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Santa Clara council adopts two‑year budget, restores reserves and funds bond implementation staffing
Summary
The City Council approved a two‑year operating budget for FY2025–26 and FY2026–27 and set the 2025 appropriation limit. The budget restores a 25% budget stabilization reserve, funds 21 new ongoing positions and includes implementation staffing for the $400 million bond; council also approved the constitutional appropriations limit.
The Santa Clara City Council on Tuesday adopted a two‑year operating budget for fiscal years 2025–26 and 2026–27 and established the city’s constitutional appropriations limit for the coming year. Staff described the package as a mix of targeted operating investments, enhancements to capital programming and steps to shore up reserves.
The proposed FY25–26 budget presented by Finance Director Ken Lee and City Manager Jovan Grogan totals just under $2.0 billion; that top‑line includes ongoing operating funds plus roughly $400 million in capital dollars carried forward. The council added several changes requested during two prior study sessions: full restoration of library materials funding ($145,000 per year for a two‑year total of $290,000 annually), additional funding for capital projects and an explicit direction to examine the capital‑reserve policy as part of a planned fiscal sustainability effort.
Highlights and staffing: the budget funds 21 additional positions (plus 18.25 FTEs previously added earlier in the fiscal year). Council approved restoration of 12 SAFER grant firefighter positions previously frozen, added three police positions (two officers and a sergeant) to address projected vacancies, and funded several development‑service and utilities positions to address backlog and inspection needs. The budget includes $2 million allocated to bond implementation staffing tied to the voter‑approved infrastructure bond, and ongoing contributions to capital maintenance and reserves.
Reserves and fiscal sustainability: the council approved restoring the general fund budget stabilization reserve to 25%—a target the staff said the city had not reached since the pandemic. The city also adopted policy direction to fund a fiscal sustainability plan, to be delivered by consultants, which will analyze long‑term structural fiscal issues, evaluate service levels and produce an implementation blueprint for funding priorities.
Public events and reimbursements: staff told council that the budget assumes major event costs (police, fire, public works) will be covered through overtime, as‑needed staff, interagency reimbursements and negotiated host‑committee contributions. The budget also assumes performance rent from the stadium authority consistent with the authority’s separate budget.
Appropriations limit: as required by the California Constitution, the council set the city’s appropriation limit for 2025 at $697,292,626; staff’s calculation showed the proposed budget stayed below that ceiling.
Council action: after discussion and supplemental Q&A, the council approved the two‑year budget and separately passed the appropriations‑limit resolution. Staff said the budget includes a mix of one‑time and ongoing funds, commits to revised project tracking and will return with further policy options on capital funding and long‑term fiscal sustainability.
