REPORT TO PLANNING COMMISSION
SUBJECT
Title
Review Planning Program Budget and Fees for FY 2026/2027.
Report
REPORT IN BRIEF
Boards and Commissions are asked to provide comments to the City Council on the recommended City budget where it could affect the Commission’s work. Staff recommends that the Commission review the following sections of the FY 2026/2027 Recommended Budget (see link in Attachment 1):
• City Manager’s Memorandum, pages 5-12
• Budget Summary Highlights, pages 13-29
• Community Development Department (CDD) Budget Summary, pages 234-249
ENVIRONMENTAL REVIEW
The recommendation of the Planning Commission on the budget is not subject to environmental review because it is a fiscal or administrative activity that will not result in direct or indirect changes to the physical environment (CEQA Guidelines Section 15378(b)(4), (5)).
DISCUSSION
Sunnyvale’s budget process alternates each year between the operating budget and the capital budget. This year is focused on the operating budget. While the previous operating budget in FY 2025-2026 was reflective of uncertainty around availability of Federal funding sources, the current operating budget reflects a current and long-term stable outlook. The General Fund is projected to be balanced at both ten and twenty years.
City Budget Summary Highlights
The 2026/27 operating budget for all funds totals $717.7 million, including
$425.1 million for City operations, $213.3 million in project and equipment expenditures, and $79.3 million in other expenditures. An additional $69.4 million of the reserves will used (see Figures 1 and 2, page 15, Volume 1). Budgeted expenditures are funded from multiple sources including general taxes and revenues (General Fund), fee supported Enterprise Funds (Water, Wastewater, Solid Waste, Development Enterprise, etc.), restricted Special Revenue Funds (Housing, Park Dedication, Gas Tax, various grants, etc.), and significant loans and debt proceeds related to major capital projects. Top revenues are anticipated to increase by a total of $5.3 million due to increased property values.
CDD Budget Summary
CDD is organized into four programs: Building/Safety; Planning; Housing/Community Development Block Grant (CDBG); and Department Management. The Planning Program mostly affects the Planning Commission’s work.
The Planning Program oversees policy planning and zoning reviews to improve the quality of life in the City through comprehensive and effective policy planning and implementation. Program activities include preparing, updating, and administering the City’s General Plan, specific plans, and other land use policy documents, reviewing and processing development applications for compliance with the zoning code and General Plan; conducting research on Council priority projects; reviewing proposed legislation affecting the City’s zoning authority; monitoring community conditions; and conducting community outreach. Program staff support the Planning Commission and the Heritage Preservation Commission.
The last fiscal year has been a very busy and productive time, with many large and complex projects moving forward. The proposed budget includes a list of accomplishments. The following are highlights:
• Specific Plans:
o Central Arques Specific Plan: The Central Arques Specific Plan would replace the 1999 Arques Specific Plan and accommodate Applied Materials’ master plan for their future campus expansion to nearby industrial parcels. The environmental review is nearly complete and the administrative draft of the plan is underway. City Council consideration is expected in Summer 2027.
o Perry Park Specific Plan: The Perry Park Specific Plan update would evaluate the allowance of an additional 1,027 units located on the south side of the plan area and the addition of 1.2 million square feet of office floor area. A consultant has been selected for the environmental review and update to the Specific Plan. Public outreach is expected during Winter 2026, with City Council consideration in Summer 2027.
o Downtown Specific Plan: Allow an additional 200,000 square feet of office on the north side Sub-Block 6 (near Murphy Ave and Washington) of the Cityline site. The proposed 329 residential units will be consolidated to the south side of the site. The environmental review is nearly complete and the administrative of the plan update is under review. Public hearings are expected in Fall 2026.
• Council Priority Projects (Formerly Study Issues) and Other Long-Range/Policy Items:
o Village Center Master Plan: The plan was adopted in July 2025.
o Low-Density Objective Design Standards: Public Hearings for recommendation by Planning Commission on April 27,2026 and City Council consideration on June 2, 2026.
o Village Center Retail Incentive Program: Incentive program for 2 Village Center sites to meet the minimum retail requirement in lieu of providing Below Market Rate units. Adopted by City Council in March 2025.
• General Plan Housing Element and Land Use and Transportation Element and Zoning Code Updates:
o Accessory Dwelling Toolkit: Online Toolkit to encourage ADU construction. Webpage went live January 2026. (Short URL: <https://shorturl.at/NKJRv>)
o Housing Plan Review Permit: Initial work on this new permit type began in 2023 outreach to start Winter 2026 with public hearings in Summer 2027.
o Amendment to the Heritage Preservation Ordinance to exclude the Murphy Station Heritage Landmark District from the provisions of SB79.
• Other General Plan and Housing Element Programs to be Completed:
o Review Park Dedication Fees: Staff is revaluating the current fee structure. Projected public hearings in Fall 2026.
o Residential Parking Standards: Study options for revised residential parking standards were brought for initial consideration in early 2024. Phase 2 of the Study is anticipated for completion in Winter 2027.
• Significant Approved Planning Entitlements:
o Moffett Park Specific Plan new three-story office building with 294,000 square feet, associated site improvements and Development Agreement approved by the Planning Commission on November 24, 2025, and City Council on December 9, 2025.
o 5 townhouse units and Tentative Map at 1001 S. Wolfe Road approved by Planning Commission on January 26, 2026.
o 28 townhouse units and Tentative Map at 845 Stewart Drive approved by Planning Commission on January 26, 2026.
o 370 units (townhouse and single family detached) with 41 ADUs and Tentative Map approved by the Planning Commission on February 23, 2026.
o Cal Water replacement facilities at 800 Carlise Way, Planning Commission recommended approval on March 9, 2026, City Council review in July 2026.
o 172 affordable units in a seven-story building at 1171 Sonora Court approved by the Planning Commission on March 23, 2026.
• Upcoming Projects for Planning Commission Review:
o 4 townhouse units at 434 Crescent Avenue.
o 264 units in an eight-story building at 1215 Bordeaux Drive (first housing development in MPSP).
o 67 units and 18,535 square feet of commercial at 929 E Duane (Village Center 5).
• A dozen Significant Planning Entitlements are underway throughout the City, including sites in the El Camino Real Specific Plan area and three additional residential sites in the Moffett Park Specific Plan area.
Permit activity continues to increase. Interest in redevelopment along El Camino Real has slowed slightly. Lawarence Station continues to see development of residential units and there is residential interest in Moffett Park. Processing of housing developments continues to be complicated due to changing State Laws. Since this is the second year of a two-year operating cycle, the budget has undergone minimal changes. CDD was able to add a new Permit Technician position and provided closed promotional Senior Planner positions to two of our Associates. CDD recruited for Assistant and Associate Planner positions and promoted one of our Permit Technicians to an Assistant Planner and we hired a new Associate Planner. In addition, an Assistant of Director position was filled in April 2026. Backfilling of existing positions may be needed to accommodate internal promotions that have occurred. Funds were moved to allow all the Planning Commissioners to attend the Planning Commissioners Academy.
Additionally, the FY 2026/27 Recommended Budget includes two Budget Supplements which include the following:
• Budget Supplement 1 - Funding for Council Priority Projects. This Budget Supplement requests funding for seven of the nine Council Priority Projects that Council ranked at its February 26, 2026, Workshop for further analysis and costing by staff. The FY 2026/27 Budget would be approximately $1.5 million and the 20 year cost would be approximately $12.1 million. Staff is recommending approval (see Table 1 for Project Listing).
• Budget Supplement 2 - Potential Additional Services or Reductions to be Considered for the FY 2026/27 Recommended Budget for optional cost savings and off-setting of City Council additions. This includes two Exhibits (A and B). Exhibit A lists 4 potential cost-savings to the current proposed FY 2026/27 Budget. These include reductions in 2 full-time staff, reductions in pavement rehabilitation and reductions in Microtransit Service. This would result in a delta for this FY budget of ($608,590) and 20-year impact of ($49,048,261) as they are included in the proposed budget. Exhibit B includes enhancements to the budget that City Council could consider. These include Street Trees with an Equity Lens and Downtown Power Washing. This would be an additional cost to the budget of $666,741 and 20-year impact of $8,557,675. Staff is not recommending approval.
Staffing for the City includes 991.27 Full Time Equivalent employees. Sixteen new positions are proposed in various departments. This includes Public Safety, City Managers Office, Public Works, Environmental Services, Human Resources, Information Technology, Library and Recreation Services and Finance.
PUBLIC HEARING
The Planning Commission has the option to make comments on the budget or to make a motion on the budget. The Planning Commission discussion (and motion, if there is one) will be provided to the City Council for the public hearing on the recommended budget on June 2, 2027 (the workshop will be on May 19, 2026).
PUBLIC CONTACT
Public contact was made through posting of the Planning Commission agenda on the City’s official notice bulletin board and the agenda and staff report on the City’s website.
RECOMMENDATION
Recommendation
Provide comments to the City Council or make a formal recommendation to the City Council on the Recommended FY 2026/2027 budget for the Planning Program.
Staff
Prepared by: Shaunn Mendrin, Planning Officer
ATTACHMENTS
1. FY 2026/2027 Recommended Budget Volume 1 - Summary and Operating Budget
2. FY 2026/2027 Recommended Budget Volume 2 - Project Budgets