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Home My WebLink AboutCC 06-16-2026 Item No. 6. FY 26-27 Operating and Capital Improvements Budget_Supplemental ReportADMINISTRATIVE SERVICES DEPARTMENT CITY HALL 10300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3220 CUPERTINO.GOV CITY COUNCIL STAFF REPORT SUPPLEMENTAL 1 Meeting: June 16, 2026 Agenda Item # 6 Subject Consideration of Recommended Operating and Capital Improvement Program Budgets for Fiscal Year (FY) 2026-27, adoption of the Operating and Capital Improvement Program Budgets for FY 2026-27, establishment of the Appropriation Limit, and related actions Recommended Action 1.Adopt Resolution No. 26-XXX establishing an Operating Budget of $141,318,264 for FY 2026-27, which includes the following changes to the FY 2026-27 Proposed Budget, published on May 4, 2026: a.Approve the operating budget of $141,293,145 outlined in the FY 2026-27 Proposed Budget. b.Approve a reduction in appropriations of $47,000 for recurring Chamber of Commerce funding agreement c.Approve additional appropriations of $25,000 for City Work Program Special Projects PR & Strategic Comm Strategy d.Approve additional appropriations of $34,119 for the Council approved salary adjustment of Senior Assistant City Attorney e.Approve additional appropriations of $13,000 for RISE Housing Solutions f.Approve the allocation of $200,000 for RISE Housing funds to be budgeted in the General Fund previously funded in Special Revenue Fund as approved by Council on May 19, 2026 g.Approve a reduction in revenues of ($224,320) relating to at-risk ERAF property tax h.Approve additional revenues of $15,000 for Law Enforcement related administrative fees i.Approve any other recommended changes as directed by City Council 2. Adopt Resolution No. 26-XXX establishing a Capital Improvement Program Budget of $14,235,000 for FY 2026-27. 3. Adopt Resolution No. 26-XXX establishing an Appropriation Limit of $148,461,383 for FY 2026-27 Background: Q1. Please include the FY 26-27 Community Funding Parks and Recreation Commission Recommendation background. The City provides funding to local non-proﬁt organizations in the areas of social services, ﬁne arts, and other programs for the public. The Community Funding Grant application process opened on January 1, 2026, and closed on February 1, 2026. Twenty-two applications were received for the FY 2026-2027 Community Funding Grant Program cycle and were brought to the Parks and Recreation Commission for review on March 5, 2026. During the April 2, 2026, Parks and Recreation Commission meeting, the Commission concluded that 17 of the 22 applications met eligibility requirements and those applications were evaluated and scored. The Parks and Recreation Commission approved the following proposed list of organizations to recommend City Council for funding, totaling $32,500; and if there is additional funding available, to ﬁrst fund Fremont Union High Schools Foundation and the remaining organizations requested amount in rank order at the Council’s discretion. 1. West Valley Community Services - $5,000 2. Fremont Union High Schools Foundation - $8,500 3. No Time to Waste - $4,000 4. Teens Talk - $450 5. Colorful Minds - $1,500 6. Remember the ToothFairy - $2,000 7. Cupertino Symphonic Band - $2,000 8. Mind4Youth - $2,500 9. Active Circle - $2,000 10. AINAK - $1,550 11. Rotary Club of Cupertino - $3,000 12. Cupertino Host Lions Club - $0 13. Bay Area Cats - $0 14. Tessellations School - $0 15. American Legion Post 642 Cupertino- $0 16. Institute for the Study of Western Civilization - $0 17. SunﬂowerMagic - $0 Recommended ranking if additional funding is available: Applicant Commission Ranking Request by Applicant Recommended Award Amount if Extra Funding West Valley Community Services Post 642 Cupertino Study of Western SunﬂowerMagic TOTAL $118,870 $32,500 $86,370 The following table includes FY 25-26 awards for comparison. Non-Proﬁt Organization FY 25-26 Funding FY 25-26 Program/Project/Event FY 26-27 Funding FY 26-27 Program/Project/Event Active Circle 2,000 All Inclusive Family Picnic 2,000 Neuro-Inclusive Picnic with Purpose AINAK 4,000 Eyecare and Eyeglasses 1,550 Eyecare and Eyeglasses Asian American Parents Association Festival Symphonic Rental Venue Background Veriﬁcation Integration and Support High Schools Classroom for the Fremont Union High Olympics Northern 2025 Cupertino Bowling Team Program Rehabilitation Education Community TOTAL $33,500 $32,500 Q2. Include the 20 Year Forecast Chart updated. Q3. Include the General Fund - Fund Balance and Reserves Chart. This is updated to reflect that the unassigned reserve is at $0 in the last year of the forecast. Q4. Provide the General Fund Annual Operating Surplus/(Deficit). This chart is reflective of all changes between the Proposed and the Final Budget. Q5. On page 16, the number for Senior Resource Officers (SROs) savings should be 672,000, not 772,000. Service Level Adjustments to Law Enforcement Services: Given that the Sheriffʹs contract is the Cityʹs single largest operating expenditure and the primary driver of long‐term fiscal pressures, the City could consider reducing law enforcement service levels to offset the FY 2026‐27 budget shortfall. Additionally, the recent County contract proposal does not include caps on annual increases, making forecasting difficult. Potential options include reducing dedicated positions such as two School Resource Officers ($772,000), one Traffic Enforcement Officer ($336,000), or one General Law Enforcement Officer ($336,000), subject to Council priorities and community service expectations. Any reductions would lower ongoing contract costs and could help mitigate future structural deficits. Q5. Why is there only .9% increase in property tax? This will be included as a desk item. Attachments Provided with Original Staﬀ Report: A – Draft Resolution – Operating Budget for Fiscal Year 2026-27 B – Draft Resolution – Capital Budget for Fiscal Year 2026-27 C – Draft Resolution – Appropriations Limit for Fiscal Year 2026-27 D – Budget Proposals Summary E – Appropriation Limit for Fiscal Year 2026-27 F – Appropriation Limit Price and Population Factors for Fiscal Year 2026-27 G – Proposed Budget Study Session Supplemental Report H – Planning Commission Adopted Resolution I – Adopted FY 2025-27 City Work Program Budget Details J – FY 2026-27 Capital Improvement Budget (CIP) Book (Draft)