News

Print
Press Enter to show all options, press Tab go to next option

News Release - Santa Clara Continues Its Strong Fiscal Management - Spending Less and Saving More

$17.7 million one-time fund surplus allows City to build up reserves, bringing reserves up 25 percent to unprecedented high levels

Post Date:12/03/2018 10:05 AM

FOR IMMEDIATE RELEASE: Monday, December 3, 2018

CONTACT: Lenka Wright, Director of Communications, 408-615-5515 or lwright@santaclaraca.gov

 

SANTA CLARA, Calif. – For 2018, the City of Santa Clara’s General Fund will end the year under budget by $17.7 million due to higher-than-expected revenue and lower-than-budgeted expenses. This is among the financial information that the City Council will receive and act upon as part of the Fiscal Year 2017/18 budget year-end report and related budget amendments at the Tuesday, Dec. 4 meeting.

“Due to strategic and prudent fiscal management, we are closing the year under budget and with millions available to place into City reserves,” said City Manager Deanna J. Santana. “Santa Clara’s reserves are now above Council policy levels and, specifically, the General Fund Budget Stabilization Reserve is on track to increase 56 percent, resulting at an all-time high of nearly $80 million in early 2019. We will continue to monitor local, state and national trends and fiscal conditions as we make budget decisions for the short- and long-term interests of our community. I recognize that the economic outlook does anticipate some level of a slowdown, and our rigorous monitoring and budget assumptions serve the City well.”   

For the fiscal year ending June 20, 2018, the City received $243.6 million in revenue which is $7.7 million, or 3.3 percent, higher than what was estimated for the Fiscal Year 2017/18 adopted budget. The increase was primarily due to more revenue coming in from the following revenue categories:

  • Property taxes
  • Other taxes such as franchise tax, transient occupancy tax and documentary transfer tax
  • Revenue from other agencies including the redistribution of land sale proceeds and ground leases as well as state-mandated reimbursement
  • Other fees for services such as those associated with plan check zoning, engineering, fire prevention as well as recreational activity revenue.

While Property Tax revenue exceeded the forecasted budget by $3.6 million, gains have  nearly been offset by lower than expected sales tax revenue of approximately $3.2 million.

In addition, actual General Fund expenditures were $10 million lower, or 4.2 percent, than budgeted with a net $3.4 million savings in salaries and benefits. The combined higher than estimated revenue and expenditure savings has resulted in $17.7 million of fund surplus in the General Fund. The General Fund is the City’s major operational fund supporting police, fire, recreational, library and administrative services, programs and activities for our residents.

During Tuesday’s meeting, the City Council will consider distributing these one-time surplus funds with $15.3 million going to various reserves. Among the considerations is placing $9.1 million to the General Fund Budget Stabilization Reserve which is the City’s “Rainy Day” fund and $3.6 million to the Capital Projects Reserve to fund future investments into parks and other City facilities. Since July 2017, the City’s “Rainy Day” fund is projected to increase by 56 percent from $50 million to over $78 million. Table 1 summarizes the reserve activity since July 1, 2017 and as projected through early 2019:

Table 1:  Reserve Activity (July 1, 2017 – Q1 2019, Projected)

Reserve Type

7/1/17 Beginning Balance

7/1/18

Beginning Balance

12/18

Proposed Contribution

FY18/19 Use of Reserves

Total Reserve Balance

Est. 2019 One-time Increase

Est.18/19 Reserve Balance

General Fund Budget Stabilization (BSR)

$50.0

$55.1

$9.1

($0.9)

$63.3

$15.0

$78.3

General Fund Capital Projects

$32.8

$31.0

$3.6

($10.1)

$24.5

-

$24.5

Land Sale Reserve

$39.3

$29.1

-

($7.9)

$21.2

-

$21.2

Building Inspection

$8.4

$12.4

$0.4

($3.2)

$9.6

-

$9.6

Special Liability

$0.5

$3.8

$2.2

($2.0)

$4.0

-

$4.0

Pension Trust (all funds)

$5.0

$15.5

$4.8

-

$20.3

-

$20.3

Electric Rate Stabilization

$87.0

$121.0

-

-

$121.0

-

$121.0

Total

$223.0

$267.9

$20.1

($24.1)

$263.9

$15.0

$278.9

 

To enhance transparency, this year’s report was restructured to provide the status and recommended increases to reserves in key funds, a summary of year-end performance for the General Fund, and a summary of a reconciliation of carryover capital projects, grants and donation funds. In the past, expenditures related to grants and donations were not consistently budgeted, resulting in an understatement of funds available for department operations.

About the City of Santa Clara

Located at the heart of Silicon Valley about 45 miles south of San Francisco, the City of Santa Clara truly is “The Center of What’s Possible.” Incorporated in 1852, Santa Clara covers an area of 19.3 square miles with a population of 120,000. Santa Clara is home to an extraordinary array of high-tech companies, including Applied Materials, Hewlett-Packard, Intel, Nvidia, Oracle, and Ericsson. The City of Santa Clara is also home to Santa Clara University, California’s Great America Theme Park, and Levi’s Stadium, home of the San Francisco 49ers and Super Bowl 50. For more information, go to www.SantaClaraCA.gov.


###

Return to full list >>
View Full Site