Sunnyvale council adopts FY2025–26 budget and fee schedule, approves utility rate increases and funds Evelyn multiuse path

The Sunnyvale City Council on June 17 adopted the city and Sunnyvale Finance Authority budgets for fiscal year 2025–26, approved a number of fee adjustments, authorized utility rate increases and approved a package of actions that included a Transportation Development Act request to help fund the Evelyn Avenue multiuse path.

Key votes and outcomes

- Budget and fees: The council adopted the FY2025–26 budget and fee schedule and approved budget modification No. 26 in the amount of $215,659. The Sunnyvale Finance Authority separately adopted its FY2025–26 budget (including debt‑service appropriations related to the Civic Center bond). The council and authority votes were unanimous, 7–0.

- Utility rates: Council adopted proposed increases for utilities for FY2025–26: water rates up 6 percent, wastewater rates up 7 percent and solid waste/recycling rates up 4 percent. The city manager and finance staff said the increases reflect wholesale water cost increases (San Francisco PUC and Valley Water), long‑term capital needs (notably the Sunnyvale Clean Water Program) and higher solid‑waste operating costs. Notices required under Proposition 218 were mailed; staff reported 99 written protests so far and said approximately 15,000 valid protests would be required to block the increase.

- Contract award: Council approved a three‑year contract to Bear Electrical Solutions for electrical services, authorizing the city manager to execute the contract and subsequent renewals up to the available budget. The initial three‑year authorised amount reported in the staff presentation was $4,000,214.75; council approved the contract unanimously.

- Evelyn Avenue multiuse path (TDA funding): Council approved staff’s recommendation to apply for Transportation Development Act (Article 3) funds and to submit an application for $811,845 to help close the construction funding gap for the Evelyn Avenue multiuse path. Staff said the project already has roughly $3.8 million in state parks funding for design and construction; the TDA request would allow additional safety features and better crossings. BPAC recommended a smaller TDA allocation earlier; after refined cost estimates staff requested the full available $811,845 and council approved that application.

- Downtown parking maintenance district: Council adopted the final engineer’s report and confirmed assessments for the Downtown Parking Maintenance District for FY2025–26. The assessments were increased by the CPI and the measure passed 7–0.

- Inclusionary/BMR alternative compliance (777 Sunnyvale‑Saratoga Road): Council approved a developer proposal to satisfy the project’s below‑market‑rate (BMR) requirements by dedicating approximately 1.456 acres (a parcel the applicant had entitled for a 162‑unit rental building) to the city. Staff said the dedication, if accepted, would provide land the city could convey to an affordable‑housing developer; the parcel was valued in staff materials at roughly $14 million (entitled land valuation). Council approved the alternative compliance plan and amended conditions of approval unanimously (7–0).

- City attorney compensation: Council approved an amendment to the city attorney employment agreement, raising annual salary from the original $293,000 to $305,000 (about a 4 percent increase). The council subcommittee that reviewed compensation recommended the increase; the full council approved the amendment 7–0.

What staff said and why the decisions matter

Finance director Matt Paul told council the budgets presented included recommended fee changes and the appropriations limit required by state law, and that the Sunnyvale Finance Authority budget included debt service for the Civic Center bond. Utility billing manager Steven Napier briefed council on utility rate drivers: purchased water is roughly 60 percent of the water utility’s operating cost and wholesale rates from Valley Water and the San Francisco PUC are increasing; wastewater rates reflect long‑term capital investment in the Sunnyvale Clean Water Program (staff cited a multi‑year program totaling roughly $1.1 billion in various presentations); and solid‑waste costs are being driven by inflationary pressures on contract costs and state diversion requirements.

On Evelyn, interim transportation manager Angela Obeso and project staff told council the design is well advanced and that increased construction cost estimates and inflation left a funding gap the city can partially address by submitting the full banked TDA allocation. Staff emphasized the project’s role as a cross‑corridor bike link.

Implementation notes and next steps

- Utilities: Rates will become effective per the schedule in the resolution after required noticing unless a majority of ratepayers file successful protests under Proposition 218. - Evelyn path: Staff will submit the TDA application and continue to refine construction plans and cost estimates; the project is scheduled to seek construction contracts in line with the design timeline. - BMR land dedication: If the city accepts the parcel, staff said it will issue a competitive solicitation to select a nonprofit affordable housing developer to build and operate the project on the dedicated site.

Votes at a glance (each vote recorded at the June 17 council meeting)

1) Consent calendar (items 1A–1E and 1G–1I) — Motion carried 7–0. - Motion: Approve consent calendar as presented excluding item 1F. - Mover: Vice Mayor Sowell; Second: Council member Srinivasan.

2) Contract award: Bear Electrical Solutions (3‑year contract, authorise renewals; amount not to exceed $4,000,214.75) — Approved 7–0. - Action kind: contract_award - Motion: Authorize awarding and contract execution; authorize renewals and city manager to modify within budget. - Mover: Vice Mayor Sowell; Second: Council member Mellinger.

3) City Council adoption of FY2025–26 budget, fee schedule and appropriation limit; approve budget modification No. 26 ($215,659) — Approved 7–0. - Action kind: budget_adoption - Mover: Council member Mellinger; Second: Council member Srinivasan.

4) Sunnyvale Finance Authority adoption of FY2025–26 budget (debt service appropriation for Civic Center bond) — Approved 7–0. - Action kind: budget_adoption - Mover: Vice Chair (Vice Mayor) Sowell; Second: Council member Srinivasan.

5) Utility rate increases for FY2025–26 (water +6%, wastewater +7%, solid waste +4%) — Approved 7–0. - Action kind: other - Motion: Adopt resolution increasing water, wastewater and solid waste rates for FY25–26. - Mover: Vice Mayor Sowell; Second: Council member Srinivasan. - Protests: staff reported 99 written protests received; approximately 15,000 protests required to block the increase under Proposition 218.

6) Authorize filing application for TDA Article 3 funds ($811,845) to supplement construction of the Evelyn Avenue multiuse path — Approved 7–0. - Action kind: other - Mover: Council member Mellinger; Second: Mayor Klein.

7) Downtown Parking Maintenance District: approve final engineer’s report and confirm assessment for FY2025–26 — Approved 7–0. - Action kind: other - Mover: Vice Mayor Sowell; Second: Council member Cisneros.

8) BMR alternative compliance (777 Sunnyvale‑Saratoga Road): accept land dedication option (approx. 1.456 acres) to meet the project’s below‑market‑rate obligations and amend conditions of approval — Approved 7–0. - Action kind: other - Mover: Council member Mellinger; Second: Council member Cisneros. - Note: Staff said the dedicated parcel could accommodate approximately 162 rental units and would be conveyed to the city for selection of a nonprofit affordable housing developer.

9) Amend city attorney employment agreement (City Attorney Rebecca Moon): increase annual salary from $293,000 to $305,000 — Approved 7–0. - Action kind: other - Mover: Council member Srinivasan; Second: Vice Mayor Sowell.

Speakers and attribution

Speakers at the meeting included: Mayor Larry Klein; Vice Mayor Sowell; Council members Mellinger, Cisneros, Srinivasan, Chang and Lay; Finance Director Matt Paul; Utility Billing Manager Steven Napier; Transportation staff Angela Obeso; and several public commenters including Michael Flores and AJ. Quotes in this article are attributed to the relevant staff or council members as recorded in the meeting transcript.

Authorities and rules referenced

- Proposition 218 (California Constitution) — public notice and protest process for property‑related fees and assessments. - Transportation Development Act (Article 3) — regional program administered by MTC for bicycle/pedestrian capital projects (source of TDA funds staff proposed to apply for).

Clarifying details

- Budget modification No. 26: $215,659 (approved as part of the FY2025–26 budget action). - TDA availability: Staff said Sunnyvale had banked TDA funds and the total available for the current cycle was $811,845; that pool included savings/rescissions from prior projects. - Utility rate drivers: Purchased water (approx. 60% of water utility costs), wholesale increases from Valley Water (9.9% referenced in staff remarks) and SFPUC (about 2.3%), ongoing capital programs including the Sunnyvale Clean Water Program (staff referenced multi‑year capital needs).

Community relevance

- Affected geographies: Downtown Sunnyvale, Caltrain station area, Evelyn Avenue corridor. - Impact groups: All utility customers in city limits and some customers outside city boundaries (water/wastewater), commuters and nearby residents for transportation projects, downtown businesses (parking maintenance district), households eligible for below‑market‑rate housing.

Provenance

- topicintro: {"block_id":"block_6461.2397","local_start":0,"local_end":220,"evidence_excerpt":"Mayor, authority chair, city council, and Sunnyvale financing authority. The items before you tonight include the city council adoption of the fiscal year 25, 26 budget by 06/30/2025...","tc_start":"00:10:10"} - topfinish: {"block_id":"block_7807.48","local_start":0,"local_end":40,"evidence_excerpt":"The motion carries 7 0.","tc_start":"01:30:07"}

Salience

Overall: 0.85 — The budget, fees and utility rate decisions are high‑impact civic actions affecting municipal services and household bills; approved capital funding for the Evelyn path advances a significant local active‑transportation project. Impact scope: local/regional — Budget and rates are local; Evelyn path and utility wholesale costs have regional connections (Valley Water, SFPUC). Attention level: high — Decisions affect city finances, rates and delivery of major projects; council unanimously approved multiple measures. Novelty: 0.45 — Annual budget and rate cycles are routine, but the TDA award for a major active‑transport corridor and the large land dedication for housing are notable developments.

Topics

- municipal_budgeting: {"justification":"Adoption of the FY2025–26 budget for the city and the Sunnyvale Finance Authority and related fee schedule; budget modification noted.","scoring":{"topic_relevance":1.00,"depth_score":0.75,"opinionatedness":0.00,"controversy":0.25,"civic_salience":1.00,"impactfulness":0.80,"geo_relevance":1.00}}, - utilities_rates: {"justification":"Adopted rate increases for water (+6%), wastewater (+7%) and solid waste (+4%) for FY25–26; staff cited wholesale water price increases and major capital programs as drivers.","scoring":{"topic_relevance":1.00,"depth_score":0.80,"opinionatedness":0.00,"controversy":0.60,"civic_salience":0.95,"impactfulness":0.85,"geo_relevance":1.00}}, - active_transportation_funding: {"justification":"Council authorized application for $811,845 in TDA Article 3 funds to close a construction gap on the Evelyn Avenue multiuse path, an important cross‑corridor bicycle link.","scoring":{"topic_relevance":1.00,"depth_score":0.70,"opinionatedness":0.00,"controversy":0.15,"civic_salience":0.70,"impactfulness":0.65,"geo_relevance":1.00}}

Searchable_tags:["FY2025-26 budget","utility rates","Evelyn Avenue","TDA","Bear Electrical Solutions","BMR land dedication","Proposition 218"]