Our General Fund is the city's pocketbook, and the stadium will keep $67 million from flowing into our pocketbook, as Councilmember McLeod explains (video).

Urgent-Santa Clara City Manager announces Santa Clara's budget deficit is the worst in 30 years.  See the video from the April 20, 2010 City Council meeting:

The Stadium will make our General Fund deficit worse.

The stadium will cause a loss of $67 million to Santa Clara's General Fund:

• Through the year 2026, our General Fund will lose $67 million because the stadium will divert property tax dollars from the redevelopment area towards stadium construction debt; those funds are supposed to flow to our General Fund.
• The $67 million loss is in addition to the $114 million direct subsidy, the $330 million from the Stadium Authority, and more than $200 million in bond and loan interest.
  

In the Frequently Asked Questions on the city's website, city staff state that, "In the Term Sheet Presentation materials from the June 2, 2009 council meeting, staff stated the maximum General Fund potential from no stadium as $98 million (Net Present Value, or NPV) and the General fund return from a stadium project as $31 million NPV."

The city staff Term Sheet Presentation of June 2, 2009 (slide 48) shows the $67 million loss.

Slide 48 shows that without the stadium, the General Fund is expected to receive $98 Million in revenues, and with the stadium, the General Fund is expected to receive $31 Million.

A Youtube video from the June 2, 2009 council meeting shows the city's consultant describing the loss to Santa Clara's general fund as money is diverted for stadium construction debt.

The $98 Million in Slide 48 is actually the total of 3 numbers:

• $67 million in property taxes which the Redevelopment Agency is supposed to pay to the General Fund, but won't, because the stadium will divert those property taxes to stadium construction debt
  
• $8M loss as result of an SB211 amendment (this amendment is required to extend the Redevelopment Agency in time to collect property taxes for stadium construction debt)
  
• $23M for loss of use of the land under stadium, because we're giving the land for free

Santa Clara's consultant, KMA, estimated that with the stadium, the General Fund is expected to receive $31 Million in revenues. 

The $98 Million the General Fund would receive without a stadium minus the $31 Million the General Fund would receive with a stadium leaves a net loss to our General Fund of $67 Million.

$98 Million - $31 Million = $67 Million

The $67 Million loss was developed by Santa Clara City Staff, comparing 2 scenarios: Without Stadium and With Stadium

Without the stadium, there will be 2 streams of income coming into our General Fund:

• Rent money from businesses that lease land in the Redevelopment Area (e.g. Irvine, Hyatt, Techmart etc.)
• Property tax dollars paid by landholders in the Redevelopment Area
  

With the stadium, there will only be 1 stream of income coming into our General Fund:

• Rent money from businesses that lease land in the Redevelopment Area

The stadium uses up one of the two sources of money which would otherwise flow to the General Fund.  The Property tax dollars paid by landholders in the Redevelopment Area will be diverted towards stadium construction debt.

This $67 Million loss comes on top of General Fund budget deficits of:

• $5 million last year, and a projected $13.5 million through FY 2010 (ends June 2010).
• These budget deficits have been paid for from reserves, which are now exhausted.
  
• $55.5 million in projected General Fund deficits  from 2010 to 2015.
• $3.1 million taken from our General Fund by the state of CA to help balance its own budget.

Our General Fund pays for:

• police, fire, 9-1-1
• libraries,
  
• Senior Center, Youth Activity Center,
• Parks and Rec, and
  
• city staff salaries and services.

Santa Clara is known for its high quality of city services, which cannot be maintained when multi-million dollar losses to our General Fund occur.

On April 20, 2010, at the city council meeting, our city manager said that she is 'shocked' at how far revenues have fallen and how much our budget deficit is this year (almost twice as much as projected = $13.5 million).

She also said that in 30 years of working in the city manager's office, this is the 'worst situation I've ever seen.'  The stadium will only make the GF deficits larger, as property tax money in our redevelopment area is diverted towards stadium construction debt and away from our GF.

Losses to our General Fund can only be balanced by increases in taxes/fees and decreases in city services.

What city services are you willing to give up to have a stadium?

How much are you willing to pay in increased taxes and fees to have a stadium?