While Silicon Valley grapples with millions of dollars in federal cuts, one city is trying to use its own money to weather the storm.
The Sunnyvale City Council allocated its fiscal year 2025-26 federal grants on May 6. The city has about $383,000 from the HOME program, $1 million in Community Development Block Grant funding and $600,000 unspent from the 2024-25 fiscal year. That money is going toward various programs and organizations that support residents, such as affordable home repairs or child care improvements. But the city is preparing to use its general fund dollars or other resources to uphold local support service programs in case federal funding cuts eliminate the grant funding.
Councilmembers approved funding for multiple in-house support services, such as loan programs for major and minor home repairs. They also met the full funding request from Sunnyvale Community Services totaling more than $1.6 million, which assists low-income residents to prevent homelessness and hunger.
“I believe it is critical that we fully fund Sunnyvale Community Services, they are a lifeline to our community, they are the frontline social safety net here,” Councilmember Richard Mehlinger said at the meeting.
Federal funding cuts threaten to hit Silicon Valley governments and nonprofits hard, impacting educators, low-income developments and the county’s hospital system, among other services. It’s already delayed community projects in San Jose, including improvements to the Alum Rock Business Corridor and Happy Hollow Zoo.
City spokesperson Jennifer Garnett said the city received confirmation May 14 it would be reimbursed for the more than $1.3 million in federal grant funding during the upcoming fiscal year.
“The requests we’ve made so far this fiscal year have gone smoothly. It remains to be seen how things go in the new fiscal year,” Garnett told San José Spotlight.
Marie Bernard, executive director of Sunnyvale Community Services, said Second Harvest of Silicon Valley slashed its food allocation five times in the past 18 months, since the food bank has had various federal and community funding cuts. She said the cuts will necessitate tough financial decisions in the coming months, but she’s glad the city is working with them.
“I’m grateful and I’m hopeful because of our city’s commitment to ensure that the contracts they signed will be honored to the best of their ability, if funds are frozen or delayed,” Bernard told San José Spotlight. “I’m sure we’re going to be making some very tough decisions in the months ahead, but at least we’ll be doing it in partnership with our local government.”
The city awarded Sunnyvale Community Services about $513,000 for its Work First program operated alongside Downtown Streets Team, which provides job training and work opportunities to homeless individuals. Bernard said the city’s also helping fund the nonprofit’s three other core programs, including its rental assistance programs and food bank.
During last year’s budget cycle, Sunnyvale officials celebrated a structural surplus with enough money to set aside $3.5 million for new services, and credited the city charter’s requirement to forecast and balance the budget 20 years out. The city will review its fiscal year 2025-26 budget at a May 22 workshop.
Multiple councilmembers signaled their support for using city dollars to fund some of the programs if needed.
“Once money like this is clawed back, my assumption now has to be that that’s not coming back for the foreseeable future,” Councilmember Alysa Cisneros said at the meeting. “I now have to assume … this is on us, so that takes a holistic look at our budget and where is this going to come from on a sustainable level from the city.”
Contact B. Sakura Cannestra at [email protected] or @SakuCannestra on X.
