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CITY OF CUPERTINO, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2020
Prepared by the City of Cupertino Administrative Services Department
Finance Division
CITY OF CUPERTINO, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the year ended June 30, 2020
CONTENTS
INTRODUCTORY SECTION
TABLEOF CONTENTS ..................................................................................................................... i
LETTER OF TRANSMITTAL.............................................................................................................. iii
ORGANIZATION CHART................................................................................................................... ix
CITY COUNCIL AND DIRECTORY OF CITY OFFICIALS ................................................................ x
COMMISSIONS AND COMMITTEES................................................................................................ xi
CERTIFICATE OF AWARD FOR EXCELLENCE IN FINANCIAL REPORTING............................... xii
FINANCIAL SECTION
INDEPENDENT AUDITOR'S REPORT.................................................................................................... 1
MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED).......................................................... 4
BASIC FINANCIAL STATEMENTS:
GOVERNMENT-WIDE FINANCIAL STATEMENTS:
STATEMENT OF NET POSITION ..................................................................................................... 23
STATEMENT OF ACTIVITIES ........................................................................................................... 24
FUND FINANCIAL STATEMENTS:
GOVERNMENTAL FUNDS:
BALANCE SHEET.............................................................................................................................. 26
RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET TO
STATEMENT OF NET POSITION ................................................................................................... 27
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUNDBALANCES ........................................................................................................................... 28
RECONCILIATION OF NET CHANGES IN FUND BALANCES —
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES.............................................. 29
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES—
BUDGET AND ACTUAL— GENERAL FUND................................................................................... 30
BUDGET AND ACTUAL—TRANSPORTATION SPECIAL REVENUE FUND................................ 31
BUDGET AND ACTUAL— HOUSING DEVELOPMENT SPECIAL REVENUE FUND.................... 32
PROPRIETARY FUNDS:
STATEMENT OF NET POSITION ..................................................................................................... 34
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION........................... 35
STATEMENT OF CASH FLOWS....................................................................................................... 36
FIDUCIARY FUND:
STATEMENT OF FIDUCIARY NET POSITION................................................................................. 38
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION ......................................................... 39
NOTES TO BASIC FINANCIAL STATEMENTS....................................................................................... 40
REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED):
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS .............. 77
SCHEDULE OF CONTRIBUTIONS— PENSION ............................................................................. 78
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS..................... 79
SCHEDULE OF CONTRIBUTIONS—OPEB..................................................................................... 80
SCHEDULE OF INVESTMENT RETURNS—OPEB ........................................................................ 81
i.
CITY OF CUPERTINO, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the year ended June 30, 2020
CONTENTS (Continued)
OTHER SUPPLEMENTARY INFORMATION:
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE—
BUDGET AND ACTUAL - PUBLIC FACILITIES CORPORATION DEBT SERVICE FUND.............. 83
NONMAJOR GOVERNMENTAL FUNDS:
COMBINING BALANCE SHEET........................................................................................................ 85
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES.................................................................................................... 86
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES— BUDGET AND ACTUAL ....................................................... 87
NONMAJOR ENTERPRISE FUND:
COMBINING STATEMENT OF NET POSITION ............................................................................... 91
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION......................................................................................................... 92
COMBINING STATEMENT OF CASH FLOWS................................................................................. 93
INTERNAL SERVICE FUNDS:
COMBINING STATEMENT OF NET POSITION ............................................................................... 95
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION......................................................................................................... 96
COMBINING STATEMENT OF CASH FLOWS................................................................................. 97
STATISTICAL SECTION
FINANCIAL TRENDS:
NET POSITION/ASSETS BY COMPONENT— LAST TEN FISCAL YEARS................................... 100
CHANGES IN NET POSITION/ASSETS —LAST TEN FISCAL YEARS.......................................... 101
FUND BALANCES OF GOVERNMENTAL FUNDS— LAST TEN FISCAL YEARS......................... 103
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS —
LAST TEN FISCAL YEARS.............................................................................................................. 104
REVENUE CAPACITY:
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE
PROPERTY— LAST TEN FISCAL YEARS.................................................................................... 105
DIRECT AND OVERLAPPING PROPERTY TAX RATES—LAST TEN FISCAL YEARS............... 106
PRINCIPAL PROPERTY TAXPAYERS—CURRENT YEAR AND FIVE YEARS AGO................... 107
PROPERTY TAX LEVIES AND COLLECTIONS— LAST TEN FISCAL YEARS............................. 108
DEBT CAPACITY:
RATIOS OF OUTSTANDING DEBT BY TYPE— LAST TEN FISCAL YEARS................................ 109
DIRECT AND OVERLAPPING BONDED DEBT................................................................................ 110
LEGAL DEBT MARGIN INFORMATION— LAST TEN FISCAL YEARS.......................................... 111
RATIO OF GENERAL BONDED DEBT— LAST TEN FISCAL YEARS ........................................... 112
DEMOGRAPHIC AND ECONOMIC INFORMATION:
DEMOGRAPHIC AND ECONOMIC STATISTICS— LAST TEN FISCAL YEARS........................... 113
2020 EMPLOYER RANKING............................................................................................................. 114
OPERATING INFORMATION:
FULL-TIME EQUIVALENT CITY EMPLOYEES BY
FUNCTION/PROGRAM —LAST TEN FISCAL YEARS ................................................................. 115
OPERATING INDICATORS BY FUNCTION/PROGRAM — LAST TEN FISCAL YEARS................ 116
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM — LAST TEN FISCAL YEARS........... 117
COMMUNITY PROFILE
ii.
CITY OF CUPERTINO
1Z
CITY HALL
10300 TORRE AVENUE•CUPERTINO, CA 95014-3202
CUPERTINO (408)777-CITY•WWW.CUPERTINO.ORG
March 8, 2021
To the Citizens of Cupertino,Honorable Mayor,
Members of the City Council,and City Manager
It is our pleasure to submit the Comprehensive Annual Financial Report(CAFR)for the City of Cupertino
(the City) for the fiscal year ended June 30, 2020. The report is prepared in accordance with generally
accepted accounting principles (GAAP) set by the Governmental Accounting Standards Board (GASB).
The report presents City information on an entity-wide basis and on a more detailed fund level basis. The
fund-level reports emphasize the City's major funds. A Management Discussion and Analysis (MD&A)
presents a comparative analysis of current and prior year results,changes in financial position,a comparison
of actual versus budget, financial highlights, trends, and disclosure of any known significant events or
decisions that affect the financial condition of the City. This transmittal letter is designed to complement
the MD&A and should therefore be read in conjunction with it. The MD&A is required supplementary
information and is found in the Financial Section of the CAFR.
The accuracy of the data presented and the completeness and fairness of the presentations, including all
disclosures,are the responsibility of the management of the City. To provide a reasonable basis for making
these representations, management has established a comprehensive internal control framework that is
designed to protect the City's assets and provide sufficient,reliable information for the proper preparation
of these financial statements. We believe the data is accurate in all material respects and is presented in a
manner that fairly sets forth the City's financial position. Furthermore, we believe that all disclosures
necessary to enable the reader to gain an understanding of the City's financial activity have been included.
REPORTING ENTITY
This CAFR includes all component units and funds of the City. It reports all activities for which the City
is considered to be financially accountable. The general governmental funds support a full range of
services, including law enforcement, community development, recreation, public works, public and
environmental affairs,and general administration. Enterprise funds account for recreation and solid waste
operations supported by user fees. This financial report incorporates data for the City of Cupertino and its
component unit,the Cupertino Public Facilities Corporation.
The City operates under a Council-City Manager form of government. There are five council members,
including the Mayor, who serve staggered four-year terms. The City Council appoints the City Manager
who is responsible for the daily administration of City affairs. The City Council also appoints the City
Attorney and the City Treasurer. All other employees are appointed by the City Manager.
iii.
ECONOMIC CONDITIONS
The City of Cupertino is located in Santa Clara County at the southern end of the San Francisco Bay
Peninsula. The City is comprised of 13-square miles and is bordered by the cities of San Jose, Saratoga,
Sunnyvale, Santa Clara, and Los Altos. It has a residential population of 66,762 (based on 2020 Claritas
estimated data).
Situated at the west end of Silicon Valley, Cupertino has earned the reputation of a balanced community
with a healthy climate for business and well-maintained residential neighborhoods, community parks and
public facilities. The excellent reputation of Cupertino's schools is a major attraction for families wishing
to settle in close proximity to high paying jobs in Silicon Valley. The City recognizes the importance of
quality school facilities and programs to all Cupertino residents, and works in partnership with the schools
in many programs affecting education and youth. National surveys rank the City high in education levels,
average household incomes,and registered patent numbers,as well as one of the best cities in which to live
and raise a family.
Because Cupertino is a mature,93%built-out city,the City of Cupertino focuses on business retention and
revitalization. Cupertino is world renowned as the home of high-tech giants, such as Apple, Inc., and as a
community with stellar public schools. De Anza College, one of the largest single-campus community
colleges in the country, is another major employer and a magnet for attracting local and international
students. The City's proactive economic development efforts have resulted in an innovative environment
for start-ups and growing companies to thrive.The City strives to retain and attract local companies through
active outreach and a responsive and customer-oriented entitlement process.
Cupertino is excited to have a number of new mixed-use development projects offering more retail and
dining options, as well as provide additional housing opportunities to meet the needs of the growing
community.
The Main Street and Nineteen800 mixed-use developments have created a vibrant downtown area for
Cupertino, offering a large selection of restaurants and retailers, including Alexander's Steakhouse,
Eureka!,Rootstock Wine Bar,Oren's Hummus,Lazy Dog,Ippudo,HaiDiLao Hot Pot Restaurant,Pressed
Juicery, Orangetheory, 85 Degree Bakery, Somi Somi, Sul& Beans, Target Express, Kura Sushi, Vitality
Bowls,Doppio Zero,Boiling Point and Jin Tea,Koja Kitchen,Bishops Cuts&Colors, Capezio,Howard's
Shoes, Tan Cha, and Meet Fresh. Housing, office, and a new Residence Inn by Marriott are available to
support the thriving area.Benihana,Bowlmor, and Ice Center Cupertino also serve as long-time anchors.
The construction of new retail and commercial development strengthens existing popular venues in
Cupertino,including The Marketplace.The Marketplace has a variety of stores and restaurants popular with
students, families, and working professionals. They include Galpao Gaucho, Daiso, Marukai Groceries,
Harumi Sushi, La Patisserie Bakery, Beard Papa's, Legend's Pizza, Merlion Restaurant, Icicles, Kong's
Tofu&BBQ,Rori Rice, One Pot Shabu Shabu,Olarn Thai, and Erik's DeliCaf6 to name a few.
Cupertino Village is undergoing renovations to upgrade existing buildings, construct new buildings,
parking, and open-courtyard space. The shopping center is home to 99 Ranch Market,Duke of Edinburgh
Pub&Restaurant,JSJ Street Kitchen,Kira Kira Beauty,MOD Pizza,Ten Ren Tea,Fantasia Coffee&Tea,
Yoga Wave,Happy Lemon,Joy Luck Palace,Kee Wah Bakery,and many other Asian restaurants,bakeries,
and shops.
Cupertino features many other retail opportunities, including TJ Maxx and Home Goods, Whole Foods,
Target,Party City,and over 180 restaurants to serve residents and the local workforce.There are now seven
hotels providing over 1,000 rooms,to serve the area: The Aloft Cupertino, Cupertino Hotel,Hilton Garden
iv.
Inn, Juniper Hotel operated by Curio, Marriott Courtyard, the Residence Inn by Marriott, and the newest
addition is the Hyatt House.
The redevelopment of the Homestead Square Shopping Center, located at Homestead Road and De Anza
Boulevard, includes a 24-hour Safeway, Ulta Beauty, Ross Stores, Stein Mart, Pet Club, Michael's, Rite
Aid, FedEx, and numerous restaurants, such as Fish's Wild, Pho Hoa Noodle Soup, Yayoi Teishoku
Japanese Restaurant, Starbucks, and Chipotle.
Apple completed construction of its new corporate campus,Apple Park,which includes approximately 2.8
million square feet of office and R&D space north of Highway 280 between Wolfe Road and Tantau
Avenue.A state-of-the-art Visitors Center, Observation Deck, flagship retail store and caf6 are open to the
public seven days a week.
According to the 2019-2020 Assessor's Annual Report for Santa Clara County,Cupertino's net assessment
roll growth increased nearly$831 million, or 3.3%, from the prior year. Approximately$470 million and
$46 million of the increase was attributable to changes in ownership for single family housing and
multifamily housing, respectively. Approximately $58 million and $19 million of the increase was
attributable to changes in new construction for single family housing and multifamily housing,respectively.
Additionally, commercial and industrial increased by $20.9 million, or 0.3%, and $56.9 million, or 7.6%,
respectively.
The City's sales tax revenues are generated from five principal economic categories: business-to-business
73.0%(includes electronic equipment and software manufacturers and distributors), state and county pools
21%,restaurants and hotels 2%,general retail 2%, and fuel and service stations 2%.
Our two largest sales taxpayers in the business-to-business category represent a large part of that sector and
therefore can significantly affect sales tax trends. The top taxpayers' corporate and business technology
spending has driven growth in this sector. Sales tax activity has increased across most sectors with a
decrease primarily in construction.This decrease is attributed to the winding down of construction projects
in the City,particularly, the Apple Park campus development. Given these trends,the City's FY 2019-20
sales tax revenue is projected to show a more modest increase going forward.
Fiscal Year Sales Tax Trend (in millions)
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
V.
Continued economic growth driven primarily by the business to business sector continued through FY
2014-15 until a slight $400,000 decline in FY 2015-16 due to a one-time clean up payment from the
previous year received in FY 2016-17. FY 2016-17 increased significantly with a$3.5 million"triple-flip"
close-out payment. There was a modest decrease in FY 2017-18 which was again attributable to the one-
time "triple-flip" close-out payment from FY 2016-17 that was not received in FY 2017-18. Despite the
fluctuation,the sales tax base experienced strong growth.FY 2018-19 experienced a slight decrease due to
the tapering of localized sales tax dollars from construction and completion of Apple Campus 2 which
further indicates a return to normalcy in respect to previous years. Additionally, the City received a one-
time quarterly clean-up payment in FY 2017-18 of$1.6 million that contributed to the comparative decrease
in FY 2018-19. In FY 2019-20,the City's sales taxes experienced growth due to a one-time double payment
from Apple. Additionally, a change in estimate in which the City adjusted its accrual practice to
include the full remittance amounts from July and August 2020 contributed to approximately$9.0
of the increase over the previous fiscal year. This change in estimate will be applied prospectively
and consistently moving forward. Though much uncertainty remains during the course of the pandemic,
the City has seen positive sales tax trends into FY 2020-21 due to the telework transition and the state-wide
need for additional electronic equipment and infrastructure.
With the economic recovery and easing of credit,commercial development activity picked up considerably
in 2012-13 and 2013-14 led by plan reviews of the new Apple Campus 2. Plans for the redevelopment of
the Marina shopping center into a mixed-use project, Marina Plaza, was approved in 2016. This project
will include 23,000 SF of retail and restaurant use, a 122-room boutique hotel, and 188 residential units
including 16 below market rate units. Construction of a five story, 148-room Hyatt House hotel was
completed in April 2019 and includes a full-service restaurant and meeting rooms. Through the City's new
General Plan Amendment (GPA) Authorization Process applications for two development projects were
authorized by City Council during FY 2019-20 with the De Anza Hotel and the Cupertino Village Hotel.
The City's pension and retiree medical unfunded actuarial accrued liabilities are discussed in the Notes to
the Basic Financial Statements. The City must pay Ca1PERS, the state's government pension system,
annually to reduce its long-term liability for pensions. Cupertino's CalPERS actuarial valuation report as
of June 30, 2019 reported a pension unfunded accrued liability of$49.2 million with annual payments to
Ca1PERS of 31.3% and 29.8% of projected payroll for 2021-22 and 2020-19, respectively, with ongoing
increases after that because of actuarial assumption changes. To address long-term rising costs, Cupertino
and state law has reduced pension benefits for new hires and increased employee contributions. As of the
June 30, 2020 GASB 74/75 report, the City has a retiree medical unfunded liability of$2 million with
annual payments to a retiree health plan trust at 9.1%of payroll.
In fiscal year 2017-18, the City Council approved the establishment of a Section 115 trust as part of a
pension rate stabilization program. An initial investment of$8,000,000 was made in FY 2018-19 and an
additional contribution of$4 million was made in FY 2019-20.
Because the City contracts out police services to the County Sheriff and because fire protection is handled
by a special district,the City avoids the high pension,capital,and operating costs of a City-operated public
safety function. The City caps its contributions to employee health insurance premiums that benefit both
the City and employees. A build-up of operating reserves from strong revenue years, such as 2013-14,
along with a traditional under-spending of budgets, enables the City to withstand weak revenue years that
occur periodically, such as in 2009-10.
vi.
ECONOMIC INITIATIVES
With the expanded Apple presence, the City's revenue base will remain concentrated among its top
companies and top economic sector,the volatile business-to-business area. Past recessions and the historic
departure of a major tax provider,Hewlett-Packard, demonstrates the need for diversification of the City's
revenue base and a long-term balance of revenues and expenditures. The City desires other revenues to
mitigate the fluctuating nature of sales taxes, hotel taxes, user fees, and state grabs of local taxes in times
of budget distress.
COVID-19 has had significant adverse impacts on the City's transient occupancy taxes, charges for
services, and is sure to have long-lasting impacts on its sales tax. While the City's revenues remained
strong in FY 2019-20 and are currently on pace with projections in FY 2020-21,the City's strong,untapped
reserves afford the City to continue actively mitigating the impacts of the pandemic on the community.
Efforts to reduce operating costs, additional allocations for tenants at risk of eviction and homeless
assistance, public facility and area sanitation enhancements, and small business grant assistance are all
examples in FY 2019-20 and FY 2020-21 of the City's on-going ability and commitment to overcome these
challenges.
ACCOUNTING AND BUDGETARY CONTROL
In developing and evaluating the City's accounting system, consideration is given to the adequacy of
internal accounting controls. The City's controls are designed to provide reasonable, but not absolute,
assurance regarding the safeguarding of assets against losses from unauthorized use or disposition and the
reliability of financial records for preparing financial statements and maintaining accountability of assets.
The concept of reasonable assurance recognizes that the costs of a control should not exceed the benefits
likely to be derived and that the evaluation of costs and benefits requires estimates and judgments by
management.
The City's budget is a detailed operating plan that identifies estimated costs and results in relation to
estimated revenues. The budget includes 1) the programs,projects, services and activities to be provided
during the fiscal year; 2) estimated revenue and fund balance available to finance the operating plan; and
3) the estimated spending requirements of the operating plan. The budget represents a process through
which policy decisions are made,implemented and controlled.
INDEPENDENT AUDIT
City ordinance requires an annual audit of the financial records by an independent certified public
accounting firm selected by the City Council and its audit committee. Crowe LLP audited the City's Basic
Financial Statements, and their opinion thereon is included in the Financial Section of this report.
FRAUD INVESTIGATION
On September 5,2018 the Santa Clara County Sheriff's Office arrested former City of Cupertino employee
Jennifer"Yuen-Cheng"Chang, Senior Accountant, for her role in the embezzlement of public funds. It is
believed that Ms. Chang issued and cashed numerous fraudulent checks between 2000 and 2014 for a total
of$791,494.
The scheme ended in September 2014 right before the implementation of an upgraded financial system in
December 2014 that tightened internal controls. Ms. Chang, who was hired by the City in 1997, retired in
July 2015.
The checks were uncovered earlier by staff during a multi-year, detailed review of several accounts—
including payroll, bank reconciliations, and deposits—which began after the implementation of the new
financial system in fiscal year 2014-2015. The checks were found debited against a liability account and
deemed suspicious due to their nature, size, and lack of supporting documentation.
vii.
The Santa Clara County Sheriff's Office submitted its case to the Santa Clara County District Attorney's
Office for the issuance of a warrant for Ms. Chang. The California Attorney General has brought forward
68 criminal charges against Ms. Chang. The City of Cupertino is seeking full restitution from Ms. Chang
through upcoming criminal and civil proceedings.
At the Preliminary Hearing on December 10, 2019, Judge Pennypacker ruled that Ms. Chang will have to
stand trial on 53 felony counts. The counts include Grand Theft and Computer Intrusion for the period
September 28,2000 to September 5,2014,and Embezzlement for the period July 22,2011 to September 5,
2014. Because Ms. Chang's bank does not save documents from prior to 2011,the State cannot prove an
element of the crime of embezzlement. Currently, the Judge set the case for an arraignment for further
decision. It is the City's position to support prosecution to the fullest extent of the law, including full
restitution and jail time if criminal liability is found.
Among other internal controls maintained by the City over its financial records,in addition to the upgraded
financial system in December 2014 that tightened internal controls,the City also hired additional accounting
staff to enhance segregation of duties as well as internal audit function that has been approved for
implementation in fiscal year 2019-20. Lastly, the City has engaged Moss Adams, LLP to serve as its
internal auditor.
CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Cupertino for its CAFR for
the year ended June 30,2018. In order to be awarded a Certificate of Achievement,a government unit must
publish an easily readable and efficiently organized CAFR. This report must satisfy both GAAP and
applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that the current report
continues to meet the Certificate of Achievement Program's requirements.
Respectfully submitted,
Zach Korach
Finance Manager
ACKNOWLEDGMENTS
I would like to express my appreciation to City employees, department heads,the City Manager,members
of the Audit Committee, and members of City Council for their interest in conducting the financial
operations of the City in a responsible manner. Special thanks go to, Thomas Leung, Zeng Wang, Min
Zhao, Jumaini Judoprasetijo, Vi Tran, and Amber Chang of the Finance staff for their continued support
and dedication. Special recognition to Beth Viajar, Richard Wong, Giang Dinh, and Mariela Vargas for
their efforts in the preparation and production of this report.
Reviewed by,
KA�k,
_
Kristina Alfaro
Director of Administrative Services
viii.
Citizens of
Cupertino
CUPERTINO
City Council
Committees and
Commissions
City Attorney City Manager City Treasurer
City Clerk Public Affairs Sustainability
Programs
r---------------
Law Enforcement Administrative Community Recreation and Innovation&
(Santa Clara County Services Development Community Services Public Works Technology
Sherriff—Contract)
Finance Building Recreation& Capital Improvement Transportation GIS Infrastructure
Code Enforcement Education Program
Human Resources Planning Sports,Safety& Development Environmental Video Applications
Outdoor Recreation Services Programs
Economic Business& Service Center
Development Community Services
Code Enforcement
(Zoning&Building) Grounds Streets Trees&ROW Facilities&Fleet
Housing
IX.
CITY OF CUPERTINO, CALIFORNIA
Fiscal Year 2019-20
CITY COUNCIL
Steven Scharf Darcy Paul
Mayor Vice Mayor
Liang Chao Rod Sinks Jon Willey
Council member Council member Council member
DIRECTORY OF CITY OFFICIALS
Deborah L. Feng—City Manager
Dianne Thompson—Assistant City Manager
Heather Minner—City Attorney (Contract)
Bill Mitchell—Chief Technology Officer
Kristina Alfaro—Director of Administrative Services
Ben Fu—Director of Community Development
Roger Lee—Director of Public Works
Joanne Magrini—Director of Parks and Recreation
X.
CITY OF CUPERTINO, CALIFORNIA
Fiscal Year 2019-20
COMMISSIONS AND COMMITTEES
BICYCLE PEDESTRIAN PLANNING COMMISSION AUDIT COMMITTEE
COMMISSION Alan Takahashi Angela Chen
Erik Lindskog David Fung Darcy Paul
Gerhard Eschelbeck Kitty Moore Eno Schmidt
Ilango Ganga R'Ray"Wang Mingming(Daisy)Liang
Jennifer Shearin Vikram Saxena Rod Sinks
Muni Madhdhipatla
PUBLIC SAFETY COMMISSION DESIGN REVIEW COMMITTEE
FINE ARTS COMMISSION Eric Shan David Fung
Diana Matley Hymanand Nellore R"Ray"Wang
Janki Chokshi Lakshminarasimha Ankireddipally
Rajeswari Mahalingam Tiffany Wang ENVIRONMENTAL REVIEW
Sonia Dhami Yvonne Chao COMMITTEE
Sudha Kasamsetty Liang Chao
SUSTAINABILITY Kitty Moore
HOUSING COMMISSION COMMISSION Dianne Thompson
Connie Cunningham Anna Weber Ben Fu
Sanjiv Kapil Gary Latshaw Chad Mosley
Siva Gandikota Meera Ramanathan
Sue Bose Ram Mohan LEGISLATIVE REVIEW
Tessa Parish Vignesh Swaminathan COMMITTEE
Liang Chao
LIBRARY COMMISSION TEEN COMMISSION Steven Scharf
Amando Wo Alden Gu
Christie Wang Anagaa Nathan
Liana Crabtree Jay Yeung
Qin Pan Kelly Tung
Rahul Vasanth Krithika Venkatasubramanian
Nitya Devisetti
PARKS AND RECREATION Rushil Jayant
COMMISSION Samikshaa Natarajan
Carol Stanek Tanvi Khot
Gopal Kumarappan
Neesha Tambe TECHNOLOGY,INFORMATION
Sashikala Begur &COMMUNICATIONS
Xiangchen Xu COMMISSION
Eliza Du
Mukesh Garg
Naidu Bollineni
Prabir Mohanty
Rajaram Soundararajam
xi.
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Cupertino
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2019
ox �,. P 7� ovu�GC
Executive Director/CEO
xii.
Crowe
Crowe LLP
1-delxr4--i it rdeniMr GuAm+ GlubLY
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and City Council
City of Cupertino, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities,each major fund, and the aggregate remaining fund information of the City of Cupertino, California
(City) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement,whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
(Continued)
1.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City, as of June 30, 2020, and the respective changes
in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for
the General Fund, the Transportation Special Revenue Fund, and the Housing Development Special
Revenue Fund for the year then ended in accordance with accounting principles generally accepted in the
United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, and the required supplementary information section on pages 4-21 and 77-81 be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by Governmental Accounting Standards Board who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America,
which consisted of inquiries of management about the methods of preparing the information and comparing
the information for consistency with management's responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The introductory section, other supplementary information
section, statistical section and community profile are presented for purposes of additional analysis and are
not a required part of the basic financial statements.
The other supplementary information section is the responsibility of management and was derived from
and relates directly to the underlying accounting and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the other
supplementary information section is fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
The introductory section, statistical section and community profile has not been subjected to the auditing
procedures applied in the audit of the basic financial statements, and accordingly, we do not express an
opinion or provide any assurance on them.
(Continued)
2.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 8, 2021
on our consideration of the City's internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City's internal control over
financial reporting and compliance.
Crowe LLP
Costa Mesa, California
March 8, 2021
3.
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
This section describes the City of Cupertino's financial performance for the year. Readers are
encouraged to consider the following information in conjunction with the accompanying Transmittal
Letter and Basic Financial Statements.
2019-20 FINANCIAL HIGHLIGHTS
• The COVID-19 pandemic, and the ensuing lockdowns, has negatively affected economies not only
in the region,but around the world. Sales tax,transient occupancy tax, and charges for services were
both positively and negatively impacted as explained further below. However, while much
uncertainty remains regarding the length and magnitude of these impacts, the City stands well
positioned with robust fund balance reserves and has implemented budget reduction strategies for
the upcoming fiscal year.
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows
of resources at the close of the fiscal year 2020 by $300.9 million (net position). Of this amount,
$74.6 million represents unrestricted net position, which may be used to meet the City's ongoing
obligations to citizens and creditors.
• City revenues have increased in 2019-20 with base governmental revenues showing a $16.4 million
increase,or 17.1%,over 2018-19. The primary fluctuations include an increase in property and sales
tax and program revenues that are offset by decreases in transient occupancy tax and other taxes.
According to the 2019-2020 Assessor's Annual Report for Santa Clara County, Cupertino's net
assessment roll growth increased nearly $831 million, or 3.3%, from the prior year. Approximately
$470 million and $46 million of the increase was attributable to changes in ownership for single
family housing and multifamily housing, respectively. Approximately $58 million and $19 million
of the increase was attributable to changes in new construction for single family housing and
multifamily housing, respectively. Although sales tax declined slightly year over year in FY 2018-
19, the City experienced an increase of approximately $10.8 million, or 43.2% over the previous
year. This is primarily due to a change in estimate in which the City adjusted its accrual practice to
include the full remittance amounts from July and August 2020. This change in estimate will be
applied prospectively and consistently moving forward. This increase is also due to a one-time
double payment received by Apple. Additionally, the City experienced declines in many of the
sectors including autos and transportation, building and construction, fuel and service stations,
general consumer goods, and restaurants and hotels; however, these experiences were mitigated by
a strong performance in the business and industry and county pool allocation. The COVID-19
pandemic has brought great uncertainty to the economy and although the business and industry sector
experiences significant increases due to the telework conversion, the City continues to monitor and
forecast these sectors conservatively. COVID-19 and shelter-in-place orders brought the City's
transient occupancy taxes to a near halt beginning in March of 2020. As a result, the City's
experienced a $1.6 million, or 18.1%, decrease in transient occupancy tax over the previous fiscal
year.
• The City continued to make substantial investment into capital projects dedicated to street and
transportation improvements, storm drain improvements, and maintenance of and improvements to
City facilities, resulting in an increase in net capital assets of$3.6 million, after depreciation.
• The City's change in net position was $15.1 million for governmental activities and$16.3 million in
total, reflecting the continued growth of revenues and modest departmental spending.
• The City's Net Pension Liability for June 30,2020,was$46.1 million,up $5.2 million from June 30,
2019, or 12.7%. The Plan Fiduciary Net Position as a Percentage of the Total Pension Liability for
the City's pension plan with Ca1PERS decreased from 69.6%to 68.3%. During fiscal year 2019-20,
the City Council approved an additional $4 million contribution to the City's recently established
4
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
pension rate stabilization program (Section 115 Trust). Annual contributions to this trust will
continue on an annual basis and as part of the City's budget process. In accordance with guidance
under GASB 67/68,the assets in the Section 115 Trust are reported as restricted cash and investments
in the City's General Fund. While the Section 115 Trust qualifies as a "trust," the assets in the
Section 115 Trust are not used to directly pay benefits to beneficiaries; rather, they are used to pay
Ca1PERS via the CERBT Trust and as a result, the activities are not required to be reported in a
fiduciary fund. The Trust's ending balance as of June 30, 2020 was $12.7 million.
• Business-type activities contributed$6.6 million to citywide revenues totaling $109.9 million,while
the same activities contributed over$8.9 million to citywide expenses of$93.7 million.
• The City implemented the provisions of GASB Statement No. 75, Accounting and Financial
Reporting for Postemployment Benefits Other Than Pensions, during the fiscal year 2017-18. This
statement requires governments to report a liability on the face of the financial statements for the
OPEB provided by the City. During FY 2019-20, the City's reduced the discount rate from 7.0%to
6.5%which consequently increased the Total OPEB Liability.As of June 30,2020,the City reported
a Net OPEB Liability of$2.0 million,Deferred Outflows of Resources of$2.7 million, and Deferred
Inflows of Resources of$1.1 million. As of June 30,2020,the City's OPEB plan had a funding ratio
or funded ratio or status of 93.7%.
• On September 29, 2020, the City of Cupertino's 2020A Certificates of Participation (2020 COPS)
were successfully sold in order to refund the City's 2012 Certificates of Participation for debt service
savings. The 2020 COPS were very well received by investors due in large part to the well-regarded
Cupertino name, the top-notch AA+rating,the sizable annual principal amounts and short maturity,
and favorable supply and demand dynamics in the California municipal market. The refunding
generated net present value savings of approximately $3.14 million, 11.61% of refunded par and a
True Interest Cost of 0.72%. Savings to the City's General Fund amounts to approximately$494,000
per year for the next 10 years, or almost $5 million in total savings.
OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis is intended to serve as an introduction to the City's Basic Financial
Statements. The Basic Financial Statements are comprised of the City-wide Financial Statements, the
Fund Financial Statements, and the notes to the Basic Financial Statements. These two sets of financial
statements provide two different views of the City's financial activities and positions.
The City-Wide Financial Statements provide a long-term view of the City's activities as a whole, and
comprise the Statement of Net Position and the Statement of Activities. These statements are prepared
on the accrual basis, which means they measure the flow of all economic resources of the City as a
whole. The accrual basis of accounting is similar to the accounting used by most private sector
companies. The Statement of Net Position provides information about the financial position of the City
as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides
information about all the City's revenues and expenses, with the emphasis on measuring net revenues
and expenses for each of the City's programs. The Statement of Activities explains in detail the change
in net position for the year. Over time, increases or decreases in net position can be indicators of whether
the financial condition of the City is improving or deteriorating.
All of the City's activities are grouped into Governmental activities and Business-type activities, as
explained below. The Statement of Net Position and the Statement of Activities provide a summary of
these two types of activities for the City as a whole.
• Governmental activities—Most of the City's basic services are considered to be governmental
activities, including public works, law enforcement, community development, recreation, public &
environmental affairs, and general administration. These services are supported by general City
revenues such as property, sales and other taxes, and by specific program revenues such as developer
fees and grants.
5
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
The City's governmental activities include the activities of a separate legal entity, the Cupertino
Public Facilities Corporation (the "Corporation"), because the City is considered to be financially
accountable for the Corporation. The City leases its major facilities from the Corporation, which
then uses the lease payments to pay principal and interest on the Corporation's long-term debt.
• Business-type activities—All of the City's enterprises are reported here, including solid waste
management and most of the City's recreational operations. Unlike governmental services, these
services are supported by charges paid by users based on the amount of services used.
The Fund Financial Statements report the City's operations in more detail than the City-wide Financial
Statements and focus primarily on the short-term activities of the City's General Fund and other major
funds. The Fund Financial Statements measure only current revenues, expenditures, assets, liabilities,
and deferred inflows and outflows of resources; they exclude long-term assets and liabilities. Because
these statements focus on the near-term inflows and outflows of spendable resources, such information
may be useful in evaluating near-term financing requirements.
The Fund Financial Statements provide detailed information about each of the City's most significant
funds, called major funds. Cupertino's Fund Financial Statements include governmental, enterprise and
internal service funds as discussed below. Each major fund is presented individually,with all non-major
funds summarized and presented only in a single column. Subordinate schedules, which follow the
Notes to Basic Financial Statements, present the detail of these non-major funds. Major funds present
the significant activities of the City for the year, and may change from year to year as a result of changes
in the pattern of City's activities and public interest. For example, the Capital Improvement Projects
Fund may or may not appear as a major fund depending on the volume of construction activity in a
certain year.
Governmental Fund financial statements are prepared on the modified accrual basis,which means they
measure only current financial resources and uses. They present essentially the same functions reported
as governmental activities in the city-wide financial statements. However, capital assets and other long-
lived assets, along with long-term liabilities, are not presented in the Governmental Fund financial
statements. Reconciliations are provided to facilitate a comparison between governmental funds and
governmental activity statements to allow a better understanding of the long-term impact of the
government's near-term financial decisions.
Comparisons of budget and actual financial information are included in the Basic Financial Statements
for the General Fund and other major Special Revenue Funds. For other nonmajor funds, budgetary
comparison schedules for these funds are included in this document as supplemental information only.
Enterprise and Internal Service Fund financial statements are prepared on the full accrual basis and
include current and long-term assets and liabilities and deferred outflows and inflows of resources.
Enterprise funds are used to report the same functions presented as business-type activities in the City-
wide Financial Statements, and in more detail in the Fund Financial Statements.
Since the City's Internal Service funds provide goods and services only to the City's governmental and
business-type activities,their activities are reported only in total at the fund level. Internal Service funds
may not be major funds because their revenues are derived from other City funds. These revenues are
eliminated in the City-wide financial statements and any related profits or losses are returned to the
activities which created them, along with any residual net position of the Internal Service funds. For this
City, internal service activities predominantly benefit governmental rather than business-type functions,
and are therefore included within governmental activities in the City-wide Financial Statements.
Fiduciary Fund financial statements are prepared on the full accrual basis and include current and long-
term assets and liabilities and deferred outflows and inflows of resources. Fiduciary funds are used to
6
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
account for resources held for the benefit of parties outside the government. Fiduciary funds activities
are excluded from the City's government-wide financial statements because the City cannot use these
assets to finance its own operations.
The City maintains an OPEB Pension Trust Fund that is used to account for the assets and liabilities held
in trust for the retirees' post-employment health benefits.
The Notes to Basic Financial Statements provide important additional detail that is essential to a full
understanding of the data reported in the City-wide and Fund Financial Statements.
CITY-WIDE FINANCIAL ACTIVITIES
This analysis focuses on the net position and changes in net position of the City's Governmental
Activities (Tables 1 and 2) and Business-Type Activities (Tables 3 and 4) as presented in the City-wide
Statement of Net Position and the Statement of Activities.
Governmental Activities
Table 1
Condensed Statement of Net Position at June 30
(in thousands)
Governmental Activities
2020 2019
Assets:
Cash and investments $ 147,608 $ 132,532
Restricted cash and
investments 17,088 12,412
Other assets 17,150 9,851
Capital assets 199,776 195,971
Total assets 381,622 350,766
Deferred Outflows of Resources:
Related to Pension(Note 10) 9,050 8,088
Related to OPEB (Note 11) 2,590 -
Total deferred outflows of
resources 11,640 8,088
Liabilities:
Long term debt 27,010 29,300
Other liabilities 72,819 59,662
Total liabilities 99,829 88,962
Deferred Inflows of Resources:
Related to Pension(Note 10) 774 638
Related to OPEB (Note 11) 1,032 1,685
Total deferred inflows of
resources 1,806 2,323
Net Position:
Net Investment in capital assets 177,128 170,974
Restricted 48,006 45,405
Unrestricted 66,493 51,190
Total net position 291,627 267,569
7
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
The City's change in net position from governmental activities was $24.1 million. The following
significant changes within assets, liability, and net position categories occurred:
• The City made an additional $4 million contribution to its Section 115 Trust as part of the
City's pension rate stabilization program. Cash held by fiscal agents for debt service is also
included in the$17.1 million of restricted cash and investments. In accordance with guidance
under GASB 67/68, the assets in the Section 115 Trust are reported as restricted cash and
investments in the City's General Fund. While the Section 115 Trust qualifies as a "trust,"
the assets in the Section 115 Trust are not used to directly pay benefits to beneficiaries;rather,
they are used to pay CalPERS via the CERBT Trust and as a result, the activities are not
required to be reported in a fiduciary fund.
• Other assets increased by approximately $7.3 million, primarily due to the actuarily-derived
Net OPEB Liability of$2.0 million. In FY 2018-19, the City reported a Net OPEB Asset of
$1.1 million; however, during FY 2019-20, the City reduced the discount rate from 7.0% to
6.5%which resulted in an increase to the Net OPEB Liability. Additionally,the City made a
change in estimate for its sales tax accrual. Accruing the full remittance in July and August
2020 contributed to $9.0 million of the increase.
• Capital assets increased approximately $3.8 million. This consisted of continued significant
capital investment into capital projects dedicated to street and transportation improvements,
storm drain improvements, and maintenance of and improvements to City facilities that was
offset with current year depreciation expense.
• Other liabilities increased by approximately $13.2 million, primarily due to a $5 million
increase in deposit liability balance resulting from an agreement with San Jose Water
Company to complete infrastructure upgrades. Additionally,the City's Net Pension Liability
and Net OPEB Liability increased approximately $7.9 million over the previous fiscal year.
• Deferred Outflows Related to Pension and OPEB increased $3.6 million primarily due to
actuarial changes of assumptions. Deferred Inflows of Resources Related to Pension and
OPEB decreased approximately$517,000 primarily due to actuarial changes of assumptions.
Sources of Revenue, Governmental Activities
2019-20
Transfeas-3.2%
Gain on capital assets
0.0% Miscellaneous 1.8%
Investment Earnings 5.2%
Other Taxes 1.6%
Franchise Tax 3.1% Charges for services
18.3%
Utility User Tax 2:9A '
Transient Occupancy
Tax 6.7%
I
ii; Capital Grants&
Contributions 1.0%
Sales Tax 32.856
8
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
In 2019-20, the City experienced continued trends toward a return to normalcy, until COVID-19 began
in March of 2020. While program revenues experienced immediate declines in the final quarter, the
City's general tax revenues remained strong. Revenues decreased $0.1 million from the prior year,
primarily due to decreases in functional program revenues offset with increases in general revenues.
Functional Expenses, Governmental Activities
2019-20
CommunftT development
1339d Administration 4.9%
Parks and Renre3dws
1114%
Law Enfar€emeM 17.59fi
Administratiwa Services
fi_2%
,y
Innovation and
Te&mAagy 4.3%
Puh6€Works 39.7%
■Administration ■I Law Enfor€emem ■Pubic waits innovation and Technology
■Admiiatrative Services ■Fula and Reerealkns ■CammuniiyOetPlvpment
The Statement of Activities presents program revenues, expenses, general revenues, and the resulting
change in net position as summarized in the next table.
9
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
Table 2
Condensed Statement of Activities for the Year Ended June 30
(in thousands)
Governmental Activities
Expenses 2020 2019
Administration $7,975 $ 6,849
Law enforcement 14,698 13,381
Innovation&technology 3,637 3,210
Administrative services 5,176 4,290
Recreation and community services 8,763 7,390
Community development 10,286 10,471
Public works 33,339 31,872
Interest on long-term debt 883 949
Total expenses 84,757 78,412
Revenues
Program revenues:
Charges for services 19,911 18,861
Operating grants and contributions 5,794 2,557
Capital grants and contributions 1,047 1,082
Total program revenues 26,752 22,500
General revenues:
Taxes:
Property tax 18,117 17,082
Property tax in-lieu of motor vehicle fee 8,490 8,219
Sales tax 35,657 24,902
Transient occupancy tax 7,286 8,901
Utility user tax 3,182 3,090
Franchise tax 3,419 3,445
Other taxes 1,774 3,300
Intergovernmental,unrestricted:
Motor vehicle license fee 47 29
Investment earnings 5,691 3,259
Gain on sale of capital assets - 4
Miscellaneous 1,922 1,187
Total general revenues 85,586 73,418
Total revenues 112,338 95,918
Excess of revenues over expenses,
before transfers 27,581 17,506
Transfers (Note 4) (3,523) (75)
Change in net position 24,058 17,431
Beginning net position 267,569 250,138
Ending net position $ 291,627 $ 267,569
10
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
City-wide Governmental Activities Revenues
Table 2 shows that revenues from governmental activities increased $16.4 million or 17.1% from last
year, finishing at$112.3 million. The increases in functional program revenues are most attributable to
$2.8 million receives from Apple Inc. for Bicycle Transportation Plan projects. General revenues also
experienced a net increase namely, property tax, sales tax, transient occupancy tax, and investment
earnings as further discussed below.
Increases in the City's general revenues are attributable to a $1.3 million increase in property tax over
the prior year. According to the 2019-2020 Assessor's Annual Report for Santa Clara County,
Cupertino's net assessment roll growth increased nearly $831 million, or 3.3%, from the prior year.
Approximately $470 million and $46 million of the increase was attributable to changes in ownership
for single family housing and multifamily housing, respectively. Approximately $58 million and $19
million of the increase was attributable to changes in new construction for single family housing and
multifamily housing, respectively.
Although sales tax declined slightly year over year in FY 2018-19, the City experienced an increase of
approximately $10.8 million, or 43.2% over the previous year. This is attributable to a $9.0 million
change in estimate for sales tax accruals. And also due to a one-time double payment received by Apple.
Additionally, the City experienced declines in many of the sectors including autos and transportation,
building and construction, fuel and service stations, general consumer goods, and restaurants and hotels;
however, these experiences were mitigated by a strong performance in the business and industry and
county pool allocation. The COVID-19 pandemic has brought great uncertainty to the economy and
although the business and industry sector experiences significant increases due to the telework
conversion, the City continues to monitor and forecast these sectors conservatively.
Transient occupancy tax has decreased$1.6 million, or 18.1%, over the prior year due to the COVID-19
and related shelter in place orders. Although the declines in this category are significant, the City has
experienced significant growth in the sales tax category from the pandemic as the State has transitioned
to a work-from-home telecommuting environment. These declines have been incorporated into the
City's FY 2020-21 Budget and forecast and staff will continue to monitor the activities throughout the
course of the pandemic.
Investment earnings saw an increase of$2.4 million, or 74.6%, over the prior year. This was due to the
City's portfolio's total rate of return of 5.52% (net of fee) for the fiscal year.
Program revenues showed an increase of $4.3 million, or 19%, and is primarily attributable to $2.8
million received in project funding donations from Apple Inc. for the Bicycle Transportation Plan
projects.
11
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
City-wide Governmental Activities Expenses
City-wide governmental activities expenses increased by$6.3 million,or 8%. The City's cost allocation
plan created fluctuations from one department to the next and special project and capital outlay spending
fluctuated as well; however, base expenses remained relatively consistent over the prior year with
increases predominantly related to negotiated salary and benefits.
Change in Net Position
The City-wide governmental net position increase of$15.1 million was slightly down compared to the
increase of$17.4 million in 2018-19 and can be best explained by continued relative stabilization in
general revenues paired with consistent and conservative spending.
Business Type Activities
Business-type activities in the City-wide Financial Statements include the City's four enterprise funds.
Enterprise funds are used to account for recreational and solid waste management operations that are
financed and operated in a manner similar to private business enterprises where the intent is that costs
of providing services and facilities to the general public on a continuing basis be financed or recovered
primarily through user fees. The major proprietary funds section of this report provides more
information on business-type results.
As shown in Table 3 and Table 4, the business-type net position totaled $9.3 million at June 30, 2020,
an increase of$1.2 million, or 14.9%, from the prior year with unrestricted net position increasing $1.4
million and the net investment in capital assets decreasing by $200,000. Business-type activities
transferred in(net) $3.5 million, an increase of$3.4 million over the prior year,which contributed to the
increase in net position. Few capital asset additions offset with $275,000 in depreciation expense
resulted in a net decrease of$200,000 over the prior year. Enterprise activities experienced an overall
increase in assets due primarily to investment income which increased cash and cash equivalents.
Liabilities for business-type activities decreased by$81,000 due to increases in accounts payable,OPEB
liability and net pension liability which were offset by decreases in unearned revenue.
In Table 4,revenues for all business-type activities decreased$97,000 and operating expenses increased
by $562,000, primarily attributable to the restructuring of the City's waste recovery contract which
eliminated pass-through costs for the entire fiscal year.
12
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
Table 3
Condensed Statement of Net Position at June 30
(in thousands)
Business Type Activities
2020 2019
Assets:
Cash and investments $ 11,524 $ 10,396
Other assets 348 407
Capital assets 1,119 1,319
Total assets 12,991 12,122
Deferred Outflows of Resources:
Related to pension 598 539
Related to OPEB 156 -
Total deferred outflows of
resources 754 539
Other Liabilities: 4,365 4,447
Total liabilities 4,365 4,447
Deferred Inflows of Resources:
Related to pension 51 43
Related to OPEB 75 114
Total deferred inflows of resources 126 157
Net Position:
Net Investment in capital assets 1,119 1,319
Unrestricted 8,135 6,738
Total net position $ 9,254 $ 8,057
13
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
Table 4
Condensed Statement of Activities for the Year Ended June 30
(in thousands)
Business Type Activities
Expenses 2020 2019
Resource recovery $ 2,213 $ 1,736
Blackberry farm 664 645
Cupertino sports center 2,884 3,036
Recreation programs 3,141 2,923
Total expenses 8,902 8,340
Revenues
Program revenues:
Charges for services 6,114 6,403
General revenues:
Investment earnings 462 270
Total revenues 6,576 6,673
Excess of revenues over expenses,
before extraordinary item and
transfers (2,326) (1,667)
Transfers 3,523 75
Change in net position 1,197 (1,592)
Beginning net position 8,057 9,649
Ending net position $ 9,254 $ 8,057
MAJOR GOVERNMENTAL FUNDS
General Fund
General Fund Revenues
General Fund actual revenues of$101.1 million ended$13.9 million,or 16.2%,above the original budget
and $10.6 million, or 11.9%, above the final budget. Actual revenues were up $12.3 million or 14%
when compared to 2018-19 actuals. Table 5 displays the variations in actual revenues, while Table 6
shows budgeted revenues compared to actuals.
14
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
Property taxes increased $1.3 million, or 5%, over the prior year due to continued roll-growth.
According to the 2019-2020 Assessor's Annual Report for Santa Clara County, Cupertino's net
assessment roll growth increased nearly $831 million, or 3.3%, from the prior year.
Sales tax increased $10.8 million, or 43%, over the prior year due to strong business and industry and
county pool allocation growth. $9.0 million of the increase was also attributable to a change in estimate
in which the full remittances for July and August 2020 were accrued.
Transient occupancy tax decreased $1.6 million, or 18%, due to the COVID-19 and the related shelter-
in-place orders which brought transient occupancy tax revenues to a near halt beginning in March 2020.
Charges for services remained relatively consistent in total, decreasing by $210,000 over the previous
year. Decreases in refundable deposit revenues of$1.2 million and planning fees of $976,000 were
offset by increases in engineering fees of$220,000 and cost allocation charges of$2.1 million.
Licenses and permits increased$590,000, or 14%, due to increased construction plan check services that
were offset by slight decreases in building inspection and general building licenses and permits.
Table 5
Revenue Changes
General Fund,Fiscal 2020 vs. 2019
(in thousands)
Increase/(Decrease)
Fiscal 2020 From Fiscal 2019
Revenue by Source Amount % of Total Amount Percent
Taxes:
Property $ 26,607 26% $ 1,306 5%
Sales 35,657 35% 10,755 43%
Transient occupancy 7,286 7% (1,615) -18%
Utility user 3,182 3% 92 3%
Franchise 3,419 3% (26) -1%
Other 1,402 2% (258) -16%
Use of money&property 4,078 4% 1,424 54%
Intergovernmental 748 1% 274 58%
Licenses and permits 4,693 5% 590 14%
Charges for services 12,435 12% (210) -2%
Fines and forfeitures 328 0% (183) -36%
Other 1,218 1% 116 11%
Total revenues $ 101,053 100% $ 12,265 14%
Other financing sources:
Transfers in $ 10,012 100% $ 10,008 250200%
Proceeds from sale of land $ - 0% $ (10) -100%
Total other financing sources $ 10,012 100% $ 9,998 71414%
15
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
Table 6
Revenue, Budget and Actual Comparisons
General Fund 2019-20
(in thousands)
Budgeted Amounts Over/(Under)
Original Final Actual Final
Taxes:
Property $ 24,703 $ 24,703 $ 26,607 $ 1,904
Sales 25,637 25,637 35,657 10,020
Transient occupancy 9,666 9,666 7,286 (2,380)
Utility user 3,199 3,199 3,182 (17)
Franchise 3,162 3,162 3,419 257
Other 1,181 1,181 1,402 221
Use of money& 1,333 1,333 4,078 2,745
property
Intergovernmental 355 355 748 393
Licenses and permits 2,524 2,524 4,693 2,169
Charges for services 13,826 16,560 12,435 (4,125)
Fines and forfeitures 615 615 328 (287)
Other 882 1,474 1,218 (256)
Total revenues $ 87,083 $ 90,409 $ 101,053 $ 10,644
Transfers in $ 12 $ 10,012 $ 10,012 $ -
General Fund Expenditures
Fiscal 2019-20 overall expenditures,at$64.6 million,were$1.6 million higher than last year. This result
came in 16.7%or$13.0 million under the final budget. Year-over-year and budget-versus-actual results
for General Fund programs are described below and in Tables 7 and 8.
Administration increased$657,000, or 10%, from 2018-19 and is primarily due to the contracting out of
the Economic Development function, increases in City Attorney contract services, and negotiated salary
and benefit increases.
Law Enforcement was higher by approximately $1.0 million, or 8%, which was the automatic increase
in the existing contract with the Santa Clara County Sheriff s Office triggered by increases in the lease
and Ca1PERS costs.
Innovation & Technology remained relatively consistent from 2018-19 to 2019-20. Some notable
special projects that commenced included, but were not limited to, ProjectDox Upgrade, Legistar and
Vision Integration, City Facility Security and Video, Laserfiche Data Replication, and Plotter and
Scanner Replacement.
Administrative Services' expenditures increased approximately $420,000, or 10%, over the prior year
due to negotiated increases in salary and benefits. This increase also reflected the addition of a full-time
benefitted employee.
16
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
Parks & Recreation General Fund expenditures experienced a 15% decrease, or $1.3 million, across its
programs. The majority of this decrease was due to COVID-19 and the inability to hold related program
activities and events in the final quarter of FY 2019-20.
Community Development expenditures in the General Fund decreased $131,000 or 2% due to the
reorganization of the Economic Development Division to the City Manager's Office.
Public Works expenditures increased approximately $1.2 million or 7%. This is primarily represented
by an increase in compensation and benefits. While various divisions and programs fluctuated over the
prior year, the notable special projects and fluctuations include, but are not limited to, Shuttle Bus Pilot
Program, office reconfigurations, field maintenance, and streetlight LED upgrades.
Transfers out of the General Fund increased from $19.4 million in 2018-19 to $30.9 million. This
increase represented a $10 million net transfer of excess fund balance to the Capital Reserve.
Table 7
Expenditure Changes
General Fund, Fiscal 2020 vs. 2019
(in thousands)
Increase/(Decrease)
Fiscal 2020 From Fiscal 2019
% Of
Function/Program Amount Total Amount Percent
Administration $ 6,950 11% $ 657 10%
Law enforcement 14,151 22% 1,042 8%
Innovation and technology 3,223 5% 379 13%
Administrative services 4,618 7% 420 10%
Parks and recreation 7,689 12% (1,306) -15%
Community development 8,423 13% (131) -2%
Public works 18,829 29% 1,162 7%
Capital outlay 705 1% (649) -48%
Total expenditures $ 64,588 100% $ 1,574 2%
Transfers out $ 30,892 100% $ 11,516 59%
17
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
Table 8
Expenditure Changes
General Fund 2019-20
(in thousands)
Budgeted Amounts (Over)/Under
Original Final Actual Final
Administration $ 7,548 $ 8,010 $ 6,950 $ 1,060
Law enforcement 14,078 14,081 14,151 (70)
Innovation and 3,231 3,512 3,223 289
technology
Administrative services 4,790 5,085 4,618 467
Parks and recreation 8,574 8,753 7,689 1,064
Community 9,605 9,032 8,423 609
development
Public works 21,513 24,444 18,829 5,615
Capital outlay 221 4,646 705 3,941
Total expenditures $ 69,560 $ 77,563 $ 64,588 $ 12,975
Transfers out $ 10,540 $ 30,892 $ 30,892 $ -
General Fund-Fund Balance
The General Fund carried a June 30, 2020, ending fund balance of$74.5 million, up 26.4% or $15.6
million from beginning of the fiscal year. Loan receivables totaled $449,341 of non-spendable fund
balance. The City committed $19.0 million for general economic uncertainty and $127,891 for
sustainability. The City assigned $3,176,882 for encumbrances. $1,368,789 was restricted for public
access television purposes, $13,193 for CASp certification training, $217,551 for Public safety power
shutoff, and $12,725,224 for the pension rate stabilization program (Section 115 Trust). $34,526,942
was classified as unassigned.
Transportation
The Transportation Special Revenue Fund carried a June 30, 2020, ending fund balance of$5,174,514,
down 48.3%, or $4.8 million from the beginning of the fiscal year. In recent years this fund has
accumulated fund balance year over year. In an effort to reduce the amount of accumulated non-
discretion balance,the City reduced the operating subsidy for FY 2019-20 relied on existing fund balance
and current year non-discretionary revenues to fund the various transportation projects.
Housing Development
The Housing Development Special Revenue Fund carried a June 30, 2020, ending fund balance of$8.5
million, 2%, or $176,000 from the beginning of the fiscal year. The activities in this fund remained
relatively consistent with the previous fiscal year.
18
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
Public Facilities Corporation
A transfer of $3,172,838 was made from the General Fund to the Public Facilities Corporation Debt
Service Fund to cover principal and interest on the 2012 Certificates of Participation lease payments.
See Notes 4 and 6 to the Basic Financial Statements and the Debt Administration section of this analysis
for more information.
Capital Improvement Projects
The Capital Improvement Projects Capital Projects Fund carried a June 30, 2020, ending fund balance
of $40,354,087, up 22.2%, or $7.3 million from the beginning of the fiscal year. During fiscal year
2019-20, a $10 million transfer in from the General Fund was received for purposes of fund capital-
related projects. The following capital projects incurred the highest expenditures: Library Expansion,
McClellan West Parking Lot Improvements, and 2016 Bike Plan Implementation.
MAJOR PROPRIETARY FUNDS
Resource Recovery
The City has a solid waste franchise agreement with Recology that shares collection, landfill disposal,
and recycling revenues and costs. This fund receives revenues from Recology with the funds going
toward landfill costs, regulatory fees, and staffing costs that the City incurs to manage its solid waste,
recycling, and household hazardous waste programs. Total operating revenue increased from $1.75
million last year to $1.82 million this year,while expenses increased by approximately $478,000 due to
increased contractual costs as well as the Waste Characterization Study and Franchise Agreement
Request for Proposal special projects on the City Work Program. Net position decreased by
approximately $152,000. The fund ended the year with a$5.3 million in net position.
Recreation Programs
This enterprise operates the Quinlan Community Center, Monta Vista Recreation Center, McClellan
Ranch, Creekside Park building, eight school sites, and various parks. While the economy and enhanced
marketing helped cultural events, youth and teen programs, sports, dance and fitness classes generate
increasing revenues in recent years, fiscal year 2019-20 saw a slight decline. These programs generated
approximately $1.6 million in revenues that were $398,000, or 20% lower than last year. Ongoing
program expenses of approximately $3.1 million included full-time administrative and programming
staff,part-time activity leaders, and class instructors on contract. This resulted in a net operating loss of
$1.5 million as compared to an operating loss of$869,000 a year ago. After the $690,000 transfer, the
fund ended up with a decrease in net position of$783,000. The fund ended the year with a net position
of$1.1 million.
Cupertino Sports Center
Tennis lesson, membership, fitness class and rent revenues of$2.4 million and increased by $16,000 or
0.7% over last year, remaining relatively stagnant over the previous year. In addition, expenses
decreased by $152,134 or 5%, due to decreased activities in the final quarter because of COVID-19 and
19
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
shelter-in-place orders resulting in a net operating loss of$518,000. In 2018-19, net operating income
was($648,000). This fund's net position was$2.6 million as of June 30,2020 and increased significantly
due to a $948,000 operating subsidy from the General Fund as well as a $1.28 million transfer from the
Capital Reserve to fund its capital improvement program capital project.
NONMAJOR PROPRIETARY FUNDS
Blackberry Farm
City employees, with a teaching professional contractor, staff the City-owned Blackberry Farm golf
course and pro shop. Operating revenues increased 7% in 2019-20 from $317,000 to $338,000.
Operating expenses decreased by $18,000, or 2.8%, to $664,000 this year. The golf course's operating
loss decreased from$328,000 last year to $325,000 this year. After a transfer in from the General Fund
of $610,000, net position increased $307,000. As of June 30, 2020, this fund's net position was
$291,098.
CAPITAL ASSETS
At June 30, 2020, the City had $200.9 million, net of depreciation, invested in a broad range of capital
assets used in governmental and business-type activities, as shown in Table 9 and in Note 5 to the Basic
Financial Statements. This reflects the City's continued investment into capital projects dedicated to
street and transportation improvements, storm drain improvements, and maintenance of and
improvements to City facilities, resulting in an increase in net capital assets of $3.6 million, after
depreciation.
Table 9
Capital Assets,Net of Depreciation, at June 30
(in thousands)
2020 2019
Governmental Activities:
Land $ 62,046 $ 62,046
Easements 19,615 19,615
Construction in Progress 5,530 3,566
Buildings 16,015 17,723
Improvements other than buildings 17,483 18,912
Machinery and equipment 4,793 4,912
Roads, curbs,gutters, sidewalks,medians and bridges 67,713 62,171
Streetlights 1,589 1,489
Storm drain structures and mains 4,263 4,695
Traffic signals 729 842
Total Governmental Activities 199,776 195,971
Business-Type Activities
Buildings 574 634
Improvements other than buildings 437 628
Machinery and equipment 108 56
Total Business-Type Activities 1,119 1,319
Total City $ 200,895 $ 197,290
20
CITY OF CUPERTINO
Management's Discussion and Analysis(Unaudited)
For the Year Ended June 30,2020
DEBT ADMINISTRATION
The City's only long-term debt liability at June 30, 2020, comes from $43,940,000 in Certificates of
Participation(COPS)issued in May 2012 by the Cupertino Public Facilities Corporation. The certificates
refunded previously issued COPS that financed Wilson Park, Blackberry Farm, and Creekside Park
purchases, the Memorial Park expansion, the Quinlan Community Center construction, the City Hall
remodel, and the new library opened in 2004. The serial fixed rate debt ranging from 0.35%to 3.125%
requires annual debt payments of approximately $3,170,379 that are covered by the General Fund. The
June 30, 2020, outstanding principal of $27,010,000 is due to be paid off by July 1, 2030. More
information can be found in Note 6 to the Basic Financial Statements and in the Public Facilities
Corporation discussion earlier in this analysis.
On September 29, 2020, the City of Cupertino's 2020A Certificates of Participation (2020 COPS) were
successfully sold in order to refund the City's 2012 Certificates of Participation for debt service savings.
The 2020 COPS were very well received by investors due in large part to the well-regarded Cupertino
name, the top-notch AA+rating, the sizable annual principal amounts and short maturity, and favorable
supply and demand dynamics in the California municipal market. The refunding generated net present
value savings of approximately$3.14 million, 11.61%of refunded par and a True Interest Cost of 0.72%.
Savings to the City's General Fund amounts to approximately $494,000 per year for the next 10 years,
or almost $5 million in total savings.
CURRENTLY KNOWN FACTS AND CONDITIONS
The COVID-19 pandemic has had significant impacts on the City, both financially as well as
operationally. Although revenues in transient occupancy tax, charges for services, and sales tax are
projected to decline in FY 2020-21,the City has put forth efforts to reduce its operating costs to mitigate
the future impacts. Additionally, preliminary sales tax data indicate for FY 2020-21 indicate a much
more positive experience than originally expected and will also assist in the mitigation. The City's
reserves remain intact and the City does not anticipate requiring the use of these Committed and
Restricted funds. Lastly, and as discussed above, the COPS refinancing is anticipated to have
approximately $494,000 in annual savings to the General Fund
Aside from the pandemic and subsequent year refinancing, the City is unaware of any other facts or
conditions or decisions that are expected to have a significant effect on net position or results of
operations.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This Comprehensive Annual Financial Report is intended to provide a general overview of the City's
finances. Further information can be provided by the City of Cupertino Finance Department, 10300
Torre Avenue, Cupertino CA 95014, phone (408) 777-3280, or by the City website at
www.cupertino.org.
21
This Page Left Intentionally Blank
STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire City's financial activities
and financial position. They are prepared on the same basis as is used by most businesses, which means
they include all the City's assets and all its liabilities, as well as all its revenues and expenses.This is known
as the full accrual basis-the effect of all the City's transactions is taken into account, regardless of whether
or when cash changes hands, but all material internal transactions between City funds have been
eliminated.
The Statement of Net Position reports the difference between the City's total assets and deferred outflows
and the City's total liabilities and deferred inflows, including all the City's capital assets and all its long term
debt.
The Statement of Net Position summarizes the financial position of all the City's Governmental Activities in
a single column, and the financial position of all the City's Business-Type Activities in a single column;these
columns are followed by a Total column which presents the financial position of the entire City.
The City's Governmental Activities include the activities of its General Fund, along with all its Special
Revenue, Capital Projects and Debt Service Funds. Since the City's Internal Service Funds service these
Funds, their activities are consolidated with Governmental Activities, after eliminating inter-fund
transactions and balances. The City's Business Type Activities include all of its Enterprise Fund activities.
The Statement of Activities reports increases and decreases in the City's net position. It is also prepared
on the full accrual basis, which means it includes all the City's revenues and all its expenses, regardless of
when cash changes hands. This differs from the "modified accrual" basis used in the Fund financial
statements, which reflect only current assets, current liabilities, available revenues and measurable
expenditures.
The format of the Statement of Activities presents the City's expenses first, listed by program, and follows
these with the expenses of its business-type activities. Program revenues, that are revenues which are
generated directly by these programs, are then deducted from program expenses to arrive at the net
expense of each governmental and business-type program. The City's general revenues are then listed in
the Governmental Activities or Business-type Activities column, as appropriate, and the Change in Net
Position is computed and reconciled with the Statement of Net Position.
Both these Statements include the financial activities of the City and the Cupertino Public Facilities
Corporation,which is a legally separate component unit of the City because it is controlled by and financially
accountable to the City.
22.
CITY OF CUPERTINO, CALIFORNIA
STATEMENT OF NET POSITION
June 30,2020
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and cash investments (Note 2) $ 147,607,536 $ 11,523,616 $ 159,131,152
Restricted cash and investments (Note 2) 17,087,541 - 17,087,541
Receivables
Accounts 12,375,945 348,347 12,724,292
Interest 70,264 - 70,264
Loans (Note 3) 4,701,781 - 4,701,781
Prepaid expenses and other assets 3,884 - 3,884
Capital assets (Note 5):
Non-depreciable 87,190,844 - 87,190,844
Depreciable, net of
accumulated depreciation 112,584,973 1,118,882 113,703,855
Total assets 381,622,768 12,990,845 394,613,613
DEFERRED OUTFLOWS OF RESOURCES
Related to pension(Note 10) 9,049,898 597,721 9,647,619
Related to OPEB(Note 11) 2,589,672 156,328 2,746,000
Total deferred outflows of resources 11,639,570 754,049 12,393,619
LIABILITIES
Accounts payable and accruals 7,849,740 506,751 8,356,491
Accrued payroll and benefits 1,405,342 289 1,405,631
Deposits 11,605,717 - 11,605,717
Unearned revenue 174,811 536,599 711,410
Compensated absences (Note 1):
Due in one year 531,203 52,043 583,246
Due in more than one year 4,616,589 311,475 4,928,064
Claims payable(Note 9):
Due in one year 274,000 - 274,000
Due in more than one year 1,253,000 - 1,253,000
Long-term debt(Note 6):
Due in one year 2,355,000 - 2,355,000
Due in more than one year 24,655,000 - 24,655,000
Net pension liability(Note 10) 43,246,621 2,851,909 46,098,530
Net OPEB liability(Note 11) 1,861,871 106,129 1,968,000
Total liabilities 99,828,894 4,365,195 104,194,089
DEFERRED INFLOWS OF RESOURCES
Related to pension(Note 10) 773,701 51,346 825,047
Related to OPEB(Note 11) 1,032,473 74,527 1,107,000
Total deferred inflows of resources 1,806,174 125,873 1,932,047
NET POSITION (Note 7)
Net investment in capital assets 177,128,134 1,118,882 178,247,016
Restricted for:
Special revenue projects 37,860,800 - 37,860,800
Affordable housing 8,459,128 - 8,459,128
Debt service 1,685,872 - 1,685,872
Total restricted net position 48,005,800 - 48,005,800
Unrestricted 66,493,336 8,134,944 74,628,280
Total net position $ 291,627,270 $ 9,253,826 $ 300,881,096
See accompanying notes to financial statements.
23.
CITY OF CUPERTINO,CALIFORNIA
STATEMENT OF ACTIVITIES
For the year ended June 30,2020
Net(Expense)Revenue and
Program Revenues Changes in Net Position
Operating Capital Business-
Charges for Grants and Grants and Govemmental Type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total
Governmental activities:
Administration $ 7,974,520 $ 2,091,811 $ - $ $ (5,882,709) $ $ (5,882,709)
Law enforcement 14,698,130 1,102,888 155,948 (13,439,294) (13,439,294)
Public and environmental affairs 3,637,354 - - (3,637,354) - (3,637,354)
Administrative services 5,175,596 3,889,180 - (1,286,416) - (1,286,416)
Recreation services 8,763,194 1,309,906 - (7,453,288) - (7,453,288)
Community development 10,286,317 5,859,847 417,650 (4,008,820) (4,008,820)
Public works 33,339,191 5,657,315 5,220,845 1,046,756 (21,414,275) (21,414,275)
Interest on long-term debt 882,837 - - - (882,837) (882,837)
Total governmental activities 84,757,139 19,910,947 5,794,443 1,046,756 (58,004,993) - (58,004,993)
Business-type activities:
Resource recovery 2,213,404 1,821,677 - - (391,727) (391,727)
Blackberry farm 663,663 338,212 - (325,451) (325,451)
Cupertino sports center 2,883,903 2,365,667 - (518,236) (518,236)
Recreation programs 3,141,225 1,588,576 - (1,552,649) (1,552,649)
Total business-type activities 8,902,195 6,114,132 - - (2,788,063) (2,788,063)
Total $ 93,659,334 $ 26,025,079 $ 5,794,443 $ 1,046,756 (58,004,993) (2,788,063) (60,793,056)
General revenues:
Taxes:
Property taxes 18,117,304 - 18,117,304
Property tax in lieu of motor vehicle fee 8,489,541 - 8,489,541
Sales taxes 35,657,214 - 35,657,214
Transient occupancy tax 7,286,083 - 7,286,083
Utility user tax 3,182,086 - 3,182,086
Franchise tax 3,418,908 - 3,418,908
Othertaxes 1,774,235 - 1,774,235
Intergovernmental, unrestricted:
Motor vehicle license fee 47,391 - 47,391
Investment earnings 5,690,723 462,387 6,153,110
Miscellaneous 1,922,356 - 1,922,356
Transfers (Note 4) (3,523,000) 3,523,000 -
Total general revenues and transfers 82,062,841 3,985,387 86,048,228
Change in Net Position 24,057,848 1,197,324 25,255,172
Net Position, beginning of year 267,569,422 8,056,502 275,625,924
Net Position, end of year $ 291,627,270 $ 9,253,826 $ 300,881,096
See accompanying notes to financial statements.
24.
FUND FINANCIAL STATEMENTS
In the Fund Financial Statements only individual major funds are presented, while non-major funds are
combined in a single column. Major funds are defined generally as having significant activities or balances
in the current year.
The funds described below were determined to be Major Funds by the City for fiscal 2019-20. Individual
non-major funds may be found in the Supplementary section.
General Fund: The general fund is the general operating fund of the City. It is used to account for all
financial resources except those that are required to be accounted for in another fund.
Transportation Special Revenue Fund: Accounts for the City's gas tax, vehicle registration fees and grant
revenues and expenditures related to the maintenance and construction of City streets. All revenue in this
fund is restricted exclusively for street and road purposes including related engineering and administrative
expenditures.
Housing Development Special Revenue Fund: Accounts for the Federal Housing and Community
Development Grant Program activities administered through the County. Monies collected from developers
that mitigate the impact of housing needs are also included. Monies in this fund are governed by the
program's rules.
Public Facilities Corporation Debt Service Fund: This fund accounts for the payments of principal and
interest on certificates of participation issued to provide for the financing of the Civic Center, Library,Wilson
Park, Memorial Park, and other City facilities.
Capital Improvement Projects Capital Projects Fund: This fund accounts for activities related to the
acquisition or construction of major capital facilities.
25.
CITY OF CUPERTINO,CALIFORNIA
GOVERNMENTALFUNDS
BALANCE SHEET
June 30,2020
Public Capital
Facilities Improvement
Special Revenue Funds Corporation Projects Nonmajor Total
Housing Debt Capital Governmental Govemmental
General Transportation Development Service Fund Projects Fund Funds Funds
ASSETS
Cash and investments(Note 2) $ 63,176,565 $ 5,169,837 $ 7,953,120 $ 54,974 $ 43,497,586 $ 18,517,883 $ 138,369,965
Restricted cash and investments(Note 2) 12,725,224 - - 4,362,317 - - 17,087,541
Receivables:
Accounts 11,952,435 191,575 175,586 - 49,349 12,368,945
Interest 70,264 - - - 70,264
Loans(Note 3) 449,341 4,252,440 4,701,781
Due from other funds(Note 4) 539,204 - 539,204
Advances to other funds(Note 4) 3,000,000 3,000,000
Other assets 3,884 - - - - - 3,884
Total assets $ 91,916,917 $ 5,361,412 $ 12,381,146 $ 4,417,291 $ 43,497,586 $ 18,567,232 $ 176,141,584
LIABILITIES
Accounts payable and accruals $ 4,225,306 $ 186,898 $ 209,898 $ 2,731,419 $ 143,499 $ 8,659 $ 7,505,679
Accrued payroll and benefits 1,405,270 - - - - - 1,405,270
Advances from other funds(Note 4) - 3,000,000 3,000,000
Deposits 11,605,717 - 11,605,717
Unearned revenue 174,811 - - - - - 174,811
Total liabilities 17,411,104 186,898 209,898 2,731,419 3,143,499 8,659 23,691,477
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-loans - - 3,712,120 - - - 3,712,120
Total deferred inflows of resources - 3,712,120 3,712,120
FUND BALANCES(Note 7)
Nonspendable 3,449,341 - - - - 3,449,341
Restricted 14,324,757 5,174,514 8,459,128 1,685,872 18,361,529 48,005,800
Committed 19,127,891 - - - - - 19,127,891
Assigned 3,176,882 40,354,087 197,044 43,728,013
Unassigned 34,426,942 - - - - - 34,426,942
Total fund balances 74,505,813 5,174,514 8,459,128 1,685,872 40,354,087 18,558,573 148,737,987
Total liabilities, deferred inflows
of resources and fund balances $ 91,916,917 $ 5,361,412 $ 12,381,146 $ 4,417,291 $ 43,497,586 $ 18,567,232 $ 176,141,584
See accompanying notes to financial statements.
26.
CITY OF CUPERTINO, CALIFORNIA
RECONCILIATION OF GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
June 30, 2020
Total fund balances reported on the governmental funds balance sheet $ 148,737,987
Amounts reported for governmental activities in the statement of net position are different
from those reported in the governmental funds because of the following:
Capital assets used in governmental activities are not current assets or
financial resources and therefore are not reported in the governmental
funds. 196,120,886
Internal service funds are used by management to charge the costs of
activities such as information technology, insurance, equipment
acquisition and maintenance, and certain employee benefits to
governmental funds. The assets and liabilities of the internal service
funds are therefore included in the governmental activities of the
statement of net position. 7,959,447
Certain receivables are not available to pay for current period
expenditures and therefore are deferred in the governmental funds. 3,712,120
The liabilities, deferred inflows of resources and deferred outflows of
resources are not related to the current period and therefore are not
reported in the governmental funds:
Long-term debt (27,010,000)
Net pension liability (40,488,773)
Net OPEB liability (1,730,132)
Pension-related deferred outflows of resources 8,478,140
Pension-related deferred inflows of resources (721,803)
OPEB-related deferred outflows of resources 2,403,803
OPEB-related deferred inflows of resources (972,787)
Compensated absences (4,861,618)
Net position for governmental activities $ 291,627,270
See accompanying notes to financial statements.
27.
CITY OF CUPERTINO,CALIFORNIA
GOVERNMENTALFUNDS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
For the year ended June 30,2020
Public Capital
Facilities Improvement
Special Revenue Funds Corporation Projects Nonmajor Total
Housing Debt Capital Governmental Governmental
General Transportation Development Service Fund Projects Fund Funds Funds
Revenues
Taxes $ 77,553,138 $ - $ 39,000 $ - $ - $ 333,233 $ 77,925,371
Use of money and property 4,077,882 243,244 311,905 26,612 903,753 695,946 6,259,342
Intergovernmental 747,941 2,938,672 357,527 - 2,844,450 - 6,888,590
Licenses and permits 4,692,847 - - - - - 4,692,847
Charges for services 12,435,382 61,900 1,443 - 1,439,225 13,937,950
Fines and forfeitures 327,833 - - - 16,175 344,008
Other revenue 1,217,623 703,218 1,515 - - 1,922,356
Total revenues 101,052,646 3,947,034 711,390 26,612 3,748,203 2,484,579 111,970,464
Expenditures
Current:
Administration 6,950,041 - - 1,500 - - 6,951,541
Law enforcement 14,151,413 - 14,151,413
Public and environmental affairs 3,223,185 3,223,185
Administrative services 4,617,787 4,617,787
Recreation services 7,688,935 - 7,688,935
Community development 8,423,300 887,527 - 9,310,827
Public works 18,829,328 2,841,815 - - 774,805 22,445,948
Capital outlay 705,153 6,165,631 - 5,709,314 64,275 12,644,373
Debt service:
Principal - - 2,290,000 - - 2,290,000
Interest and fiscal charges 882,837 - 882,837
Total expenditures 64,589,142 9,007,446 887,527 3,174,337 5,709,314 839,080 84,206,846
Excess(deficiency)of revenues
over expenditures 36,463,504 (5,060,412) (176,137) (3,147,725) (1,961,111) 1,645,499 27,763,618
Other financing sources(uses)
Transfers in(Note 4) 10,012,000 221,000 3,172,838 20,705,438 1,097,000 35,208,276
Transfers(out)(Note 4) (30,892,276) - - - (11,400,000) (12,000) (42,304,276)
Total other financing sources(uses) (20,880,276) 221,000 - 3,172,838 9,305,438 1,085,000 (7,096,000)
Net change in fund balances 15,583,228 (4,839,412) (176,137) 25,113 7,344,327 2,730,499 20,667,618
Beginning fund balances 58,922,585 10,013,926 8,635,265 1,660,759 33,009,760 15,828,074 128,070,369
Ending fund balances $ 74,505,813 $ 5,174,514 $ 8,459,128 $ 1,685,872 $ 40,354,087 $ 18,558,573 $ 148,737,987
See accompanying notes to financial statements.
28.
CITY OF CUPERTINO, CALIFORNIA
GOVERNMENTAL FUNDS
RECONCILIATION OF NET CHANGES IN FUND BALANCES —
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For the year ended June 30, 2020
The schedule below reconciles the net changes in fund balances reported on the governmental funds
statement of revenues, expenditures and changes in fund balances, which measures only changes in
current assets and current liabilities on the modified accrual basis, with the change in net position of
governmental activities reported in the statement of activities, which is prepared on the full accrual basis.
Total net changes in fund balances reported on the
governmental funds balance sheet $20,667,618
Amounts reported for governmental activities in the statement of activities
are different from those reported in the governmental funds because of
the following:
Governmental funds report capital outlays as expenditures. However, in
the statement of activities, the cost of those assets are capitalized and
depreciated over their estimated useful lives, which is reported as
depreciation expense. Expenditures for capital assets reported as:
Capital outlay 11,317,866
Depreciation expense (7,472,456)
Net retirements (12,380)
Long term debt principal payments are reported as expenditures in the
governmental funds but are not reported as expenses in the statement
of activities. 2,290,000
The changes in the amounts below do not provide or require the use of
current financial resources and therefore are not reported as revenues
or expenditures in the governmental funds:
Compensated absences (316,029)
Net pension liability (4,579,619)
Net OPEB liability (asset) (2,725,069)
Pension-related deferred outflows of resources 895,881
Pension-related deferred inflows of resources (126,805)
OPEB-related deferred outflows of resources 2,403,803
OPEB-related deferred inflows of resources 605,768
Internal service funds are used by management to charge the costs of
activities such as information technology, insurance, equipment
acquisition and maintenance, and certain employee benefits to
governmental funds. The portion of the net expense of these internal
service funds arising out of their transactions with governmental funds
is reported with governmental activities because they service those
activities. 1,109,270
Change in net position of governmental activities $24,057,848
See accompanying notes to financial statements.
29.
CITY OF CUPERTINO, CALIFORNIA
GENERALFUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES— BUDGET AND ACTUAL
For the year ended June 30, 2020
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes $ 67,548,518 $ 67,548,518 $ 77,553,138 $ 10,004,620
Use of money and property 1,333,079 1,333,079 4,077,882 2,744,803
Intergovernmental 354,547 354,547 747,941 393,394
Licenses and permits 2,524,000 2,524,000 4,692,847 2,168,847
Charges for services 13,825,725 16,559,545 12,435,382 (4,124,163)
Fines and forfeitures 615,000 615,000 327,833 (287,167)
Other revenue 882,283 1,474,015 1,217,623 (256,392)
Total revenues 87,083,152 90,408,704 101,052,646 10,643,942
Expenditures
Current
Administration 7,547,520 8,009,767 6,950,041 1,059,726
Law enforcement 14,077,937 14,080,543 14,151,413 (70,870)
Public and environmental affairs 3,230,880 3,512,186 3,223,185 289,001
Administrative services 4,790,420 5,085,300 4,617,787 467,513
Recreation services 8,574,403 8,753,432 7,688,935 1,064,497
Community development 9,604,789 9,031,527 8,423,300 608,227
Public works 21,512,912 24,443,890 18,829,328 5,614,562
Capital outlay 221,050 4,646,388 705,153 3,941,235
Total expenditures 69,559,911 77,563,033 64,589,142 12,973,891
Excess of revenues
over expenditures 17,523,241 12,845,671 36,463,504 23,617,833
Other financing sources (uses)
Transfers in 12,000 10,012,000 10,012,000 -
Transfers (out) (10,539,557) (30,892,276) (30,892,276) -
Total other financing
sources (uses) (10,527,557) (20,880,276) (20,880,276) -
Net change in fund balance $ 6,995,684 $ (8,034,605) 15,583,228 $ 23,617,833
Beginning fund balance 58,922,585
Ending fund balance $ 74,505,813
See accompanying notes to financial statements.
30.
CITY OF CUPERTINO, CALIFORNIA
TRANSPORTATION SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES— BUDGET AND ACTUAL
For the year ended June 30, 2020
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Use of money and property $ - $ - $ 243,244 $ 243,244
Intergovernmental 7,192,936 6,423,936 2,938,672 (3,485,264)
Charges for services - - 61,900 61,900
Other revenue 2,198,521 841,855 703,218 (138,637)
Total revenues 9,391,457 7,265,791 3,947,034 (3,318,757)
Expenditures
Current
Public works 3,002,883 2,992,268 2,841,815 150,453
Capital outlay 5,035,000 6,197,940 6,165,631 32,309
Total expenditures 8,037,883 9,190,208 9,007,446 182,762
Deficiency of revenues
under expenditures 1,353,574 (1,924,417) (5,060,412) (3,135,995)
Other financing sources (uses)
Transfers in 221,000 221,000 221,000 -
Total other financing
sources (uses) 221,000 221,000 221,000 -
Net change in fund balance $ 1,574,574 $(1,703,417) (4,839,412) $(3,135,995)
Beginning fund balance 10,013,926
Ending fund balance $ 5,174,514
See accompanying notes to financial statements.
31.
CITY OF CUPERTINO, CALIFORNIA
HOUSING DEVELOPMENT SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES— BUDGET AND ACTUAL
For the year ended June 30, 2020
Variance with
Final Budget
Budgeted Amounts Actual Positive
Oriciinal Final Amounts (Negative)
Revenues
Taxes $ 3,000 $ 3,000 $ 39,000 $ 36,000
Use of money and property 14,800 14,800 311,905 297,105
Intergovernmental 361,597 361,597 357,527 (4,070)
Charges for services - - 1,443 1,443
Other revenue - - 1,515 1,515
Total revenues 379,397 379,397 711,390 331,993
Expenditures
Current
Community development 1,044,216 986,694 887,527 99,167
Total expenditures 1,044,216 986,694 887,527 99,167
Net change in fund balance $ (664,819) $ (607,297) (176,137) $ 431,160
Beginning fund balance 8,635,265
Ending fund balance $ 8,459,128
See accompanying notes to financial statements.
32.
MAJOR PROPRIETARY FUNDS
Proprietary funds account for City operations financed and operated in a manner similar to a private
business enterprise. The intent of the City is that the cost of providing goods and services be financed
primarily through user charges.
The City has identified the funds below as major proprietary funds for fiscal 2019 - 20.
Resources Recovery Fund: This fund accounts for activity related to the collection, disposal, and recycling
of solid waste. A private company has been issued an exclusive franchise to perform these services.
Recreation Programs Fund: This fund accounts for activities of the City's community centers and park
facilities.
Cupertino Sports Center Fund: This fund accounts for the operation and maintenance of the Cupertino
Sports Center.
33.
CITY OF CUPERTINO, CALIFORNIA
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
June 30,2020
Business-type Activities-Enterprise Funds Governmental
Cupertino Nonmajor Activities-
Resources Recreation Sports Enterprise Internal Service
Recovery Programs Center Fund Totals Funds
ASSETS
Current assets
Cash and cash investments(Note 2) $ 6,184,319 $ 1,796,544 $ 3,000,252 $ 542,501 $ 11,523,616 $ 9,237,571
Accounts receivable 348,287 60 - 348,347 7,000
Total current assets 6,532,606 1,796,544 3,000,312 542,501 11,871,963 9,244,571
Noncurrent assets
Capital assets(Note 5):
Nondepreciable - - - - - 214,666
Depreciable, net of -
accumulated depreciation 7,141 664,745 420,459 26,537 1,118,882 3,440,265
Total noncurrent assets 7,141 664,745 420,459 26,537 1,118,882 3,654,931
Total assets 6,539,747 2,461,289 3,420,771 569,038 12,990,845 12,899,502
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 10) 223,874 186,269 127,822 59,756 597,721 571,758
Related to OPEB(Note 11) 58,740 41,283 48,184 8,121 156,328 185,869
Total deferred outflows of resources 282,614 227,552 176,006 67,877 754,049 757,627
LIABILITIES
Current liabilities
Accounts payable and accruals 168,295 299,334 9,420 29,702 506,751 344,061
Accrued payroll and benefits 289 - - - 289 72
Due to other funds(Note 4) - - - - - 539,204
Compensated absences(Note 1): 22,630 20,661 8,348 404 52,043 29,530
Claims payable(Note 9) - - - - - 274,000
Unearned revenue - 234,845 278,669 23,085 536,599 -
Total current liabilities 191,214 554,840 296,437 53,191 1,095,682 1,186,867
Noncurrent liabilities
Compensated absences(Note 1) 135,436 123,656 49,963 2,420 311,475 256,644
Claims payable(Note 9) - - - - - 1,253,000
Net pension liability(Note 10) 1,074,514 889,060 612,730 275,605 2,851,909 2,757,848
Net OPEB liability(Note 11) 35,777 29,586 36,031 4,735 106,129 131,739
Total noncurrent liabilities 1,245,727 1,042,302 698,724 282,760 3,269,513 4,399,231
Total liabilities 1,436,941 1,597,142 995,161 335,951 4,365,195 5,586,098
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 10) 19,154 15,159 11,863 5,170 51,346 51,898
Related to OPEB(Note 11) 32,598 20,677 16,556 4,696 74,527 59,686
Total deferred inflows of resources 51,752 35,836 28,419 9,866 125,873 111,584
NET POSITION(Note 7)
Net investment in capital assets 7,141 664,745 420,459 26,537 1,118,882 3,654,931
Unrestricted 5,326,527 391,118 2,152,738 264,561 8,134,944 4,304,516
Total Net Position $ 5,333,668 $ 1,055,863 $ 2,573,197 $ 291,098 $ 9,253,826 $ 7,959,447
See accompanying notes to financial statements.
34.
CITY OF CUPERTINO, CALIFORNIA
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
For the year ended June 30,2020
Business-type Activities-Enterprise Funds Governmental
Cupertino Nonmajor Activities-
Resources Recreation Sports Enterprise Internal Service
Recovery Programs Center Fund Totals Funds
Operating revenues
Charges for services $ 1,796,908 $ 1,525,850 $ 2,099,163 $ 305,525 $ 5,727,446 $ 4,495,541
Other 24,769 62,726 266,504 32,687 386,686 -
Total operating revenue 1,821,677 1,588,576 2,365,667 338,212 6,114,132 4,495,541
Operating expenses
Salaries and benefits 746,414 896,130 641,910 159,143 2,443,597 3,543,748
Materials and supplies 225,510 1,150,435 433,912 172,317 1,982,174 1,913,950
Contractual services 1,238,166 883,232 1,753,699 326,168 4,201,265 274,224
Insurance and claims and premium - - - - - 702,266
Depreciation (Note 5) 3,314 211,428 54,382 6,035 275,159 969,469
Total operating expenses 2,213,404 3,141,225 2,883,903 663,663 8,902,195 7,403,657
Operating income(loss) (391,727) (1,552,649) (518,236) (325,451) (2,788,063) (2,908,116)
Nonoperating revenues
Investment Income 239,701 79,759 120,087 22,840 462,387 367,523
Gain on sale of capital assets - - - - - 76,863
Total nonoperating revenues 239,701 79,759 120,087 22,840 462,387 444,386
Income(loss)before transfers (152,026) (1,472,890) (398,149) (302,611) (2,325,676) (2,463,730)
Transfers in (Note 4) - 690,000 2,223,000 610,000 3,523,000 3,573,000
Changes in net position (152,026) (782,890) 1,824,851 307,389 1,197,324 1,109,270
Net position- beginning of year 5,485,694 1,838,753 748,346 (16,291) 8,056,502 6,850,177
Net position-end of year $ 5,333,668 $ 1,055,863 $ 2,573,197 $ 291,098 $ 9,253,826 $ 7,959,447
See accompanying notes to financial statements.
35.
CITY OF CUPERTINO,CALIFORNIA
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
For the year ended June 30,2020
Business-type Activities-Enterprise Funds Governmental
Cupertino Nonmajor Activities-
Resources Recreation Sports Enterprise Internal Service
Recovery Programs Center Fund Totals Funds
Cash flows from operating activities
Cash received from customers $ 1,713,201 $ 1,177,069 $ 2,240,151 $ 345,135 $ 5,475,556 $ 4,488,541
Cash payments to suppliers for
goods and services (1,305,571) (1,857,210) (2,401,221) (481,458) (6,045,460) (2,079,815)
Cash payments to employees for salaries
and benefits (636,988) (808,137) (581,640) (185,719) (2,212,484) (3,203,921)
Cash payments forjudgment and claims - - - - (728,543)
Net cash provided(used)by operating activities (229,358) (1,488,278) (742,710) (322,042) (2,782,388) (1,523,738)
Cash flows from noncapital financing activities
Transfers in - 690,000 2,223,000 610,000 3,523,000 3,701,660
Cash flows from noncapital financing activities - 690,000 2,223,000 610,000 3,523,000 3,701,660
Cash flows from capital and related financing activities
Acquisition of capital assets - - (75,297) - (75,297) (941,206)
Sale of capital assets - - 76,863
Cash flows from capital and related - - (75,297) - (75,297) (864,343)
financing activities
Cash Flows from investing activities
Interest received 239,701 79,759 120,087 22,840 462,387 367,523
Cash flows from investing activities 239,701 79,759 120,087 22,840 462,387 367,523
Net cash flows 10,343 (718,519) 1,525,080 310,798 1,127,702 1,681,102
Cash and investments at beginning of year 6,173,976 2,515,063 1,475,172 231,703 10,395,914 7,556,469
Cash and investments at end of year $ 6,184,319 $ 1,796,544 $ 3,000,252 $ 542,501 $ 11,523,616 $ 9,237,571
Reconciliation of operating income(loss)to
to net cash provided by operating activities:
Operating income(loss) $ (391,727) $ (1,552,649) $ (518,236) $ (325,451) $ (2,788,063) $ (2,908,116)
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation 3,314 211,428 54,382 6,035 275,159 $ 969,469
Change in assets, deferred outflows of
resources, liabilities and deferred inflows
of resources
Accounts receivable (108,476) 95,858 - - (12,618) (7,000)
Due to retirement system 87,751 83,519 58,727 21,431 251,428 280,530
Due to OPEB system (6,952) (4,886) (5,703) (961) (18,502) (21,996)
Accounts payable and accruals 158,105 176,457 (213,610) 17,027 137,979 108,359
Unearned revenue - (507,365) (125,516) 6,923 (625,958) -
Compensated absences 28,627 9,360 7,246 (47,046) (1,813) 81,293
Claims payable - - - (26,277)
Net cash provided(used)by operating
activities $ (229,358) $ (1,488,278) $ (742,710) $ (322,042) $ (2,782,388) $ (1,523,738)
See accompanying notes to financial statements.
36.
FIDUCIARY FUND
Fiduciary funds account for activities where the City holds related resources in trust for specific purposes
but cannot claim the resources with those that belong to the City.
Other Post-Employment Benefits Trust Fund: This fund accounts for activity related the City's OPEB plan
administered through a qualified trust.
37.
CITY OF CUPERTINO, CALIFORNIA
FIDUCIARY FUND
STATEMENT OF FIDUCIARY NET POSITION
June 30, 2020
Other Post-
Employment
Benefits
Trust Fund
ASSETS
Cash and equivalents $ 910,970
1 nvestments:
Mutual funds:
Fixed income 18,088,348
Equity 9,519,169
Real estate 851,762
Total assets 29,370,249
LIABILITIES -
NET POSITION
Restricted for post-employment benefits other than pensions $ 29,370,249
See accompanying notes to financial statements.
38.
CITY OF CUPERTINO, CALIFORNIA
FIDUCIARY FUND
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
For the year ended June 30, 2020
Other Post-
Employment
Benefits
Trust Fund
ADDITIONS
Employer contributions $ 1,140,063
Investment income:
Net decrease in fair value of investments (410,344)
Interest and dividends 683,065
Less investment expense (53,326)
Total additions 1,359,458
DEDUCTIONS
Benefit payments 1,140,063
Administrative expense 67,381
Total deductions 1,207,444
Change in net position 152,014
Net position - beginning of year 29,218,235
Net position- end of year $ 29,370,249
See accompanying notes to financial statements.
39.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity: The City of Cupertino, California (the City) was incorporated on October 3, 1955, under
the laws of the State of California. The City operates under a Council - City Manager form of government
and provides services through the following departments: Administrative Services, Community
Development, City Manager, Parks and Recreation, Public and Environmental Affairs, and Public Works.
Fire services are provided by the Santa Clara County Fire District, and the City contracts with the Santa
Clara County Sheriff's Department for police services, and with Recology for garbage and recycling
services.
The accompanying basic financial statements include all funds and boards and commissions that are
controlled by the City Council. The basic financial statements include the City's blended component unit
entity for which the City is considered to be financially accountable. A blended component unit, although a
legally separate entity, is in substance, part of the City's operations and so data from this unit is combined
with the City.
Blended Component Unit: The Cupertino Public Facilities Corporation (the Corporation)was incorporated
in May 1986, under the Nonprofit Public Benefit Corporation Law of the State of California. The Corporation
was organized as a nonprofit corporation solely for the purpose of assisting the City in the acquisition,
construction, and financing of public improvements which are of public benefit to the City. The Corporation,
after acquiring certain properties from the City, leases these back to the City. The lease money provides
the funds for the debt service for the Certificates of Participation issued by the Corporation to acquire the
properties. The Corporation does not issue separate financial statements, since it is reported separately in
the City's basic financial statements.
Fiduciary Component Unit: The City participates in the Public Agency Retirement System (PARS) Public
Agencies Post Retirement Health Care Plan Trust Program (PARS Trust), an agent-multiple employer
irrevocable trust established to fund other postemployment benefits. The PARS Trust functions for the
benefit of the employees. The City funds all PARS Trust costs based on actuarial valuations for its specific
portion of the PARS Trust as opposed to the PARS Trust as a whole.
Effective July 1, 2016, the City reported in its fiduciary fund financial statements the PARS Trust that
pertains to the City as well as OPEB benefit payments of the Plan initiated by the City but reimbursed to
the PARS Trust are required to be recognized under applicable standards due to a change in the reporting
entity. With the implementation of GASB Statement 74, Financial Reporting for Postemployment Benefit
Plans Other Than Pension Plans, the City reviewed the PARS Trust separately issued financial statements
and determined that inclusion of the City OPEB Plan component unit financial statements and related
disclosures as a City trust fund were necessary as omission would have been misleading.
Measurement Focus, Basis of Accounting and Basis of Presentation: The City's basic financial statements
are prepared in conformity with accounting principles generally accepted in the United States. The
Government Accounting Standards Board (GASB) is the acknowledged standard setting body for
establishing accounting and financial reporting standards followed by governmental entities in the United
States.
Government-wide Statements: The Statement of Net Position and the Statement of Activities display
information about the primary government(the City)and its component units.These statements include the
financial activities of the overall City government and distinguish between the governmental and business-
type activities of the City. Governmental activities generally are financed through taxes, intergovernmental
revenues, and other nonexchange transactions. Business-type activities are financed in whole or in part by
fees charged to external parties.
(Continued)
40.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The Statement of Activities presents a comparison between expenses and program revenues for each
segment of the business-type activities of the City and for each function of the City's governmental activities.
Expenses include direct and indirect types. Direct expenses are those that are specifically associated with
a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses such
as depreciation, information technology, insurance and equipment replacement are included in expenses
for individual activities and functions. Program revenues include(a)charges paid by the recipients of goods
or services offered by the programs and (b) grants and contributions that are restricted to meeting the
operational or capital needs of a particular program. Revenues that are not classified as program revenues,
including taxes, are presented as general revenues. Program revenues and direct expenses related to
interfund services are included and indirect expenses funded by interfund transfers are excluded from the
Statement of Activities. The Statement of Net Position eliminates interfund balances between governmental
funds and interfund balances between proprietary funds.
Fund Financial Statements: The fund financial statements provide information about the City's funds,
including fiduciary funds and blended component units. Separate statements for each fund category —
governmental, proprietary, and fiduciary—are presented. The emphasis of fund financial statements is on
major individual governmental and enterprise funds, each of which is displayed in a separate column. All
remaining governmental funds are aggregated and reported as nonmajor funds.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions
associated with the principal activity of the fund. Exchange transactions are those in which each party
receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment
earnings, result from nonexchange transactions or ancillary activities.
Major Funds: The City's major governmental and enterprise funds are identified and presented separately
in the fund financial statements. All other funds, called nonmajor funds, are combined and reported in a
single column, regardless of their fund type.
Major funds are defined as funds,which have either assets(plus deferred outflows), liabilities(plus deferred
inflows), revenues or expenditures in excess of 10 percent of their fund-type total and five percent of the
aggregate total for both governmental funds and enterprise funds. The General Fund is always a major
fund. The City may select other funds it believes should be presented as major funds.
The City reported the following major governmental funds in the accompanying financial statements:
• The General Fund is the general operating fund of the City. It is used to account for all financial
resources except those that are required to be accounted for in another fund.
• The Transportation Special Revenue Fund accounts for the City's gas tax,vehicle registration fees and
grant revenues and expenditures related to the maintenance and construction of City streets. All
revenue in this fund is restricted exclusively for street and road purposes including related engineering
and administrative expenses. Management considers this fund qualitatively major and has elected to
present this fund as such, even if mathematically it does not qualify per applicable GASB requirements.
• The Housing Development Special Revenue Fund accounts for the Federal Housing and Community
Development Grant Program activities administered through the County. Monies collected from
developers that mitigate the impact of housing needs are also included. Monies in this fund are
governed by the program's rules.
(Continued)
41.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
• The Public Facilities Corporation Debt Service Fund accounts for the payments of principal and interest
on certificates of participation issued to provide for the financing of City Hall, Library, Wilson Park,
Memorial Park, and other City facilities.
• Capital Improvement Projects Capital Projects Fund Accounts for activities related to the acquisition or
construction of major capital facilities.
The City reports the following enterprise funds as major funds in the accompanying financial statements:
• The Resources Recovery Fund accounts for activity related to the collection, disposal, and recycling of
solid waste. A private company has been issued an exclusive franchise to perform these services.
• The Recreation Programs Fund accounts for activities of the City's community centers and park
facilities.
• The Cupertino Sports Center Fund accounts for activities of the City's sports center facility.
The City also reports the following fund types:
• Internal Service Funds. These funds account for workers' compensation, management information
systems maintenance and replacement, equipment maintenance and replacement, retiree health costs,
accrued leave payouts, and long-term disability coverage which are provided to other departments on
a cost-reimbursement basis.
• Fiduciary Fund. The City's Other Post-Employment Benefits (OPEB) Trust fund is established in
accordance with GASB Statement No. 74 for the defined benefit OPEB plan administered though trusts
that meet the specified criteria.
Basis of Accounting: The government-wide, proprietary and fiduciary financial statements are reported
using the economic resources measurement focus and the full accrual basis of accounting. Revenues are
recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when
the related cash flows take place.
Governmental funds are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Under this method, revenues are recognized when measurable and
available.The City considers all revenues reported in the governmental funds to be available if the revenues
are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is
incurred, except for principal and interest on long-term debt which are recognized as expenditures to the
extent the City has provided financial resources to a debt service fund for payment of these liabilities that
mature early in the following year. General capital asset acquisitions are reported as expenditures in
governmental funds. Proceeds from long-term debt and acquisitions under capital leases are reported as
other financing sources.
Unearned revenues are considered on a full accrual basis, while unavailable revenues are based on the
modified accrual measure.
Property taxes, transient occupancy taxes, utility taxes, franchise taxes, interest and special assessments
are susceptible to accrual. Other receipts and taxes are recognized as revenue when the cash is received.
Sales taxes collected and held by the state at year end on behalf of the City are also recognized as revenue.
Sales tax consultant payments which are contingent on revenues collected are netted against the related
revenues.
(Continued)
42.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Under the terms of grant agreements, the City may fund certain programs with a combination of cost
reimbursement grants, categorical block grants, and general revenue. The City's policy is to first apply
restricted grant resources to such programs, followed by general revenues if necessary. Grant revenues
are recognized after eligibility and billing occurs, but may be a deferred inflow if not received within sixty
days of year-end. Because of the cost-reimbursement and recognition nature of some grants, certain
capital project funds may carry deficit fund balances until billing and receipt of grants. The City may also
front the capital outlays with cash advances from other funds.
Non-exchange transactions, in which the City gives or receives value without directly receiving or giving
equal value in exchange, include property taxes, grants, entitlements, and donations. On the accrual basis,
revenue from property taxes is recognized in the fiscal year for which the taxes are levied or assessed.
Revenue from grants is recognized as described above. Entitlement and donation revenues are recognized
when cash is received.
Budgetary Practices: The budget of the City is a detailed operating plan which identifies estimated costs
and results in relation to estimated revenues. The budget includes (1)the programs, projects, services and
activities to be provided during the fiscal year; (2)estimated revenue available to finance the operating plan;
and (3) the estimated spending requirements of the operating plan. The budget represents a process
through which policy decisions are made, implemented and controlled. The City prohibits expending funds
for which there is no legal appropriation. Operating appropriations lapse at fiscal year end.
In May of each year, the City Manager submits to the City Council a proposed budget for the fiscal year
beginning July 1. Public hearings on the proposed budget are held during the month of June and the
budgets for all fund types are legally adopted by Resolution prior to June 30. Original budget amounts are
presented on the accompanying budgetary statements include these legally adopted amounts.
The City's legal level of budgetary control is at the functional level for the general fund and at the fund level
for other funds. The City Manager is responsible for controlling the City's expenditures in accordance with
the adopted budget. The City Manager is authorized to administer and transfer appropriations between
budget accounts within the operating budget when in his opinion such transfers become necessary for
administrative purposes. Any revision which increases total appropriations must be approved by the City
Council. Requests for additional personnel or capital outlay also require the approval of the City Council.
Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting
principles. Budget information is presented for the general, special revenue and debt service funds only.
Capital projects funds are budgeted on a long-term project-by-project basis and, hence, budgets for these
funds are not presented in the basic financial statements. The Traffic Impact Fund does not have a legally
adopted budget. During the fiscal year, expenditures exceeded appropriations as follows:
Excess of
Expenditures
Fund/Department Over Appropriations
Public Facilities Corporation Debt Service Fund $ 1,499
Cash and Investments: The City pools its cash resources, consisting of cash and investments, of all funds
for investment except for restricted funds generally held by an outside fiscal agent. Cash amounts are
reported net of outstanding warrants. Investments are stated at fair value, except for money market mutual
funds which are reported at amortized cost.
(Continued)
43.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets: Capital assets are recorded at cost or estimated historical cost if purchased or constructed.
Donated capital assets are recorded at their estimated acquisition value on the date donated. Public
domain (infrastructure) capital assets consisting of roads, bridges, curbs, gutters, medians, sidewalks,
drainage and lighting systems have been capitalized and depreciated. Capital assets are defined as assets
with an initial individual cost of more than $5,000 for general capital assets and $100,000 for intangible
assets.
Depreciation is recorded using the straight-line method over the following useful lives:
Buildings 15—25 years
Improvements 10— 15 years
Vehicles 4— 10 years
Street equipment 3—20 years
Water equipment 3—50 years
Office equipment 3—5 years
Road, curbs, gutters, sidewalks, medians and bridges 30—40 years
Streetlights 20 years
Storm drain structure and mains 40 years
Traffic signals 20 years
Major outlays for capital assets and improvements are capitalized as projects are constructed. For
enterprise funds, interest incurred during the construction phase is reflected in the capitalized value of the
asset constructed, net of interest earned on the invested proceeds over the same period. Some capital
assets may be acquired using federal and state grant funds, or they may be contributed by developers or
other governments. These contributions are accounted for as revenues at the time the capital assets are
contributed.
Claims and Judgment Payable: Claims and judgments payable are accrued when the liability is incurred
and the amount can be reasonably estimated. Claims and judgments payable are recorded in an internal
service fund for workers' compensation and long-term disability, and other claims and judgments are
recorded in the General Fund or enterprise funds, as appropriate.
Compensated Absences: Compensated absences comprise vested accumulated vacation and sick leave.
The City's liability for compensated absences is recorded in governmental or business-type activities as
appropriate. The liability for compensated absences is determined annually. For all governmental funds,
amounts expected to be "permanently liquidated," such as what is due to be paid because of a realized
employment action, are recorded as fund liabilities; the long-term portion is recorded in the Statement of
Net Position.
Compensated absences are liquidated by the fund that has recorded the liability. The long-term portion of
governmental activities compensated absences are liquidated primarily by the General Fund, using the
Compensated Absences and Long-Term Disability internal service fund to account for termination payouts.
(Continued)
44.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The changes in compensated absences for the year ended June 30, 2020 were as follows:
Governmental Business-Type
Activities Activities Total
Beginning balance $ 4,750,470 $ 365,331 $ 5,115,801
Additions 982,983 45,758 1,028,741
Reductions (585,661) (47,571) (633,232)
Ending balance $ 5,147,792 $ 363,518 $ 5,511,310
Current portion $ 531,203 $ 52,043 $ 583,246
Non-current portion $ 4,616,589 $ 311,475 $ 4,928,064
Deferred Outflows/Inflows of Resources: In addition to assets,the statement of financial position or balance
sheet reports a separate section for deferred outflows of resources. This separate financial statement
element, deferred outflows of resources, represents a consumption of net position or fund balance that
applies to a future period(s)and so will not be recognized as an outflow of resources(expense/expenditure)
until then. The City reports differences between expected and actual experience, changes in pension and
OPEB assumptions, loss on pension and OPEB investments, and contributions made subsequent to the
measurement date as well. Differences between expected and actual experience and changes in pension
and OPEB plan assumptions are deferred and amortized over the average of the expected remaining
service lives of employees who are provided with benefits through the pension and OPEB plans. Loss on
pension and OPEB investments are deferred and amortized over five years. Employer contributions made
subsequent to the measurement date and change in proportionate share are deferred and recognized as a
reduction of the net pension and net OPEB liability in the subsequent reporting year.
In addition to liabilities, the statement of financial position or balance sheet reports a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position or fund balance that applies to a future period(s)and so will not be
recognized as an inflow of resources (revenue) until that time. Under the accrual basis of accounting
differences between expected and actual experience are deferred and amortized over the average of the
expected remaining service lives of all employees who are provided with benefits through the pension and
OPEB plans.
Property Tax Calendar: All property taxes are levied and collected by the County of Santa Clara. Secured
taxes are levied on July 1, are due in two installments on November 1 and February 1 and become
delinquent after December 10 and April 10. Unsecured taxes are levied on July 1 and become delinquent
on August 31. The lien date for secured and unsecured property taxes is January 1.
The City, in fiscal year 1993-94, adopted an alternative method of property tax distribution (the "Teeter
Plan"). Under this method, the City receives 100 percent of its secured property tax levied in exchange for
foregoing any interest and penalties collected on delinquent taxes. The City receives remittances as a
series of advances made by the County during the year.
Interfund Transactions: Transactions constituting reimbursements to a fund for expenditures/expenses
initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses
in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed.
(Continued)
45.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Statement of Cash Flows: For purposes of reporting cash flows for the City's proprietary funds, pooled
cash and investments are considered cash equivalents as the proprietary funds can access pooled cash
and investments in a manner similar to a demand deposit account.
Prepaid Items: Prepaid items are reported under the consumption method, which recognizes the
expenditures/expense in the period associated with the service rendered or goods consumed.
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that
affect certain amounts and disclosures. Accordingly, actual results could differ from those estimates.
Implementation of Governmental Accounting Standards Board (GASB) Pronouncements: Management
adopted the provisions of the following Governmental Accounting Standards Board (GASB) Statements,
which became effective during the year ended June 30, 2018.
In May 2020, the GASB issued Statement 95, Postponement of the Effective Dates of Certain Authoritative
Guidance. This Statement postpones the effective date of certain pending GASB pronouncements and
implementation guides due to the impacts of the COVID-19 pandemic. The requirements of this Statement
are effective immediately. As such,the City has implemented this standard for its fiscal year ended June 30,
2020, and has postponed the implementation of certain future standards to comply with this standard.
Fair Value Measurements: Fair value is defined as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date. The
City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques
used to measure fair value into three levels based on the extent to which inputs used in measuring fair
value are observable in the market:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs—other than quoted prices included within level 1 —that are observable for
an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the fair value
hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to
the entire measurement.
(Continued)
46.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 2—CASH AND INVESTMENTS
Primary Government: The City's pooled idle funds are invested pursuant to investment policy guidelines
adopted by the City Council. The objectives of the policy are to invest funds to the fullest extent possible
and to invest in accordance with the provisions of the California Government Code with the priority of safety,
liquidity and yield. The policy addresses the safekeeping of securities, types of investment instruments,
diversification, maturities, reporting requirements, and internal control. The City maintains a cash and
investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on
the Statement of Net Position and the balance sheet as"cash and investments."
Policies: California Law requires banks and savings and loan institutions to pledge government securities
with a market value of 110 percent of the City's cash on deposit, or first trust deed mortgage notes with a
market value of 150 percent of the deposit, as collateral for these deposits. Under California Law, this
collateral is held in a separate investment pool by another institution in the City's name and places the City
ahead of general creditors of the institution.
The City and its fiscal agents invest in individual investments and in investment pools. Individual
investments are evidenced by specific identifiable securities instruments, or by an electronic entry
registering the owner in the records of the institution issuing the security, called the book entry system.
Security instruments owned by the City are held in safekeeping by a third party custodian acting as agent
for the City under the terms of a custody agreement.
The City's investments are carried at fair value with the exception of money market mutual funds, which
are carried at amortized cost. The City adjusts the carrying value of its investments to reflect their fair value
at each fiscal year end, and it includes the effects of these adjustments in investment income for that fiscal
year.
Classification: The City's total cash and investments,at fair value,are presented on the financial statements
in the following allocation:
Primary Government
Cash and investments $ 159,131,152
Restricted cash and investments:
Held by fiscal agent for pension 12,725,224
Held by fiscal agent for bond repayments 4,362,317
Total cash and investments $ 176,218,693
(Continued)
47.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 2—CASH AND INVESTMENTS (Continued)
Authorized Investments by the City: The City's Investment Policy and the California Government Code
allow the City to invest its pooled idle funds in the following, under limits and provisions that address interest
rate risk, credit risk, and concentration of credit risk. This does not include the City's investments of debt
proceeds held by fiscal agents that are governed by the provisions of debt agreements of the City.
Minimum Maximum Maximum
Maximum Credit Percentage of Investment in
Authorized Investment Type Maturity Quality Portfolio One Issuer
U.S.Treasury Obligations 5 years N/A None None
U.S.Agency Securities* 5 years N/A None None
California Local Agency Investment
Fund(LAIF) N/A N/A Up to$65 million None
Non-negotiable Certificates of
Deposits(time deposits) 5 years N/A 30%"` 10%of portfolio;
5%of issuer's net worth**
State of California registered state
warrants,treasury notes,or bonds 5 years N/A None None
California local agency bonds, notes,
warrants,or other obligations 5 years N/A None None
Bond issued by the local agency 5 years N/A None None
Bankers'Acceptances 180 days N/A 40% None
Commercial Paper 270 days A-1+P-1 25% 10%of portfolio;5%of
issuer's net worth; 10%of
outstanding paper of
Issuer..*
Negotiable Certificates of Deposit 5 years N/A 30% 10%of portfolio;5%of
issuer's net worth. "
Repurchase Agreements 1 year N/A None 10%of portfolio;5%of
issuer's net worth."
Medium Term Corporate Notes 5 years A or better 30% 10%of portfolio;5%of
issuer's net worth.**
Money market mutual funds investing
in U.S.Treasury, Government Agency
securities or repurchase agreements
collateralized by U.S.Treasury or
Government Agency securities 5 years Aaa/AAA 20% None
Supranationals 5 years AA or better 30% 10%of portfolio
Securities issued by agencies of the federal government such as the Government National Mortgage Association(GNMA),
the Federal Farm Credit System(FFCB),the Federal Home Loan Bank(FHLB),the Federal National Mortgage Association
(FNMA),the Student Loan Marketing Association(SLMA),and the Federal Home Loan Mortgage Association(FHLMC).
Represents restriction in which the City's investment policy is more restrictive than the California Government Code.
30%maximum percent of portfolio if using a private sector entity to assist in the placement of the time deposits.No maximum
for others.
Authorized Investments by Debt Agreements: The City must maintain required amounts of cash and
investments with trustees or fiscal agents under the terms of certain debt issues. These funds are
unexpended bond proceeds or are pledged reserves to be used if the City fails to meet its obligations under
these debt issues. The California Government Code requires these funds to be invested in accordance
with City ordinances, bond indentures or State statutes. The City's Investment Policy allows investments
of bond proceeds to be governed by provisions of the related bond indentures. The following identifies the
investment types that are authorized for investments held by fiscal agents under the terms of the bond
indentures of the related debt issue:
(Continued)
48.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 2—CASH AND INVESTMENTS (Continued)
Minimum Maximum
Maximum Credit Percentage of
Authorized Investment Type Maturity Quality Portfolio
Cash or obligations of the U.S. including U.S.Treasury obligations N/A N/A None
Federal agencies obligations which represent
full faith and credit of the U.S. N/A N/A None
Direct federal agencies obligations which are not
fully guaranteed by the full faith and credit of the U.S. N/A N/A None
U.S. dollar denominated deposit accounts,federal funds and
bankers'acceptances with domestic commercial banks 360 days P-1,A-1+, A-1 None
Commercial Paper 270 days P-1,A-1 None
Money market funds N/A Aaam or AAAm-G None
Pre-refunded municipal obligations that are not callable prior
to maturity or as to which irrevocable instructions have been Highest
given to call on the date specified in the notice N/A rating category None
Municipal obligations or General obligations of states N/A Aaa,AAA,A2,A None
California Local Agency Investment Fund (LAIF) N/A N/A Up to$65 million
Shares in a California common law trust established pursuant
to Title 1, Division 7, Chapter 5 of the California Government
Code which invests exclusively in investments permitted by
Section 53635 of Title 5, Division 2, Chapter of the California
Government Code, as it may be amended. N/A N/A None
Interest Rate Risk: Interest rate risk is the risk that changes in market interest rates will adversely affect
the fair value of an investment. Generally,the longer the maturity of an investment the greater the sensitivity
of its fair value to changes in market interest rates.
Information about the sensitivity of the fair values of the City's investments (including investments held by
bond trustees) to market interest rate fluctuations is provided by the following table that shows the
distribution of the City's investments by maturity or earliest call date:
12 Months 13 to More than
Investment Type or less 24 Months 24 Months Total
U.S.Treasury Securities $ 2,418,852 $ 8,202,760 $ 17,421,510 $ 28,043,122
U.S.Agency Notes
Federal Home Loan Mortgage Corporation - 1,550,010 6,140,693 7,690,703
Federal National Mortgage Association 2,211,506 - 11,717,112 13,928,618
Federal Home Loan Banks - 2,049,600 7,034,330 9,083,930
Federal Farm Credit Banks - 1,370,527 4,334,280 5,704,807
Corporate Notes 2,891,546 2,047,960 23,953,184 28,892,690
Local Agency Investment Fund 20,824,714 - - 20,824,714
Municipal Bonds - - 805,487 805,487
Asset Backed Securities - - 10,358,047 10,358,047
Collateralized Mortgage Obligations - - 3,237,400 3,237,400
Money Market Mutual Funds 6,630,849 - - 6,630,849
Total investments $ 34,977,467 $ 15,220,857 $ 85,002,043 135,200,367
Cash in banks and on hand 28,293,102
Restricted for Pension(PARS) 12,725,224
Total cash and investments $ 176,218,693
(Continued)
49.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 2—CASH AND INVESTMENTS (Continued)
The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California
Government Code Section 16429 under the oversight of the Treasurer of the State of California. The Local
Investment Advisory Board (Board) has oversight responsibility for LAIF. The Board consists of five
members as designated by State Statute. The City reports its investment in LAIF at the fair value amount
provided by LAIF, which is the same as the value of the pool share.The balance is available for withdrawal
on demand, and is based on the accounting records maintained by LAIF, which are recorded on an
amortized cost basis. Included in LAIF's investment portfolio are U.S. Treasuries, Federal Agency
obligations, time deposits, negotiable certificates of deposits, commercial paper, corporate bonds, and
security loans. These investments had weighted average maturity of 191 days.
Money market mutual funds are available for withdrawal on demand. At June 30, 2020, money market
mutual funds, used for pooled investment and held by fiscal agent purposes, had a weighted average
maturity of 46 days or less.
Fair Value Hierarchy: The City categorizes its fair value measurements within the fair value hierarchy
established by generally accepted accounting principles. The hierarchy is based on the valuation inputs
used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical
assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant
unobservable inputs.
The following is a summary of the fair value hierarchy of the fair value of investments of the City as of
June 30, 2020:
Investments by Fair Value Level Level 1 Level 2 Total
U.S.Treasury Securities $ - $ 28,043,122 $ 28,043,122
U.S.Agency Notes
Federal Home Loan Mortgage Corporation - 7,690,703 7,690,703
Federal National Mortgage Association - 13,928,618 13,928,618
Federal Home Loan Banks - 9,083,930 9,083,930
Federal Farm Credit Banks - 5,704,807 5,704,807
Corporate Notes - 28,892,690 28,892,690
Municipal Bonds - 805,487 805,487
Asset Backed Securities - 10,358,047 10,358,047
Collateralized Mortgage Obligations - 3,237,400 3,237,400
Total investments $ - $ 107,744,804 107,744,804
Investments Measured at Amortized Cost:
Money Market Mutual Funds 6,630,849
Investments Exempt from Fair Value Hierarchy:
Local Agency Investment Fund 20,824,714
Cash in banks and on hand 28,293,102
Investments Held in Trust:
Restricted for Pension(PARS) 12,725,224
Total cash and investments $ 176,218,693
(Continued)
50.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 2—CASH AND INVESTMENTS (Continued)
Investments classified in Level 1 of the fair value hierarchy include securities valued using quoted prices in
active markets. Federal Agency Securities and other U.S. Treasury Securities, classified in Level 2 of the
fair value hierarchy are valued using matrix pricing techniques maintained by various pricing vendors.
Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices.
Fair value is defined as the quoted market value on the last trading day of the period. These prices are
obtained from various pricing sources by the custodian bank.The California Local Agency Investment Fund
(LAIF) is valued using factors provided in the Pooled Money Investment Account (PMIA) Performance
Report by the State Treasurer's Office. Money market funds and negotiable certificates of deposit are
exempt from fair value measurement and are reported at amortized cost.
Credit Risk: Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating
organization. Presented below is the actual rating as of June 30, 2020 for each investment type, including
those with fiscal agents, as provided by Moody's ratings:
Investment Type Ratings Total
Money Market Mutual Funds Aaa $ 6,630,849
Corporate Notes Al 28,892,690
U.S. Agency Notes
Federal Home Loan Mortgage Corporation Aaa 7,690,703
Federal National Mortgage Association Aaa 13,928,618
Federal Home Loan Banks Aaa 9,083,930
Federal Farm Credit Banks Aaa 5,704,807
Municipal Bonds Aa2 805,487
Asset Backed Securities Aaa 10,358,047
Collateralized Mortgage Obligations Aaa 3,237,400
U.S. Treasury Securities Aaa 28,043,122
Not rated:
Local Agency Investment Fund Not Rated 20,824,714
Total investments $135,200,367
Concentration of Credit Risk: The City's investment policy contains certain limitations on the amount that
can be invested in any one issuer. In certain categories, these limitations are more restrictive than those
required by California Government Code Sections 53600 et seq. Excluding those issued or explicitly
guaranteed by the U.S.government and investments in the local agency investment fund and mutual funds,
the City had the following investments that represent five percent or more of total City-wide investments:
Issuer Investment Type Amount
Federal Home Loan Mortgage Corporation (FHLMC) U.S. Agency Notes $ 7,690,703
Federal Home Loan Banks (FHLB) U.S. Agency Notes 9,083,930
Federal National Mortgage Association (FNMA) U.S. Agency Notes 13,928,618
(Continued)
51.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 2—CASH AND INVESTMENTS (Continued)
OPEB Trust: The OPEB Trust's pooled idle funds are invested pursuant to investment policy guidelines
adopted by the Plan. The objectives of the policy are to invest funds to the fullest extent possible and to
invest in accordance with the provisions of the California Government Code with the priority of safety,
liquidity and yield. The policy addresses the safekeeping of securities, types of investment instruments,
diversification, maturities, reporting requirements, and internal control. The Plan maintains a cash and
investment pool that is available for use only by the plan and not any other City funds.
Policies: California Law requires banks and savings and loan institutions to pledge government securities
with a market value of 110 percent of the Plan's cash on deposit, or first trust deed mortgage notes with a
market value of 150 percent of the deposit, as collateral for these deposits. Under California Law, this
collateral is held in a separate investment pool by another institution in the Plans name and places the Plan
ahead of general creditors of the institution.
The Plan and its fiscal agent invest in individual investments and in investment pools. Individual
investments are evidenced by specific identifiable securities instruments, or by an electronic entry
registering the owner in the records of the institution issuing the security, called the book entry system.
Security instruments owned by the Plan are held in safekeeping by a third party custodian acting as agent
for the City under the terms of a custody agreement.
The Plan's investments are carried at fair value with the exception of money market mutual funds which
are carried at amortized cost. The Plan adjusts the carrying value of its investments to reflect their fair value
at each fiscal year end, and it includes the effects of these adjustments in investment income for that fiscal
year.
Classification: The Plan's total cash and investments, at fair value, are presented on the fiduciary fund
financial statements.
Authorized Investments: The Plan's Investment Policy and the California Government Code allow the Plan
to invest its pooled idle funds in the following, under limits and provisions that address interest rate risk,
credit risk, and concentration of credit risk. Specifics of the policy are:
Fixed Income Assets- The fixed income investments are to maintain intermediate-term average weighted
duration, between three-seven years. At the time of purchase, no single fixed income issuer shall exceed
two percent of the total market value of the Portfolio, with the exception of U.S. Treasury or Agency
obligations. The direct high-yield portion shall constitute no more than 10 percent of the total market value
of the Portfolio.
Equity & Growth Assets - The domestic equity investments are expected to be diversified at all times by
size, industry, sector, and style (Large Cap, Mid Cap, and Small Cap). At the time of purchase, no
individual equity security shall exceed two percent of the total market value of the Portfolio. The
international equity investments (including emerging markets) shall constitute no more than 20 percent of
the total market value of the Portfolio. The real estate investments shall be captured through the use of
diversified mutual funds or ETFs investing in REITs; and shall constitute no more than 15 percent of the
total market value of the Portfolio. The commodities investments shall be captured through the use of
diversified mutual funds or ETFs; and shall constitute no more than 10 percent of the total market value of
the Portfolio.
(Continued)
52.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 2—CASH AND INVESTMENTS (Continued)
Permitted Asset Classes and Security Types
• Fixed Income & Cash Equivalent Investments:
• Domestic Certificates of Deposit(rated A-1/P-1 or better)
• Domestic Commercial Paper(rated A-1/P-1 or better)
• Floating Rate Notes
• Money Market Mutual Funds
• U.S. Treasury Bonds, Bills and Notes
• U.S. Agency (and Instrumentality) Discount Notes, Notes, and Bonds
• Treasury Inflation-Protected Securities (TIPS)
• Municipal Bonds and Notes
• Corporate Bonds
• Mortgage-Backed Bonds (MBS)
• Asset-Backed Bonds (ABS)
• High-Yield Bonds (rated B-/B3 or better)
• Dollar denominated Foreign Bonds and Notes
• Bond Mutual Funds
• Equity Investments:
• Common & Preferred Stocks
• American Depository Receipts (ADRs)
• Domestic and International Equity Mutual Funds (Open and Closed)
• Emerging Market Equity Funds or Exchange Traded Funds (ETFs)
• Alternative Investments:
• Commodities Mutual Funds or Exchange Traded Notes (ETNs)
• REIT Investment or Pooled Strategy or Fund of REITs
• Registered Hedge Funds or Hedge Fund of Funds
Interest Rate Risk: Interest rate risk is the risk that changes in market interest rates will adversely affect
the fair value of an investment. Generally,the longer the maturity of an investment the greater the sensitivity
of its fair value to changes in market interest rates. All of the Plan's investments are held in mutual fund
securities with a maturity of less than 12 months.
Money market mutual funds are available for withdrawal on demand. At June 30, 2020, money market
mutual funds, used for investment and held by fiscal agent purposes, had a weighted average maturity of
43 days or less.
Fair Value Hierarchy: The Plan categorizes its fair value measurements within the fair value hierarchy
established by generally accepted accounting principles. The hierarchy is based on the valuation inputs
used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical
assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant
unobservable inputs. The Plan's investments in mutual funds are valued at fair value and are considered
Level 1 investments.
(Continued)
53.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 2—CASH AND INVESTMENTS (Continued)
Credit Risk: Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating
organization. As the Plan is invested in mutual funds, there are no available credit risk ratings.
Concentration of Credit Risk: The Plan's investment policy contains certain limitations on the amount that
can be invested in any one issuer. In certain categories, these limitations are more restrictive than those
required by California Government Code Sections 53600 et seq. Excluding those issued or explicitly
guaranteed by the U.S.government and investments in the local agency investment fund and mutual funds,
the Plan did not have investments that represent five percent or more of total Plan investments.
NOTE 3— LOANS RECEIVABLE
Housing Program Loans: On June 30, 1995, the City loaned $821,000 to Community Housing Developers,
a California nonprofit public benefit corporation. The note bears interest at three percent per annum,
compounded annually, payable to the extent of surplus cash, and all unpaid principal and interest due
June 30, 2035. At June 30, 2020, the balance remaining on the loan was $821,000. The loan was issued
using resources in the Housing Development Fund and is considered governmental activities.
On June 6, 1996, the City loaned $320,000 to Cupertino Community Services, a California nonprofit public
benefit corporation. The note bears interest at three percent per annum and due on July 14, 2026. At
June 30, 2020,the balance on the loan was$168,661. The loan was issued using resources in the Housing
Development Fund and is considered governmental activities.
On September 11, 2017 the City loaned $3,672,000 to Stevens Creek, L.P., a California limited partnership.
The note bears interest at three percent per annum for 55 years. After the completion of construction of the
development, no later than April 301h of each calendar year, the Developer shall make repayments of the
loan in an amount equal to the City loan percentage of the lenders'share of residual receipts.The payments
shall be credited first against accrued interest and then against outstanding principal of the loan, and shall
be accompanied by the developer's report of residual receipts. At June 30, 2020, the balance remaining on
the loan was $3,672,000. The loan was issued using resources in the Housing Development Fund and is
considered governmental activities.
In addition to these loans, the City has $40,120 in housing and other loans receivable at June 30, 2020.
These loans bear interest at three to six percent and are due by June 30, 2025. The loan was issued using
resources in the Housing Development Fund and is considered governmental activities.
(Continued)
54.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 4— INTERFUND TRANSACTIONS
Transfers between funds during the fiscal year ended June 30, 2020 were as follows:
Fund Making Transfers Fund Receiving Transfers Amount Transferred
General Fund Transportation Special Revenue Fund $ 221,000 (A)
Public Financing Corporation Debt Service Fund 3,172,838 (B,D)
Capital Improvement Projects Capital Projects Fund 20,705,438 (A)
Non-major Governmental Funds 1,097,000 (C)
Non-major Enterprise Funds 610,000 (D)
Cupertino Sports Center Fund 948,000 (D)
Recreation Programs Fund 565,000 (D)
Internal Service Funds 3,573,000 (E)
Capital Improvements Projects
Capital Projects Fund General Fund 10,000,000 (A)
Cupertino Sports Center Fund 1,275,000 (A)
Recreation Programs Fund 125,000 (C)
Non-major Governmental Funds General Fund 12,000 (F)
Total Interfund Transfers $ 42,304,276
The reasons for these transfers are set forth below:
(A) To fund capital projects.
(B) For annual lease payment for 2012 Certificates of Participation debt service.
(C) To support state-mandated activities including complaint response and enforcement programs.
(D) Operating subsidy from General Fund.
(E) To fund IT operations,personnel costs associated with staffing special project,and compensated absences and retiree health.
(F) To fund purchase of trees
Current Interfund Balances: Current interfund balances arise in the normal course of business and are
expected to be repaid shortly after the end of the fiscal year. At June 30, 2020, the Equipment Revolving
Internal Service Fund owed the General Fund $539,204.
Interfund Advances: Interfund advances are balances between funds that are not expected to be repaid
within the current fiscal year. As of June 30, 2020, the General Fund advanced $3,000,000 to the Capital
Improvement Projects Capital Projects Fund for advance funding of planned projects that will be repaid in
subsequent years.
(Continued)
55.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 5—CAPITAL ASSETS
A summary of changes in governmental activities capital assets is as follows:
Balance at Balance at
July 1, 2019 Additions Deletions Transfers June 30, 2020
Governmental activities:
Capital assets not being depreciated:
Land $ 62,045,969 $ $ $ $ 62,045,969
Easements 19,615,039 19,615,039
Construction in progress 3,556,011 11,317,866 (12,380) (9,546,327) 5,315,170
Total general government capital
assets not being depreciated 85,217,019 11,317,866 (12,380) (9,546,327) 86,976,178
Capital assets being depreciated:
Buildings 46,154,679 - 53,248 46,207,927
Improvements other than buildings 57,704,166 853,679 58,557,845
Machinery and equipment 3,705,886 (26,038) 469,559 4,149,407
Roads, curbs, gutters, sidewalks, medians
and bridges 170,021,047 7,950,226 177,971,273
Streetlights 8,838,715 219,615 9,058,330
Storm drain structure and mains 37,373,158 - 37,373,158
Traffic signals 6,418,246 - - 6,418,246
Total capital assets being depreciated 330,215,897 (26,038) 9,546,327 339,736,186
Less accumulated depreciation for:
Buildings (28,431,668) (1,762,190) - (30,193,858)
Improvements other than buildings (38,792,488) (2,283,155) - (41,075,643)
Machinery and equipment (2,466,624) (355,065) 26,038 (2,795,651)
Roads, curbs, gutters, sidewalks, medians
and bridges (107,849,619) (2,408,644) - (110,258,263)
Streetlights (7,350,244) (118,898) (7,469,142)
Storm drain structure and mains (32,678,455) (431,927) (33,110,382)
Traffic signals (5,575,962) (112,577) - (5,688,539)
Total accumulated depreciation (223,145,060) (7,472,456) 26,038 (230,591,478)
Total general government capital
assets being depreciated, net 107,070,837 (7,472,456) - 9,546,327 109,144,708
Internal service fund capital assets:
Capital assets not being depreciated:
Construction in progress 10,045 941,206 (736,585) 214,666
Total internal fund capital
assets not being depreciated 10,045 941,206 (736,585) 214,666
Capital assets being depreciated:
Machinery and equipment 10,988,245 - (302,613) 736,585 11,422,217
Less accumulated depreciation (7,315,096) (969,469) 302,613 - (7,981,952)
Total internal fund capital
assets being depreciated, net 3,673,149 (969,469) - 736,585 3,440,265
Governmental activities capital assets, net $195,971,050 $ 3,817,147 $ (12,380) $ - $199,775,817
(Continued)
56.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 5—CAPITAL ASSETS (Continued)
Balance at Balance at
July 1, 2019 Additions Deletions Transfers June 30, 2020
Business-type activities:
Capital assets not being depreciated:
Construction in progress $ - $ 75,297 $ - $ (75,297) $ -
Total capital assets not being depreciate - 75,297 - (75,297)
Capital assets being depreciated:
Buildings 1,006,002 - - 1,006,002
Improvements other than buildings 2,089,743 - - 2,089,743
Machinery and equipment 635,822 - 75,297 711,119
Total capital assets being depreciated 3,731,567 - 75,297 3,806,864
Less accumulated depreciation for:
Buildings (371,575) (60,461) - - (432,036)
Improvements other than buildings (1,461,742) (191,679) - (1,653,421)
Machinery and equipment (579,506) (23,019) - (602,525)
Total accumulated depreciation (2,412,823) (275,159) - (2,687,982)
Total capital assets being depreciated 1,318,744 (275,159) - 75,297 1,118,882
Business-type activity capital assets, net $ 1,318,744 $ (199,862) $ - $ - $ 1,118,882
Depreciation expense was charged to functions and programs based on their usage of the related assets.
Depreciation expense was charged to governmental activities as follows:
Governmental Activities
Administration $ 183,075
Public and Environment Affairs 15,692
Administrative Services 28,395
Parks and Recreation 162,899
Public Works 7,082,395
Total $ 7 472 456
Depreciation expense was charged to the business-type activities as follows:
Business-Type Activities
Resources Recovery $ 3,314
Blackberry Farm 6,035
Cupertino Sports Center 54,382
Recreation Program 211,428
Total $ 275159
(Continued)
57.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 6—LONG-TERM DEBT
Cupertino Public Facilities Corporation Certificates of Participation:
Original Balance Balance
Issue June 30, June 30, Current
Amount 2019 Retirements 2020 Portion
2012 Refinancing Certificates
of Participation:
0.350-3.125%, due 07/01/2030 $ 43,940,000 $ 29,300,000 $ 2,290,000 $ 27,010,000 $ 2,355,000
Total long-term debt $ 29,300,000 $ 2,290,000 $ 27,010,000 $ 2,355,000
The Cupertino Public Facilities Corporation issued Certificates of Participation to provide financing for the
construction of the Community Center, improvements of the City Hall and the Library in July 1986; purchase
of Wilson Park in 1989; finance the Memorial Park Expansion in 1990; and purchase the Blackberry Farm
and Fremont Older site in 1991. The Cupertino Public Facilities Corporation, as lessor, leased real property
to the City (under the Lease Agreement with the lessee) and assigned the base rental payments to the
trustee for the benefit of the owners of the certificates of participation. The rental payments which represent
the pledged revenues are scheduled to be sufficient in both time and amount, when the principal and
interest of the certificates are due, which was the case for the year ended June 30, 2020.
On May 9, 2012, $43,940,000 principal amount of 2012 Refinancing Certificates of Participation (2012
COPs) were issued to refund the 2002 COPs, to fund a reserve fund for the 2012 COPs, and pay costs
incurred in connection with issuance.
The 2012 COPs are payable by a pledge of revenues from the lease payments payable by the City pursuant
to the Lease Agreement between the Cupertino Public Facilities Corporation and the City for the use and
possession of the Site and Facility as described in the Lease Agreement. The City also covenanted in the
Lease Agreement to include all lease payments in its annual budget. Total debt service payments
remaining on the 2012 COPs is $31,702,271 payable through July 1, 2030. For the year ended June 30,
2020, the bonds had $2,290,000 of principal and $882,837 interest due.
Annual debt service requirements for the 2012 COPS are shown below:
For the Year Governmental Activities
Ending June 30 Principal Interest
2021 $ 2,355,000 $ 814,138
2022 2,425,000 743,486
2023 2,500,000 670,738
2024 2,575,000 595,738
2025 2,655,000 518,488
2026-2030 14,500,000 1,349,683
Total $ 27,010,000 $ 4,692,271
(Continued)
58.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 7— NET POSITION AND FUND BALANCES
Net Position is measured on the full accrual basis while Fund Balance is measured on the modified accrual
basis.
Net Position: The government-wide and proprietary fund financial statements utilize a net position
presentation. Net position is categorized as follows:
Net investment in capital assets-This category groups all capital assets including, infrastructure, into one
component of net position. Accumulated depreciation and outstanding balances of debt that are
attributable to the acquisition, construction or improvement of these assets reduce the balance in this
category.
Restricted - This category represents net position that has external restrictions imposed by creditors,
grantors, contributors or laws or regulations of other governments and restrictions imposed by law through
constitutional provisions or enabling legislation.
Unrestricted - This category represents net position of the City that do not meet the definition of "net
investment in capital assets" or"restricted."
Fund Balances: As prescribed by GASB Statement No. 54, governmental funds report fund balance in
classifications based primarily on the extent to which the City is bound to honor constraints on the specific
purposes for which amounts in the funds can be spent. Fund balances for governmental funds are made
up of the followings:
Nonspendable Fund Balance - includes amounts that are (a) not in spendable form, or (b) legally or
contractually required to be maintained intact. The "not in spendable form" criterion includes items that are
not expected to be converted to cash, for example: prepaid items, property held for resale and long term
notes receivable.
Restricted Fund Balance- includes amounts that can be spent only for the specific purposes stipulated by
external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be
changed or lifted only with the consent of resource providers.
Committed Fund Balance - includes amounts that can only be used for the specific purposes determined
by a formal action of the City's highest level of decision-making authority, the City Council. Commitments
may be changed or lifted only by the City taking the same formal action (resolution) that imposed the
constraint originally.
Assigned Fund Balance-comprises amounts intended to be used by the City for specific purposes that are
neither restricted nor committed. Intent is expressed by the City Council or official to which the City Council
has delegated the authority to assign amounts to be used for specific purposes. Through the adopted
budget, the City Council establishes assigned fund balance policy levels and also sets the means and
priority for the City Manager to fund these levels.
Unassigned Fund Balance-is the residual classification for the General Fund and includes all amounts not
contained in the other classifications. Unassigned amounts are technically available for any purpose.
In circumstances when an expenditure may be made for which amounts are available in multiple fund
balance classifications, the fund balance in General Fund will generally be used in the order of restricted,
unassigned, and then assigned reserves. In other governmental funds,the order will generally be restricted
and then assigned.
(Continued)
59.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 7— NET POSITION AND FUND BALANCES (Continued)
Fund balances for all major and nonmajor governmental funds as of June 30, 2020, were distributed as
follows:
Public Capital Other
Housing Facilities Improvements Governmental
General Transportation Development Corporation Projects Funds Total
Nonspendable:
Loans receivable $ 449,341 $ $ $ $ $ $ 449,341
Advances to other funds 3,000,000 3,000,000
Subtotal 3,449,341 3,449,341
Restricted for:
Public access television 1,368,789 1,368,789
Debt service 13,193 1,685,872 1,699,065
PRSP Section 115 Trust 12,725,224 - 12,725,224
Public safety power shutoff 217,551 217,551
Storm drain system - 3,994,007 3,994,007
Parks and open space 12,345,423 12,345,423
Environmental management 1,780,980 1,780,980
Streets and road projects 5,174,514 241,119 5,415,633
Housing programs - 8,459,128 - 8,459,128
Subtotal 14,324,757 5,174,514 8,459,128 1,685,872 18,361,529 48,005,800
Committed for:
Economic uncertaintyl 19,000,000 - - - - 19,000,000
Sustainability Reserve 127,891 127,891
Subtotal 19,127,891 19,127,891
Assigned to:
Encumbrances 3,176,882 - - 3,176,882
Capital projects - 40,354,087 197,044 40,551,131
Subtotal 3,176,882 40,354,087 197,044 43,728,013
Unassigned 34,426,942 - - 34,426,942
Total $ 74,505,813 $ 5,174,514 $ 8,459,128 $ 1,685,872 $ 40,354,087 $ 18,558,573 $148,737,987
NOTE 8—COMMITMENTS AND CONTINGENCIES
Federal and State Grant: The City participates in a number of federal and state grant programs subject to
financial and compliance audits by the grantors or their representatives. Audits of certain grant programs,
including those for the year ended June 30, 2020, have yet to be conducted. The amount, if any, of
expenditures that may be disallowed by the granting agencies cannot be determined at this time.
Management believes that such disallowances, if any, would not have a material effect on the financial
statements.
Encumbrances: The City uses encumbrances to control expenditure commitments for the year.
Encumbrances represent commitments related to executor contracts not yet performed and purchase
orders not yet filled. Commitments for such expenditure of monies are encumbered to reserve a portion of
applicable appropriations. Encumbrances still open at year end are not accounted for as expenditures and
liabilities, but as restricted, or assigned fund balance.
(Continued)
60.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 8—COMMITMENTS AND CONTINGENCIES (Continued)
As of June 30, 2020, the City had the following encumbrances outstanding:
Governmental Funds:
General Fund $ 3,176,882
Transportation Special Revenue Fund 486,221
Housing Development Special Revenue Fund 10,318
Capital Improvements Projects Capital Projects Fund 1,697,733
Other Governmental Funds 93,459
Total Encumbrances $ 5,464,613
Lease Agreement with County of Santa Clara: The City has an agreement(commitment), expired in 2019
but still being honored, to lease a building to the County of Santa Clara for the purpose of providing library
service to the City's residents. The lease requires a minimum annual payment of $120,000 adjusted for
Cupertino's portion of book circulation and increase of assessed valuation. This is an operating lease with
a renewable option. The City is currently negotiating the terms with the Santa Clara County Library District
JPA to renew the operating lease. At June 30, 2020, the cost and carrying value of the building which
opened in October 2004, is $21,952,133 and $8,060,185 respectively, with $13,891,948 in accumulated
depreciation.
Consulting Agreement for Sales Taxes: The City entered into agreements (commitments) with two
companies to provide services consisting of the assessment and creation of new sales and use tax revenue
sources for the City. The City agreed to pay the companies based on a sliding scale payment schedule
dependent on the level of new sales tax revenue realized by the City as defined in the consulting
agreements. These agreements qualify as tax abatements under the provisions of GASB Statement 77.
However, due to legal restrictions per the California Revenue and Taxation Code, Section 7056, additional
disclosures cannot be provided.
Santa Clara County Vehicle Registration Fee (VRF): The City is required to report VRF revenues,
expenditures and fund balances as of the year ended June 30, 2020:
VRF Balance as of July 1, 2019 $ -
VRF Revenue 401,249
VRF Interest -
VRF Expended 401,249
VRF Balance as of June 30, 2020 $ -
NOTE 9 — LIABILITIES UNDER SELF-INSURANCE AND RISK MANAGEMENT
General and Property Liability: The City is self-insured for the first$250,000 of general and property liability
for each occurrence, and the excess (up to $10,000,000 for each occurrence and annual aggregate) is
covered through the City's participation in the Association of Bay Area Governments Pooled Liability
Assurance Network (ABAG PLAN). The risk pool consists of 30 agencies within the San Francisco Bay
Area. The stated purpose of the ABAG PLAN is to provide certain levels of liability insurance coverage,
claims management, risk management services, and legal defense to its participating members. ABAG
PLAN is governed by a Board of Directors, which comprises officials appointed by each participating
member. Premiums paid to ABAG are subject to possible refund based on the results of actuarial studies
and approval by the Board of Directors. Complete financial statements for ABAG PLAN may be obtained
from their offices at the following address: ABAG PLAN, Finance Department, P.O. Box 2050, Oakland,
CA 94604. Premiums are revised each year based on the City's claims experience and risk exposure. For
the year ended June 30, 2020, the City paid ABAG PLAN premiums of$14,150.
(Continued)
61.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 9—LIABILITIES UNDER SELF-INSURANCE AND RISK MANAGEMENT (Continued)
Workers' Compensation Liability: The City belongs to the CSAC Excess Insurance Authority (EIA), a joint
power authority which provides excess workers' compensation liability claims coverage above the City's
self-insured retention of$500,000 per occurrence. Losses above the self-insured retention are pooled with
excess reinsurance purchased to a$50,000,000 statutory limit. EIA was established in 1979 for the purpose
of creating a risk management pool for all California public entities. EIA is governed by a Board of Directors
consisting of representatives of its member public entities. Complete financial statements for ETA may be
obtained from their offices at the following address: CSAC Excess Insurance Authority, Finance
Department, EIA 75 Iron Point Circle, Suite 200, Folsom, CA 95630. For the year ended June 30, 2020,
the City paid premiums of$104,514.
It is the City's practice to obtain biennial actuarial studies for the self-insured workers'compensation liability.
The claims liabilities included in the workers' compensation internal service fund is based on the results of
actuarial studies and include amounts for claims incurred but not reported and loss adjustment expenses.
Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends, including
frequency and amount of payouts, and other economic and social factors. Inflation of 2.5 percent, annual
rate of return of two percent, claim severity increase at 2.5 percent were assumed. In the current year,
management used actuarial estimates based on a 90 percent confidence level.
Settlements have not exceeded insurance coverage in the past three years.
Changes in the balances of workers' compensation and general claims liabilities during the years ended
June 30 are as follows:
2020 2019
Claims liability, beginning of year $ 1,553,277 $ 1,369,165
Incurred claims and changes in estimate 127,471 419,279
Claim payments and credits (153,478) (235,167)
Total claims liability, end of year 1,527,000 1,553,277
Less current portion (274,000) (313,291)
Non-current portion $ 1,253,000 $ 1 239 986
NOTE 10— DEFINED BENEFIT PENSION PLAN
Plan Descriptions and Summary of Balances by Plan: The City has one defined benefit pension plan. The
Miscellaneous Plan (Plan) is an Agent-Multiple Employer Plan. Benefit provisions under the Plan is
established by State statute and City Ordinance. All qualified permanent and probationary employees are
eligible to participate in the Plan for which they are an eligible member based on their employment position
with the City.
The Plan is administered by the California Public Employees' Retirement System (CaIPERS)which acts as
a common investment and administrative agent for its participating member employers. CaIPERS issues
publicly available reports that include a full description of the pension plans regarding benefit provisions,
assumptions and membership information that can be found on the CaIPERS website.
(Continued)
62.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 10— DEFINED BENEFIT PENSION PLAN (Continued)
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of the Miscellaneous Plan and
additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as
they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds
of employee contributions) are recognized when currently due and payable in accordance with the benefit
terms. Investments are reported at fair value.
Below is a summary of the deferred outflows of resources, net pension liabilities and deferred inflows of
resources by Plan:
Deferred Outflows Net Pension Deferred Inflows
of Resources Liability of Resources
Miscellaneous $ 9,647,619 $ 46,098,530 $ 825,047
Benefits Provided: CalPERS provides service retirement and disability benefits, annual cost of living
adjustments and death benefits to plan members, who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full time employment. Members with
five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are
eligible for non-duty disability benefits after 10 years of service. The cost of living adjustments for each
plan are applied as specified by the Public Employees' Retirement Law. The Pension Reform Act of 2013
(PEPRA), Assembly Bill 340, is applicable to employees new to CalPERS and hired after December 31,
2012. The Plans' provisions and benefits in effect at June 30, 2020, are summarized as follows:
Hire date
Prior to On or after
January 1, 2013 January 1, 2013
Benefit formula 2.7% @ 55 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service
Benefit payments monthly for life monthly for life
Minimum retirement age 50 52
Monthly benefits, as a % of eligible compensation 2% to 2.7% 1% to 2%
Required employee contribution rates 8.00% 6.25%
Required employer contribution rates 23.54% 25.653%
Employees Covered: As of the June 30, 2018 actuarial valuation date (most current), the following
employees were covered by the benefit terms of the Plan:
Inactive employees or beneficiaries currently receiving benefits 227
Inactive employees entitled to but not yet receiving benefits 139
Active employees 196
Total 562
Contributions: Section 20814(c) of the California Public Employees' Retirement Law requires that the
employer contribution rates for all public employers be determined on an annual basis by the actuary and
shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans
are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate
is the estimated amount necessary to finance the costs of benefits earned by employees during the year,
with an additional amount to finance any unfunded accrued liability. The City is required to contribute the
difference between the actuarially determined rate and the contribution rate of employees.
(Continued)
63.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 10—DEFINED BENEFIT PENSION PLAN (Continued)
Net Pension Liability: The City's net pension liability for the Plan is measured as the total pension liability,
less the pension plan's fiduciary net position. The net pension liability of the Plan is measured as of June 30,
2019, using an annual actuarial valuation as of June 30, 2018 rolled forward to June 30, 2019 using
standard update procedures. A summary of principal assumptions and methods used to determine the net
pension liability is shown below.
Actuarial Assumptions: The total pension liabilities in the June 30, 2018 actuarial valuations were
determined using the following actuarial assumptions:
Valuation Date June 30, 2018
Measurement Date June 30, 2019
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Payroll Growth 3.00%
Projected Salary Increase Varies by Entry Age and Service (1)
Investment Rate of Return 7.375% (2)
Derived using CaIPERS' Membership
Mortality Data for all Funds (3)
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses and administrative expenses, including inflation
(3)The mortality table used was developed based on CaIPERS'specific data.The table includes 15 years of
mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer
to the CaIPERS 2017 experience study report available on CaIPERS website.
All other actuarial assumptions used in the June 30, 2018 valuation were based on the results of a
December 2017 actuarial experience study for the period 1997 to 2015, including updates to salary
increase, mortality and retirement rates. Further details of the Experience Study can be found on the
CalPERS website under Forms and Publications.
Change of Assumptions: None in 2019.
Discount Rate: The discount rate used to measure the total pension liability was 7.15 percent for the Plan.
To determine whether the municipal bond rate should be used in the calculation of a discount rate for each
plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different
from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets.
Therefore, the current 7.15 percent discount rate is adequate and the use of the municipal bond rate
calculation is not necessary. The long term expected discount rate of 7.15 percent will be applied to all
plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed
report that can be obtained from the CalPERS website.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class.
(Continued)
64.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 10—DEFINED BENEFIT PENSION PLAN (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-
term market return expectations as well as the expected pension fund cash flows. Using historical returns
of all the funds' asset classes, expected compound returns were calculated over the short-term (first 10
years)and the long-term(11-60 years)using a building-block approach. Using the expected nominal returns
for both short-term and long-term,the present value of benefits was calculated for each fund. The expected
rate of return was set by calculating the single equivalent expected return that arrived at the same present
value of benefits for cash flows as the one calculated using both short-term and long-term returns. The
expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded
down to the nearest one quarter of one percent.
New
Strategic Real Return Real Return
Asset Class Allocation Years 1 - 10(a) Years 11+(b)
Global Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Assets 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Estate 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
Total 100.00%
(a) An expected inflation of 2.00%used for this period.
(b) An expected inflation of 2.92%used for this period.
The table above reflects the long-term expected real rate of return by asset class. The rate of return was
calculated using the capital market assumptions applied to determine the discount rate and asset allocation.
These rates of return (presented as geometric means) are net of administrative expenses.
Changes in Net Pension Liability: The changes in the Net Pension Liability for the City's Miscellaneous
Plan are as follows:
(Continued)
65.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 10—DEFINED BENEFIT PENSION PLAN (Continued)
Increase(Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
Balance at June 30,2018 $ 134,356,434 $ 93,476,845 $ 40,879,589
Changes in the year:
Service cost 3,324,361 - 3,324,361
Interest on the total pension liability 9,800,245 - 9,800,245
Change of Assumptions - - -
Differences between actual and expected experience 4,144,384 - 4,144,384
Contribution-employer - 4,654,841 (4,654,841)
Contribution-employee - 1,364,731 (1,364,731)
Net investment income - 6,096,968 (6,096,968)
Administrative expenses - (66,707) 66,707
Other miscellaneous income/(expenses) - 216 (216)
Benefit payments, including refunds of employee
contributions (6,193,271) (6,193,271) -
Net changes 11,075,719 5,856,778 5,218,941
Balance at June 30,2019 $ 145,432,153 $ 99,333,623 $ 46,098,530
Sensitivity of the Net Pension Liability to Changes in the Discount Rate: The following presents the net
pension liability of the City, calculated using the discount rate for the Plan, as well as what the City's net
pension liability would be if it were calculated using a discount rate that is one percentage point lower or
one percentage point higher than the current rate:
Miscellaneous
1% Decrease 6.15%
Net Pension Liability $ 65,372,004
Current Discount Rate 7.15%
Net Pension Liability $ 46,098,530
1% Increase 8.15%
Net Pension Liability $ 30,149,053
Pension Plan Fiduciary Net Position: Detailed information about the Plan's fiduciary net position is available
in the separately issued CalPERS financial reports.
(Continued)
66.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 10—DEFINED BENEFIT PENSION PLAN (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions: For the year ended
June 30, 2020, the City recognized pension expense of$9,671,506. At June 30, 2020, the City reported
deferred outflows of resources and deferred inflows of resources related to pensions from the following
sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $ 5,308,577 $ -
Differences between actual and expected experience 3,500,740 21,459
Changes in assumptions 838,302 363,260
Net differences between projected and actual earnings
on plan investments - 440,328
Total $ 9,647,619 $ 825,047
The $5,308,577 of contributions for the fiscal year ended June 30, 2020 reported as deferred outflows of
resources related to contributions subsequent to the measurement date will be recognized as a reduction
of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
Year Ended Annual
June 30 Amortization
2020 $ 2,396,183
2021 438,453
2022 566,893
2023 112,466
$ 3,513,995
NOTE 11 —OTHER POST EMPLOYMENT BENEFITS (OPEB)
Plan Description: Permanent employees who retire under the City's CalPERS retirement plan are, pursuant
to their respective collective bargaining agreements, eligible to have their medical insurance premiums paid
by the City. Retirees receive the amount necessary to pay the cost of his/her enrollment, including the
enrollment of his/her family members, in a health benefit plan provided by CalPERS up to the maximum
received by active employees in their respective bargaining unit.
The City contracts with CalPERS for this insured-benefit plan established under the state Public Employees'
Medical and Hospital Care Act (PEMHCA). The plan offers employees and retirees three CaIPERS' self-
funded options, setup as insurance risk pools, or offers various third-party insured health plans. The plan's
medical benefits and premium rates are established by CalPERS and the insurance providers. The City
contribution is established by City resolution. Retirees and active employees pay the difference between
the premium rate and the City's contribution. Premiums and City contributions are based on the plan and
coverage selected by actives and retirees,with the City's potential contribution ranging from zero to$1,605
per month per employee or retiree. The responsibility for benefit payments has transferred to the insurers
and the City does not guarantee the benefits in the event of default by the insurers. A comprehensive
annual financial report of CalPERS, inclusive of their benefit plans, is available at www.calpers.ca.gov.
(Continued)
67.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 11 —OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
The City participates in the Public Agency Retirement System (PARS) Public Agencies Post Retirement
Health Care Plan Trust Program (PARS Trust), an agent-multiple employer irrevocable trust established to
fund other postemployment benefits. The City Council adopted the PARS Public Agencies Post-Retirement
Health Care Plan Trust, including the PARS Public Agencies Post-Retirement Health Care Plan, to fund
medical insurance costs for its retired employees, effective February 17, 2010. The City Council appointed
the City Treasurer, or his/her successor or his/her designee as the City's plan administrator. The plan
administrator is authorized to execute the PARS legal documents on behalf of the City and to take whatever
additional actions necessary to maintain the City's participation in the Program and to maintain compliance
of any relevant regulation issued or as may be issued; therefore, authorizing him/her to take whatever
additional actions are required to administer the City's PARS Plan. The PARS Trust is approved by the
Internal Revenue Code Section 115 and invests funds in equity, bond, and money market mutual funds.
Copies of PARS Trust annual financial report is available at the City's Finance Department. However, as
the City is the plan administrator and has ultimate responsibility for the plan, the City considered the plan
to be a single employer plan with PARS as the trust administrator only(with no special funding situation or
nonemployer contributing entity). As such, in accordance with the requirements of GASB Statement 74,
Financial Reporting for Post Employment Benefit Plans Other Than Pension Pans, the City has elected to
present the PARS Trust as a fiduciary fund and include the required disclosures and required
supplementary information in its annual financial statements.
An employee is eligible for lifetime medical benefits under the OPEB Plan, along with his/her spouse or
declared domestic partner at the time of retirement, if all criteria listed below are met:
• The employee was hired or the City Council member was elected prior to August 1, 2004, and the
employee has five or more full-time years of service and the City Council member has five or more
years of elected service with the City of Cupertino; or
• The employee was hired or the City Council member was elected on or after August 1, 2004, and
the employee has ten or more full-time and/or elected years of CalPERS service, five years of
which must be from the City of Cupertino; and
• The employee is eligible for retirement as defined under the CalPERS retirement system; and the
employee retires from the City of Cupertino.
In addition,the eligible employee's dependent children at the time of retirement who are under 23 years old
are eligible for medical benefits. In addition to extending the eligibility of dependents from age 23 to age 26
in accordance with the recent healthcare reform act, effective July 1, 2010, employees that retire or resign
from service with the City of Cupertino and who are not eligible for retiree medical benefits can continue on
the City's medical and dental plans provided that they pay the premiums in full.
Plan membership: At January 1, 2019 (the latest information available), Plan membership consisted of the
following:
Inactive plan members or beneficiaries currently receiving benefit payments 138
Inactive plan members entitled to but not yet receiving benefit payments -
Active plan members 176
314
Contributions: OPEB Plan contributions are set by the adopted budget. The cost of the benefits provided
by the OPEB Plan is currently being paid by the City on a fully pre-funded basis. Based on the actuarial
valuation date of January 1, 2019, the annual required contribution rate is 7.41 percent of annual covered
payroll. For the year ended June 30, 2020, the City paid$1,140,063 in healthcare premium payments. Plan
members are not required to contribute to the plan.
(Continued)
68.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 11 —OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
Net OPEB Liability of the City: The components of the net OPEB liability of the City at June 30, 2020
(expressed in thousands)were as follows:
Total OPEB liability $ 31,338
Plan fiduciary net position 29,370
City's net OPEB liability $ 1,968
Plan fiduciary net position as a percentage of the total OPEB liability 93.72%
Investment rate of return: The long-term expected rate of return on OPEB plan investments was determined
using a building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of investment expense and inflation) are developed for each major asset class.
These ranges are combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation. Best
estimates of geometric real rates of return for each major asset class included in the target asset allocation
as of June 30, 2020 (see the discussion of the Plan's investment policy) are summarized in the following
table:
Long-Term Expected
Asset Class Real Rate of Return
Fixed income—core 1.52%
Fixed income— high yield 3.96%
Fixed income— inflation protected 1.96%
Fixed income— hedged 2.59%
Equities—domestic 5.85%
Equities—developed foreign 7.42%
Equities—emerging foreign 8.58%
Real estate 4.17%
Commodities 3.37%
Cash 2.19%
Investment policy: The Plan's policy in regard to the allocation of invested assets is established and may
be amended by the Plan's Board by a majority vote of its members. It is the policy of the Plan Board to
pursue an investment strategy that reduces risk through the prudent diversification of the portfolio across a
broad selection of distinct asset classes. The Plan's investment policy discourages the use of cash
equivalents, except for liquidity purposes, and aims to refrain from dramatically shifting asset class
allocations over short time spans. The following was the Board's adopted asset allocation policy as of
June 30, 2020:
Asset Class Target Allocation
Fixed income 29%
Equities 62%
Real estate 6%
Commodities 2%
Cash 1%
Total 100%
(Continued)
69.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 11 —OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
Concentrations: The Plan did not have investments outside of mutual funds that comprise five percent or
more of the Plan's total fiduciary net position.
Rate of return: For the year ended June 30, 2020, the annual money-weighted rate of return on
investments, net of investment expense, was 4.68 percent. The money-weighted rate of return expresses
investment performance, net of investment expense, adjusted for the changing amounts actually invested.
Actuarial assumptions: The total OPEB liability was determined by an actuarial valuation as of January 1,
2019, using the previously listed actuarial assumptions, applied to all periods included in the measurement,
unless otherwise specified. Mortality rates were based on the CalPERS mortality assumptions.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the time
of each valuation and the historical pattern of sharing of benefit costs between the employer and plan
members to that point. The actuarial methods and assumptions used include techniques that are designed
to reduce effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets,
consistent with long-term perspective of the calculations.
The other significant actuarial assumptions used to prepare the City's January 1, 2019 actuarial valuation
include the following:
Valuation date: January 1, 2019
Measurement date: June 30, 2020
Actuarial Cost Method: Entry Age Normal
Amortization Method: Level percent of pay closed
Amortization Period: 10 year
Asset Valuation Method: Market value
Actuarial Assumptions:
Discount Rate 6.50%
Payroll Growth 3.00%
Ultimate Rate of Medical Inflation 4.50%
Mortality (1) CalPERS mortality assumptions
Health Care Trend The annual cost of healthcare is
expected to decrease from
7.0% in 2019 to 4.5% from 2076
and later.
(1) 2017 CalPERS Experience Study, Recipients with attained age of 50
Discount rate: The discount rate used to measure the total OPEB liability was 6.5 percent. The projection
of cash flows used to determine the discount rate assumed that City contributions will be made at rates
equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan's
fiduciary net position was projected to be available to make all projected future benefit payments of current
plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to
all periods of projected benefit payments to determine the total OPEB liability.
(Continued)
70.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 11 —OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
Changes in the Net OPEB Liability: The changes in the City's net OPEB liability(asset)are (in thousands):
Net Increase (Decrease)
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability (Asset)
Balance at July 1, 2019 $ 28,073 $ 29,218 $ (1,145)
Changes in the year
Service cost 1,009 - 1,009
Interest on the total OPEB liability 1,985 - 1,985
Change of assumpsions 1,412 - 1,412
Differences between actual and
expected experience - - -
Contribution —employer - 1,141 (1,141)
Contribution —employee - - -
Net investment income - 219 (219)
Adminsitrative expenses - (67) 67
Benefit payments, including refunds of
Employee contributions (1,141) (1,141) -
Net changes 3,265 152 3,113
Balance at June 30, 2020 $ 31,338 $ 29,370 $ 1,968
Sensitivity of the net OPEB liability (asset) to changes in the discount rate: The following presents the net
OPEB asset of the City, as well as what the City's net OPEB liability would be if it were calculated using a
discount rate that is one-percentage-point lower(5.5 percent)or one-percentage-point higher(7.5 percent)
than the current discount rate (expressed in thousands):
1% Current 1%
Decrease Discount Rate Increase
5.50% 6.50% 7.50%
City of Cupertino's net OPEB liability
(asset)for the plan $ 6,040 $ 1,968 $ (1,396)
Sensitivity of the net OPEB liability (asset( to changes in the healthcare cost trend rates: The following
presents the net OPEB asset of the City, as well as what the City's net OPEB liability would be if it were
calculated using healthcare cost trend rates that are one-percentage-point lower(decreasing to 3.5 percent)
or one-percentage-point higher (increasing to 5.5 percent) than the current healthcare cost trend rates
(expressed in thousands):
Current
1% Healthcare Cost 1%
Decrease Trend Rate Increase
City of Cupertino's net OPEB liability
(asset)for the plan $ (1,772) $ 1,968 $ 6,571
(Continued)
71.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 11 —OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
OPEB Expense and Deferred Inflows of Resources Related to OPEB: For the year ended June 30, 2020,
the City recognized OPEB expense of $392,000. At June 30, 2020, the City reported deferred inflows of
resources related to OPEB from the following sources (in thousands):
Deferred Outflows Deferred Inflows
of Resources of Resources
Net difference between projected and actual
earnings on investments $ 1,337 $ -
Differences between expected and actual experience - 1,085
Changes in assumption 1,409 22
$ 2,746 $ 1,107
Amounts reported as deferred inflows of resources related to OPEB will be recognized as OPEB expense
as follows (in thousands):
Year Ended Deferred Inflows
June 30 of Resources
2021 $ 92
2022 364
2023 478
2024 705
Total $ 1,639
NOTE 12—CONCENTRATION RISK
The City has an economic dependency on revenues generated directly or indirectly from one company. For
the year ended June 30, 2020, more than 10 percent of the City General Fund's total revenues are derived
from the company. The City's operations would be adversely impacted if there are any significant declines
in taxes received from the company.
NOTE 13—UPCOMING GASB PRONOUCEMENTS
In January 2017, the GASB issued Statement 84, Fiduciary Activities. The objective of this Statement is to
improve guidance regarding the identification of fiduciary activities for accounting and financial reporting
purposes and how those activities should be reported. This Statement establishes criteria for identifying
fiduciary activities of all state and local governments. The focus of the criteria generally is on (1)whether a
government is controlling the assets of the fiduciary activity and (2)the beneficiaries with whom a fiduciary
relationship exists. Separate criteria are included to identify fiduciary component units and postemployment
benefit arrangements that are fiduciary activities. This Statement is now effective for the City's fiscal year
ended June 30, 2021 due to the postponement impacts of GASB Statement 95. Management has not
determined what impact, if any, this statement will have on its financial statements.
(Continued)
72.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 13—UPCOMING GASB PRONOUCEMENTS (Continued)
In June 2017, the GASB issued Statement 87, Leases. The objective of this Statement is to better meet
the information needs of financial statement users by improving accounting and financial reporting for
leases by governments. This Statement increases the usefulness of governments' financial statements by
requiring recognition of certain lease assets and liabilities for leases that previously were classified as
operating leases and recognized as inflows of resources or outflows of resources based on the payment
provisions of the contract. It establishes a single model for lease accounting based on the foundational
principle that leases are financings of the right to use an underlying asset. This Statement is now effective
for the City's fiscal year ended June 30, 2022 due to the postponement impacts of GASB Statement 95.
Management has not determined what impact, if any, this statement will have on its financial statements.
In June 2018, the GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of
a Construction Period.The objectives of this Statement are (1)to enhance the relevance and comparability
of information about capital assets and the cost of borrowing for a reporting period and (2) to simplify
accounting for interest cost incurred before the end of a construction period. This Statement establishes
accounting requirements for interest cost incurred before the end of a construction period. This Statement
is now effective for the City's fiscal year ended June 30, 2022 due to the postponement impacts of GASB
Statement 95. Management has not determined what impact, if any,this statement will have on its financial
statements."
In August 2018, the GASB issued Statement No. 90, Majority Equity Interests—an amendment of GASB
Statements No. 14 and No. 61. The primary objectives of this Statement are to improve the consistency
and comparability of reporting a government's majority equity interest in a legally separate organization and
to improve the relevance of financial statement information for certain component units. It defines a majority
equity interest and specifies that a majority equity interest in a legally separate organization should be
reported as an investment if a government's holding of the equity interest meets the definition of an
investment. This Statement also requires that a component unit in which a government has a 100 percent
equity interest account for its assets, deferred outflows of resources, liabilities, and deferred inflows of
resources at acquisition value at the date the government acquired a 100 percent equity interest in the
component unit. This Statement is effective for the City's fiscal year ended June 30, 2020. Management
has not determined what impact, if any, this statement will have on its financial statements.
In May 2019, the GASB issued Statement No. 91, Conduit Debt Obligations. The primary objectives of this
Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate
diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated
with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives
by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is
not a liability of the issuer; establishing standards for accounting and financial reporting of additional
commitments and voluntary commitments extended by issuers and arrangements associated with conduit
debt obligations; and improving required note disclosures. This Statement is effective for the City's fiscal
year ended June 30, 2022. Management has not determined what impact, if any, this statement will have
on its financial statements.
In January 2020, GASB issued Statement No. 92, Omnibus 2020.The primary objectives of this Statement
are to enhance comparability in accounting and financial reporting and improve the consistency of
authoritative literature by addressing practice issues that have been identified during implementation and
application of certain GASB statements. Upon the City's adoption of GASB Statement No 95, effective date
for the Statement was delayed for the City until their fiscal year ended June 30, 2022, with the exception of
paragraphs 11 and 13 which are now effective and the City has implemented with no material impact to the
City's financial statements. Management has not yet determined the impact of the remainder of this
statement on the City's financial statements.
(Continued)
73.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 13—UPCOMING GASB PRONOUCEMENTS (Continued)
In March 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates. The primary
objectives of this Statement is to address those and other accounting and financial reporting implications
that result from the replacement of an IBOR. Upon the City's adoption of GASB Statement No 95, effective
date for the Statement was delayed for the City until their fiscal year ended June 30, 2022. Management
has not yet determined the impact of this statement on the City's financial statements.
In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and
Availability Payment Arrangements. The primary objectives of this Statement is improve financial reporting
by addressing issues related to public-private and public-public partnership arrangements. This Statement
also provides guidance for accounting and financial reporting for availability payments arrangements. The
requirements of this Statement are effective for the City's fiscal year ended June 30, 2023. Management
has not yet determined the impact of this statement on the City's financial statements.
In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements.
This Statement provides guidance on the accounting and financial reporting for subscription-based
information technology arrangements (SBITAs) for government end users (governments). This Statement
(1)defines a SBITA; (2)establishes that a SBITA results in a right-to-use subscription asset—an intangible
asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other
than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures
regarding a SBITA. The requirements of this Statement are effective for the City's fiscal year ended June
30, 2023. Management has not yet determined the impact of this statement on the City's financial
statements.
In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and
Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. The primary
objectives of this Statement are to (1) increase consistency and comparability related to the reporting of
fiduciary component units in circumstances in which a potential component unit does not have a governing
board and the primary government performs the duties that a governing board typically would perform; (2)
mitigate costs associated with the reporting of certain defined contribution pension plans, defined
contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension
plans or OPEB plans (other employee benefit plans)as fiduciary component units in fiduciary fund financial
statements; and (3)enhance the relevance, consistency, and comparability of the accounting and financial
reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans)
that meet the definition of a pension plan and for benefits provided through those plans. The requirements
of this Statement are effective for the City's fiscal year ended June 30, 2022, with the exception of
paragraphs 4 and 5 which are now effective and the City has implemented with no material impact to the
City's financial statements. Management has not yet determined the impact of the remainder of this
statement on the City's financial statements.
NOTE 14—COVID-19 IMPACT
The spread of the novel strain of coronavirus called SARS-CoV-2 that causes the disease known as COVID-
19 ("COVID-19"), and local, state and federal actions in response to COVID-19, are having a significant
impact on the economy and on the City's operations and finances. In response to the increasing number of
cases of COVID-19 and fatalities, health officials and experts are recommending, and some governments
are mandating, a variety of responses ranging from travel bans and social distancing practices,to complete
shutdowns of certain services and facilities. On March 4, 2020, as part of the State's response to address
the outbreak,the Governor declared a state of emergency. On March 13, President Donald Trump declared
a national emergency, freeing up funding for federal assistance to state and local governments. On March
19, 2020, the Governor issued Executive Order N-33-20, a mandatory statewide shelter-in-place order
applicable to all nonessential services.
(Continued)
74.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 14—COVID-19 IMPACT (Continued)
In May 2020, the Governor outlined a phased approach to re-opening businesses in California. As a result
of State and local actions taken to slow the spread of COVID-19, a number of businesses have had to close
and other businesses, such as restaurants, have been permitted to stay open subject to certain conditions.
These circumstances, among other market factors, have led to increased unemployment since the
beginning of the COVID-19 outbreak in the United States. In addition to increased unemployment, financial
markets in the United States and globally have been volatile, with significant declines attributed to
coronavirus concerns.
On July 13, 2020, the Governor issued another order requiring all counties within the State to close indoor
operations in certain sectors, including dine-in restaurants, wineries and tasting rooms, movie theatres,
family entertainment centers,zoos and museums and cardrooms. The Governor's July 13, 2020 order also
required certain counties on the Governor's Monitoring List, which as of August 17, 2020 included Santa
Clara County, to shut down additional industries and activities, including gyms and fitness centers, places
of worship and cultural ceremonies (such as wedding and funerals), offices for non-critical infrastructure
sectors, personal care services (such as nail salons, body waxing and tattoo parlors) and shopping malls.
On August 28, 2020, the State released further guidance regarding re-opening certain types of businesses
based on a county-by-county approach where each county is assigned a tier based on COVID-19 case
rates within each County. Based on the initial assessment from the State, Santa Clara County is in the
"Widespread" tier as of September 4, 2020. For counties in the "Widespread" tier, certain non-essential
indoor businesses are required to remain closed. Consistent with the state-wide loosening of certain
restrictions, however, certain indoor business operations in the County, including hair salons and
barbershops, shopping malls, retail businesses, and grocery stores, may reopen subject to certain
operating capacity and other restrictions.
While the effects of COVID-19 may be temporary, the outbreak and governmental actions responsive to it
are altering the behavior of businesses and people in a manner that is having significant negative impacts
on global and local economies. In addition, stock markets in the U.S. and globally have seen significant
declines attributed to coronavirus concerns.CalPERS has reportedly lost significant value in its investments
as a result of declines in the stock market and elsewhere, which could result in a significant increase in the
City's unfunded pension liability and future pension costs, commencing in Fiscal Year 2022-23. The
outbreak has resulted in increased pressure on State finances, as budgetary resources are directed
towards containing the pandemic and tax revenues sharply decline. Identified cases of COVID-19 and
deaths attributable to the COVID-19 outbreak are continuing to increase throughout the United States,
including the City. The COVID-19 outbreak is expected to result in material declines in major General Fund
revenues. In addition, Governor Newsom extended the deadline to file and pay first quarter sales and use
tax returns by 90 16 days for all but the very largest taxpayers, and up to 361,000 California businesses
with less than$5 million in taxable annual sales will be allowed to defer up to$50,000 in sales tax and enter
into 12-month payment plans at zero interest.This will result in delays in the receipt by the City of its portion
of the delayed payments.
In response to the pandemic, the City has taken actions to activate its emergency operations center,
temporarily close all non-essential City services, introduce teleworking as and where appropriate,and abide
by all federal, state, and regional orders. The City actively monitors the COVID-19 situation in the
community and acts swiftly to issue additional emergency orders to mitigate both the spread of the virus
and economic impacts to the community.
(Continued)
75.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2020
NOTE 14—COVID-19 IMPACT (Continued)
Since the onset of the COVID-19 pandemic, the County Health Officer has issued a series of orders
regulating activities throughout the County, including within the City. The County's orders are more strict in
certain respects than federal guidelines and state orders related to COVID-19. The most recent order,
issued July 2, 2020, continues to urge all County residents to stay home as much as possible, requires
workers to do their jobs from home whenever possible, and prohibits indoor dining and bars, but permits
certain indoor gatherings (up to 20 people) and outdoor gatherings (up to 60 people).
In an effort to assist residential tenants and small business commercial tenants, the County temporarily
banned evictions for non-payment of rent or no-fault evictions when the tenant has suffered a substantial
loss of income and/or substantial out-of-pocket medical expense due to the COVID-19 pandemic. The
County's eviction moratorium expired August 31, 2020. Based on the County's evaluation of the State's
August 31, 2020 statewide eviction and foreclosure protections, the County may extend or revise its
legislation.
The City has also taken certain measures to protect and mitigate impacts to the public and businesses in
the community, including adoption of emergency orders requiring individuals to wear a face covering when
they need to leave their home to work or obtain essential goods and services; allowing outdoor dining and
retail services with a special permit; adoption of an urgency ordinance to extend certain permit deadlines
and requirements; offering loans and grants to income-qualified Cupertino residents to assist with
residential rental payments; and establishing a small business emergency relief grant program . The City
is considering orders to waive sign fees and permit requirements for retail and restaurant "open for
business" signs.
As a result of COVID-19, the City forecasts a budget deficit of$2.8 million in Fiscal Year 2020-21 (although
the City has available fund balance reserves if needed). The City has also identified significant unfunded
needs (defined as items the City has planned for but have not funded with current resources) in its Capital
Improvement Program (CIP), including substantial investments in the City's capital infrastructure. In
response, the City has already implemented several budget balancing strategies, including: reduced
recreation programming; hiring freeze,with limited exceptions;furloughing approximately 65%of temporary
staffing, approximately 80 positions; limiting travel and training; and reducing various other expenditure
categories including materials, contracts, contingencies, and special projects.Additional measures that the
City is considering include: continue to reduce recreation programming; reduce library hours and/or
programming; longer planning, code enforcement, and public safety response times; fewer community
events and grants; reduced or deferred capital infrastructure maintenance; reduced administrative staff and
continued evaluation of staffing needs.
On March 27, Congress passed and the President signed the $2.2 trillion Coronavirus Aid, Relief, and
Economic Stabilization Act ("CARES Act") that provides, among other measures, $150 billion in financial
assistance to states, tribal governments and local governments to provide emergency assistance to those
most significantly impacted by COVID-19. The City expects to receive approximately $735,259 in CARES
Act funds through the State by the end of calendar year 2020, which has not required any financial
statement adjustment for the year ended June 30, 2020.
NOTE 15—SUBSEQUENT EVENT
On September 29, 2020, the City's 2020A Certificates of Participation (2020 COPs)were successfully sold
in order to refund the City's 2012 Certificates of Participation for debt service savings. The refunding
generated net present value savings of approximately $3.14 million, 11.61% of refunded par and a True
Interest Cost of 0.72%. Savings to the City's General Fund amounts to approximately $494,000 per year
for the next 10 years, or almost$5 million in total savings.
76.
REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)
CITY OF CUPERTINO, CALIFORNIA
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY
AND RELATED RATIOS
For the year ended June 30, 2020
Agent Multiple Employer Defined Benefit Retirement Plan-Miscellaneous Plan
Last 10 years"
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019
Total Pension Liability
Service Cost $ 2,504,228 $ 2,444,939 $ 2,525,314 $ 2,895,549 $ 3,058,629 $ 3,324,361
Interest 7,349,943 7,789,134 8,253,983 8,619,588 9,065,322 9,800,245
Changes of benefit terms - - - - - -
Differences between a)pected and actual experience 372,917 696,347 (182,397) 1,184,340 4,144,384
Changes in assumptions (1,883,633) - 7,125,558 (847,606) -
Benefit payments,including refunds of employee contributions (4,351,614) (4,637,005) (5,151,298) (5,346,890) (6,051,845) (6,193,271)
Net change in total pension liability 5,502,557 4,086,352 6,324,346 13,111,408 6,408,840 11,075,719
Total pension liability-beginning 98,922,931 104,425,488 108,511,840 114,836,186 127,947,594 134,356,434
Total pension liability-ending(a) $104,425,488 $108,511,840 $114,836,186 $127,947,594 $134,356,434 $145,432,153
Plan fiduciary net position
Contributions-employer $ 2,891,986 $ 3,301,642 $ 3,659,170 $ 4,183,822 $ 4,263,020 $ 4,654,841
Contributions-employee 1,061,884 1,149,894 1,169,921 1,236,052 1,506,888 1,364,731
Net investment income 11,379,985 1,724,204 466,704 8,749,288 7,347,936 6,096,968
Benefit payments,including refunds of employee contributions (4,351,614) (4,637,005) (5,151,298) (5,346,890) (6,051,845) (6,193,271)
Administrative a)pense (87,780) (47,536) (115,304) (392,346) (66,707)
Other miscellaneous Income/(Expense) 216
Net change in plan fiduciary net position 10,982,241 1,450,955 96,961 8,706,968 6,673,653 5,856,778
Plan fiduciary net position-beginning 65,566,067 76,548,308 77,999,263 78,096,224 86,803,192 93,476,845
Plan fiduciary net position-ending(b) $ 76,548,308 $ 77,999,263 $ 78,096,224 $ 86,803,192 $ 93,476,845 $ 99,333,623
Net pension liability-ending(a)-(b) $ 27,877,180 $ 30,512,577 $ 36,739,962 $ 41,144,402 $ 40,879,589 $ 46,098,530
Plan fiduciary net position as a percentage of the total pension liability 73.30% 71.88% 68.01% 67.84% 69.57% 68.30%
Covered payroll $ 13,080,327 $ 13,504,966 $ 14,336,969 $ 15,595,136 $ 16,809,349 $ 18,461,490
Net pension liability as percentage of covered payroll 213.12% 225.94% 256.26% 263.83% 243.20% 249.70%
Notes to Schedule:
Benefit changes.The figures above do not include any liability impact that may have resulted from plan changes which occurred after the actuarial valuation date. This
applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit(a.k.a.Golden Handshakes).
Changes in assumptions.None in 2019. In 2018,demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and
Review of Actuarial Assumptions from December 2017. In 2017,the accounting discount rate reduced from 7.65 percent to 7.15 percent.In 2016,there were no changes.
In 2015,amounts reported reflect an adjustment of the discount rate from 7.5 percent(net of administrative expense)to 7.65 percent(without a reduction for pension plan
administrative expense.) In 2014,amounts reported were based on the 7.5 percent discount rate.
-Fiscal year 2015 was the 1st year of implementation,therefore only six years are shown.
Source:CalPERS Accounting Valuation
77.
CITY OF CUPERTINO, CALIFORNIA
SCHEDULE OF CONTRIBUTIONS- PENSION
For the year ended June 30, 2020
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan
Last 10 Years*
2015 2016 2017 2018 2019 2020
Actuarially determined contribution $ 3,608,853 $ 3,659,170 $ 4,183,821 $ 4,263,020 $ 4,654,841 $ 5,308,577
Contributions in relation to the actuarially determined contributions (3,608,853) (3,659,170) (4,183,821) (4,263,020) (4,654,841) (5,308,577)
Contribution deficiency(excess) $ - $ - $ - $ - $ - $
Covered payroll $ 13,504,966 $ 14,336,969 $ 15,595,136 $ 16,809,349 $ 19,664,057 $ 19,871,414
Contributions as a percentage of covered payroll 26.72% 25.52% 26.83% 25.36% 23.67% 26.71%
Notes to Schedule
Valuation date: 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age
Amortization method Level percentage of payroll,closed
Remaining amortization period 19 Years as of the Valuation Date
Asset valuation method 15 Year Smoothed Market
Inflation 2.75%
Salary increases 3%
Investment rate of return 7.375%Net of Pension Plan
Retirement age The probabilities of Retirement are based on the 2017 CaIPERS Experience Study for the period
from 1997 to 2015.
Mortality The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from
1997 to 2015.Pre-retirement and Post-retirement mortality rates include 20 years of projected
mortality improvement using Scale BB published by the Society of Actuaries.
*-Fiscal year 2015 was the 1 st year of implementation,therefore only six years are shown.
Source:City of Cupertino's general ledger and CalPERS Actuarial Valuation
Notes to Schedule:
Benefit changes.The figures above do not include any liability impact that may have resulted from plan changes which occurred after the actuarial valuation date. This
applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit(a.k.a.Golden Handshakes).
Changes in assumptions. None in 2019. In 2018,demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and
Review of Actuarial Assumptions from December 2017. In 2017,the accounting discount rate reduced from 7.65 percent to 7.15 percent.In 2016,there were no changes.
In 2015,amounts reported reflect an adjustment of the discount rate from 7.5 percent(net of administrative expense)to 7.65 percent(without a reduction for pension plan
administrative expense.) In 2014,amounts reported were based on the 7.5 percent discount rate.
-Fiscal year 2015 was the 1st year of implementation,therefore only three years are shown.
Source:CalPERS Accounting Valuation
78.
CITY OF CUPERTINO, CALIFORNIA
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY
AND RELATED RATIOS
For the year ended June 30, 2020
Single Employer Defined Benefit OPEB Plan
Last 10 years*
Expressed in thousands
6/30/2017 6/30/2018 6/30/2019 6/30/2020
Total OPEB liability
Service cost $ 908 $ 1,008 $ 865 $ 1,009
Interest 1,781 1,876 2,005 1,985
Changes of benefit terms - - - -
Differences between expected and actual experience (1,808) -
Changes of assumptions (37) 1,412
Benefit payments (1,333) (1,419) (1,423) (1,141)
Net change in total OPEB liability 1,356 1,465 (398) 3,265
Total OPEB liability-beginning 25,650 27,006 28,471 28,073
Total OPEB liability-ending(a) $ 27,006 $ 28,471 $ 28,073 $ 31,338
Plan fiduciary net position
Contributions-employer 1,333 1,419 1,423 1,141
Net investment income 2,960 2,365 1,259 219
Benefit payments (1,333) (1,419) (1,423) (1,141)
Administrative expense (49) (54) (97) (67)
Net change in fiduciary net position 2,911 2,311 1,162 152
Plan fiduciary net position-beginning 22,834 25,745 28,056 29,218
Plan fiduciary net position-ending(b) $ 25,745 $ 28,056 $ 29,218 $ 29,370
Net OPEB liability(asset)-ending(a-b) $ 1,261 $ 415 $ (1,145) $ 1,968
Plan fiduciary net position as a percentage of the total OPEB liability 95.33% 98.54% 104.08% 93.72%
Covered payroll $ 17,255 $ 19,153 $ 20,086 $ 21,643
Net OPEB liability(asset)as a percentage of covered payroll 7.31% 2.17% -5.70% 9.09%
Notes to schedule:
-Fiscal year 2017 was the 1st year of implementation,therefore only four years are shown.
79.
CITY OF CUPERTINO, CALIFORNIA
SCHEDULE OF CONTRIBUTIONS-OPEB
For the year ended June 30, 2020
Single Employer Defined OPEB Plan
Last 10 years*
Expressed in thousands
6/30/2017 6/30/2018 6/30/2019 6/30/2020
Actuarially determined contribution $ 1,117 $ 1,362 $ 1,300 $ 1,401
Contributions in relation to the actuarially determined contributions 1,333 1,419 1,423 1,141
Contribution deficiency(excess) $ (216) $ (57) $ (123) $ 260
Covered payroll $ 17,255 $ 19,153 $ 20,086 $ 21,643
Contributions as a percentage of covered payroll 7.73% 7.41% 7.08% 5.27%
Notes to schedule:
"-Fiscal year 2017 was the 1st year of implementation,therefore only four years are shown.
Valuation Date 1/1/2019
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age
Amortization method Level percentage of pay,closed
Remaining amortization period 12 years as of the valuation date
Asset valuation method Fair value of assets
Discount rate 6.50%
Amortization growth rate 3.00%
Ultimate rate of medical inflation 4.50%
Salary increases 3.00%plus merit component based on years of service
Mortality CalPERS mortality assumptions
80.
CITY OF CUPERTINO, CALIFORNIA
SCHEDULE OF INVESTMENT RETURNS - OPEB
For the year ended June 30, 2020
Single Employer Defined OPEB Plan
Last 10 years*
6/30/2017 6/30/2018 6/30/2019 6/30/2020
Annual money-weighted rate of return, net of investment expense 10.74% 8.31% 6.32% 4.68%
Notes to schedule:
-Fiscal year 2017 was the 1st year of implementation,therefore only four years are shown.
81.
MAJOR GOVERNMENTAL FUNDS OTHER
THAN THE GENERAL FUND AND SPECIAL
REVENUE FUNDS
This section is provided for the presentation of budget-to-actual statements for the Public Facilities
Corporation Debt Service Fund. Although the fund is considered to be a major government fund, budget-
to-actual information in the basic financial statements is limited to the General Fund and major Special
Revenue Funds. All other major governmental fund schedules with such information are therefore included
as Supplemental Information. The Capital Projects Funds are budgeted on a major project length basis
and therefore not comparable on an annual basis.
Public Facilities Corporation Debt Service Fund: This fund accounts for the payments of principal and
interest on certificates of participation issued to provide for the financing of the Civic Center, Library, Wilson
Park, Memorial Park, and other City facilities.
82.
CITY OF CUPERTINO, CALIFORNIA
PUBLIC FACILITIES CORPORATION DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
For the year ended June 30, 2020
Variance
Final Positive
Budget Actual (Negative)
Revenues
Use of money and property $ - $ 26,612 $ 26,612
Total revenues - 26,612 26,612
Expenditures
Administration - 1,500 (1,500)
Debt service:
Principal 2,290,000 2,290,000 -
Interest and fiscal charges 882,838 882,837 1
Total expenditures 3,172,838 3,174,337 (1,499)
Excess (deficiency) of revenues
over expenditures (3,172,838) (3,147,725) 25,113
Other financing sources (uses)
Transfers in 3,172,838 3,172,838 -
Total other financing sources (uses) 3,172,838 3,172,838 -
Net change in fund balance $ - 25,113 $ 25,113
Beginning fund balance 1,660,759
Ending fund balance $ 1,685,872
83.
NON-MAJOR GOVERNMENTAL FUNDS
All funds not considered as major funds on the Fund Financial Statements are consolidated in one column
entitled "Other Governmental Funds." These non-major funds are identified and included in this
supplementary section and includes the City's Special Revenue Funds and Capital Project Funds.
The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are
legally restricted to expenditures for specified purposes.
Storm Drain Improvement—Accounts for the construction and maintenance of storm drain facilities
including drainage and sanitary sewer facilities. Revenues were collected from developers as a
result of connections to the storm drainage sewer system.
Park Dedication —Accounts for the activity granted by the business and professions code of the
State of California in accordance with the open space and conservation element of the City's
General Plan. Revenues of this fund are restricted for the acquisition, improvement, expansion and
implementation of the City's parks and recreation facilities.
Environmental Management/Clean Creeks —Accounts for all activities related to operating the
non-point source pollution program. A parcel tax provides revenues.
Traffic Impact — Accounts for development impact fees and related that ensure that new
development and redevelopment projects pay their"fair share"to mitigate traffic impacts.
Capital Projects Funds account for the financial resources committed to the construction or improvement
of major facilities.
Stevens Creek Corridor Park Capital Projects Fund—Accounts for the design and construction of
the Stevens Creek Corridor Park projects.
84.
CITY OF CUPERTINO, CALIFORNIA
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
June 30, 2020
Capital Projects
Special Revenue Funds Fund
Total
Storm Environmental Nonmajor
Drain Park Management/ Traffic Stevens Creek Governmental
Improvement Dedication Clean Creeks Impact Corridor Park Funds
Assets
Cash and investments $ 3,994,007 $ 12,339,423 $ 1,746,290 $ 241,119 $ 197,044 $ 18,517,883
Accounts receivable - 6,000 43,349 - - 49,349
Total assets $ 3,994,007 $ 12,345,423 $ 1,789,639 $ 241,119 $ 197,044 $ 18,567,232
Liabilities
Accounts payable and
accruals $ - $ - $ 8,659 $ - $ - $ 8,659
Total liabilities - - 8,659 - - 8,659
Fund balances
Restricted 3,994,007 12,345,423 1,780,980 241,119 - 18,361,529
Assigned - - - - 197,044 197,044
Total fund balances 3,994,007 12,345,423 1,780,980 241,119 197,044 18,558,573
Total liabilities and
fund balances $ 3,994,007 $ 12,345,423 $ 1,789,639 $ 241,119 $ 197,044 $ 18,567,232
85.
CITY OF CUPERTINO, CALIFORNIA
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
For the year ended June 30, 2020
Capital Projects
Special Revenue Funds Fund
Total
Storm Environmental Nonmajor
Drain Park Management/ Traffic Stevens Creek Governmental
Improvement Dedication Clean Creeks Impact Corridor Park Funds
Revenues
Taxes $ 87,233 $ 246,000 $ - $ - $ - $ 333,233
Use of money and property 152,484 473,382 57,035 8,947 4,098 695,946
Charges for services - 899 1,403,738 34,588 - 1,439,225
Fines and forfeitures - - 16,175 - - 16,175
Total revenues 239,717 720,281 1,476,948 43,535 4,098 2,484,579
Expenditures
Current:
Public works - - 774,805 - - 774,805
Capital outlay 4,000 51,035 - - 9,240 64,275
Total expenditures 4,000 51,035 774,805 - 9,240 839,080
Excess of revenues over
(under) expenditures 235,717 669,246 702,143 43,535 (5,142) 1,645,499
Other finances sources (uses)
Transfers in 437,000 - 660,000 - - 1,097,000
Transfers out - (12,000) - - - (12,000)
Total other financing
sources (uses) 437,000 (12,000) 660,000 - - 1,085,000
Net change in fund balances 672,717 657,246 1,362,143 43,535 (5,142) 2,730,499
Beginning fund balances 3,321,290 11,688,177 418,837 197,584 202,186 15,828,074
Ending fund balances $ 3,994,007 $ 12,345,423 $ 1,780,980 $ 241,119 $ 197,044 $ 18,558,573
86.
CITY OF CUPERTINO, CALIFORNIA
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES— BUDGET AND ACTUAL
For the year ended June 30, 2020
Special Revenue Funds
Storm Drain Improvement
Variance
Original Final Positive
Budget Budget Actual (Negative)
Revenues
Taxes $ 74,741 $ 74,741 $ 87,233 $ 12,492
Use of money and property - - 152,484 152,484
Charges for services - - - -
Fines for forfeitures - - - -
Other revenue - - - -
Total revenues 74,741 74,741 239,717 164,976
Expenditures
Current:
Public works - - - -
Capital outlay - 88,828 4,000 84,828
Total expenditures - 88,828 4,000 84,828
Excess (deficiency) of revenues
over expenditures 74,741 (14,087) 235,717 249,804
Other financing sources (uses)
Transfers in 437,000 437,000 437,000 -
Transfers (out) - - - -
Total other financing sources (uses) 437,000 437,000 437,000 -
Net change in fund balance $ 511,741 $ 422,913 672,717 $ 249,804
Beginning fund balance 3,321,290
Ending fund balance $ 3,994,007
(Continued)
87.
CITY OF CUPERTINO, CALIFORNIA
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES— BUDGET AND ACTUAL
For the year ended June 30, 2020
Special Revenue Funds
Park Dedication
Variance
Original Final Positive
Budget Budget Actual Ne ative
Revenues
Taxes $ 375,663 $ 375,663 $ 246,000 $ (129,663)
Use of money and property - - 473,382 473,382
Charges for services 21,045 21,045 899 (20,146)
Fines for forfeitures - - - -
Other revenue - - - -
Total revenues 396,708 396,708 720,281 323,573
Expenditures
Current:
Public works - - - -
Capital outlay - 51,395 51,035 360
Total expenditures - 51,395 51,035 360
Excess (deficiency) of revenues
over expenditures 396,708 345,313 669,246 323,933
Other financing sources (uses)
Transfers in - - - -
Transfers (out) 12,000 12,000 (12,000) -
Total other financing sources (uses) 12,000 12,000 (12,000) -
Net change in fund balance $ 408,708 $ 357,313 657,246 $ 323,933
Beginning fund balance 11,688,177
Ending fund balance $12,345,423
(Continued)
88.
CITY OF CUPERTINO, CALIFORNIA
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES— BUDGET AND ACTUAL
For the year ended June 30, 2020
Special Revenue Funds
Environmental Management/Clean Creeks
Variance
Original Final Positive
Budget Budget Actual Ne ative
Revenues
Taxes $ - $ - $ - $Use of money and property 900 900 57,035 56,135
Charges for services 370,000 370,000 1,403,738 1,033,738
Fines for forfeitures 10,000 10,000 16,175 6,175
Other revenue - - - -
Total revenues 380,900 380,900 1,476,948 1,096,048
Expenditures
Current:
Public works 743,278 905,483 774,805 130,678
Capital outlay - - - -
Total expenditures 743,278 905,483 774,805 130,678
Excess (deficiency) of revenues
over expenditures (362,378) (524,583) 702,143 1,226,726
Other financing sources (uses)
Transfers in 660,000 660,000 660,000 -
Total other financing sources (uses) 660,000 660,000 660,000 -
Net change in fund balance $ 297,622 $ 135,417 1,362,143 $ 1,226,726
Beginning fund balance 418,837
Ending fund balance $ 1,780,980
89.
NON-MAJOR ENTERPRISE FUND
Proprietary funds account for City operations financed and operated in a manner similar to a private
business enterprise. The intent of the City is that the cost of providing goods and services be financed
primarily through user charges.
The City has identified the fund below as a nonmajor proprietary fund for fiscal 2019-20.
Blackberry Farm Fund: This fund accounts for activities related to operating the City-owned golf course.
90.
CITY OF CUPERTINO, CALIFORNIA
NON-MAJOR ENTERPRISE FUND
COMBINING STATEMENT OF NET POSITION
For the year ended June 30, 2020
Blackberry
Farm
ASSETS
Current assets
Cash and cash investments (Note 2) $ 542,501
Total current assets 542,501
Noncurrent assets
Capital assets (Note 5):
Depreciable, net of
accumulated depreciation 26,537
Total non current assets 26,537
Total assets 569,038
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 10) 59,756
Related to OPEB (Note 11) 8,121
Total deferred outflows of resources 67,877
LIABILITIES
Current liabilities
Accounts payable and accruals 29,702
Compensated absences (Note 1) 404
Unearned revenue 23,085
Total current liabilities 53,191
Noncurrent liabilities
Compensated absences (Note 1) 2,420
Net pension liability (Note 10) 275,605
Net OPEB liability (Note 11) 4,735
Total noncurrent liabilities 282,760
Total liabilities 335,951
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 10) 5,170
Related to OPEB (Note 11) 4,696
Total deferred inflows of resources 9,866
NET POSITION (Note 7)
Net investment in capital assets 26,537
Unrestricted 264,561
Total Net Position $ 291,098
91.
CITY OF CUPERTINO, CALIFORNIA
NON-MAJOR ENTERPRISE FUND
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
For the year ended June 30, 2020
Blackberry
Farm
Operating revenues
Charges for services $ 305,525
Other 32,687
Total operating revenue 338,212
Operating expenses
Salaries and benefits 159,143
Materials and supplies 172,317
Contractual services 326,168
Depreciation (Note 5) 6,035
Total operating expenses 663,663
Operating income (loss) (325,451)
Nonoperating revenues
Investment income 22,840
Total nonoperating revenues 22,840
Income (loss) before transfers (302,611)
Transfers in (Note 4) 610,000
Changes in net position 307,389
Net position - beginning of year (16,291)
Net position - end of year $ 291,098
92.
CITY OF CUPERTINO, CALIFORNIA
NON-MAJOR ENTERPRISE FUND
COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2020
Blackberry
Farm
Cash flows from operating activities
Cash received from customers $ 345,135
Cash payments to suppliers for
goods and services (481,458)
Cash payments to employees for salaries and benefits (185,719)
Net cash provided (used) by operating activities (322,042)
Cash flows from noncapital financing activities
Transfers in 610,000
Cash flows from noncapital financing activities 610,000
Cash Flows from Investing Activities
Interest received 22,840
Cash flows from investing activities 22,840
Net cash flows 310,798
Cash and investments at beginning of year 231,703
Cash and investments at end of year $ 542,501
Reconciliation of operating income (loss) to
to net cash provided by operating activities:
Operating income (loss) $ (325,451)
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation 6,035
Change in assets, deferred outflows of resources, liabilities,
and deferred inflows of resources
Due to retirement system 21,431
Due to OPEB system (961)
Accounts payable and accruals 17,027
Unearned revenue 6,923
Compensated absences (47,046)
Net cash provided (used) by operating activities $ (322,042)
93.
INTERNAL SERVICE FUNDS
Internal Service Funds are used to finance and account for special activities and services provided by one
department or program to other departments of the City on a cost reimbursement basis.
The concept of major funds does not extend to internal service funds because they do not do business with
outside parties. For the Statement of Activities, the net revenues or expenses of each internal service fund
are eliminated by netting them against the operations of the City departments that generated them. The
remaining balance sheet items are consolidated with these same funds in the Statement of Net Position.
However, internal service funds are still presented separately in the Fund financial statements.
Information Technology- Accounts for the activities related to the maintenance and replacement
of the City's technology infrastructure.
Workers' Compensation - Accounts for the activities in support of the self-insured workers'
compensation program.
Equipment Revolving - Accounts for the activities related to the maintenance and replacement of
the City's vehicle fleet and other equipment.
Compensated Absences and Long-Term Disability- Accounts for accrued leave payouts and the
City's long term disability insurance program.
Retiree Medical-Accounts for funds set-aside for other post-employment retirement benefits.
94.
CITY OF CUPERTINO,CALIFORNIA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
For the year ended June 30,2020
Compensated
Absences and
Information Workers' Equipment Long-Term Retiree
Technology Compensation Revolving Disabili Medical Total
ASSETS
Current assets:
Cash and investments $ 2,745,987 $ 3,963,239 $ $ 1,193,551 $ 1,334,794 $ 9,237,571
Accounts receivable - 7,000 - - 7,000
Total current assets 2,745,987 3,970,239 1,193,551 1,334,794 9,244,571
Noncurrent assets:
Capital assets(Note 5):
Nondepreciable 79,434 - 135,232 - - 214,666
Capital assets,depreciable net
ofaccumulated depreciation 875,799 2,564,466 3,440,265
Total noncurrent assets 955,233 - 2,699,698 - 3,654,931
Total assets 3,701,220 3,970,239 2,699,698 1,193,551 1,334,794 12,899,502
DEFERRED OUTFLOWS OF RESOURCES
Related to pension(Note 10) 425,237 14,361 132,160 - - 571,758
Related to OPEB(Note 11) 139,122 2,705 44,042 185,869
Total deferred outflows of resources 564,359 17,066 176,202 757,627
LIABILITIES
Current liabilities
Accounts payable and accruals 232,090 97,688 14,283 344,061
Accrued payroll and benefits - 72 - 72
Due to other funds - - 539,204 539,204
Compensated absences 24,882 935 3,713 29,530
Claims payable - 274,000 - - 274,000
Total current liabilities 256,972 274,935 640,677 14,283 1,186,867
Noncurrent liabilities
Compensated absences 216,244 8,132 32,268 - 256,644
Claims payable - 1,253,000 - 1,253,000
Net pension liability(Note 10) 2,085,457 64,724 607,667 2,757,848
NetOPEB liability(Note 11) 95,151 2,547 34,041 131,739
Total noncurrent liabilities 2,396,852 1,328,403 673,976 4,399,231
Total liabilities 2,653,824 1,603,338 1,314,653 14,283 5,586,098
DEFERRED INFLOWS OF RESOURCES
Related to pension(Note 10) 40,962 1,034 9,902 - 51,898
Related to OPEB(Note 1 1) 41,534 789 17,363 59,686
Total deferred inflows of resources 82,496 1,823 27,265 111,584
NET POSITION
Net investment in capital assets 955,233 - 2,699,698 - - 3,654,931
Unrestricted 574,026 2,382,144 (1,165,716) 1,179,268 1,334,794 4,304,516
Total net position $ 1,529,259 $ 2,382,144 $ 1,533,982 $ 1,179,268 $ 1,334,794 $ 7,959,447
95.
CITY OF CUPERTINO,CALIFORNIA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES,EXPENSES AND
CHANGES IN NET POSITION
For the year ended June 30,2020
Compensated
Absences and
Information Workers' Equipment Long-Term Retiree
Technology Compensation Revolving Disabilily Medical Total
Operating revenues
Charges for services $ 2,731,703 $ 237,707 $ 1,352,200 $ 173,931 $ - $ 4,495,541
Total operating revenues 2,731,703 237,707 1,352,200 173,931 - 4,495,541
Operating expenses
Salaries and related expenses 1,891,486 52,162 457,307 - 1,142,793 3,543,748
Materials and supplies 1,467,517 23,142 412,706 4,323 6,262 1,913,950
Contractual services 213,827 - 60,397 - - 274,224
Insurance claims and premiums - 153,748 - 548,518 - 702,266
Depreciation 303,672 - 665,797 - - 969,469
Total operating expenses 3,876,502 229,052 1,596,207 552,841 1,149,055 7,403,657
Operating income (loss) (1,144,799) 8,655 (244,007) (378,910) (1,149,055) (2,908,116)
Nonoperating revenue (expenses)
Interest income 109,151 150,548 - 48,647 59,177 367,523
Gain on sale of capital assets - - 76,863 - - 76,863
Total nonoperating
revenue (expenses) 109,151 150,548 76,863 48,647 59,177 444,386
Income (loss) before transfers (1,035,648) 159,203 (167,144) (330,263) (1,089,878) (2,463,730)
Transfers in 72,000 - - 1,109,000 2,392,000 3,573,000
Change in net position (963,648) 159,203 (167,144) 778,737 1,302,122 1,109,270
Beginning net position 2,492,907 2,222,941 1,701,126 400,531 32,672 6,850,177
Ending net position $ 1,529,259 $ 2,382,144 $ 1,533,982 $ 1,179,268 $ 1,334,794 $ 7,959,447
96.
CITY OF CUPERTINO, CALIFORNIA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2020
Compensated
Absences and
Information Workers' Equipment Long-Term Retiree
Technology Compensation Revolving Disability Medical Total
Cash flows from operating activities
Cash received from customers $ 2,731,703 $ 230,707 $ 1,352,200 $ 173,931 $ - $ 4,488,541
Cash payments to suppliers for
goods and services (1,655,138) (23,142) (405,233) 9,960 (6,262) (2,079,815)
Cash payments to employees (1,622,143) (44,696) (394,289) - (1,142,793) (3,203,921)
Cash payment for judgment
and claims - (180,025) - (548,518) - (728,543)
Net cash from operating activities (545,578) (17,156) 552,678 (364,627) (1,149,055) (1,523,738)
Cash flows from noncapital
financing activities
Transfers in 72,000 - 128,660 1,109,000 2,392,000 3,701,660
Net cash from noncapital
financing activities 72,000 - 128,660 1,109,000 2,392,000 3,701,660
Cash flows from capital and related
financing activities
Acquisition of capital assets (186,880) - (754,326) - - (941,206)
Sale of capital assets - - 76,863 - - 76,863
Net cash from capital and related
financing activities (186,880) - (677,463) - - (864,343)
Cash flows from investing activities
Interest received 109,151 150,548 - 48,647 59,177 367,523
Net cash flows from
investing activities 109,151 150,548 - 48,647 59,177 367,523
Net cash flows (551,307) 133,392 3,875 793,020 1,302,122 1,681,102
Cash and investments beginning of year 3,297,294 3,829,847 (3,875) 400,531 32,672 7,556,469
Cash and investments end of year $ 2,745,987 $ 3,963,239 $ - $ 1,193,551 $ 1,334,794 $ 9,237,571
(Continued)
97.
CITY OF CUPERTINO, CALIFORNIA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2020
Compensated
Absences and
Information Workers' Equipment Long-Term Retiree
Technology Compensation Revolving Disability Medical Total
Reconciliation of operating income(loss)
to net cash flows from operating activities
Operating income(loss) $ (1,144,799) $ 8,655 $ (244,007) $ (378,910) $ (1,149,055) $ (2,908,116)
Adjustments to reconcile operating
income(loss)to net cash flows
from operating activities
Depreciation 303,672 - 665,797 - - 969,469
Change in assets,deferred outflows of resources,
liabilities and deferred inflows of resources
Accounts receivable - (7,000) - - - (7,000)
Prepaid expenses - - - - - -
Due to retirement system 219,823 5,700 55,007 - - 280,530
Due to OPEB system (16,465) (320) (5,211) - - (21,996)
Accounts payable and accruals 26,206 - 67,870 14,283 - 108,359
Accrued payroll and benefits - - - - - -
Compensated absences 65,985 2,086 13,222 - - 81,293
Claims payable - (26,277) - - - (26,277)
Cash flows from operating activities $ (545,578) $ (17,156) $ 552,678 $ (364,627) $ (1,149,055) $ (1,523,738)
98.
STATISTICAL SECTION
This part of the City's Comprehensive Annual Financial Report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, and required
supplementary information says about the City's overall financial health. In contrast to the financial section,
the statistical section information is not subject to independent audit.
Financial Trends
These schedules contain trend information to help the reader understand how the City's financial
performance and wellbeing have changed over time:
1. Net Position/Assets by Component
2. Changes in Net Position/Assets
3. Fund Balances of Governmental Funds
4. Changes in Fund Balance of Governmental Funds
Revenue Capacity
These schedules contain information to help the reader assess the City's most significant own-source
revenue, property tax.
1. Assessed and Estimated Actual Value of Taxable Property
2. Direct and Overlapping Property Tax Rates
3. Principal Property Taxpayers
4. Property Tax Levies and Collections
Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current levels
of outstanding debt and the City's ability to issue additional debt in the future:
1. Ratios of Outstanding Debt by Type
2. Direct and Overlapping Bonded Debt
3. Legal Debt Margin Information
4. Ratio of General Bonded Debt Outstanding
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the City's financial activities take place:
1. Demographic and Economic Statistics
2. 2019 Employer Ranking
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information
in the City's financial report relates to the services the City provides and the activities it performs:
1. Full-Time Equivalent Employees by Function/Program
2. Operating Indicators by Function/Program
3. Capital Assets Statistics by Function/Program
Sources
Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual
Financial Reports for the relevant year.
99.
CITY OF CUPERTINO
Net Positions/Assets by Component
Last Ten Fiscal Years
(Accrual basis of accounting)
(Unaudited)
Fiscal Year Ended June 30
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Governmental Activities
Net investment in capital assets $ 120,724,205 $ 117,440,257 $ 116,343,918 $ 122,081,223 $ 131,425,677 $ 148,168,074 $ 153,239,534 $ 167,606,366 $ 170,973,897 $ 177,128,134
Restricted 7,721,962 7,572,865 8,351,118 24,232,367 38,327,705 34,861,807 34,991,692 32,073,195 45,405,508 48,005,800
Unrestricted 33,185,903 38,117,361 47,558,701 63,150,548 51,003,950 51,164,063 59,385,309 50,457,871 51,190,017 66,493,336
Total governmental activities net position/assets 161,632,070 163,130,483 172,253,737 209,464,138 220,757,332 234,193,944 247,616,535 250,137,432 267,569,422 291,627,270
Business-Type Activities
Net investment in capital assets 777,521 824,687 762,013 1,110,414 2,079,561 1,708,183 1,972,169 1,597,700 1,318,744 1,118,882
Unrestricted 9,779,087 10,057,331 10,865,479 10,292,210 6,604,578 7,375,444 9,092,584 8,051,015 6,737,758 8,134,944
Total business-type activities net position/assets 10,556,608 10,882,018 11,627,492 11,402,624 8,684,139 9,083,627 11,064,753 9,648,715 8,056,502 9,253,826
Primary Government
Net investment in capital assets 121,501,726 118,264,944 117,105,931 123,191,637 133,505,238 149,876,257 155,211,703 169,204,066 172,292,641 178,247,016
Restricted 7,721,962 7,572,865 8,351,118 24,232,367 38,327,705 34,861,807 34,991,692 32,073,195 45,405,508 48,005,800
Unrestricted 42,964,990 48,174,692 58,424,180 73,442,758 57,608,528 58,539,507 68,477,893 58,508,886 57,927,775 74,628,280
(1),(2) $ 172,188,678 $ 174,012,501 $ 183,881,229 $ 220,866,762 $ 229,441,471 $ 243,277,571 $ 258,681,288 $ 259,786,147 $ 275,625,924 $ 300,881,096
(1)Represents net assets thru June 30,2012 and net position after that.
(2)Noted that restatements due to prior period adjustments and changes in accounting principles are not reflected in the prior year balances.
100.
CITY OF CUPERTINO
Change in Net Positions/Assets
Last Ten Fiscal Years
(Accrual basis of accounting)
(Unaudited)
Fiscal Year Ended June 30
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Expenses
Governmental Activities:
Administration $ 1,860,451 $ 1,837,072 $ 2,367,255 $ 4,529,539 $ 3,286,919 $ 3,710,388 $ 2,873,744 $ 5,612,733 $ 6,849,046 $ 7,974,520
Law enforcement 8,434,885 8,776,633 9,274,536 10,062,192 10,705,328 11,316,271 12,528,328 12,674,042 13,381,113 14,698,130
Public and environmental affairs 1,625,876 1,743,151 1,595,982 512,895 649,442 575,260 1,884,165 3,244,846 3,210,343 3,637,354
Administrative services 3,993,654 4,309,503 4,171,440 2,662,008 4,300,336 2,994,611 5,898,479 4,415,647 4,290,818 5,175,596
Recreation services 4,528,968 4,577,243 4,473,861 4,866,974 5,365,282 5,758,194 10,651,557 9,352,551 7,389,915 8,763,194
Community development 5,961,774 4,922,237 4,676,273 9,108,949 5,976,797 6,259,734 13,775,591 16,789,351 10,470,973 10,286,317
Public works 20,224,662 20,387,508 22,149,063 21,143,331 27,893,361 31,313,396 32,491,244 28,995,382 31,870,165 33,339,191
Interest on long-term debt 2,032,464 1,837,655 1,256,922 1,130,428 1,120,138 1,077,538 1,035,738 993,038 949,438 882,837
Total governmental activities expense 48,662,734 48,391,002 49,965,332 54,016,316 59,297,603 63,005,392 81,138,846 82,077,590 78,411,811 84,757,139
Business-Type Activities:
Resources recovery 1,801,599 1,566,229 1,764,993 2,159,047 2,548,461 2,997,200 2,991,177 2,594,511 1,735,885 2,213,404
Blackberry farm 457,065 460,698 463,336 571,000 547,185 576,177 597,406 656,112 645,469 663,663
Cupertino sports center 1,716,741 1,897,611 2,011,483 2,221,703 2,269,420 2,299,210 2,159,243 2,633,748 3,036,037 2,883,903
Recreation programs 1,753,156 1,985,618 2,025,416 2,730,765 2,342,457 3,136,011 2,351,501 3,232,593 2,923,336 3,141,225
Total business-type activities expense 5,728,561 5,910,156 6,265,228 7,682,515 7,707,523 9,008,598 8,099,327 9,116,964 8,340,727 8,902,195
Total primary government expense 54,391,295 54,301,158 56,230,560 61,698,831 67,005,126 72,013,990 89,238,173 91,194,554 86,752,538 93,659,334
Program Revenues
Governmental Activities:
Charges for services:
Administration 15,801 6,454 5,676 1,087,393 322,534 369,069 3,992,716 5,062,988 1,319,395 2,091,811
Law enforcement 797,757 696,498 637,595 725,631 590,378 664,483 603,194 732,544 889,923 1,102,888
Public and environmental affairs - - - - 41,352 41,352 - - - -
Administrative services - - - - 481,616 359,148 3,565,627 2,635,885 3,113,731 3,889,180
Recreation services 1,020,159 1,166,323 970,292 955,081 1,798,134 1,421,185 2,016,159 1,589,134 1,563,262 1,309,906
Community development 4,149,620 4,919,216 6,765,564 6,649,292 8,511,745 10,534,457 10,902,822 8,598,935 7,470,690 5,859,847
Public works 549,065 503,225 593,501 7,916,897 2,869,357 6,358,870 6,873,487 4,720,646 4,504,104 5,657,315
Operating grants and contributions 2,351,287 2,508,917 2,752,493 10,000,131 6,002,617 1,851,282 2,313,632 4,819,696 2,557,470 5,794,443
Capital grants and contributions 1,972,951 780,761 719,880 569,159 4,022,190 362,491 245,288 271,587 1,082,243 1,046,756
Total governmental activities program revenue 10,856,640 10,581,394 12,445,001 27,903,584 24,639,923 21,962,337 30,512,925 28,431,415 22,500,818 26,752,146
Business-Type Activities:
Charges for services:
Resources recovery 1,931,076 1,727,783 1,882,517 2,074,251 2,591,276 2,664,888 2,792,190 2,559,862 1,750,279 1,821,677
Blackberry farm 447,797 411,056 386,753 302,472 388,091 334,529 325,224 345,667 316,615 338,212
Cupertino sports center 1,722,700 1,965,684 2,150,139 2,188,127 2,152,498 2,224,146 2,238,023 2,403,665 2,349,468 2,365,667
Recreation programs 2,260,296 2,325,705 2,409,720 2,480,209 2,532,800 2,466,336 2,778,588 2,516,678 1,986,781 1,588,576
Operating grants and contributions - - - -
Total business-type activities program revenuf 6,361,869 6,430,228 6,829,129 7,045,059 7,664,665 7,689,899 8,134,025 7,825,872 6,403,143 6,114,132
Total primary government program revenue 17,218,509 17,011,622 19,274,130 34,948,643 32,304,588 29,652,236 38,646,950 36,257,287 28,903,961 32,866,278
(continued)
101.
CITY OF CUPERTINO
Change in Net Positions/Assets
Last Ten Fiscal Years
(Accrual basis of accounting)
(Unaudited)
Fiscal Year Ended June 30
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Net(Expense)Revenue:
Governmental activities $ (37,806,094) $ (37,809,608) $ (37,520,331) $ (26,112,732) $ (34,657,680) $ (41,043,055) $ (50,625,921) $ (53,646,175) $ (55,910,993) $ (58,004,993)
Business-Type activities 633,308 520,072 563,901 (637,456) (42,858) (1,318,699) 34,698 (1,291,092) (1,937,584) (2,788,063)
Total primary government net expense (37,172,786) (37,289,536) (36,956,430) (26,750,188) (34,700,538) (42,361,754) (50,591,223) (54,937,267) (57,848,577) 66,493,336
General Revenues and Transfers
Governmental Activities:
Taxes:
Property taxes 7,296,970 7,479,132 8,793,110 9,169,183 11,864,027 13,251,840 14,881,533 17,082,005 18,117,304
Property taxes in lieu of motor vehicle fee 4,404,795 4,487,412 4,772,355 5,289,476 6,330,436 6,967,237 7,552,272 8,219,090 8,489,541
Incremental property tax 1,251,777 202,793 - - - - - - -
Sales tax 14,539,243 17,326 18,721,193 19,794,036 21,350,056 26,932,012 26,164,531 24,901,779 35,657,214
Transient occupancy tax 2,536,501 3,112,934 3,768,504 4,590,156 5,852,244 6,023,681 6,810,718 8,901,337 7,286,083
Utility user tax 3,227,942 3,264,896 2,994,526 3,098,639 3,370,830 3,082,407 3,146,398 3,089,922 3,182,086
Franchise tax 2,841,344 2,808,136 2,848,950 2,775,892 3,478,024 3,409,572 3,563,820 3,445,253 3,418,908
Othertaxes 1,491,316 1,377,211 4,561,219 18,791,559 2,818,019 3,258,118 1,943,652 3,299,587 1,774,235
Intergovernmental(1) 259,289 29,064 30,256 25,294 24,111 26,118 31,013 28,844 47,391
Investment earnings 259,217 61,096 176,782 133,243 40,751 807,287 694,730 916,638 3,258,550 5,690,723
Miscellaneous 1,144,429 82,684 126,690 57,005 (2) 219,053 2,004,906 1,834,492 1,187,741 1,922,356
Gain on sale of capital assets - - - - 23,715,897 580 - 740,570 3,875 -
Extraordinary items(2) (1,130,797) - - - - -
Transfers-fund closings(3) - - - - - 272,011 - -
Transfers 15 207,000 (150,000) (401,350) 872,340 (1,635,000) (1,874,120) 107,030 (75,000) (3,523,000)
Total governmental activities 39,252,838 21,998,887 46,643,585 63,323,133 24,628,986 54,479,667 64,048,512 67,692,667 73,342,983 82,062,841
Business-Type Activities:
Investment earnings 71,486 12,338 31,573 11,238 42,531 82,187 59,012 75,663 270,371 462,387
Transfers (15) (207,000) 150,000 401,350 (872,340) 1,635,000 1,874,120 (107,030) 75,000 3,523,000
Total business-type activities 71,471 (194,662) 181,573 412,588 (829,809) 1,717,187 1,933,132 (31,367) 345,371 3,985,387
Total primary government 39,324,309 21,804,225 46,825,158 63,735,721 23,799,177 56,196,854 65,981,644 67,661,300 73,688,354 86,048,228
Change in Net Position/Assets(4)
Governmental activities 1,446,744 (15,810,721) 9,123,254 37,210,401 (10,028,694) 13,436,612 13,422,591 14,046,492 17,431,990 24,057,848
Business-Type activities 704,779 325,410 745,474 (224,868) (872,667) 398,488 1,967,830 (1,322,459) (1,592,213) 1,197,324
Total primary government $ 2,151,523 $ (15,485,311) $ 9,868,728 $ 36,985,533 $ (10,901,361) $ 13,835,100 $ 15,390,421 $ 12,724,033 $ 15,839,777 $ 25,255,172
(1)The 2006 state take-away of sales taxes,property taxes and vehicle license fees is reported in this category.
(2)Asset transfer to Successor to Redevelopment Agency fiduciary trust in 2012.
(3)Asset and liability transfer from the closed City Channel/web Internal Service Fund in 2017.
(4)Representes changes in net assets thru fiscal year ended June 30,2012 and changes in net position after that.
102.
CITY OF CUPERTINO
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified accrual basis of accounting
(Unaudited)
Fiscal Year Ended June 30
2011 (1) 2012 2013 2014 2015 2016 2017 2018 2019(2) 2020
General Fund
Nonspendable $ 1,023,950 $ 1,003,438 $ 956,827 $ 3,363,065 $ 938,245 $ 937,381 $ 876,939 $ 464,893 $ 454,188 $ 3,449,341
Restricted 663,254 695,564 725,903 - 761,653 888,374 1,016,771 1,254,578 9,469,670 14,324,757
Committed - - - - - - 19,000,000 19,122,754 19,123,397 19,127,891
Assigned 14,739,394 17,729,297 16,400,000 16,400,000 28,849,679 20,500,000 4,638,181 9,963,310 1,979,202 3,176,882
Unassigned 3,380,279 6,669,379 17,961,579 23,197,378 8,774,966 29,869,085 28,057,799 21,704,922 27,896,128 34,426,942
Total General Fund 19,806,877 26,097,678 36,044,309 42,960,443 39,324,543 52,194,840 53,589,690 52,510,457 58,922,585 74,505,813
All Other Governmental Funds
Nonspendable 615,000 - - - - - - - - -
Restricted 6,314,106 6,877,301 7,625,215 24,232,367 37,566,052 33,973,433 33,974,921 30,818,617 35,935,838 33,681,043
Committed - - - - 1,398,665 1,398,665 1,398,665 - - -
Assigned 4,303,822 3,646,073 5,299,904 7,619,534 20,671,116 15,344,191 25,305,974 29,129,616 33,211,946 40,551,131
Unassigned - (2,280,961)
Total All Other Governmental Funds 11,232,928 10,523,374 12,925,119 29,570,940 59,635,833 50,716,289 60,679,560 59,948,233 69,147,784 74,232,174
Total Governmental Funds $ 31,039,805 $ 36,621,052 $ 48,969,428 $ 72,531,383 $ 98,960,376 $ 102,911,129 $ 114,269,250 $ 112,458,690 $ 128,070,369 $ 148,737,987
(1)The City implemented GASB Statement No.54 under which governmental fund balances are reported as nonspendable,restricted,committed,
assigned and unassigned compared to reserved and unreserved
(2)The City established a trust to fund Other Post-Employment Benefit contributions,which is classified as a restriction in fund balance.
103.
CITY OF CUPERTINO
Change in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified accrual basis of accounting)
(Unaudited)
Fiscal Year Ended June 30
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenues
Taxes $ 37,582,299 $ 40,265,944 $ 48,382,570 $ 72,211,724 $ 55,134,238 $ 55,462,956 $ 62,924,867 $ 64,062,924 $ 68,938,973 $ 77,925,371
Use of money and property 792,035 661,602 744,196 764,299 915,933 1,654,702 1,425,629 1,543,818 3,896,813 6,259,342
Intergovernmental 3,543,641 2,678,888 2,841,407 3,069,400 7,210,562 2,532,025 2,585,038 5,122,296 3,668,557 6,888,590
Licenses and permits 2,901,944 2,900,936 3,502,617 3,679,943 3,170,445 3,073,110 2,536,925 2,757,928 4,102,665 4,692,847
Charges for services 2,311,216 3,273,946 4,515,066 10,744,113 5,203,371 17,249,123 24,103,167 15,638,247 13,385,698 13,937,950
Fines and forfeitures 695,666 661,899 560,417 616,889 554,002 564,903 603,194 602,934 534,012 344,008
Other 73,881 264,302 57,828 545,052 542,429 1,289,013 2,004,904 1,834,492 1,187,741 1,922,356
Total revenues 47,900,682 50,707,517 60,604,101 91,631,420 72,730,980 81,825,832 96,183,724 91,562,639 95,714,459 111,970,464
Expenditures:
Current:
Administration 1,528,070 1,533,070 2,005,176 3,957,739 3,897,701 4,053,741 5,942,633 4,943,052 6,294,111 6,951,541
Law enforcement 8,434,885 8,445,917 8,783,885 9,626,121 10,283,772 10,988,735 11,939,095 12,362,621 13,108,732 14,151,413
Public and environmental affairs 1,497,263 1,659,856 1,486,910 477,852 624,295 544,718 1,864,746 2,835,768 2,843,540 3,223,185
Administrative services 3,695,076 4,103,982 3,772,714 2,444,670 3,226,164 2,811,117 5,054,539 4,430,300 4,197,582 4,617,787
Recreation services 4,117,477 4,319,983 4,083,822 4,536,519 5,047,548 5,441,200 9,361,934 8,686,076 8,996,118 7,688,935
Community development 5,693,541 4,762,229 4,395,601 8,424,254 5,180,659 6,102,820 7,431,292 12,907,086 9,359,835 9,310,827
Public works 12,234,726 12,528,194 13,996,516 17,469,627 14,625,038 15,078,174 18,623,585 18,191,714 19,955,579 22,445,948
Capital Outlay 5,281,927 3,523,047 4,684,676 7,110,974 21,760,899 26,171,127 18,731,165 23,395,112 10,528,246 12,644,373
Debt service:
Principal repayment 1,500,000 - 1,920,000 2,040,000 2,055,000 2,090,000 2,135,000 2,180,000 2,220,000 2,290,000
Interest and fiscal charges 2,032,464 1,837,665 1,256,922 1,130,428 1,120,138 1,077,538 1,035,738 993,038 949,438 882,837
Payment to refunded debt escrow agent - 44,897,800 -
Total expenditures 46,015,429 87,611,743 46,386,222 57,218,184 67,821,214 74,359,170 82,119,727 90,924,767 78,453,181 84,206,846
Excess(deficiency)of revenues over
(under)expenditures 1,885,253 (36,904,226) 14,217,879 34,413,236 4,909,766 7,466,662 14,063,997 637,872 17,261,278 27,763,618
Other Financing Sources(Uses)
Bond proceeds - 44,823,839 - - - - - - - -
Proceeds from sale of capital assets 1,055,449 421 - 37,569 23,814,257 580 - 872,250 3,875 -
Transfers in 5,684,483 6,484,426 8,438,707 13,610,304 39,408,990 11,905,724 26,446,090 31,028,218 19,407,613 35,208,276
Transfers in-fund closing - - - - - - 260,374 - - -
Transfers out (7,883,751) (7,692,426) (10,308,210) (24,499,154) (39,177,284) (15,422,213) (29,412,340) (34,348,900) (21,061,087) (42,304,276)
Total other financing sources(uses) (1,143,819) 43,616,260 (1,869,503) (10,851,281) 24,045,963 (3,515,909) (2,705,876) (2,448,432) (1,649,599) (7,096,000)
Extraordinary Item
Asset transferred to Successor Agencies - (1,130,797) - - - - - - -
Change in fund balances $ 741,434 $ 5,581,237 $ 12,348,376 $ 23,561,955 $ 28,955,729 $ 3,950,753 $ 11,358,121 $ (1,810,560) $ 15,611,679 $ 20,667,618
Debt service as a percentage of
noncapital expenditures(1) 8.7% 55.6% 7.6% 6.3% 6.9% 6.6% 5.0% 4.7% 4.7% 4.4%
(1)Noncapital expenditures is total expenditures less capital assets added each year to the statement of net position/assets.
104.
CITY OF CUPERTINO
Assessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(Unaudited)
State Board of Total Assessed& Direct
Total Equalization Secured Est.Full Market Tax
Fiscal Year Secured(a) Unsecured(a) Non-Unitary Exemptions Valuation(a) Rate
2011 13,017,910,372 476,332,025 1,390,000 96,704,811 13,495,632,397 6.51%
2012 13,219,574,367 527,310,319 1,390,000 96,081,912 13,748,274,686 6.24%
2013 13,882,147,291 738,243,050 1,390,000 108,468,872 14,621,780,341 6.20%
2014 15,391,656,690 813,117,019 1,390,000 113,744,809 16,206,163,709 5.62%
2015 16,133,637,244 965,141,148 - 119,476,276 17,098,778,392 5.61%
2016 18,308,720,226 1,086,786,901 - 114,223,063 19,395,507,127 5.59%
2017 20,196,258,418 1,150,311,942 - 118,257,368 21,346,570,360 5.98%
2018 22,024,906,420 1,114,123,426 - 122,805,695 23,139,029,846 6.19%
2019 23,402,123,229 1,779,936,377 - 125,245,819 25,182,059,606 6.38%
2020 24,370,718,536 1,641,863,322 - 138,025,761 26,012,581,858 6.50%
$18
$16
'm
$14
$12
$10
$8
$6
$4
$2
$0
r1 N m v 1n W 11, oo rn o
r-1 r-1 r-I r-I c-I c-I c-I c-I r-I N
O O O O O O O O O O
■Secured Property N Unsecured Property
(a)Net of exemptions
Source: HdL,Coren&Cone
Data Source: Santa Clara County Assessor 2010-11 -2019-20 Combined Tax Rolls
This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren&Cone
Prepared On 9/4/2020 by MV
105.
THE CITY OF CUPERTINO
Direct and Overlapping Property Tax Rates
(Rate per$100 of taxable value)
Last 10 Fiscal Years
Agency 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018-19 2019-20
Basic Levy' 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000
Co.Housing Bond 2016 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.01266 0.01050 0.01000
County Bond 2008 Hospital Facility 0.00950 0.00470 0.00510 0.00350 0.00910 0.00880 0.00860 0.00820 0.00720 0.00690
County Library Retirement Levy 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240
County Retirement Levy 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880
Cupertino Elementary 0.03080 0.02900 0.05980 0.05250 0.05400 0.05190 0.05090 0.04960 0.03970 0.04150
El Camino Hospital 2003 0.01290 0.01290 0.01290 0.01290 0.01290 0.01290 0.01290 0.01000 0.01000 0.01000
Foothill De Anza College 0.03260 0.02970 0.02870 0.02900 0.02760 0.02400 0.02340 0.02200 0.02170 0.02080
Fremont High 0.03650 0.04150 0.03900 0.04050 0.03960 0.05250 0.04030 0.04640 0.04300 0.04790
Los Gatos-Saratoga High 1998 0.03770 0.03810 0.03680 0.03510 0.05160 0.04230 0.04690 0.04570 0.03040 0.01770
MidPeninsula Open Space 2014 0.00000 0.00000 0.00000 0.00000 0.00000 0.00080 0.00060 0.00090 0.00180 0.00160
Santa Clara Unified 0.05190 0.08360 0.08190 0.07070 0.07040 0.09420 0.08180 0.08280 0.07070 0.11760
Santa Clara Valley Water District 0.00720 0.00640 0.00690 0.00700 0.00650 0.00570 0.00860 0.00620 0.00420 0.00410
Saratoga Elementary 0.04370 0.04440 0.04520 0.04500 0.04580 0.04490 0.04560 0.04580 0.04580 0.04640
West Valley College 0.01390 0.01370 0.02890 0.02550 0.01200 0.02320 0.01960 0.02000 0.01980 0.01860
West Valley-Mission Ccd 2018 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.01100
Total Direct&Overlapping'Tax Rates 1.31790 1.34520 1.38640 1.36290 1.37070 1.40240 1.38040 1.39146 1.34600 1.39530
City's Share of 1%Levy Per Prop 13' 0.05644 0.05650 0.05652 0.05626 0.05617 0.05571 0.05962 0.06148 0.06320 0.06531
General Obiligation Debt Rate
Redevelopment Rate' 1.04840 1.04760
Total Direct Rates 0.06507 0.06238 0.06204 0.05623 0.05610 0.05588 0.05976 0.06187 0.06381 0.06499
Notes:
'In 1978,California voters passed Proposition 13 which set the property tax rate at a 1.00%fixed amount.This 1.00%is shared by all taxing
agencies for which the subject property resides within.In addition to the 1.00%fixed amount,property owners are charged taxes as a
percentage of assessed property values for the payment of any voter approved bonds.
'Overlapping rates are those of local and county governments that apply to property owners within the City.Not all overlapping rates apply to all city property owners.
'City's Share of 1%Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city.
ERAF general fund tax shifts may not be included in tax ratio figues.
'Redevelopment Rate is based on the largest RDA tax rate area and only includes rate(s)from indebtedness adopted prior to 1989 per
California State statute.RDA direct and overlapping rates are applied only to the incremental property values.The approval of ABXI 26
eliminated Redevelopment from the State of California for the fiscal year 2012/13 and years thereafter.
'Total Direct Rate is the weighted average of all individual direct rates applied to by the government preparing the statistical section
information and excludes revenues derived from aircraft.Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated
from the former redevelopment tax rate areas.Challenges to recognized enforceable obligations are assumed to have been resolved during
2012/13.For the purposes of this report,residual revenue is assumed to be distributed to the City in the same proportions as general fund
revenue.
Data Source: Santa Clara County Assessor 2010111-2019120 Tax Rate Table
This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent ofHdL, Coren&Cone
Prepared on 9/4/2020 by MV
106.
CITY OF CUPERTINO
Principal Property Taxpayers
Current Year and Five Years Ago
(Unaudited)
2020 Percentage of 2015 Percentage of
Assessed Total Assessed Assessed Total Assessed
Taxpayer Valuation Valuation Valuation Valuation
Apple Inc. $ 6,191,911,133 23.80% $ 1,596,975,041 9.34%
Main Street Cupertino 396,065,000 1.52% - -
Vallco Property Owner LLC 339,916,857 1.31% 157,741,957 0.92%
Cupertino City Center 201,051,525 0.77% 139,849,982 0.82%
BVK Perimeter Square Retail LLC ET AL 181,321,407 0.70% - -
Cupertino Property Development 180,164,643 0.69% 100,941,770 0.59%
Mission West Properties LP II ETAL 140,416,937 0.54% 127,777,488 0.75%
PR Cupertino Gateway LLC 130,693,479 0.50% - -
Markham Apartments LP 104,481,230 0.40% - -
Cupertino Hotel Owner LLC 97,799,908 0.38% - -
Total $ 7,963,822,119 30.61% $ 2,123,286,238 12.42%
Source: HdL,Coren&Cone
107.
CITY OF CUPERTINO
Property Tax Levies and Collections
Last Ten Fiscal Years
(Unaudited)
Percent of
Percent Delinquent Total Total Tax
Fiscal Total Current Tax of Levy Tax Tax Collections
Year Tax Levy Collections Collected(1) Collections(1) Collections to Tax Levy
2011 8,497,119 8,497,119 100.00% - 8,497,119 100.00%
2012 7,681,925 7,681,925 100.00% - 7,681,925 100.00%
2013 8,199,752 8,199,752 100.00% - 8,199,752 100.00%
2014 9,169,183 9,169,183 100.00% - 9,169,183 100.00%
2015 10,178,734 10,178,734 100.00% - 10,178,734 100.00%
2016 11,864,026 11,864,026 100.00% - 11,864,026 100.00%
2017 13,308,884 13,308,884 100.00% - 13,308,884 100.00%
2018 13,172,425 13,172,425 100.00% - 13,172,425 100.00%
2019 16,049,112 16,049,112 100.00% - 16,049,112 100.00%
2020 18,117,304 18,117,304 100.00% - 18,117,304 100.00%
(1)Per the Teeter Plan,the City receives 100%of the tax levy,while the County receives delinquencies and penalties.
Source: City of Cupertino
108.
CITY OF CUPERTINO
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Unaudited)
Percentage
of Estimated %of
Fiscal Certificates Actual Market Value Personal
Year of Participation of Taxable Property Per Capita Income
2011 44,010,000 0.30% 755 1.70%
2012 43,940,000 0.27% 744 1.56%
2013 42,020,000 0.26% 705 1.41%
2014 39,980,000 0.23% 671 1.38%
2015 37,925,000 0.20% 633 1.28%
2016 35,835,000 0.18% 598 1.21%
2017 33,700,000 0.15% 579 1.02%
2018 31,520,000 0.12% 525 0.87%
2019 29,300,000 0.11% 488 0.81%
2020 27,010,000 0.10% 451 0.71%
Source: City of Cupertino
109.
CITY OF CUPERTINO
Direct and Overlapping Bonded Debt
June 30,2020
(Unaudited)
2019-20 Assessed Valuation $ 26,012,581,858
Total Debt % City's Share of
Overlapping Tax and Assessment Debt: 6/30/2020 Applicable(1) Debt 6/30/20
Santa Clara County $ 947,220,000 5.096% $ 48,270,331
Santa Clara County General Fund Obligations 710,539,120 5.096% 36,209,074
Santa Clara County Pension Obligations 352,378,882 5.096% 17,957,228
Santa Clara County Board of Education Certificates of Participation 4,255,000 5.096% 216,835
Foothill-DeAnza Community College District 620,143,886 13.454% 83,434,158
West Valley Community College District 635,310,000 1.634% 10,380,965
West Valley-Mission Community College District General Fund Obligations 62,200,000 1.634% 1,016,348
Santa Clara Unified School District 1,081,495,000 3.813% 41,237,404
Santa Clara County Vector Control District Certificates of Participation 2,245,000 5.096% 114,405
Fremont Union High School District 562,210,088 29.883% 168,005,241
Cupertino Union School District 274,238,303 50.963% 139,760,066
El Camino Hospital District 124,490,000 1.056% 1,314,614
Midpeninsula Regional Open Space District and General Fund Obligations 209,910,600 8.134% 17,074,128
Santa Clara Valley Water District Benefit Assessment 73,570,000 5.096% 3,749,127
Total Overlapping Tax and Assessment Debt 5,660,205,879 568,739,926
Direct Debt:City of Cupertino Certificates of Participation 27,010,000 100.000% 27,010,000
Total Direct and Overlapping General Fund Debt 27,010,000 27,010,000
Totals by Cateeory: (3)
Total Direct Debt 27,010,000 27,0109000
Total Overlapping Debt 5,660,205,879 568,739,926
Combined Total Debt $ 5,687,215,879 $ 595,749,926
Ratios to 2019-20 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 2.19%
0.10%
Combined Total Debt 2.29%
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value.Applicable
(2) Principal amount as of 6/30/20.
110.
CITY OF CUPERTINO
Legal Debt Margin Information
Last Ten Fiscal Years
(Unaudited)
Total net debt
Total Net Legal applicable to the
Fiscal Debt Debt Applicable Debt limit as a%of
Year Limit to Limit Margin debt limit
2011 488,171,639 - 488,171,639 -
2012 495,734,039 - 495,734,039 -
2013 520,580,523 - 520,580,523 -
2014 577,187,126 - 577,187,126 -
2015 605,011,397 - 605,011,397 -
2016 686,577,008 - 686,577,008 -
2017 757,359,691 - 757,359,691 -
2018 825,933,991 - 825,933,991 -
2019 877,579,621 - 877,579,621 -
2020 913,901,945 - 913,901,945 -
Debt Limit:
Secured property assessed value,net of exempt real property $ 24,370,718,536
Adjusted valuation-25%of assessed valuation 6,092,679,634
Debt limit- 15%of adjusted valuation 913,901,945
Amount of Debt Subject to Limit:
Total Bonded Debt 27,010,000
Less: Certificates of Participation not subject to debt limit (27,010,000)
Amount of debt subject to limit -
Legal Debt Margin $ 913,901,945
Note:The Government Code of the State of California provides for a legal debt limit of 15%of gross assessed valuation.However,this
provision was enacted when assessed valuation was based upon 25%of market value. Effective with the 1981-82 fiscal year,each parcel is
now assessed at 100%of market value(as of the most recent change in ownership for that parcel).The computations shown above reflect a
conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25%level that was in effect at the
time that the legal debt margin was enacted by the State of California for local governments located within the state.
Source: City of Cupertino
111.
CITY OF CUPERTINO
Ratio of General Bonded Debt
Last Ten Fiscal Years
(Unaudited)
Ratio of General
Fiscal Assessed General Bonded Debt Bonded Debt to
Year Population Value Bonded Debt Per Capita Assessed Value
2011 56,431 13,495,632,397 - - -
2012 59,022 13,748,274,686 - - -
2013 59,620 14,621,780,341 - - -
2014 59,946 17,098,778,392 - - -
2015 59,777 19,395,507,127 - - -
2016 58,185 19,395,507,127 - - -
2017 58,917 21,346,570,360 - - -
2018 60,091 23,139,029,846 - - -
2019 59,879 25,182,059,606 - - -
2020 59,549 26,012,581,858 - - -
Sources: HdL,Coren&Cone
112.
City of Cupertino
Demographic and Economic Statistics
Last Ten Fiscal Years
' i 1 ' I
city ' 1 Population Population
CountyFiscal '
City Personal Capita1 1 1 1 Median Over 25 Over 25
' ll 11 Population ' ll II 11
IncomePersonal ' ' I with
� i I 1 1 - -
Incomei i School Bachelor's
Degree Degree
2010-11 56,431 1,781,642 3.17% 2,586,120,000 45,828 10,365 7.3% - 39.1 96.3% 72.6%
2011-12 59,022 1,809,378 3.26% 2,818,655,000 47,756 10,625 6.3% - 39.2 97.0% 74.7%
2012-13 59,620 1,842,254 3.24% 2,985,829,000 50,081 29,699 4.1% 8.4% 39.5 96.7% 75.5%
2013-14 59,946 1,868,558 3.21% 3,090,636,000 51,557 29,904 3.4% 6.8% 40.0 96.2% 74.2%
2014-15 59,777 1,889,638 3.16% 3,186,772,000 53,311 29,871 4.2% 3.8% 40.0 96.5% 74.6%
2015-16 58,185 1,927,888 3.02% 3,340,132,000 57,405 29,684 3.4% 4.2% 40.2 96.5% 75.6%
2016-17 58,917 1,938,180 3.04% 3,486,805,000 59,181 29,467 3.0% 3.8% 40.6 96.7% 76.0%
2017-18 60,091 1,938,153 3.10% 3,620,255,000 60,246 29,255 3.3% 3.8% 40.7 97.1% 76.6%
2018-19 59,879 1,937,570 3.09% 3,821,320,000 63,817 29,240 2.6% 2.3% 41.1 97.1% 77.2%
2019-20 59,549 1,927,852 3.09% 4,114,967,000 69,102 29,550 2.4% 10.7% 41.1 97.2% 78.1%
Notes and Data Sources:
Population: California State Department of Finance. Unemployment Data: California Employment Development Department
Income,Age,and Education Data: ESRI-Demographic Estimates are based on the last available Census. Projections are developed by incorporating all of the
prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's boundaries
201-and later-Income,Age and education Data-US Census Bureau,most recent American Community Survey
"Reported Public School Enrollment reflects the total number of students in the Fremont Union High School District and Cupertino Union School District.
Previously published reports included Fremont Union High School District only.
113.
CITY OF CUPERTINO
2020 Employer Ranking
(Unaudited)
Employer Ranking Employer Ranking
Apple I Panasonic Corporation 11
Cupertino Union School District 2 Pleasant View Convalescent Hospital 12
Corinthian International Parking Services; 3 Sunny Retirement Home 13
Synophic Systems Inc. 4 City of Cupertino 14
De Anza Community College District 5 Ch Cupertino Owner LLC 15
Target Stores, Inc. 6 Zend Technologies Usa, Inc. 16
Fremont Union High School District 7 Mist Systems, Inc. 17
Forum Healthcare Center 8 County of Santa Clara 18
Whole Foods Market 9 Cupertino Lessee LLC 19
Mobileum, Inc. 10 Posh Bakery Inc. 20
Source: InfoUSA
114.
CITY OF CUPERTINO
Full-Time Equivalent City Employees by Function/Program
Last Ten Fiscal Years
(Unaudited)
Function/Program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Council and Commissions 1.46 1.47 1.52 1.57 1.55 1.60 1.55 2.35 2.35 2.51
Administration 4.85 5.05 5.05 10.75 10.75 10.85 10.57 14.12 15.47 15.15
Innovation&Technology 6.95 6.95 6.90 11.00 10.25 11.40 13.95 14.55 15.05 14.95
Administrative Services 22.34 22.48 22.26 11.00 12.00 12.30 12.30 12.00 14.00 16.00
Parks&Recreation 30.78 29.78 29.53 29.48 31.28 32.18 33.08 35.13 34.80 32.10
Community Development 23.78 23.43 23.90 24.83 24.80 27.30 28.18 28.08 28.13 28.29
Public Works 72.59 73.59 73.59 74.12 77.12 82.12 84.12 84.52 84.95 88.75
Law Enforcement 0.00 0.00 0.00 2.00 2.00 2.00 2.00 2.00 2.00 0.00
Total 162.75 162.75 162.75 164.75 169.75 179.75 185.75 192.75 196.75 197.75
250
■Public Works
'00
■Community
Development
■Parks&
�0
Recreation
Administrative
Services
100
■Innovation&
Technology
■Administration
50
■Council and
Commissions
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: City of Cupertino Budget
115.
CITY OF CUPERTINO
Operating Indicators by Function/Program
Last Ten Fiscal Years
(Unaudited)
Function/Program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Law Enforcement Sheriff Response
Priority One-Respond within 5 minutes 4.49 Min. 4.84 Min. 3.76 Min. 4.30 Min. 4.90 Min. 4.90 Min. 5.07 Min 4.23 Min. 3.95 Min. 3.96 Min.
Priority Two-Respond within 9 minutes 5.76 Min. 6.44 Min. 5.98 Min. 6.39 Min. 6.56 Min. 6.56 Min. 8.00 Min. 7.49 Min. 6.33 Min. 6.74 Min.
Priority Three-Respond within 20 minutes 9.79 Min. 10.62 Min. 10.29 Min. 10.76 Min. 10.52 Min. 10.52 Min. 15.79 Min 14.79 Min. 13.23 Min. 12.42 Min.
Public Works
Street Sweeping 696 Curb Miles 575 Curb Miles 575 Curb Miles 575 Curb Miles 575 Curb Miles 575 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles
Street Maintenance 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs o£Call
Number of development permit applications received 428 434 428
Number of encroachment permits received 121 136 134
S.Drain Inlets Inspected/Cleaned 815 1063 1638
Roadway Signs Repaired/Replaced 404 721 346
Number of noes planted vs.removed 53/67 155/192 164/190
Parks&Recreation
Number of reservations at Quinlan Center 560 402 526
Number of rounds of gol£at BBF Golf Course 28,193 27,205 28,952
Sports Center Memberships 1,598 1,776 1,852 1,950 2,000 1,989 2,015 1,850 1,952 1,802
Number of Senior Center classess offered 246 320 258
Senior Center Memberships 2,387 2,470 2,456 2,623 2,549 2,493 2,094 2,260 2,171 2,171
Quinlan Community Center Rental Revenue $91,000 $133,000 $120,000 $109,342 $110,033 $104,150 $128,778 $72,948 $139,590 $139,590
Community Development
Approved Building Plan Sets 97%Within 5 Days 93%Within 5 Days 92%Within 5 Days 95%Within 7 Work Days 95%Within 7 Work Days 95%Within 7 Work Days 95%Within 7 Work Days 95%Within 7 Work Days 95%Within 7 Work Days 95%Within 7 Work Days
Discretionary Land Use Applications 100%Within 21 Days 99%Within 21 Days 99%Within 21 Days 99%Within 21 Work Days 99%Within 21 Work Days 99%Within 21 Work Days 99%Within 21 Work Days 99%Within 21 Work Days 99%Within 21 Work Days 99%Within 21 Work Days
Public Notice of Upcoming Proiects 100%Within 10 Days 100%Within 10 Days 100%Within 10 Days 100%Within 10 Days 100%Within 10 Days 100%Within 10 Days 100%Within 10 Days 100%Within 10 Days 100%Within 10 Days 100%Within 10 Days
Number of preliminary reviews 82 90 110
Number of planning applications received 169 138 194
Number of permits received 2,322 2,321 2,534
Number of inspections requested 16,026 13,625 14,596
Administrative Services
Accounts Payable Processing 5 Days 7 Days 7 Days 7 Days 7 Days 7 Days 7 Days 7 Days 7 Days 7 Days
Business License Renewal Certificates 3 Days 3 Days 3 Days 3 Days 3 Days 3 Days 3 Days 3 Days 3 Days 3 Days
Number of regular recruitments 21 21 28
Number of new hires 26 16 14
Number of temporary new hires 101 105 38
Number of personnel payroll changes 702 938 1,094
Number of vendor checks processes 6,793 6,536 5,906
Number of payroll checks process 10,387 10,301 10,802
Number ofbusiness license applications 1,294 1,154 1,032
Number of ioutual entries posted 2,830 4,521 4,558
Number of receipts processed 9,766 13,913 18,992
Library
Volumes in Collection - - - - 361,817 364,557 369,924 367,979 367,101 368,461
Annual Gate Count - - - - 869,762 880,894 835,073 873,862 904,349 620,007
Annual Circulation Children's Items - - - - 1,474,996 1,544,095 1,448,265 1,453,173 1,535,842 1,192,880
Annual Circulation Adult and Teen Items - - - - 999,766 1,032,326 950,453 980,609 1,049,166 831,114
Adult Classes and Events - - - - 209 215 242 206 207 396
Adult Classes and Events Attendence - - - - 11,860 8,855 9,242 7,622 8,304 9,986
Teen Classes and Events - - - - 52 78 66 79 52 57
Teen Classes and Events Attendence - - - - 3,393 3,135 2,571 2,495 1,283 8,495
Children's Classes and Events - - - - 458 493 440 426 424 477
Children's Classes and Events Atendence - - - - 25,529 28,532 25,857 24,675 22,851 26,032
Volunteer Hours - - - - 11,786 10,000 9,645 10,302 10,191 6,592
Sources:City of Cupertino and Santa Clam County Library District
116.
CITY OF CUPERTINO
Capital Assets Statistics by Function/Program
Last Ten Fiscal Years
(Unaudited)
Function/Program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Public Works
Centerlane Miles of Streets 142 142 142 142 142 142 142 142 142 142
Streetlights 2,950 2,950 2,950 2,950 2,950 2,950 2,950 2,950 2,950 2,950
Traffic Signals 39 39 48 48 48 48 48 52 52 52
Culture&Recreation
Parks and Open Spaces 19 19 19 21 21 21 21 21 21 21
Park and Landscape Acreage 169 169 169 169 169 169 169 169 169 169
City Trails 1 1 1 3 3 3 3 3 3 3
Golf Courses 1 1 1 1 1 1 1 1 1 1
Community Center 1 1 1 1 1 1 1 1 1 1
Community Hall 1 1 1 1 1 1 1 1 1 1
Senior Center 1 1 1 1 1 1 1 1 1 1
Sports Center 1 1 1 1 1 1 1 1 1 1
Swimming Pools 1 1 1 1 1 1 1 1 1 1
Tennis Courts 17 17 17 17 28 28 28 28 28 28
Sports Fields 41 41 41 41 41 41 41 41 41 41
City Library 1 1 1 1 1 1 1 1 1 1
Source: City of Cupertino
117.
History
"This place of San Joseph Cupertino has good water and much firewood, but nothing suitable for a
settlement because it is among the hills very near to the range of cedars which I mentioned yesterday, and
lacks level lands."
When Spanish explorer San Juan Bautista De Anza traveled through California in 1776, he and
his party documented these words about the land surrounding Stevens Creek,named back then
as Arroyo San Joseph Cupertino. However, first impressions can often be misleading.
Underneath the spiny, overgrown bush was a completely different land waiting to be
uncovered. During this time, the area was populated by Native Americans who hunted and
gathered,prospering from the abundant resources the land had to offer.
It wasn't until 1848 when the first American settler, Elijah Stephens, a blacksmith from South
Carolina, moved to the area—at this time, named simply 'West Side' and primarily owned by
the government. After crossing over the Sierra Nevada in wagons,he discovered the true value
of the land underneath the bush, and proceeded to purchase over 300 acres of farmland to grow
grapes and blackberries. Stephens pioneered the way for farmers, which established West Side
as an agricultural hot spot. The land Stephens owned eventually became Blackberry Farm, and
the road, creek, and reservoir were all named after him, although misspelled.
In early West Side, many of the newest advances in agriculture were being developed. Settlers
were drawn to the land because of its rich earth, where they were able to grow products that
competed on the world market. Once the bush had been cleared, they grew grapes, which
covered the West Valley area with vineyards by the late 1800s. By the 1900s, a plant louse called
Phylloxera spread throughout the vineyards, attacking the roots of the grape vines, killing the
grapes and putting a halt to wine production. As a solution, nearly everything was replanted
with fruit orchards. When the fruit trees blossomed, visitors would come to the orchards for
"The Valley of Heart's Delight" festivals, which celebrated the prosperous agriculture of the
West Valley area.
Apart from the farmland, West Side was primarily known as a crossroads, an intersection
between Saratoga-Sunnyvale Road and Stevens Creek. This served as a way station for travelers
to pass through while going from town to town. As more people came to West Side to take
advantage of the rich farm land, more family holdings gathered around the cross-roads.
Starting off as just a post office and home union store, West Side's humble cross-roads brought
many diverse communities, all attracted by the preferable climate and profitable market for
crops.
As more people were drawn to the area around the cross-roads, the orchards were gradually
replaced with modern houses for workers. The population steadily grew, and the face of West
Side changed, progressing to a more modern town. The community wanted to rename the city,
as to not confuse it with other cities, as well as establish a unique identity. John T. Doyle, a
lawyer from San Francisco, and writer of historical anthologies on the area, chose the name
"Cupertino" after the original name of the creek.
After the post-World War II population boom, the growing community petitioned for
Cupertino to become an incorporated town. Members of the community were worried that the
alternative to incorporation was to have parts of Cupertino annexed by surrounding cities,
splitting up the community and erasing the local culture. To preserve the rural atmosphere,
lower taxes for farmers, start a local government, and prepare for growth, Cupertino voted for
incorporation. In 1955, Cupertino officially became the 13th city in Santa Clara County.
By the 1970s, Cupertino once again began to undergo dramatic changes. The growing
community attracted several large technology corporations. Lockheed Martin, HP, Intel, and
many other big names established themselves in the Silicon Valley. Apple Inc. was founded in
Cupertino in 1976 and quickly grew into the tech giant it's known for today.
In the late 20th century, Cupertino and the surrounding areas experienced another surge in
population growth, this time due to the immigration of people from Asian countries.
Immigration laws at the time were in the favor of families looking to move to the Silicon Valley.
People immigrated here for a variety of reasons—whether they were aspiring for career
prospects with major tech companies, or striving for a quality education for their children,
everyone who immigrated here had a common goal: to find opportunities to work hard for a
better life for themselves and their families.
2020 Community Economic Profile
Cupertino, with a population of 66,762 and City limits stretching across 13 square miles, is
considered one of the most prestigious cities to live and work in the Bay Area.
Economic health is an essential component to maintaining a balanced city,which provides high-
level opportunities and services that create and help sustain a sense of community and quality
of life. Public and private interests must be mutual so that success as a partnership is a direct
reflection of success as a community. The cornerstone of this partnership is a cooperative and
responsive government that fosters residential and business prosperity and strengthens
working relationships among all sectors of the community.
Because Cupertino is a mature, 93% built-out city, the City of Cupertino focuses on business
retention and revitalization. Cupertino is world renowned as the home of high-tech giants, such
as Apple, Inc. and Seagate Technologies, and as a community with stellar public schools. De
Anza College, one of the largest single-campus community colleges in the country, is another
major employer and a magnet for attracting local and international students. The City's
proactive economic development efforts have resulted in an innovative environment for start-
ups and growing companies to thrive. The City strives to retain and attract local companies
through active outreach and a responsive and customer-oriented entitlement process.
Cupertino is excited to have a number of new mixed-use development projects offering more
retail and dining options, as well as provide additional housing opportunities to meet the needs
of the growing community.
The Main Street and Nineteen800 mixed-use developments have
created a vibrant downtown area for Cupertino, offering a large
_ _ u selection of restaurants and retailers, including Alexander's
_.+it� �'ry �"` Steakhouse, Eureka!, Rootstock Wine Bar, Oreri s Hummus, Lazy
Dog, Ippudo, HaiDiLao Hot Pot Restaurant, Pressed Juicery,
Orangetheory, 85 Degree Bakery, Somi Somi, Sul & Beans, Target
Express, Kura Sushi, Vitality Bowls, Doppio Zero, Boiling Point and Jin Tea, Koja Kitchen,
Bishops Cuts & Colors, Capezio, Howard's Shoes, Tan Cha, and Meet Fresh. Housing, office,
and a new Residence Inn by Marriott are available to support the thriving area. Benihana,
Bowlmor, and Ice Center Cupertino also serve as long-time anchors.
The construction of new retail and commercial development strengthens existing popular
venues in Cupertino, including The Marketplace. The Marketplace has a variety of stores and
restaurants popular with students, families, and working professionals. They include Galpao
Gaucho, Daiso, Marukai Groceries, Harumi Sushi, La Patisserie Bakery, Beard Papa's, Legend's
Pizza, Merlion Restaurant, Icicles, Kong's Tofu & BBQ, Rori Rice, One Pot Shabu Shabu, Olarn
Thai, and Erik's DehCafe to name a few.
Cupertino Village is undergoing renovations to upgrade existing buildings, construct new
buildings, parking, and open-courtyard space. The shopping center is home to 99 Ranch
Market,Duke of Edinburgh Pub &Restaurant,JSJ Street Kitchen, Kira Kira Beauty, MOD Pizza,
Ten Ren Tea, Fantasia Coffee & Tea, Yoga Wave, Happy Lemon, Joy Luck Palace, Kee Wah
Bakery, and many other Asian restaurants,bakeries, and shops.
Cupertino features many other retail opportunities, including TJ Maxx and Home Goods,
Whole Foods, Target, Party City, and over 180 restaurants to serve residents and the local
workforce. There are now seven hotels providing over 1,000 rooms, to serve the area: The Aloft
Cupertino, Cupertino Hotel, Hilton Garden Inn, Juniper Hotel operated by Curio, Marriott
Courtyard, the Residence Inn by Marriott, and the newest addition is the Hyatt House.
The redevelopment of the Homestead Square Shopping Center, located at Homestead Road and
De Anza Boulevard, includes a 24-hour Safeway,Ulta Beauty, Ross Stores, Stein Mart, Pet Club,
Michael's, Rite Aid, FedEx, and numerous restaurants, such as Fish's Wild, Pho Hoa Noodle
Soup,Yayoi Teishoku Japanese Restaurant, Starbucks, and Chipotle.
Apple completed construction of its new corporate campus, Apple
Park, which includes approximately 2.8 million square feet of office
and R&D space north of Highway 280 between Wolfe Road and _
Tantau Avenue. A state-of-the-art Visitors Center, Observation = '
ItUCI 010P
AA
Deck, flagship retail store and cafe are open to the public seven days a week.
2020 City Profile
The City of Cupertino operates as a general law city with a City Council-City Manager form of
government. Five council members serve four year, overlapping terms, with elections held
every two years. The Council meets twice a month on the first and third Tuesday at 6:45 p.m. in
Cupertino Community Hall. The meetings can be viewed on the City website.
The City has 197.75 authorized full-time benefited employee positions.Departments include:
• City Council&Commissions
• Administration(City Manager, City Clerk, City Attorney)
• Innovation Technology(GIS,Infrastructure,Applications)
• Administrative Services(Finance,Human Resources)
• Parks and Recreation (Business and Community Services, Recreation and Education,
Sports,Safety, and Outdoor Recreation)
• Community Development(Planning,Building,Housing Services, Code Enforcement)
• Public Works (Environmental Programs, Developmental Services, Service Center,
Grounds, Streets, Trees and Right of Way, Facilities and Fleet, Transportation, Storm
Drain Management)
• Public Safety services are provided by the Santa Clara County Sheriff's Department and
the Santa Clara County Fire District.
Assisting the City Council are several citizen advisory commissions and one committee
including:
• Audit Committee • Planning Commission
• Fine Arts Commission • Public Safety Commission
• Housing Commission • Sustainability Commission
• Library Commission • Teen Commission
• Parks and Recreation Commission • Technology, Information and
Communication Commission
The Commissioners are appointed by Council and vacancies are announced so that interested
residents can apply for the positions. For more information,visit cupertino.org/commissions.
Housing
Based on data from Corelogic the median sales price for an existing single-family home was
$2,080,000 in February 2020. For housing programs in Cupertino, please see "Programs &
Applications."
Community Health Care Facilities
Cupertino is served by the Cupertino Medical Clinic, NovaCare Occupational Health Services.
Nearby hospitals include Kaiser Permanente Medical Center in Santa Clara, El Camino Hospital
in Mountain View, O'Connor Hospital in San Jose, Community Hospital of Los Gatos, Stanford
Hospital in Palo Alto, and the Saratoga Walk-in Clinic in Saratoga.
Utilities
Gas &Electric Pacific Gas and Electric, 800-743-5000
Phone AT&T residential service, 800-894-2355
AT&T business service, 800-750-2355
Cable Comcast, 800-945-2288
Solid Waste &Recycling Recology, 408-588-7200
Water San Jose Water Company,408-279-7900
California Water Service, 650-917-0152
Sewer Service Cupertino Sanitary District,408-253-7071
Tax Rates and Government Services
Residential, commercial, and industrial property is appraised at full market value as it existed
on March 1, 1975,with increases limited to a maximum of 2% annually. Property created or sold
since March 1, 1975 bears full cash value as of the time created or sold, plus the 2% annual
increase. The basic tax rate is $1.00 per $100 (full cash value) plus any tax levied to cover
bonded indebtedness for county, city, school, and other taxing agencies. Assessed valuations
and tax rates are published annually after July 1.
Assessed Valuation (Secured and Unsecured)
Cupertino: $26,013,180,424 (7/19)
County: $516,068,803,614(7/19)
Retail Sales Tax Distribution
Agency Sales Tax Distribution
• State 6.000%
• VTA 1.125%
• City of Cupertino 1.000%
• County General Purpose 0.625%
• County Transportation 0.250%
Total: 9.000%
Transportation
Rail: The CalTrain station is four miles north of Cupertino. The Amtrak station is 10 miles south.
Air: The San Francisco International Airport is located roughly 30 miles north, and the Mineta
San Jose International Airport is located approximately 11 miles south.
Bus: Cupertino is served by the Santa Clara Valley Transportation Authority. The routes listed
below pass through the City. For Cupertino-specific schedules and maps visit their online
website:
Route 23 San Jose—Mountain View/Palo Alto
Route 25 San Jose—De Anza College
Route 26 Eastridge—Lockheed
Route 36 East San Jose-Vallco
Route 51 Vallco-Moffett/Ames
Route 53 Westgate-Sunnyvale
Route 55 De Anza-Great America
Route 81 East San Jose-Vallco
Express 101 Camden/Branham-Palo Alto
Express 501 Palo Alto-I.B.M Bailey
Car: The City of Cupertino is in the heart of the world-renowned Silicon Valley. The major
highway transportation facilities are Interstate Route 280 and State Route 85 freeways. The City
is linked internally by several principal arterials and Santa Clara County expressways. Principal
arterials are De Anza Boulevard, Stevens Creek Boulevard, and Wolfe Road. Nearby
expressways are Lawrence Expressway and Foothill Expressway.
Sister Cities
City of Cupertino recognizes the value of developing people-to-people contacts by
strengthening the partnerships between the city and its four sister cities of Copertino, Italy;
Hsinchu, Taiwan; Toyokawa, Japan, and Bhubaneswar, India. Cupertino's Sister City
partnerships have proven successful in fostering educational, technical, economic, and cultural
exchanges. Over the years, there have been many delegations visiting both the cities as well as
many local students participating in annual student exchange programs.
Education
Winners of numerous state and national awards for excellence, Cupertino's schools are widely
acknowledged as models of quality instruction.
Cupertino Union School District serves over 18,000 students in a 26 -Ell '
square mile area that includes Cupertino and portions of five other
cities. The district has 20 elementary schools and five middle schools,
including several choice programs. Eighteen schools have received
state and/or national awards for educational excellence.
Student achievement is exceptionally high. Historically, district test scores place Cupertino
among the premier public school districts in California. The district is a leader in the
development of standards-based system of education and is nationally recognized for
leadership in the use of technology as an effective tool for learning. Quality teaching and parent
involvement are the keys to the district's success.
The Fremont Union High School District serves 10,000 students in a 42 square mile area
covering all of Cupertino, most of Sunnyvale, and portions of San Jose, Los Altos, Saratoga, and
Santa Clara. The five high schools of the district have garnered many awards and recognition
based on both the achievement of students and the programs designed to support student
achievements. Many high schools in the district exceed their established achievement targets for
the State Academic Performance Index. District students are encouraged to volunteer and
provide service to organizations within the community. During their senior year, if students
complete 80 hours of service to a non-profit community organization, they are recognized with
a "Community Service Award" medal that may be worn at their graduation ceremonies.
Building on its tradition of excellence and innovation, De Anza College challenges students of
every background to develop their intellect, character, and abilities; to achieve their educational
goals; and to serve their community in a diverse and changing world.
De Anza College offers a wide range of quality programs and services to meet the work force
development needs of our region. The college prepares current and
future employees of Silicon Valley in traditional classroom settings
and customized training arranged by employers. Several De Anza
programs encourage economic development through college credit
' courses, short-term programs, services for manufacturers, technical
assistance, and/or recruitment and retention services.
Programs & Applications
Community Outreach Programs
Leadership 95014
Leadership 95014 is a program designed by the City of Cupertino, Wilfred Jarvis Institute, and
other local sponsors to offer an exciting adult program that is guaranteed to enhance the
participants' leadership skills. The ten full-day sessions feature inside looks at local
governments, the social sector, local non-profit organizations, and educational institutions. This
9-month program is offered annually, September to May, and applications can be found online.
Neighborhood Block Leader Program
Good neighborhoods are those where neighbors work together on common issues and look out
for each other. Block leaders take extra steps to connect neighbors
and build community, making our neighborhoods safer and more
harmonious. The Block Leader Program teaches residents how to get
to know their neighbors and how to organize activities so neighbors
can more easily communicate with each other. Block leaders are vital
links between City Hall and the neighborhoods, and leaders gain the
inside track on neighborhood development activities.
Neighborhood Watch
Neighborhood Watch is a crime prevention program that enlists the active participation of
citizens in cooperation with law enforcement to reduce crime in our communities. The program
involves: neighbors getting to know each other and working together in a program of mutual
assistance; citizens being trained to recognize and report suspicious activities in their
neighborhoods; and implementation of crime prevention techniques such as home security and
operation identification. To organize a Neighborhood Watch program in your neighborhood,
please contact the Neighborhood Watch Coordinator at 408-777-3177.
eCAP
Email Community Alert Program(eCAP) was created by the Santa Clara County Sheriff's Office
to prevent and reduce crime by raising community awareness, minimizing opportunities for
crime, and increasing the possibility of solving crimes with the public's help. Cupertino
residents may voluntarily register their email addresses with the Sheriff's Office for community
alert messages. Citizens can sign-up at a Neighborhood Watch meeting or log-on to the City of
Cupertino's eCAP online registration.
Affordable Housing:BMR (Below Market Rate) Program
The City of Cupertino requires 15% of all new construction be affordable to households below
120% of the County median income. Rental units are affordable to very low and low-income
households while ownership units are affordable to median and moderate-income households.
The City of Cupertino contracts with West Valley Community Services (WVCS) to screen and
place qualified households in most of the city's BMR units. WVCS maintains a waiting list of
interested persons for these BMR units. If interested,please call 408-255-8033. More information
can be found online.
Smart Phone Applications
Mobile 95014
City of Cupertino's Mobile 95014 app offers latest listing of Cupertino news and events
as well as local parks, schools, and recreation offerings in the city. This app showcases
environmental services and community services such as Block Leaders and Neighborhood
Watch programs. Users can learn about public safety and contact City Council members and
City officials. The app also offers links to Cupertino's social media sites.
Trees 95014
Trees 95014 is an iPhone/iPad and Android app which provides details about the city-planted
trees in Cupertino. Users can search for trees by street name or by current location. The search
results show the picture of the tree and details such as location, height, diameter, and species.
Cupertino residents can also sign up their tree,name their tree, and request tree service through
this app.
Eats 95014
Eats 95014 is the local restaurant app that showcases Cupertino's dining options such as
restaurants, grocery stores, farmers' markets, and vineyards. The app provides information on
the services offered at such eating places including store hours, parking information, noise
level, directions, and website link.
Ready 95014
Ready 95014 is an app that puts safety information into the hands of Cupertino
residents. Steps to prepare and respond to emergencies including earthquakes, floods,
fires, and pandemics are outlined in an easy-to-understand format. The app also streams
Cupertino's own AM radio station (1670 AM) and has a map of the City's Area Resource
Centers, satellite locations opened after disasters to provide public assistance.
Website Applications
Cupertino.orglShopAndDine
This interactive website app offers users mapping features of current Cupertino businesses and
restaurants.
Community Statistics
Facts and Figures'
Population in City Limits 66,762
Average Household Income $242,777
Average Age 40.4
Registered Voters 28,539
Democrats 11,113
—Republicans 4,648
American Independent 402
Other 218
No Political Party Designated 12,158
1 Claritas 2020 Estimates and California Statewide Direct Primary Election June 5,2018
. . 25 SalesProducers
Quarter 21 • • • - • • • -
7 Eleven BJ's Restaurant& Lazy Dog Cafe TJ Maxx
Brewhouse
MAR
99 Ranch Market California Dental Arts Rotten Robbie Ulta Beauty
Alexander's Steak Chevron Safeway Valero
House
Alliance Estel Group Seagate Technology Whole Foods Market
Apple Galpao Gaucho Shane Company
Argonaut Window&Door Haidilao Hot Pot Shell
Benihana Insight Direct Target
Population by Single-Classification Race
■Asian Alone 69.36%
■White Alone 24.61%
■Two orMore Races 3.77%
Sorne Other Race Alone 1.35%
i
■Black or-African American Alone
0,61%
■Amer. Indian and Alaska Native
Alone 0.21%
■Native Hawaiian and Other Pac. Isl.
--• Alone 0.10%
Saurce:C1ar€tas2020 Estimates
Community and Recreation Services
Blackberry Farm
Blackberry Farm has been upgraded and restored to improve the natural habitat for native
trees, animals, and fish. Improvements to the park include construction of a new ticket kiosk, re-
plastered pools, a new water slide, bocce ball, horseshoe courts, and numerous upgrades to the
west bank picnic area. The park is located at 21979 San Fernando Avenue. Telephone: 408-777-
3140.
The Blackberry Fann Golf Course is located at 22100 Stevens Creek Boulevard. Telephone: 408-
253-9200.
The Quinlan Community Center
The City of Cupertino's Quinlan Community Center is a 27,000 square foot facility that provides
a variety of recreational opportunities.
Most prominent is the Cupertino Room - a multi-purpose room that can accommodate 300
people in a banquet format.
Telephone:408-777-3120.
Cupertino Sports Center
The Sports Center is a great place to meet friends. The facility features 17 tennis courts,
complete locker room facilities, and a fully-equipped fitness center featuring free weights,
Cybex, and cardio equipment. A teen center and a child-watch center are also included. The
center is located at the corner of Stevens Creek Boulevard and Stelling Road. Telephone: 408-
777-3160.
Cupertino Senior Center
The Senior Center provides a welcome and friendly environment for adults over age 50. There
is a full calendar of opportunities for learning, volunteering, and enjoying life. There are
exercise classes, computer lab classes, and English as a second language classes, and cultural
and special interest classes. The center also coordinates trips and socials.
The Senior Center is located at 21251 Stevens Creek Boulevard and is open Monday through
Friday, 8 a.m. to 5 p.m. Telephone: 408-777-3150.
Civic Center and Library
The complex has a 6,000 square foot Community Hall, plaza with fountain, trees, and seating
areas. City Council meetings, Planning Commission sessions, and Parks and Recreation
Commission sessions are held in the Community Hall.
The 54,000 square foot library continues to be one of the busiest libraries in the Santa Clara
County Library system.For more information, call 408-446-1677.
McClellan Ranch Park
A horse ranch during the 1930's and 40's, this 18-acre park has the appearance of a working
ranch. Preserved on the property are the original ranch house, milk barn, livestock barn, and
two historic buildings:Baer's Blacksmith Shop, originally located at DeAnza and Stevens Creek,
and the old water tower from the Parish Ranch, now the site of Memorial Park. Rolling Hills 4-
H Club members raise rabbits, chickens, sheep, swine, and cattle. The Junior Nature Museum,
which features small live animal exhibits and dispenses information about bird, animal, and
plant species of the area, is also located at the ranch. The newly opened Environmental
Education Center has Open House hours on Friday, Saturday, and Sunday. McClellan Ranch is
located at 22221 McClellan Road. Telephone: 408-777-3120.
Things to Do and See
Euphrat Museum of Art
The highly regarded Euphrat Museum of Art, at its new location next to the new Visual Arts
and Performance Center at De Anza College, presents one-of-a-kind exhibitions, publications,
and events reflecting the rich diverse heritage of our area. The Museum prides itself on its
changing exhibitions of national and international stature emphasizing Bay Area artists.
Museum hours are 10 a.m.-3 p.m. Monday through Thursday. Telephone: 408-864-5464
Apple Park Visitor Center, Store &Cafe
A state-of-the-art Visitors Center, Observation Deck, flagship retail store and cafe are open to
the public seven days a week. The Visitor Center is located at 10600 N Tantau Avenue.
Free parking is available. For more information, visit the website at
www.apple.com/retail/appleparkvisitorcenter or call 408-961-1560.
Fujitsu Planetarium
The Fujitsu Planetarium on the De Anza College campus is a must-visit Cupertino facility for
stargazers. It hosts a variety of planetarium shows and events, including educational programs
for school groups and family astronomy evenings. For more information, visit the website at
http://planetarium.deanza.edu or call 408-864-8814.
Cupertino Historical Society
The Cupertino Historical Society was founded in 1966 by a group of -
177 longtime residents and is dedicated to the preservation and
exhibition of the city's history. Their museum, located at the
Quinlan Community Center, develops and expands the learning -_
opportunities that it offers to the ethnically diverse community of r -""
the City of Cupertino. Telephone: 408-973-1495.
Farmers'Markets
There are two farmers' markets located in the City of Cupertino. One is held on Fridays from
8:30 a.m. to 1:00 p.m. at Creekside Park located at 10455 Miller Avenue, and the other is held
every Sunday from 9:00 a.m. to 1:00 p.m. at The Oaks Shopping Center, 21275 Stevens Creek
Blvd.
California History Center
The California History Center and Foundation is located on the De Anza College campus. The
center has published 37 volumes on California history and has a changing exhibit program. The
center's Stocklmeir Library Archives boast a large collection of books, pamphlet files, oral
history tapes, videotapes, and a couple thousand student research papers. The library's
collection is for reference only. Heritage events focusing on California's cultural and/or natural
history are offered by the center each quarter. For more information, call 408-864-8987. The
center is open September through June, Tuesday through Thursday, from 9:30 a.m. to noon and
1:00 p.m. to 4:00 p.m.
Local Wineries
The Santa Cruz Mountains has played a pivotal role in the history of winemaking in California,
with roots going back over 100 years, and including legendary winemakers such as Paul
Masson,Martin Ray,David Bennion(Ridge), and David Bruce. The Santa Clara Valley Wine
Trail features wineries in the southern portion of Santa Clara County, including Cupertino.
Take some time to enjoy Cupertino-based wineries: Fellom Ranch Vineyards, Naumann
Vineyards,Picchetti Winery,R&W Vineyards, Ridge Vineyards, and Vidovich Vineyards, as
well as the breathtaking scenery of the surrounding foothills.
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Photo courtesy of Ridge Vineyards