Santa Clara Prepares for Long Rainy Day With $48MM Reserve Fund

Santa Clara, Santa Clara City Council, Bay Area, Silicon Valley, Capital Projects Reserve fund

santa clara

By Adam Steinhauer

Even if it’s development boom comes to an abrupt and catastrophic end, the city of Santa Clara may be in a position to continue providing services at its current level for some time.

[contextly_sidebar id=”dsiCARG8yHkp0PTxE0DVYhW8WBFzYvDi”]Last month, after stronger-than-expected tax revenue in the 2014-2015 fiscal year, the Santa Clara City Council approved the transfer of $15 million to the city’s working capital reserve. The transfer will bring the total size of the reserve to $47.9 million, City Manager Julio Fuentes told The Registry.

That compares to a working capital reserve of only $6 million when Fuentes arrived in Santa Clara two years ago, he said. After the Great Recession hit, the reserve was cut from $21 million down to a low of $2 million.

“We live in Silicon Valley and are totally dependent on the tech industry,” Fuentes said. “When that industry hits difficulty, the entire region goes into free fall.”

The council also added $4.8 million from the excess tax revenue to the city’s Capital Projects Reserve fund.

City staff expects enough tax revenue for Santa Clara to add another $7 million to its Working Capital Reserve at the end of the current fiscal year in June 2016, Fuentes said.

After the recession, and the loss of revenue that most California cities bore when the state eliminated redevelopment agencies in 2012, Santa Clara focused on operating more efficiently.

“We’ve reduced our budgets and are living well within our means and are putting away a lot of money to deal with any economic downturn or any other catastrophic downturn” such as an earthquake, Fuentes said.

At the same time, Santa Clara stands to benefit from the development of a 240-acre golf course near Levi’s Stadium into a commercial district with 9.2 million square feet of space. The development is expected to attract businesses that will bring 25,000 jobs and generate $22 million to $23 million in new tax revenue annually for Santa Clara, according to Fuentes.

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