REPORT TO COUNCIL
SUBJECT
Title
Action on Monthly Financial Status and Investment Reports for December 2025 and Approve the Related Budget Amendments
Report
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 December 2025 are submitted for your information. The financial reviews, as of December 31, 2025, provide a year-to-date financial update to the City Council for fiscal year 2025/26. 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 Budget incorporates the estimated revenues and planned expenditures for all funds. The attached Financial Status Reports provide the budget to actual revenue and expenditure summaries for the General Fund, Special Revenue Funds, Enterprise Funds and Internal Service Funds, as well as expenditure summaries for Capital Improvement Funds and Fund Reserve Balances. Any significant variances are explained in the reports.
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 December 31, 2025 (Attachment 1). This report provided financial analysis for the General Fund, select Special Revenue Funds, Internal Service Funds, Enterprise Operating Funds, and Capital Improvement Funds.
Monthly Financial Status Report shows that General Fund revenues (excluding transfers) at 40% of the budget through December 2025. In some cases, such as property tax, most payments are scheduled to occur later in the fiscal year. Based on the prior year performance and collections through December, General Fund revenues are currently tracking to exceed the budget. As shown in Monthly Financial Status Report, General Fund expenditures (excluding transfers) were at 46.6% through December 2025 and are tracking within budgeted levels.
As shown in Monthly Financial Status Report, total revenues for Enterprise Funds (Electric, Water, Sewer, Cemetery, Solid Waste, and Water Recycling) were at 37.7% of the budget through December 31, 2025, while total expenses were at 45.4%.
In December, donations of $1,042 were received, bringing total donations to $36,872.
The December 2025 UCLA Anderson Forecast continues to point to elevated uncertainty regarding the economic trajectory. These include trade uncertainty, concerns about the credibility of our central bank and government statistical agencies, the continued feasibility of the AI boom, and the potential impacts of domestic political strife.
In the updated estimate for the third quarter 2025, the Gross Domestic Product (GDP) increased at an annual rate of 4.4%, following a GDP increase of 3.8% in the second quarter 2025. On a national level, the unemployment rate of 4.3% changed little between December 2025 and January 2026. In January, the number of unemployed persons totaled 7.4 million, down approximately 2% from December. The California unemployment rate changed little from 5.6% to 5.5% between November and December 2025. The unadjusted unemployment rate in the San José-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) was 4.0% in December 2025, down slightly from a revised 4.3% in November 2025, and unchanged from the December 2024 level of 4.0%.
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 December 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 December 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 from 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 December.
The Monthly Investment Report also 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 a “project” 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 any commitment to any specific project which may result in a potential 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 adjustment is described in Attachment 3 and summarized below:
• General Fund - increases the other fees for services estimate related to ambulance transport revenue and appropriates the funding to the Fire Department to support ambulance services. An action is also included to recognize sponsorship funding and appropriate the funding to Non-Departmental for the “Where the Mission Meets the Moment” campaign;
• Downtown Parking Maintenance District Fund - establishes a transfer to the Public Buildings Capital Fund to establish a new Public Facilities Paid Parking project;
• Electric Utility Fund - decreases the transfer to the Vehicle Replacement Fund as this funding is no longer needed. The transfer was initially approved to fund a new vehicle; however, an existing vehicle was identified that could be used;
• Parks and Recreation Capital Fund - recognizes Mitigation Fee Act revenue and allocates the funds to the Park Impact Fees Monitoring project, the Parkland Acquisition project, the Community ISC Aquatic Facility, and the ending fund balance;
• Public Buildings Capital Fund - recognizes a transfer from the Downtown Parking Maintenance District Fund and establishes a new Public Facilities Paid Parking project;
• Public Donations Fund - recognizes and appropriates non-resident youth sports participation fees, donations, and interest earnings for the Wade Brummal Scholarship Program;
• Sewer Utility Fund/ Water Utility Fund - transfers funding to the Vehicle Replacement Fund to fund the purchase of a vehicle for site visits;
• Storm Drain Capital Fund - a technical correction to decrease the other agencies revenue estimate to align with anticipated revenue;
• Streets and Highways Capital Fund - recognizes and appropriates grant revenue to the Benton Street Bikeway project; technical corrections to the other agencies revenue estimate, transfer to the Traffic Mitigation Fund and ending fund balance;
• Traffic Mitigation Fund - recognizes a transfer from the Streets and Highways Capital Fund and increases the unrestricted ending fund balance; and
• Vehicle Replacement Fund - recognizes transfers from the Sewer Utility and Water Utility Funds and increases the capital outlay appropriations; and decreases a transfer from the Electric Utility Fund as the purchase of a new vehicle is no longer needed.
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 December 2025 as presented; and
2. Approve the FY 2025/26 budget amendments in the following funds (as detailed in the Fiscal Impact section of the staff report and Attachment 3 of the staff report):
a. In the General Fund, increases the other fees for service estimate and the miscellaneous other revenue estimate and appropriates funding to the Fire Department and Non-Departmental, with a net impact of $418,600;
b. In the Downtown Parking Maintenance District Fund, transfers funding to the Public Buildings Fund and decreases the unrestricted ending fund balance, with a net impact of $0;
c. In the Electric Utility Fund, decreases the transfer to the Vehicle Replacement Fund and increases the unrestricted ending fund balance, with a net impact of $0;
d. In the Parks and Recreation Capital Fund, increases the Mitigation Fee Act revenue estimate and increases the Park Impact Fees Monitoring project, the Parkland Acquisition project, the Community ISC Aquatic Facility project, and the Ending Fund Balance, with a net impact of $13,297,955;
e. In the Public Buildings Capital Fund, recognizes a transfer from the Downtown Parking Maintenance District Fund and establishes a Public Facilities Paid Parking project, with a net impact of $180,000;
f. In the Public Donations Fund, recognizes and appropriates non-resident youth sports participation fees, donations, and interest earnings for the Wade Brummal Scholarship Program, with a net impact of $20,797;
g. In the Sewer Utility Fund, transfers funding to the Vehicle Replacement Fund and decreases the unrestricted ending fund balance, with a net impact of $0;
h. In the Storm Drain Capital Fund, decreases the other agencies revenue estimate and decreases the unrestricted ending fund balance, with a net impact of ($126,281);
i. In the Streets and Highways Capital Fund, adjusts the other agencies revenue estimate, increases the transfer to the Traffic Mitigation Fund, and adjusts the unrestricted ending fund balance, with a net impact of $149,379;
j. In the Traffic Mitigation Fund, recognizes a transfer from the Streets and Highways Capital Fund and increases the unrestricted ending fund balance, with a net impact of $144,379;
k. In the Vehicle Replacement Fund, adjusts transfers from the Electric Utility, Sewer Utility, and Water Utility Fund and adjusts the capital outlay appropriation, with a net impact of ($3,000); and
l. In the Water Utility Fund, transfers funding to the Vehicle Replacement Fund and decreases the unrestricted 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 - December 2025
2. Monthly Investment Report - December 2025
3. FY 2025/26 Budget Amendments