SUNNYVALE ADOPTS FY 2005/06 BUDGET

SUNNYVALE, Calif. – Sunnyvale City Council has adopted a $226.8 million budget for Fiscal Year 2005/06. The action came by a unanimous vote of Council at their regular Tuesday (June 21) meeting.

The total approved budget is 14 percent lower than the FY 2004/05 budget of $264.5 million. The reduction is primarily a result of the completion of some capital projects, such as the Sunnyvale Senior Center.

Sunnyvale’s General Fund increased a mere 4 percent to $110 million.

“I’m really pleased we were able to approve a budget that preserves service levels,” said Mayor Dean J. Chu. “That’s particularly challenging these days in light of rising health care and pension costs. I look forward to an improving economy helping us stabilize revenues so we can continue to provide the services our residents desire.”

Sunnyvale is still facing a $1.75 million gap between revenues and expenditures. The City’s unique long-range planning process, which requires a 20-year forecast on City budgets, allows the City time to implement changes which will bring the structure of the budget into balance. One of the mechanisms available to balance the budget over the long-term is to improve revenues, such as the Transient Occupancy Tax (TOT) and fees paid for business licenses.

At the same Tuesday meeting, Council approved placing an increase in the City’s TOT on the November ballot. Under the proposal, the TOT would increase, in stages, from the current 8½ percent to 9½ percent. If approved by voters, the first increase – to 9 percent – would take place in January 2007. If Sunnyvale hotel occupancy averages at least 60 percent in the first nine months of 2008, the TOT would increase to 9½ percent in January 2009. If that occupancy rate is not achieved, the final increase in the TOT would be put off an additional year until January 2010.

The proposed increase in the TOT will be a companion to the Council’s earlier vote to put an increase in the City’s business license fee on the same November ballot.