REPORT TO COUNCIL
SUBJECT
Title
Action on Monthly Financial Status and Investment Reports for April 2025 and Approve the Related Budget Amendments
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
In compliance with the Charter of the City of Santa Clara and the adopted Investment Policy, the monthly financial report and monthly investment report for April 2025 are submitted for your information. The financial reviews, as of April 30, 2025, provide a year-to-date financial update to the City Council for fiscal year 2024/25. The analysis of the revenues collected and all expenditures measures the level of adherence to the established resource allocation plan and allows the City to monitor and project revenues and expenditures throughout the year.
The Amended Budget incorporates the estimated revenues and planned expenditures for all funds. The attached Financial Status Report provide the budget to actual revenue and expenditure summaries for the General Fund, Special Revenue Funds and Enterprise Operating Funds, as well as expenditure summaries for Capital Improvement Funds and Fund Reserve Balances. Any significant variances are explained in the report.
In accordance with City Council Policy 051 - Donations to the City, a monthly activity and annual summary of donations received by department is included in these reports. Although the requirement of the policy is to report quarterly, the City will include this information monthly in the financial status report.
DISCUSSION
Monthly Financial Status Report (Attachment 1)
The attached Monthly Financial Status Report summarizes the City’s financial performance as of April 30, 2025 (Attachment 1). This report provides financial analysis for the General Fund, select Special Revenue Funds, Enterprise Operating Funds, and Capital Improvement Funds.
Attachment 1 shows that General Fund revenues (excluding transfers) at 84.2% of the budget through April 2025. Revenues are currently tracking to exceed budgeted levels with higher collections in several categories, including Sales Tax, Property Tax, Transient Occupancy Tax, and Intergovernmental revenues.
As shown in Attachment 1, General Fund expenditures (excluding transfers) were at 77.8% of budget through April 2025, which is below the par level of 83.3%. Overall, expenditures are tracking to end the year with savings.
As shown in Attachment 1, total revenues for Enterprise Funds (Electric, Water, Sewer, Cemetery, Solid Waste, and Water Recycling) were at 86.5% of the budget through April 30, 2025, while total expenses were at 71.4%.
In the month of April, donations of $3,302 were received, bringing total donations to $31,856.
The Spring 2025 UCLA Anderson Forecast points to significant uncertainty related to trade, fiscal policy, and geopolitical risk with the new administration. The Forecast predicts higher unemployment and higher prices in 2025 with some potential upside in 2027 and beyond.
On a national level, the unemployment rate remained unchanged at 4.2% between April 2025 and May 2025. The number of unemployed persons totaled 7.2 million, consistent with April numbers. In the second estimate for the first quarter 2025, the Gross Domestic Product (GDP) decreased at an annual rate of 0.2%, following a GDP increase of 2.4% in the fourth quarter 2024.
The California unemployment rate remain unchanged at 5.3% between March and April 2025. The unadjusted unemployment rate in the San José-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) was 3.9% in April 2025, down slightly from a revised 4.1% in March 2025, but slightly above the April 2024 estimate of 3.8%.
Staff will continue to closely monitor the General Fund revenues and the City’s overall financial performance.
Monthly Investment Report (Attachment 2)
All securities held by the City of Santa Clara as of April 30, 2025, were in compliance with the City’s Investment Policy Statement regarding current market strategy and long-term goals and objectives. All securities held are rated “A” or higher by two nationally recognized rating agencies. There is adequate cash flow and maturity of investments to meet the City’s needs for the next six months.
The City’s investment strategy for April 2025 was to invest funds not required to meet current obligations in securities listed in the prevailing Investment Policy Statement, with maturities not to exceed five years form the date of purchase. This strategy ensures safety of the City’s funds, provides liquidity to meet the City’s cash needs, and with a reasonable portfolio return of 4.11% in April.
The Monthly Investment Report also now includes a Statement of Transactions, following the Investment Inventory, in accordance with California Municipal Treasurers Association investment policy guidelines.
ENVIRONMENTAL REVIEW
The actions being considered do not constitute “projects” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(4) of Title 14 of the California Code of Regulations in that they are fiscal activities that do not involve the commitment to a specific project which may result in a potentially significant physical impact on the environment.
FISCAL IMPACT
From time to time, adjustments to the budget are required to reflect new information, align budgets with actual revenues and expenses, and correct for inadvertent errors. The recommended budget adjustments are described in Attachment 3 and summarized below:
• General Fund - increases to revenue estimates in various categories including sales tax, Stadium Authority excess revenue, and Stadium Authority performance rent. The majority of this additional revenue is applied to the ending fund balance as these funds were assumed in the development of the FY 2025/26 Adopted Operating Budget and used to increase the Budget Stabilization Reserve to 25%, with the remaining funds used to offset other recommended budget actions. Budget amendments are included for the City Clerk’s Office, Finance Department, and Fire Department budgets. Several net-zero actions are also recommended, including: an increase the Non-Departmental Stadium budget offset by an increase the Stadium reimbursement revenue; the recognition of proceeds from the sale of the Hyatt property offset by an increase to the Land Sale Reserve; an increase the property tax administration budget offset by additional property tax; the recognition of other fees for services and wildland reimbursement revenue offset by an increase to the Fire Department budget; recognition of rental revenue for the Youth Soccer Park offset by a transfer to the Parks and Recreation Capital Fund; and an increase in the Accrued Liability Reserve offset by a reduction in the Non-Departmental budget for separation payouts.
• Building Special Programs and Training Fund - recognizes and appropriates higher than anticipated license/permitting revenue to the Community Development’s Building Division budget for increases in training;
• Cemetery Fund - recognizes interest earnings transfers from the Endowment Care and Perpetual Care Fund and increases to the ending fund balance;
• Electric Operating Grant Trust Fund - transfer funds to the Vehicle Replacement Fund based on increased reimbursement costs for the purchase of electric vehicles, offset by the ending fund balance;
• Electric Utility Capital Fund - increases the Replace Balance of Plant Control System project, decreases the Grizzly Tap Line Repairs and Northwest Loop Capacity Upgrade projects and increases the ending fund balance;
• Electric Utility Debt Service Fund - increases the bond proceeds estimate and appropriates them to the administrative costs budget;
• Electric Utility Fund - increases the Charges for Services estimate and increases the Operations and Maintenance Reserve and the Rate Stabilization Reserve;
• Endowment Care Fund - increases the interest earnings estimate and increases the transfer to the Cemetery Fund;
• Fire Development Services Fund - recognizes other fees for services revenue and appropriates the funding to the Fire Department;
• Fire Operating Grant Trust Fund - recognizes and appropriates reimbursement revenue for training and urban search and rescue deployment, and adjusts the Staffing for Adequate Fire and Emergency Response grant budget;
• Parks and Recreation Capital Fund - recognizes a transfer from the General Fund from Youth Soccer Park rental revenue and establishes the Youth Sports Park Capital Improvement project; recognizes Mitigation Fee Act and Quimby Act revenue, increases the Park Impact Monitoring and Parkland Acquisition projects and the ending fund balances for unallocated Mitigation Fee Act Fees and Quimby Act Fees;
• Parks and Recreation Operating Grant Trust Fund - recognizes and appropriates funding for Santa Clara County Fireworks grant program;
• Perpetual Care Fund - increases the interest earnings estimate and increases the transfer to the Cemetery Fund;
• Public Donations Fund - increases the other revenue estimate and appropriates the funding to support programs for Seniors;
• Public Facilities Financing Corporation Fund - increases the interest earnings estimate and the interest expense for the 2013 Certificates of Participation payments;
• Sewer Utility Fund - increases the interest earnings estimate and increases the right-of-way expense appropriation;
• Streets and Highways Capital Fund - increases the revenue from the Caltrans Bridge Preventive Maintenance Program and appropriates the funding to the Bridge Maintenance Program project;
• Vehicle Replacement Fund - recognizes a transfer from the Electric Operating Grant Trust Fund and appropriates the funding to the capital outlay budget;
• Water Recycling Fund - increases the Charges for Services estimate, increases the resource and production budget and decreases the Operations and Maintenance Reserve; and
• Water Utility Capital Fund - increases to the Asset Management Program, SCADA Improvements, and Tank Rehabilitation projects and decreases the unrestricted ending fund balance.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Note and file the Monthly Financial Status Report and Monthly Investment Report for April 2025 as presented; and
2. Approve the FY 2024/25 Budget Amendments in the following funds (as detailed in the Fiscal Impact Section of the staff report and Attachment 3 to the staff report):
a. General Fund: increases to revenue including sales tax, property tax, other agencies revenue, rent revenue, Stadium Authority excess revenue, performance rent, and charges for services, increases to various departmental budgets including the City Clerk’s Office, Finance Department, Fire Department, and Non-Departmental, an increase to the Parks and Recreation Capital Fund, and increases to the Land Sale Reserve, Accrued Liability Reserve, and Ending Fund Balance, with a net impact of $20,746,435;
b. Building Special Programs and Training Fund: increase of license/permit revenue and increase to the Community Development Department’s Building Division training budget, with a net impact of $7,000;
c. Cemetery Fund: increases the transfers from the Endowment and Perpetual Care Funds and increase to ending fund balance, with a net impact of $81,500;
d. Electric Operating Grant Trust Fund: increases the transfer to the Vehicle Replacement Fund and decreases ending fund balance-greenhouse gas program, with a net impact of $0;
e. Electric Utility Capital Fund: adjustments to multiple capital projects and an increase to the ending fund balance, with a net impact of $0;
f. Electric Utility Debt Service Fund: increases to bond proceeds and administrative costs, with a net impact of $585,113;
g. Electric Utility Fund: increase in charges for services offset with increases to the Operations and Maintenance Reserve and Rate Stabilization Reserve, with a net impact of $25,000,000;
h. Endowment Fund: transfer of interest earnings to the Cemetery Fund, with a net impact of $80,000;
i. Fire Development Services Fund: recognition of other fees for services and appropriate the funds to the Fire Department, with a net impact of $250,000;
j. Fire Operating Grant Trust Fund: recognition and appropriation of grant revenue and reimbursements for the Fire Department, with a net impact of $438,178;
k. Parks and Recreation Capital Fund: recognition of a transfer from the General Fund to establish the Youth Soccer Parks Capital Improvement project; recognition of Mitigation Fee and Quimby Act revenue and increases to the Park Impact Fees Monitoring and Parkland Acquisition projects and ending fund balances for unallocated Mitigation Fee Act Fees and Quimby Act Fees, with a net impact of $4,456,644;
l. Parks and Recreation Operating Grant Trust Fund: recognition and appropriation of a grant from the County of Santa Clara for the July 4th Fireworks, with a net impact of $5,000;
m. Perpetual Care Fund: transfer of interest earnings to the Cemetery Fund, with a net impact of $1,500;
n. Public Donations Fund: recognition and appropriation of donation revenue to support program for Seniors, with a net impact of $6,100;
o. Public Facilities Financing Corporation Fund: increase in interest earnings and interest expense, with a net impact of $1,500;
p. Sewer Utility Fund: increase to the estimate for interest earnings and increase for right of way expense appropriation, with a net impact of $100,000;
q. Streets and Highways Capital Fund: recognition and appropriation of revenue for the Bridge Maintenance Program project, with a net impact of $262,360;
r. Vehicle Replacement Fund: transfer from the Electric Utility Fund for capital outlay, with a net impact of $120,232;
s. Water Recycling Fund: increase to charges for services, increase to resource and production partially offset by a decrease in the Operations and Maintenance Reserve, with a net impact of $360,000; and
t. Water Utility Capital Fund: increases to various capital projects offset by ending fund balance, with a net impact of $0.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Monthly Financial Status Report - April 2025
2. Monthly Investment Report - April 2025
3. FY 2024/25 Budget Amendments