While most of Santa Clara County struggles to balance budget deficits, one city has enough money to set aside for future resident services. Now, city officials have to decide where that money should go.
Sunnyvale is investing money in a “reserve” fund, which will start with $3.5 million this fiscal year. The Sunnyvale City Council approved that fund earlier this month as part of its $731 million budget. Money from the fund can be used to expand existing ones. city services or launch new ones, such as a guaranteed basic income program or promote the city’s support for homeless residents. Officials estimate the fund could total about $213 million as early as 2043.
City revenues exceeded expectations, Finance Director Tim Kirby told San José Spotlight, adding that property and sales taxes are exceeding estimates. He said the budget projects an increase in available resources after 2036 because a large portion of the city’s pension obligations will be canceled, freeing up existing revenue for the set-aside fund. The city charter requires a 20-year budget plan, which Kirby said prevents the city from committing too many resources.
“These are just estimates, we change them every year, we review them again every year,” Kirby told San José Spotlight. “(If) it’s going to be too tight in 10 years, then we have the discipline to not add anything now that we know we can’t afford it on an ongoing basis.”
The last time Sunnyvale had money in the set aside fund was before the pandemic. To balance the city’s budget over the long term, including continuing existing services, Kirby said the city liquidated the fund.
City officials are excited to have money to spend on services, but said they will be careful with their allocations.
“If we have an ongoing cost, then that $3.5 million will be reduced,” Councilwoman Linda Sell told San José Spotlight. “I want to build on the legacy of previous councils. “I would consider whether that expense is part of (the city’s) priorities and whether it will have multiple benefits.”
Councilman Murali Srinivasan does not want the set-aside fund to pay for projects with ongoing costs and said he is more interested in immediate projects with one-time costs, such as road safety improvements. He also warned that the COVID pandemic showed the city’s financial stability could change quickly.
“Every few years, a new service emerges, whether it’s a universal basic income or a homelessness program. Now you need to determine how you will finance that, because your financing needs will increase due to inflation and other things,” Srinivasan told San José Spotlight. “Your income may not increase.”
Kirby said the money is available now and should be used as soon as possible to begin increasing community services.
“Putting this aside comes with a lot of responsibilities,” Sell told San José Spotlight. “Over the years, I have knocked on many doors. You talk to a lot of people and hear a lot of their concerns and priorities.”
Contact B. Sakura Cannestra at [email protected] or @SakuCannestra on X, formerly known as Twitter.
