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Cupertino council accepts first‑quarter financial report; staff recommends modest adjustments and flags sheriff contract risk
Summary
Council accepted the City Manager's FY25‑26 first‑quarter financial report and adopted Budget Modification No. 25-26-419 (increasing revenues by $503,628 and decreasing appropriations by $674,221). Staff warned a pending sheriff contract renegotiation could materially affect future forecasts and recommended a $200,000 traffic data collection study.
The Cupertino City Council accepted the City Manager's Fiscal Year 2025‑26 first‑quarter financial report on Dec. 1 and approved a staff‑recommended budget modification that increases estimated revenues by $503,628 and reduces appropriations by $674,221, a net positive to fund balance of about $1.2 million across funds.
Director of Administrative Services Christine Alfaro told the council the city closed FY24‑25 with general‑fund revenues of $115.4 million and expenditures of $99.6 million, producing a $15.7 million positive change to fund balance and an all‑fund year‑end balance of about $181.8 million. Alfaro attributed the improvement largely to lower salary costs and stronger investment earnings (mark‑to‑market gains).
For the first quarter of FY25‑26 staff proposed targeted adjustments across funds: $265,826 of increased general‑fund revenue (primarily plan‑review fees tied to the Toll Brothers project) offset by $195,316 of expense reductions, and additional re‑allocations and defunding in special‑revenue and capital projects (including defunding McClellan Road separated bike phase 3 and the Bollinger Road corridor project). Staff recommended $200,000 for an engineering and traffic data collection study to gather volumes, turning movements and bicycle/pedestrian counts to inform speed‑limit decisions and other transportation initiatives.
Alfaro warned the council that an upcoming sheriff contract negotiation could significantly affect future forecasts: the current one‑year extension runs through June 30, 2026, and staff expects to present a longer‑term contract proposal in winter that may increase costs beyond CPI+2 escalators used in baseline forecasting.
Council members asked for clarification about a CDTFA sales‑tax true‑up the prior month. Staff said the CDTFA printout showed gross receipts of roughly $5.7 million for the relevant quarter; that true‑up covered a prior CDTFA liability of about $3.6 million and left net remittances to the city. Staff said it will provide additional detail in the midyear report.
After staff presentation and questions, Vice Mayor Moore moved and the council seconded the staff recommendation; the motion passed unanimously on a roll‑call vote.
