Cupertino council accepts midyear financial report, approves midyear budget modifications

The Cupertino City Council on Tuesday accepted the city manager's midyear financial report for fiscal year 2024'25 and adopted a midyear budget modification that adjusts appropriations and revenues.

The midyear presentation, led by Christine Alfaro, director of administrative services, and Tony Oase Anderson, acting budget manager, summarized actions taken after a 2021 sales-tax audit and a later dispute with the California Department of Tax and Fee Administration. Alfaro told the council that staff and departments reduced the budget by about $23.8 million across fiscal years 2023 and 2024 and that the city avoided layoffs by eliminating 13 vacant positions and cutting materials and contract costs.

The report matters because it updates a 10-year forecast that the city uses to judge structural balance and long-term risks. Staff said forecast changes and one-time settlements have improved the 10-year outlook: the year-10 deficit the council had previously projected was narrowed and, after midyear adjustments, staff said the model now shows a modest surplus in that same 10th year. But presenters warned surpluses…