REPORT TO COUNCIL
SUBJECT
Title
Action on Monthly Financial Status and Investment Reports for March 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 March 2025 are submitted for your information. The financial reviews, as of March 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 March 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 72% of the budget through March 2025. Revenues appear to be tracking slightly below par due to the timing of payments. However, General Fund revenues are currently tracking to exceed budgeted levels.
As shown in Attachment 1, General Fund expenditures (excluding transfers) were at 70% of budget through March 2025. Overall, expenditures are tracking within budgeted levels.
As shown in Attachment 1, total revenues for Enterprise Funds (Electric, Water, Sewer, Cemetery, Solid Waste, and Water Recycling) were at 78.4% of the budget through March 31, 2025, while total expenses were at 64.1%.
In the month of March, donations of $600 were received, bringing total donations to $28,554.
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 March 2025 and April 2025. The number of unemployed persons totaled 7.2 million, consistent with March numbers. In the advance estimate for the first quarter 2025, the Gross Domestic Product (GDP) decreased at an annual rate of 0.3%, following a GDP increase of 2.4% in the fourth quarter 2024.
The California unemployment rate changed little from 5.4% in February 2025 to 5.3% in March 2025. The unadjusted unemployment rate in the San José-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) was 4.1% in March 2025, down slightly from a revised 4.2% in February 2025, and unchanged from the March 2024 estimate of 4.1%.
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 March 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 March 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 4.09% in March.
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 the Community Development Department budget to fund a consultant agreement for work related to the Downtown Precise Plan Community Benefits Program and increases the transfer to the Solid Waste Fund to cover increased costs associated with the Financial Rate Assistance Program, offset by a decrease to the Budget Stabilization Reserve. An action is also included to recognize and appropriate wildland deployment reimbursements to the Fire Department.
• Building Development Services Fund - recognizes and appropriates reimbursement from the State related to the California Automated Permit Processing (CalAPP) program, including staff time spent implementing the solar permit application platform;
• Developer Traffic Payments Fund - updates the beginning and ending fund balance based on the FY 2023/24 year-end reconciliation;
• Expendable Trust Fund - recognizes and appropriates Revenue from Other Agencies to the Information Technology and Public Works Departments for support and services provided to the Silicon Valley Animal Control Authority;
• General Government Capital Fund - recognizes and appropriates reimbursement from the State for the CalAPP program in the Permit Information System project;
• Housing and Urban Development Fund - increases the program income estimates and the appropriations for the CDBG Administration project and HOME Administration project. An action is also included to reallocate funding from the NCIP - CDBG project to the Rebuilding Together Silicon Valley project, consistent with the updated FY 2024/25 Annual Action Plan;
• Sewer Utility Fund - transfers funding to the Special Liability Insurance Fund as a second installment for a settlement agreement related to the utility;
• Solid Waste Fund - recognizes a transfer from the General Fund and increases the unrestricted ending fund balance to account for the increased costs associated with the Financial Rate Assistance Program that is covered by the General Fund; and
• Special Liability Insurance Fund - recognizes a transfer from the Sewer Utility Fund and replenishes the Reserve for Future Claims.
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 March 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: recognition of wildland reimbursements for the Fire Department; funding for a Downtown Precise Plan consulting agreement and increased costs associated with the Financial Rate Assistance Program offset by a decrease in the Budget Stabilization Reserve with a net impact of $237,520;
b) Building Development Services Fund: State reimbursements for the California Automated Permit Processing program with a net impact of $21,431;
c) Developer Traffic Payments Fund: FY 2023/24 year-end reconciliation with a net impact of $260,410;
d) Expendable Trust Fund: recognition of revenues from other agencies for City services to SVACA with a net impact of $123,000;
e) General Government Capital Fund: State reimbursements for the California Automated Permit Processing program with a net impact of $11,574;
f) Housing and Urban Developer Fund: program income estimate adjustments and reallocations consistent with the 2024/25 CDBG Annual Action Plan with a net impact of $224,000;
g) Sewer Utility Fund: transfer to the Special Liability Insurance Fund reimbursing for a settlement agreement with a net impact of $0;
h) Solid Waste Fund: transfer from the General Fund for the City’s Financial Rate Assistance Program with a net impact of $67,200; and
i) Special Liability Insurance Fund: transfer from the Sewer Utility Fund to replenish the Reserve for Future Claims with a net impact of $877,287.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Monthly Financial Status Report - March 2025
2. Monthly Investment Report - March 2025
3. FY 2024/25 Budget Amendments