed to stabilize rates and avoid wide swings in rates: reserve target is a balance equal to 10% of each utility's Qrojected current year rate payer revenue - Infrastructure Reserve - reserve target is equal to an average annual CIP budget, calculated over a 48- month period; at minimum, the !filget is to reserve 20% of the average annual GIP budget amount
3 December 17, 2025
7 Overview (Cont'd.)
• Ended FY 2024/25 in a solid fiscal position
• General Fund ended the year with available fund balance to distribute of $41.3 million due to higher revenues ($28.1 million) and expenditure savings ($13.2 million)
• Other funds generally ended FY 2024/25 within estimated levels or with improvements to their overall position (summarized in Attachment 3) • Enterprise Funds increased reserve levels (fund balances/reserves summarized in Attachment 4)
Hiring and Recruitment Update
Hiring Efforts Continue
• As of July 1, 2025, 190.50 vacancies (vacancy rate of
15.9%), up from July 2024 rate of 12.8%; the increase is due in part to the addition of new positions ( excluding new positions, the rates would be 12.2% in July 2024 and 13.0% in July 2025)
• Active recruitments for 123 positions (55 classifications) and 15 As Needed classifications (multiple hires) in progress I Want to Work in Santa Clara
Y'pitl!iallll~Jrol.
Item #3.8
war ... ,r.ijo..-..-
8 • Classification/compensation projects for 5 classifications • July- late-November Hiring: 60 new hires/rehires and 45 promotions versus 36 separations
4 December 17, 2025 Item #3.B
9 Year-End Results - General Fund
• Revenues of $362.3 Mended 10% ($33.0 million) above budget; $4.9 M allocated to Advanced Planning Fee, Technology Fee and Pension Stabilization Reserves, resulting in net additional revenue of $28.1 M
• Expenditures of $319.1 M were 4.4% ($14.8 M) below budget; $1.6 M of savings assumed/carried over in the FY 2025/26 in Adopted Budget, resulting in net savings of $13.2 M
• Additional fund balance of $41.3 Mover the estimate used to develop FY 2025/26 Adopted Budget; largest actions include:
• Capital Projects: Civic Center Campus Future Needs/Relocation ($20.35 M), Measure I Bond Furniture, Fixtures and Equipment ($1.0 M)
• Reserves: Capital Projects ($13.0 M), Pension Trust ($4.6 M), Budget Stabilization ($1.3 M) General Fund Revenue Variance
Category
Sales Tax
SVP Transfer
Transient Occupancy Tax
Fees for Services (CUPA, Tech Fee, Planning, Parks)
Interest
Interest (Pension Trust Earnings)
Property Tax
Licenses and Permits
Fines and Penalties
Remaining Revenue Variance
Total Revenue Variance
Variance
$10.54 M
$4.38 M
$4.14 M
$4.11 M
$3.14 M
$3.04 M
$1.42 M
$1.22 M
$0.99 M
$0.07 M
$33.0SM
- ~ - - ··------ -- - --- --~- - ---- ~ -
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10 5
December 17, 2025
Sales Tax Performance
Sales Tax Receipts
(2Q 2025, FY 2024/25)
t" .1,h f<~£eipts
S.aintai Clara
Santa c,ara County11Jide Pool
Santa Clar-~ Countv'Mde
S.F. Day A.rei!II Rel!:ion
Statewide
Quaner Annual
11.3% 28..Bt''I
83% 1217,
4.)o/,i, -01%
4 ]to 0 1%
2.0% 0.0%
Top 25 Sales Tax Remitters
AG ELECTRONIC M.~TERIALS
APPLIED MATERIALS
P.RIS TA NETWOR~S
BELL ELECTRICAL SUPFLY
COSTCO WHOLESALE
FINANCIAL SERVICES VEHICLE TRUST
FP.ONTrER FORD
HOME OE POT
INGRASYS TECHNOLOGY USA
LASER TEC U S A
LENOVO GLOBAL TECHNOLOGY
LEVlS STADIUM
LEXUS OF STEVENS CREEK
NVIDIA CORPORATION
ORACLE AIAERICA
PORSCHE STEVENS CREEK
ROTTEN ROBBIE SERVICE ST~TIONS
SHOCKWAVE MEDICAL
STEVENS CREEK AUTO IMPORTS
STEVENS CREEK BMW
STEVENS CREEK HYUNDAI
TARGET STORES
l''IWYNN INTERNATIONAL
Wll3LD WIDE TECHNOLOGY
ZT SYSTEMS
Source: MUNISERVICES, AN AVE NU INSIGHTS AND ANALYTICS COMPANY 11 -'dl"ll'\'<'l,-,lll'lr.n1D11
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General Fund Revenue History
FY FY FY FY FY FY
2018/19 2019/20 2020/21 2021/22 2022/23 2023(24
Actual Actual Actual Actual Actual Actual
Property Tax $58.4 M $65.5 M $68.8 M S74.6 M $84.6 M $90.7 M Sales Tax $58.5 M $55.3 M $562M $56.9M $64.5 M $61.8 M
Transient Occupancy $22.5 M $16.0 M $2.9 M $10.8 M $19.0 M $22.3 M Tax*
Silicon Valley Power $21.3 M 522.7 M Transfer $24.5 M $27.3 M $29.6 M $33.1 M Growth
FY from
2024/25 FY
Actual 2018/19
$95.9 M 64%
$79.4 M 36%
$27.0 M 20%
$38.9 M 83%
• The TOT rate increased 42% from 9.5% to 13.5% (2% in Jan. 2022, 1 % in Jan. 2024 and 1 % in Jan. 2025) 12 Item #3.B
6 December 17, 2025
General Fund Expenditures
13 • Expenditures below budget by $14.8 million (4.4%)
• All departments remained within budget
• Salaries and Benefits generated savings of $6.4 million (2.9%) • Non-personnel generated savings of $8.4 million ( 18.1 % ) Savings in the materials/services/supplies category
Adopted budget assumed expenditure savings and the carryover of unspent funds ($1.6 million)
Proposed General Fund Allocations
14 • $41.3 million available for distribution
• Capital Infrastructure
Capital Budget Reserve ($13 M) for use in FY 2026/27 and FY 2027/28 Biennial Capital Budget; brings reserve to $21.4 M (6.6% of expenditures) Civic Center Campus Future Needs/Relocation ($20.35 M)
G.O. Bond Projects Furniture, Fixtures and Equipment ($1.0 M) • Add funding to reserves (Pension Trust and Budget Stabilization Reserve; informed by Council policies)
• Reconciling items/clean-ups/FY 2025/26 funding needs
Item #3.B
7 December 17, 2025 Item #3.B
Proposed General Fund Allocations (Cont'd.
15 General Fund
Recommended Use of Fund Balance
Recommended Adjustments
Civic Center Campus Future Needs/Relocation
Capital Projects Reserve (for use in FY 2026/27 and FY 2027/28 Capital Budget Development)
Pension Trust Reserve (brings General Fund reserve level to 8% of unfunded liability)
Budget Stabilization Reserve (brings reserve level to 25% of amended operating budget)
Impact on
Fund
Balance
$20.35 M
$13.00 M
$4.60 M
$1.30 M
Proposed General Fund Allocations (Cont'd.
16 General Fund
Recommended Use of Fund Balance
Recommended Adjustments (Cont'd.)
Measure I Bond Furniture, Fixtures and Equipment (ineligible for bond proceeds)
City Manager's Office/Non-Departmental Carryovers {Climate Action Plan, organizational review, employee recognition, 49ers rant commitment
Commerce/Peddler's Plaza property maintenance and repairs Transfer to Vehicle Replacement Fund (Fire vehicles funded from mutual aid revenues received in FY 2024/25)
Impact on
Fund
Balance
$1.00 M
$0.41 M
$0.35 M
$0.27 M
8 December 17, 2025 Item #3.B
Proposed General Fund Allocations (cont'd.
17 General Fund
Recommended Use of Fund Balance
Recommended Adjustments (Cont'd.)
Eliminate transfer from the Electric Utility Fund (costs captured in Cost Allocation Plan
Transfer to the Fire Operating Grant Trust and Police Operating Grant Trust Funds
Transfer to the Parks and Recreation Capital Fund / Youth Sports Park Improvements Project (rent reconciliation)
Capital Projects Reserve (recognizing FY 2024/25 project savings) Impact on
Fund
Balance
$0.21 M
$0.20 M
$0.03 M
$0.02 M
Proposed General Fund Allocations (Cont'd.
18 General Fund
Recommended Use of Fund Balance
Recommended Adjustments (Cont'd.)
Transfer to the Streets and Highways Capital Fund/ Tree Replacement (allocating fee revenue)
Human Resources Department- allocate FY 2024/25 Flexible Spending Account forfeiture funds
Transfer from Capital Funds to return project savings to Capital Projects Reserve
Transfer from the Public Works Capital Management Fund (return FY 2024/25 savings)
Impact on
Fund
Balance
$0.01 M
$0.01 M
($0.02 M)
($0.20 M)
9 December 17, 2025 Item #3.B
Proposed General Fund Allocations (cont'd.
19 General Fund
Recommended Use of Fund Balance
Recommended Adjustments (Cont 'd.)
FEMA reimbursements for Covid-related expenses
Ending Fund Balance (set aside funds to address funding needs that arise in FY 2025/26
Total Proposed Adjustments
Summary of Select General Fund
Reserves
Impact on
Fund
Balance
($0.36 M)
$0.14 M
$41.32 M
FY 2025/26
General Fund Reserve Amended Balance
20 Budget Stabilization Reserve (25% of budgeted
expenditures)
Capital Projects Reserve (meets the $5.0 M minimum
balance goal, brings reserve to 6.6% of expenditures)
Pension Stabilization Reserve (8.0% of unfunded liability) $81.0 M
$21.4 M
$42.1 M
10 December 17, 2025
Enterprise Funds - Reserves
• Select reserve balances with recommended actions (in millions) Ullllly Reser,e
Water
Water
Water
Operations & Maintem;ince
Infrastructure
Rate Stabilization
I Water Tota
Sewer Oper~tions & Maintenance
Sewer Infrastructure
Sewer Rate Stabilization
I Sewer Tota
Recycled Water Of)Elra~on • & Maintenance
Recycled Water Infrastructure
Recycled Waler Rate S tabiHzation
Recyclod Water Total
21 F'f202M"I
-..1
410
210
2 50
8.70 1 ao
1.60 2 40
5.80 1 50
0 90
2 30
4.70 FY2021t22 FY2022/23
Actual Actl.lal
3.10 2.40
2.10 12□
110 075
6.30 4.35
1.80 1 80
160 1 60
2.40 2.40
5.80 5.80
2.10 230
0,01 001
1.00 2.30
3.11 4.61'
FY21123/24 FY 202"412~ FY2025/26
--
AcUlal AcbJal Recommended
5.40 7,.40 10.80 90 days
too 1.03 200 20%
3.80 6.80 7.32 10%
10.20 15.23 20.12
830 15 34 10.20 90 da~s
4.60 5 2B 1230 20%
4.30 459 5.41 10%
17.40 26.21 27.91
2.30 2.60 2.20 90 days
0.01 005 0.05 2.0%
230 0.80 0.93 10%
4.61 3.65 J.18
Item #3.B
Ro.vised
Level
5~ days
31%
10%
92 day•
3!1"1.
11%
63 days
36%
10%
Enterprise Funds - Reserves (Cont'd.)
• Select reserve balances with recommended actions (in millions) UUltty Reserve
Electric
Electric
Electric
Solid Waste
Solid Waste
Cor1vention
Center
22 Operations & Maintenance
lnfraslrueture
Rate Stabilization
Electric Tota I
Operations & Ma int.ena nee
Rate Slab;lizalion
Solid Waste Tota I
Operations & Maintenance
I Convention Center Tota
FY 2020/21
Actual
107.90
55.30 44,40
207.60
2 67
1.76 4A3
FY2021122 FY2022123
Aclual Actual
11e.eo 150,80
48.80 56.80
167.60 207.60
2.67 2.67
1 59 1.76
4.26 4,43
. .
FY 2023124 FY 202412; FY 2025126 m,, ;,:L·
Aciual A<;rual Rec<>mmended
19500 278.00 377.00 90 • 160 days•
5000 50 00 61.00 20%"
66.00 7400 78.00 10%t
311.00 402.00 516.00
267 10 33 717 90 days
176 1 76 4.17 10%
4.43 12.09 fl.34
. 420 4.50 90 dais
. 4.20 4.!Ml
Revi sed
Level
207 days
27%
10%
69 day>
10o/.
90 day•
11 December 17, 2025
Next Steps
23 • Update 10-Year General Fund Forecast in February
• Study Session/Public Hearing on the FY 2026/27 Municipal Fee Schedule in April 2026
• Release FY 2026/27 and FY 2027 /28 Proposed Capital Budget on May 1, 2026, Study Sessions and Public Hearing on the Proposed Budget for action by June 30, 2026
Recommended Adjustments
24 FY 2024/25 Budget Ratifications (Attachment 1)
• Four appropriations totaling $2.9 million in four funds • $2.7 million in the Water Utility Fund due to higher than anticipated water purchase costs, offset by higher revenue
• $0.2 million in Sewer Utilfty Fund due to higher than budgeted maintenance expenses, offset by unrestricted ending fund balance
• Approximately $4,000 across the Fire and Police Operating Grant Trust Funds
Item #3.B
12 December 17, 2025
Recommended Adjustments (Cont'd.)
FY 2025/26 Budget Adjustments (Attachment 2)
• 25
• Adjustment of Beginning and Ending Fund Balances for all funds • General Fund Adjustments to close out FY 2024/25 and allocate $41.32 million in available fund balance
• CIP carryover true-up - increase of $23.4 million (bringing total CIP carryovers to $423.8 million); other CIP amendments of $24.1 million • Grants carryover - $3.0 million
• Donatio_ns and reimbursements carryover funds - $2.3 million Recommendations
26 1. Note and file the FY 2024/25 Budget Year-End Report.
2. Approve the FY 2024/25 Budget Amendments to address necessary budget ratifications totaling $2,948,287 in four funds as set forth in Attachment 1 of this report (five affirmative Council votes required to appropriate additional revenue and for the use of unused balances).
Item #3.B
13 December 17, 2025
Recommendations (Cont'd.)
27 3. Approve the FY 2025/26 Budget Amendments, as set forth in Attachment 2.
This includes actions in the General Fund to distribute excess funding from the close-out of FY 2024/25. as detailed below (five affirmative Council votes required to appropriate additional revenue and for the use of unused balances):
a) Increase the transfer to the Public Buildings Capital Fund for a new Civic Center Campus Future Needs/Relocation Project in the amount of $20,350,000, offset by an increase to the Beginning Fund Balance;
b) Increase the Capital Projects Reserve in the amount of $13,000,000, offset by an increase to the Beginning Fund Balance:
c) Increase the Pension Stabilization Reserve in the amount of $4,599,593, offset by an increase to the Beginning Fund Balance;
d) Increase the Budget Stabilization Reserve in the amount of $1,305,540, offset by an increase to the Beginning Fund Balance and transfers from other funds; Recommendations (Cont'd.)
28 3. (Cont'd.)
e) Increase the transfer to the General Government Capital Fund by $1,000,000 for a new Measure I Furniture, Fixtures and Equipment Project, offset by an increase to the Beginning Fund Balance;
f) Increase the transfer to the Public Buildings Capital fund by $350,000 for the Commerce/Peddler's Maintenance Project, offset by an increase to the Beginning Fund Balance;
g) Increase the transfer to the Vehicle Replacement Fund by $274,000, offset by an increase to the Beginning Fund Balance;
h) Eliminate the transfer from the Electric Utility Fund in the amount of $205,262 that was budgeted to partially offset the cost of a Deputy City Attorney position as this cost was factored into the Cost Allocation Plan, offset by an increase to the Beginning Fund Balance;
Item #3.B
14 December 17, 2025
Recommendations (Cont'd.)
29 3. (Cont'd.)
i) Increase the City Manager's Office budget by $300,000 to carry over unspent funds for the Climate Action Plan dashboard and organizational reviews, offset by an increase to the Beginning Fund Balance;
j) Increase the Non-Departmental budget by $108,729 to carry over unspent community grant funds from the Forty Niners SC Stadium Company and for employee recognition, offset by an increase to the Beginning Fund Balance; k) Increase the transfer to the Parks and Recreation Capital Fund by $33,820 for the Youth Sports Park Improvements Project to true up the Youth Sports Park facility rental revenue received in FY 2024/25, offset by an increase to the Beginning Fund Balance;
I) Increase the transfer to the Streets and Highways Capital Fund by $12,407 for the Tree Replacement Project to allocate planning zoning fees received in FY 2024/25, offset by an increase to the Beginning Fund Balance;
Recommendations (Cont'd.)
30 3. (Cont'd.)
m) Establish a transfer to the Fire Operating Grant Trust Fund in the amount of $193,388 as a reconciling adjustment for the Staffing for Adequate Fire and Emergency Response (SAFER) grant, offset by an increase to the Beginning Fund Balance;
n) Establish a transfer to the Police Operating Grant Trust Fund in the amount of $5,910 to cover expenses that were ineligible for grant reimbursement, offset by an increase to the Beginning Fund Balance:
o) Increase the Human Resources Department budget by $5,348 to appropriate Flexible Spending Account forfeiture funds received in FY 2024/25 to wellness activities, offset by an increase to the Beginning Fund Balance; p) Increase the transfer from the Fire Department Capital Fund in the amount of $18,764 to return capital project savings and increase the Capital Projects Reserve by $18,764;
Item #3.B
15 December 17, 2025
Recommendations (Cont'd.)
31 3. (Cont'd.)
q) Increase the transfer from the General Government Capital Fund in the amount of $9,540 to return capital project savings from the Downtown Master Plan Implementation project and increase the Land Sale Reserve by $9,540; r) Increase the transfer from the General Government Capital Fund in the amount of $444 to return capital project savings and increase the Capital Projects Reserve by $444;
s) Increase the Rents revenue estimate by $428,400 and establish a transfer to the Convention Center Enterprise Fund in the amount of $428,400 to reflect a technical change in the accounting for the ballroom lease rent from the Hyatt; t) Recognize Beginning Fund Balance - Restricted for Prepayments in the amount of $19,278 and increase the Public Works Department appropriation for remaining developer deposits for third party plan review and inspections; Recommendations (Cont'd .)
3. (Cont'd.)
u) Increase the transfer from the Public Works Capital Projects Management Fund in the amount of $201,743 to return FY 2024/25 savings; v) Recognize a transfer from the Other City Departments Operating Grant Trust Fund in the amount of $359,768 to recognize FEMA reimbursements for Covid related expenses; and
w) Increase the Unrestricted Ending Fund Balance by $141,402 to set aside funds to address funding needs that arise during FY 2025/26.
Item #3.B
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f~ ~~.~~--~J~~a 32
32 16
December 17, 2025
33 Item #3.B
Council and
Authorities
Concurrent Meeting
Item 3.B. Action on FY 2024/25
Budget Year-End Report and
Approve the Related Budget
Amendments
(Deferred from December 9, 2025)
17