Cupertino council adopts FY2025–26 budget, approves changes to special projects and community grants

Cupertino Mayor Liang Chao and the City Council unanimously adopted the city's final fiscal year 2025'26 operating and capital budgets on a motion that included several staff-recommended adjustments and a small amendment to the community grants list.

The action finalizes a consolidated budget of $136,063,401 in operating and capital appropriations across all funds. Acting Budget Manager Antonio Ase Anderson told the council, “Overall staff is recommending a budget across all funds for operating and capital of $136,063,401.” The council also voted on separate direction for special projects and city work program items that were carried over from FY2024'25.

The adopted budget reflects staff updates after the proposed document was printed on May 1 and includes an increase of $65,966 in appropriations tied primarily to staffing adjustments. Director of Administrative Services Christina Delfarro summarized the hearing as “the final final adoption of the budget,” and said staff had separated the FY2025'26 budget adoption from changes proposed for special projects that relate to FY2024'25.

Why this matters: The council's action establishes spending and appropriation limits for the coming fiscal year, sets staffing and vacancy assumptions used in the long'term forecast, and directs staff to return to council with quarter'end financial reports. Those choices affect service levels, capital planning and the city's use of reserves.

Major numbers and assumptions - Total recommended appropriations (operating + capital): $136,063,401. - Recommended revenues across all funds: $133,654,373. - General fund drivers noted by staff: property tax up about $2.2 million, franchise fees up about $900,000, and higher intergovernmental revenue (including grant funds for the Hopper shuttle and reimbursements from other cities). - Vacancy-rate assumption changed in the near-term forecast from 4% to 6% for FY2026 and FY2027 to better reflect recent salary-savings experience; the forecast returns to 4% in later years. - Staff advised the council the adopted numbers could result in using up to about $2.4 million of fund balance (retained earnings) if all budgeted appropriations are expended; staff said that use of reserves is allowable under the city's balanced-budget approach when paired with a plan to return to structural balance.

Staff and staffing changes Staff explained several post'printing adjustments. The net $65,966 increase in appropriations results primarily from adding an administrative assistant in the city clerk's office while eliminating a part-time economic development analyst and removing a requested assistant director classification in Administrative Services. The final budget recommends one continuing part-time communications and marketing coordinator position (previously funded with salary savings). City staff also reported adjustments to transfers among enterprise and internal service funds to correct amounts that had been double'counted.

Special projects, community grants and council direction After the budget vote, the council considered FY2024'25 special-project balances and work-program items that were carried forward. Staff said the FY2024'25 special-project list included 74 projects with an amended budget of about $41.6 million as of March 31, 2025, with roughly $3.9 million in expenses to date and $7.4 million in encumbrances.

Council approved staff'recommended defunding and return-of-savings for a subset of those items while directing staff to retain or restore funding for a small number of community programs. Specifically: - The council approved the staff recommendations for the special-project and work-program adjustments listed in the staff report, with an amendment to the community grants list made on the floor. The motion carried unanimously. - Council later approved the staff recommendations on remaining FY2024'25 special projects and city work-program items, with a council amendment restoring funding for the Block Leader community grants program (the council added back the program funding after staff had proposed defunding it). That motion also carried unanimously.

Community grants and festival funding The council reviewed the community grants list (staff said the total available had been reduced to about $32,000) and discussed the AAPI Multicultural Festival organized by the Asian American Parent Association. The mayor moved to add a community grant for the AAPI Multicultural Festival; the council approved the budget adoption motion as amended. Council members clarified that festival fee waivers are a separate budget item (staff noted festival fee waivers total roughly $171,000 in estimated costs for the current year) and that an organization cannot receive both a community grant and a festival fee waiver for the same event under current policy.

Active Transportation Plan (ATP) The council heard multiple public speakers urging it to keep the Active Transportation Plan (ATP) funded and complete the planning work. Public Works Director Chad Mosley said the ATP work is under way under a consultant contract and that the city had collected roughly 1,900 unique public inputs in early outreach; Mosley said about $150,000 had been spent on the contract to date. Several residents and a Planning Commissioner (speaking as a resident) warned that canceling ATP now could jeopardize grant funding and lead to repeated rework of priorities. Councilmembers debated the merits of the ATP and whether council-level policy direction should limit or shape how ATP recommendations would be implemented; no action to cancel the ATP was taken.

Process and transparency concerns raised Several councilmembers and public commenters urged greater clarity in future agenda packets. Council members noted the proposed budget packet had been published online since May 1 but that the final-adoption agenda packet only displayed changes since the May 15 study session rather than containing the complete proposed documents, which some members and members of the public said made review harder. Staff acknowledged the difference from some historical practice and said the CIP and community funding documents had been published with the proposed budget and were available online.

What the council asked staff to do next Council asked staff to return with the first-quarter financial report in November 2025; staff also agreed to incorporate council direction on special projects, to correct and finalize the adopted resolution language to reflect the council'approved changes, and to continue to provide detailed attachments for CIP, community funding and the base budget on an improved schedule next year.

Ending The meeting closed after council action on the budget and special-project items. Council members and multiple public speakers emphasized the need to balance fiscal discipline with continued attention to community programs and capital projects, and staff said it will present quarterly updates and the revised documents requested by council.