Financial Report 06-30-20221,74
CITY OF
CUPERTINO
FISCAL YEAR
2021 - 2022
CITY OF CUPERTINO, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2022
Prepared by the City of Cupertino Administrative Services Department
Finance Division
CITY OF CUPERTINO, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the year ended June 30, 2022
CONTENTS
INTRODUCTORY SECTION
TABLEOF CONTENTS..................................................................................................................... i
LETTER OF TRANSMITTAL.............................................................................................................. iii
ORGANIZATION CHART................................................................................................................... xi
CITY COUNCIL AND DIRECTORY OF CITY OFFICIALS................................................................ xii
COMMISSIONS AND COMMITTEES................................................................................................ xiii
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING .................. xiv
FINANCIAL SECTION
INDEPENDENT AUDITOR'S REPORT
MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED).......................................................... 4
BASIC FINANCIAL STATEMENTS:
GOVERNMENT -WIDE FINANCIAL STATEMENTS:
STATEMENT OF NET POSITION..................................................................................................... 25
STATEMENT OF ACTIVITIES........................................................................................................... 26
FUND FINANCIAL STATEMENTS
GOVERNMENTAL FUNDS:
BALANCESHEET.............................................................................................................................. 28
RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET TO
STATEMENT OF NET POSITION................................................................................................... 29
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUNDBALANCES........................................................................................................................... 30
RECONCILIATION OF NET CHANGES IN FUND BALANCES —
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES .............................................. 31
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES —
BUDGET AND ACTUAL — GENERAL FUND................................................................................... 32
BUDGET AND ACTUAL — TRANSPORTATION SPECIAL REVENUE FUND ................................ 33
BUDGET AND ACTUAL — HOUSING DEVELOPMENT SPECIAL REVENUE FUND .................... 34
PROPRIETARY FUNDS:
STATEMENT OF NET POSITION..................................................................................................... 36
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION ........................... 37
STATEMENT OF CASH FLOWS....................................................................................................... 38
NOTES TO BASIC FINANCIAL STATEMENTS....................................................................................... 39
REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED):
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS .............. 72
SCHEDULE OF CONTRIBUTIONS — PENSION............................................................................. 73
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS ..................... 74
SCHEDULE OF CONTRIBUTIONS — OPEB..................................................................................... 75
CITY OF CUPERTINO, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the year ended June 30, 2022
CONTENTS (Continued)
OTHER SUPPLEMENTARY INFORMATION:
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE —
BUDGET AND ACTUAL - PUBLIC FACILITIES CORPORATION DEBT SERVICE FUND .............. 77
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET........................................................................................................ 79
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES.................................................................................................... 80
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES — BUDGET AND ACTUAL ....................................................... 81
NONMAJOR ENTERPRISE FUND
COMBINING STATEMENT OF NET POSITION............................................................................... 85
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION......................................................................................................... 86
COMBINING STATEMENT OF CASH FLOWS................................................................................. 87
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION............................................................................... 89
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION......................................................................................................... 90
COMBINING STATEMENT OF CASH FLOWS................................................................................. 91
STATISTICAL SECTION
FINANCIAL TRENDS
NET POSITION/ASSETS BY COMPONENT — LAST TEN FISCAL YEARS ................................... 94
CHANGES IN NET POSITION/ASSETS — LAST TEN FISCAL YEARS .......................................... 95
FUND BALANCES OF GOVERNMENTAL FUNDS — LAST TEN FISCAL YEARS ......................... 97
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS —
LAST TEN FISCAL YEARS.............................................................................................................. 98
REVENUE CAPACITY:
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE
PROPERTY — LAST TEN FISCAL YEARS.................................................................................... 99
DIRECT AND OVERLAPPING PROPERTY TAX RATES — LAST TEN FISCAL YEARS ............... 100
PRINCIPAL PROPERTY TAXPAYERS — CURRENT YEAR AND TEN YEARS AGO .................... 101
PROPERTY TAX LEVIES AND COLLECTIONS — LAST TEN FISCAL YEARS ............................. 102
DEBT CAPACITY
RATIOS OF OUTSTANDING DEBT BY TYPE — LAST TEN FISCAL YEARS ................................
103
DIRECT AND OVERLAPPING BONDED DEBT................................................................................
104
LEGAL DEBT MARGIN INFORMATION — LAST TEN FISCAL YEARS ..........................................
105
RATIO OF GENERAL BONDED DEBT — LAST TEN FISCAL YEARS ...........................................
106
DEMOGRAPHIC AND ECONOMIC INFORMATION:
DEMOGRAPHIC AND ECONOMIC STATISTICS — LAST TEN FISCAL YEARS ...........................
107
2022 EMPLOYER RANKING.............................................................................................................
108
OPERATING INFORMATION:
FULL-TIME EQUIVALENT CITY EMPLOYEES BY
FUNCTION/PROGRAM — LAST TEN FISCAL YEARS.................................................................
109
OPERATING INDICATORS BY FUNCTION/PROGRAM — LAST TEN FISCAL YEARS ................
110
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM — LAST TEN FISCAL YEARS...........
111
COMMUNITY PROFILE
CUPERTINO
March 31, 2023
CITY OF CUPERTINO
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3202
(408) 777-CITY • WWW.CUPERTINO.ORG
To the Citizens of Cupertino, Honorable Mayor,
Members of the City Council, and City Manager
It is our pleasure to submit the Annual Comprehensive Financial Report (ACFR) for the City of Cupertino
(the City) for the fiscal year ended June 30, 2022. 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 ACFR.
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 ACFR 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, while the Director of Administrative Services is appointed Treasurer and also shall act as ex
officio Assessor and shall assess and collect all City taxes save and except for those collected by State and
County officers for the City ((CMC 2.48.020(A)(3)). All other employees are appointed by the City
Manager.
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 66,274.
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 continues to offer a vibrant downtown area for
Cupertino, with a large selection of restaurants and retailers, including Alexander's Steakhouse, Eureka!,
Oren's Hummus, Lazy Dog, Ippudo, HaiDiLao Hot Pot Restaurant, Pressed Juicery, Orangetheory, 85
Degree Bakery, Somi Somi, Sul & Beans, Kura Sushi, Vitality Bowls, Doppio Zero, Boiling Point and Jin
Tea, Koja Kitchen, Bishops Cuts & Colors, Capezio, Howard's Shoes, Tan Cha, Meet Fresh, Pineapple
Thai, Koi Palace, Myungrang Hot Dog, Pacific Catch, Pasta Armellino, Philz Coffee, Pelicana Chicken,
Golden Vision Optical, Meri West Bank, AT&T Store, The Original Face Bar, Orange Theory, Pizza My
Heart, Ameritrade, and Bon Mot Resturant. Housing, office, and a Residence Inn by Marriott and Main
Street Cupertino Lofts are available to support the thriving area. Benihana, Bowlmor, and Ice Center
Cupertino also serve as long-time anchors.
The limited construction of new retail and commercial development results in strengthening 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, Icicles, Kong's
Tofu & BBQ, One Pot Shabu Shabu, and Olarn Thai.
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, Chung Chou, Ume Tea, Tofu Plus, Kira Kira Beauty, MOD Pizza, Ten Ren Tea, Fantasia
Coffee & Tea, Yoga Wave, Happy Lemon, Kee Wah Bakery, and many other Asian restaurants, bakeries,
and shops.
[kilo
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 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 2021-2022 Assessor's Annual Report for Santa Clara County, Cupertino's net assessment
roll growth increased by nearly $986.4 million, or 3.5%, from the prior year. Residential use values
increased 4.9% a total of $829.9 million and represented 84% of all growth experienced in the City.
Commercial properties posted an increase of $572.8 million, or 7.6%, due to the movement of assets from
the unsecured to the secure roll. The industrial properties reported growth of $267 million, or 30.8%, on
the strength of parcels adding improvement values between tax years or tenants at these sites adding fixtures
and business assets. Unsecured assets in Cupertino decreased by $699.7 million, or 28.9% due to the
movement of assets from the unsecured to the secured roll, which contributed to the large growth seen in
the commercial use category.
The City's sales tax revenues are generated from five principal economic categories: business -to -business
65% (includes electronic equipment and software manufacturers and distributors), state and county pools
20%, restaurants and hotels 6%, general retail 4%, and fuel and service stations and other 6%.
Our two largest sales taxpayers in the business -to -business category represent a large part of that sector and
therefore can significantly affect sales tax trends. Due to taxpayer confidentiality constraints, the City is
unable to disclose the amounts of sales tax reported for these businesses. The top taxpayers' corporate and
business technology spending has driven growth in this sector. Sales tax activity has increased across most
sectors with a decrease primarily in construction. This decrease is attributed to the winding down of
construction projects in the City, particularly, the Apple Park campus development. Given these trends, the
City's sales tax revenue is projected to show a more modest increase going forward.
0
Sales Tax ($ in millions)
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$-
_n
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
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 million 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, and the Wayfair decision.
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 sq. ft. 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 (also referred to as OPEB, Other Post -Employment Benefits)
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 Ca1PERS actuarial valuation report as of June 30, 2021 reported a pension unfunded
accrued liability of $41.3 million with annual payments to Ca1PERS of 32.8% and 32.2% of projected
payroll for 2023-24 and 2024-25, respectively, with ongoing decreases after that. Ca1PERS recently
experienced strong performance in FY 2020-21 with a return of 21.3% that ultimately triggered a reduction
in the discount rate from 7% to 6.8%. 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, 2022, the City has
►TIF
a Net OPEB Liability of $(1.5) million with annual payments to a retiree health plan trust at -6.1% of
payroll. The negative percentage of payroll further represents an over -funded status.
In addition to the City's Section 115 OPEB Investment Trust established in 2010, in FY 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 million was made in FY 2018-19, with additional contributions of $4 million in
FY 2019-20, $2 million in FY 2020-21, and $2 million in FY 2021-22.
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 FY 2009-10.
On March 11, 2021, the American Rescue Plan Act (ARP) of 2021 was signed into law and established the
Coronavirus State Recovery Fund and Coronavirus Local Fiscal Recovery Funds, which together make up
the Coronavirus State and Local Fiscal Recover Funds ("SLFRF").
The ARP is a $1.9 trillion economic stimulus bill. Within the ARP, the Coronavirus Local Fiscal Recovery
Fund provided $350 billion for states, municipalities, counties, tribes, and territories, including $130 billion
for local governments split evenly between municipalities and counties. California cities are expected to
receive more than $7 billion dollars in much needed assistance to help offset the billions of dollars in
revenue shortfalls due to the shutdown of local economies and the billions spent protecting public health,
delivering essential services, protecting vulnerable populations, and helping small businesses survive
during the pandemic.
The City of Cupertino is expected to receive two payments totaling $9,694,773 in SLFRF funding. The first
payment was received in May 2021 in the amount of $4,847,386.50 and the second payment was received
in May 2022. The City may use SLFRF funds to cover these eligible costs incurred during the period that
begins on March 3, 2021 and ends on December 31, 2024, as long as the award funds for the obligations
incurred by December 31, 2024 are spent by December 31, 2026.
As a recipient of the SLFRF award, the City has substantial discretion to use the award funds in the ways
that best suit the needs of the City's constituents — as long as such use fits into one of the following four
statutory categories determined by the U.S. Department of the Treasury:
• Public Health/Negative Economic Impacts: Recipients may use SLFRF award funds to provide
assistance to households — such as rent, mortgage, or utility assistance — for costs incurred by the
household prior to March 3, 2021, provided that the City did not incur the cost of providing such
assistance prior to March 3, 2021.
• Premium Pay: Recipients may provide premium pay retrospectively for work performed at any
time since the start of the COVID-19 public health emergency. Such premium pay must be "in addition
to" wages and remuneration already received and the obligation to provide such pay must not have been
incurred by the recipient prior to March 3, 2021.
• Revenue Loss: Treasury's Final Rule gives recipients broad latitude to use funds for the provision
of government services to the extent of reduction in revenue. While calculation of loss revenue begins
with the recipient's revenue in the last full fiscal year prior to the COVID-19 public health emergency
and includes the 12-month period ending December 31, 2020, use of funds for government services
must be forward looking for costs incurred by the recipient after March 3, 2021.
vii.
• Investments in Water, Sewer, and Broadband: Recipients may use SLFRF award funds to make
necessary investments in water, sewer, and broadband. Recipients may use SLFRF award funds to
cover costs incurred for eligible projects planned or started prior to March 3, 2021, provided that the
project costs covered by the SLFRF award funds were incurred after March 3, 2021.
On September 7, 2021, the Cupertino City Council approved a plan which allocated the ARP funding
towards revenue loss which was estimated at approximately $29 million. Additionally, the $9.7 million in
total ARP funding was approved to be spent on general government services in the General Fund,
specifically, City Work Program and special project items. Subsequently, and in accordance with the
Treasury's Final Rule, a $10 million "standard allowance" may be taken which would relieve a
jurisdiction's substantiation of revenue loss. Nevertheless, the City plans to continue using the ARP funding
as originally authorized and will continue to monitor and report out on the estimated and actual revenue
losses resulting from the pandemic.
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.
viii.
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 early 2018 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.
In 2018, 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 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 prior to this time.
Ms. Chang was criminally prosecuted and plead guilty to three felony counts in December 2021.On January
31, 2022, Ms. Chang paid $612,000 in criminal restitution to the City of Cupertino. The City has separately
pursued civil remedies against Ms. Chang to recover damages that were not available through criminal
restitution for the entire amount embezzled ($791,494), interest, and investigation costs.
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 ACFR for
the year ended June 30, 2020. In order to be awarded a Certificate of Achievement, a government unit must
publish an easily readable and efficiently organized ACFR. This report must satisfy both GAAP and
applicable legal requirements.
ix.
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.
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 Janet Liang for their
efforts in the preparation and production of this report.
Reviewed by,
KA�A,—
Kristina Alfaro
Director of Administrative Services
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CUPERTINO
XI.
Directory of City Officials
Darcy Paul
Mayor
Kitty Moore
City Council
Hung Wei
Liang Chao
Vice Mayor
Jon Willey
Council Member Council Member Council Member
Directory of City Officials
Jim Throop - City Manager
Dianne Thompson - Assistant City Manager
Christopher Jensen - City Attorney
Kristina Alfaro - Director of Administrative Services
Ben Fu - Director of Community Development
Matt Morley - Director of Public Works
Joanne Magrini - Director of Parks and Recreation
Bill Mitchell - Chief Technology Officer
As of June 30, 2022
Commissions and Committees
AUDIT COMMITTEE
Angela Chen
Yan (Sophie) Song
Darcy Paul
Kitty Moore
Laura Hammer
BICYCLE PEDESTRIAN
COMMISSION
Gerhard Eschelbeck
Grace John
Erik Lindskog
Jack Carter
Ilango Ganga
DESIGN REVIEW COMMITTEE
Muni Madhdhipatla
Sanjiv Kapil
R Wang
ENVIRONMENTAL REVIEW
COMMITTEE
Kitty Moore
Matt Morley
Ben Fu
Dianne Thompson
Steven Scharf
Darcy Paul
Muni Madhdhipatla
ECONOMIC DEVELOPMENT
COMMITTEE
Darcy Paul
Kevin McClelland
Hung Wei
Mike Rohde
Rod Diridon Jr.
Alan Takahashi
Roslyn Donald
Angela Tsui
Ben Fu
Anjali Kausar
Roger Lee
FINE ARTS COMMISSION
Carol Maa
Janki Chokshi
Satish Tare
Esha Rao
Sudha Kasamsetty
HOUSING COMMISSION
Govind Tatachari
Tessa Parish
Sue Bose
Connie Cunningham
Angan Das
LEGISLATIVE REVIEW
COMMITTEE
Liang Chao
Kitty Moore
LIBRARY COMMISSION
Archana Panda
Liyan Zhao
Sheela Sreekanth
Qin Pan
Rahul Vasanth
PARKS AND RECREATION
COMMISSION
Carol Stanek
Xiangchen "Minna" Xu
Gopal Kumarappan
Seema Swamy
Sashikala Begur
PLANNING COMMISSION
R 'Ray" Wang
Vikram Saxena
Sanjiv Kapil
Muni Madhdhipatla
Steven Scharf
As of June 30, 2022
PUBLIC SAFETY COMMISSION
Eric Shan
Hymanand Nellore
Lakshminarasimha Ankireddipally
Tiffany Wang
Bobby Toda
SUSTAINABILITY
COMMISSION
Anna Weber
Sonali Padgaonkar
Meera Ramanathan
Steve Poon
Vignesh Swaminathan
TEEN COMMISSION
Rachael Ding
Geethikaa Tarra
Andrew Qin
Maple Leung
Zehra Naqvi
Dhruti Halambi
Elspeth Luu
Alex Zhang
Adhya Kasamsetty
TECHNOLOGY, INFORMATION
& COMMUNICATIONS
COMMISSION
Eliza Du
Mukesh Garg
Naidu Bollineni
Rajaram Soundararajan
Prabir Mohanty
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Cupertino
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
AV.
Crowe
INDEPENDENT AUDITOR'S REPORT
Crowe LLP
Independent Member Crowe Global
To the Honorable Mayor and City Council
City of Cupertino, California
Report on the Audit of the Financial Statements
Opinions
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, 2022, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements as listed in the table of contents.
In our opinion, the accompanying 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, 2022, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards (Government Auditing Standards), issued by the Comptroller General of the United States. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of
the Financial Statements section of our report. We are required to be independent of the City, and to meet
our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Emphasis of Matter
As discussed in Note 1 to the financial statements, in 2022, the City adopted new accounting guidance in
the form of the provisions of GASB Statement No. 87, Leases. Our opinions are not modified with respect
to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for 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.
(Continued)
1.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a
going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes
our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing
Standards will always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
• Obtain an understanding of internal control relevant to the audit 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 City's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the City's ability to continue as a going concern for a reasonable
period of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control -related matters
that we identified during the audit.
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 4-23 and 72-75 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.
(Continued)
2.
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 other supplementary information section is presented
for purposes of additional analysis and is not a required part of the basic financial statements. Such
information 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. The 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.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the introductory section, statistical section and community profile but does not include the basic
financial statements and our auditor's report thereon. Our opinions on the basic financial statements do
not cover the other information, and we do not express an opinion or provide any assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If, based
on the work performed, we conclude that an uncorrected material misstatement of the other information
exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 31, 2023
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.
Cf�w
Crowe LLP
Costa Mesa, California
March 31, 2023
3.
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
reviewThis 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.
2021-22 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 that have been bolstered by strong sales tax
performance, federal funding from the American Rescue Plan Act of 2021, and budget reduction
strategies.
• 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 2021-22 by $369.0 million (net position). Of this amount,
$104.9 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 2021-2022 with base governmental revenues showing a $4.0 million
increase, or 3%, over 2020-2021. The primary fluctuations include an increase in property and sales
tax and program revenues that are offset by decreases in transient occupancy tax and charges for
services. According to the 2021-2022 Assessor's Annual Report for Santa Clara County, Cupertino's
net assessment roll growth increased $986 million, or 3.55%, from the prior year
• Residential use values increased 4.9% a total of $829.9 million and represented 84% of all growth
experienced in the City. Commercial properties posted an increase of $572.8 million, or 7.6%, due
to the movement of assets from the unsecured to the secure roll. The industrial properties reported
growth of $267 million, or 30.8%, on the strength of parcels adding improvement values between
tax years or tenants at these sites adding fixtures and business assets. Unsecured assets in Cupertino
decreased by $699.7 million, or 28.9% due to the movement of assets from the unsecured to the
secured roll, which contributed to the large growth seen in the commercial use category.
• The City experienced an increase of approximately $1.1 million, or 3% in FY 2021-22 sales tax
revenues compared to the previous year. Although 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 over the last two year, these experiences were
mitigated by strong performance in the business and industry sector and the City's county pool
allocation. The COVID-19 pandemic has brought great uncertainty to the economy and although the
business and industry sector has experienced significant growth due to the telework conversion and
closure of brick -and -mortar retail, 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. Inspite of uncertainty, the result to the City's was a $2.3M
increased or 106% 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 $4.7 million, or 2.2%, after depreciation.
• The City's change in net position was $34.6 million for governmental activities reflecting the
continued positive experience in sales tax and modest departmental spending.
• The City's Net Pension Liability for June 30, 2022, was $34.1 million, decreased by $14.5 million
from June 30, 2022, or 30%. The Plan Fiduciary Net Position as a Percentage of the Total Pension
4
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Liability for the City's pension plan with Ca1PERS increased to 78.9%. 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, 2022 was $17.4 million.
Business -type activities contributed $6.2 million to citywide revenues totaling $124.6 million, while
the same activities contributed over $7.5 million to citywide expenses of $90.7 million.
The City implemented the provisions of GASB Statement No. 75, Accounting and Financial
Reporting for Postemployment Benefits Other Than Pensions, during 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 reduced the discount rate from 7.0% to
6.5% which consequently increased the Total OPEB Liability. As of June 30, 2022, the City reported
a decrease in Net OPEB Asset of $7.9 million primarily due to the investment return being less than
the service cost plus interest on Total OPEB Liability (TOL). The City's actuarial valuation
generated a Net OPEB Asset of $1.5 million. The City also reported deferred outflows and inflows
related to OPEB of $5 million and $3.2 million, respectively. As of June 30, 2022, the City's OPEB
plan had a funding ratio or funded ratio or status of 105%.
On March 11, 2021, the American Rescue Plan Act (ARP) of 2021 was signed into law and
established the Coronavirus State Fiscal Recovery Fund and Coronavirus Local Fiscal Recovery
Funds, which together make up the Coronavirus State and Local Fiscal Recovery Funds ("SLFRF").
The American Rescue Plan (ARP) Act of 2021 is a $1.9 trillion economic stimulus bill. Within the
ARP, the Coronavirus Local Fiscal Recovery Fund provided $350 billion for states, municipalities,
counties, tribes, and territories, including $130 billion for local governments split evenly between
municipalities and counties. California cities are expected to receive more than $7 billion dollars in
much needed assistance to help offset the billions of dollars in revenue shortfalls due to the shutdown
of local economies and the billions spent protecting public health, delivering essential services,
protecting vulnerable populations, and helping small businesses survive during the pandemic.
The City of Cupertino expected to receive two payments totaling $9,694,773 in SLFRF funding. The
first payment was received in May 2021 in the amount of $4,847,386.50 and the second payment
was received in May 2022. The City may use SLFRF funds to cover these eligible costs incurred
during the period that begins on March 3, 2021 and ends on December 31, 2024, as long as the award
funds for the obligations incurred by December 31, 2024 are spent by December 31, 2026.
As a recipient of the SLFRF award, the City has substantial discretion to use the award funds in the
ways that best suit the needs of the City's constituents — as long as such use fits into one of the
following four statutory categories determined by the U.S. Department of the Treasury:
Public Health/Negative Economic Impacts: Recipients may use SLFRF award funds to provide
assistance to households — such as rent, mortgage, or utility assistance — for costs incurred by the
household prior to March 3, 2021, provided that the City did not incur the cost of providing such
assistance prior to March 3, 2021.
Premium Pay: Recipients may provide premium pay retrospectively for work performed at any
time since the start of the COVID-19 public health emergency. Such premium pay must be "in
addition to" wages and remuneration already received and the obligation to provide such pay
must not have been incurred by the recipient prior to March 3, 2021.
Revenue Loss: Treasury's Final Rule gives recipients broad latitude to use funds for the provision
of government services to the extent of reduction in revenue. While calculation of lost revenue
begins with the recipient's revenue in the last full fiscal year prior to the COVID-19 public health
emergency and includes the 12-month period ending December 31, 2020, use of funds for
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
government services must be forward looking for costs incurred by the recipient after March 3,
2021.
Investments in Water, Sewer, and Broadband: Recipients may use SLFRF award funds to make
necessary investments in water, sewer, and broadband. Recipients may use SLFRF award funds
to cover costs incurred for eligible projects planned or started prior to March 3, 2021, provided
that the project costs covered by the SLFRF award funds were incurred after March 3, 2021.
On September 7, 2021, the Cupertino City Council approved a plan which allocated the ARP funding
towards revenue loss which was estimated at approximately $29 million. Additionally, the $9.7
million in total ARP funding was approved to be spent on general government services in the General
Fund, specifically, City Work Program and special project items. Subsequently, and in accordance
with the Treasury's Final Rule, a $10 million "standard allowance" may be taken which would
relieve a jurisdiction's substantiation of revenue loss. Nevertheless, the City plans to continue using
the ARP funding as originally authorized and will continue to monitor and report out on the estimated
and actual revenue losses resulting from the pandemic.
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.
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.
0
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
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.
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.
7
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Governmental Activities
Table 1
Condensed Statement of Net Position at June 30
(in thousands)
Assets:
Cash and investments
Restricted cash and investments
Other assets
Net OPEB assets
Capital assets
Total assets
Deferred Outflows of Resources:
Loss on refunding
Related to Pension (Note 10)
Related to OPEB (Note 11)
Total deferred outflows of resources
Liabilities:
Long term debt
Other liabilities
Total liabilities
Deferred Inflows of Resources:
Leases Receivable
Related to Pension (Note 10)
Related to OPEB (Note 11)
Total deferred inflows of resources
Net Position:
Net Investment in capital assets
Restricted
Unrestricted
Total net position
Governmental Activities
2022
$ 190,003
17,248
17,916
1,370
214,927
4419464
199
8,317
4,786
13,302
21,269
58,527
79,796
2,495
11,161
2,993
16,649
196,916
68,300
93,105
$ 358,321
2021
$ 167,810
18,499
17,260
8,958
210,273
422,800
239
8,623
1,468
10,330
23,348
77,687
101,035
100
8,323
8,423
186,503
53,711
83,458
$ 323,672
The City's change in net position from governmental activities was $34.6 million. The following
significant changes within assets, liability, and net position categories occurred:
• The City made an additional $2 million contribution in March 2022 to its Section 115 Trust
as part of the City's pension rate stabilization program. 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,
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
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.
• Cash and investments increased by $22.2 million, or 13%, over the previous fiscal year. This
was due to continued positive performance of the City's sales tax, receiving of the 2nd tranche
of American Rescue Plan Act funding ($4.8 million), and reduced departmental spending in
an effort to mitigate the fiscal impacts brought on by the pandemic.
• With strong investment performance in the City's Section 115 OPEB Investment Trust, the
City's Net OPEB Liability was converted to a Net OPEB Asset in FY 2020-21 and was
reported at $9.4 million. This declined to $1.4 million in FY 2021 — 22 due to market
conditions for the City's investments for OPEB.
• Capital assets increased approximately $4.6 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 were
offset with current year depreciation expense.
• Long-term debt decreased by $2 million or 8.9% over the previous year and resulted from
scheduled debt service of the City's 2020 Certificates of Participation.
• Other liabilities decreased by approximately $19.2 million or 24.7%, primarily due to an
decrease in the City's Net Pension Liability as well as a $4.8 million unearned revenue related
to the American Rescue Plan Act of 2021 from FY 2020 — 21 that was not repeated in FY22.
• Deferred Outflows Related to Pension and OPEB increased $3 million primarily due to
actuarial changes of assumptions. Deferred Inflows of Resources Related to Pension and
OPEB increased approximately $8.2 million primarily due to actuarial changes of
assumptions as well as a new deferral required to be reported due to the City's adoption of
GASB Statement No. 87, Leases.
0
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Sources of Revenue, Governmental Activities
2021-22
Gain on capital asset -Transfers -0.8%
0.0% Miscellaneous 1.7%
Investment r-in- -7 QO/-
Other Taxes
Franchise Tax 3.0%
Utility User Tax 2.8%
Transient Occupancy
Tax 3.7%
Services
Operating Grants &
Contributions 6.4%
Capital Grants &
Contributions 1.1%
Program revenues experienced consistent performance year -over -year as the pandemic has had
significant adverse impact on charges for services, particularly in the Parks and Recreation department.
With the exception of investment income, the City's general tax revenues remained strong with sales tax
continuing its unprecedented positive performance throughout the pandemic. Revenues increased net
$5.0 million from the prior year.
10
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Functional Expenses, Governmental Activities
2021-22
Community Development Administration 8.8%
Parks and Recreatio
4.8%
Administrative Services
6.5%
Innovation and
Technology 2.4%
Public Works43.2%
aw Enforcement 19.5%
■ Administration ■ Law Enforcement ■ Public Works _ Innovation and Technology
■ Administrative Services ■ Parks and Recreations ■ Community Development
The Statement of Activities presents program revenues, expenses, general revenues, and the resulting
change in net position as summarized in the next table.
11
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Table 2
Condensed Statement of Activities for the Year Ended June 30
(in thousands)
Governmental Activities
Expenses
2022
2021
Administration
$7,293
$3,637
Law enforcement
16,100
15,212
Innovation & technology
2,004
1,722
Administrative services
5,364
5,358
Recreation and community services
3,977
1,183
Community development
12,210
11,496
Public works
35,654
41,870
Interest on long-term debt
637
398
82,239
80,876
Revenue
Program revenues:
Charges for services
21,387
18,137
Operating grants and contributions
7,601
5,998
Capital grants and contributions
1,283
1,792
Total program revenues
30,271
25,928
General revenues:
Taxes:
Property tax
20,323
19,198
Property tax in -lieu of motor vehicle fee
9,402
9,080
Sales tax
43,647
42,581
Transient occupancy tax
4,405
2,141
Utility user tax
3,356
3,074
Franchise tax
3,480
3,368
Other taxes
11,118
3,022
Intergovernmental, unrestricted:
Motor vehicle license fee
68
44
Investment earnings
(9,242)
4,148
Gain on sale of capital assets
-
-
Miscellaneous
1,948
3,185
Total general revenues
88,504
89,842
Total revenues
118,775
115,770
Excess of revenues over expenses,
before transfers
35,536
34,894
Transfers (Note 4)
(887)
(2,849)
Change in net position
34,649
32,045
Beginning net position
323,672
291,627
Ending net position
$ 358,321
$ 323,672
12
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
City-wide Governmental Activities Revenues
Table 2 shows that revenues from governmental activities increased $3 million or 2.5% from last year,
finishing at $119 million. General revenues also experienced a net increase namely, property tax, sales
tax, and other taxes as further discussed below.
Increases in the City's general revenues are attributable to a $1.1 million increase in property tax over
the prior year. According to the 2022/23 City of Cupertino Property Tax Review from HDL (Assessor's
Annual Report for Santa Clara County) the net assessment roll growth increased $2.1 billion million, or
7.24%, from the prior year. Approximately 100% was attributable to residential, commercial, industrial,
recreational, vacant properties, Miscellaneous and Institutional use values and 2.27% decreased in
Unsecured Value change.
The City experienced an increase of $1.1 million in FY 2021-22 with sales tax revenues increasing by
2.5% over the previous fiscal year. Although 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 over the last two year, these experiences were mitigated by strong
performance in the business and industry sector and the City's county pool allocation. The COVID-19
pandemic has brought great uncertainty to the economy and although the business and industry sector
has experienced significant growth due to the telework conversion and closure of brick -and -mortar retail,
the City continues to monitor and forecast these sectors conservatively.
In FY 2021-22, total transient occupancy tax increased $2.3 million, or 105.7%, over the prior year.
Although an improvement from prior year, we are on the road to recovery for this tax source although it
was anticipated to take longer than other areas as employers' long-term and permanent telework policies
will have substantial impact on the timing and extent of recovery. Other taxes experienced an increased
of $8.1 million, or 268% due to new Park Dedication taxes received in 2022.
Investment earnings decreased by $13.4 million, or 323%, over the prior year. This was due to the City's
portfolio's total rate of return of negative 4.76% (net of fee) for the fiscal year (source: Chandler Asset
Management) resulting from market conditions.
Program revenues showed an increased of $3.3 million or 18%, and is primarily attributable to an
increase in services within the Parks & Recreation department as pandemic restrictions eased.
City-wide Governmental Activities Expenses
City-wide governmental activities expenses increased by $2.4 million, or 3%. This was primarily driven
by budget reduction strategies that were incorporated as part of the FY 2021-22 Adopted Budget in
response to the COVID-19 pandemic. The increase in Administration expenses from Table 2 was due
to the purchase of 10455 Torre Avenue property in the prior fiscal year that was capitalized as
construction in progress (this expense capitalization was not repeated in 2022). This asset is currently
still in progress and not ready to be placed in service with corresponding depreciation, as there was no
service date as of year-end.
Change in Net Position
The City-wide governmental net position increase of $34.6 million was significantly up compared to the
increase in 2020-21 and can be best explained by continued positive sales tax performance, federal
funding assistance, and budget reduction strategies.
13
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
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 $10.7 million at June 30, 2022,
decreased by $785,000 or 7%, from the prior and the net investment in capital assets is slightly lower
than prior year. Business -type activities transferred in (net) decreased by $2 million over the prior year.
An increase in capital asset additions of $336,816 offset with $222,566 in depreciation expense resulted
in a net increase of $114,250 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 $271,000 or 6.2% over the previous year In Table 4, revenues for
all business -type activities increased $968,000, or 19.9% and operating expenses increased by $2
million, primarily attributable the impacts set forth by the pandemic.
14
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Table 3
Condensed Statement of Net Position at June 30
(in thousands)
Assets:
Cash and investments
Other assets
Capital assets
Total assets
Deferred Outflows of Resources:
Related to pension
Related to OPEB
Total deferred outflows of
resources
Other Liabilities:
Total liabilities
Deferred Inflows of Resources:
Related to pension
Related to OPEB
Total deferred inflows of resources
Net Position:
Net Investment in capital assets
Restricted
Unrestricted
Total net position
Business
2022
$ 12,342
230
2,090
14,662
565
256
821
Activities
2021
$ 12,961
577
2,091
15,629
579
101
680
4,118 4,389
4,118 4,389
..
21
434
455
2,090 2,091
167 -
8,423 9,374
$ 10,679 $ 11,465
15
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Table 4
Condensed Statement of Activities for the Year Ended June 30
(in thousands)
Expenses
Resource recovery
Blackberry farm
Cupertino sports center
Recreation programs
Total expenses
Revenues
Program revenues:
Charges for services
General revenues:
Investment earnings
Total revenues
Excess of revenues over expenses,
before extraordinary item and
transfers
Transfers
Change in net position
Beginning net position
Ending net position
MAJOR GOVERNMENTAL FUNDS
General Fund
Business Tvue Activities
2022
2021
$ 1,838
$ 1,670
655
535
3,396
2,183
1,618
1,117
7,507
5,505
6,239
4,831
(404) 36
5,835 4,867
(1,672) (638)
887 2,849
(785)
11,465
$ 10,680
2,211
9,254
$ 11,465
General Fund Revenues
General Fund actual revenues of $105 million ended $15.6 million, or 17%, above the original budget
and $33.6 million, or 24%, below the final budget. Conservative estimates were applied to the original
budget due to the pandemic. Table 5 displays the variations in actual revenues, while Table 6 shows
budgeted revenues compared to actuals.
16
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Property taxes increased $1.4 million, or 5%, over the prior year due to continued roll -growth.
According to the 2020-2021 Assessor's Annual Report for Santa Clara County, Cupertino's net
assessment roll growth increased by $2.1 billion, or 7.24%, from the prior year. Sales tax decreased by
1% or $0.4 million, over the prior year due to county pool allocations. Sales Tax revenue is 40.1% of
total. Transient occupancy tax increased $2.3 million, or 106%, 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 increased by 23% nearly $12M over the previous year due to increased in
services as pandemic restrictions eased. Licenses and permits decreased $74,000, or 2%, due to
decreased on permitting on animal licenses, Mech/Elec/Plumbing and others.
Revenue by Source
Taxes:
Property
Sales
Transient occupancy
Utility user
Franchise
Other
Use of money & property
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Other
Total revenues
Other financing sources:
Transfers in
Total other financing sources
Table 5
Revenue Changes
General Fund, Fiscal 2022 vs. 2021
(in thousands)
Increase/(Decrease)
Fiscal 2022
From Fiscal 2021
Amount
% of Total
Amount
Percent
$ 29,724
28%
$ 1,446
5%
42,208
40%
(373)
-1%
4,405
4%
2,264
106%
3,356
3%
282
9%
3,480
3%
112
9%
1,906
2%
(734)
-28%
-5,341
-5%
(10,179)
-210%
4,385
4%
2,938
203%
4,142
4%
74
2%
14,592
14%
2,710
23%
370
0%
241
187%
1,941
2%
678
54%
$ 105,168
100%
$ (541)
-1 %
$ 15
$ 15
100% $ (493) -97%
100% $ (493) -97%
17
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Table 6
Revenue, Budget and Actual Comparisons
General Fund 2021-22
(in thousands)
Budgeted Amounts
Original Final
Taxes:
Property
$ 27,840
Sales
27,856
Transient occupancy
3,000
Utility user
3,245
Franchise
3,381
Other
1,249
Use of money &
1,251
property
Intergovernmental
5,094
Licenses and permits
3,140
Charges for services
12,322
Fines and forfeitures
225
Other
1,001
Actual
$ 27,840 $ 29,724
36,912
42,208
3,000
4,405
3,245
3,356
3,381
3,480
1,249
1,906
1,251
(5,341)
10,366
4,385
33,595
4,142
16,063
14,592
225
370
1,644
1,941
Over/(Under)
Final
1,884
5,296
1,405
111
99
657
(6,592)
(5,981)
(29,453)
(1,471)
145
297
Total revenues $ 89,602 $ 138,770 $ 105,168 $ (33,602)
Transfers in $ 45 $ 5,092 $ 15 $ (5,077)
General Fund Expenditures
Fiscal 2020-21 overall expenditures, at $70.4 million, were $1.7 million, or 2%, higher than last year.
This result came in $12.2 million, or 15%, 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 decreased $57,000 or 1%, from 2020-21 and is primarily due to the Economic
Development and Video functions moving from Community Development and Innovation &
Technology departments, respectively. Law Enforcement was $940,000 higher or approximately 6%,
which was the automatic increase in the existing contract with the Santa Clara County Sheriff's Office
triggered by increases in the operating agreement and CaIPERS costs. Innovation & Technology
increased by $226,000, or 12%, over the prior year. This was driven by the Department's reorganization
from prior years where full year costs are now captured in the Department. Administrative Services'
expenditures increased approximately $330,000, or 6%, over the prior year due to negotiated increases
in salary and benefits. This increase also reflected the establishment of the internal audit function. Parks
& Recreation General Fund expenditures experienced a 1% decrease, or $59,000, across its programs. The
majority of this decrease was due to COVID-19 and the inability to hold related program activities and
events in FY 2020-21 that were resumed in FY 2021-22 in other funds/functions. Community
Development expenditures in the General Fund increased $1.5 million, or 16%, and resulted primarily
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
from increases in cost allocation charges. Public Works expenditures increased approximately $3.3
million or 16%. This is primarily represented by an increase in compensation and benefits. Various
divisions and programs fluctuated over the prior year due to the addition and completion of one-time
special projects. Transfers out of the General Fund increased from $15.1 million in 2020-21 to $21.4
million, or 41 %. This was due to a reduction in one-time transfers from the General Fund to the Capital
Reserve.
Table 7
Expenditure Changes
General Fund, Fiscal 2022 vs. 2021
(in thousands)
Increase/(Decrease)
Fiscal 2022
From Fiscal 2021
Function/Program
Amount
% of Total
Amount Percent
Administration
$ 7,492
11%
$ (57)
-1%
Law enforcement
15,716
22%
940
6%
Innovation and
2,063
3%
226
12%
technology
Administrative
5,526
8%
330
6%
services
Parks and
4,729
7%
(59)
-1%
recreation
Community
11,188
16%
1,509
16%
development
Public works
23,327
33%
3,302
16%
Capital outlay
396
1%
(4,476)
-92%
Total expenditures
$ 70,437
100%
$ 1,715
2%
Transfers out
$ 21,425
189%
$ 6,276
41%
19
Function/Program
Administration
Law enforcement
Innovation and
technology
Administrative
services
Parks and recreation
Community
development
Public works
Capital outlay
Total expenditures
Transfers out
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Table 8
Expenditure Changes
General Fund 2021-22
(in thousands)
Budgeted Amounts
(Over)/Under
Original
Final
Actual
Final
$ 9,010
$ 9,557
$ 7,492
$ 2,065
15,756
15,756
15,716
40
2,369
2,211
2,063
148
5,378
5,649
5,526
123
7,349
7,466
4,729
2,737
12,872
12,331
11,188
1,143
25,573
28,622
23,327
5,295
208
1,068
396
672
$ 78,515
$ 82,660
$ 70,437
$ 12,223
$ 11,252
$ 26,124
$ 21,425
$ (4,699)
General Fund - Fund Balance
The General Fund carried a June 30, 2022, ending fund balance of $110.2 million, up 13% over the prior
fiscal year. Loan receivables totaled $439,199 of non -spendable fund balance. The City committed $34.1
million for general economic uncertainty and $127,891 for sustainability. The City assigned $5,041,682
million for encumbrances. $1,492,810 million was restricted for public access television purposes,
$23,621 for debt service, and $17,240,051 for the pension rate stabilization program (Section 115 Trust).
$48,696,821 was classified as unassigned.
Transportation
The Transportation Special Revenue Fund carried a June 30, 2022, ending fund balance of $11,828,395
up 25.7%, or $9.4 million from the beginning of the fiscal year. In recent years this fund has accumulated
fund balance year over year. The increase was primarily driven by a reduction of spending due to the
pandemic as well as an accumulation of SB1 revenues which is used for transportation projects in FY
2022-23.
Housing Development
The Housing Development Special Revenue Fund carried a June 30, 2022, ending fund balance of $7.2
million, down 9%, or $770,000, from the beginning of the fiscal year. The activities in this fund remained
relatively consistent with the previous fiscal year.
20
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Public Facilities Corporation
In 2020, the City of Cupertino 2020A Certificates of Participation (2020 COPS) were successfully sold
at very attractive interest rates 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. Fund balance
as of June 30, 2022 was $8,350 substantially lower than the previous year, due to the reserve fund
requirement being removed from the new issuance in 2021 and scheduled debt service in 2022.
Capital Improvement Projects
The Capital Improvement Projects Capital Projects Fund carried a June 30, 2022, ending fund balance
of $34,922,310 down 5.3%, or $2 million from the beginning of the fiscal year. The City continued to
expend resources for capital projects planned, using fund level resources and also resources from other
funds transferred in as appropriate.
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 and expenses is at $1.55
million and $1.84 million, respectively. Net position decreased by $487,065. The fund ended the year
with $5 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. Recreation Programs experienced
the severe impacts of the pandemic with revenue and expense reductions of over 60% in prior years that
since has started to recover. These programs generated approximately $1.3 million in revenues and
program expenses of approximately $1.6 million. This resulted in a net operating loss of $323,589. After
the $806,809 transfer from the General Fund, the fund ended up with an increase in net position of
$376,040. The fund ended the year with a net position of $2.6 million.
Cupertino Sports Center
Revenue increased by $986,135 or 54.4% since COVID-19 cases has gone done from the prior fiscal
year. As a result of the increased in services generating more revenue, expenses increased by $1.2 million
or 55.65% resulted in a net operating loss of $599,817. This fund's net position was $2.2 million as of
June 30, 2022.
21
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
NONMAJOR PROPRIETARY FUND
Blackberry Farm
City employees, with a teaching professional contractor, staff the City -owned Blackberry Farm golf
course and pro shop. Operating revenues decreased from $610,603 to $602,778 or 1.3%. Operating
expenses increased by $119,910, or 22.5%, to $655,184 this year which ended up with operating loss of
$52,406. After a transfer in from the General Fund of $79,992, net position decreased $12,289. As of
June 30, 2022, this fund's net position was $856,221.
CAPITAL ASSETS
At June 30, 2022, the City had $217 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 $4.7 million, after
depreciation.
Table 9
Capital Assets, Net of Depreciation, at June 30
(in thousands)
Governmental Activities:
Land
Easements
Construction in Progress
Buildings
Improvements other than buildings
Machinery and equipment
Roads, curbs, gutters, sidewalks, medians and
bridges
Streetlights
Storm drain structures and mains
Traffic signals
Total Governmental Activities
2022
64,787
19,615
23,406
14,118
15,405
4,195
67,932
1,270
3,691
508
214.927
i
2021
64,787
19,615
15,951
14,578
17,753
4,621
66,900
1,620
3,831
617
210.273
22
CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
Business -Type Activities
Construction in Progress
Buildings
Improvements other than buildings
Machinery and equipment
Total Business -Type Activities
Total City
DEBT ADMINISTRATION
185
$ 125
1,501
1,546
315
337
89
83
2.090
2.091
$ 217,017 $ 212,364
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.
The June 30, 2022, outstanding principal of $18,020,000 is due to be paid off by June 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.
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 and charges for services have experienced
declines since the start of the pandemic and subsequent recoveries, the City has continued to put forth
efforts to reduce its operating costs to mitigate the future impacts. Additionally, through the assistance
of the CARES Act and American Rescue Plan Act, the City anticipates these funds will mitigate much
of the revenue loss and fiscal impact of the pandemic over the short- and long-term. The City's reserves
remain intact and the City does not anticipate requiring the use of these Committed and Restricted funds.
Aside from the pandemic, 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 Annual Comprehensive 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.
23
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.
24.
CITY OF CUPERTINO, CALIFORNIA
STATEMENT OF NET POSITION
June 30, 2022
Governmental
Business -Type
Activities
Activities
Total
ASSETS
Cash and cash investments (Note 2)
$ 190,002,762
$ 12,342,235
$ 202,344,997
Restricted cash and investments (Note 2)
17,248,384
-
17,248,384
Receivables
Accounts
10,628,820
131,658
10,760,478
Interest
39,428
-
39,428
Loans (Note 3)
4,640,130
-
4,640,130
Leases
2,495,226
-
2,495,226
Prepaid expenses and other assets
111,363
-
111,363
Net OPEB asset (Note 11)
1,369,935
99,065
1,469,000
Capital assets (Note 5):
Non -depreciable
107,808,185
184,667
107,992,852
Depreciable, net of
accumulated depreciation
107,119,305
1,904,902
109,024,207
Total assets
441,463,538
14,662,527
456,126,065
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding
199,347
-
199,347
Related to pension (Note 10)
8,316,782
565,574
8,882,356
Related to OPEB (Note 11)
4,786,098
255,902
5,042,000
Total deferred outflows of resources
13,302,227
821,476
14,123,703
LIABILITIES
Accounts payable and accruals
5,254,663
436,940
5,691,603
Accrued payroll and benefits
2,491,253
289
2,491,542
Deposits
10,461,068
-
10,461,068
Unearned revenue
2,359,654
1,107,161
3,466,815
Compensated absences (Note 1):
Due in one year
540,130
16,927
557,057
Due in more than one year
4,150,191
199,709
4,349,900
Claims payable (Note 9):
Due in one year
282,000
-
282,000
Due in more than one year
1,287,000
-
1,287,000
Long-term debt (Note 6):
Due in one year
1,955,000
-
1,955,000
Due in more than one year
19,313,829
-
19,313,829
Net pension liability - noncurrent (Note 10)
31,701,032
2,357,544
34,058,576
Total liabilities
79,795,820
4,118,570
83,914,390
DEFERRED INFLOWS OF RESOURCES
Leases receivable
2,495,226
-
2,495,226
Related to pension (Note 10)
11,160,865
497,967
11,658,832
Related to OPEB (Note 11)
2,992,641
188,360
3,181,001
Total deferred inflows of resources
16,648,732
686,327
17,335,059
NET POSITION (Note 7)
Net investment in capital assets
196,915,823
2,089,569
199,005,392
Restricted for:
Special revenue projects
57,951,406
-
57,951,406
Affordable housing
7,177,611
-
7,177,611
OPEB
3,163,392
166,607
3,329,999
Debt service
8,350
-
8,350
Total restricted net position
68,300,759
166,607
68,467,366
Unrestricted
93,104, 631
8,422, 930
101,527, 561
Total net position
$ 358,321,213
$ 10,679,106
$ 369,000,319
See accompanying notes to financial statements.
25.
Functions/Programs
Governmental activities:
Administration
Law enforcement
Public and environmental affairs
Administrative services
Recreation services
Community development
Public works
Interest on long - term debt
Total governmental activities
Business -type activities:
Resource recovery
Blackberry farm
Cupertino sports center
Recreation programs
Total business -type activities
Total
General revenues:
Taxes:
Property taxes
Property tax in lieu of motor vehicle fee
Sales taxes
Transient occupancy tax
Utility user tax
Franchise tax
Othertaxes
Intergovernmental, unrestricted:
Motor vehicle license fee
Investment earnings (loss)
Miscellaneous
Transfers (Note 4)
Total general revenues and transfers
Change in Net Position
Net Position, beginning of year
Net Position, end of year
CITY OF CUPERTINO, CALIFORNIA
STATEMENT OF ACTIVITIES
For the year ended June 30, 2022
Net (Expense) Revenue and
Program Revenues
Changes in Net Position
Operating
Capital
Business -
Charges for
Grants and
Grants and
Governmental
Type
Expenses
Services
Contributions
Contributions
Activities
Activities
Total
$ 7,293,244
$ 2,551,205
$ 3,594,028 $
-
$ (1,148,011)
$ - $
(1,148,011)
16,100, 903
940,797
438,134
-
(14, 721, 972)
-
(14, 721, 972)
2,004,515
-
-
-
(2,004,515)
-
(2,004,515)
5,363,745
7,457,032
-
2,093,287
-
2,093,287
3,976,793
653,994
-
-
(3,322,799)
-
(3,322,799)
12,209,547
5,768,850
844,919
-
(5,595,778)
-
(5,595,778)
35,653,588
4,015,183
2,724,129
1,282,617
(27,631,659)
-
(27,631,659)
636,960
-
-
-
(636,960)
-
(636,960)
83,239,295
21,387,061
7,601,210
1,282,617
(52,968,407)
-
(52,968,407)
1,837,781
1,545,683
-
-
-
(292,098)
(292,098)
655,184
602,778
-
-
(52,406)
(52,406)
3,396,146
2,796,329
-
-
(599,817)
(599,817)
1,617,717
1,294,128
-
-
(323,589)
(323,589)
7,506,828
6,238,918
-
(1,267,910)
(1,267,910)
$ 90,746,123
$ 27,625,979
$ 7,601,210 $
1,282,617
(52,968,407)
(1,267,910)
(54,236,317)
20,322,779
-
20,322,779
9,401,632
-
9,401,632
43,646,813
-
43,646,813
4,404,958
-
4,404,958
3,356,389
-
3,356,389
3,479,554
-
3,479,554
11,117,528
-
11,117,528
67,762
-
67,762
(9,241,781)
(404,444)
(9,646,225)
1,948,332
-
1,948,332
(886,801)
886,801
-
87,617,165
482,357
88,099,522
34,648,758
(785,553)
33,863,205
323,672,455
11,464,659
335,137,114
$ 358, 321, 213
$ 10, 679,106 $
369, 000, 319
See accompanying notes to financial statements.
26.
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 2021-22. Individual
non -major funds may be found in the Supplementary section.
General Fund: The general fund is the general operating fund of the City. The general fund is used to pay
for core services such as public safety, parks and recreation, community development, public works, and a
host of other vital services. The revenue used to pay for these services comes primarily from local taxes
such as sales tax, property tax, franchise fees, charges for services, and a variety of other discretionary
sources. It also accounts for activities related to the City's investment portfolio. 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, including rehabilitation loans.
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.
27.
CITY OF CUPERTINO, CALIFORNIA
GOVERNMENTALFUNDS
BALANCE SHEET
June 30, 2022
Public
Capital
Facilities
Improvement
Special Revenue
Funds
Corporation
Projects
Nonmajor
Total
Housing
Debt
Capital
Govemmental
Governmental
General
Transportation
Development
Service Fund
Projects Fund
Funds
Funds
ASSETS
Cash and investments (Note 2)
$
99,149,578
$
11,869,955
$
6,261,918
$ 17
$
37,728,845
$
27,541,423
$
182,551,736
Restricted cash and investments (Note 2)
17,240,051
-
-
8,333
-
-
17,248,384
Receivables:
Accounts
9,281,673
222,980
561,200
-
529,854
33,113
10,628,820
Interest
39,428
-
-
-
-
-
39,428
Loans (Note 3)
439,199
-
4,200,931
-
4,640,130
Leases
2,495,226
-
-
-
2,495,226
Due from other funds (Note 4)
539,204
-
-
539,204
Advances to other funds (Note 4)
3,000,000
-
-
3,000,000
Prepaid items
107,479
-
-
107,479
Other assets
3,884
-
-
-
-
-
3,884
Total assets
$
132,295,722
$
12,092,935
$
11,024,049
$ 8,350
$
38,258,699
$
27,574,536
$
221,254,291
LIABILITIES
Accounts payable and accruals
$
4,328,312
$
264,540
$
174,438
$ -
$
327,116
$
41,428
$
5,135,834
Accrued payroll and benefits
2,491,181
-
-
-
-
-
2,491,181
Advances from other funds (Note 4)
-
-
-
3,000,000
3,000,000
Deposits
10,461, 068
-
-
-
10, 461, 068
Unearned revenue
2,350,381
-
-
9,273
-
2,359,654
Total liabilities
19,630,942
264,540
174,438
3,336,389
41,428
23,447,737
DEFERRED INFLOWS OF RESOURCES
Leases receivable
2,495,226
-
-
-
-
-
2,495,226
Unavailable revenue - loans
-
-
3,672,000
-
3,672,000
Total deferred inflows of resources
2,495,226
-
3,672,000
-
6,167,226
FUND BALANCES (Note 7)
Nonspendable
3,546,678
-
-
-
-
3,546,678
Restricted
18,756,482
11,828,395
7,177,611
8,350
27,366,529
65,137,367
Committed
34,127,891
-
-
-
-
-
34,127,891
Assigned
5,041,682
-
-
34,922,310
166,579
40,130,571
Unassigned
48,696,821
-
-
-
-
-
48,696,821
Total fund balances
110,169,554
11,828,395
7,177,611
8,350
34,922,310
27,533,108
191,639,328
Total liabilities, deferred inflows
of resources and fund balances
$
132,295,722
$
12,092,935
$
11,024,049
$ 8,350
$
38,258,699
$
27,574,536
$
221,254,291
See accompanying notes to financial statements.
28.
CITY OF CUPERTINO, CALIFORNIA
RECONCILIATION OF GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET POSITION
June 30, 2022
Total fund balances reported on the governmental funds balance sheet $ 191,639,328
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. 211, 949,122
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. 5,916,992
Certain receivables are not available to pay for current period
expenditures and therefore are deferred in the governmental funds. 3,672,000
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
(21,268,829)
Net pension liability
(29,775,089)
Net OPEB asset
1,288,806
Deferred loss on refunding
199,347
Pension -related deferred outflows of resources
7,797,653
Pension -related deferred inflows of resources
(10,361,010)
OPEB-related deferred outflows of resources
4,439,796
OPEB-related deferred inflows of resources
(2,806,502)
Compensated absences
(4,370,401)
Net position for governmental activities $ 358,321,213
See accompanying notes to financial statements.
29.
CITY OF CUPERTINO, CALIFORNIA
GOVERNMENTALFUNDS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
For the year ended June 30, 2022
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
$ 85,079,013
$ -
$ 36,000
$
$ 1,438,505
$ 9,176,135 $
95,729,653
Use of money and property
(5,341,211)
(375,355)
(161,249)
(1,682,882)
(940,742)
(8,501,439)
Intergovernmental
4,384,812
3,025,691
787,172
753,914
8,951,589
Licenses and permits
4,141,902
-
-
-
-
4,141,902
Charges for services
14,592,031
25,210
3,040
1,753,622
16,373,903
Fines and forfeitures
370,159
-
-
-
3,563
373,722
Other revenue
1,941,050
3,245
4,037
-
1,948,332
Total revenues
105,167,756
2,678,791
669,000
509,537
9,992,578
119,017,662
Expenditures
Current:
Administration
7,492,277
7,492,277
Law enforcement
15,715,815
15,715,815
Public and environmental affairs
2,063,176
2,063,176
Administrative services
5,525,888
5,525,888
Recreation services
4,729,438
-
4,729,438
Community development
11,188,200
-
1,439,502
-
12,627,702
Public works
23,327,366
3,566,689
-
-
1,648,795
28,542,850
Capital outlay
396,356
3,261,133
8,711,579
408,053
12,777,121
Debt service:
Principal
-
-
1,880,000
-
-
1,880,000
Interest and fiscal charges
-
-
796,000
-
796,000
Total expenditures
70,438,516
6,827,822
1,439,502
2,676,000
8,711,579
2,056,848
92,150,267
Excess (deficiency) of revenues
over expenditures
34,729,240
(4,149,031)
(770,502)
(2,676,000)
(8,202,042)
7,935,730
26,867,395
Other financing sources (uses)
Transfers in (Note 4)
15,000
6,672,824
2,621,000
10,130,235
3,650,000
23,089,059
Transfers (out) (Note 4)
(21,425,477)
(105,235)
-
(3,865,000)
(381,000)
(25,776,712)
Total other financing sources (uses)
(21,410,477)
6,567,589
2,621,000
6,265,235
3,269,000
(2,687,653)
Net change in fund balances
13,318,763
2,418,558
(770,502)
(55,000)
(1,936,807)
11,204,730
24,179,742
Beginning fund balances
96,850,791
9,409,837
7,948,113
63,350
36,859,117
16,328,378
167,459,586
Ending fund balances
$ 110,169,554
$ 11,828,395
$ 7,177,611
$ 8,350
$ 34,922,310
$ 27,533,108 $
191,639,328
See accompanying notes to financial statements.
30.
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, 2022
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
$24,179,742
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
12,848,688
Depreciation expense
(7,827,241)
Long term debt principal payments are reported as expenditures in the
governmental funds but are not reported as expenses in the statement
of activities.
1,880,000
Bond proceeds provide current financial resources to governmental
funds, but issuing debt increases long-term liabilities in the statement of
net position with previously capitalized items related to debt issuance
reported as expenses in the statement of activities.
Amortization of premium
198,908
Amortization of deferred loss on refunding
(39,869)
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
550,135
Net pension liability
12,859,888
Net OPEB liability (asset)
(7,042,356)
Pension -related deferred outflows of resources
(284,420)
Pension -related deferred inflows of resources
(10,264,945)
OPEB-related deferred outflows of resources
3,079,272
OPEB-related deferred inflows of resources
4,947,155
Certain revenues deferred in the governmental revenues are recognized
in the statement of activities
(40,120)
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.
(396,079)
Change in net position of governmental activities
$34,648,758
See accompanying notes to financial statements.
31.
CITY OF CUPERTINO, CALIFORNIA
GENERALFUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES — BUDGET AND ACTUAL
For the year ended June 30, 2022
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes
$ 66, 571, 053
$ 75, 627, 490
$ 85, 079, 013
$ 9,451,523
Use of money and property
1,251,220
1,251,220
(5,341,211)
(6,592,431)
Intergovernmental
5,093,946
10,365,946
4,384,812
(5,981,134)
Licenses and permits
3,140,195
33,594,629
4,141,902
(29,452,727)
Charges for services
12,320,922
16,061,509
14,592,031
(1,469,478)
Fines and forfeitures
225,000
225,000
370,159
145,159
Other revenue
1,000,555
1,643,661
1,941,050
297,389
Total revenues
89,602,891
138,769,455
105,167,756
(33,601,699)
Expenditures
Current
Administration
9,009,957
9,557,105
7,492,277
2,064,828
Law enforcement
15,756,350
15,756,350
15,715,815
40,535
Public and environmental affairs
2,369,287
2,211,383
2,063,176
148,207
Administrative services
5,378,147
5,648,948
5,525,888
123,060
Recreation services
7,348,805
7,465,969
4,729,438
2,736,531
Community development
12,871,834
12,330,569
11,188,200
1,142,369
Public works
25,572,670
28,622,249
23,327,366
5,294,883
Capital outlay
208,000
1,068,025
396,356
671,669
Total expenditures
78,515,050
82,660,598
70,438,516
12,222,082
Excess of revenues
over expenditures
11,087,841
56,108,857
34,729,240
(21,379,617)
Other financing sources (uses)
Transfers in 45,000 5,092,387 15,000 (5,077,387)
Transfers (out) (11,251,984) (26,124,371) (21,425,477) 4,698,894
Total other financing
sources (uses) (11,206,984) (21,031,984) (21,410,477) (378,493)
Net change in fund balance
Beginning fund balance
Ending fund balance
$ (119,143) $ 35,076,873 13,318,763 $ (21,758,110)
96, 850, 791
$110,169, 554
See accompanying notes to financial statements.
32.
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, 2022
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Use of money and property
$ -
$ -
$ (375,355)
$ (375,355)
Intergovernmental
3,004,034
3,004,034
3,025,691
21,657
Charges for services
3,978
3,978
25,210
21,232
Other revenue
87,057
87,057
3,245
(83,812)
Total revenues
3,095,069
3,095,069
2,678,791
(416,278)
Expenditures
Current
Public works
4,467,837
4,961,040
3,566,689
1,394,351
Capital outlay
3,315,000
7,704,485
3,261,133
4,443,352
Total expenditures
7,782,837
12,665,525
6,827,822
5,837,703
Deficiency of revenues
under expenditures
(4,687,768)
(9,570,456)
(4,149,031)
5,421,425
Other financing sources (uses)
Transfers in
6,672,824 6,672,824
6,672,824 -
Transfers (out)
- (105,235)
(105,235) -
Total other financing
sources (uses)
6,672,824 6,567,589
6,567,589 -
Net change in fund balance
$ 1,985,056 $ (3,002,867)
2,418,558 $ 5,421,425
Beginning fund balance 9,409,837
Ending fund balance $11,828,395
See accompanying notes to financial statements.
33.
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, 2022
Budgeted Amounts
Actual
Original
Final
Amounts
Revenues
Taxes
$ 3,611,855
$ 3,611,855
$ 36,000
Use of money and property
3,300
3,300
(161,249)
Intergovernmental
463,996
801,854
787,172
Charges for services
-
-
3,040
Other revenue
-
-
4,037
Total revenues
4,079,151
4,417,009
669,000
Expenditures
Current
Community development
1,818,104
1,566,766
1,439,502
Total expenditures
1,818,104
1,566,766
1,439,502
Deficiency of revenues
under expenditures
2,261,047
2,850,243
(770,502)
Other financing sources (uses)
Transfers out
-
(200,000)
-
Total other financing
sources (uses)
-
(200,000)
-
Net change in fund balance
$ 2,261,047
$ 2,650,243
(770,502)
Beginning fund balance
7,948,113
Ending fund balance
$ 7,177,611
See accompanying notes to financial statements.
Variance with
Final Budget
Positive
Ne ative
$ (3,575,855)
(164, 549)
(14, 682)
3,040
4,037
(3,748,009)
127,264
127,264
(3,620,745)
200,000
200,000
$ (3,420,745)
34.
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 2021 - 22.
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.
35.
ASSETS
Current assets
Cash and cash investments (Note 2)
Accounts receivable
Total current assets
Noncurrent assets
Net OPEB asset (Note 11)
Capital assets (Note 5):
Nondepreciable
Depreciable, net of
accumulated depreciation
Total noncurrent assets
Total assets
CITY OF CUPERTINO, CALIFORNIA
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
June 30. 2022
Business -type Activities - Enterprise Funds
Governmental
Cupertino
Nonmajor
Activities -
Resources
Recreation
Sports
Enterprise
Internal Service
Recovery
Programs
Center
Fund
Totals
Funds
$ 5,933,225
$ 3,246,435
$ 1,970,200
$ 1,192,375 $
12,342,235
$ 7,451,026
129,930
558
1,000
170
131,658
-
6,063,155
3,246,993
1,971,200
1,192,545
12,473,893
7,451,026
5,001
36,852
57,212
-
99,065
81,129
-
184,667
-
184,667
7,828
513
539,207
1,344,308
20,874
1,904,902
2,970,540
5,514
760,726
1,401,520
20,874
2,188,634
3,059,497
6,068,669
4,007,719
3,372,720
1,213,419
14,662,527
10,510,523
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 10) 212,882 175,395 118,601 58,696 565,574 519,129
Related to OPEB (Note 11) 96,483 67,343 78,977 13,099 255,902 346,302
Total deferred outflows of resources 309,365 242,738 197,578 71,795 821,476 865,431
LIABILITIES
Current liabilities
Accounts payable and accruals
Accrued payroll and benefits
Due to other funds (Note 4)
Compensated absences (Note 1):
Claims payable (Note 9)
Unearned revenue
Total current liabilities
Noncurrent liabilities
Compensated absences (Note 1)
Claims payable (Note 9)
Net pension liability (Note 10)
Total noncurrent liabilities
Total liabilities
101,906
234,207
62,250
38,577
436,940
118,829
289
-
-
-
289
72
-
-
-
-
-
539,204
4,652
7,150
3,648
1,477
16,927
36,841
-
-
-
-
-
282,000
83,693
393,601
535,236
94,631
1,107,161
-
190,540
634,958
601,134
134,685
1,561,317
976,946
54,884
84,361
43,036
17,428
199,709
283,079
-
-
-
-
-
1,287,000
882,091
740,638
484,580
250,235
2,357,544
1,925,943
936,975
824,999
527,616
267,663
2,557,253
3,496,022
1,127,515
1,459,957
1,128,750
402,348
4,118,570
4,472,968
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 10) 189,264 152,244 129,814 26,645 497,967 799,855
Related to OPEB (Note 11) 50,257 61,536 76,567 - 188,360 186,139
Total deferred inflows of resources 239,521 213,780 206,381 26,645 686,327 985,994
NET POSITION (Note 7)
Net investment in capital assets
513
723,874
1,344,308
20,874
2,089,569
2,978,368
Restricted - OPEB
51,227
42,659
59,622
13,099
166,607
241,292
Unrestricted
4,959,258
1,810,187
831,237
822,248
8,422,930
2,697,332
Total Net Position
$ 5,010,998 $
2,576,720 $
2,235,167 $
856,221 $
10,679,106 $
5,916,992
See accompanying notes to financial statements.
M.
CITY OF CUPERTINO, CALIFORNIA
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
For the year ended June 30, 2022
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
$ 1,530,871
$ 1,148,250
$ 2,451,149
$ 555,103 $
5,685,373
$ 5,136,902
Other
14,812
145,878
345,180
47,675
553,545
2,818
Total operating revenue
1,545,683
1,294,128
2,796,329
602,778
6,238,918
5,139,720
Operating expenses
Salaries and benefits
487,062
521,877
422,614
145,634
1,577,187
3,509,214
Materials and supplies
374,497
361,169
475,002
165,714
1,376,382
1,648,724
Contractual services
972,908
627,619
2,389,161
341,004
4,330,692
165,673
Insurance and claims and premium
-
-
-
-
-
901,544
Depreciation (Note 5)
3,314
107,052
109,369
2,832
222,567
926,453
Total operating expenses
1,837,781
1,617,717
3,396,146
655,184
7,506,828
7,151,608
Operating income (loss)
(292,098) (323,589)
(599,817) (52,406) (1,267,910) (2,011,888)
Nonoperating revenues
Investment Income
(194,967)
(107,180)
(62,422)
(39,875)
(404,444)
(202,688)
Gain on sale of capital assets
-
-
17,645
Total nonoperating revenues
(194,967)
(107,180)
(62,422)
(39,875)
(404,444)
(185,043)
Income (loss) before transfers
(487,065)
(430,769)
(662,239)
(92,281)
(1,672,354)
(2,196,931)
Transfers in (Note 4)
-
806,809
79,992
886,801
1,800,852
Changes in net position
(487,065)
376,040
(662,239) (12,289) (785,553) (396,079)
Net position - beginning of year
5,498,063
2,200,680
2,897,406
868,510
11,464,659
6,313,071
Net position - end of year
$ 5,010,998 $
2,576,720
$ 2,235,167 $
856,221 $
10,679,106 $
5,916,992
See accompanying notes to financial statements.
37.
CITY OF CUPERTINO, CALIFORNIA
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
Business -type Acti\ities - Enterprise Funds
Governmental
Cupertino
Nonmajor
Acti\ities -
Resources
Recreation
Sports
Enterprise
Internal Service
Recovery
Programs
Center
Fund
Totals
Funds
Cash flows from operating activities
Cash received from customers
$ 1,632,285 $
1,410,873 $
2,835,405 $
638,627 $
6,517,190
$ 5,139,720
Cash payments to suppliers for
goods and services
(1,319,013)
(916,916)
(2,921,916)
(479,723)
(5,637,568)
(1,927,943)
Cash payments to employees for salaries
and benefits
(554,532)
(582,418)
(478,358)
(144,200)
(1,759,508)
(3,820,153)
Cash payments for judgment and claims
(706,544)
Net cash provided (used) by operating activities
(241,260)
(88,461)
(564,869)
14,704
(879,886)
(1,314,920)
Cash flows from noncapital financing activities
Transfers in _
Cash flows from noncapital financing activities
Cash flows from capital and related financing activities
Acquisition of capital assets
Sale of capital assets _
Cash flows from capital and related _
financing activities
Cash Flows from investing activities
806,809 79,992 886,801 1,800,852
806,809 79,992 886,801 1,800,852
(182,809) (38,798) (221,607) (559,009)
17,645
(182,809) (38,798) (221,607) (541,364)
Interest received
70,995
37,798
25,407
14,316
148,516
92,974
Sale of investments
(265,962)
(144,978)
(87,829)
(54,191)
(552,960)
(295,662)
Cash flows from investing activities
(194,967)
(107,180)
(62,422)
(39,875)
(404,444)
(202,688)
Net cash flows
(436,227)
428,359
(666,089)
54,821
(619,136)
(258,120)
Cash and cash investments at beginning of year
6,369,452
2,818,076
2,636,289
1,137,554
12,961,371
7,709,146
Cash and cash investments at end of year
$ 5,933,225 $
3,246,435 $
1,970,200 $
1,192,375 $
12,342,235 $
7,451,026
Reconciliation of operating income (loss) to
to net cash provided by operating activities:
Operating income (loss) $
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation
Change in assets, deferred outflows of
resources, liabilities and deferred inflows
of resources
Accounts receivable
Due to retirement system
Due to OPEB system
Accounts payable and accruals
Unearned revenue
Compensated absences
Claims payable
Net cash provided (used) by operating
(292,098) $ (323,589) $ (599,817) $ (52,406) $ (1,267,910) $ (2,011,888)
3,314 107,052 109,369 2,832 222,567 $ 926,453
2,909
1,305
280
(170)
4,324
(40,429)
(33,267)
(28,576)
(4,992)
(107,264)
(179,226)
(17,313)
(13,841)
(17,127)
(9,674)
(57,955)
(76,973)
28,392
71,872
(57,753)
26,995
69,506
(113,546)
83,693
115,440
38,796
36,019
273,948
(9,728)
(13,433)
(10,041)
16,100
(17,102)
(54,740)
-
195,000
activities $ (241,260) $ (88,461) $ (564,869) $ 14,704 $ (879,886) $ (1,314,920)
See accompanying notes to financial statements.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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.
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.
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.
(Continued)
39.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fund Financial Statements: The fund financial statements provide information about the City's funds,
including blended component units. Separate statements for each fund category — governmental and
proprietary— 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.
• 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.
(Continued)
40.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
Basis of Accounting: The government -wide and proprietary 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.
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.
(Continued)
41.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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, no funds had expenditures which exceeded appropriations.
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. Adjustments to fair value, as well as dividend and interest
income received is recorded by the City in its governmental funds in the Use of money and property caption
while proprietary funds report these items as Investment income.
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
(Continued)
42.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Major outlays for capital assets and improvements are capitalized as projects are constructed. 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.
The changes in compensated absences for the year ended June 30, 2022 were as follows:
Governmental Business -Type
Activities Activities Total
Beginning balance
$ 5,295,199
$ 233,737
$ 5,528,934
Additions
(280,094)
(9,295)
(289,389)
Reductions
(324,784)
(7,806)
(332,590)
Ending balance
$ 4,690,321
$ 216,636
$ 4,906,957
Current portion
$ 540,130
$ 16,927
$ 557,057
Non -current portion
$ 4,150,191
$ 199,709
$ 4349 900
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 deferred losses on debt refundings, 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. Losses on debt refund ings are amortized
over the life of the debt. 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.
(Continued)
43.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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. The amounts for deferred lease revenues represent future revenues related to the leasing
arrangements the City entered into for some of its assets. This is amortized over the life of the lease
contract on the straight-line basis.
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.
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, 2022.
In June 2017, the GASB issued Statement No. 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 effective for
the City's fiscal year ended June 30, 2022 and management has implemented the provisions of the
Statement by calculating the lease receivables and deferred inflows of resources related to these lease
contracts as of July 1, 2021, per Note 13.
(Continued)
44.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The City then recognized the current year payment provisions as inflows and outflows as appropriate. The
beginning balances of certain footnotes were not required to be restated to reflect this implementation, nor
was a restatement of beginning net position due to the change in accounting principle required.
The City also adopted the provisions of the following pronouncements, noting no impact of the City's
financial statements:
GASB Statement No. 89 — Accounting for Interest Costs Incurred before the End of a Construction Period
GASB Statement No. 91 — Conduit Debt Obligations
GASB Statement No. 92 — Omnibus 2021 (except for paragraphs 11 and 13 which were implemented in
the last fiscal year)
GASB Statement No. 93 — Replacement of Interbank Offered Rates
GASB Statement No. 97 — Certain Component Unit Criteria, and Accounting and Financial Reporting for
Internal Revenue Code Section 457 Deferred Compensation Plans (except for paragraphs 4 and 5 which
were implemented in the last fiscal year)
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.
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.
(Continued)
45.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 2 — CASH AND INVESTMENTS (Continued)
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 $ 202,344,997
Restricted cash and investments:
Held by fiscal agent for pension 17,240,051
Held by fiscal agent for bond repayments 8,333
Total cash and investments $ 219,593,381
The bank value of the City's cash deposits is $32,249,699 with cash per books of $32,665,499. All deposits
in excess of FDIC coverage limits were collateralized with securities at year end.
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.
(Continued)
46.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 2 — CASH AND INVESTMENTS (Continued)
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)
47.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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:
Investment Type
U.S. Treasury Securities
Corporate Notes
U.S. Agency Notes
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Federal Home Loan Banks
Federal Farm Credit Banks
Local Agency Investment Fund
Municipal Bonds
Asset -Backed Securities
Supranationals
Collateralized Mortgage Obligations
Money Market Mutual Funds - Restricted for Pension (PARS)
Money Market Mutual Funds
Total Investments
Cash in banks and on hand
Total Cash and Investments
12 Months 13 to
More than
or less 24 Months
24 Months
Total
$ $
$ 34,667,431
$ 34,667,431
39,671,519
39,671,519
8,749,022
8,749,022
14,830,810
14,830,810
5,134,002
5,134,002
4,011,600
4,011,600
21,059,752
-
21,059,752
-
744,596
744,596
20,119,630
20,119,630
11,552,549
11,552,549
-
7,882,726
7,882,726
17,240,051
-
17,240,051
1,264,194
-
1,264,194
$ 39,563,997 $
$ 147,363,885
186,927,882
32,665,499
(Continued)
$ 219,593,381
48.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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 sme 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 311 days.
Money market mutual funds are available for withdrawal on demand. At June 30, 2022, money market
mutual funds, used for pooled investment and held by fiscal agent purposes, had a weighted average
maturity of 45 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, 2022:
Investments bvFair Value Level
U.S. Treasury Securities
Corporate Notes
U.S. Agency Notes
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Federal Home Loan Banks
Federal Farm Credit Banks
Asset -Backed Securities
Collateralized Mortgage Obligations
Supranationals
Municipal Bonds
Total Investments
Investments Measured at Amortized Cost:
Money Market Mutual Funds
Money Market Mutual Funds - Restricted for Pension (PARS)
Investments Exempt from Fair Value Hierarchy:
Local Agency Investment Fund
Cash in banks and on hand
Total Cash and Investments
Level Level Total
$ 34,667,431 $ - $ 34,667,431
- 39,671,519 39,671,519
- 8,749,022
8,749,022
- 14,830,810
14,830,810
- 5,134,002
5,134,002
- 4,011,600
4,011,600
- 20,119,630
20,119,630
- 7,882,726
7,882,726
- 11,552,549
11,552,549
- 744,596
744,596
$ 34,667,431 $ 112,696,454 147,363,885
(Continued)
1,264,194
17,240,051
21,059,752
32,665,499
$ 219,593,381
49.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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, 2022 for each investment type, including
those with fiscal agents, as provided by Moody's ratings:
Investment Type
Ratings
Total
Money Market Mutual Funds
Aaa
$ 18,504,245
Corporate Notes
A1,A2,A3
39,671,519
U.S. Agency Notes
Federal Home Loan Mortgage Corporation
Aaa
8,749,022
Federal National Mortgage Association
Aaa
14,830,810
Federal Home Loan Banks
Aaa
5,134,002
Federal Farm Credit Banks
Aaa
4,011,600
Asset -Backed Securities
Aaa
20,119,630
Collateralized Mortgage Obligations
Aaa
7,882,726
Supranationals
Aaa
11,552,549
Municipal Bonds
Aa2
744,596
U.S. Treasury Securities
Aaa
34,667,431
Not Rated:
Local Agency Investment Fund
Not Rated
21,059,752
Total Investments
$186, 927, 882
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 $ 8,749,022
Federal Home Loan Banks (FHLB) U.S. Agency Notes 5,134,002
Federal National Mortgage Association (FNMA) U.S. Agency Notes 14,830,810
Federal Farm Credit Banks (FFCB) U.S. Agency Notes 4,011,600
(Continued)
50.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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. As of June 30, 2022, 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. As of
June 30, 2022, the balance on the loan was $147,130. 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 30t" 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. As of June 30, 2022, 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 had housing and other loans receivable that were completely repaid as
of June 30, 2022.
NOTE 4 — INTERFUND TRANSACTIONS
Transfers between funds during the fiscal year ended June 30, 2022 were as follows:
Fund Making Transfers Fund Receiving Transfers
Amount Transferred
General Fund Transportation Special Revenue Fund
$6,457,824
(C)
Public Financing Corporation Debt Service Fund
2,621,000
(B,C)
Capital Improvement Projects Capital Projects Fund
10,025,000
(A)
Recreation Enterprise Fund
806,809
(C)
Non -major Enterprise Funds
79,992
(C)
Internal Service Funds
1,434,852
(D)
Transportation Special Revenue Fund Capital Improvement Projects Capital Projects Fund 105,235 (A)
Capital Improvements Projects
Capital Projects Fund
Non -major Governmental Funds
Total Interfund Transfers
Transportation Special Revenue Fund
Non -major Governmental Funds
General Fund
Internal Service Funds
(Continued)
215,000 (A)
3,650,000 (A)
15,000 (E)
366,000
$25 776 112
51.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 4 — INTERFUND TRANSACTIONS (Continued)
The reasons for these transfers are set forth below:
(A) To fund capital projects.
(B) For annual lease payment for 2020A Certificates of Participation debt service.
(C) Operating subsidy from General Fund.
(D) To fund IT operations, personnel costs associated with staffing special project, and compensated
absences and retiree health.
(E) 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. As of June 30, 2022, 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, 2022, 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)
52.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 5 — CAPITAL ASSETS
A summary of changes in governmental activities capital assets is as follows:
Governmental activities:
Capital assets not being depreciated:
Land
Easements
Construction in progress
Total general government capital
assets not being depreciated
Capital assets being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
Roads, curbs, gutters, sidewalks, medians
and bridges
Streetlights
Storm drain structure and mains
Traffic signals
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
Roads, curbs, gutters, sidewalks, medians
and bridges
Streetlights
Storm drain structure and mains
Traffic signals
Total accumulated depreciation
Total general government capital
assets being depreciated, net
Internal service fund capital assets:
Capital assets not being depreciated:
Construction in progress
Total internal fund capital
assets not being depreciated
Capital assets being depreciated:
Machinery and equipment
Less accumulated depreciation
Total internal fund capital
assets being depreciated, net
Governmental activities capital assets, net
Balance at Balance at
July 1. 2021 Additions Deletions Transfers June 30, 2022
$ 64,786,669 $ $ $ $ 64,786,669
19,615,039 19,615,039
15,950,996 12,848,688 (5,401,035) 23,398,649
100,352,704 12,848,688 (5,401,035) 107,800,357
46,540,557 - 1,223,356 47,763,913
61,129,702 134,224 61,263,926
4,340,441 (10,549) 200,037 4,529,929
179,773,593 3,760,619 183,534,212
9,219,638 82,799 9,302,437
37,373,158 - 37,373,158
6,418,246 - 6,418,246
344,795,335 (10,549) 5,401,035 350,185,821
(31,962,639) (1,683,655) - (33,646,294)
(43,377,323) (2,481,693) - (45,859,016)
(3,065,019) (251,640) 10,549 (3,306,110)
(112,872,141) (2,729,484) - (115,601,625)
(7,599,818) (431,927) (8,031,745)
(33,542,309) (139,739) (33,682,048)
(5,801,115) (109,103) - - (5,910,218)
(238,220,364) (7,827,241) 10,549 - (246,037,056)
106,574,971 (7,827,241) 5,401,035 104,148,765
- 559,011 (551,183) 7,828
- 559,011 (551,183) 7,828
12,218,251 - 551,183 12,769,434
(8,872,439) (926,455) - (9,798,894)
3,345,812 (926,455) 551,183 2,970,540
$ 210,273,487 $ 4,654,003 $ $ - $ 214,927,490
(Continued)
53.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 5 — CAPITAL ASSETS (Continued)
Balance at Balance at
July 1, 2021 Additions Deletions Transfers June 30, 2022
Business -type activities:
Capital assets not being depreciated:
Construction in progress $ 125,331 $ 221,605 $ $ (162,269) $ 184,667
Total capital assets not being depreciated 125,331 221,605 (162,269) 184,667
Capital assets being depreciated:
Buildings 2,029,925
Improvements other than buildings 2,089,743
Machinery and equipment 711,119
Total capital assets being depreciated 4,830,787
Less accumulated depreciation for
43,764
2,073,689
86,171
2,175, 914
32,334
743,453
162,269
4,993,056
Buildings (484,434) (88,789)
Improvements other than buildings (1,753,209) (107,531)
Machinery and equipment (627,945) (26,246)
Total accumulated depreciation (2,865,588) (222,566)
Total capital assets being depreciated, net 1,965,199 (222,566)
(573,223)
(1,860,740)
(654,191)
(3,088,154)
162,269 1,904,902
Business -type activity capital assets, net $ 2,090,530 $ (961) $ - $ - $ 2,089,569
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
$ 191,767
Public and Environment Affairs
16,437
Administrative Services
29,744
Parks and Recreation
170,634
Public Works
7,418,659
Subtotal
7,827,241
Internal Service Allocation
Administration
287,386
Public and Environment Affairs
25,107
Administrative Services
64,111
Parks and Recreation
84,771
Public Works
465,080
Subtotal
926,455
Total — Governmental Activities
$ 8 753 996
Depreciation expense was charged to the business -type activities as follows:
Business -Type Activities
Resources Recovery $ 3,314
Blackberry Farm 2,832
Cupertino Sports Center 109,369
Recreation Program 107,051
Total — Business -Type Activities $ 222,566
(Continued)
54.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 6 — LONG-TERM DEBT
Cupertino Public Facilities Corporation Certificates of Participation:
2020A Certificates
of Participation
4%, due 06/01/2030
Issuance Premium
Total long-term debt
Original Balance
Issue June 30,
Amount 2021
$22,040,000 $19,900,000
3,447,737
$ 23, 347, 737
Balance
June 30,
Current
Additions Retirements
2022
Portion
$ $ 1,880,000
$18,020,000
$1,955,000
198,908
3,248,829
$ $ 2,078,908
$21,268,829
$1,955,000
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, previously leased
real property to the City (under the Lease Agreement with the lessee, with the Lease Agreement being
classified as a lease prior to the adoption of GASB Statement No. 87) 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, 2022.
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.
On September 29, 2020, $22,040,000 principal amount of 2020A Certificates of Participation (2020 COPs)
were issued to refund the 2012 COPs and pay costs incurred in connection with issuance. The proceeds
were placed into an escrow account, along with funds from the City's 2012 COPs Reserve and on
October 30, 2020, the 2012 COPS were prepaid, resulting no amounts outstanding as of June 30, 2022 for
the 2012 COPs. The result of the transaction was an economic gain of $3,133,819.
The 2020A COPs are payable by a pledge of revenues from the payments payable by the City pursuant to
the Agreement between the Cupertino Public Facilities Corporation and the City for the use and possession
of the Site and Facility as described in the Agreement. The City also covenanted in the Agreement to
include all payments in its annual budget. Total debt service payments remaining on the 2020 COPs is
$21,412,000 payable through June 1, 2030. For the year ended June 30, 2022, the bonds had $1,880,000
of principal and $796,000 interest due.
(Continued)
55.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 6 — LONG-TERM DEBT (Continued)
Annual debt service requirements for the 2020A COPS are shown below:
For the Year
Ending June 30
2023
2024
2025
2026
2027
2028-2030
Total
Governmental Activities
Principal
Interest
$ 1,955,000
$ 720,800
2,035,000
642,600
2,115, 000
561,200
2,200,000
476,600
2,285,000
388,600
7,430,000
602,200
$ 18, 020, 000
$ 3,392,000
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.
(Continued)
56.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 7 — NET POSITION AND FUND BALANCES (Continued)
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. Only
the General Fund reports unassigned positive fund balance. A governmental fund other than the General
Fund may report a negative unassigned fund balance if expenditures incurred for a specific purpose exceed
the amounts that are restricted, committed or assigned to those purposes.
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)
57.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 7 — NET POSITION AND FUND BALANCES (Continued)
Fund balances for all major and nonmajor governmental funds as of June 30, 2022,
were distributed
as
follows:
Public
Capital
Other
Housing Facilities
Improvements
Governmental
General Transportation Development Corporation
Projects
Funds
Total
Nonspendable:
Loans receivable
$ 439,199 $ $ $
$
$
$ 439,199
Advances to other funds
3,000,000
3,000,000
Prepaid items
107,479
107,479
Subtotal
3,546,678
3,546,678
Restricted for:
Public access television
1,492,810
1,492,810
Debt service
23,621 8,350
31,971
PRSP Section 115 Trust
17,240,051 -
17,240,051
Storm drain system
-
4,033,799
4,033,799
Parks and open space
21,302,884
21,302,884
Environmental management
1,309,649
1,309,649
Streets and road projects
11,828,395
720,197
12,548,592
Housing programs
- 7,177,611
-
7,177,611
Subtotal
18,756,482 11,828,395 7,177,611 8,350
27,366,529
65,137,367
Committed for:
Economic uncertaintyl
24,000,000 - - -
-
24,000,000
Sustainability reserve
127,891
127,891
Capital project reserve
10,000,000
10,000,000
Subtotal
34,127,891
34,127,891
Assigned to:
Encumbrances
5,041,682
5,041,682
Capital projects
-
34,922,310
166,579
35,088,889
Subtotal
5,041,682
34,922,310
166,579
40,130,571
Unassigned
48,696,821
-
-
48,696,821
Total
$ 110,169,554 $ 11,828,395 $ 7,177,611 $ 8,350
$ 34,922,310
$ 27,533,108
$ 191,639,328
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, 2022, 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)
58.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 8 — COMMITMENTS AND CONTINGENCIES (Continued)
As of June 30, 2022, the City had the following encumbrances outstanding:
Governmental Funds:
General Fund $ 5,041,681
Transportation Special Revenue Fund 2,181,032
Housing Development Special Revenue Fund 59,022
Capital Improvements Projects Capital Projects Fund 3,672,662
Other Governmental Funds 1,741,273
Total Encumbrances $ 12,695,670
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, 2022:
VRF Balance as of July 1, 2021
VRF Revenue
VRF Interest
VRF Expended
VRF Balance as of June 30, 2022
358,553
535
(359,088)
Unasserted Claim: The City is aware of a probable reallocation of sales and use tax revenues pursuant to
Revenue and Taxation Code section 7209. The City anticipates a determination by the California
Department of Tax and Fee Administration ("CDTFA") within two to six months from the date of the issuance
of the financial statements. Given the limited information available about this matter, the City is not able
predict the likelihood of an unfavorable outcome or the amount or range of any potential loss. The City will
evaluate options for appealing any adverse determination but has not made any decisions regarding
litigation strategy at this time.
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 Pooled Liability Assurance Network Joint Powers Authority
(PLAN JPA — formerly the Association of Bay Area Governments Pooled Liability Assurance Network or
ABAG PLAN). The risk pool consists of 28 agencies within the San Francisco Bay Area. The stated purpose
of the PLAN JPA is to provide certain levels of liability insurance coverage, claims management, risk
management services, and legal defense to its participating members. PLAN JPA is governed by a Board
of Directors, which comprises officials appointed by each participating member. Premiums paid to PLAN
JPA are subject to possible refund based on the results of actuarial studies and approval by the Board of
Directors. Complete financial statements for PLAN JPA may be obtained from their offices at the following
address: PLAN JPA, c/o Sedgwick, 1750 Creekside Oaks Drive Suite 200, Sacramento, CA, 95833.
Premiums are revised each year based on the City's claims experience and risk exposure. For the year
ended June 30, 2022, the City paid ABAG PLAN premiums of $14,602.
(Continued)
59.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 9 — LIABILITIES UNDER SELF-INSURANCE AND RISK MANAGEMENT (Continued)
Workers' Compensation Liability: The City belongs to the Public Risk Innovation, Solutions and
Management (PRISM) (formerly 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 EIA 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, 2022, the City paid premiums of
$158,781.
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:
Claims liability, beginning of year
Incurred claims and changes in estimate
Claim payments and credits
Total claims liability, end of year
Less current portion
Non -current portion
NOTE 10 — DEFINED BENEFIT PENSION PLAN
2022
$ 1,374,000
671,344
(476,344)
1,569,000
(282,000)
2021
$ 1,527,000
(117,896)
(35,104)
1,374,000
(245,000)
$ 1,287,000 $ 1,129,000
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 at
www.calpers.ca.gov.
(Continued)
.e
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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:
Miscellaneous
Deferred Outflows Net Pension Deferred Inflows
of Resources Liability of Resources
$ 8,882,356 $ 34,058,576 $ 11,658,832
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, 2022, 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%
7.00%
Required employer contribution rates
23.54%
29.63%
Employees Covered: As of the June 30, 2020 actuarial valuation date (most current), the following
employees were covered by the benefit terms of the Plan:
Inactive employees or beneficiaries currently receiving benefits 249
Inactive employees entitled to but not yet receiving benefits 149
Active employees 201
Total 599
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)
61.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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,
2020 using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 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, 2021 actuarial valuations were
determined using the following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Payroll Growth
Projected Salary Increase
Investment Rate of Return
Derived using CalPERS' Membership
Mortality
June 30, 2020
June 30, 2021
Entry -Age Normal Cost Method
7.15%
2.50%
2.75%
Varies by Entry Age and Service (1)
7.00% (2)
(1) Depending on age, service and type of employment
Data for all Funds (3)
(2) Net of pension plan investment expenses and administrative expenses, including inflation
(3) The mortality table used was developed based on CalPERS' 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 CalPERS 2017 experience study report available on CalPERS website.
All other actuarial assumptions used in the June 30, 2020 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 2022.
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)
62.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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)
63.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 10 — DEFINED BENEFIT PENSION PLAN (Continued)
Miscellaneous Plan:
Balance at June 30, 2020
Changes in the year:
Service cost
Interest on the total pension liability
Change of Assumptions
Differences between actual and expected experience
Contribution - employer
Contribution - employee
Net investment income
Administrative expenses
Other miscellaneous income/(expenses)
Benefit payments, including refunds of employee
contributions
Net changes
Balance at June 30, 2021
Total Pension
Liability
Increase (Decrease)
Plan Fiduciary Net Pension
Net Position Liability
$ 152,604,961 $ 104,091,941 $ 48,513,020
3,392,942 - 3,392,942
10,907,002 - 10,907,002
2,212,836 -
2,212,836
- 5,957,595
(5,957,595)
- 1,560,532
(1,560,532)
- 23,553,078
(23,553,078)
- (103,981)
103,981
(7,937,592) (7,937,592)
-
8,575,188 23,029,632
(14,454,444)
$ 161,180,149 $ 127,121,573 $ 34,058,576
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 $ 55,121,458
Current Discount Rate 7.15%
Net Pension Liability $ 34,058,576
1 % Increase 8.15%
Net Pension Liability $ 16,633,651
Pension Plan Fiduciary Net Position: Detailed information about the Plan's fiduciary net position is available
in the separately issued CalPERS financial reports.
(Continued)
64.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 10 — DEFINED BENEFIT PENSION PLAN (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions: For the year ended
June 30, 2022, the City recognized pension expense of $3,799,059. As of June 30, 2022, the City reported
deferred outflows of resources and deferred inflows of resources related to pensions from the following
sources:
Pension contributions subsequent to measurement date
Differences between actual and expected experience
Changes in assumptions
Net differences between projected and actual earnings
on plan investments
Total
Deferred Outflows Deferred Inflows
of Resources of Resources
$ 6,396,051 $
2,486,305
11,658,832
$ 8,882,356 $ 11,658,832
The $6,396,051 of contributions for the fiscal year ended June 30, 2022 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, 2023. 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
2022 $ (1,051,611)
2023 (2,005,392)
2024 (2,437,763)
2025 (3,227,761)
$ (9,172,527)
NOTE 11 — OTHER POST EMPLOYMENT BENEFITS (OPEB)
Plan Description: Permanent employees who retire under the City's Cal PERS 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. An annual
comprehensive financial report of CalPERS, inclusive of their benefit plans, is available at
www.caloers.ca.aov.
(Continued)
65.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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.
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, 2021 (the latest information available), Plan membership consisted of the
following:
Inactive plan members or beneficiaries currently receiving benefit payments 148
Inactive plan members entitled to but not yet receiving benefit payments -
Active plan members 173
321
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, 2021, the annual required contribution rate is 0.54 percent of annual covered
payroll. For the year ended June 30, 2022, the City paid $1,691,000 in healthcare premium payments. Plan
members are not required to contribute to the plan.
(Continued)
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 11 — OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
Net OPEB Liability of the City: The components of the net OPEB liability of the City as of June 30, 2022
(expressed in thousands) were as follows:
Total OPEB liability $ 29,871
Plan fiduciary net position 31,340
City's net OPEB liability (asset) $ (1,469)
Plan fiduciary net position as a percentage of the total OPEB liability 105%
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, 2022 (see the discussion of the Plan's investment policy) are summarized in the following
table:
Asset Class
Fixed income — core
Fixed income — high yield
Equities — domestic
Equities — developed foreign
Equities — emerging foreign
Real estate
Cash
Long -Term Expected
Real Rate of Return
0.53%
1.68%
4.38%
5.68%
6.90%
4.31 %
0.36%
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, 2022:
Asset Class Target Allocation
Fixed income
29%
Equities
62%
Real estate
6%
Commodities
2%
Cash
1 %
Total 100%
(Continued)
67.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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, 2022, the annual money -weighted rate of return on
investments, net of investment expense, was -17.43 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,
2021, 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, 2021 actuarial valuation
include the following:
Valuation date:
Measurement date:
Actuarial Cost Method:
Amortization Method:
Amortization Period:
Asset Valuation Method:
Actuarial Assumptions:
Discount Rate
Payroll Growth
Ultimate Rate of Medical Inflation
Mortality (1)
Health Care Trend
January 1, 2021
June 30, 2022
Entry Age Normal
Level percent of pay closed
10 year
Market value
6.50%
3.00%
4.50%
CalPERS mortality assumptions
The annual cost of healthcare is
expected to decrease from
6.5% in 2020 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)
.:
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
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):
Balance at July 1, 2021
Changes in the year
Service cost
Interest on the total OPEB liability
Change of assumptions
Differences between actual and
expected experience
Contribution — employer
Contribution — employee
Net investment income
Administrative expenses
Benefit payments, including refunds of
Employee contributions
Net changes
Balance at June 30, 2022
Net Increase (Decrease)
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability (Asset)
$ 28,626 $ 38,025 $ (9,399)
1,015 - 1,015
1,921 - 1,921
1,691 (1,691)
(6,568) 6,568
(117) 117
(1,691) (1,691) -
1,245 (6,685) 7,930
$ 29,871 $ 31,340 $ (1,469)
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):
City of Cupertino's net OPEB liability
(asset) for the plan
1 % Current
Decrease Discount Rate
5.50% 6.50%
$ 2,300 $ (1,469) $
1%
Increase
7.50%
(4,602)
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):
City of Cupertino's net OPEB liability
(asset) for the plan
Current
1% Healthcare Cost
Decrease Trend Rate
$ (5,087) $ (1,469) $
(Continued)
1%
Increase
2,995
.•
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 11 — OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
OPEB Expense and Deferred Inflows of Resources Related to OPEB: For the year ended June 30, 2022,
the City recognized OPEB expense of $572,000. As of June 30, 2022, 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 $ 3,953 $ -
Differences between expected and actual experience - 3,173
Changes in assumption 1,089 8
$ 5,042 $ 3,181
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
2023
$ 101
2024
328
2025
(376)
2026
1,808
Total
$ 1,861
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, 2022, 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 — LEASES
The City leases various City assets to other entities via contractual arrangements under the provisions of
GASB Statement No. 87, Leases. The leases include land leases utilized for cell phone towers as well as
property leases of the McClellan Ranch House and the Cupertino Public Library. The City receives fixed
payments from the lessees, with a total of $178,486 recognized as rental revenue and $32,532 recognized
as interest revenue on the lease for the year ended June 30, 2022 and a receivable for the remaining
payments under the leases of $2,495,226.
(Continued)
70.
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 14 — UPCOMING GASB PRONOUCEMENTS (Continued)
In March 2021, 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 2021, 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 April 2022, the GASB issued Statement No. 99, Omnibus 2022. The objectives of this Statement are to
enhance comparability in accounting and financial reporting and to improve the consistency of authoritative
literature by addressing (1) practice issues that have been identified during implementation and application
of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The
requirements related to leases, public -private and public -public partnerships, and subscription -based
information technology arrangements are effective for the City's fiscal year ended June 30, 2023. The
requirements related to financial guarantees and the classification and reporting of derivative instruments
are effective for the City's fiscal year ended June 30, 2024. Management has not determined what impact,
if any, this Statement will have on its financial statements.
In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections. The
primary objective of this Statement is to enhance accounting and financial reporting requirements for
accounting changes and error corrections to provide more understandable, reliable, relevant, consistent,
and comparable information for making decisions or assessing accountability. The requirements of this
Statement are effective for the City's fiscal year ended June 30, 2024. Management has not determined
what impact, if any, this Statement will have on its financial statements.
In June 2022, the GASB issued Statement No. 101, Compensated Absences. The objective of this
Statement is to better meet the information needs of financial statement users by updating the recognition
and measurement guidance for compensated absences. That objective is achieved by aligning the
recognition and measurement guidance under a unified model and by amending certain previously required
disclosures. The requirements of this Statement are effective for the City's fiscal year ended June 30, 2025.
Management has not determined what impact, if any, this Statement will have on its financial statements.
71.
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, 2022
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan
Last 10 years*
Measurement Date
Total Pension Liability
Service Cost
Interest
Changes of benefit terms
Differences between expected and actual experience
Changes in assumptions
Benefit payments, including refunds of employee contributions
Net change in total pension liability
Total pension liability - beginning
Total pension liability - ending (a)
Plan fiduciary net position
Contributions - employer
Contributions - employee
Net investment income
Benefit payments, including refunds of employee contributions
Administrative expense
Other miscellaneous Income/(Expense)
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
Net pension liability - ending (a)-(b)
Plan fiduciary net position as a percentage of the total pension liability
Covered payroll
Net pension liability as percentage of covered payroll
6130/2014
6/30/2015
6/30/2016
6/30/2017
6/30/2018
613012019
6130/2020
6/30/2021
$ 2,504,228
$ 2,444,939 $
2,525,314 $
2,895,549
$ 3,058,629 $
3,324,361
$ 3,241,719 $
3,392,942
7,349,943
7,789,134
8,253,983
8,619,588
9,065,322
9,800,245
10,302,395
10,907,002
-
372,917
696,347
(182,397)
1,184,340
4,144,384
444,188
2,212,836
-
(1,883,633)
-
7,125,558
(847,606)
-
-
-
(4,351,614)
(4,637,005)
(5,151,298)
(5,346,890)
(6,051,845)
(6,193,271)
(6,815,494)
(7,937,592)
5,502,557
4,086,352
6,324,346
13,111,408
6,408,840
11,075,719
7,172,808
8,575,188
98,922,931
104,425,488
108,511,840
114,836,186
127,947,594
134,356,434
145,432,153
152,604,961
$104,425,488
$108,511,840 $114,836,186 $127,947,594
$134,356,434 $145,432,153
$152,604,961 $ 161,180,149
$ 2,891,986
$ 3,301,642 $
3,659,170 $
4,183,822
$ 4,263,020 $
4,654,841 $
5,308,580 $
5,957,595
1,061,884
1,149,894
1,169,921
1,236,052
1,506,888
1,364,731
1,429,446
1,560,532
11,379,985
1,724,204
466,704
8,749,288
7,347,936
6,096,968
4,975,822
23,553,078
(4,351,614)
(4,637,005)
(5,151,298)
(5,346,890)
(6,051,845)
(6,193,271)
(6,815,494)
(7,937,592)
-
(87,780)
(47,536)
(115,304)
(392,346)
(66,707)
(140,036)
(103,981)
216
10,982,241
1,450,955
96,961
8,706,968
6,673,653
5,856,778
4,758,318
23,029,632
65,566,067
76,548,308
77,999,263
78,096,224
86,803,192
93,476,845
99,333,623
104,091,941
$ 76,548,308
$ 77,999,263 $ 78,096,224 $ 86,803,192
$ 93,476,845 $ 99,333,623 $104,091,941 $ 127,121,573
$ 27,877,180 $ 30,512,577 $ 36,739,962 $ 41,144,402 $ 40,879,589 $ 46,098,530 $ 48,513,020 $ 34,058,576
73.30% 71.881/6 68.01 % 67.84 % 69.57% 68.30% 68.21 % 78.871/6
$ 13,080,327 $ 13,504,966 $ 14,336,969 $ 15,595,136 $ 16,809,349 $ 18,461,490 $ 18,662,748 $ 20,427,103
213.12 % 225.94 % 256.26 % 263.83 % 243.20 % 249.70 % 259.95 % 166.731/6
Notes to Schedule:
Benefit changes. The figures above do not include any liability impact that may have resulted from plan changes %filch occurred after She actuarial valuation dale. 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 2020 or 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 "re 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 eight years are shown.
Source: CalPERS Accounting Valuation
72.
CITY OF CUPERTINO, CALIFORNIA
SCHEDULE OF CONTRIBUTIONS - PENSION
For the year ended June 30, 2022
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan
Last 10 years'
2015
2016 2017
2018 2019
2020 2021
2022
Actuarially determined contribution
$ 3,608,853
$ 3,659,170 $ 4,183,821
$ 4,263,020 $ 4,654,841
$ 5,308,577 $ 5,957,573
$ 6,396,061
Contributions in relation to the actuarially determined contributions
(3,608,a53)
(3,659,170) (4,183,821)
(4,263,020) (4,654,841)
(5,308,577) (5,957,573)
(6,396,061)
Contribution deficiency (excess)
$ -
$ - $ -
$ - $ -
$ - $ -
$
Covered payroll
$ 13,504,966
$ 14,336,969 $ 15,595,136
$ 16,809,349 $ 18,461,490
$ 18,662,748 $ 20,427,103
$ 20,455,494
Contributions as a percentage of covered payroll
26.72 %
25.52 % 26.83 %
25.36 % 25.21 %
28.44 % 29.17%
31.27
Notes to Schedule
Valuation date:
6/30/2013
6/30/2014 6/30/2015
6/30/2016 6/30/2017
6/30/2018 6/30/2019
6/30/2020
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age
Amortization method Leval percentage of payroll, closed
Remaining amortization period 19 Years as of the Valuation Date
Asset valuation method 15 Year Smoothed Market
Inflation 2.50
Salary increases Varies by Entry age and Service
Investment rate of return 7.15 % 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 CaIPERS 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 1st year of implementation, therefore only eight years are shown.
Source: City of Cupertinds general ledger and CaIPERS Actuarial Valuation
Notes to Schedule:
Benefit chances. 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).
Chances in assumptions. None in 2019 or 2020. 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 e)pense.) 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: CAPERS Accounting Valuation
73.
CITY OF CUPERTINO, CALIFORNIA
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY
AND RELATED RATIOS
For the year ended June 30, 2022
Single Employer Defined Benefit OPEB Plan
Last 10 years*
Expressed in thousands
Total OPEB liability
Service cost
Interest
Changes of benefit terms
Differences between expected and actual experience
Changes of assumptions
Benefit payments
Net change in total OPEB liability
Total OPEB liability - beginning
Total OPEB liability - ending (a)
Plan fiduciary net position
Contributions - employer
Net investment income
Benefit payments
Administrative expense
Net change in fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
Net OPEB liability (asset) - ending (a-b)
Plan fiduciary net position as a percentage of the total OPEB liability
Covered payroll
Net OPEB liability (asset) as a percentage of covered payroll
Notes to schedule:
6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022
$ 908
$ 1,008 $
865 $
1,009 $
844 $
1,015
1,781
1,876
2,005
1,985
2,042
1,921
(1,808)
-
(4,688)
(37)
1,412
640
(1,333)
(1,419)
(1,423)
(1,141)
(1,550)
(1,691)
1,356
1,465
(398)
3,265
(2,712)
1,245
25,650
27,006
28,471
28,073
31,338
28,626
$ 27,006
$ 28,471 $
28,073 $
31,338 $
28,626 $
29,871
1,333
1,419
1,423
1,141
1,550
1,691
2,960
2,365
1,259
219
8,776
(6,568)
(1,333)
(1,419)
(1,423)
(1,141)
(1,550)
(1,691)
(49)
(54)
(97)
(67)
(121)
(117)
2,911
2,311
1,162
152
8,655
(6,685)
22,834
25,745
28,056
29,218
29,370
38,025
$ 25,745
$ 28,056 $
29,218 $
29,370 $
38,025 $
31,340
2.65
$ 1,261
$ 415 $
(1,145) $
1,968 $
(9,399) $
(1,469)
95.33%
98.54%
104.08%
93.72%
132.83%
104.92%
$ 17,255
$ 19,153 $
20,086 $
21,643 $
23,082 $
24,015
7.31%
2.17%
-5.70%
9.09%
-40.72%
-6.12%
* - Fiscal year 2017 was the 1st year of implementation, therefore only six years are shown.
74.
CITY OF CUPERTINO, CALIFORNIA
SCHEDULE OF CONTRIBUTIONS - OPEB
For the year ended June 30, 2022
Single Employer Defined Benefit OPEB Plan
Last 10 years*
Expressed in thousands
6/30/2017 6/30/2018
6/30/2019
6/30/2020
6/30/2021
6/30/2022
Actuarially determined contribution
$ 1,117 $ 1,362 $
1,300 $
1,401
$ 124
$ 129
Contributions in relation to the actuarially determined contributions 1,333 1,419
1,423
1,141
1,550
1,691
Contribution deficiency (excess)
$ (216) $ (57) $ (123) $
260
$ (1,426)
$ (1,562)
Covered payroll
$ 17,255 $ 19,153 $
20,086 $
21,643
$ 23,082
$ 24,015
Contributions as a percentage of covered payroll
7.73 % 7.41 %
7.08 %
5.27 %
6.72 %
7.04
Notes to schedule:
* - Fiscal year 2017 was the 1st year of implementation, therefore only six years are shown.
Valuation Date 1/1/2021
Methods and assumptions used to determine contribution rates
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Discount rate
Amortization growth rate
Ultimate rate of medical inflation
Salary increases
Mortality
Entry age
2.65
Varies by Entry age and Service
Market Value of Assets
6.50
2.75
4.30
2.75 % plus merit component based on years of service
CalPERS mortality assumptions
75.
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.
76.
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, 2022
Variance
Budgeted
Amounts
Positive
Original
Final
Actual (Negative)
Revenues
Use of money and property
$ -
$ -
$ - $ -
Total revenues
-
-
- -
Expenditures
Debt service:
Principal
1,880,000
1,880,000
1,880,000 -
Interest and fiscal charges
796,000
796,000
796,000 -
Total expenditures
2,676,000
2,676,000
2,676,000 -
Excess (deficiency) of revenues
over expenditures
(2,676,000)
(2,676,000)
(2,676,000) -
Other financing sources (uses)
Transfers in
2,621,000
2,621,000
2,621,000 -
Total other financing sources (uses)
2,621,000
2,621,000
2,621,000 -
Net change in fund balance
$ (55,000)
$ (55,000)
(55,000) $ -
Beginning fund balance
63,350
Ending fund balance
$ 8,350
77.
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.
78.
Assets
Cash and investments
Accounts receivable
Total assets
Liabilities
Accounts payable and
accruals
Total liabilities
Fund balances
Restricted
Assigned
Total fund balances
Total liabilities and
fund balances
CITY OF CUPERTINO, CALIFORNIA
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
June 30, 2022
Special Revenue Funds
Storm Environmental
Drain Park Management/ Traffic
Improvement Dedication Clean Creeks Impact
Capital Projects
Fund
Total
Nonmajor
Stevens Creek Governmental
Corridor Park Funds
$ 4,033,799 $ 21, 323, 792 $ 1,297,056 $ 720,197 $ 166,579 $ 27, 541, 423
- - 33,113 - - 33,113
$ 4,033,799 $ 21,323,792 $ 1,330,169 $ 720,197 $ 166,579 $ 27,574,536
$ - $ 20,908 $ 20,520 $ - $ - $ 41,428
20,908 20,520 - - 41,428
4,033,799 21, 302, 884 1,309,649 720,197 - 27, 366, 529
- - - - 166,579 166,579
4,033,799 21, 302, 884 1,309,649 720,197 166,579 27, 533,108
$ 4,033,799 $ 21, 323, 792 $ 1,330,169 $ 720,197 $ 166,579 $ 27, 574, 536
79.
Revenues
Taxes
Use of money and property
Charges for services
Fines and forfeitures
Total revenues
Expenditures
Current:
Public works
Capital outlay
Total expenditures
Excess of revenues over
(under) expenditures
Other finances sources (uses)
Transfers in
Transfers out
Total other financing
sources (uses)
Net change in fund balances
Beginning fund balances
Ending fund balances
CITY OF CUPERTINO, CALIFORNIA
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
For the year ended June 30, 2022
Special Revenue Funds
Storm Environmental
Drain Park Management/ Traffic
Improvement Dedication Clean Creeks Impact
Capital Projects
Fund
Stevens Creek
Corridor Park
Total
Nonmajor
Governmental
Funds
$ 131,135 $ 9,045,000 $ - $ - $ - $ 9,176,135
(133,241) (730,897) (44,526) (24,639) (7,439) (940,742)
- 1,477,784 275,838 - 1,753,622
- 3,563 - - 3,563
(2,106) 8,314,103 1,436,821 251,199 (7,439) 9,992,578
- - 1,648,795 - - 1,648,795
48,120 354,894 - - 5,039 408,053
48,120 354,894 1,648,795 - 5,039 2,056,848
(50,226) 7,959,209 (211,974) 251,199 (12,478) 7,935,730
3,650,000 - -
(15,000) (366,000) -
3,635,000 (366,000) -
(50,226) 11,594,209 (577,974) 251,199
4,084,025 9,708,675 1,887,623 468,998
$ 4,033,799 $ 21, 302, 884 $ 1,309,649 $ 720,197
("12,4to)
179,057
$ 166,579
3,650,000
(381,000)
3,269,000
11, 204, 730
16, 328, 378
$ 27,533,108
e
CITY OF CUPERTINO, CALIFORNIA
NON -MAJOR GOVERNMENTAL FUNDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES — BUDGET AND ACTUAL
For the year ended June 30, 2022
Revenues
Taxes
Use of money and property
Charges for services
Fines for forfeitures
Total revenues
Expenditures
Current:
Public works
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses)
Transfers in
Transfers (out)
Total other financing sources (uses)
Net change in fund balance
Beginning fund balance
Ending fund balance
Special Revenue Funds
Storm Drain Improvement
Variance
Original Final Positive
Budget Budget Actual (Nec
iative)
$ 79,237 $ 79,237 $ 131,135 $ 51,898
- - (133,241) (133,241)
79,237 79,237 (2,106) (81,343)
2,000,000 48,121 48,120 1
2,000,000 48,121 48,120 1
(1,920,763) 31,116 (50,226) (81,342)
$(1,920,763) $ 31,116
(Continued)
(50,226) $ (81,342)
4,084,025
$ 4,033,799
81.
CITY OF CUPERTINO, CALIFORNIA
NON -MAJOR GOVERNMENTAL FUNDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES — BUDGET AND ACTUAL
For the year ended June 30, 2022
Revenues
Taxes
Use of money and property
Charges for services
Fines for forfeitures
Total revenues
Expenditures
Current:
Public works
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses)
Transfers in
Transfers (out)
Total other financing sources (uses)
Net change in fund balance
Beginning fund balance
Ending fund balance
Special Revenue Funds
Park Dedication
Original Final
Budget Budget
Variance
Positive
Actual (Negative)
$ 9,045,000 $ 9,045,000
(730,897) (730,897)
4,650,000 354,894 354,894 4,650,000 354,894 354,894 -
(4,650,000) (354,894) 7,959,209 8,314,103
3,650,000
3,650,000
3,650,000 -
(15,000)
(15,000)
(15,000)
3,635,000
3,635,000
3,635,000 -
$ (1,015,000)
$ 3,280,106
11, 594, 209 $ 8,314,103
9,708,675
$21,302,884
(Continued)
82.
CITY OF CUPERTINO, CALIFORNIA
NON -MAJOR GOVERNMENTAL FUNDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES — BUDGET AND ACTUAL
For the year ended June 30, 2022
Revenues
Taxes
Use of money and property
Charges for services
Fines for forfeitures
Total revenues
Expenditures
Current:
Public works
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses)
Transfers in
Transfers (out)
Total other financing sources (uses)
Net change in fund balance
Beginning fund balance
Ending fund balance
Special Revenue Funds
Environmental Manaaement/Clean Creeks
Variance
Original Final Positive
Budget Budget Actual (Negative)
908
908
(44,526)
(45,434)
1,543,100
1,543,100
1,477,784
(65,316)
10,000
10,000
3,563
(6,437)
1,554,008
1,554,008
1,436,821
(117,187)
1,965,083 2,083,958 1,648,795 435,163
(411,075) (529,950) (211,974) 317,976
(366,000) (366,000) (366,000) -
(366,000) (366,000) (366,000) -
$ (777,075) $ (895,950) (577,974) $ 317,976
1,887,623
$ 1,309,649
83.
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 2021-22.
Blackberry Farm Fund: This fund accounts for activities related to operating the City -owned golf course.
84.
CITY OF CUPERTINO, CALIFORNIA
NON -MAJOR ENTERPRISE FUND
COMBINING STATEMENT OF NET POSITION
For the year ended June 30, 2022
Blackberry
Farm
ASSETS
Current assets
Cash and cash investments (Note 2) $ 1,192,375
Accounts receivable 170
Total current assets 1,192,545
Noncurrent assets
Capital assets (Note 5):
Depreciable, net of
accumulated depreciation 20,874
Total non current assets 20,874
Total assets 1,213,419
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 10) 58,696
Related to OPEB (Note 11) 13,099
Total deferred outflows of resources 71,795
LIABILITIES
Current liabilities
Accounts payable and accruals 38,577
Compensated absences (Note 1) 1,477
Unearned revenue 94,631
Total current liabilities 134,685
Noncurrent liabilities
Compensated absences (Note 1) 17,428
Net pension liability (Note 10) 250,235
Total noncurrent liabilities 267,663
Total liabilities 402,348
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 10) 26,645
Total deferred inflows of resources 26,645
NET POSITION (Note 7)
Net investment in capital assets 20,874
Restricted - OPEB 13,099
Unrestricted 822,248
Total Net Position $ 856,221
85.
CITY OF CUPERTINO, CALIFORNIA
NON -MAJOR ENTERPRISE FUND
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
For the year ended June 30, 2022
Blackberry
Farm
Operating revenues
Charges for services $ 555,103
Other 47,675
Total operating revenue 602,778
Operating expenses
Salaries and benefits
145,634
Materials and supplies
165,714
Contractual services
341,004
Depreciation (Note 5)
2,832
Total operating expenses
655,184
Operating income (loss) (52,406)
Nonoperating revenues
Investment income (39,875)
Total nonoperating revenues (39,875)
Income (loss) before transfers (92,281)
Transfers in (Note 4) 79,992
Changes in net position (12,289)
Net position - beginning of year 868,510
Net position - end of year $ 856,221
:.
CITY OF CUPERTINO, CALIFORNIA
NON -MAJOR ENTERPRISE FUND
COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
Blackberry
Farm
Cash flows from operating activities
Cash received from customers $ 638,627
Cash payments to suppliers for
goods and services (479,723)
Cash payments to employees for salaries and benefits (144,200)
Net cash provided (used) by operating activities 14,704
Cash flows from noncapital financing activities
Transfers in 79,992
Cash flows from noncapital financing activities 79,992
Cash Flows from Investing Activities
Interest received 14,316
Sale of investments (54,191)
Cash flows from investing activities (39,875)
Net cash flows 54,821
Cash and cash investments at beginning of year 1,137,554
Cash and cash investments at end of year $ 1,192,375
Reconciliation of operating income (loss) to
to net cash provided by operating activities:
Operating income (loss)
$ (52,406)
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation
2,832
Change in assets, deferred outflows of resources, liabilities,
and deferred inflows of resources
Due to retirement system
(4,992)
Due to OPEB system
(9,674)
Accounts payable and accruals
26,995
Unearned revenue
36,019
Compensated absences
16,100
Net cash provided (used) by operating activities
$ 14,704
87.
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 claims and insurance premiums related to workers'
compensation.
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
::
CITY OF CUPERTINO, CALIFORNIA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
For the year ended June 30, 2022
Compensated
Absences and
Information
Workers'
Equipment
Long -Term
Retiree
Technology
Compensation
Revolving
Disability
Medical
Total
ASSETS
Current assets:
Cash and investments
$ 2,113,332
$ 3,855,949
$ 1,117,855
$ 337,336
$ 26,554 $
7,451,026
Total current assets
2,113,332
3,855,949
1,117,855
337,336
26,554
7,451,026
Noncurrent assets:
Net OPEB asset (Note 11)
58,885
738
21,506
-
-
81,129
Capital assets (Note 5):
Nondepreciable
-
-
7,828
7,828
Capital assets, depreciable net
ofaccumulated depreciation
610,680
-
2,359,860
2,970,540
Total noncurrent assets
669,565
738
2,389,194
-
3,059,497
Total assets
2,782,897
3,856,687
3,507,049
337,336
26,554
10,510,523
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 10)
383,807
13,410
121,912
-
-
519,129
Related to OPEB (Note 11)
261,849
3,946
80,507
346,302
Total deferred outflows of resources
645,656
17,356
202,419
865,431
LIABILITIES
Current liabilities
Accounts payable and accruals
71,117
47,712
118,829
Accrued payroll and benefits
-
72
72
Due to other funds
-
-
539,204
539,204
Compensated absences
32,803
1,429
2,609
36,841
Claims payable
-
282,000
-
282,000
Total current liabilities
103,920
283,429
589,597
976,946
Noncurrent liabilities
Compensated absences
252,049
10,982
20,048
283,079
Claims payable
-
1,287,000
-
1,287,000
Net pension liability (Note 10)
1,432,761
48,818
444,364
1,925,943
Total noncurrent liabilities
1,684,810
1,346,800
464,412
3,496,022
Total liabilities
1,788,730
1,630,229
1,054,009
4,472,968
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 10)
628,135
15,198
156,522
799,855
Related to OPEB (Note 11)
135,541
1,863
48,735
186,139
Total deferred inflows of resources
763,676
17,061
205,257
985,994
NET POSITION
Net investment in capital assets
610,680
-
2,367,688
2,978,368
Restricted - OPEB
185,193
2,821
53,278
-
-
241,292
Unrestricted
80,274
2,223,932
29,236
337,336
26,554
2,697,332
Total net position
$ 876,147
$ 2,226,753
$ 2,450,202
$ 337,336
$ 26,554 $
5,916,992
�iM
Operating revenues
Charges for services
Other
Total operating revenues
Operating expenses
Salaries and related expenses
Materials and supplies
Contractual services
Insurance claims and premiums
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating revenue (expenses)
Interest income
Gain on sale of capital assets
Total nonoperating
revenue (expenses)
Income (loss) before transfers
Transfers in
Change in net position
Beginning net position
Ending net position
CITY OF CUPERTINO, CALIFORNIA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
For the year ended June 30, 2022
Information
Technology
$ 2,959,603
Workers'
Compensation
$ 356,831
Equipment
Revolving
$ 1,718,598
2,818
Compensated
Absences and
Long -Term
Disability
$ 101,870
2,959,603 356,831 1,721,416 101,870
1,739,571
1,210,730
113,496
285,961
3,349,758
(390,155)
(69,415)
(69,415)
(459, 570)
192,078
(267,492)
1,143, 639
$ 876,147
39,137
28,167
476,344
J.FJ, O-FO
(186,817)
(126, 776)
(126, 776)
(313,593)
kJ IJ, JZ9J1
2,540,346
$ 2,226,753
388,348
385,994
52,177
640,492
1,467,011
254,405
10,326
17,645
27,971
282,376
366,000
648,376
1,801,826
$ 2,450,202
8,952
425,200
434,152
(332,282)
(21,623)
(21,623)
(353,905)
21,570
(332,335)
669,671
$ 337,336
Reti ree
Medical Total
$ - $ 5,136, 902
2,818
5,139, 720
1,342,158 3,509,214
14,881 1,648,724
- 165,673
901,544
- 926,453
1,357,039 7,151,608
(1,357,039) (2,011,888)
4,800 (202,688)
4,800
(1,352,239)
1,221,204
(131,035)
157,589
$ 26,554
17,645
(185, 043)
(2,196,931)
1,800,852
(396,079)
6,313,071
$ 5,916,992
Cash flows from operating activities
Cash received from customers
Cash payments to suppliers for
goods and services
Cash payments to employees
Cash payment for judgment
and claims
Net cash from operating activities
Cash flows from noncapital
financing activities
Transfers in
Net cash from noncapital
financing activities
Cash flows from capital and related
financing activities
Acquisition of capital assets
Sale of capital assets
Net cash from capital and related
financing activities
Cash flows from investing activities
Interest received
Sale of investments
Net cash flows from
investing activities
Net cash flows
Cash and cash investments beginning of year
Cash and cash investments end of year
CITY OF CUPERTINO, CALIFORNIA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
Compensated
Absences and
Information Workers' Equipment Long -Term Retiree
Technology Compensation Revolving Disability Medical Total
$ 2,959,603
$ 356,831 $
1,721,416
$ 101,870 $
-
$ 5,139,720
(1,459,760)
(28,167)
(416,183)
(8,952)
(14,881)
(1,927,943)
(1,977,586)
(41,352)
(459,057)
-
(1,342,158)
(3,820,153)
-
(281,344)
-
(425,200)
-
(706,544)
(477,743)
5,968
846,176
(332,282)
(1,357,039)
(1,314,920)
192,078
-
366,000
21,570
1,221,204
1,800,852
192,078
-
366,000
21,570
1,221,204
1,800,852
(28,638)
-
(530,371)
-
-
(559,009)
-
-
17,645
-
-
17,645
(28,638)
- (512,726)
(541,364)
24,907
45,079
10,326
7,862
4,800
92,974
(94,322)
(171,855)
-
(29,485)
-
(295,662)
(69,415)
(126,776)
10,326
(21,623)
4,800
(202,688)
(383,718)
(120,808)
709,776
(332,335)
(131,035)
(258,120)
2,497,050
3,976,757
408,079
669,671
157,589
7,709,146
$ 2,113,332
$ 3,855,949 $
1,117,855
$ 337,336 $
26,554
$ 7,451,026
(Continued)
91.
Reconciliation of operating income (loss)
to net cash flows from operating activities
Operating income (loss)
Adjustments to reconcile operating
income (loss) to net cash flows
from operating activities
Depreciation
Change in assets, deferred outflows of resources,
liabilities and deferred inflows of resources
Due to retirement system
Due to OPEB system
Accounts payable and accruals
Compensated absences
Claims payable
Cash flows from operating activities
CITY OF CUPERTINO, CALIFORNIA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
Information Workers' Equipment
Technology Compensation Revolving
Compensated
Absences and
Long -Term Retiree
Disability Medical Total
$ (390,155) $ (186,817) $ 254,405 $ (332,282) $ (1,357,039) $ (2,011,888)
285,961
- 640,492
- 926,453
(140,738)
(3,378)
(35,110) -
- (179,226)
(58,702)
(601)
(17,670) -
- (76,973)
(135,534)
-
21,988 -
- (113,546)
(38,575)
1,764
(17,929) -
- (54,740)
-
195,000
- -
- 195,000
$ (477,743) $
5,968 $
846,176 $ (332,282) $
(1,357,039) $ (1,314,920)
92.
STATISTICAL SECTION
This part of the City's Annual Comprehensive 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. 2022 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 Annual Comprehensive
Financial Reports for the relevant year.
93.
CITY OF CUPERTINO
Net Positions/Assets by Component
Last Ten Fiscal Years
(Accrual basis of accounting)
(Unaudited)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Governmental Activities
Net investment in capital assets
$ 116,343,918
$ 122,081,223
$ 131,425,677
$ 148,168,074
$ 153,239,534
$ 167,606,366 $
170,973,897
$ 177,128,134
$ 186,503,116 $
196,915,823
Restricted
8,351,118
24,232,367
38,327,705
34,861,807
34,991,692
32,073,195
45,405,508
48,005,800
53,711,040
68,300,759
Unrestricted
47,558,701
63,150,548
51,003,950
51,164,063
59,385,309
50,457,871
51,190,017
66,493,336
83,458,299
93,104,631
Total governmental activities net position/assets
172,253,737
209,464,138
220,757,332
234,193,944
247,616,535
250,137,432
267,569,422
291,627,270
323,672,455
358,321,213
Business -Type Activities
Net investment in capital assets
762,013
1,110,414
2,079,561
1,708,183
1,972,169
1,597,700
1,318,744
1,118,882
2,090,530
2,089,569
Restricted
-
-
-
-
-
-
-
-
-
166,607
Unrestricted
10,865,479
10,292,210
6,604,578
7,375,444
9,092,584
8,051,015
6,737,758
8,134,944
9,374,129
8,422,930
Total business -type activities net position/assets
11,627,492
11,402,624
8,684,139
9,083,627
11,064,753
9,648,715
8,056,502
9,253,826
11,464,659
10,679,106
Primary Government
Net investment in capital assets
117,105,931
123,191,637
133,505,238
149,876,257
155,211,703
169,204,066
172,292,641
178,247,016
188,593,646
199,005,392
Restricted
8,351,118
24,232,367
38,327,705
34,861,807
34,991,692
32,073,195
45,405,508
48,005,800
53,711,040
68,467,366
Unrestricted
58,424,180
73,442,758
57,608,528
58,539,507
68,477,893
58,508,886
57,927,775
74,628,280
92,832,428
101,527,561
(1),(2)
$ 183,881,229
$ 220,866,762
$ 229,441,471
$ 243,277,571
$ 258,681,288
$ 259,786,147 $
275,625,924
$ 300,881,096
$ 335,137,114 $
369,000,319
(1) Represents net assets thru June 30, 2013 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
94.
Expenses
Governmental Activities:
Administration
Law enforcement
Public and environmental affairs
Administrative services
Recreation services
Community development
Public works
Interest on long-term debt
Total governmental activities expense
Business -Type Activities:
Resources recovery
Blackberry farm
Cupertino sports center
Recreation programs
Total business -type activities expense
Total primary government expense
CITY OF CUPERTINO
Change in Net Positions/Assets
Last Ten Fiscal Years
(Accrual basis of accounting)
(Unaudited)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
$ 2,367,255 $ 4,529,539 $ 3,286,919 $ 3,710,388 $ 2,873,744 $ 5,612,733 $ 6,849,046 $ 7,974,520 $ 3,637,467 $ 7,293,244
9,274,536 10, 062 ,192 10, 705, 328 11, 316, 271 12, 528, 328 12,674,042 13, 381,113 14, 698,130 15, 211, 646 16,100, 903
1,595,982 512,895 649,442 575,260 1,884,165 3,244,846 3,210,343 3,637,354 1,721,729 2,004,515
4,171,440 2,662,008 4,300,336 2,994,611 5,898,479 4,415,647 4,290,818 5,175,596 5,358,183 5,363,745
4,473,861 4,866,974 5,365,282 5,758,194 10,651,557 9,352,551 7,389,915 8,763,194 1,182,662 3,976,793
4,676,273 9,108,949 5,976,797 6,259,734 13,775,591 16,789,351 10,470,973 10,286,317 11,495,788 12,209,547
22,149,063 21,143,331 27,893,361 31,313,396 32,491,244 28,995,382 31,870,165 33,339,191 41,870,240 35,653,588
1,256,922 1,130,428 1,120,138 1,077,538 1,035,738 993,038 949,438 882,837 397,682 636,960
49,965,332 54,016,316 59,297,603 63,005,392 81,138,846 82,077,590 78,411,811 84,757,139 80,875,397 83,239,295
1,764,993 2,159,047 2,548,461 2,997,200 2,991,177 2,594,511 1,735,885 2,213,404 1,670,261 1,837,781
463,336 571,000 547,185 576,177 597,406 656,112 645,469 663,663 535,274 655,184
2,011,483 2,221,703 2,269,420 2,299,210 2,159,243 2,633,748 3,036,037 2,883,903 2,182,900 3,396,146
2,025,416 2,730,765 2,342,457 3,136,011 2,351,501 3,232,593 2,923,336 3,141,225 1,117,244 1,617,717
6,265,228 7,682,515 7,707,523 9,008,598 8,099,327 9,116,964 8,340,727 8,902,195 5,505,679 7,506,828
56,230,560 61,698,831 67,005,126 72,013,990 89,238,173 91,194,554 86,752,538 93,659,334 86,381,076 90,746,123
Program Revenues
Governmental Activities:
Charges for services:
Administration
5,676
1,087,393
322,534
369,069
3,992,716
5,062,988
1,319,395
2,091,811
2,387,412
2,551,205
Law enforcement
637,595
725,631
590,378
664,483
603,194
732,544
889,923
1,102,888
550,051
940,797
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
5,232,679
7,457,032
Recreation services
970,292
955,081
1,798,134
1,421,185
2,016,159
1,589,134
1,563,262
1,309,906
264,426
653,994
Community development
6,765,564
6,649,292
8,511,745
10,534,457
10,902,822
8,598,935
7,470,690
5,859,847
5,736,587
5,768,850
Public works
593,501
7,916,897
2,869,357
6,358,870
6,873,487
4,720,646
4,504,104
5,657,315
3,966,206
4,015,183
Operating grants and contributions
2,752,493
10,000,131
6,002,617
1,851,282
2,313,632
4,819,696
2,557,470
5,794,443
5,998,209
7,601,210
Capital grants and contributions
719,880
569,159
4,022,190
362,491
245,288
271,587
1,082,243
1,046,756
1,792,376
1,282,617
Total governmental activities program revenue
12,445,001
27,903,584
24,639,923
21,962,337
30,512,925
28,431,415
22,500,818
26,752,146
25,927,946
30,270,888
Business -Type Activities:
Charges for services:
Resources recovery
1,882,517
2,074,251
2,591,276
2,664,888
2,792,190
2,559,862
1,750,279
1,821,677
1,819,861
1,545,683
Blackberry farm
386,753
302,472
388,091
334,529
325,224
345,667
316,615
338,212
610,603
602,778
Cupertino sports center
2,150,139
2,188,127
2,152,498
2,224,146
2,238,023
2,403,665
2,349,468
2,365,667
1,810,194
2,796,329
Recreation programs
2,409,720
2,480,209
2,532,800
2,466,336
2,778,588
2,516,678
1,986,781
1,588,576
590,871
1,294,128
Total business -type activities program revenu(
6,829,129
7,045,059
7,664,665
7,689,899
8,134,025
7,825,872
6,403,143
6,114,132
4,831,529
6,238,918
Total primary government program revenue
19,274,130
34,948,643
32,304,588
29,652,236
38,646,950
36,257,287
28,903,961
32,866,278
30,759,475
36,509,806
(continued)
95.
Net(Expense)Revenue:
Governmental activities
Business -Type activities
Total primary government net expense
General Revenues and Transfers
Governmental Activities:
Taxes:
Property taxes
Property taxes in lieu of motor vehicle fee
Sales tax
Transient occupancy tax
Utility user tax
Franchise tax
Othertaxes
Intergovernmental (1)
Investment earnings
Miscellaneous
Gain on sale of capital assets
Transfers -fund closings (2)
Transfers
Total governmental activities
Business -Type Activities:
Investment earnings
Transfers
Total business -type activities
Total primary government
Change in Net Position/Assets (3)
Governmental activities
Business -Type activities
Total primary government
CITY OF CUPERTINO
Change in Net Positions/Assets
Last Ten Fiscal Years
(Accrual basis of accounting)
(Unaudited)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
$ (37,520,331) $ (26,112,732) $ (34,657,680) $ (41,043,055) $ (50,625,921) $ (53,646,175) $ (55,910,993) $ (58,004,993) $ (54,947,451) $ (52,968,407)
563,901 (637,456) (42,858) (1,318,699) 34,698 (1,291,092) (1,937,584) (2,788,063) (674,150) (1,267,910)
(36,956,430) (26,750,188) (34,700,538) (42,361,754) (50,591,223) (54,937,267) (57,848,577) (60,793,056) (55,621,601) (54,236,317)
8,793,110
9,169,183
11,864,027
13,251,840
14,881,533
17,082,005
18,117,304
19,197,994
20,322,779
4,772,355
5,289,476
6,330,436
6,967,237
7,552,272
8,219,090
8,489,541
9,079,845
9,401,632
18,721,193
19,794,036
21,350,056
26,932,012
26,164,531
24,901,779
35,657,214
42,581,070
43,646,813
3,768,504
4,590,156
5,852,244
6,023,681
6,810,718
8,901,337
7,286,083
2,141,058
4,404,958
2,994,526
3,098,639
3,370,830
3,082,407
3,146,398
3,089,922
3,182,086
3,074,358
3,356,389
2,848,950
2,775,892
3,478,024
3,409,572
3,563,820
3,445,253
3,418,908
3,368,286
3,479,554
4,561,219
18,791,559
2,818,019
3,258,118
1,943,652
3,299,587
1,774,235
3,022,333
11,117,528
30,256
25,294
24,111
26,118
31,013
28,844
47,391
43,675
67,762
176,782
133,243
40,751
807,287
694,730
916,638
3,258,550
5,690,723
4,147,907
(9,241,781)
126,690
57,005
(2)
219,053
2,004,906
1,834,492
1,187,741
1,922,356
3,185,110
1,948,332
-
-
23,715,897
580
-
740,570
3,875
-
-
-
-
-
-
-
272,011
-
-
-
(150,000)
(401,350)
872,340
(1,635,000)
(1,874,120)
107,030
(75,000)
(3,523,000)
(2,849,000)
(886,801)
46,643,585
63,323,133
24,628,986
54,479,667
64,048,512
67,692,667
73,342,983
82,062,841
86,992,636
87,617,165
31,573 11,238 42,531 82,187 59,012 75,663 270,371 462,387 35,983 (404,444)
150,000 401,350 (872,340) 1,635,000 1,874,120 (107,030) 75,000 3,523,000 2,849,000 886,801
181,573 412,588 (829,809) 1,717,187 1,933,132 (31,367) 345,371 3,985,387 2,884,983 482,357
46,825,158 63,735,721 23,799,177 56,196,854 65,981,644 67,661,300 73,688,354 86,048,228 89,877,619 88,099,522
9,123,254 37,210,401 (10,028,694) 13,436,612 13,422,591 14,046,492 17,431,990 24,057,848 32,045,185 34,648,758
745,474 (224,868) (872,667) 398,488 1,967,830 (1,322,459) (1,592,213) 1,197,324 2,210,833 (785,553)
$ 9,868,728 $ 36,985,533 $ (10,901,361) $ 13,835,100 $ 15,390,421 $ 12,724,033 $ 15,839,777 $ 25,255,172 $ 34,256,018 $ 33,863,205
(1) The 2006 state take -away of sales taxes, property taxes and vehicle license fees is reported in this category.
(2) Asset and liability transfer from the closed City Channel/Web Internal Service Fund in 2017.
(3) Representes changes in net assets thru fiscal year ended June 30, 2013 and changes in net position after that.
96.
CITY OF CUPERTINO
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified accrual basis of accounting
(Unaudited)
2013
2014
2015
2016
2017
2018
2019(2)
2020
2021
2022
General Fund
Nonspendable
$ 956,827
$ 3,363,065
$ 938,245 $
937,381 $
876,939 $
464,893
$ 454,188 $
3,449,341 $
3,444,346 $
3,546,678
Restricted
725,903
-
761,653
888,374
1,016,771
1,254,578
9,469,670
14,324,757
20,140,419
18,756,482
Committed
-
-
-
-
19,000,000
19,122,754
19,123,397
19,127,891
19,127,891
34,127,891
Assigned
16,400,000
16,400,000
28,849,679
20,500,000
4,638,181
9,963,310
1,979,202
3,176,882
4,906,139
5,041,682
Unassigned
17,961,579
23,197,378
8,774,966
29,869,085
28,057,799
21,704,922
27,896,128
34,426,942
49,231,996
48,696,821
Total General Fund
36,044,309
42,960,443
39,324,543
52,194,840
53,589,690
52,510,457
58,922,585
74,505,813
96,850,791
110,169,554
All Other Governmental Funds
Nonspendable
-
-
-
-
-
-
-
-
-
-
Restricted
7,625,215
24,232,367
37,566,052
33,973,433
33,974,921
30,818,617
35,935,838
33,681,043
33,570,621
46,380,885
Committed
-
-
1,398,665
1,398,665
1,398,665
-
-
-
-
-
Assigned
5,299,904
7,619,534
20,671,116
15,344,191
25,305,974
29,129,616
33,211,946
40,551,131
37,038,174
35,088,889
Unassigned
-
(2,280,961)
Total All Other Governmental Funds
12,925,119
29,570,940
59,635,833
50,716,289
60,679,560
59,948,233
69,147,784
74,232,174
70,608,795
81,469,774
Total Governmental Funds
$ 48,969,428
$ 72,531,383 $
98,960,376
$ 102,911,129 $
114,269,250
$ 112,458,690
$ 128,070,369
$ 148,737,987
$ 167,459,586 $
191,639,328
(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.
97.
Revenues
Taxes
Use of money and property
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Other
Total revenues
Expenditures:
Current:
Administration
Law enforcement
Public and environmental affairs
Administrative services
Recreation services
Community development
Public works
Capital Outlay
Debt service:
Principal repayment
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over
(under) expenditures
Other Financing Sources (Uses)
Proceeds from debt issuance
Proceeds from debt issuance premium
Payments to refunding agent
Proceeds from sale of capital assets
Transfers in
Transfers in - fund closing
Transfers out
Total other financing sources (uses)
CITY OF CUPERTINO
Change in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified accrual basis of accounting)
(Unaudited)
2013 2014 2015 2016 2017 2018 2019 2020 2021
$ 48,382,570 $ 72,211,724 $ 55,134,238 $ 55,462,956 $ 62,924,867 $ 64,062,924 $ 68,938,973 $ 77,925,371 $ 82,464,944
744,196
764,299
915,933
1,654,702
1,425,629
1,543,818
3,896,813
6,259,342
4,447,970
2,841,407
3,069,400
7,210,562
2,532,025
2,585,038
5,122,296
3,668,557
6,888,590
7,834,260
3,502,617
3,679,943
3,170,445
3,073,110
2,536,925
2,757,928
4,102,665
4,692,847
4,068,238
4,515,066
10,744,113
5,203,371
17,249,123
24,103,167
15,638,247
13,385,698
13,937,950
13,601,302
560,417
616,889
554,002
564,903
603,194
602,934
534,012
344,008
134,459
57,828
545,052
542,429
1,289,013
2,004,904
1,834,492
1,187,741
1,922,356
3,185,110
60,604,101
91,631,420
72,730,980
81,825,832
96,183,724
91,562,639
95,714,459
111,970,464
115,736,283
2,005,176
3,957,739
3,897,701
4,053,741
5,942,633
4,943,052
6,294,111
6,951,541
7,549,386
8,783,885
9,626,121
10,283,772
10,988,735
11,939,095
12,362,621
13,108,732
14,151,413
14,776,409
1,486,910
477,852
624,295
544,718
1,864,746
2,835,768
2,843,540
3,223,185
1,836,725
3,772,714
2,444,670
3,226,164
2,811,117
5,054,539
4,430,300
4,197,582
4,617,787
5,196,299
4,083,822
4,536,519
5,047,548
5,441,200
9,361,934
8,686,076
8,996,118
7,688,935
4,787,914
4,395,601
8,424,254
5,180,659
6,102,820
7,431,292
12,907,086
9,359,835
9,310,827
11,177,690
13,996,516
17,469,627
14,625,038
15,078,174
18,623,585
18,191,714
19,955,579
22,445,948
24,568,155
4,684,676
7,110,974
21,760,899
26,171,127
18,731,165
23,395,112
10,528,246
12,644,373
19,483,945
1,920,000
2,040,000
2,055,000
2,090,000
2,135,000
2,180,000
2,220,000
2,290,000
2,140,000
1,256,922
1,130,428
1,120,138
1,077,538
1,035,738
993,038
949,438
882,837
798,747
46,386,222
57,218,184
67,821,214
74,359,170
82,119,727
90,924,767
78,453,181
84,206,846
92,315,270
14,217,879
34,413,236
4,909,766
7,466,662
14,063,997
637,872
17,261,278
27,763,618
23,421,013
22,040,000
3,878,704
(27,279,118)
- 37,569 23,814,257 580 - 872,250 3,875 - -
8,438,707 13,610,304 39,408,990 11,905,724 26,446,090 31,028,218 19,407,613 35,208,276 12,876,969
- - - - 260,374 - - - -
(10,308,210) (24,499,154) (39,177,284) (15,422,213) (29,412,340) (34,348,900) (21,061,087) (42,304,276) (16,215,969)
(1,869,503) (10,851,281) 24,045,963 (3,515,909) (2,705,876) (2,448,432) (1,649,599) (7,096,000) (4,699,414)
Extraordinary Item
Asset transferred to Successor Agencies (1,130,797) -
Change in fund balances $ 11,217,579 $ 23,561,955 $ 28,955,729 $ 3,950,753 $ 11,358,121 $ (1,810,560) $ 15,611,679 $ 20,667,618 $ 18,721,599
Debt service as a percentage of
noncapital expenditures (1) 7.6% 6.3% 6.9% 6.6% 5.0% 4.7% 4.7% 4.4% 4.0%
(1) Noncapital expenditures is total expenditures less capital assets added each year to the statement of net position/assets.
98.
Fiscal Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
CITY OF CUPERTINO
Assessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(Unaudited)
State Board of
Total Assessed &
Total
Equalization
Secured
Est. Full Market
Secured (a)
Unsecured (a)
Non -Unitary
Exemptions
Valuation (a)
$ 13,882,147,291
$ 738,243,050
$ 1,390,000
$ 108,468,872
$ 14,621,780,341
15,391,656,690
813,117,019
1,390,000
113,744,809
16,206,163,709
16,133,637,244
965,141,148
-
119,476,276
17,098,778,392
18,308,720,226
1,086,786,901
-
114,223,063
19,395,507,127
20,196,258,418
1,150,311,942
-
118,257,368
21,346,570,360
22,024,906,420
1,114,123,426
-
122,805,695
23,139,029,846
23,402,123,229
1,779,936,377
-
125,245,819
25,182,059,606
24,370,718,536
1,641,863,322
-
138,025,761
26,012,581,858
25,397,331,860
2,423,984,683
-
145,644,653
27,821,316,543
27,083,468,890
1,724,247,088
-
149,658,614
28,807,715,978
= $16
m
$14
M Lr) lD I, 00 Ol O c 1 N
a-i r-I ci ci c-I 1-1 ci N N N
O O O O O O O O O O
■ Seriesl Unsecured Property
(a) Net of exemptions
Source: HdL, Coren & Cone
Data Source: Santa Clara County Assessor 2012-13 - 2021-22 Combined Tax Rolls
Direct
Tax
Rate
6.20%
5.62%
5.61 %
5.59%
5.98%
6.19%
6.38%
6.50%
6.46%
3.55%
THE CITY OF CUPERTINO
Direct and Overlapping Property Tax Rates
Rate per $100 of taxable value
Last 10 Fiscal Years
Agency 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018-19
1 2019-20
1 2020-21
2020-22
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
0.01266
0.01050
0.01000
0.00000
0.01266
County Bond 2008 Hospital Facility
0.00510
0.00350
0.00910
0.00880
0.00860
0.00820
0.00720
0.00690
0.00690
0.00610
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
0.05980
0.05250
0.05400
0.05190
0.05090
0.04960
0.03970
0.04150
0.04030
0.03800
El Camino Hospital2003
0.01290
0.01290
0.01290
0.01290
0.01290
0.01000
0.01000
0.01000
0.01000
0.01000
Foothill De Anza College
0.02870
0.02900
0.02760
0.02400
0.02340
0.02200
0.02170
0.02080
0.03640
0.03310
Fremont High
0.03900
0.04050
0.03960
0.05250
0.04030
0.04640
0.04300
0.04790
0.04780
0.04160
Los Gatos -Saratoga High 1998
0.03680
0.03510
0.05160
0.04230
0.04690
0.04570
0.03040
0.01770
0.01930
0.01850
MidPeninsula Open Space 2014
0.00000
0.00000
0.00000
0.00080
0.00060
0.00090
0.00180
0.00160
0.00150
0.00150
Santa Clara Unified
0.08190
0.07070
0.07040
0.09420
0.08180
0.08280
0.07070
0.11760
0.10450
0.10140
Santa Clara Valley Water District
0.00690
0.00700
0.00650
0.00570
0.00860
0.00620
0.00420
0.00410
0.00370
0.00510
Saratoga Elementary
0.04520
0.04500
0.04580
0.04490
0.04560
0.04580
0.04580
0.04640
0.04850
0.04830
West Valley College
0.02890
0.02550
0.01200
0.02320
0.01960
0.02000
0.01980
0.01860
0.03110
0.03040
Total Direct & Overlapping2 Tax Rates
1.38640
1.36290
1.37070
1.40240
1.38040
1.39146
1.34600
1.39530
1.39120
1.38786
City's Share of 1% Levy Per Prop 133
0.05652
0.05626
0.05617
0.05571
0.05962
0.06148
0.06320
0.06531
0.06515
0.06528
General Obiligation Debt Rate
Redevelopment Rate'
Total Direct Rates
0.06204
0.05623
0.05610
0.05588
0.05976
0.06187
0.06381
0.06499
0.06463
0.06477
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.
2Overlapping 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.
3City'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 fiaues.
^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 ABX1 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 2012113 - 2021122 Tax Rate Table
100.
CITY OF CUPERTINO
Principal Property Taxpayers
Current Year and Ten Years Ago
(Unaudited)
2022
Percentage of
2013
Percentage of
Assessed
Total Assessed
Assessed
Total Assessed
Taxpayer
Valuation
Valuation
Valuation
Valuation
Apple Inc.
$ 7,077,454,285
24.57%
$ 933,312,667
6.38%
Main Street Cupertino
372,315,274
1.29%
-
0.00%
Vallco Property Owner LLC
350,306,826
1.22%
72,972,533
0.50%
Swift Results Way LLC
346,000,000
1.20%
-
0.00%
Cupertino City Center
266,991,604
0.93%
-
0.00%
Cupertino Property Development
210,893,888
0.73%
-
0.00%
PR Cupertino Gateway LLC
134,707,992
0.47%
-
0.00%
Avery Glenbrook LP
111,499,196
0.39%
-
0.00%
Markham Apartments LP
107,316,527
0.37%
-
0.00%
Preg Emerson LLC
105,566,151
0.37%
-
0.00%
Total
$ 9,083,051,743
31.54%
$ 1,006,285,200
6.88%
Source: HdL, Coren & Cone
101.
Fiscal
Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total
Tax Levy
$ 8,199,752
9,169,183
10,178,734
11,864,026
13,308,884
13,172,425
16,049,112
18,117,304
19,197,994
20,322,779
CITY OF CUPERTINO
Property Tax Levies and Collections
Last Ten Fiscal Years
(Unaudited)
Current Tax
Collections
$ 8,199,752
9,169,183
10,178,734
11,864,026
13,308,884
13,172,425
16,049,112
18,117,304
19,197,994
20,322,779
Percent
Delinquent
of Levy
Tax
Collected (1)
Collections (1)
100.00%
$ -
100.00%
-
100.00%
-
100.00%
-
100.00%
-
100.00%
-
100.00%
-
100.00%
-
100.00%
-
100.00%
-
Total
Tax
Cnlwrtinnc
$ 8,199,752
9,169,183
10,178,734
11,864,026
13,308,884
13,172,425
16,049,112
18,117,304
19,197,994
20,322,779
Percent of
Total Tax
Collections
to Tax LevN
(1) Per the Teeter Plan, the City receives 100% of the tax levy, while the County receives delinquencies and penalties.
Source: City of Cupertino NWS
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
102.
Fiscal
Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
CITY OF CUPERTINO
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Unaudited)
Certificates
of Particination
$ 42,020,000
39,980,000
37,925,000
35,835,000
33,700,000
31,520,000
29,300,000
27,010,000
22,040,000
19,900,000
Source: City of Cupertino Budget Book
Percentage
of Estimated
Actual Market Value
of Taxable Property
0.26%
0.23%
0.20%
0.18%
0.15%
0.12%
0.11%
0.10%
0.08%
0.07%
Per Capita
$ 705
671
633
598
579
525
488
451
370
328
% of
Personal
Income
1.41%
1.38%
1.28%
1.21%
1.02%
0.87%
0.81%
0.71%
0.54%
0.44%
103.
CITY OF CUPERTINO
Direct and Overlapping Bonded Debt
June 30, 2022
(Unaudited)
2022-23 Assessed Valuation
$ 28,807,715,978
Total Debt
%
City's Share of
Overlapping Tax and Assessment Debt:
6/30/2022
Applicable (1)
Debt 6/30/22
Santa Clara County
$ 1,130,850,000
4.998%
$ 56,519,883
Santa Clara County General Fund Obligations
1,210,694,365
4.998%
60,510,504
Santa Clara County Pension Obligations
335,638,470
4.998%
16,775,211
Santa Clara County Board of Education Certificates of Participation
1,820,000
4.998%
90,964
Foothill-DeAnza Community College District
657,878,325
12.559%
82,622,939
Foothill-DeAnza Community College District Certificates of Participation
21,380,000
12.559%
2,685,114
West Valley Community College District
732,500,000
1.977%
14,481,525
West Valley -Mission Community College District General Fund Obligations
12,000,000
1.977%
237,240
Santa Clara Unified School District
956,350,000
4.380%
41,888,130
Santa Clara Unified School District General Fund Obligations
13,325,000
4.380%
583,635
Santa Clara County Vector Control District Certificates of Participation
1,505,000
4.998%
75,220
Fremont Union High School District
582,770,088
28.026%
163,327,145
Cupertino Union School District
271,768,303
51.138%
138,976,875
El Camino Hospital District
111,240,000
0.891%
991,148
Midpeninsula Regional Open Space District and General Fund Obligations
84,575,000
7.600%
6,427,700
Santa Clara Valley Water District Benefit Assessment
48,150,000
4.998%
2,406,537
Total Overlapping Tax and Assessment Debt
6,172,444,551
588,599,770
Direct Debt: City of Cupertino Certificates of Participation
19,900,000
100.000%
19,900,000
Total Direct and Overlapping General Fund Debt
19,900,000
19,900,000
Totals by Category:
Total Direct Debt
19,900,000
19,900,000
Total Overlapping Debt
6,172,444,551
588,599,770
Combined Total Debt
$ 6,192,344,551
$ 608,499,770
Ratios to 2021-22 Assessed Valuation:
Total Overlapping Tax and Assessment Debt
2.04%
0.07%
Combined Total Debt
2.11 %
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were
estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's
total taxable assessed value-
(2) Principal amount as of 6/30/22.
(3)
Fiscal Debt
Year Limit
CITY OF CUPERTINO
Legal Debt Margin Information
Last Ten Fiscal Years
(Unaudited)
Total Net
Debt Applicable
to Limit
Legal
Debt
Margin
Total net debt
applicable to the
limit as a % of
debt limit
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 -
2021
1,015,630,083
- 1,015,630,083 -
2022
1,015,630,083
- 1,015,630,083 -
Debt Limit:
Secured property assessed value, net of exempt real property
Adjusted valuation - 25% of assessed valuation
Debt limit - 15% of adjusted valuation
Amount of Debt Subject to Limit:
Total Bonded Debt
Less: Certificates of Participation not subject to debt limit
Amount of debt subject to limit
Legal Debt Margin
$ 27,083,468,890
6,770,867,223
1,015,630,083
19,900,000
(19,900,000)
$ 1,015,630,083
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 Budget Book 105.
CITY OF CUPERTINO
Ratio of General Bonded Debt
Last Ten Fiscal Years
(Unaudited)
Fiscal
Assessed
Year
Population
Value
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
27,821,316,543
2021
60,656
27,821,316,543
2022
66,274
28,807,715,978
Sources: HdL, Coren & Cone/Cupertino Budget Book
General
Bonded Debt
Bonded Debt
Per Capita
Ratio of General
Bonded Debt to
Assessed Value
106.
City of Cupertino
Demographic and Economic Statistics
Last Ten Fiscal Years
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%
2020-21 60,656 1,936,259
3.13% 4,378,045,000 74,485
30,900
4.9%
5.2%
41.6
97.2%
78.8%
2021-22 66,274 1,934,171
3.43% 4,571,170,000 76,684
24,380
3.7%
2.2%
41.2
97.3%
79.6%
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.
107.
CITY OF CUPERTINO
2022 Employer Ranking
(Unaudited)
Employer Ranking Employer Ranking
Apple
1
Mist Systems, Inc.
11
De Anza College
2
Intero Real Estate Services, Inc
12
Force 5 Software Inc
3
Keller Williams Realty
13
Whole Foods Market
4
Cupertino Healthcare & Wellness Center
14
Claris International, Inc
5
Exilant
15
Health Care Center at the Forum
6
BJ's Resturant & Brewhouse
16
Target
7
Sunny View Retirement Community
17
Seagate Technology
8
Insight Solutions Inc
18
Cupertino Union School District
9
Cupertino High School
19
City of Cupertino
10
Monta Vista High School
20
Source: Data -Axle
M
CITY OF CUPERTINO
Full -Time Equivalent City Employees by Function/Program
Last Ten Fiscal Years
(Unaudited)
Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Council and Commissions
1.52
1.57
1.55
1.60
1.55
2.35
2.35
2.51
2.53
7.3
Administration
5.05
10.75
10.75
10.85
10.57
14.12
15.47
15.15
17.85
24.3
Innovation & Technology
6.90
11.00
10.25
11.40
13.95
14.55
15.05
14.95
11.93
13.4
Administrative Services
22.26
11.00
12.00
12.30
12.30
12.00
14.00
16.00
15.90
18.9
Parks & Recreation
29.53
29.48
31.28
32.18
33.08
35.13
34.80
32.10
31.90
29.5
Community Development
23.90
24.83
24.80
27.30
28.18
28.08
28.13
28.29
28.49
37.5
Public Works
73.59
74.12
77.12
82.12
84.12
84.52
84.95
88.75
90.15
94.1
Law Enforcement
0.00
2.00
2.00
2.00
2.00
2.00
2.00
0.00
0.00
0.00
Total
162.75
164.75
169.75
179.75
185.75
192.75
196.75
197.75
198.75 225.00
Source: City of Cupertino Budget
i1el'l
CITY OF CUPERTINO
Operating Indicators by Funedon/Program
Last Ten Fiscal Years
(Unaudited)
Function/Program
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Law Enforcement Sheriff Response
Priority One -Respond within 5 minutes
3.76 Min,
4.30 Min.
4.90 Min.
4.90 Min.
5.07 Min
4.23 Min.
4.39 Min.
3.51 Min.
3.40 Min.
5.33 Min
Priority Two -Respond within 9 minutes
5.98 Min,
6.39 Min.
6.56 Min.
6.56 Min.
8.00 Min.
7.49 Min.
6.23 Min.
6.37 Min.
6.07 Min.
6.94 Min.
Priority Three -Respond within 20 minutes
10.29 Min,
10.76 Min.
10.52 Min.
10.52 Min.
15.79 Min
14.79 Min.
12.11 Min.
11.96 Min.
11.80 Min.
11.73 Min
Public Works
Street Sweeping
575 Curb Miles
575 Curb Miles
575 Curb Miles
575 Curb Miles
534 Curb Miles
534 Curb Miles
534 Curb Miles
534 Curb Miles
534 Curb Miles
534 Curb Miles
Street Maintenance
24 Hrs of Call
24 Hes of Call
24 Hrs of Call
24 H. of Call
24 Bra of Call
24 H. of Call
24 Bra of Call
24 H. of Call
24 Bra of Call
24 Bra of Call
Number of development permit applications received
428
434
428
127
128
Number ofencroachment permits received
121
136
134
577
426
Storm Drain Inlets Inspected/Cleaned
815
1063
1638
1802
80 %
Roadway Signs Repaired/Replaced
404
721
346
1151
3.5 %
Number oftrees planted vs. removed
53/67
155/192
164/190
187/202
2111187
Parks & Recreation
Number ofreservations at Quinlan Center
560
402
526
8
260
Number ofrounds ofgolfat BBF GotfCourse
28,193
27,205
28,952
43,650
45367
Sports Center Memberships
1,852
1,950
2,000
1,989
2,015
1,850
1,952
1,802
1,655
1186
Number of Senior Center classes offered
246
320
258
100
183
Senior Center Memberships
2,456
2,623
2,549
2,493
2,094
2,260
2,171
2,171
1,470
210
Quinlan Community Center Rental Revenue
$120,000
$109,342
$110,033
$104,150
$128,778
$72,948
$139,590
$139,590
$5,507
$115,093
Community Development
Approved Building Plan Sets
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
95% Within 7 Work Days
95% Within 7 Work Days
Discretionary Land Use Applications
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
99% Within 21 Work Days
99% Within 21 Work Days
Public Notice of Upcoming Praiects
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 ofmclirninary reviews
82
90
110
163
142
Number ofplanning applications received
169
138
194
237
301
Number ofpermits received
2322
2,321
2,534
2,364
2380
Number of inspections requested
16026
13,625
14,596
13,374
11906
Administrative Services
Accounts Payable Processing
7 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 ofre"lar recruitments
21
21
28
24
33
Number ofnew hires
26
16
14
21
38
Number oftempormynew hires
101
105
38
17
77
Number ofvendor checks processes
6793
6,536
5,906
4,457
4993
Number ofpayroll checks process
10387
10,301
10,802
7,816
8119
Number of business license applications
1294
1,154
1,032
1,061
884
Number ofioumal entries posted
2830
4,521
4,558
3,915
3635
Number ofreceipts processed
9766
13,913
18,992
10,367
9353
Library
Volumes in Collection
-
-
361817
364,557
369,924
367,979
367,101
368,461
350,088
367,745
Annual Gate Count
-
-
869762
880,894
835,073
873,862
904,349
620,007
128,912
387,285
Annual Circulation Childrens Items
-
-
1474996
1,544,095
1,448,265
1,453,173
1,535,842
1,192,880
1,207,878
1,771,986
Annual Circulation Adult and Teen Items
-
-
999766
1,032,326
950,453
980,609
1,049,166
831,114
750,602
1,056,451
Adult Classes and Events
-
-
209
215
242
206
207
396
459
62
Adult Classes and Events Attea dence
-
-
11860
8,855
9,242
7,622
8,304
9,986
19,223
861
Teen Classes and Events
-
-
52
78
66
79
52
57
31
21
Teen Classes and Events Attendence
-
-
3393
3,135
2,571
2,495
1,283
8,495
7,151
916
Children's Classes and Events
-
-
458
493
440
426
424
477
464
105
Children's Classes and Events Attendence
-
-
25529
28,532
25,857
24,675
22,851
26,032
52,634
7,711
Volunteer Hours
-
-
11786
10,000
9,645
10,302
10,191
6,592
465
4305.8
Sources: City of Cupertino PM & WIs and Santa Clam CountyLibrary District
110.
CITY OF CUPERTINO
Capital Assets Statistics by Function/Program
Last Ten Fiscal Years
(Unaudited)
Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
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
2950
Traffic Signals
48
48
48
48
48
52
52
52
52
52
Culture & Recreation
Parks and Open Spaces
19
21
21
21
21
21
21
21
21
21
Park and Landscape Acreage
169
169
169
169
169
169
169
169
169
169
City Trails
1
3
3
3
3
3
3
3
3
3
Golf Courses
1
1
1
1
1
1
1
l
l
1
Community Center
1
1
1
1
1
1
1
1
1
1
Community Hall
1
1
1
1
1
1
1
1
l
1
Senior Center
1
1
1
1
1
1
1
1
1
1
Sports Center
1
1
1
1
1
1
1
1
l
1
Swimming Pools
1
1
1
1
1
1
1
1
1
1
Tennis Courts
17
17
28
28
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
l
1
Source: City of Cupertino Budget Book/GIS Team