REPORT TO COUNCIL
SUBJECT
Title
Action on Monthly Financial Status and Investment Reports for May 2025
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 May 2025 are submitted for your information. The financial reviews, as of May 31, 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 May 31, 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 95.3% of the budget through May 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 85% of budget through May 2025, which is below the par level of 91.7%. 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 94.3% of the budget through May 31, 2025, while total expenses were at 80%.
In the month of May, donations of $2,100 were received, bringing total donations to $33,956.
The Summer 2025 UCLA Anderson Forecast points to significant economic and geopolitical uncertainty with impacts associated with high tariffs and the federal budget reconciliation bill that is not anticipated to improve the U.S. fiscal trajectory. The Forecast predicts a deterioration in the labor market with higher unemployment in 2025 that will remain elevated through 2026 and 2027. Gross Domestic Product (GDP) growth is also expected to slow.
On a national level, the unemployment rate changed little from 4.2% in May 2025 to 4.1% in June 2025. The number of unemployed persons totaled 7.0 million, consistent with May numbers. In the third estimate for the first quarter 2025, the Gross Domestic Product (GDP) decreased at an annual rate of 0.5%, following a GDP increase of 2.4% in the fourth quarter 2024.
The California unemployment rate remain unchanged at 5.3% between April and May 2025. The unadjusted unemployment rate in the San José-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) was 3.9% in May 2025, down slightly from a revised 4.0% in April 2025, but above the May 2024 estimate of 3.6%.
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 May 31, 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 May 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 4.12% in May.
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
There is no fiscal impact associated with this report.
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
Note and file the Monthly Financial Status Report and Monthly Investment Report for May 2025 as presented.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Monthly Financial Status Report - May 2025
2. Monthly Investment Report - May 2025