While most of Santa Clara County grapples with balancing budget shortfalls, 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 putting money into a “set aside” fund, beginning 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 city services or launch new ones, such as a guaranteed basic income program or furthering the city’s support for homeless residents. Officials estimate the fund could total about $213 million as early as 2043.
City revenue exceeded expectations, Finance Director Tim Kirby told San José Spotlight, adding that property and sales taxes are outperforming estimates. He said the budget projects a bump in available resources after 2036 because a large chunk of the city’s pension liabilities will be paid off, which frees up existing revenue for the set aside fund. The city’s charter requires a 20-year budget plan, which Kirby said keeps the city from overcommitting resources.
“These are just estimates, we change them every year, we look at them again every year,” Kirby told San José Spotlight. “(If) it’s going to be really tight in 10 years, then we have the discipline where we won’t add something now that we know we can’t afford on an ongoing basis.”
The last time Sunnyvale had money in the set aside fund was prior to the pandemic. To balance the city’s budget long term, including to continue existing services, Kirby said the city liquidated the fund.
City officials are excited to have money to spend on services, but said they’re going to be thoughtful with their allocations.
“If we have an ongoing cost, then that $3.5 million is going to become smaller,” Councilmember Linda Sell told San José Spotlight. “I want to kind of build on the legacy of previous councils. I would look at, is that expenditure part of the (city’s) priorities and will it have multiple benefits.”
Councilmember Murali Srinivasan doesn’t want the set aside fund to pay for projects with ongoing costs and said he’s more interested in immediate projects with one-time costs, such as road safety improvements. He also cautioned that the COVID pandemic proved that the city’s financial stability could change fast.
“Every few years, you come up with a new service, whether it’s universal basic income or an unhoused program. Now, you need to figure out how will you fund that, because your funding requirements will go up because of inflation and other things,” Srinivasan told San José Spotlight. “Your revenue may not go up.”
Kirby said the money is available now and should be tapped into as soon as possible to begin increasing community services.
“Having this set aside comes along with a lot of responsibilities,” Sell told San José Spotlight. “Over the years, I’ve knocked on a lot of doors. You talk to a lot of people and you hear a lot of their concerns and their priorities.”
