Cupertino Matters
- State of the City
- UPCOMING – City Council, Tues., Mar. 4, 2025, 6:45 p.m.
- RECAP – City Council Study Session, Mon., Mar. 3, 2025
- RECAP – Planning Commission, Tues., Feb. 25, 2025
Good news for city finances! City officials had predicted a shortfall of roughly $10.1 million going into fiscal year 2024-25, and a continued structural deficit. Thanks to actions by our capable city manager and her staff and the difficult reductions authorized by council last year, the updated 10-Year financial forecast is for structurally sound budgets. The outer year forecasts only show a negative outlook with the return to transferring funds to the Capital Reserve and the eventual expiration of the utility user tax. This result arises on account of significant changes in revenues and expenditures, primarily staff reductions. Moreover, the current forecast is conservative about increased property tax revenues stemming from new development, which should be expected to pick up as Housing Element sites develop and when Vallco is ultimately built.
Mayor Liang Chao’s State of the City address, on Wed., Feb. 26 was an unusual affair that significantly departed from past practice. Traditionally, this speech offers an opportunity for the Mayor to acknowledge achievements of the previous year and to highlight city plans for the current year. Instead, the presentation was prefaced by a statement “Representing myself only” and twenty minutes of personal projects, including a new initiative CupertinoStories.org, followed by ten minutes of the mayor’s personal journey, before talking about city issues in a campaign-style address. The mayor declined the customary assistance from city staff (including the city manager) in favor of personal volunteers, and without community partners like the Chamber of Commerce. The pitfall in this approach became apparent quickly as the mayor apologized for the lack of live-streaming on account of her misunderstanding of the need to inform staff. Councilmember Wang was on vacation and Councilmember Fruen had a scheduling conflict.
The accomplishments the mayor cites were dated. While two hotels were approved by a previous council in 2019 and 2020, neither has broken ground, with the De Anza Hotel cancelling its plans this month. Two additional hotels are in financial trouble. The mixed use Canyon Crossings project was approved in 2022, but there has been no construction beyond demolition of the site. The slide on school enrollment was not only irrelevant, but erroneous with Alum Rock data for 2019-2020.
The Mayor did acknowledge some challenges, including the budget and loss of retail along Stevens Creek Boulevard to various townhouse-focused developments, as covered in a Mercury News article entitled Cupertino: Mayor talks housing, budget challenges in State of the City address.
The mayor’s speech, however, was missing key updates:
- Certification of the Housing Element was a major 2024 accomplishment, and staff should have received kudos. Neither did she mention the ongoing effort to develop Residential Objective Design Standards in order to ensure that our local development standards are enforceable under current law. This is a major Planning Division project in 2025. Previously, the mayor was a strong advocate for these standards.
- Insufficient progress toward meeting state Housing Element requirements, which covers the years 2023-2031. Two years into that plan, Cupertino has produced less than 150 housing units. The mayor is proud of the Alan Row project (formerly the Bateh Bros. liquor store site) approved in 2022 but it only added 9 townhouses. There is a list of proposed projects on the city website. Only one project has more than 100 units, and at least one is in financial trouble.
- Vallco was mentioned only as an “office park,” not the thousands of housing units essential to Cupertino meeting its Housing Element requirements. Progress on Vallco was top of mind for voters during the 2024 election, so its absence as a focus was curious. Significant progress was made with the $43 million settlement that the city received after finally acknowledging that $34 million of the original $77 million was overstated with regard to impact fees (affordable housing, parkland and transportation being provided by the project).
- No mention of the Eden teacher and workforce housing project at the Simian site on Wolfe Road or the developmentally disabled housing on Mary Avenue.
- No mention of steps to address seismic safety at City Hall–a major concern for city employees.
The program ended on a strange note. Rather than having the appointed city poet laureate speak, the Mayor read a poem that she generated using ChatGP. Instead of allowing Public Comment, the meeting ended chaotically with a trivia quiz.
For research, past issues back to January 2020 of Cupertino Matters are posted on the website. Encourage your friends who would like to become better informed about our community to subscribe to our email newsletter at CupertinoMatters.org.
UPCOMING – CITY COUNCIL, Tues., Mar. 4, 6:45 p.m., Regular meeting
The Ceremonial Items are Item No.1: Recognition of March as Youth Art Month, and Item No. 2: Recognition of March as American Red Cross Month
Oral Communications from the public on non-agenda items precede the Consent Calendar, which contains four routine items. Members of the public may speak on any or all consent calendar items when the mayor asks for public comment on the Consent Calendar. If an item is pulled from the Consent Calendar, council’s procedural rules require it to be addressed after all regularly scheduled action items, unless council votes to reorder items on the agenda. Members of the public may comment on that item when it is considered.
Item No. 7: Baker Tilly Budget Format Review and Performance Measures Updates During budget preparation for FY 2024-25 review, feedback received on the budget document from City Council, residents and City staff from budget sessions, community outreach and internal budget meetings, and the City’s internal auditors suggested the need to improve and streamline the annual budget. In Fall 2024, the City engaged Baker Tilly US, LLP, to conduct a comprehensive review of its Budget Document and Performance Measures. The Audit Committee reviewed the recommendations. The city council is being asked to approve incorporation of changes for the upcoming budget cycle.
Item No. 8: Accept the City Manager’s Mid-Year Financial Report for Fiscal Year 2024-25; Budget Modification No. 2425-383, increasing appropriations by $4,161,892 and revenues by $4,115,183 This mid-year report is an important financial tool, ensuring that the city is on track going into the next fiscal year budget cycle. The Mid-Year Financial Report for Fiscal Year (FY) 2024-25 outlines the City’s financial status as of December 31, 2024. The council is being asked to accept the report for some normal small budget adjustments. In a dramatic turnaround as a result of significant departmental cost reductions and changes in revenues, the City has updated its 10-Year financial forecast and is forecasting to be structurally sound.
Item No. 9: Amendments to the Cupertino City Council Procedures Manual (Continued from February 19, 2025 City Council Meeting). This item first surfaced at the very end of the Feb. 4 council meeting, limiting council discussion. Proposed changes have been incorporated into the redline version of the manual. Many of the changes are minor, but several could significantly impact city operations: (1) allowing anyone to pull agenda consent items could consume significant dais time, (2) allowing council members to submit Public Records Act requests which have to be fulfilled in 10 days even though they may involve significant staff time, (3) removal of commission members must be approved by council, even if they violate objective standards, such as failure to file required conflict of interest disclosure forms and attend security training (which puts the entire city at risk), and (4) the removal of limitations on reappointment of council members as mayor and vice mayor, along with (5) a curious addition not contained in the motion from the last council meeting banning use of phones or other texting by councilmembers on the dais. Notably, the staff report is signed only by the new interim city attorney, with no sign-off from the City Manager.
Item No.10: Study Session on updates to the Policies and Guidelines on Sister Cities, Friendship Cities, and International Delegations pertaining to international travel. This policy was revised in Oct. 2023, five years after the previous revision in 2018. The need for another revision in less than two years is questionable.
Item No. 11: Council Reports, (now submitted in written form) are provided by Vice-Mayor Kitty Moore, Councilmembers Fruen and Mohan. Mayor Chao and Councilmember Wang did not submit reports.
RECAP – CITY COUNCIL, Mon., Mar. 3, 5:00 p.m., Special Meeting (Council Goals and Work Program)
YouTube: 4 hr. 21 min
Item No. 1: FY 2025-2027 City Work Program Prioritization and Goal Setting Workshop. A planned two hour session turned into a four hour marathon as the council struggled to prioritize the 49 items originally proposed–a dramatic expansion from the last cycle–then reduced that number to approximately 20 items. Staff and budget are major constraints. The resulting narrowed set of work plan items was passed on a 3-2 vote with Mohan and Fruen voting nay due to opposition to limiting consideration of city hall to the 2022 retrofit.
RECAP – Planning Commission, Tues. Feb. 25, 2025; 6:45 p.m., Regular Meeting
YouTube: 26 min.
Agenda and Presentations
Item No. 2: 2024 General Plan Report. Commissioners offered few questions on this year’s annual report. The 89-page report modifications related primarily to adoption of the Housing Element and current work on Objective Design Standards, as well as other updates to strategies, including completed projects. The commission accepted the report.
CUPERTINO COURIER: February 28, 2025
The front page picture and article on page 4 is entitled Seeing a ‘tangible difference’: San Jose resident leaves Silicon Valley’s corporate world for peer-to-peer caregiving. Their service area includes Cupertino. Community briefs are (1) Auditing applicants and (2) AI writing workshop. Legal notices for the March 11 Planning Commission meeting are public hearings for (1) Modification of the previously approved Westport Assisted Living/Memory Care project, (2) Permit modifications for Gate of Heaven Cemetery, and a (3) Hillside Exception at 22346 Regnart Road.
Warm regards,
Jean Bedord
Cupertino Matters
Publisher and Editor
