Dear Santa Clara Community,
The purpose of this community letter is to share information about the City’s fiscal condition. Santa Clara has been impacted by the global COVID- 19 pandemic and economic crisis. This letter summarizes the budget impacts.
On May 12, the City Council will discuss the Fiscal Year (FY) 2020/21 budget and, also, the current year deficit. Table 1 shows the estimated General Fund deficits:
Table 1: Estimated General Fund Deficits
|
FY 2019/20 |
FY 2020/21 |
|
| Deficit Amount |
($10 million) |
($22.7 million) |
This situation is not unique to Santa Clara: local governments across California and throughout the U.S. are facing similar deficits resulting from the impacts of COVID-19. These estimates are based on the current information that we have available and there remains uncertainty with the economic forecast. Further, since we still do not know the long-lasting impacts of COVID-19 or whether full economic recovery will happen when the State of California begins to re-open based on the Governor’s framework.
We have already taken actions to reduce costs while trying to minimize the effects on level of public services. To date, we have implemented:
- Hiring freeze, with limited exceptions
- Stricter expenditure controls
- Decreased approximately 50% of temporary staffing
- Limited travel
- Limited training
- Reduced expenditures for IT
- Reduced expenditures for vehicle/fleet purchases
- Evaluating current contracts and other non-personnel expenditures
However, with little time in the current fiscal year to correct the estimated deficit, we will need to continue to solve the deficits into the next fiscal year with additional actions. Over the coming months, we will bring forward addition budget reductions to resolve our estimated deficits, which may include:
- Reduced parks and recreation programming
- Fewer library hours and/or programming
- Longer planning, code enforcement, and public safety response times
- Fewer community events and grants
- Reduced or deferred capital infrastructure maintenance
- Less administrative staff to support quick public service
- Reduced programs
- Potential layoffs
Understandably, due to the COVID-19 fiscal consequences, our priorities have shifted. Where we were once focused on growth strategies and strategic addition of resources for expanded services, we are now focused to strategic decisions of maintaining service levels. Our City is resilient, and we have already collaboratively resolved so many challenges together. I am confident that we will continue working towards solutions to resolve our fiscal condition and serve Santa Clara well, and within the resources available to provide services.
You can view the FY 2020/21 and 2021/22 Proposed Biennial Capital Budget and Five-Year CIP, along with the proposed amendments for the FY 2020/21 Adopted Operated Budget, on the City website. This approach continues the biennial budget process that alternates between an operating and capital budget. The Biennial Capital Budget totals $285 million and the Five-Year CIP totals $515 million, supporting infrastructure improvements throughout the City. Of this CIP amount, almost three-fourths of the CIP funds our utilities. Other projects are included to improve our parks, trails, libraries, transportation system, storm system, convention center and other City facilities. While we have identified significant unfunded needs totaling approximately $1 billion, there are significant investments in our capital infrastructure which supports the facilities that serve our residents and community.
For questions about the fiscal impacts of COVID-19 on the City’s budget, contact the City Manager’s Office at 408-615-2210 or manager@santaclaraca.gov.
In community spirit,
Deanna J. Santana
City Manager