HomeMy WebLinkAboutAC 12-1-2025 Searchable PacketCITY OF CUPERTINO
AUDIT COMMITTEE
AGENDA
10185 North Stelling Road, Quinlan Conference Room and Via Teleconference
Monday, December 1, 2025
1:00 PM
Special Meeting
IN-PERSON AND TELECONFERENCE / PUBLIC PARTICIPATION INFORMATION
OPTIONS TO OBSERVE:
Members of the public wishing to observe the meeting may do so in one of the following
ways:
1) Attend in person at Quinlan Community Center, Conference Room, 10185 N. Stelling
Road.
2) Watch a live stream online at https://youtube.com/@cupertinocitycommission.
OPTIONS TO PARTICIPATE AND COMMENT:
Members of the public wishing to address the Audit Committee may do so in the following
ways:
1) Appear in person at Quinlan Community Center, Conference Room, 10185 N. Stelling
Road:
A. During “Oral Communications”, the public may comment on matters not on the agenda,
and for agendized matters, the public may comment during the public comment period for
each agendized item.
B. Speakers are requested to complete a Speaker Card. While completion of Speaker Cards
is voluntary and not required to attend the meeting or provide comments, it is helpful for
the purposes of ensuring that all speakers are called upon.
C. Speakers must wait to be called and may begin speaking when recognized by the Chair.
D. Speakers are limited to three (3) minutes each. However, the Chair may reduce the
speaking time depending on the number of people who wish to speak on an item. A
speaker representing a group of 2 to 5 or more people who are present may have up to 2
minutes per group member, up to 10 minutes maximum.
E. Please note that due to cyber security concerns, speakers are not allowed to connect any
personal devices to any City equipment. However, speakers that wish to share a document
(e.g. presentations, photographs or other documents) during oral comments may do so by:
a. E-mailing the document to auditcommittee@cupertino.gov by 12:00 p.m. and staff will
advance the slides/share the documents during your oral comment.
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2) Written communications as follows:
A. E-mail comments to AuditCommittee@cupertino.gov.
B. Regular mail or hand delivered addressed to the: Cupertino Audit Committee , City Hall,
10300 Torre Avenue, Cupertino, CA 95014
C. Comments addressed to the Audit Committee received by 12:00 p.m. on the day of the
meeting will be included in written communications published and distributed before the
beginning of the meeting.
D. Comments addressed to the Audit Committee received after the 12:00 p.m. deadline, but
through the end of the Commission meeting, will be posted to the City’s website by the end
of the following business day.
3) Teleconference in one of the following ways:
A. Online via Zoom on an electronic device (Audio and Video): Speakers must register in
advance by clicking on the link below to access the meeting:
https://cityofcupertino.zoom.us/webinar/register/WN_biwcug07SKG3uZ1LGsLg6g
a. Registrants will receive a confirmation email containing information about joining the
webinar.
b. Speakers will be recognized by the name they use for registration. Once recognized,
speakers must click ‘unmute’ when prompted to speak.
c. Please read the following instructions about technical compatibility carefully: One can
directly download the teleconference (Zoom) software or connect to the meeting in their
internet browser. If a browser is used, make sure the most current and up-to-date browser,
such as the following, is used: Chrome 30+, Firefox 27+, Microsoft Edge 12+, Safari 7+.
Certain functionality may be disabled in older browsers, including Internet Explorer.
B.By Phone (Audio only): No registration is required in advance and speakers may join the
meeting as follows:
a. Dial 669-900-6833 and enter WEBINAR ID: 834 8805 0424
b. To “raise hand” to speak: Dial *9; When asked to unmute: Dial *6
c. Speakers will be recognized to speak by the last four digits of their phone number.
C. Via an H.323/SIP room system:
H.323 Information:
144.195.19.161 (US West)
206.247.11.121 (US East)
Meeting ID: 834 8805 0424
SIP: 83488050424@zoomcrc.com
NOTICE AND CALL FOR A SPECIAL MEETING OF THE CUPERTINO AUDIT
COMMITTEE
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Audit Committee Agenda December 1, 2025
NOTICE IS HEREBY GIVEN that a special meeting of the Cupertino Audit Committee is
hereby called for Monday, December 1, 2025, commencing at 1:00 p.m. at the Quinlan
Community Center Conference Room, 10185 North Stelling Road, Cupertino, California
95014. Said special meeting shall be for the purpose of conducting business on the subject
matters listed below under the heading, "Special Meeting."
SPECIAL MEETING
ROLL CALL
ORDERS OF THE DAY
APPROVAL OF MINUTES
1.Subject: Approve Minutes of Regular Meeting on October 27, 2025
Recommended Action: Approve Minutes of Regular Meeting on October 27, 2025
A - Draft Minutes
POSTPONEMENTS
ORAL COMMUNICATIONS
This portion of the meeting is reserved for persons wishing to address the Committee on any matter
within the jurisdiction of the Committee and not on the agenda. Speakers are limited to three (3)
minutes. In most cases, State law will prohibit the Commission from making any decisions with respect
to a matter not on the agenda.
OLD BUSINESS
NEW BUSINESS
2.Subject: ACTION ITEM Receive OPEB & Pension Section 115 Trust Performance Report
for Quarter Ending September 30, 2025 and forward to City Council
Recommended Action: Receive OPEB & Pension Section 115 Trust Performance Report
for Quarter Ending September 30, 2025 and forward to City Council
Presenter: PARS and US Bank
1:15(30)
Staff Report
A - OPEB Trust Investment Policy
B - Pension Trust Investment Policy
3.Subject: ACTION ITEM Receive the FY 2024-25 Annual Comprehensive Financial
Report (ACFR) and Supplemental Reports and forward to City Council
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Recommended Action: Receive the FY 2024-25 Annual Comprehensive Financial
Report (ACFR) and Supplemental Reports and forward to City Council
Presenter: Jonathan Orozco, Finance Manager and The Pun Group
1:45(30)
A - FY2024-25 ACFR Final Draft
4.Subject: INFORMATIONAL ITEM Receive the proposed Audit Committee 2026
Schedule and Workplan
Receive the proposed Audit Committee 2026 Schedule and
Workplan
Presenter: Jonathan Orozco, Finance Manager
2:15(10)
A - Proposed Audit Committee 2026 Schedule and Work Plan
STAFF AND COMMITTEE REPORTS
COMMITTEEMEMBER ATTENDANCE AT UPCOMING MEETINGS AND EVENTS
FUTURE AGENDA SETTING
ADJOURNMENT
In compliance with the Americans with Disabilities Act (ADA), anyone who is planning to attend this
meeting who is visually or hearing impaired or has any disability that needs special assistance should
call the City Clerk's Office at 408-777-3223, at least 48 hours in advance of the meeting to arrange for
assistance. In addition, upon request in advance by a person with a disability, meeting agendas and
writings distributed for the meeting that are public records will be made available in the appropriate
alternative format.
Any writings or documents provided to a majority of the members after publication of the agenda will
be made available for public inspection. Please contact the City Clerk’s Office in City Hall located at
10300 Torre Avenue, Cupertino, California 95014, during normal business hours.
IMPORTANT NOTICE: Please be advised that pursuant to Cupertino Municipal Code section
2.08.100 written communications sent to the City Council, Commissioners or staff concerning a matter
on the agenda are included as supplemental material to the agendized item. These written
communications are accessible to the public through the City website and kept in packet archives. Do
not include any personal or private information in written communications to the City that you do not
wish to make public, as written communications are considered public records and will be made
publicly available on the City website.
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CITY OF CUPERTINO
Agenda Item
Subject: Approve Minutes of Regular Meeting on October 27, 2025
Approve Minutes of Regular Meeting on October 27, 2025
CITY OF CUPERTINO Printed on 11/26/2025Page 1 of 1
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DRAFT MINUTES
AUDIT COMMITTEE
Monday, October 27, 2025
At 4:00 p.m. Chair Eno Schmidt called the regular Audit Committee meeting to order in the City
of Cupertino Conference Room A, 10300 Torre Avenue.
ROLL CALL
Present: Chair Eno Schmidt, Vice Mayor Kitty Moore, Council Member Sheila Mohan, Vice Chair
Hanyan Wu and Committee Member William Wong. Absent: None.
APPROVAL OF MINUTES
1. Subject: Approve Minutes of Regular Meeting on July 28, 2025
Recommended Action: 1. Approve Minutes of Regular Meeting on July 28, 2025
MOTION: Moore moved and Mohan seconded to approve the minutes of the regular
meeting on July 28, 2025. The motion carried with the following vote: Ayes: Schmidt,
Mohan, Moore, Wong, Wu. Noes: None. Abstain: None. Absent: None.
2. Subject: Approve Minutes of Special Meeting on August 4, 2025
Recommended Action: Approve Minutes of Special Meeting on August 4, 2025
MOTION: Moore moved and Mohan seconded to approve the minutes of the Special
Meeting on August 4, 2025. The motion carried with the following vote: Ayes: Schmidt,
Mohan, Moore, Wong, Wu. Noes: None. Abstain: None. Absent: None.
POSTPONEMENTS – None.
ORAL COMMUNICATIONS –
San Rao emphasized the importance of reviewing budgets by department and conducting
outreach. He noted that community members varied in their financial understanding - some
needed simplified information, while others were capable of deeper analysis. Rao urged focusing
on “personas” who were either decision-makers or knowledgeable contributors, so the budgeting
process could benefit from informed input and ultimately achieve its goals.
OLD BUSINESS – None.
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NEW BUSINESS
3. Subject: INFORMATIONAL ITEM Receive OPEB & Pension Section 115 Trust
Performance Report for Quarter Ending September 30, 2025
Recommended Action: Receive OPEB & Pension Section 115 Trust Performance Report
for Quarter Ending September 30, 2025
Presenter: PARS and US Bank
4:15(10)
PARS and US Bank gave a presentation.
Committee members asked questions, which staff and the Dennis Mullins responded to.
Chair Schmidt opened the public comment period, and seeing no one, closed the public
comment period.
4. Subject: INFORMATIONAL ITEM Receive the Treasurer's Investment Report for the
Quarter Ending September 30, 2025
Recommended Action: Receive the Treasurer's Investment Report for the Quarter Ending
September 30, 2025
Presenter: Jonathan Orozco, Finance Manager, and Chandler
4:25(15)
Finance Manager Jonathan Orozco gave a presentation.
Carlos Oblites from Chandler Asset Management gave a presentation.
Committee members asked questions which staff and Oblites responded to.
Chair Schmidt opened the public comment period, and seeing no one, closed the public
comment period.
MOTION: Moore moved and Wu seconded to accept a modification in the Treasurer’s
Investment Report to identify and include the transactions that had not yet posted in
future reports. The motion carried with the following vote: Ayes: Schmidt, Mohan,
Moore, Wong, Wu. Noes: None. Abstain: None. Absent: None.
5. Subject: INFORMATIONAL ITEM Receive the Internal Audit and Fraud, Waste, and
Abuse programs update
Recommended Action: Receive the Internal Audit and Fraud, Waste, and Abuse
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programs update
Presenter: Baker Tilly
4:40(10)
Maria Stroth and Colleen Rozillis from Baker Tilly gave a presentation.
Committee members asked questions, which Maria Stroth and Colleen Rozillis responded to.
Chair Schmidt opened the public comment period, and seeing no one, closed the public comment
period.
6. Subject: ACTION ITEM Review and accept the OPEB and Pension Trust Investment
Policies
Recommended Action: Review and accept the OPEB and Pension Trust Investment
Policies
Presenter: Jonathan Orozco, Finance Manager
4:50(10)
Finance Manager Jonathan Orozco gave a presentation.
Committee members asked questions which staff responded to.
Chair Schmidt opened the public comment period and the following people spoke:
San Rao
Chair Schmidt closed the public comment period.
MOTION: Moore moved and Mohan seconded to bring this item back to a future Audit
Committee meeting and withhold acceptance of the report until additional information is
provided by City staff, along with any relevant input from PFM, PARS, and the City Attorney’s
Office. The motion carried with the following vote: Ayes: Schmidt, Mohan, Moore, Wong,
Wu. Noes: None. Abstain: None. Absent: None.
7. Subject: INFORMATIONAL ITEM Receive the Fiscal Year 2024-25 Annual
Comprehensive Financial Report (ACFR) Update
Recommended Action: Receive the Fiscal Year 2024-25 Annual Comprehensive
Financial Report (ACFR) Update
Presenter: The Pun Group
5:05(10)
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Sophia Kuo from The Pun Group gave a presentation.
Committee members asked questions and made comments, which the presenter and staff
responded to.
Chair Schmidt opened the public comment period, and seeing no one, closed the public comment
period.
8. Subject: ACTION ITEM OpenGov Budget Format Review Presentation and Finalize
Recommendations
Recommended Action: a. Receive Budget Format Review presentation as outlined in
the Budget Format Implementation Action Plan (IAP) recommendation numbers 15, 17,
18, 19, and 30
b. Finalize OpenGov budget format for recommendation to City Council
Presenter: Toni Oasay-Anderson, Interim Budget Manager
5:15(30)
Toni Oasay-Anderson, Interim Budget Manager, and Alexis Chiu, Budget Intern II, gave a
presentation.
Committee members asked questions, which staff responded to.
Chair Schmidt opened the public comment period and the following people spoke:
San Rao
Chair Schmidt closed the public comment period.
Moore moved and Wu seconded to move the staff recommendation, while including in the
staff report information about the genesis of the OpenGov budget format. The motion
carried with the following vote: Ayes: Schmidt, Mohan, Moore, Wong, Wu. Noes: None.
Abstain: None. Absent: None.
9. Subject: INFORMATIONAL ITEM Receive the proposed Audit Committee 2025
Schedule and Workplan
Recommended Action: Receive the proposed Audit Committee 2025 Schedule and
Workplan
Presenter: Jonathan Orozco, Finance Manager
5:45(10)
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Finance Manager Jonathan Orozco gave a presentation.
Committee members asked questions which staff responded to.
STAFF AND COMMITTEE REPORTS – None.
COMMITTEEMEMBER ATTENDANCE AT UPCOMING MEETINGS AND EVENTS
Chair Schmidt announced the Community Service Awards.
Vice Chair Wu discussed the Mayor’s Meeting where they voted on the CREST Awards.
Vice Mayor Moore noted excitement about the work that the interns have done, thanking them
for the cashflow policy and getting the budget moving along.
FUTURE AGENDA SETTING – None
ADJOURNMENT
At 5:48 p.m. Chair Schmidt adjourned the regular Audit Committee Meeting. Minutes
prepared by:
Lindsay Nelson, Administrative Assistant
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CITY OF CUPERTINO
Agenda Item
Subject: ACTION ITEM Receive OPEB & Pension Section 115 Trust Performance Report for Quarter
Ending September 30, 2025 and forward to City Council
Receive OPEB & Pension Section 115 Trust Performance Report for Quarter Ending September 30,
2025 and forward to City Council
Presenter: PARS and US Bank
1:15(30)
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AUDIT COMMITTEE STAFF REPORT
Meeting: December 1, 2025
Subject
Consider the Other Post-Employment Benefits (OPEB) and Pension Trust Investment
Policies
Recommended Action
Review and accept the OPEB and Pension Trust Investment Policies
Discussion
Background
In Fiscal Year (FY) 2009-10, the City established a Section 115 Trust to help fund its retiree
health obligations, also known as OPEB. In FY 2017-18, the City also established a Section
115 Trust to pre-fund its pension obligations and reduce the potential impact of pension
cost volatility on the City's operating budget.
OPEB and Pension Trusts
Section 115 Trust Overview
A Section 115 Trust is a tax-exempt investment tool that allows local governments to pre-
fund pension and retiree health costs. The benefits of a Section 115 Trust include the
following:
Local control over assets: The City controls the contributions, withdrawals,
investment strategy, and risk level of assets in the Trust.
Potential for higher investment returns than General Fund: Investment
requirements that apply to the City's General Fund assets under Government
Code 53601 are not applicable to Trust assets.
Pension rate stabilization: Assets can be transferred to CalPERS at the City 's
discretion to pay for Normal Cost or Unfunded Accrued Liability (UAL)
contributions and can be used to reduce or eliminate large fluctuations in the City's
pension costs.
Diversification: Trust assets will be diversified from CalPERS investments.
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OPEB Trust Overview
In FY 2009-10, the City established a Section 115 Trust to help fund its retiree health
obligations, also known as OPEB. Compared to a pay-as-you-go plan, the OPEB Trust
allows the City to:
Grow assets to pay future OPEB benefits.
Earn higher returns than the General Fund.
Reduce its total cost for providing post-employment benefits.
Reduce its Net OPEB Liability.
In July 2010, the City contributed $7.0 million in initial funding. With additional
contributions of $12.3 million, total contributions to date are $19.3 million.
As of June 30, 2025, the City's OPEB Trust had a market value of $42.7 million and had
earned an annualized investment return of 7.68% gross of fees since inception.
Time Period Annualized Investment Return
1 Year 12.80%
5 Year 8.93%
Since Inception 7.68%
1-Year investment returns were impacted by financial market volatility due to heightened
geopolitical risk, supply chain bottlenecks and persistent inflation, and the Federal
Reserve’s pivot to a less accommodative monetary policy.
As of the June 30, 2025, measurement date, using a 6.5% discount rate, the City’s OPEB
plan had an accrued liability of $41.5 million and a market value of assets of $42.7 million,
resulting in a net asset of $1.3 million and a funded ratio of 103.0%. Compared to June 30,
2024, the unfunded accrued liability became a net asset, primarily due to favorable market
conditions.
June 30, 2023* June 30, 2024* June 30, 2025*
Accrued Liability 35,290,000 40,389,000 41,472,000
Market Value of Assets 34,708,000 38,013,000 42,734,000
Unfunded Accrued Liability 582,000 2,376,000 (1,262,000)
Funded Ratio 98.4% 94.1% 103.0%
*Amounts provided from Actuarial Report, as opposed to PARS provided.
Pension Trust Overview
Since pension obligations are one of the City's largest financial obligations, the City has
taken proactive steps to reduce the impacts of pension cost volatility. In March 2018, the
City provided options to Council to address rising pension costs. In April 2018, the City
presented a long-term pension funding strategy to the Fiscal Strategic Plan Committee. In
May 2018, the City adopted a Section 115 Trust, also known as a Pension Rate Stabilization
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Program (PRSP), to reduce pension rate volatility on the City's budget. The Pension Trust
helps the City to:
Grow assets for future pension contributions.
Invest assets over appropriate time horizons.
Earn higher investment returns than the General Fund.
Reduce pension contribution volatility.
Diversify funds from CalPERS investments.
As a fiscal sustainability measure, the City funds the Pension Trust using a more
conservative discount rate of 6.25%. The City's pension funding goal is to accumulate
sufficient funds in the Pension Trust to fund the difference between a 6.25% and a 7%
discount rate and achieve a funded status of 80% by FY 2036-37, 20 years from the
adoption of the Pension Trust. The City's projections indicated that it would need to
accumulate over $42 million in the Pension Trust within 20 years to achieve its pension
funding goal.
As a result, the funding strategy proposed $8.0 million in initial funding, along with
additional funding of $10.0 million over the first five years. To date, the City has
contributed $16.0 million, including:
$8.0 million in FY 2018-19
$4.0 million in FY 2019-20
$2.0 million in FY 2020-21
$2.0 million in FY 2021-22
As of June 30, 2025, the City's Pension Trust had a market value of $24.3 million, a year-
over-year increase of $2.7 million, and had earned an annualized investment return of
8.03% gross of fees since inception.
Time Period Annualized Investment Return
1 Year
5 Year
12.64%
8.86%
Since Inception 8.03%
Driven by favorable market performance, the Trust achieved a 12.64% return over the past
year. Five-year and since-inception returns remain strong at 8.86% and 8.03%,
respectively, underscoring the City’s long-term strategy to promote pension funding
stability.
OPEB and Pension Trust Investment Policies
The Audit Committee is responsible for reviewing the OPEB and Pension Trust
investment policies annually, appointing investment managers, and monitoring
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investment performance. The City Council is responsible for annually adopting the OPEB
and Pension Trust investment policies.
It is not expected that the OPEB and Pension Trust investment policies will change
frequently. Short-term changes in the financial markets should not require adjustments to
the policies.
The Audit Committee last reviewed the policies on October 31, 2024, with City Council
adopting the policies on December 3, 2024.
Public Agency Retirement Services (PARS) is the City’s Trust Administrator and PFM
Asset Management is the City’s Investment Manager for the Pension and OPEB Trusts.
The Investment Manager manages the investments per the investment policies. Within
the constraints imposed by these policies, Investment Managers are expected to comply
with all applicable fiduciary and due diligence requirements under the “prudent
investor” rules.
OPEB and Pension Trust Investment Objectives
The OPEB Trust has a “Balanced” investment objective with a target rate of return of
6.50%, and the Pension Trust has a “Balanced” investment objective with a target rate of
return of 6.25%. The “Balanced” investment objective is designed to provide a moderate
amount of current income with moderate growth of capital. Investors should have
sufficient tolerance for price and return volatility and substantial periodic declines in
investment value. This objective is recommended for investors with a long-term time
horizon.
As part of ongoing efforts to align with evolving industry best practices and enhance
portfolio diversification, Global Infrastructure has been formally incorporated into the
strategic asset allocation. Similar to Real Estate and Commodities, Global Infrastructure
is recognized for its inflation-hedging characteristics, stable cash flows, and historically
low correlation to traditional equities and fixed income assets.
The strategic asset allocation ranges and tactical targets for this objective are listed
below:
Asset Class Range Target
Fixed Income 20-40% 29%
Equities 50-70% 63%
Real Estate 0-10% 3.5%
Global Infrastructure 0-10% 3.5%
Commodities 0-10% 0%
Cash 0-10% 1%
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The target rates of return are based on the long-term expected rate of return for assets in
the trusts and the City's time horizon for the investments.
With strong reserves and a fully funded OPEB plan, the City can maintain a long-term
investment horizon with a “balanced” investment objective. There may be periods of
substantial decline in investment value, and the portfolio should expect periodic
volatility. However, a 6.56% return on investment is expected over the long-term, based
on the current investment objective. More conservative investment objectives such as
“moderate” and “moderate-conservative” would expect less volatility and declines in
investment value; however, over the long term, they would also expect lower returns.
Many agencies anticipate needing to access the funds in their respective trusts sooner and
invest with more emphasis on preserving capital in the near term.
The OPEB Trust has a higher discount rate than the Pension Trust because OPEB
investments are expected to have a longer time horizon. OPEB obligations are generally
longer in duration, and the City expects to withdraw Pension Trust funds earlier to fund
CalPERS contributions. Given that changes to the CalPERS discount rate have larger
effects on the City's operating budget and are farther out of the City's control, it is
important that the City be able to use the Trust to pay CalPERS contributions as needed.
Sustainability Impact
There is no sustainability impact.
Fiscal Impact
There is no direct fiscal impact at this time.
_____________________________________
Prepared by: Jonathan Orozco, Finance Manager
Reviewed by: Kristina Alfaro, Director of Administrative Services
Approved for Submission by: Tina Kapoor, City Manager
Attachments:
A – OPEB Trust Investment Policy
B – Pension Trust Investment Policy
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Other Post-
Employment Benefits
(OPEB) Investment
Policy
Citywide Policy Manual
Attachments: N/A
Effective Date:
December 2, 2025 November 19, 2024
Responsible Department:
Administrative Services
Related Policies & Notes:
City Investment Policy, Pension Investment Policy
Overview
In response to the Government Accounting Standards Board (GASB) Statement No. 45,
replaced by GASB Statement No. 74 and GASB Statement No. 75, new disclosure requirements
for Other Post-employment Benefit (OPEB) Plans, the City of Cupertino has adopted a
Section 115 Trust and Plan that seeks to satisfy these liabilities for certain eligible
employees
Executive Summary
Account Name: City of Cupertino OPEB Trust
Account Number: 6746035000
Investment Authority: Full Investment Authority
Current Assets: $45.1 40.7 m illion (September 2025 2024)
Time Horizon: Long-Term
Target Rate of Return: 6.5%
Communication Schedule: Meetings will be conducted at least quarterly
U.S. Bank Portfolio Manager: Dennis Mullins
Dennis.mullins@usbank.com
513-304-0398
U.S. Bank Relationship Manager : Ryan Maxey
ryan.maxey@usbank.com
503-464-3789
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Investment Objective: ‘Balanced’
This investment objective is designed to provide a moderate amount of current income with moderate
growth of capital. Investors should have sufficient tolerance for price and return volatility and substantial
periodic declines in investment value. This objective is recommended for investors with a long-term time
horizon.
The strategic asset allocation ranges and tactical targets for this objective are listed below:
Investment Guidelines
Overview
This document defines the investment policy, guidelines and performance objectives applicable
to the assets of The City of Cupertino’s OPEB Trust. The goal of this Policy is to create an
investment framework within which the assets can be actively yet prudently managed.
The purpose of this document is threefold.
First, it will set forth an investment structure for managing the Portfolio assets. This
structure is expected to produce an appropriate level of overall diversification and
total investment return over the investment time horizon.
Second, it will serve as to encourage effective communications between the
organization and parties involved with investment management decisions.
Third, these guidelines will provide a framework to measure ongoing investment
performance.
Within the constraints imposed by these policies, Investment Managers are expected to comply
with all applicable fiduciary and due diligence requirements under the “prudent investor” rules,
which state: “Investments shall be made with judgment and care, under circumstances then
prevailing, which persons of prudence, discretion and intelligence exercise in the management of
their own affairs, not for speculation, but for investment, considering the probable safety of their
capital as well as the probable income to be derived.” All applicable laws, rules and regulations
from various local, state, federal and international political entities that may impact the Portfolio
are to be adhered to.
Asset Class Range
Benchmark
Target
Fixed Income
Equities
Real Estate
Global Infrastructure
Commodities
Cash
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Diversification
Your Portfolio Manager is responsible for maintaining the balance between the various asset classes based on the investment objective’s strategic asset allocation. As a general policy, the Investment Manager will maintain reasonable diversification at all times by asset class, credit quality, issuer, sector, industry, and country.
The following parameters shall be adhered to in managing the portfolio:
Fixed Income Assets
• The fixed income investments are to maintain intermediate -term average weighted
duration, between three-seven years.
• At the time of purchase, no single fixed income issuer shall exceed 2% of the total market
value of the Portfolio, with the exception of U.S. Treasury or Agency obligations.
• The direct high-yield portion shall constitute no more than 10% of the total market value
of the Portfolio.
• Hedged fixed income positions shall constitute no more than 10% of the total market
value of the Portfolio.
Equity & Growth Assets
• The domestic equity investments are expected to be diversified at all times by size,
industry, sector, and style (Large Cap, Mid Cap, and Small Cap).
• At the time of purchase, no individual equity security shall exceed 2% of the total market
value of the Portfolio.
• The real estate investments shall be captured through the use of diversified mutual
funds or ETFs investing in REITs; and shall constitute no more than 15% of the total
market value of the Portfolio .
• The commodities investments shall be captured through the use of diversified mutual
funds or ETFs; and shall constitute no more than 10% of the total market value of the
Portfolio.
• Hedged equity positions shall constitute no more than 10% of the total market value of
the Portfolio
Permitted Asset Classes and Security Types
Fixed Income & Cash Equivalent Investments:
Domestic Certificates of Deposit (rated A-1/P-1 or better)
Domestic Commercial Paper (rated A-1/P-1 or better)
Floating Rate Notes
Money Market Mutual Funds
U.S. Treasury Bonds, Bills and Notes
U.S. Agency (and Instrumentality) Discount Notes, Notes, and Bonds
Treasury Inflation-Protected Securities (TIPS)
Municipal Bonds and Notes
Corporate Bonds
Mortgage-Backed Bonds (MBS)
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Asset-Backed Bonds (ABS)
High-Yield Bonds (rated B-/B3 or better)
Dollar denominated Foreign Bonds and Notes
Bond Mutual Funds
Equity Investments:
Common & Preferred Stocks
American Depository Receipts (ADRs)
Domestic and International Equity Mutual Funds (Open and Closed)
Emerging Market Equity Funds or Exchange Traded Funds (ETFs)
Alternative Investments:
Commodities Mutual Funds or Exchange Traded Notes (ETNs)
REIT Investment or Pooled Strategy or Fund of REITs
Registered Hedge Funds or Hedge Fund of Funds
Global Infrastructure Mutual Funds or Exchange Traded Funds
Prohibited Asset Classes and Transactions
The Investment Manager is prohibited from purchasing or holding any of the following types of
investments:
Partnerships unless investing in Master Limited Partnerships invested in a mutual fund
and limited in scope and allocation of Portfolio based on asset class limitations of table
above
Letter stock and other unregistered securities; physical commodities or other commodity
contracts; and short sales or margin transactions
Investments in the equity securities of any company with a record of less than three years
continuous operation, including the operation of any predecessor
Investments for the purpose of exercising control of management
Direct or indirect exposure to cryptocurrencies
Leveraged securities, other than registered Hedged Equity and Hedged Fixed Income
positions
Duties and Responsibilities
1) CITY OF CUPERTINO AUDIT COMMITTEE
a) Establish, approve, and maintain investment objectives, guidelines, and policies
(including this Policy).
b) Appoint Investment Managers who can be reasonably expected to adhere to the
investment guidelines and meet the investment objectives as established.
c) Monitor the investment performance of the Portfolio and compare actual investment
performance relative to an appropriate benchmark index given the stated investment
guidelines and objectives set forth in this Policy.
d) Conduct a formal review of the Portfolio’s asset allocation, investment structure and
performance annually or more frequently as the need arises.
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e) Periodically review the Portfolio performance against objectives.
2) CITY OF CUPERTINO CITY COUNCIL
a) Adopt the Policy by resolution of the City Council on an annual basis.
3) PORTFOLIO MANAGER
The Portfolio Manager will be responsible for carrying out the activities related to the
Portfolio in accordance with the Policy including:
a) Manage the day-to-day investment of Portfolio assets in accordance with the Policy
guidelines and objectives included herein.
b) Exercise full investment discretion and prudence in the selection and diversification
of investments.
c) Promptly bring to the attention of the City Treasurer or designee any investment that
is subsequently downgraded and fails to meet the quality guidelines, along with a
recommendation of retention or disposal.
d) Provide on a quarterly basis the following investment reporting:
(i) Year-to-date rate of return
(ii) Annualized one, three, five, etc. rates of return
e) Provide annually to the City’s Audit Committee a commentary and analysis of
investment performance to include an evaluation of the current and future investment
environment and potential impact of the investment environment on achievement of
investment objectives.
Investment Policy Statement Review
The City’s Audit Committee will review and the Cupertino City Council will adopt this
Investment Policy Statement at least annually to determine whether stated investment objectives
are still relevant and the continued feasibility of achieving the same. It is not expected that the
Policy will change frequently. In particular, short-term changes in the financial markets should
not require adjustments to the Policy.
If at any time the Portfolio Manager finds the above guidelines too restrictive or possibly injurious
to investment returns, they should communicate that information immediately to the City’s Audit
Committee.
City Manager’s signature: _______________________________
Date: _______________________________
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Revisions: 6.5.2018, 11.19.2019, 11.17.2020, 12.7.2021, 12.06.2022, 12.05.2023, 12.03.2024
Director of Administrative Services’ signature: _______________________________
Date: _______________________________
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Pension Trust
Investment Policy
Citywide Policy Manual
Attachments: N/A
Effective Date:
December 2, 2025 November 19, 2024
Responsible Department:
Administrative Services
Related Policies & Notes:
N/A
Investment Policy Statement
Overview
The City has established a Section 115 Trust with PARS to assist in stabilizing the potential impact
of pension cost volatility on the City’s operating budget. The City intends to use the Section 115
Trust to pre-fund pension costs and proactively address the unfunded liability. The City’s goal
is to have sufficient assets in the trust to increase the funded status to over 80% within 20 years,
as well as fund the difference between a 7.0% and 6.25% discount rate.
Executive Summary
Account Name: City of Cupertino Pension Trust
Account Number: 6746050100
Investment Authority: Full Investment Authority
Current Assets: $25.6 23.0 Million (September 2025 2024)
Time Horizon: Long-Term
Target Rate of Return: 6.25%
Communication Schedule: Meetings will be conducted at least quarterly
U.S. Bank Portfolio Manager: Dennis Mullins
Dennis.mullins@usbank.com
513-304-0398
U.S. Bank Relationship Manager : Ryan Maxey
ryan.maxey@usbank.com
503-464-3789
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Investment Objective: ‘Balanced’
This investment objective is designed to provide a moderate amount of current income with moderate
growth of capital. Investors should have sufficient tolerance for price and return volatility and substantial
periodic declines in investment value. This objective is recommended for investors with a long-term time
horizon.
The strategic asset allocation ranges and tactical targets for this objective are listed below:
Investment Guidelines
Overview
This document defines the investment policy, guidelines and performance objectives applicable
to the assets of The City of Cupertino’s Pension Trust. The goal of this Policy is to create an
investment framework within which the assets can be actively yet prudently managed.
The purpose of this document is threefold.
First, it will set forth an investment structure for managing the Portfolio assets. This
structure is expected to produce an appropriate level of overall diversification and
total investment return over the investment time horizon.
Second, it will serve as to encourage effective communications between the
organization and parties involved with investment management decisions.
Third, these guidelines will provide a framework to measure ongoing investment
performance.
Within the constraints imposed by these policies, Investment Managers are expected to comply
with all applicable fiduciary and due diligence requirements under the “prudent investor” rules,
which state: “Investments shall be made with judgment and care, under circumstances then
prevailing, which persons of prudence, discretion and intelligence exercise in the management of
their own affairs, not for speculation, but for investment, considering the probable safety of their
capital as well as the probable income to be derived.” All applicable laws, rules and regulations
from various local, state, federal and international political entities that may impact the Portfolio
are to be adhered to.
Asset Class Range
Benchmark
Target
Fixed Income
Equities
Real Estate
Global Infrastructure
Commodities
Cash
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Diversification
Your Portfolio Manager is responsible for maintaining the balance between the various asset classes based on the investment objective’s strategic asset allocation. As a general policy, the Investment Manager will maintain reasonable diversification at all times by asset class, credit quality, issuer, sector, industry, and country.
The following parameters shall be adhered to in managing the portfolio:
Fixed Income Assets
• The fixed income investments are to maintain intermediate -term average weighted
duration, between three-seven years.
• At the time of purchase, no single fixed income issuer shall exceed 2% of the total market
value of the Portfolio, with the exception of U.S. Treasury or Agency obligations.
• The direct high-yield portion shall constitute no more than 10% of the total market value
of the Portfolio.
• Hedged fixed income positions shall constitute no more than 10% of the total market
value of the Portfolio
Equity & Growth Assets
• The domestic equity investments are expected to be diversified at all times by size,
industry, sector, and style (Large Cap, Mid Cap, and Small Cap).
• At the time of purchase, no individual equity security shall exceed 2% of the total market
value of the Portfolio.
• The real estate investments shall be captured through the use of diversified mutual
funds or ETFs investing in REITs; and shall constitute no more than 15% of the total
market value of the Portfolio .
• The commodities investments shall be captured through the use of diversified mutual
funds or ETFs; and shall constitute no more than 10% of the total market value of the
Portfolio.
• Hedged equity positions shall constitute no more than 10% of the total market value of
the Portfolio
Permitted Asset Classes and Security Types
Fixed Income & Cash Equivalent Investments:
Domestic Certificates of Deposit (rated A-1/P-1 or better)
Domestic Commercial Paper (rated A-1/P-1 or better)
Floating Rate Notes
Money Market Mutual Funds
U.S. Treasury Bonds, Bills and Notes
U.S. Agency (and Instrumentality) Discount Notes, Notes, and Bonds
Treasury Inflation-Protected Securities (TIPS)
Municipal Bonds and Notes
Corporate Bonds
Mortgage-Backed Bonds (MBS)
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Asset-Backed Bonds (ABS)
High-Yield Bonds (rated B-/B3 or better)
Dollar denominated Foreign Bonds and Notes
Bond Mutual Funds
Equity Investments:
Common & Preferred Stocks
American Depository Receipts (ADRs)
Domestic and International Equity Mutual Funds (Open and Closed)
Emerging Market Equity Funds or Exchange Traded Funds (ETFs)
Alternative Investments:
Commodities Mutual Funds or Exchange Traded Notes (ETNs)
REIT Investment or Pooled Strategy or Fund of REITs
Registered Hedge Funds or Hedge Fund of Funds
Global Infrastructure Mutual Funds or Exchange Traded Funds
Prohibited Asset Classes and Transactions
The Investment Manager is prohibited from purchasing or holding any of the following types of
investments:
Partnerships unless investing in Master Limited Partnerships invested in a mutual fund
and limited in scope and allocation of Portfolio based on asset class limitations of table
above
Letter stock and other unregistered securities; physical commodities or other commodity
contracts; and short sales or margin transactions
Investments in the equity securities of any company with a record of less than three years
continuous operation, including the operation of any predecessor
Investments for the purpose of exercising control of management
Direct or indirect exposure to cryptocurrencies
Leveraged securities, other than registered Hedged Equity and Hedged Fixed Income
positions
Duties and Responsibilities
1) CITY OF CUPERTINO AUDIT COMMITTEE
a) Establish, approve, and maintain investment objectives, guidelines, and policies
(including this Policy).
b) Appoint Investment Managers who can be reasonably expected to adhere to the
investment guidelines and meet the investment objectives as established.
c) Monitor the investment performance of the Portfolio and compare actual investment
performance relative to an appropriate benchmark index given the stated investment
guidelines and objectives set forth in this Policy.
d) Conduct a formal review of the Portfolio’s asset allocation, investment structure and
performance annually or more frequently as the need arises.
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e) Periodically review the Portfolio performance against objectives.
2) CITY OF CUPERTINO CITY COUNCIL
a) Adopt the Policy by resolution of the City Council on an annual basis.
3) PORTFOLIO MANAGER
The Portfolio Manager will be responsible for carrying out the activities related to the
Portfolio in accordance with the Policy including:
a) Manage the day-to-day investment of Portfolio assets in accordance with the Policy
guidelines and objectives included herein.
b) Exercise full investment discretion and prudence in the selection and diversification
of investments.
c) Promptly bring to the attention of the City Treasurer or designee any investment that
is subsequently downgraded and fails to meet the quality guidelines, along with a
recommendation of retention or disposal.
d) Provide on a quarterly basis the following investment reporting:
(i) Year-to-date rate of return
(ii) Annualized one, three, five, etc. rates of return
e) Provide annually to the City’s Audit Committee a commentary and analysis of
investment performance to include an evaluation of the current and future investment
environment and potential impact of the investment environment on achievement of
investment objectives.
Investment Policy Statement Review
The City’s Audit Committee will review and the Cupertino City Council will adopt this
Investment Policy Statement at least annually to determine whether stated investment objectives
are still relevant and the continued feasibility of achieving the same. It is not expected that the
Policy will change frequently. In particular, short-term changes in the financial markets should
not require adjustments to the Policy.
If at any time the Portfolio Manager finds the above guidelines too restrictive or possibly injurious
to investment returns, they should communicate that information immediately to the City’s Audit
Committee.
City Manager’s signature: _______________________________
Date: _______________________________
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Revisions: 11.19.2019, 11.17.2020, 12.7.2021, 12.06.2022, 12.05.2023, 12.03.2024
Director of Administrative Services’ signature: _______________________________
Date: _______________________________
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CITY OF CUPERTINO
Agenda Item
Subject: ACTION ITEM Receive the FY 2024-25 Annual Comprehensive Financial Report (ACFR) and
Supplemental Reports and forward to City Council
Receive the FY 2024-25 Annual Comprehensive Financial Report (ACFR) and Supplemental
Reports and forward to City Council
Presenter: Jonathan Orozco, Finance Manager and The Pun Group
1:45(30)
CITY OF CUPERTINO Printed on 11/26/2025Page 1 of 1
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Fiscal Year 2024-2025
Annual Comprehensive Financial Report
City of Cupertino . 10300 Torre Avenue . Cupertino CA 95014 . cupertino.gov
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CITY OF CUPERTINO, CALIFORNIA
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
WITH REPORTS ON AUDIT
BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
FOR THE YEAR ENDED
JUNE 30, 2025
Prepared by:
The City of Cupertino Administrative Services Department
Finance Division
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City of Cupertino
Annual Comprehensive Financial Report
For the Year Ended June 30, 2025
Table of Contents
Page
INTRODUCTORY SECTION (Unaudited)
Letter of Transmittal ...................................................................................................................................................... i
City Council and Directory of City Officials .............................................................................................................. vii
Organizational Chart .................................................................................................................................................. viii
Commissions and Committees ..................................................................................................................................... ix
GFOA Certificate of Achievement for Excellence in Financial Reporting .................................................................. x
FINANCIAL SECTION
Independent Auditor’s Report on Financial Statements ......................................................................................... 1
Management’s Discussion and Analysis (Required Supplementary Information) (Unaudited) ......................... 5
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position .............................................................................................................................. 20
Statement of Activities ................................................................................................................................... 22
Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet .......................................................................................................................................... 26
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ......................................................................... 29
Statement of Revenues, Expenditures, and
Changes in Fund Balances ................................................................................................................ 30
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fund Balances to the Government-Wide
Statement of Activities ...................................................................................................................... 32
Proprietary Fund Financial Statements:
Statement of Net Position ........................................................................................................................ 34
Statement of Revenues, Expenses, and Changes in Net Position ............................................................ 38
Statement of Cash Flows ......................................................................................................................... 40
Notes to the Basic Financial Statements ........................................................................................................... 49
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City of Cupertino
Annual Comprehensive Financial Report
For the Year Ended June 30, 2025
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule:
General Fund .................................................................................................................................................. 93
Transportation Special Revenue Fund ........................................................................................................... 94
Housing Development Special Revenue Fund ............................................................................................... 95
Notes to the Budgetary Comparison Schedules .................................................................................................. 97
Schedule of Changes in the Net Pension Liability and Related Ratios:
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan ....................................... 98
Schedule of Contributions – Pensions:
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan ..................................... 100
Schedule of Changes in the Net Other postemployment Benefits Liability and Related Ratios ..................... 102
Schedule of Contributions - Other postemployment Benefits ......................................................................... 104
Supplementary Information:
Other than the General Fund and Special Revenue Funds ................................................................................. 109
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:
Public Facilities Corporation Debt Service Fund ......................................................................................... 111
Capital Improvement Projects Capital Projects Fund .................................................................................. 112
Nonmajor Governmental Funds:
Description of Nonmajor Governmental Funds ........................................................................................... 113
Combining Balance Sheet ............................................................................................................................ 114
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 116
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:
Storm Drain Improvement Special Revenue Fund ................................................................................ 118
Park Dedication Special Revenue Fund ................................................................................................ 119
Environmental Management/Clean Creeks Special Revenue Fund ...................................................... 120
Traffic Impact Special Revenue Fund ................................................................................................... 121
Stevens Creek Corridor Park Capital Projects Fund .............................................................................. 122
Nonmajor Enterprise Funds:
Combining Statement of Net Position.......................................................................................................... 125
Combining Statement of Revenues, Expenses and Changes in Net Position .............................................. 126
Combining Statement of Cash Flows ........................................................................................................... 127
Internal Service Funds:
Combining Statement of Net Position.......................................................................................................... 130
Combining Statement of Revenues, Expenses, and Changes in Net Position ............................................. 132
Combining Statement of Cash Flows ........................................................................................................... 134
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City of Cupertino
Annual Comprehensive Financial Report
For the Year Ended June 30, 2025
Table of Contents (Continued)
Page
STATISTICAL SECTION (Unaudited)
Description of Statistical Section Contents ............................................................................................................... 141
Financial Trends:
Net Position By Component – Last Ten Fiscal Years ........................................................................................... 142
Changes in Net Position - Expenses and Program Revenues – Last Ten Fiscal Years ......................................... 144
Fund Balances of Governmental Funds – Last Ten Fiscal Years .......................................................................... 148
Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years ....................................................... 150
Revenue Capacity:
Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ........................................... 152
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ................................................................... 153
Principal Property Taxpayers – Current Year and Nine Years Ago ...................................................................... 154
Property Tax Levies and Collections – Last Ten Fiscal Years .............................................................................. 155
Debt Capacity:
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ............................................................................... 156
Direct and Overlapping Bonded Debt .................................................................................................................... 157
Legal Debt Margin Information – Last Ten Fiscal Years ...................................................................................... 158
Ratio of General Bonded Debt – Last Ten Fiscal Years ........................................................................................ 159
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years ........................................................................... 160
Top 25 Sales Tax Producers .................................................................................................................................. 161
Operating Information:
Full-Time Equivalent City Employees by Function/Program – Last Ten Fiscal Years ........................................ 163
Operating Indicators by Function/Program – Last Ten Fiscal Years ..................................................................... 164
Capital Assets Statistics by Function/Program – Last Ten Fiscal Years ............................................................... 166
Community Economic Profile ................................................................................................................................. 169
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i
December XX, 2025
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), California for the fiscal year ended June 30, 2025. The report is prepared in accordance with
accounting principles generally accepted in the United States of America (GAAP) set by the Governmental
Accounting Standards Board (GASB). The report presents City information on an entity-wide basis and 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. The Director of Administrative Services shall also be appointed Treasurer per the Cupertino
Municipal Code 2.48.020. All other employees are appointed by the City Manager.
CITY OF CUPERTINO
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3202
(408) 777-CITY • WWW.CUPERTINO.ORG
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ECONOMIC CONDITIONS
The City of Cupertino is located in Santa Clara County at the southern end of the San Francisco Bay
Peninsula. The City is comprised of 13-square miles and is bordered by the cities of San Jose, Saratoga,
Sunnyvale, Santa Clara, and Los Altos. It has a residential population of 59,831 (California Department of
Finance, January 2025).
Situated at the west end of Silicon Valley, the City 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-wage 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.
The City is world renowned as the home of high-tech giants, such as Apple, Inc. and Amazon, 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 continued commitment to supporting a vibrant local community has 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 permitting process.
The City is excited to feature a number of new mixed-use development projects offering more retail and
dining options, as well as providing additional housing opportunities to meet the needs of the growing
community.
The Main Street and Nineteen800 mixed-use developments continue to offer a vibrant downtown area for
the City, with a large selection of restaurants and retailers, including Alexander’s Steakhouse, Eureka!,
Oren’s Hummus, Lazy Dog, Ippudo, HaiDiLao Hotpot Restaurant, Pressed Juicery, Orangetheory Fitness,
85 Degree Bakery, Somi Somi, Sul & Beans, Kura Sushi, Vitality Bowls, Holder's Country Inn, HEYTEA,
Bishops Cuts/Color, Capezio, Pineapple Thai, Koi Palace Contempo, Pacific Catch, Philz Coffee, Meri
West Bank, AT&T Store, The Original Facial Bar, Pizza My Heart, and Charles Schwab (formerly TD
Ameritrade), . Housing, office, and a Residence Inn by Marriott and Main Street Cupertino Lofts are
available to support the thriving area. Benihana, Bowlmor, and Cupertino Ice Center 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 Sanrio (Hello Kitty),
Kiddleton, Galpao Gaucho (Brazilian Steakhouse), Daiso, Marukai Groceries, Harumi Sushi, La Patisserie
Bakery, Beard Papa’s, Legend’s Pizza, Icicles, Kong’s Tofu & BBQ, and One Pot Shabu Shabu.
Shopping center improvements to Cupertino Village reflect building upgrades and renovations, newly
constructed buildings, parking, and open space. The shopping center is home to 99 Ranch Market, Duke of
Edinburgh Pub & Restaurant, Ume Tea, Tofu Plus, Kira Kira Beauty, Ten Ren Tea, Fantasia Coffee & Tea,
Happy Lemon, Shanghai Family Restaurant, and many other Asian restaurants, bakeries, and shops.
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The City features many other retail opportunities, including TJ Maxx and Home Goods, Whole Foods,
Target, and over 180 restaurants to serve residents and the local workforce. There are 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 Hyatt House.
The Homestead Square Shopping Center, located at Homestead Road and De Anza Boulevard, includes a
Safeway, PGA Tour Superstore, Ulta Beauty, Ross, Pet Club, Michaels, FedEx, and numerous restaurants,
such as Fish’s Wild, Pho Hoa Noodle Soup, Yayoi Teishoku Japanese Restaurant, 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 café offer the public
a place to learn, explore, and shop.
California Department of Tax and Fee Administration (CDTFA)
The City recently achieved a favorable resolution to a California Department of Tax and Fee Administration
(CDTFA) audit involving a major sales taxpayer. In anticipation of a potentially adverse outcome, the City
proactively established a $74.5 million Sales Tax Repayment Reserve to fully account for disputed revenues
and accrued interest.
Following the October 2024 settlement, the City determined that the full reserve was no longer necessary.
Of the $74.5 million, $10.0 million was used to make an Additional Discretionary Payment (ADP) toward
the City’s CalPERS Unfunded Accrued Liability, with the remaining $64.5 million transferred to a Future
Use Reserve within the General Fund. This strategic action demonstrates the City’s commitment to
responsible financial planning, reinforces long-term fiscal sustainability, and positions Cupertino to better
manage future economic uncertainties.
Property Tax
According to the 2024-2025 Assessor’s Annual Report for Santa Clara County, Cupertino’s net assessment
roll growth increased by nearly $1,413 million, or 4.4%, from the prior year. Residential use values
increased 5.7%, a total of $1,147 million, and represented 81.2% of net positive growth experienced in the
City. Commercial properties posted an increase of $225.1 million, or 2.5%, due to the movement of assets
from the secured to the unsecured roll. The industrial properties reported growth of $115.8 million, or 7.7%,
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 $64.7 million, or -5.7% due to the
movement of assets from the secured to the unsecured roll, which contributed to the large growth in
unsecured seen in the commercial use category.
Sales Tax
The City has experienced significant fluctuations in sales tax revenues over the past several fiscal years.
Revenues peaked at $42.6 million in FY 2020–21, driven by increased demand for technology and online
purchases during the pandemic, particularly in the Business and Industry and State & County Pools
categories. As in-person shopping resumed, sales tax revenues declined to $34.8 million in FY 2022–23
and further to $31.0 million in FY 2023–24, returning to pre-pandemic levels.
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Much of the initial growth during FY 2020–21 and FY 2021–22 was concentrated in the Business and
Industry and State & County Pools categories. However, these groups returned to FY 2019–20 levels by
FY 2022–23, with other industry segments showing modest but steady growth. In FY 2023–24, the Business
and Industry group experienced the largest decline, which also negatively impacted the State and County
Pools. FY 2024–25 continued this downward trend, primarily due to the resolution of the CDTFA audit,
discussed in further detail below, and the resulting reallocation of sales taxes. Because State and County
Pools are directly linked to the City's overall direct allocations, the pooled distributions also declined
accordingly.
In FY 2024–25, the City’s sales tax revenue was comprised of eight major industry groups: Business and
Industry and State & County Pools (73.7%), Restaurants and Hotels (13.0%), General Consumer Goods
(6.3%), Fuel and Service Stations (3.2%), Food and Drugs (1.9%), Building and Construction (1.4%), and
Autos and Transportation (0.3%). Due to confidentiality requirements, the percentage for State & County
Pools is included within the Business and Industry category. These figures underscore the City’s continued
reliance on technology-driven sectors while also highlighting the growing role of hospitality and retail
industries in the City’s economic landscape.
Pension and Other Post-Employment Benefits (OPEB)
The City remains committed to responsibly managing its long‑term pension and retiree medical obligations.
As of the most recent CalPERS actuarial valuation (measured as of June 30, 2024), the City’s Miscellaneous
Plan reported an unfunded accrued liability (UAL) of approximately $56.4 million and a funded status of
70.7%.
Despite external fiscal pressures, the City continues to address its pension and retiree medical obligations
through disciplined, long-term financial planning. Cupertino proactively manages these commitments by
implementing cost-control measures, such as reducing pension benefits for new hires under state law and
increasing employee contributions. The City also leverages its Section 115 Pension Trust (established in
FY 2017–18 as part of a pension rate stabilization strategy), which has received $16 million in contributions
to date. This trust remains a critical tool for managing cost volatility and ensuring long-term sustainability.
In FY 2024–25, the City made an Additional Discretionary Payment (ADP) of $10.0 million directly to
CalPERS to further reduce its unfunded liability. This payment is not reflected in the June 30, 2024 actuarial
valuation, but it is expected to materially improve the City’s funded status in the next valuation cycle. The
timing of this payment was fiscally advantageous, occurring in a year when CalPERS reported a preliminary
investment return of 11.6%, significantly above its 6.8% assumed rate of return, helping the City achieve
immediate and long‑term savings.
As of June 30, 2025, the City’s Net OPEB Asset stands at approximately $1.26 million, with a funded status
of 103.0%. While the City has traditionally contributed annually to its retiree health plan trust, the City
paused its contributions in FY 2022-23 to help balance potential General Fund deficits resulting from the
CDTFA audit. This decision underscores Cupertino’s flexibility in addressing short-term fiscal challenges
while remaining committed to the long-term sustainability of its OPEB obligations.
The City benefits from its contracted approach to public safety services, outsourcing police operations to
the County Sheriff and fire protection to a special district. This structure avoids the significant pension and
capital costs associated with operating its own public safety departments. Additionally, prudent financial
practices, including maintaining robust reserves and implementing cost-saving measures, position
Cupertino to navigate economic uncertainties effectively.
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ECONOMIC INITIATIVES
The City remains committed to fostering economic diversity and maintaining long-term fiscal
sustainability. While Cupertino benefits from a thriving high-tech economy, led by major employers like
Apple Inc., the City is focused on broadening its revenue base to enhance stability and growth.
This includes supporting the development of emerging industries, promoting local entrepreneurship, and
investing in innovative infrastructure that attracts diverse businesses. By fostering a vibrant mix of industry
sectors, from technology to retail and services, the City aims to create a resilient economy that can adapt to
changing market conditions, ensuring sustained prosperity for the community and future generations.
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.
SINGLE AUDIT
In accordance with the Single Audit Act of 1984 and the U.S. Office of Management and Budget’s Uniform
Guidance, the City is required to undergo an annual Single Audit if total federal expenditures exceed
$750,000 within a given fiscal year. In FY 2024–25, the City expended federal funds in excess of this
threshold, primarily from the U.S. Department of Transportation passed through the California Department
of Transportation (Caltrans), triggering the requirement for a Single Audit.
The Single Audit will commence upon completion of the Annual Comprehensive Financial Report (ACFR).
As prescribed by federal regulations, the Single Audit must be completed and submitted no later than nine
months after the close of the fiscal year, ensuring continued transparency and compliance with federal grant
requirements.
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. The Pun Group LLP audited the
City’s Basic Financial Statements, and their opinion thereon is included in the Financial Section of this
report.
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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, 2024. 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.
ACKNOWLEDGMENTS
I would like to express my appreciation to City employees, department heads, the City Manager, members
of the Audit Committee, and members of the City Council for their commitment to conducting the City’s
financial operations in a responsible manner. Special thanks go to Jonathan Orozco, Richard Wong, Vi
Tran, Min Zhao, Amber Chang, Janet Liang, Zeng Wang, and Jumaini Judoprasetijo of the Finance staff
for their continued support, dedication, and efforts in the preparation and production of this report.
Reviewed by,
Kristina Alfaro
Director of Administrative Services
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Directory of City Officials
City Council
Liang Chao Kitty Moore
Mayor Vice Mayor
J.R. Fruen R "Ray" Wang
Council Member Council Member
Sheila Mohan
Council Member
Directory of City Officials
Tina Kapoor – Interim City Manager
Floy Andrews – Contract City Attorney
Kristina Alfaro – Director of Administrative Services
Ben Fu – Director of Community Development
Chad Mosley – Director of Public Works
Rachelle Sander – Director of Parks and Recreation
Teri Gerhardt – Chief Technology Officer
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Commissions and Committees
ARTS AND CULTURE
COMMISSION
Archana Panda
Susan Chen
David Wang
Kiran Varshneya Rohra
Gurmeet Lamba
AUDIT COMMITTEE
Kitty Moore
Eno Schmidt
Hanyan Wu
Sheila Mohan
William Wong
BICYCLE PEDESTRIAN
COMMISSION
Hervé Marcy
Gerhard Eschelbeck
Joel Wolf
Munisekaran Madhipatla
Ilango Ganga
ECONOMIC DEVELOPMENT
COMMITTEE
Vacant
HOUSING COMMISSION
Usha Narayan
Connie Cunningham
Elida" Lida" Xhindi
Vacant
Vacant
SUSTAINABILITY
COMMISSION
Alexander Fung
Conny Yang
Jack Carter
Susan Hansen
Sonali Padgaonkar
TEEN COMMISSION
Vinay Prakash
Anushree Misra
Brianna Su
Chelsea Lau
Harly Liu
Rusheel Deshmukh
Saanvi Halambi
Sumedha Kumar
Jonathan Gao
TECHNOLOGY, INFORMATION
& COMMUNICATIONS
COMMISSION
Balaram Donthi
Emma Shearin
Mukesh Garg
Prabir Mohanty
Sudeep Kumar
LIBRARY COMMISSION
Chandra Sakthivel
Janki Chokshi
Liyan Zhao
Minna Xu
Qin Pan
PARKS AND RECREATION
COMMISSION
Carol Stanek
Claudio Bono
Gopal Kumarappan
Sheela Sreekanth
Seema Swamy
PLANNING COMMISSION
Santosh Rao
David Fung
Seema Lindskog
Steven Scharf
Tracy Kosolcharoen
PUBLIC SAFETY COMMISSION
Nirmalendu Das
Ravi Kiran Singh Sapaharam
Sashikala Begur
Sidarth Rajaram
Gregory Klein
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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, 2024
Executive Director/CEO
x
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INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and the Members of the City Council
of the City of Cupertino
Cupertino, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of City of Cupertino, California (the “City”) as of and for the year
ended June 30, 2025, and the related notes to the basic 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, 2025, and the respective changes in financial
position, and, where applicable, cash flows thereof 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 and
the standards applicable to financial audits contained in 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.
Other Matters
Change in Accounting Principle - Implementation of GASB 101
As discussed in Note 1 to the basic financial statements, the City adopted new accounting guidance, Governmental
Accounting Standards Board (“GASB”) Statement No. 101, Compensated absences. Our opinion is not modified with
respect to this matter. The adoption of this standard resulted in the restatement of the City’s net position as of
June 30, 2024.
Prior Period Adjustments
As discussed in the Note 15 to the basic financial statements, the City also recorded prior period adjustment in the
governmental activities in the amount of $5,742,773 due to correction of recording capital assets.
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To the Honorable Mayor and the Members of the City Council
of the City of Cupertino
Cupertino, California
Page 2
2
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.
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 auditing standards generally accepted in the United States of America 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 auditing standards generally accepted in the United States of America 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.
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To the Honorable Mayor and the Members of the City Council
of the City of Cupertino
Cupertino, California
Page 3
3
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management’s Discussion and
Analysis, the Budgetary Comparison Schedules – General Fund and Major Special Revenue Funds, the Schedule of
Changes in Net Pension Liability and Related Ratios, the Schedule of Contributions – Pensions, the Schedules of
Changes in Net Other Postemployment Benefits Liability and Related Ratios, and the Schedule of Contributions –
Other Postemployment Benefits as listed in the table of contents be presented to supplement the basic financial
statements. Such information is the responsibility of management and, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the City’s basic financial statements. The accompanying combining and individual nonmajor fund financial
statements are presented for purposes of additional analysis and are 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 combining and individual nonmajor fund financial statements are 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 and the Statistical Section are presented for purposes of additional analysis and are not a
required part of the basic financial statements. Our opinions on the basic financial statements do not cover the other
information, and we do not express an opinion or any form of 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.
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To the Honorable Mayor and the Members of the City Council
of the City of Cupertino
Cupertino, California
Page 3
4
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated Need date, 2025, 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 solely
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.
Santa Ana, California
Need date, 2025
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CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2025
5
As management of the City of Cupertino (City), we offer readers of the City's financial statements this narrative
overview and analysis of the financial activities for the fiscal year ended June 30, 2025 (FY 2024-25). Readers are
encouraged to consider the following information in conjunction with the accompanying Transmittal Letter and Basic
Financial Statements.
FINANCIAL HIGHLIGHTS
The comparisons provided in this discussion and analysis are between FY 2023-24 and FY 2024-25. All increases and
decreases are expressed relative to FY 2023-2024 amounts. Financial highlights for FY 2024-25 are summarized below.
Details related to these highlights are found in the remaining sections of this analysis.
Government-wide
The City's total net position, the amount by which total assets and deferred outflows of resources exceed total
liabilities and deferred inflows of resources, equaled $460.8 million in FY 2024-25 and $430.5 million in FY 2023-
24.
Of this amount, $170.7 million is unrestricted and may be used to meet the City's ongoing obligations to residents
and creditors at June 30, 2025. The remaining net position at June 30, 2025 is classified as net investment in capital
assets of $212.5 million and restricted of $77.6 million.
The City's total net position increased by $30.3 million over FY 2023-24, and is largely attributed to revenues
exceeding expenses as reported in the statement of activities. The remainder of this report will provide a more
detailed analysis of the City's net position and operating activities that contributed to this increase.
In October 2023, the California Department of Tax and Fee Administration (CDTFA) issued its final audit
determination regarding a major sales taxpayer, concluding that a substantial portion of sales tax revenues had been
misallocated to Cupertino. In anticipation of this outcome, the City had proactively established a $74.5 million
committed Sales Tax Repayment Reserve. Following settlement discussions and finalization of the agreement in
September 2024, the City Council voted in October 2024 to reallocate the reserve funds: $10.0 million was used
for an Additional Discretionary Payment (ADP) toward the City’s CalPERS Unfunded Accrued Liability (UAL),
and the remaining $64.5 million was transferred to a newly established Future Use Reserve. These decisions are
reflected in the FY 2024–25 financial statements and demonstrate the City’s continued fiscal prudence in addressing
long-term liabilities and future needs.
As interest rates began to decline during the fiscal year, the market value of the City’s investment portfolio
improved. As of June 30, 2025, the City’s portfolio reached 100.5% of its book value, up from 98.1% the prior
year, reflecting favorable market conditions and a recovering fixed-income environment. This resulted in a positive
year-over-year mark-to-market adjustment of $5.7 million.
A prior period adjustment of $403,451 was recorded to implement GASB Statement No. 101, Compensated
Absences. This adjustment ensures compliance with updated guidance for the recognition and measurement of
compensated absences liabilities. Additional details are provided in Note 15 to the Basic Financial Statements.
A second prior period adjustment of $5,742,773 was made to recognize capital improvements performed by San
Jose Water Company on City-owned water infrastructure. These improvements, which were previously unrecorded,
are now included as part of the City's capital assets. Further information can be found in Note 15.
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CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited) (Continued)
For the Year Ended June 30, 2025
6
Fund Level
As of June 30, 2025, governmental funds report a combined fund balance of $265.0 million, an increase of $19.0
million from the prior year. Of this amount, $56.1 million is available for spending at the City's discretion
(unassigned fund balance).
As of June 30, 2025, the General Fund reports an ending fund balance of $181.8 million. Of this amount, $56.1
million is available for spending at the City's discretion (unassigned fund balance). Cash and investments of the
General Fund total $188.1 million, which represents 103.5% of the General Fund's total fund balance.
OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis are intended to serve as an introduction to the City’s Basic Financial Statements. The Basic
Financial Statements are comprised of the Government-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 Government-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 an 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.
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CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited) (Continued)
For the Year Ended June 30, 2025
7
The Fund Financial Statements report the City’s operations in more detail than the Government-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 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 details 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 the 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 a 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 government-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 a 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 Government-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 Government-wide and Fund Financial Statements.
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GOVERNMENT-WIDE FINANCIAL ANALYSIS
This analysis focuses on the net position and changes in net position of the City’s Governmental and Business-Type
Activities as presented in the government-wide Statement of Net Position and the Statement of Activities.
Total assets increased by $38.1 million, primarily due to a $41.6 million increase in cash and investments. This growth
reflects stronger operating results and cash retained from one-time revenues, including proceeds from the sale of City
property and favorable investment performance.
Deferred outflows of resources increased by $5.2 million, mainly due to a $6.1 million increase in pension-related items.
This was partially offset by a $1.0 million reduction in OPEB-related deferrals.
Total liabilities decreased by $8.9 million, largely reflecting a combination of long-term and short-term reductions.
Long-term debt declined by $2.5 million due to scheduled debt service payments, while pension and OPEB liabilities
decreased by $1.6 million and $2.4 million, respectively. Current liabilities also dropped by $6.4 million, driven by
reductions in accounts payable and accrued liabilities. These decreases were partially offset by minor increases across
other liability categories.
Deferred inflows of resources increased by $21.8 million, primarily due to a $20.3 million increase related to lease
revenue recognition. This reflects the straight-line amortization of the $22.1 million concession fee received in
October 2024 under a 12-year agreement, in accordance with applicable accounting standards.
Over time, net position may serve as a useful indicator of a City's financial position. At June 30, 2025, the City’s net
position was $460.8 million, an increase of $30.3 million or 7.0%, over the net position of $430.5 million at
June 30, 2024.
2025 2024*2025 2024*2025 2024*
Assets:
Current and other asset 327,584$ 293,913$ 10,485$ 11,366$ 338,069$ 305,279$
Capital assets, net 225,968 220,484 1,835 2,009 227,803 222,493
Total assets 553,552 514,397 12,320 13,375 565,872 527,772
Deferred Outflows of Resources:
Loss on refunding 137 120 - - 137 120
Related to Pension (Note 8)22,070 16,410 1,320 872 23,390 17,282
Related to OPEB (Note 9)4,725 5,693 372 378 5,097 6,071
Total deferred outflows of resources 26,931 22,223 1,692 1,250 28,623 23,473
Liabilities:
Long term debt 13,904 16,417 - - 13,904 16,417
Other liabilities 89,007 95,344 4,507 4,574 93,514 99,918
Total liabilities 102,911 111,761 4,507 4,574 107,418 116,335
Deferred Inflows of Resources:
Leases Receivabl 22,667 2,321 - - 22,667 2,321
Related to Pension (Note 8) 34 82 2 4 36 86
Related to OPEB (Note 9) 3,274 1,857 258 123 3,532 1,980
Total deferred inflows of resources 25,975 4,260 260 127 26,235 4,387
Net Position:
Net Investment in capital assets 210,649 208,704 1,835 2,010 212,484 210,714
Restricted 77,671 73,407 - 107 77,671 73,514
Unrestricte 163,277 138,488 7,410 7,807 170,687 146,295
Total net position 451,597$ 420,599$ 9,245$ 9,924$ 460,842$ 430,523$
*2024 balances were restated due to prior period adjustments (see Note 15 for detail).
Table 1
Condensed Statement of Net Position
(in thousands)
Governmental Activities Business-Type Activities Totals
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The largest portion of the City's net position ($212.5 million or 46.1%) is its investment in capital assets (e.g., land,
buildings, infrastructure, and equipment, right-to-use assets, etc.). The City uses capital assets to provide services to
residents; consequently, these assets are not available for future spending. This category of net position increased mainly
from ongoing pavement management improvements, an all-inclusive playground at Jollyman Park, and Regnart Road
improvements.
The City's restricted net position totals $77.7 million (16.9% of total net position). Restricted net position represents
resources that are subject to external restrictions on how they may be used. The remaining balance of $170.7 million
(37.0%) represents unrestricted net position; this category of net position may be used to meet the City's ongoing
obligations to residents and creditors.
Total net position increased by $30.3 million from an excess of revenues over expenses. This net increase was reflected
by an increase of $1.7 million, $4.2 million, and $24.4 million in net investments in capital assets, restricted net position
and unrestricted net position, respectively. The excess of revenues over expenses will be analyzed in conjunction with
the Statement of Activities.
The following is a summary of the government-wide Statement of Activities, which illustrates the City’s overall $30.3
million increase in net position resulting from program expenses being less than total program and general revenues. A
discussion regarding significant changes in revenues and expenses follows the table.
Expenses:2025 2024 2025 2024 2025 2024
Administration 6,608$ 9,069$ -$ -$ 6,608$ 9,069$
Law enforcement 17,387 16,682 - - 17,387 16,682
Innovation and Technology 3,127 3,127 - - 3,127 3,127
Administrative Services 7,557 8,166 - - 7,557 8,166
Parks and Recreation 9,250 7,195 5,139 6,181 14,389 13,376
Community Development 12,349 13,696 - - 12,349 13,696
Public Works 38,742 36,547 2,825 2,228 41,567 38,775
Interest on long-term debt 156 305 - - 156 305
Total expenses 95,176 94,787 7,964 8,409 103,140 103,196
Revenues:
Program revenues:
Charges for services 23,170 18,622 5,696 7,429 28,866 26,051
Operating grants and contributions 7,079 4,685 - - 7,079 4,685
Capital grants and contributions 6,136 3,666 - - 6,136 3,666
Total program revenues 36,385 26,973 5,696 7,429 42,081 34,402
General revenues:
Taxes:
Property tax 23,422 22,494 - - 23,422 22,494
Property tax in-lieu of motor vehicle fee 11,003 10,543 - - 11,003 10,543
Sales tax 17,484 30,961 - - 17,484 30,961
Transient occupancy tax 7,886 6,907 - - 7,886 6,907
Utility user tax 4,214 3,936 - - 4,214 3,936
Franchise tax 4,384 4,314 - - 4,384 4,314
Other taxes 3,669 1,971 - - 3,669 1,971
Intergovernmental, unrestricted:
Motor vehicle license fee 95 75 - - 95 75
Investment earnings 17,723 11,563 530 434 18,253 11,997
Miscellaneous 968 1,442 - - 968 1,442
Total general revenues 90,848 94,204 530 434 91,378 94,638
Total revenues 127,233 121,177 6,226 7,863 133,459 129,040
Excess of revenues over expenses 32,057 26,390 (1,738) (546) 30,319 25,844
Transfers (1,059) 20 1,059 (20) - -
Change in net position 30,998 26,410 (679) (566) 30,319 25,844
Beginning net position 420,599 388,109 9,924 10,425 430,523 398,534
Change in accounting principle (Note 15)- 338 - 65 - 403
Error corrections (Note 15)- 5,743 - - - 5,743
Ending net position 451,597$ 420,599$ 9,245$ 9,924$ 460,842$ 430,523$
Governmental Activities Business-Type Activities Total
Condensed Statement of Activities
(in thousands)
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Government-wide revenues totaled $133.5 million in FY 2024-25, an increase of $4.4 million (3.4%) compared to the
prior year. This increase was driven by broad-based growth across most revenue categories, including a $6.3 million
increase in investment income, $2.8 million in charges for services, $2.5 million in capital grants, and $2.4 million in
operating grants. These gains were partially offset by a $13.5 million decline in sales tax revenue, primarily due to the
tax reallocation required by the CDTFA audit.
The rise in investment income reflects both strong portfolio performance and unrealized mark-to-market gains resulting
from improving bond valuations as interest rates began to decline.
The City’s largest revenue source continued to be property taxes and in-lieu motor vehicle fees, which comprised 25.8%
of total revenue. Charges for services accounted for 21.6%, sales taxes contributed 13.1%, and investment income made
up 13.7%. Grants and contributions represented 9.9%, while the remaining 15.9% came from other taxes and fees.
Government-wide expenses for all City programs and services totaled $103.1 million for the fiscal year ended
June 30, 2025, representing a slight net decrease of $56.3 thousand (0.1%) from the prior year. This reflects an increase
of $388.1 thousand in Governmental Activities and a decrease of $444.4 thousand in Business-Type Activities.
Expenses include adjustments for depreciation, long-term debt, and pension and OPEB costs. The most significant
increases were in Law Enforcement ($0.7 million), Parks and Recreation ($1.0 million), and Public Works ($2.8
million), which were offset by reductions in Administration ($2.5 million), Administrative Services ($0.6 million), and
Community Development ($1.3 million).
Public Works accounted for the largest share of expenses at 40.3%, followed by Law Enforcement at 16.9%, Parks and
Recreation at 14.0%, Community Development at 12.0%, Administrative Services at 7.3%, Administration at 6.4%,
Innovation and Technology at 3.0%, and Interest Expense at 0.2%.
Governmental activities contributed $32.1 million before transfers to the increase in net position resulting from
revenues exceeding expenses. Governmental activities comprise the majority of the government-wide data, and
explanations for changes in government-wide and governmental activities are often similar.
Revenues of governmental activities report a net increase over the prior year of $6.1 million (5.0%), to $127.2 million.
Approximately $6.1 million of this increase is related to interest income. Charges for service increased by $4.5 million.
Property tax revenue increased by $1.4 million, and operating and capital grants increased by $4.9 million. These
increases were offset by a decrease in sales tax by 13.5 million.
Expenses of governmental activities increased by a net $389 thousand (0.41%). Expenses include interest, OPEB, and
pension costs. The net increase is spread across the City's programs with Law Enforcement ($0.7 million), Parks and
Recreation ($2.1 million), and Public Works ($2.2 million), which were offset by reductions in Administration ($2.5
million), Administrative Services ($0.6 million), and Community Development ($1.3 million). Interest expense and
Innovation and Technology experienced a negligible change.
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The following two charts show the source and use of funds for Governmental Activities:
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Business-type activities include four enterprise funds, which support recreational and solid waste operations. These
enterprise funds are operated similarly to private businesses, with the intent that the costs of providing services and
facilities to the public are primarily funded through user fees. Additional detail can be found in the Major Proprietary
Funds section of this report.
As of June 30, 2025, the net position for business-type activities totaled $9.2 million, reflecting a decrease of $0.6
million (or 6.2%) from the prior year, primarily due to operating costs exceeding revenues. Total revenues from
business-type activities declined by $1.7 million (23.3%) to $7.9 million, while investment income rose by $0.1 million.
Operating expenses fell by $0.4 million, totaling $8.0 million for the year.
The operating loss was largely attributed to the Cupertino Sports Center, Recreation Programs, and Blackberry Farm.
Notably, the Sports Center renegotiated its service contracts to a net revenue model, in which contractor costs are
excluded from gross revenues. This change is reflected in a $1.1 million decrease in reported revenue and a $1.3 million
decrease in contract service expenses.
FUND FINANCIAL ANALYSIS
For FY 2024-25, the City included the following major governmental funds: General Fund, Transportation Special
Revenue Fund, Housing Development Special Revenue Fund, Public Facilities Corporation Debt Service Fund, and
the Capital Improvement Capital Projects Fund.
General Fund
The General Fund’s fund balance increased by $15.7 million. This increase was driven by total revenues and other
financing sources of $115.4 million, which exceeded total expenditures of $86.4 million and transfers out of $13.2
million.
General Fund revenues increased by a net $1.4 million compared to FY 2023–24, while expenditures rose by $10.3
million year over year. However, actual expenditures were $6.6 million below budget. This variance is primarily
attributed to personnel savings across all departments due to a high number of vacant positions, as operating budgets
are prepared at full staffing levels.
Transportation
The Transportation Special Revenue Fund carried a June 30, 2025, ending fund balance of $13.3 million, decreasing
by 2.7%, or $0.4 million from the beginning of the fiscal year. In recent years this fund has accumulated fund balance
year over year. The current year’s decrease is primarily attributed to the progression of scheduled projects.
Housing Development
The Housing Development Special Revenue Fund carried a June 30, 2025, ending fund balance of $11.4 million, up
2.7%, or $0.3 million, from the beginning of the fiscal year.
Public Facilities Corporation
The Cupertino Public Facilities Corporation (PFC) is a legally separate component unit established to facilitate long-
term debt financing for public capital improvements. The Corporation's financial activity is limited to servicing debt
obligations and is reported within the Debt Service Fund.
As of June 30, 2025, the PFC had a fund balance of $0, reflecting a $250 decrease from the prior year. This zero balance
is expected to remain consistent in future fiscal years in line with the Corporation’s intended structure and minimal
activity level.
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For additional details regarding debt obligations administered through the Corporation, see the “Debt Administration”
section.
Capital Improvement Projects
As of June 30, 2025, the Capital Improvement Projects Fund had an ending fund balance of $33.1 million, representing
a $1.0 million increase from the prior fiscal year. This increase was primarily driven by transfers from the General
Fund, partially offset by expenditures related to ongoing capital projects.
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 $1.8 million and $2.8 million, respectively. Considering net non-
operating revenues of $0.3 million and net transfers of $0.2 million, net position decreased by $0.5 million to an ending
fund balance of $4.6 million.
Recreation Programs
This enterprise operates the Quinlan Community Center, Monta Vista Recreation Center, McClellan Ranch, Creekside
Park building, eight school sites, and various parks. These programs generated approximately $2.0 million in revenues
and program expenses of approximately $2.3 million. Considering net non-operating revenues of $0.1 million and net
transfers of $0.1 million, the program experienced a net operating gain of $16.1 thousand. The fund ended the year
with a net position of $2.8 million.
Cupertino Sports Center
The Cupertino Sports Center offers a broad range of health and wellness activities, including fitness classes, personal
training, youth sports, and racquet sports such as tennis, pickleball, badminton, and table tennis. The program generated
approximately $1.1 million in revenues and incurred $1.8 million in program expenses. After accounting for $43.1
thousand in net non-operating revenues and $527.8 thousand in net transfers, the program closed the year with a net
operating loss of $110.4 thousand. The fund ended the fiscal year with a net position of $1.2 million.
NONMAJOR PROPRIETARY FUNDS
Blackberry Farm
The City-operated nine-hole Blackberry Farm Golf Course and Pro Shop is staffed by City employees and services all
ages. For FY 2024–25, the fund recorded operating revenues of $733.6 thousand and operating expenses of $1.01
million. However, positive nonoperating revenues totaling $48.8 thousand helped offset the shortfall, resulting in a
modest net position decrease of $50.0 thousand. The fund ended the fiscal year with a healthy net position of $708.8
thousand.
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GENERAL FUND BUDGETARY HIGHLIGHTS
For the fiscal year ended June 30, 2025, the General Fund’s original expenditure budget of $90.0 million was increased
by $16.2 million through budget amendments, resulting in a final adopted budget of $106.2 million. Actual expenditures
totaled $99.6 million, coming in $6.6 million under the final budget.
The majority of the budget adjustments were related to two key items: a $10.0 million Additional Discretionary Payment
(ADP) toward the City’s CalPERS Unfunded Accrued Liability (UAL) and a $4.1 million transfer to the Capital Reserve
to support future infrastructure investments.
CAPITAL ASSETS
At June 30, 2025, the City had $227.8 million, net of depreciation and amortization, invested in a broad range of capital
assets used in governmental and business-type activities, as detailed in Note 6 to the Basic Financial Statements. This
represents a slight decrease from the restated FY 2024 ending balance of $228.2 million. The prior year balance was
adjusted by $5.7 million to recognize water infrastructure improvements performed by San Jose Water Company that
were contributed to the City but previously unreported.
During FY 2025, the City sold a parcel of land on Byrne Avenue for $2.5 million. Excluding the effects of this land
sale and the prior period adjustment, the City’s overall capital assets increased, reflecting its continued investment in
capital projects related to street and transportation infrastructure, stormwater management, and the maintenance and
enhancement of public facilities.
DEBT ADMINISTRATION
On September 29, 2020, the City of Cupertino successfully issued the 2020A Certificates of Participation (2020 COPs)
to refund its 2012 COPs and achieve significant debt service savings. The 2020 COPs received strong investor interest,
due to the City’s AA+ rating, its favorable name recognition, and advantageous market conditions. Investor demand
exceeded available bonds by nearly eight times, allowing the underwriter to further reduce yields.
The refunding resulted in net present value savings of approximately $3.14 million (11.61% of refunded par) and a True
Interest Cost (TIC) of 0.72%, compared to $2.26 million (8.36% of refunded par) when presented to Council on
September 1, 2020. These savings translated into an annual reduction of approximately $494,000 in General Fund debt
service costs over the next 10 years, or nearly $5 million in total.
As of June 30, 2025, the outstanding principal on the 2020 COPs was $11.92 million, with final maturity scheduled for
June 1, 2030. More information can be found in Note 7 to the Basic Financial Statements.
2025 2024*2025 2024 2025 2024
Land 64,787$ 64,787$ -$ -$ 64,787$ 64,787$
Easements 19,849 19,615 - - 19,849 19,615
Construction in progress 19,222 27,558 - 3 19,222 27,561
Buildings 8,599 11,967 1,450 1,540 10,049 13,507
Improvements other than buildings 19,457 15,431 352 419 19,809 15,850
Machinery and equipment 3,756 3,574 34 46 3,790 3,620
Roads, curbs, gutters, sidewalks, medians and bridges 76,270 69,403 - - 76,270 69,403
Streetlights 1,707 1,361 - - 1,707 1,361
Storm drain structures and mains 4,864 5,551 - - 4,864 5,551
Traffic signals 291 355 - - 291 355
Water infrastructure 5,898 5,339 - - 5,898 5,339
Right-to-use assets 1,268 1,287 - - 1,268 1,287
Total Governmental Activities 225,968$ 226,227$ 1,835$ 2,009$ 227,803$ 228,236$
*Updated to reflect prior period adjustment (see Note 15).
Total
Capital Assets, Net of Depreciation and Amortization
(in thousands)
Governmental Activities Business-Type Activities
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In addition to traditional long-term debt, the City is also required to recognize lease and subscription-based IT
arrangement (SBITA) liabilities under GASB Statements No. 87 and 96, respectively. As of June 30, 2025, the lease
liability totaled $8,561, down from $15,369 in the prior year, and the SBITA liability totaled $1,196,199, compared to
$1,210,274 in FY 2023–24. These declines reflect scheduled payments based on the contracts. Additional information
on these liabilities is provided in Note 7 to the Basic Financial Statements.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This Annual Comprehensive Financial Report is intended to provide a general overview of the City’s finances. Further
information can be provided by the City of Cupertino Finance Department, 10300 Torre Avenue, Cupertino CA 95014,
phone (408) 777-3280, or by the City website at www.cupertino.gov.
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FINANCIAL STATEMENTS
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Governmenta Business-Type
Activities Activities Total
ASSETS
Current assets:
Cash and investments (Note 2) 283,350,889$ 10,083,012$ 293,433,901$
Receivables:
Accounts 7,790,052 239,056 8,029,108
Interest 4,133,216 70,308 4,203,524
Leases, due within one year (Note 4) 242,614 - 242,614
Inventories 21,383 - 21,383
Prepaid items 28,055 - 28,055
Other assets 3,884 - 3,884
Total current assets 295,570,093 10,392,376 305,962,469
Noncurrent assets:
Restricted cash and investments (Note 2) 24,320,860 - 24,320,860
Lease receivable, due in more than one year (Note 4) 1,917,636 - 1,917,636
Loans receivable, net (Note 3) 4,605,314 - 4,605,314
OPEB assets (Note 9) 1,169,899 92,166 1,262,065
Capital assets: (Note 6)
Capital assets, not being depreciated 103,857,846 - 103,857,846
Capital assets, being depreciated and amortized 122,109,910 1,835,040 123,944,950
Total noncurrent assets 257,981,465 1,927,206 259,908,671
Total assets 553,551,558 12,319,582 565,871,140
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding 136,879 - 136,879
Related to pensions (Note 8) 22,069,534 1,319,645 23,389,179
Related to other postemployment benefits (Note 9) 4,724,864 372,227 5,097,091
Total deferred outflows of resources 26,931,277 1,691,872 28,623,149
City of Cupertino
Statement of Net Position
June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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Governmenta Business-Type
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LIABILITIES
Current liabilities:
Accounts payable and accruals 8,080,430 310,766 8,391,196
Accrued payroll and benefits 724,902 289 725,191
Deposits payable 10,904,750 - 10,904,750
Interest payable 39,717 - 39,717
Due to other government agency 3,286,175 - 3,286,175
Unearned revenues 5,261,473 793,930 6,055,403
Compensated absences, due within one year (Note 7) 857,020 118,507 975,527
Claims payable, due within one year (Note 10) 338,000 - 338,000
Lease liabilities, due within one year (Note 7) 6,844 - 6,844
Subscription liabilities, due within one year (Note 7) 685,571 - 685,571
Certificates of participation, due within one year (Note 7) 2,200,000 - 2,200,000
Total current liabilities 32,384,882 1,223,492 33,608,374
Noncurrent liabilities:
Compensated absences, due in more than one year (Note 7) 3,427,177 99,601 3,526,778
Claims payable, due in more than one year (Note 10) 1,638,731 - 1,638,731
Lease liabilities, due in more than one year (Note 7) 1,717 - 1,717
Subscription liabilities, due more than one year (Note 7) 510,628 - 510,628
Certificates of participation, due in more than one year (Note 7) 11,704,079 - 11,704,079
Aggregate net pension liabilities (Note 8) 53,244,043 3,183,722 56,427,765
Net other postemployment benefit liabilities (Note 9) - - -
Total noncurrent liabilities 70,526,375 3,283,323 73,809,698
Total liabilities 102,911,257 4,506,815 107,418,072
DEFERRED INFLOWS OF RESOURCES
Leases related 22,667,158 - 22,667,158
Related to pensions (Note 8) 33,607 2,008 35,615
Related to other postemployment benefits (Note 9) 3,273,623 257,896 3,531,519
Total deferred inflows of resources 25,974,388 259,904 26,234,292
NET POSITION
Net investment in capital assets (Note 11)210,649,411 1,835,040 212,484,451
Restricted for:
Public works 40,467,123 - 40,467,123
Affordable housing 11,401,135 - 11,401,135
Pension trust 24,320,860 - 24,320,860
Other purposes 1,481,643 - 1,481,643
Total restricted 77,670,761 - 77,670,761
Unrestricted 163,277,018 7,409,695 170,686,713
Total net position 451,597,190$ 9,244,735$ 460,841,925$
June 30, 2025
Statement of Net Position (Continued)
City of Cupertino
See accompanying Notes to the Basic Financial Statements.
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Capital Grants
Charges for Operating Grants and
Expenses Services and Contributions Contributions
Functions/Programs
Governmental Activities:
Administration 6,607,845$ 2,711,892$ -$ -$
Law enforcement 17,386,971 485,514 1,438,433 -
Innovation and technology 3,126,745 - - -
Administrative services 7,557,365 7,878,626 - -
Recreation services 9,249,954 1,189,382 - -
Community development 12,348,713 7,390,115 245,751 -
Public works 38,742,291 3,514,553 5,394,847 6,136,022
Interest and fiscal charges 155,710 - - -
Total Governmental Activities 95,175,594 23,170,082 7,079,031 6,136,022
Business-Type Activities:
Resource recovery 2,825,410 1,799,649 - -
Cupertino sports center 1,826,303 1,144,857 - -
Recreation programs 2,307,538 2,017,910 - -
Blackberry farm 1,005,370 733,550 - -
Total Business-Type Activities 7,964,621 5,695,966 - -
Total Primary Government 103,140,215$ 28,866,048$ 7,079,031$ 6,136,022$
City of Cupertino
Statement of Activities
For the Year Ended June 30, 2025
Program Revenues
See accompanying Notes to the Basic Financial Statements.
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Governmental Business-Type
Activities Activities Total
Functions/Programs
Governmental Activities:
Administration (3,895,953)$ -$ (3,895,953)$
Law enforcement (15,463,024) - (15,463,024)
Innovation and technology (3,126,745) - (3,126,745)
Administrative services 321,261 - 321,261
Recreation services (8,060,572) - (8,060,572)
Community development (4,712,847) - (4,712,847)
Public works (23,696,869) - (23,696,869)
Interest and fiscal charges (155,710) - (155,710)
Total Governmental Activities (58,790,459) - (58,790,459)
Business-Type Activities:
Resource recovery - (1,025,761) (1,025,761)
Cupertino sports center - (681,446) (681,446)
Recreation programs - (289,628) (289,628)
Blackberry farm - (271,820) (271,820)
Total Business-Type Activities - (2,268,655) (2,268,655)
Total Primary Government (58,790,459) (2,268,655) (61,059,114)
General Revenues:
Taxes:
Property taxes 23,421,977 - 23,421,977
Property tax in lieu of motor vehicle fee 11,003,490 - 11,003,490
Sales taxes 17,484,041 - 17,484,041
Transient occupancy tax (TOT) 7,886,009 - 7,886,009
Utility user tax (UUT) 4,214,212 - 4,214,212
Franchise tax 4,383,827 - 4,383,827
Other taxes 3,668,729 - 3,668,729
Motor vehicle license fee 95,136 - 95,136
Investment earnings 17,722,521 530,199 18,252,720
Miscellaneous 967,701 - 967,701
Total General Revenues 90,847,643 530,199 91,377,842
Transfers (1,059,253) 1,059,253 -
Changes in Net Position 30,997,931 (679,203) 30,318,728
Net Position - Beginning of year, as previously reported 414,518,394 9,858,579 424,376,973
Change in accounting principle (GASB 101) (Note 15)338,092 65,359 403,451
Errors corrections (Note 15)5,742,773 - 5,742,773
Net Position - Beginning of year, as restated 420,599,259 9,923,938 430,523,197
Net Position - End of year 451,597,190$ 9,244,735$ 460,841,925$
Net (Expense) Revenue and Changes in Net Position
City of Cupertino
Statement of Activities (Continued)
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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Capital Improvement Projects Capital Projects Fund -This fund accounts for activities related to the acquisition or
construction of major capital facilities.
GOVERNMENTAL FUND
FINANCIAL STATEMENTS
General Fund - This fund is the general operating fund of the City and 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 - This 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 - This 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.
In the Fund Financial Statements only individual major funds are presented, while nonmajor 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. Individual nonmajor funds can be found in the
Supplementary Section.
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Housing
General Transportation Development
ASSETS
Cash and investments (Note 2) 188,135,470$ 14,064,499$ 5,609,754$
Restricted cash and investments (Note 2) 24,320,860 - -
Receivables:
Accounts 4,109,660 1,830,861 61,311
Interest 2,193,325 97,546 1,607,158
Loans, net (Note 3) 422,800 - 4,182,514
Leases (Note 4) 2,160,250 - -
Due from other funds (Note 5) 1,390,420 - -
Advances to other funds (Note 5) 3,000,000 - -
Inventories 21,383 - -
Other assets 3,884 - -
Total assets 225,758,052 15,992,906 11,460,737
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable and accruals 6,018,370 1,179,336 59,602
Accrued payroll and benefits 724,830 - -
Advances from other funds (Note 5) - - -
Due to other government agency 3,286,175 - -
Deposits 10,904,750 - -
Unearned revenue 261,473 - -
Total liabilities 21,195,598 1,179,336 59,602
Deferred inflows of resources:
Lease related (Note 4)22,667,158 - -
Unavailable revenue 58,036 1,548,530 -
Total deferred inflows of resources 22,725,194 1,548,530 -
Fund balances: (Note 11)
Nonspendable 4,037,435 - -
Restricted 25,802,503 13,265,040 11,401,135
Committed 88,627,891 - -
Assigned 7,287,794 - -
Unassigned 56,081,637 - -
Total fund balances 181,837,260 13,265,040 11,401,135
Total liabilities, deferred inflows
of resources, and fund balances 225,758,052$ 15,992,906$ 11,460,737$
(Continued)
Special Revenue Funds
City of Cupertino
Balance Sheet
June 30, 2025
Governmental Funds
See accompanying Notes to the Basic Financial Statements.
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Public Capital
Facilities Improvement
Corporation Projects Nonmajor Total
Debt Capital Governmental Governmental
Service Fund Projects Fund Funds Funds
ASSETS
Cash and investments (Note 2)-$ 41,516,642$ 25,317,964$ 274,644,329$
Restricted cash and investments (Note 2)- - - 24,320,860
Receivables:
Accounts - 203,842 67,557 6,273,231
Interest - - 174,994 4,073,023
Loans, net (Note 3)- - - 4,605,314
Leases (Note 4)- - - 2,160,250
Due from other funds (Note 5)- - - 1,390,420
Advances to other funds (Note 5)- - - 3,000,000
Inventories - - - 21,383
Other assets - - - 3,884
Total assets - 41,720,484 25,560,515 320,492,694
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable and accruals - 658,148 59,530 7,974,986
Accrued payroll and benefits - - - 724,830
Advances from other funds (Note 5)- 3,000,000 - 3,000,000
Due to other government agency - - - 3,286,175
Deposits - - - 10,904,750
Unearned revenue - 5,000,000 - 5,261,473
Total liabilities - 8,658,148 59,530 31,152,214
Deferred inflows of resources:
Lease related (Note 4)- - - 22,667,158
Unavailable revenue - 3,842 52,743 1,663,151
Total deferred inflows of resources - 3,842 52,743 24,330,309
Fund balances: (Note 11)
Nonspendable - - - 4,037,435
Restricted - - 25,290,276 75,758,954
Committed - - - 88,627,891
Assigned - 33,058,494 157,966 40,504,254
Unassigned - - - 56,081,637
Total fund balances - 33,058,494 25,448,242 265,010,171
Total liabilities, deferred inflows
of resources, and fund balances -$ 41,720,484$ 25,560,515$ 320,492,694$
(Concluded)
City of Cupertino
Balance Sheet (Continued)
Governmental Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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Total Fund Balances - Total Governmental Funds 265,010,171$
Nondepreciable, net of $267,710 reported in the Internal Service Fund 103,590,136$
Depreciable and amortizable,
net of $2,394,502 reported in the Internal Service Fund 119,715,408 223,305,544
Bonds payable (11,915,000)
Premium on bonds payable (1,989,079)
Deferred charges on refunding 136,879
(1,055,905)
Interest payable (39,717)
(3,996,422)
Claims liability, net of $1,379,000 reported in the Internal Service Funds (597,731) (19,456,975)
20,650,649$
(49,820,902)
(31,445) (29,201,698)
4,452,107$
1,102,362
(3,084,643) 2,469,826
1,663,151
7,807,171
Net Position of Governmental Activities 451,597,190$
City of Cupertino
Reconciliation of the Governmental Funds Balance Sheet to th
June 30, 2025
Government-Wide Statement of Net Positio
Amounts reported for governmental activities in the Statement of Net Position were reported differently because:
Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities. All
liabilities, both current and long-term, are reported in the Statement of Net Position:
Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in
the Governmental Funds Balance Sheet.
Internal Service Funds were used by management to charge the costs of certain activities, such as insurance and equipment
replacement to individual funds. The assets and liabilities of the Internal Service Funds were included in the governmental
activities in the Government-Wide Statement of Net Position.
Revenue reported as unavailable revenue in the governmental funds when it is not received soon enough after year-end to
be considered available. The availability criteria does not apply to the Government-Wide Financial Statements and,
therefore, the revenue is recognized when eligibility requirements are met and earned.
Net pension liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and
payable in the current period or not available for current expenditures and are not reported in the governmental fund
financial statements:
Net other postemployment benefit liability and the related deferred outflows of resources and deferred inflows of
resources are not due and payable in the current period or not available for current expenditures and are not reported in the
governmental fund financial statements:
Pension related deferred outflows of resources, net of $1,418,8853 reported in the Internal
Service Funds
Pension related deferred inflows of resources, net of $2,162 reported in the Internal Service
Funds
Aggregate net pension liability, net of $3,423,141 reported in the Internal Service Funds
Subscription liabilities, net of $140,294 reported in the Internal Service Funds
Compensated absences, net of $287,775 reported in the Internal Service Funds
Other postemployment benefits related deferred outflows of resources, net of $272,757 reported
in the Internal Service Funds
Other postemployment benefits related deferred inflows of resources, net of $188,980 reported
in the Internal Service Funds
Net Other postemployment benefits assets , net of $67,537 reported in the Internal Service
Funds
See accompanying Notes to the Basic Financial Statements.
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Housing
General Transportation Development
Revenues:
Taxes 70,837,599$ -$ 457,847$
Use of money and property 14,804,318 748,039 351,276
Intergovernmental 2,962,429 5,649,963 241,797
Licenses and permits 5,755,842 - -
Charges for services 14,757,441 2,214 -
Fines and forfeitures 394,405 - -
Other revenue 2,056,694 3,433 -
Total revenues 111,568,728 6,403,649 1,050,920
Expenditures:
Current:
Administration 7,074,451 - -
Law enforcement 17,386,971 - -
Innovation and technology 3,241,574 - -
Administrative services 8,216,429 - -
Recreation services 7,612,682 - -
Community development 12,500,932 - 847,299
Public works 28,702,541 4,694,339 -
Capital outlay 1,108,602 3,996,786 -
Debt service:
Principal 553,163 - -
Interest and fiscal charges 14,498 - -
Total expenditures 86,411,843 8,691,125 847,299
Excess (deficiency) of revenues over
expenditures 25,156,885 (2,287,476) 203,621
Other financing sources (uses):
Inception of subscription liability 523,417 - -
Proceeds from the sale of capital assets 2,912,435 - -
Transfers in (Note 5)348,334 2,610,158 94,258
Transfers out (Note 5)(13,199,130) (693,000) -
Total other financing sources (uses)(9,414,944) 1,917,158 94,258
Net Change in Fund Balances 15,741,941 (370,318) 297,879
Fund balances:
Beginning of year 166,095,319 13,635,358 11,103,256
End of yea 181,837,260$ 13,265,040$ 11,401,135$
(Continued)
Special Revenue Funds
City of Cupertino
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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Public Capital
Facilities Improvement
Corporation Projects Nonmajor Total
Debt Capital Governmental Governmental
Service Fund Projects Fund Funds Funds
Revenues:
Taxes -$ -$ 1,097,721$ 72,393,167$
Use of money and property - 821,189 1,222,135 17,946,957
Intergovernmental - 2,656,151 - 11,510,340
Licenses and permits - - - 5,755,842
Charges for services - - 1,587,768 16,347,423
Fines and forfeitures - - 2,970 397,375
Other revenue - - 2,499 2,062,626
Total revenues - 3,477,340 3,913,093 126,413,730
Expenditures:
Current:
Administration 1,500 - - 7,075,951
Law enforcement - - - 17,386,971
Innovation and technology - - - 3,241,574
Administrative services - - - 8,216,429
Recreation services - - - 7,612,682
Community development - - - 13,348,231
Public works - - 2,046,348 35,443,228
Capital outlay - 6,057,035 126,040 11,288,463
Debt service:
Principal 2,115,000 - - 2,668,163
Interest and fiscal charges 561,200 - - 575,698
Total expenditures 2,677,700 6,057,035 2,172,388 106,857,390
Excess (deficiency) of revenues over
expenditures (2,677,700) (2,579,695) 1,740,705 19,556,340
Other financing sources (uses):
Inception of subscription liability - - - 523,417
Proceeds from the sale of capital assets - - - 2,912,435
Transfers in (Note 5)2,677,450 4,763,000 470,443 10,963,643
Transfers out (Note 5)- (1,095,914) (15,000) (15,003,044)
Total other financing sources (uses)2,677,450 3,667,086 455,443 (603,549)
Net Change in Fund Balances (250) 1,087,391 2,196,148 18,952,791
Fund balances:
Beginning of year 250 31,971,103 23,252,094 246,057,380
End of yea -$ 33,058,494$ 25,448,242$ 265,010,171$
(Concluded)
City of Cupertino
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)
Governmental Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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Net Change in Fund Balances - Total Governmental Funds 18,952,791$
Capital outlay, net of $264,441 reported in Internal Service Fund 11,234,197$
Depreciation and amortization, net of $531,501 reported in Internal Service Funds (8,637,085)
Net effect on disposal of capital assets (2,758,163) (161,051)
415,646
Bonds payable 2,115,000$
Subscription liabilities, net of $125,986 reported in the Internal Service Funds 553,163 2,668,163
7,050
415,086
(523,417)
27,402
345,994
(199,144)
6,846,650
969,033
1,233,728
Chan e in Net Position of Governmental Activities 30,997,931$
Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and equipment
replacement, to individual funds. The net revenue of the Internal Service Funds is reported in governmental activities.
Certain ension expenses reported in the Statemen o Activities do not require the use o current financial resources and,
therefore, are not reported as expenditures in governmental funds, net of $725,075 reported in Internal Service Funds.
Certain OPEB expenses reported in the Statement of Activities do not require the use of current financial resources and,
therefore, are not reported as expenditures in governmental funds net of $43,662 reported in Internal Service Funds.
Compensated absences were reported in the Government-Wide Statement of Activities, but they did not require the use of
current financial resources. Therefore, compensated absences were not reported as expenditures in the governmental funds.
Compensated absences is net of $92,654 reported in the Internal Service Funds.
Net change in revenues that was considered unavailable in the governmental funds. These items have been reported as
revenue in the Statement of Activities.
Amortization of bond premium and deferred charges were recognized in interest expense on the Government-Wide
Statement of Activities, but did not require the use of current financial resources. Therefore amortization of bond discount
was not reported as an expenditure in the governmental funds.
Principal repayment on long-term debt is not an expense in the Statement of Activities, but is considered an expenditure in
governmental funds.
Interest accrued on long-term debt is reported in the Statement of Activities, but does not require the use of current financial
resources. Therefore, accrued interest is not reported as an expenditure in governmental funds. This amount represents the
change in accrued interest from the prior year.
Certain claims expenses reported in the Statement of Activities do not require the use of current financial resources and,
therefore, are not reported as expenditures in governmental funds net of $106,000 reported in Internal Service Funds.
Inception of subscription liability, net of $175,435 reported in the Internal Service Funds.
Termination of subscription liability, net of $6,376 reported in the Internal Service Funds.
Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental
funds.
Governmental activities in the Statement of Activities were reported differently because:
City of Cupertino
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes
For the Year Ended June 30, 2025
in Fund Balances to the Government-Wide Statement of Activitie
See accompanying Notes to the Basic Financial Statements.
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PROPRIETARY FUND
FINANCIAL STATEMENTS
Resources Recovery Fund -This fun accounts fo activit related to the collection, disposal, an recyclin of solid waste.rivate
company has been issued an exclusive franchise to perform these services.
Recreation Programs Fund - This fund accounts for activities of the City's community centers and park facilities.
Cupertino Sports Center Fund -This fund accounts for the operation and maintenance of the Cupertino Sports Center.
Proprietary funds account for City operations financed and operated a in manner similar to a private business enterprise. The intent of
the City is that the cost of providing goods and services be financed primarily through user charges.
The City has identified the funds below as major proprietary funds for fiscal year 2024-2025.
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Cupertino
Resources Recreation Sports
Recovery Programs Center
ASSETS
Current assets:
Cash and investments (Note 2) 5,296,493$ 3,148,094$ 722,728$
Accounts receivable 158,699 32,804 47,553
Interest receivable 36,993 21,888 5,004
Prepaid expense - - -
Total current assets 5,492,185 3,202,786 775,285
Noncurrent assets:
OPEB assets (Note 9) 26,153 31,788 24,548
Capital assets: (Note 6)
Nondepreciable - - -
Depreciable and amortizable, net - 596,575 1,115,343
Total noncurrent assets 26,153 628,363 1,139,891
Total assets 5,518,338 3,831,149 1,915,176
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions (Note 8) 543,436 351,173 267,279
Related to other postemployment benefit (Note 9) 105,622 128,382 99,142
Total deferred outflows of resources 649,058 479,555 366,421
(Continued)
Business-Type Activities - Enterprise Funds
City of Cupertino
Statement of Net Position
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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Governmental
Activities
Nonmajor Internal
Enterprise Service
Fund Total Funds
ASSETS
Current assets:
Cash and investments (Note 2)915,697$ 10,083,012$ 8,706,560$
Accounts receivable - 239,056 1,516,821
Interest receivable 6,423 70,308 60,193
Prepaid expense - - 28,055
Total current assets 922,120 10,392,376 10,311,629
Noncurrent assets:
OPEB assets (Note 9)9,677 92,166 67,537
Capital assets: (Note 6)
Nondepreciable - - 267,710
Depreciable and amortizable, net 123,122 1,835,040 2,394,502
Total noncurrent assets 132,799 1,927,206 2,729,749
Total assets 1,054,919 12,319,582 13,041,378
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions (Note 8)157,757 1,319,645 1,418,885
Related to other postemployment benefit (Note 9)39,081 372,227 272,757
Total deferred outflows of resources 196,838 1,691,872 1,691,642
(Continued)
Business-Type Activities
Enterprise Funds
City of Cupertino
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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Cupertino
Resources Recreation Sports
Recovery Programs Center
LIABILITIES
Current liabilities:
Accounts payable and accruals 95,772 140,889 49,487
Accrued payroll and benefits 289 - -
Due to other funds - - -
Compensated absences, due within one year (Note 7) 73,635 6,212 38,660
Claims payable, due within one year (Note 10) - - -
Unearned revenue - 391,291 318,805
Lease liabilities, due within one year (Note 7) - - -
Subscription liabilities, due within one year (Note 7) - - -
Total current liabilities 169,696 538,392 406,952
Noncurrent liabilities:
Compensated absences, due more than one year (Note 7) 16,576 54,676 1,747
Claims payable, due more than one year (Note 10) - - -
Lease liabilities, due more than one year (Note 7) - - -
Subscription liabilities, due more than one year (Note 7) - - -
Net pension liabilities (Note 8) 1,311,070 847,225 644,828
Total noncurrent liabilities 1,327,646 901,901 646,575
Total liabilities 1,497,342 1,440,293 1,053,527
DEFERRED INFLOWS OF RESOURCES
Related to pensions (Note 8) 827 534 407
Related to other postemployment benefit (Note 9) 73,180 88,949 68,690
Total deferred inflows of resources 74,007 89,483 69,097
NET POSITION
Net investment in capital assets (Note 11) - 596,575 1,115,343
Unrestricted 4,596,047 2,184,353 43,630
Total net position 4,596,047$ 2,780,928$ 1,158,973$
(Continued)
Business-Type Activities - Enterprise Funds
City of Cupertino
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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LIABILITIES
Current liabilities:
Accounts payable and accruals 24,618 310,766 105,444
Accrued payroll and benefits - 289 72
Due to other funds - - 1,390,420
Compensated absences, due within one year (Note 7)- 118,507 9,992
Claims payable, due within one year (Note 10)- - 248,000
Unearned revenue 83,834 793,930 -
Lease liabilities, due within one year (Note 7)- - 6,844
Subscription liabilities, due within one year (Note 7)- - 125,593
Total current liabilities 108,452 1,223,492 1,886,365
Noncurrent liabilities:
Compensated absences, due more than one year (Note 7)26,602 99,601 277,783
Claims payable, due more than one year (Note 10)- - 1,131,000
Lease liabilities, due more than one year (Note 7)- - 1,717
Subscription liabilities, due more than one year (Note 7)- - 14,701
Net pension liabilities (Note 8)380,599 3,183,722 3,423,141
Total noncurrent liabilities 407,201 3,283,323 4,848,342
Total liabilities 515,653 4,506,815 6,734,707
DEFERRED INFLOWS OF RESOURCES
Related to pensions (Note 8)240 2,008 2,162
Related to other postemployment benefit (Note 9)27,077 257,896 188,980
Total deferred inflows of resources 27,317 259,904 191,142
NET POSITION
Net investment in capital assets (Note 11)123,122 1,835,040 2,513,357
Unrestricted 585,665 7,409,695 5,293,814
Total net position 708,787$ 9,244,735$ 7,807,171$
(Concluded)
Business-Type Activities
Enterprise Funds
City of Cupertino
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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OPERATING REVENUES:
Charges for services 1,799,449$ 1,927,668$ 863,579$
Other 200 90,242 281,278
TOTAL OPERATING REVENUES 1,799,649 2,017,910 1,144,857
OPERATING EXPENSES:
Salaries and benefits 1,093,077 765,569 633,047
Materials and supplies 540,857 445,026 741,714
Contractual services 1,191,476 1,040,905 349,732
Insurance and claims and premium - - -
Depreciation and amortizaiton - 56,038 101,810
TOTAL OPERATING EXPENSES 2,825,410 2,307,538 1,826,303
OPERATING LOSS (1,025,761) (289,628) (681,446)
NONOPERATING REVENUES (EXPENSES):
Investment income 270,777 167,517 43,128
Gain on sale of capital assets - - -
Interest expense - - -
Total Nonoperating Income (Expenses)270,777 167,517 43,128
NET LOSS BEFORE TRANSFERS (754,984) (122,111) (638,318)
TRANSFERS:
Transfers in (Note 5)220,143 138,195 527,885
TOTAL TRANSFERS 220,143 138,195 527,885
CHANGES IN NET POSITION (534,841) 16,084 (110,433)
NET POSITION:
Beginning of year, as previously reported 5,122,605 2,753,355 1,225,464
Change in accounting principle (GASB 101)8,283 11,489 43,942
Beginning of year, as restated (Note 15)5,130,888 2,764,844 1,269,406
End of year 4,596,047$ 2,780,928$ 1,158,973$
(Continued)
Business-Type Activities - Enterprise Funds
City of Cupertino
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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Enterprise Service
Fund Total Funds
OPERATING REVENUES:
Charges for services 674,474$ 5,265,170$ 5,284,825$
Other 59,076 430,796 156,004
TOTAL OPERATING REVENUES 733,550 5,695,966 5,440,829
OPERATING EXPENSES:
Salaries and benefits 441,044 2,932,737 3,646,864
Materials and supplies 283,674 2,011,271 1,362,319
Contractual services 264,120 2,846,233 624,706
Insurance and claims and premium - - 1,437,114
Depreciation and amortizaiton 16,532 174,380 531,501
TOTAL OPERATING EXPENSES 1,005,370 7,964,621 7,602,504
OPERATING LOSS (271,820) (2,268,655) (2,161,675)
NONOPERATING REVENUES (EXPENSES):
Investment income 48,777 530,199 403,402
Gain on sale of capital assets - - 14,001
Interest expense - - (2,148)
Total Nonoperating Income (Expenses)48,777 530,199 415,255
NET LOSS BEFORE TRANSFERS (223,043) (1,738,456) (1,746,420)
TRANSFERS:
Transfers in (Note 5)173,030 1,059,253 2,980,148
TOTAL TRANSFERS 173,030 1,059,253 2,980,148
CHANGES IN NET POSITION (50,013) (679,203) 1,233,728
NET POSITION:
Beginning of year, as previously reported 757,155 9,858,579 6,528,882
Change in accounting principle (GASB 101)1,645 65,359 44,561
Beginning of year, as restated (Note 15)758,800 9,923,938 6,573,443
End of year 708,787$ 9,244,735$ 7,807,171$
(Concluded)
Enterprise Funds
City of Cupertino
Statement of Revenues, Expenses, and Changes in Net Position (Continued)
Proprietary Funds
For the Year Ended June 30, 2025
Business-Type Activities
See accompanying Notes to the Basic Financial Statements.
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CASH FLOWS FROM OPERATING: ACTIVITIES
Cash received from customers and users 2,424,396$ 1,975,177$ 1,138,339$
Cash paid to suppliers for goods and services (1,717,146) (1,622,961) (1,074,460)
Cash paid to employees for services (1,107,405) (926,737) (759,853)
Cash paid to insurance claims - - -
Net Cash (Used in) Operating Activities (400,155) (574,521) (695,974)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Cash received from (paid to) other funds 220,143 138,195 527,885
Net Cash Provided by (Used in)
Noncapital Financing Activities 220,143 138,195 527,885
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition of capital assets - - -
Principal paid - - -
Interest paid - - -
Proceed from sale of capital assets - - -
Net Cash (Used in) Capital and
Related Financing Activities - - -
CASH FLOWS FROM INVESTING
ACTIVITIES:
Investment income 266,115 167,145 43,123
Net Cash Provided b Investin Activities 266,115 167,145 43,123
Net Change In Cash and Cash Equivalents 86,103 (269,181) (124,966)
CASH AND CASH EQUIVALENTS:
Beginning of year 5,210,390 3,417,275 847,694
End of yea 5,296,493$ 3,148,094$ 722,728$
CASH AND CASH EQUIVALENTS:
Cash and investments 5,296,493$ 3,148,094$ 722,728$
Total cash and cash e uivalents 5,296,493$ 3,148,094$ 722,728$
(Continued)
Business-Type Activities - Enterprise Funds
City of Cupertino
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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CASH FLOWS FROM OPERATING: ACTIVITIES
Cash received from customers and users 707,881$ 6,245,793$ 5,311,967$
Cash paid to suppliers for goods and services (562,498) (4,977,065) (3,515,148)
Cash paid to employees for services (385,130) (3,179,125) (4,508,255)
Cash paid to insurance claims - - 106,000
Net Cash (Used in) Operating Activities (239,747) (1,910,397) (2,605,436)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Cash received from (paid to) other funds 173,030 1,059,253 2,968,621
Net Cash Provided by (Used in)
Noncapital Financing Activities 173,030 1,059,253 2,968,621
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition of capital assets - - (264,441)
Principal paid - - (132,794)
Interest paid - - (2,148)
Proceed from sale of capital assets - - 14,001
Net Cash (Used in) Capital and
Related Financing Activities - - (385,382)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Investment income 48,164 524,547 399,119
Net Cash Provided b Investin Activities 48,164 524,547 399,119
Net Change In Cash and Cash Equivalents (18,553) (326,597) 376,922
CASH AND CASH EQUIVALENTS:
Beginning of year 934,250 10,409,609 8,329,638
End of yea 915,697$ 10,083,012$ 8,706,560$
CASH AND CASH EQUIVALENTS:
Cash and investments 915,697$ 10,083,012$ 8,706,560$
Total cash and cash e uivalents 915,697$ 10,083,012$ 8,706,560$
(Concluded)
Enterprise Funds
Business-Type Activities
City of Cupertino
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements.
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Reconciliation of Operating Income (Loss) to
Net Cash Provided by (Used in) Operating Activities:
Operating income (loss) (1,025,761)$ (289,628)$ (681,446)$
Adjustments to reconcile to net cash provided by
Operating activities:
Depreciation and amortization - 56,038 101,810
Changes in assets and liabilities:
(Increase)/decrease in accounts receivables 624,747 31,137 (6,253)
(Increase)/decrease in prepaid expense - - -
(Increase)/decrease in deferred outflows of resources
related to pensions (231,696) (78,350) (52,200)
(Increase)/decrease in deferred outflows of resources
related to other postemployment benefit 252 10,816 7,348
Increase/(decrease) in accounts payable 15,187 (137,030) 16,986
Increase/(decrease) in unearned revenue - (73,870) (265)
Increase/(decrease) in compensated absences (17,393) 18,881 28,433
Increase/(decrease) in claims payable - - -
Increase/(decrease) in net pension liabilities 264,178 (68,972) (77,454)
Increase/(decrease) in other postemployment benefit liabilities (assets)(67,586) (86,262) (66,222)
Increase/(decrease) in deferred inflows of resources
related to pensions (733) (832) (670)
Increase/(decrease) in deferred inflows of resources
related to other postemployment benefit 38,650 43,551 33,959
Net Cash Provided b (Used in) O eratin Activities (400,155)$ (574,521)$ (695,974)$
NONCASH ITEMS:
Acquisition of subscription assets -$ -$ -$
Issuance of subscription liabilities -$ -$ -$
Termination of subscription liabilities -$ -$ -$
(Continued)
City of Cupertino
For the Year Ended June 30, 2025
Business-Type Activities - Enterprise Funds
Statement of Cash Flows (Continued)
Proprietary Funds
See accompanying Notes to the Basic Financial Statements.
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Reconciliation of Operating Income (Loss) to
Net Cash Provided by (Used in) Operating Activities:
Operating income (loss)(271,820)$ (2,268,655)$ (2,161,675)$
Adjustments to reconcile to net cash provided by
Operating activities:
Depreciation and amortization 16,532 174,380 531,501
Changes in assets and liabilities:-
(Increase)/decrease in accounts receivables 2,534 652,165 (128,862)
(Increase)/decrease in prepaid expense - - (23,375)
(Increase)/decrease in deferred outflows of resources
related to pensions (85,089) (447,335) (263,052)
(Increase)/decrease in deferred outflows of resources
related to other postemployment benefit (12,904) 5,512 108,294
Increase/(decrease) in accounts payable (14,704) (119,561) (67,634)
Increase/(decrease) in unearned revenue (28,203) (102,338)
Increase/(decrease) in compensated absences 18,847 48,768 (92,654)
Increase/(decrease) in claims payable - - 106,000
Increase/(decrease) in net pension liabilities 136,565 254,317 (458,400)
Increase/(decrease) in other postemployment benefit liabilities (assets)(19,921) (239,991) (216,659)
Increase/(decrease) in deferred inflows of resources
related to pensions (124) (2,359) (3,623)
Increase/(decrease) in deferred inflows of resources -
related to other postemployment benefit 18,540 134,700 64,703
Net Cash Provided b (Used in) O eratin Activities (239,747)$ (1,910,397)$ (2,605,436)$
NONCASH ITEMS:
Acquisition of subscription assets -$ -$ (175,435)$
Issuance of subscription liabilities -$ -$ 175,435$
Termination of subscription liabilities -$ -$ (6,376)$
(Concluded)
City of Cupertino
For the Year Ended June 30, 2025
Business-Type Activities
Enterprise Funds
Statement of Cash Flows (Continued)
Proprietary Funds
See accompanying Notes to the Basic Financial Statements.
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NOTES TO THE BASIC FINANCIAL STATEMENTS
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Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
47
Page
Note 1 – Summary of Significant Accounting Policies ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 49
A. Financial Reporting Entity ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 49
B. Basis of Presentation ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 50
C. Measurement Focus, Basis of Accounting and Financial Statements Presentation ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 50
D. Cash, Cash Equivalents, and Investments ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 53
E. Fair Value Measurements ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 54
F. Receivables ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 54
G. Lease Receivable ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 54
H. Inventories ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 55
I. Prepaid Items ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 55
J. Interfund Transactions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 55
K. Capital Assets ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 55
L. Deferred Outflows of Resources and Deferred Inflows of Resourcesꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 56
M. Interest Payable ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 57
N. Unearned Revenue ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 57
O. Compensated Absences ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 57
P. Claims and Judgement Payable ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 57
Q. Lease Liabilities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 57
R. Subscription Liabilities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 58
S. Long-Term Debt ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 59
T. Pensions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 59
U. Other Postemployment Benefits (“OPEB”) Plan ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 59
V. Net Position ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 60
W. Fund Balancesꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 60
X. Property Taxes ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 61
Y. Use of Estimates ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 61
Z. Implementation of New GASB Pronouncements ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 62
AA. Upcoming New GANB Pronouncements ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 62
Note 2 – Cash and Investments ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 62
A. Deposits ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 63
B. Investments Authorized by the California Government Code and the City’s Investment Policy ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 64
C. Investments Authorized by Debt Agreements ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 65
D. Risk Disclosures ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 65
E. Investment in Local Agency Investment Fund (LAIF) ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 67
F. Fair Value Measurement Disclosure ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 67
Note 3 – Loans Receivable ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 68
Note 4 – Leases Receivable ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 68
Note 5 – Interfund Transactions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 69
A. Advances ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 69
B. Due from and to other Funds ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 69
C. Transfers In and Out ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 70
FINAL
D
R
A
F
T
1
1
.
2
6
.
2
0
2
5
94
AC 12-1-2025
94 of 221
City of Cupertino
Index to the Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
48
Page
Note 6 – Capital Assets ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 71
A. Governmental Activities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 71
B. Business-Type Activities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 72
Note 7 – Long-Term Liabilities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 73
A. Governmental Activities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 73
B. Business-Type Activities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 75
Note 8 – Defined Benefit Pension Plan ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 75
A. General Information about the Pension Plan ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 75
B. Net Pension Liability ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 77
C. Changes in the Net Pension Liability ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 79
Note 9 – Other Post Employment Benefits (OPEB) ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 81
A. General Information about the OPEB Plan ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 81
B. Net OPEB Liability (Asset) ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 82
C. Change in Net OPEB Liability (Asset) ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 84
D. OPEB Expense and Deferred Inflows of Resources Related to OPEB ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 85
Note 10 – Liabilities Under Self-Insurance and Risk Management ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 86
Note 11 – Net Position and Fund Balances ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 87
A. Net Investment in Capital Assets ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 87
B. Fund Balance Classifications ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 87
Note 12 – Commitments and Contingencies ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 88
A. Federal and State Grants ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 88
B. Encumbrances ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 88
C. Consulting Agreement for Sales Taxes ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 88
D. Santa Clara County Vehicle Registration Fee (VRF) ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 88
E. California Department of Tax and Fee Administration (“CDTFA”) Local Tax Reallocation ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 89
Note 13 – Concentration Risk ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 89
Note 14 – Stewardship, Compliance and Accountability ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 89
A. Deficit Fund Balance/Net Position ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 89
B. Excess of Expenditures over Appropriations ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 89
Note 15 – Restatements and Prior Period Adjustments of Beginning Net Position ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 90
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Note 1 – Summary of Significant Accounting Policies
A. Financial 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
In evaluating how to define the City for financial reporting purposes, management has considered all potential
component units. The primary criteria for including a potential component unit within the reporting entity are the
governing body’s financial accountability and a financial benefit or burden relationship and whether it is misleading
to exclude. A primary government is financially accountable and shares a financial benefit or burden relationship,
if it appoints a voting majority of an organization’s governing body and it is able to impose its will on the
organization, or if there is a potential for the organization to provide specific financial benefits to, or impose specific
financial burdens on the primary government. A primary government may also be financially accountable if an
organization is fiscally dependent on the primary government regardless of whether the organization has a
separately elected governing board, a governing board appointed by a higher level of government, or a jointly
appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose
specific financial burdens on the primary government.
Although the following is legally separate from the City, it has been “blended” as though it is part of the City
because the component unit’s governing body is substantially the same as the City’s and there is a financial benefit
or burden relationship between the City and the component unit; management of the City has operational
responsibilities for the component unit; and/or the component unit provides services entirely, or almost entirely, to
the City or otherwise exclusively, or almost exclusively, benefits the City, even though it does not provide services
directly to it.
The Cupertino Public Facilities Corporation (the “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.
The City had no discretely presented component units.
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Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Presentation
Financial statement presentation follows the recommendations promulgated by the Governmental Accounting
Standards Board (“GASB”) commonly referred to as accounting principles generally accepted in the United States
of America (“U.S. GAAP”). GASB is the accepted standard-setting body for establishing governmental accounting
and financial reporting standards.
C. Measurement Focus, Basis of Accounting and Financial Statements Presentation
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting
entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that
comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Fund accounting
segregates funds according to their intended purpose and is used to aid management in demonstrating compliance
with finance-related legal and contractual provisions. The minimum number of funds is maintained in accordance
with legal and managerial requirements.
Government-Wide Statements
The City’s Government-Wide Financial Statements include a Statement of Net Position and a Statement of
Activities. These statements present summaries of governmental and business-type activities for the City
accompanied by a total column. Fiduciary activities of the City are not included in these statements.
These financial statements are presented on an “economic resources” measurement focus and the accrual basis of
accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of
resources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the
accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the
accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are
recognized in the period in which the liability is incurred.
Certain types of transactions are reported as program revenues for the City in three categories:
Charges for services
Operating grants and contributions
Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal
balances in the Statement of Net Position have been eliminated except those representing balances between the
governmental activities and the business-type activities, which are presented as internal balances and eliminated in
the total primary government column. In the Statement of Activities and Changes in Net Position, internal service
fund transactions have been eliminated; however, those transactions between governmental and business-type
activities have not been eliminated. The following interfund activities have been eliminated:
Advance from/to other funds
Due to/from other funds
Transfers in/out
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 1 – Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accounting and Financial Statements Presentation (Continued)
Governmental Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and
Changes in Fund Balances for all major governmental funds and nonmajor funds aggregated. An accompanying
schedule is presented to reconcile and explain the differences in net position as presented in these statements to the
net position presented in the Government-Wide Financial Statements. The City has presented all major funds that
met the applicable criteria.
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and
the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the
Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases
(revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.
Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they
become both “measurable” and “available” to finance expenditures of the current period.
Revenues are recognized as soon as they are both “measurable” and “available”. Revenues are considered to be
available when they are collectible within the current period as soon enough thereafter to pay liabilities of the
current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of
the end of the current fiscal period. The primary revenue sources, which have been treated as susceptible to accrual
by the City, are property taxes, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in
the accounting period in which the related fund liability is incurred.
The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to
explain the differences.
The City reports the following major Governmental Funds:
General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial
resources except those that are required to be accounted for in another fund.
Transportation Special Revenue Fund - 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.
Housing Development Special Revenue Fund - 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. 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.
Public Facilities Corporation Debt Service Fund - 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. 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.
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 1 – Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accounting and Financial Statements Presentation (Continued)
Governmental Fund Financial Statements (Continued)
Capital Improvement Projects Capital Projects Fund - The Capital Improvement Projects Capital Projects Fund
Accounts for activities related to the acquisition or construction of major capital facilities.
Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses and
Changes in Fund Net Position, and a Statement of Cash Flows for each major Proprietary Fund.
A separate column representing internal service funds is also presented in these statements. However, internal
service balances and activities have been combined with the governmental activities in the Government-Wide
Financial Statements. The City’s internal service funds include two individual funds which provide services directly
to other City funds. These areas of service include Central Garage and Print Shop.
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of
accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of
Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position presents increases (revenues)
and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in
the period in which they are earned while expenses are recognized in the period in which the liability is incurred.
In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts.
Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of
the fund. All other revenues are reported as nonoperating revenues. Operating expenses are those expenses that are
essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.
The City reports the following major proprietary funds:
Resources Recovery Enterprise Fund - The Resources Recovery Enterprise 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 Enterprise Fund - The Recreation Programs Enterprise Fund accounts for activities of
the City's community centers and park facilities.
Cupertino Sports Center Enterprise Fund - The Cupertino Sports Center Enterprise Fund accounts for activities
of the City’s sports center facility.
The City also reports the following fund as proprietary fund type:
Internal Service Funds - These funds account for management information systems maintenance and
replacement, workers' compensation, equipment maintenance and replacement, accrued leave payouts, and
long-term disability, retiree health costs, coverage which are provided to other departments on a cost-
reimbursement basis.
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 1 – Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accounting and Financial Statements Presentation (Continued)
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 both the full accrual basis and the modified 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.
D. Cash, Cash Equivalents, 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.
The statement of cash flows requires presentation of “cash and cash equivalents”. For the purposes of the statement
of cash flows, the City considers all proprietary fund pooled cash and investments as “cash and cash equivalents”,
as such funds are available to the various funds as needed.
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 1 – Summary of Significant Accounting Policies (Continued)
D. Cash, Cash Equivalents, and Investments (Continued)
Certain disclosure requirements, if applicable, for Deposits and Investment Risks in the following areas:
Interest Rate Risk
Credit Risk
- Overall
- Custodial Credit Risk
- Concentration of Credit Risk
Foreign Currency Risk
In addition, other disclosures are specified including use of certain methods to present deposits and investments,
highly sensitive investments, credit quality at year-end and other disclosures.
E. Fair Value Measurements
U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosures about
fair value measurement. Investments, unless otherwise specified, recorded at fair value in the financial statements,
are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Levels
of inputs are as follows:
The three levels of the fair value measurement hierarchy are described below:
Level 1 – Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the
measurement date.
Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the assets or liabilities
through corroboration with market data at the measurement date.
Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use
in pricing the assets or liabilities at the measurement date.
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.
F. Receivables
Receivables include such items as taxes, intergovernmental revenues, charges for services, miscellaneous accounts
receivable, and interest receivable. No allowance for doubtful accounts has been established, as the City believes
all amounts are considered to be collectible in the normal course of business.
G. Lease Receivable
The City is a lessor for leases of buildings and land and recognizes leases receivable and deferred inflows of
resources in the financial statements. Variable payments based on future performance or usage of the underlying
asset are not included in the measurement of the lease receivable.
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 1 – Summary of Significant Accounting Policies (Continued)
G. Lease Receivable (Continued)
At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be
received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease
payments received. The deferred inflows of resources are initially measured as the initial amount of the lease
receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the
deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational
method.
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected
lease receipts to present value, (2) lease term, and (3) lease receipts.
The City uses the incremental borrowing rate (IBR) provided by the City’s financial institution for existing
leases or the current rate at the time a new lease is executed.
The lease term includes the noncancelable period of the lease plus any option periods that are likely to be
exercised.
Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the
lessee.
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the
lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect
the amount of the lease receivable.
H. Inventories
Inventories consist of fuel, which are reported under historical cost.
I. 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.
J. Interfund Transactions
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the
fiscal year are referred to as either “due to/from other funds” or “advances to/from other funds” (i.e., the current
portion of interfund loans). Any residual balances outstanding between the governmental activities and business-
type activities are reported in the Government-Wide Financial Statements as “internal balances”.
K. 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.
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 1 – Summary of Significant Accounting Policies (Continued)
K. Capital Assets (Continued)
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
Water infrastructure 20 – 125 years
Major outlays for capital assets and improvements are capitalized as projects are constructed. For enterprise funds,
interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of
interest earned on the invested proceeds over the same period. Some capital assets may be acquired using federal
and state grant funds, or they may be contributed by developers or other governments. These contributions are
accounted for as revenues at the time the capital assets are contributed.
Right-of-Use Lease Assets
Lease assets are recorded at the amount of the initial measurement of the lease liabilities and adjusted by any lease
payments made to the lessor at or before the commencement of the lease term, less any lease incentives received
from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary
charges necessary to place the lease assets into service. Lease assets are amortized using the straight-line method
over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase
option that the City has determined is reasonably certain of being exercised. In this case, the lease asset is amortized
over the useful life of the underlying asset.
Right-of-Use Subscription Assets
Subscription assets are recorded at the amount of the initial measurement of the SBITA liabilities (“subscription
liabilities”) and adjusted by any subscription payments to the SBITA vendor at or before the commencement of the
subscription term, less any incentives received from the SBITA vendor at or before the commencement of the
subscription term along with subscription implementation costs. Subscription assets are amortized over the shorter
of the subscription term or the useful life of the underlying information technology assets.
L. Deferred Outflows of Resources and Deferred Inflows of Resources
The Statement and Net Position and the Balance Sheet report separate sections for deferred outflows of resources,
and deferred inflows of resources, when applicable.
Deferred Outflows of Resources represent a consumption of net assets that applies to future periods.
Deferred Inflows of Resources represent an acquisition of net assets that applies to future periods.
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M. Interest Payable
In the government-wide financial statements, interest payable on long-term debt is recognized as the liability is
incurred for governmental activities and business-type activities.
N. Unearned Revenue
Unearned revenue is reported for transactions for which revenue has not yet been earned. Typical transactions
recorded as unearned revenues are prepaid charges for services.
O. 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.
The liability for compensated absences is recognized as leave is earned, based on the employee’s pay rate in effect
at the financial statement date, including any applicable salary-related costs. The liability includes only leave
attributable to services already rendered and that is more likely than not to be paid.
P. Claims and Judgement 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.
Q. Lease Liabilities
The City has a policy to recognize a lease liability and a right-to-use asset (lease asset) in the financial statements
with an initial, individual value of $5,000 or more with a lease term greater than one year. Variable payments based
on future performance or usage of the underlying assets are not included in the measurement of the lease liability.
At the commencement of a lease, the lease liability is measured at the present value of payments expected to be
made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments
made.
Lease assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease
payments made to the lessor at or before the commencement of the lease term, less any lease incentives received
from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary
charges necessary to place the lease assets into service. Lease assets are amortized using the straight–line method
over the shorter of the lease term or the useful life of the underlying asset, unless the lease e State has determined
is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the
underlying asset.
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Note 1 – Summary of Significant Accounting Policies (Continued)
Q. Lease Liabilities (Continued)
Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to
discount the expected lease payments to present value, (2) lease term, and (3) lease payments.
The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by
the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount
rate for leases.
The lease term includes the noncancelable period of the lease, plus any option periods that are reasonably
certain to be exercised.
Lease payments included in the measurement of the lease liability are composed of fixed payments and
purchase option price that the City is reasonably certain to exercise. The City monitors changes in
circumstances that would require a remeasurement of a lease and will remeasure any lease asset and liability
if certain changes occur that are expected to significantly affect the amount of the lease liability.
Lease assets are reported as right-to-use along with other capital assets and lease liabilities are reported as long term
liabilities on the statement of net position.
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure
any lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease
liability.
R. Subscription Liabilities
The City recognizes subscription liabilities with an initial, individual value of $5,000 or more with a subscription
term greater than one year in the government-wide and proprietary fund financial statements. Variable payments
based on future performance of the City, usage of the underlying information technology assets, or number of user
seats are not included in the measurement of the subscription liability.
At the commencement of a subscription, the City initially measures the subscription liability at the present value of
payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by
the principal portion of subscription payments made.
Key estimates and judgments related to subscription liabilities include how the City determines (1) the discount
rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3)
subscription payments.
The City uses incremental borrowing rate provided by the financial institution at July 1, 2022 for existing
subscription or the current rate at the time a new subscription is executed.
The subscription term includes the noncancellable period of the SBITA. Subscription payments included
in the measurement of the subscription liability are composed of fixed payments.
The City monitors changes in circumstances that would require a remeasurement of its SBITA and will remeasure
any subscription asset and liability if certain changes occur that are expected to significantly affect the amount of
the subscription liability.
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For the Year Ended June 30, 2025
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Note 1 – Summary of Significant Accounting Policies (Continued)
S. Long-Term Debt
Government-Wide Financial Statements
Long-term debt and other financial obligations are reported as liabilities in the statement of net position.
Bond premiums and discounts, as well as gains and losses on refunding, are deferred and amortized over the life of
the bonds using the effective interest method. Bonds payable are reported net of the applicable premium or discount.
Issuance costs are expensed in the year of issuance.
Fund Financial Statements
The fund financial statements do not present long-term debt but are shown in the Reconciliation of the
Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position.
T. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources
related to pensions, and pension expense, information about the fiduciary net position of the plans and additions
to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported
by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when
due and payable in accordance with benefit terms. Investments are reported at fair value.
The following timeframes are used for pension reporting:
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension
expense systematically over time. The first amortized amounts are recognized in pension expense for the year the
gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources
related to pensions and are to be recognized in future pension expense. The amortization period differs depending
on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line
over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all
members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement
period.
General Fund is typically used to liquidate pension liabilities to governmental funds.
U. Other Postemployment Benefits (“OPEB”) Plan
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources
related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s OPEB Plan and
additions to/deductions from the OPEB Plans’ fiduciary net position have been determined on the same basis as
they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions)
are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.
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For the Year Ended June 30, 2025
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Note 1 – Summary of Significant Accounting Policies (Continued)
U. Other Postemployment Benefits (“OPEB”) Plan (Continued)
The following timeframes are used for OPEB reporting:
Valuation Date June 30, 2025
Measurement Date June 30, 2025
Measurement Period July 1, 2024 to June 30, 2025
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB
expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the
gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources
related to OPEB and are to be recognized in future OPEB expense. The amortization period differs depending on
the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over
5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all
members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement
period.
General Fund is typically used to liquidate OPEB liabilities to governmental funds.
V. Net Position
In governmental-wide and proprietary fund financial statements, net positions are categorized as follows:
Net Investment in Capital Assets – This category consists of capital assets, net of accumulated
depreciation/amortization, reduced by the outstanding balances of debt that are attributable to the acquisition,
construction, or improvement of those assets and retention payable.
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."
When expenses are incurred for purposes for which both restricted and unrestricted net position are available, the
City’s policy is to apply restricted net position first, then unrestricted net position as they are needed.
W. 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.
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For the Year Ended June 30, 2025
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W. Fund Balances (Continued)
Restricted Fund Balance – includes amounts that can be spent only for the specific purposes stipulated by external
resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or
lifted only with the consent of resource providers.
Committed Fund Balance – includes amounts that can only be used for the specific purposes determined by a
formal action of the City's highest level of decision-making authority, the City Council. Commitments may be
changed or lifted only by the City taking the same formal action (resolution) that imposed the constraint originally.
Assigned Fund Balance – comprises amounts intended to be used by the City for specific purposes that are neither
restricted nor committed. Intent is expressed by the City Council or official to which the City Council has delegated
the authority to assign amounts to be used for specific purposes. Through the adopted budget, the City Council
establishes assigned fund balance policy levels and also sets the means and priority for the City Manager to fund
these levels.
Unassigned Fund Balance – is the residual classification for the General Fund and includes all amounts not
contained in the other classifications. Unassigned amounts are technically available for any purpose. 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.
X. Property Taxes
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.
Y. Use of Estimates
The preparation of the basic financial statements in accordance with U.S. GAAP requires management to make
estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could
differ from those estimates.
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For the Year Ended June 30, 2025
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Note 1 – Summary of Significant Accounting Policies (Continued)
Z. Implementation of New GASB Pronouncements
GASB Statement No. 101 – 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 fiscal years beginning after December 15, 2023,
and all reporting periods thereafter. Implementation of this Statement resulted in a restatement of the beginning
fund balance as of July 1, 2024, as presented in Note 15.
GASB Statement No. 102 – In December 2023, the GASB issued Statement No. 102, Certain Risk Disclosures.
The objective of this Statement is to provide users of government financial statements with information about risks
related to a government’s vulnerabilities due to certain concentrations or constraints that is essential to their analyses
for making decisions or assessing accountability. The requirements of this Statement are effective for fiscal years
beginning after June 15, 2024, and all reporting periods thereafter. The City has evaluated its exposure to financial
risk stemming from concentrations and constraints. Management has determined that a concentration exists in the
City’s revenue, as disclosed in Note 13.
AA. Upcoming New GANB Pronouncements
The City is currently evaluating its accounting practices to determine the potential impact on the financial
statements for the following GASB Statements:
GASB Statement No. 103 – In April 2024, GASB issued Statement No. 103, Financial Reporting Model
Improvements. The objective of this Statement is to improve key components of the financial reporting model to
enhance its effectiveness in providing information that is essential for decision making and assessing a
government’s accountability. Application of this statement is effective for the City’s fiscal year ending
June 30, 2026. The City has not determined the effect on the financial statements.
GASB Statement No. 104 – In September 2024, the GASB issued Statement No. 104, Disclosure of Certain Capital
Assets. The objective of this Statement is to provide users of government financial statements with essential
information about certain types of capital assets. This Statement requires certain types of capital assets to be
disclosed separately in the capital assets note disclosures required by Statement 34. This Statement also requires
additional disclosures for capital assets held for sale. Application of this statement is effective for the City’s fiscal
year ending June 30, 2026. The City has not determined the effect on the financial statements.
Note 2 – Cash and Investments
The City had the following cash and investments at June 30, 2025:
Governmental Business-Type
Activities Activities Total
Cash and investments 283,350,889$ 10,083,012$ 293,433,901$
Restricted cash and investments:
Held by fiscal agent for pension 24,320,860 - 24,320,860
Total cash and investments 307,671,749$ 10,083,012$ 317,754,761$
Government-Wide
Statement of Net Position
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City of Cupertino
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For the Year Ended June 30, 2025
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Note 2 – Cash and Investments (Continued)
The City’s cash and investments at June 30, 2025, in more detail:
Cash on hand 2,963$
Deposits with financial institutions 51,509,352
Total cash 51,512,315
Investments 241,921,586
Investments with PARS 24,320,860
Total investments 266,242,446
Total cash and investments 317,754,761$
A. Deposits
The carrying amounts of the City’s demand deposits were $51,509,352 at June 30, 2025. Bank balances at that date
were $51,715,814 the total amount of which was collateralized or insured with accounts held by the pledging
financial institutions in the City’s name as discussed below.
Cash and Investments with PARS were related to the City’s Pension Trust.
The California Government Code requires California banks and savings and loan associations to secure the City’s
cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have
the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral
for cash deposits is considered to be held in the City's name.
The fair value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows
institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s
total cash deposits. The City may waive collateral requirements for cash deposits, deposits, which are fully insured
up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The City did not waive the collateral
requirement for deposits insured by FDIC.
The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by
fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is
allocated on an accounting period basis to the various funds based on the period-end cash and investment balances.
Interest income from cash and investments with fiscal agents is credited directly to the related fund.
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For the Year Ended June 30, 2025
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Note 2 – Cash and Investments (Continued)
B. Investments Authorized by the California Government Code and the City’s Investment Policy
The following table identifies the investment types that are authorized for the City by the California Government
Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the
California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk,
credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond
trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the
California Government Code or the City’s investment policy: 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.
Authorized Investment Type
Maximum
Maturity
Minimum Credit
Quality
Maximum
Percentage of
Portfolio
Maximum Investment in
One Issuer
U.S. Treasury Obligations 5 years N/A None None
U.S. Agency Securities* 5 years N/A None 25% of portfolio, 20% of callable
securities
California Local Agency Investment Fund (LAIF)N/A N/A Up to $75 million None
Non-negotiable Certificates of Deposits (time deposits)5 years N/A 30%None
State of California registered state
warrants, treasury notes, or bonds 5 years N/A 30%5% of portfolio
California local agency bonds, notes,
warrants, or other obligations 5 years N/A 30%5% of portfolio
Bond issued by the local agency 5 years N/A 30%5% of portfolio
Bankers' Acceptances 180 days A or better 40%None
Commercial Paper 270 days A-1 25% 5% of issuer's net worth; 10% of
outstanding paper of Issuer. **
Negotiable Certificates of Deposit 5 years N/A 30% 5% of issuer's net worth. **
Repurchase Agreements 1 year N/A None None
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 N/A N/A 20%None
Asset-backed, mortgage-backed, mortgage pass-through securities, 5 years AA or better 20%5% of the portfolio
and collateralized mortgage obligations,
Supernationals 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),
** Represents restriction in which the City's investment policy is more restrictive than the California Government Code.
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For the Year Ended June 30, 2025
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Note 2 – Cash and Investments (Continued)
C. Investments Authorized 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:
Authorized Investment Type
Maximum
Maturity
Minimum Credit
Quality
Maximum
Percentage of
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 $75 million
Shares in a California common law trust established pursuant
to Title 1, Division 7, Chapter 5 of the California Government
Code which invests exclusively in investments permitted by
Section 53635 of Title 5, Division 2, Chapter of the California
Government Code, as it may be amended.N/A N/A None
D. Risk Disclosures
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market
interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination
of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the
portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and
liquidity needed for operations.
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For the Year Ended June 30, 2025
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Note 2 – Cash and Investments (Continued)
D. Risk Disclosures (Continued)
Disclosures Relating to Interest Rate Risk (Continued)
Information about the sensitivity of the fair values of the City's investments (including investments held by bond
trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the
City's investments by maturity:
Investment Type
12 Months of
less 13 to 24 Months
More than 24
Months Total
U.S. Treasury Securities 10,696,361$ 14,009,029$ 47,621,119$ 72,326,509$
Corporate Notes 4,176,191 6,652,128 35,095,869 45,924,188
U.S. Agency Notes:
Federal Home Loan Mortgage Corporation 594,533 638,009 19,841,256 21,073,798
Federal National Mortgage Association 2,467,004 - - 2,467,004
Federal Home loan Banks - 1,906,833 - 1,906,833
Farm Credit System - 2,440,711 2,848,664 5,289,375
Municipal Bonds - - 1,770,876 1,770,876
Asset-Backed Securities 45,176 2,383,271 11,570,698 13,999,145
Supranationals 4,767,449 - 3,474,940 8,242,389
Local Agency Investment Fund 68,136,759 - - 68,136,759
Money Market Mutual Funds 784,710 - - 784,710
Restricted investment with PARS 24,320,860 - - 24,320,860
Total investments 115,989,043$ 28,029,981$ 122,223,422$ 266,242,446$
Remaining Maturity (In Months)
Disclosures Relating to Credit Risk
Generally, 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 minimum rating required by (where applicable) the California Government Code, the City's
investment policy, or debt agreements, and the actual rating, by Standard and Poor’s or Moody’s’, as of
June 30, 2025 for each investment type:
Investment Type Total AAA AA A Not Required
U.S. Treasury Securities 72,326,509$ 72,326,509$ -$ -$ -$
Corporate Notes 45,924,188 6,589,675 6,479,086 32,855,427 -
U.S. Agency Notes
Federal Home Loan Mortgage Corporation 21,073,798 21,073,798 - - -
Federal National Mortgage Association 2,467,004 2,467,004 - - -
Federal Home Loan Banks 1,906,833 1,906,833 - - -
Farm Credit System 5,289,375 5,289,375 - - -
Municipal Bonds 1,770,876 - 1,770,876 - -
Asset-Backed Securities 13,999,145 13,999,145 - - -
Supranationals 8,242,389 8,242,389 - - -
Local Agency Investment Fund 68,136,759 - - - 68,136,759
Money Market Mutual Funds 784,710 - - - 784,710
Restricted investment with PARS 24,320,860 - - - 24,320,860
Total Investments 266,242,446$ 131,894,728$ 8,249,962$ 32,855,427$ 93,242,329$
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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 2 – Cash and Investments (Continued)
D. Risk Disclosures (Continued)
Disclosures Relating to Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer
beyond that stipulated by the California Government Code. At June 30, 2025, the following investment represent
5% or more of total City investments:
Issuer Investment Type Amount Percentage
Federal Home Loan Mortgage Corporation U.S. Agency Notes 21,073,798$ 8%
Disclosures Relating to Custodial Credit Risk
Custodial credit risk is the risk that, in the event of the failure of the counter party, the City will not be able to
recover the value of its investments or collateral securities that are in the possession of an outside party. All
securities, with the exception of LAIF and other pooled investments, are held by a third-party custodian.
E. Investment in Local Agency Investment Fund (LAIF)
The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the
oversight of the Treasurer of the State of California. As of June 30, 2025, the City had $68,136,759 invested in
LAIF. LAIF determines fair value on its investment portfolio based on market quotations for those securities where
market quotations are readily available and based on amortized cost or best estimate for those securities where
market value is not readily available. LAIF is reported at amortized cost, which approximates fair value.
F. Fair Value Measurement Disclosure
The investments are reported at fair value. The following table presents the fair value measurement of investments
on a recurring basis and the levels within GASB 72 fair value hierarchy in which the fair value measurements fall
at June 30, 2025:
Investments by Fair Value Level
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2) Uncategoraized Total
U.S. Treasury Securities 72,326,509$ -$ -$ 72,326,509$
Corporate Notes - 45,924,188 - 45,924,188
U.S. Agency Notes
Federal Home Loan Mortgage Corporation - 21,073,798 - 21,073,798
Federal National Mortgage Association - 2,467,004 - 2,467,004
Federal Home Loan Banks - 1,906,833 - 1,906,833
Farm Credit System - 5,289,375 - 5,289,375
Asset-Backed Securities - 13,999,145 - 13,999,145
Supranationals - 8,242,389 - 8,242,389
Municipal Bonds - 1,770,876 - 1,770,876
Money Markel Mutual Funds
- Restricted for Pension (PARS)- - 24,320,860 24,320,860
Money Markel Mutual Funds - - 784,710 784,710
Local Agency Investment Fund - - 68,136,759 68,136,759
Total Investments 72,326,509$ 100,673,608$ 93,242,329$ 266,242,446$
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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, 2025, the balance remaining on the loan
was $1,934,740 including principal and interest in the amounts of $821,000 and $1,171,782, respectively. The loan was
issued using resources in the amount of $417,000 and $404,000 in the General Fund and the Housing Development
Special Revenue Fund, respectively 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, 2025, the
balance on the loan was $112,314. The loan was issued using resources in the Housing Development Special Revenue
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 30th 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, 2025, the balance remaining on the loan was $4,527,698 including principal and interest in the
amounts of $3,672,000 and $855,698, respectively in the Housing Development Special Revenue Fund and is
considered as governmental activities.
Note 4 – Leases Receivable
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, the Cupertino Public Library, and Water Infrastructure. The City receives fixed payments
from the lessees, with a total of $1,666,700 recognized as rental revenue and $30,743 recognized as interest revenue on
the lease for the year ended June 30, 2025 and a receivable for the remaining payments under the leases of $2,160,250.
The leases have receipts that range from $974 to $22,100,000 and interest rates that range from 0.0000% to 2.2820%
On October 1, 2024, the City entered into a 12-years lease agreement with San Jose Water Company (the “Company”)
for the operation and maintenance of the City’s water system. Under this agreement, the City received a $22 million
prepayment, which is recorded as deferred inflow and amortized over the life of the contract. The agreement also
provides for an annual $1.8 million investment rent paid to the City, which is recorded as deposit payable and designated
to reimburse the Company for City-approved capital improvement projects. Additionally, the Company will pay the
City an annual franchise fee equal to 2% of its previous year's gross receipts derived from customer operations.
Total deferred inflows of resources relating to leases amounted to $22,667,158 at June 30, 2025.
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Note 4 – Leases Receivable (Continued)
At June 30, 2025, the required payments for these leases, including interest, are:
Year Ending
June 30,
NPV Leases
Receivable Interest
Total Lease
Payment
2026 242,614$ 26,659$ 269,273$
2027 254,306 23,691 277,997
2028 266,058 20,584 286,642
2029 224,664 17,367 242,031
2030 217,245 14,541 231,786
2031 - 2035 702,002 38,094 740,096
2036 - 2040 249,045 9,856 258,901
2041 4,316 5 4,321
Total 2,160,250$ 150,797$ 2,311,047$
Note 5 – Interfund Transactions
A. Advances
Interfund advances are balances between funds that are not expected to be repaid within the current fiscal year. As
of June 30, 2025, the General Fund advanced $3,000,000 to the Capital Improvement Projects Capital Projects Fund
for advance funding of planned projects that will be repaid in subsequent years.
B. Due from and to other Funds
At June 30, 2025, the City has the following due from and to other funds:
Due to
Other Funds
Internal Service
Due From Other Funds Funds
Governmental Funds:
General Fund 1,390,420$
1,390,420$
These interfund balances represent routine short-term cash flow assistance.
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For the Year Ended June 30, 2025
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Note 5 – Interfund Transactions (Continued)
C. Transfers In and Out
Transfers between funds during the fiscal year ended June 30, 2025 were as follows:
Capital
Improvement
Transportation Projects Nonmajor
Special Revenue Capital Project Governmental
Transfers In General Fund Fund Fund Funds Total
Governmental Funds:
General Fund -$ -$ 333,334$ 15,000$ 348,334$
Transportation
Special Revenue Fund 1,847,578 - 762,580 - 2,610,158
Housing Development
Special Revenue Fund 94,258 - - - 94,258
Public Facilities Corporation
Debt Service Fund 2,677,450 - - - 2,677,450
Capital Improvement Projects
Capital Projects Fund 4,070,000 693,000 - - 4,763,000
Nonmajor Governmental Funds 470,443 - - - 470,443
Proprietary Funds:
Resource Recovery Enterprise Fund 220,143 - - - 220,143
Recreation Programs Enterprise Fund 138,195 - - - 138,195
Sports Center Enterprise Fund 527,885 - - - 527,885
Nonmajor Enterprise Fund 173,030 - - - 173,030
Internal Service Funds 2,980,148 - - - 2,980,148
13,199,130$ 693,000$ 1,095,914$ 15,000$ 15,003,044$
Governmental Funds
Transfers Out
Transfers provided funding for operating subsidies, capital projects, capital acquisitions, internal service funds
personnel costs associated with staff special project, compensated absences and retiree health, and debt service.
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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 6 – Capital Assets
A. Governmental Activities
A summary of changes in capital assets of the governmental activities for the year ended June 30, 2025 is as follows:
Balance
Governmental Activities:July 1, 2024 Balance
General Government Capital Assets:(as restated) Additions Deletions Transfers June 30, 2025
Ca ital assets not bein de reciated:
Land 64,786,669$ -$ -$ -$ 64,786,669$
Easements 19,615,039 234,341 - - 19,849,380
Construction in progress 27,365,395 10,206,365 (912,590) (17,705,083) 18,954,087
Total general government capital assets not being depreciated 111,767,103 10,440,706 (912,590) (17,705,083) 103,590,136
Capital assets being depreciated:
Buildings 48,886,305 - (2,450,000) - 46,436,305
Improvements other than buildings 66,169,099 - (14,960) 6,010,304 72,164,443
Machinery and equipment 4,887,544 - (5,069) 610,041 5,492,516
Roads, curbs, gutters, sidewalks, medians and bridges 190,818,876 - - 10,136,084 200,954,960
Streetlights 9,986,718 - - 593,727 10,580,445
Storm drain structure and mains 39,919,335 - - - 39,919,335
Traffic signals 6,485,366 - - - 6,485,366
Water infrastructure 5,338,561 270,073 - 354,927 5,963,561
Total capital assets being depreciated 372,491,804 270,073 (2,470,029) 17,705,083 387,996,931
Less accumulated depreciation for:
Buildings (36,919,734) (1,552,189) 634,499 - (37,837,424)
Improvements other than buildings (50,738,244) (1,981,901) 12,289 - (52,707,856)
Machinery and equipment (3,714,335) (188,616) 5,069 - (3,897,882)
Roads, curbs, gutters, sidewalks, medians and bridges (121,415,663) (3,269,188) - - (124,684,851)
Streetlights (8,625,688) (247,342) - - (8,873,030)
Storm drain structure and mains (34,368,305) (686,545) - - (35,054,850)
Traffic signals (6,130,715) (64,095) - - (6,194,810)
Water infrastructure - (66,031) - - (66,031)
Total accumulated depreciation (261,912,684) (8,055,907) 651,857 - (269,316,734)
Total capital assets being depreciated, net 110,579,120 (7,785,834) (1,818,172) 17,705,083 118,680,197
Intangible assets, being amortized
Right-to-use subscription assets 2,235,145 523,418 (82,217) - 2,676,346
Total intangible assets, being amortized 2,235,145 523,418 (82,217) - 2,676,346
Less accumulated amortization for:
Right-to-use subscription assets (1,114,773) (581,178) 54,816 - (1,641,135)
Total accumulated amortization (1,114,773) (581,178) 54,816 - (1,641,135)
Total intangible assets, being amortized, net 1,120,372 (57,760) (27,401) - 1,035,211
Total general government capital asset, net 223,466,595 2,597,112 (2,758,163) - 223,305,544
Internal Service Fund Capital Assets:
Capital assets not being depreciated:
Construction in progress 192,925 264,441 - (189,656) 267,710
Total internal fund capital
assets not being depreciated 192,925 264,441 - (189,656) 267,710
Capital assets being depreciated:
Machinery and equipment 13,299,517 - (274,919) 189,656 13,214,254
Less accumulated depreciation (10,898,811) (428,666) 274,919 - (11,052,558)
Total internal fund capital assets being depreciated, net 2,400,706 (428,666) - 189,656 2,161,696
Intangible assets, being amortized
Right-to-use lease assets 34,108 - - - 34,108
Right-to-use subscription assets 334,167 175,435 (6,376) - 503,226
Total intangible assets, being amortized 368,275 175,435 (6,376) - 537,334
Less accumulated amortization for:
Right-to-use lease assets (18,844) (6,784) - - (25,628)
Right-to-use subscription assets (182,849) (96,051) - - (278,900)
Total accumulated amortization (201,693) (102,835) - - (304,528)
Total intangible assets, being amortized, net 166,582 72,600 (6,376) - 232,806
Total internal service fund capital assets, net 2,760,213 (91,625) (6,376) - 2,662,212
Governmental activities capital assets, net 226,226,808$ 2,505,487$ (2,764,539)$ -$ 225,967,756$
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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 6 – Capital Assets (Continued)
A. Governmental Activities (Continued)
Depreciation and amortization expenses were charged to functions and programs based on their usage of the related
assets. Depreciation and amortization expenses were charged to governmental activities as follows:
Governmental Activities Depreciation Amortization Total
Administration 24,480$ 59,018$ 83,498$
Innovation and technology 44,438 - 44,438
Administrative Services 21,541 50,086 71,627
Parks and Recreation 2,192,893 31,639 2,224,532
Community development 23,866 136,032 159,898
Public Works 5,748,689 304,403 6,053,092
Subtotal 8,055,907 581,178 8,637,085
Internal Service Allocation
Administration - 8,339 8,339
Innovation and technology 84,473 - 84,473
Administrative Services - 1,792 1,792
Parks and Recreation - 7,066 7,066
Community development - 24,803 24,803
Public Works 344,193 60,835 405,028
Subtotal 428,666 102,835 531,501
Total - Governmental Activities 8,484,573$ 684,013$ 9,168,586$
B. Business-Type Activities
A summary of changes in capital assets of the business-type activities for the year ended June 30, 2025 is as follows:
Balance Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025
Business-type activities:
Capital assets not being depreciated:
Construction in progress 3,337$ -$ -$ (3,337)$ -$
Total capital assets not being depreciated 3,337 - - (3,337) -
Capital assets being depreciated:
Buildings 2,291,240 - - - 2,291,240
Improvements other than buildings 2,399,072 - - 3,337 2,402,409
Machinery and equipment 751,752 - (6,601) - 745,151
Total capital assets being depreciated 5,442,064 - (6,601) 3,337 5,438,800
Less accumulated depreciation for:
Buildings (750,805) (90,648) - - (841,453)
Improvements other than buildings (1,979,892) (70,971) - - (2,050,863)
Machinery and equipment (705,284) (12,761) 6,601 - (711,444)
Total accumulated depreciation (3,435,981) (174,380) 6,601 - (3,603,760)
Total capital assets being depreciated, net 2,006,083 (174,380) - 3,337 1,835,040
Business-type activity capital assets, net 2,009,420$ (174,380)$ -$ -$ 1,835,040$
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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 6 – Capital Assets (Continued)
B. Business-Type Activities (Continued)
Depreciation expense was charged to the business-type activities as follows:
Business-Type Activities Depreciation
Cupertino Sports Center 101,810$
Recreation Program 56,038
Blackberry Farm 16,532
Total 174,380$
Note 7 – Long-Term Liabilities
A. Governmental Activities
A summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2025 is as
follows:
Balance
July 1, 2024
(as restated)
Additions/
Adjustment Retirements
Balance
June 30, 2025 Current Portion
Long-term
Portion
2020A Certificates of Participation 14,030,000$ -$ (2,115,000)$ 11,915,000$ 2,200,000$ 9,715,000$
Issuance Premium 2,386,895 - (397,816) 1,989,079 - 1,989,079
Lease liabilities 15,369 - (6,808) 8,561 6,844 1,717
Subscription liabilities 1,210,274 698,852 (712,927) 1,196,199 685,571 510,628
Claims payable 1,671,587 754,588 (449,444) 1,976,731 338,000 1,638,731
Compensated absences 4,722,845 (438,648) * - 4,284,197 857,020 3,427,177
Total long-term liabilities 24,036,970$ 1,014,792$ (3,681,995)$ 21,369,767$ 4,087,435$ 17,282,332$
* The change in the compensated absences liability is presented as a net change.
2020 A Certificates of Participation
The Cupertino Public Facilities Corporation issued Certificates of Participation to provide financing for the
construction of the Community Center, improvements of the City Hall and the Library in July 1986; purchase of
Wilson Park in 1989; finance the Memorial Park Expansion in 1990; and purchase the Blackberry Farm and
Fremont Older site in 1991. The Cupertino Public Facilities Corporation, as lessor, leased real property to the City
(under the Lease Agreement with the lessee) and assigned the base rental payments to the trustee for the benefit of
the owners of the certificates of participation. The rental payments which represent the pledged revenues are
scheduled to be sufficient in both time and amount, when the principal and interest of the certificates are due, which
was the case for the year ended June 30, 2025.
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, 2025 for the 2012 COPs. The result of the transaction
was an economic gain of $3,133,819.
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For the Year Ended June 30, 2025
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Note 7 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
2020 A Certificates of Participation (Continued)
The 2020A COPs are payable by a pledge of revenues from the lease payments payable by the City pursuant to the
Lease Agreement between the Cupertino Public Facilities Corporation and the City for the use and possession of
the Site and Facility as described in the Lease Agreement. The City also covenanted in the Lease Agreement to
include all lease payments in its annual budget. Total debt service payments remaining on the 2020 COPs is
$13,382,400 payable through June 1, 2030. During the year ended June 30, 2025, the bonds had $2,115,000 of
principal and $561,200 interest due and paid. The annual debt service requirements on these certificates are as
follows:
Year Ending
June 30, Principal Interest Total
2026 2,200,000$ 476,600$ 2,676,600$
2027 2,285,000 388,600 2,673,600
2028 2,380,000 297,200 2,677,200
2029 2,475,000 202,000 2,677,000
2030 2,575,000 103,000 2,678,000
Total 11,915,000$ 1,467,400$ 13,382,400$
Lease Liabilities
The City has entered into a lease for vehicle uses. The terms of the agreements are 36 months with an implicit rate
0.5273%. Principal and interest to maturity are as follows:
Year Ending
June 30, Principal Interest Total
2026 6,844$ 29$ 6,873$
2027 1,717 2 1,719
Total 8,561$ 31$ 8,592$
Subscription Liabilities
The City has entered into subscriptions for information technology arrangements. The terms of the arrangements
range from 12 to 48 months with implicit rates used between 1.710% to of 3.331%. Principal and interest to
maturity are as follows:
Year Ending
June 30, Principal Interest Total
2026 685,571$ 20,043$ 705,614$
2027 375,313 11,592 386,905
2028 135,315 3,583 138,898
Total 1,196,199$ 35,218$ 1,231,417$
Claims Payable
Refer to Note 10 for more details.
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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 7 – Long-Term Liabilities (Continued)
B. Business-Type Activities
The following is a summary of changes in long-term liabilities for business-type activities for the year ended
June 30, 2025:
Balance
July 1, 2024
(as restated) Net Changes
Balance
June 30, 2025 Current Portion
Long-term
Portion
Compensated absences 169,340$ 48,768$ * 218,108$ 118,507$ 99,601$
Total long-term liabilities 169,340$ 48,768$ 218,108$ 118,507$ 99,601$
* The change in the compensated absences liability is presented as a net change.
Note 8 – Defined Benefit Pension Plan
A. General Information about the Pension Plan
Plan Description
The City contributes to the California Public Employees’ Retirement System (“CalPERS”), an agent multiple-
employer public employee defined benefit pension plan. CalPERS acts as a common investment and administrative
agent for participating public entities within the State of California. Benefit provisions and all other requirements
are established by state statute and City ordinance. A full description of the pension plan regarding number of
employees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership
information are listed in the Annual Actuarial Valuation Report. This report and CalPERS’ audited financial
statements are publicly available reports that can be obtained at CalPERS’ website at www.calpers.ca.gov under
Forms and Publications.
Benefit 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, 2025, are summarized as
follows:
Prior to January 1 ,
2013
On or after 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% 7.75%
Required employer contribution rates 10.46% 10.46%
Hire date
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For the Year Ended June 30, 2025
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Note 8 – Defined Benefit Pension Plan (Continued)
A. General Information about the Pension Plan (Continued)
Benefit Provided (Continued)
Participant is eligible for non-industrial disability retirement if becomes disabled and has at least 5 years of credited
service. There is no special age requirement. The standard non-industrial disability retirement benefit is a monthly
allowance equal to 1.8 percent of final compensation, multiplied by service. Industrial disability benefits are not
offered.
An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The
employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is
eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this basic
death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions,
where interest is currently credited at 6 percent per year, plus a lump sum in the amount of one-month salary for
each completed year of current service, up to a maximum of six-months salary. For purposes of this benefit, one
month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months
preceding death.
Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated
survivor(s), or to the retiree's estate.
Benefit terms provide for annual cost-of-living adjustments to each employee’s retirement allowance. Beginning
the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted
on a compound basis by 2 percent.
Employees Covered by Benefit Terms
As of the June 30, 2023, the valuation date, the following employees were covered by the benefit terms of the Plan:
Active employees 200
Transferred and terminated employees 187
Retired Employees and Beneficiaries 271
Total 658
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.
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
77
Note 8 – Defined Benefit Pension Plan (Continued)
B. Net Pension Liability
Actuarial Methods and Assumptions Used to Determine Total Pension Liability
The June 30, 2023 valuation was rolled forward to determine the June 30, 2024 total pension liability, based on the
following actuarial methods and assumptions:
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate 6.90%
Inflation 2.30%
Salary Increases
Mortality Rate Table1
Post Retirement Benefit Increase
1The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS
Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using80%
of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report
from November 2021 that can be found on the CalPERS website.
Entry Age Actuarial Cost method
Varies by Entry Age and Service
Derived using CalPERS’ Membership Data for all Funds.
The lesser of contract COLA or 2.30% until Purchasing Power Protection
Allowance floor on purchasing power applies, 2.30% thereafter
Change of Assumptions
There were no changes of assumptions in 2024.
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method
in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation)
are developed for each major asset class.
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
78
Note 8 – Defined Benefit Pension Plan (Continued)
B. Net Pension Liability (Continued)
Long-term Expected Rate of Return (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term
market return expectations. Using historical returns of all of the funds’ asset classes, expected compound
(geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of
return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates
of return by asset class are as follows:
Asset Class1
Assumed
Asset
Allocation Real Return 1,2
Global Equity - Cap-weighted 30.00%4.54%
Global Equity - Non-Cap-weighted 12.00%3.84%
Private Equity 13.00%7.28%
Treasury 5.00%0.27%
Mortgage-backed Securities 5.00%0.50%
Investment Grade Corporates 10.00%1.56%
High Yield 5.00%2.27%
Emerging Market Debt 5.00%2.48%
Private Debt 5.00%3.57%
Real Assets 15.00%3.21%
Leverage -5.00%-0.59%
100.00%
1An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.
Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members will be made at the current member
contribution rates and that contributions from employers will be made at statutorily required rates, actuarially
determined. Based on those assumptions, the 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 plan
investments was applied to all periods of projected benefit payments to determine the total pension liability.
Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
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Note 8 – Defined Benefit Pension Plan (Continued)
C. Changes in the Net Pension Liability
The following table shows the changes in net pension liability for the City’s Miscellaneous Plan recognized over
the measurement period.
Total Pension
Liability (a)
Plan Fiduciary Net
Position (b)
Net Pension Liability
(c) = (a) - (b)
Balance at June 30, 2023 (Valuation Date)182,272,023$ 124,235,178$ 58,036,845$
Changes in the year:
Service cost 4,256,243 - 4,256,243
Interest on the total pension liability 12,577,249 - 12,577,249
Change of Benefit Terms - - -
Change of Assumptions - - -
Differences between actual and expected experience 2,583,077 - 2,583,077
Contribution - employer - 7,230,634 (7,230,634)
Contribution - employee - 1,824,533 (1,824,533)
Net investment income - 12,071,573 (12,071,573)
Administrative expenses - (101,091) 101,091
Other miscellaneous income/(expenses) - - -
Benefit payments, including refunds of employee
contributions (9,408,506) (9,408,506) -
Net Changes during July 1, 2023 to June 30, 2024 10,008,063 11,617,143 (1,609,080)
Balance at June 30, 2024 (Measurement Date)192,280,086$ 135,852,321$ 56,427,765$
Miscellaneous Plan
Increase (Decrease)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the plans as of the measurement date, calculated using the
discount rate of 6.90%, as well as what the net pension liability would be if it were calculated using a discount rate
that is 1 percentage-point lower (5.90%) or 1 percentage-point higher (7.90%) than the current rate:
Discount Rate Current Discount Discount Rate
- 1% (5.90%) Rate (6.90%) + 1% (7.90%)
Miscellaneous Plan 82,243,006$ 56,427,765$ 35,208,267$
Plan's Net Pension Liability/(Asset)
Pension Plan Fiduciary Net Position
Detailed information about the plan’s fiduciary net position is available in the separately issued CalPERS financial
report.
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
80
Note 8 – Defined Benefit Pension Plan (Continued)
C. Changes in the Net Pension Liability (Continued)
Pension Expense (Credit) and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
For the year ended June 30, 2025, the City recognized pension expense of $9,950,519. As of June 30, 2025, the
City reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contribution made after measurement date 17,717,621$ -$
Changes of assumptions 1,018,005 -
Difference between expected and actual experience 2,823,744 (35,615)
Net difference between projected and actual earning on
pension plan investments 1,829,809 -
Total 23,389,179$ (35,615)$
Miscellaneous Plan
The amounts above are net of outflows and inflows recognized in the 2023-24 measurement period expense.
The expected average remaining service lifetime (“EARSL”) is calculated by dividing the total future service years
by the total number of plan participants (active, inactive, and retired). The EARSL for the Plan for the measurement
period ending June 30, 2024 is 3.6 years, which was obtained by dividing the total service years of 2,383 (the sum
of remaining service lifetimes of the active employees) by 658 (the total number of participants: active, inactive,
and retired). Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is
based on the members’ probability of decrementing due to an event other than receiving a cash refund.
The $17,717,621 of contributions for the fiscal year ended June 30, 2025 reported as deferred outflows of resources
related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ending June 30, 2026.
Other amounts reported as deferred inflows of resources related to pensions will be recognized as pension expense
as follows:
Measurement
Period
Ending June 30
2025 2,180,283$
2026 4,256,558
2027 (96,751)
2028 (704,147)
2029 -
Thereafter -
Total 5,635,943$
Deferred
Outflows/(Inflows)
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
81
Note 9 – Other Post Employment Benefits (OPEB)
A. General Information about the OPEB Plan
Plan Description
Permanent employees who retire under the City's CalPERS retirement plan are, pursuant to their respective
collective bargaining agreements, eligible to have their medical insurance premiums paid by the City. Retirees
receive the amount necessary to pay the cost of his/her enrollment, including the enrollment of his/her family
members, in a health benefit plan provided by CalPERS up to the maximum received by active employees in their
respective bargaining unit.
The City contracts with CalPERS for this insured-benefit plan established under the state Public Employees'
Medical and Hospital Care Act (PEMHCA). The plan offers employees and retirees three CalPERS' 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 $1,060 to $2,815 per month per employee or retiree. The
responsibility for benefit payments has transferred to the insurers and the City does not guarantee the benefits in
the event of default by the insurers. A comprehensive annual financial report of CalPERS, inclusive of their benefit
plans, is available at www.calpers.ca.gov.
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.
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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
82
Note 9 – Other Post Employment Benefits (OPEB) (Continued)
A. General Information about the OPEB Plan (Continued)
Plan Description (Continued)
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 Members Covered by Benefit Terms
At June 30, 2025, the valuation date, the Plan membership consisted of the following:
Inactive plan members or beneficiaries currently receiving benefit payments 156
Inactive plan members entitled to but not yet receiving benefit payments -
Active plan members 183
339
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. For the year ended June 30, 2025, the City paid
$2,350,230 in healthcare premium payments including implied subsidy. Plan members are not required to contribute
to the plan.
B. Net OPEB Liability (Asset)
The City’s net OPEB liability(Asset) was measured as of June 30, 2025 and the total OPEB liability used to calculate
the net OPEB liability(Asset) was determined by an actuarial valuation as of June 30, 2025. Standard actuarial
update procedures were used to project/discount from valuation to measurement dates.
Long-term Expected Rate of Return
As of June 30, 2025, the long-term expected rates of return for each major investment class in the Plan’s portfolio
are as follows:
Investment Class JP Morgan Benchmark Target Allocation
Long-Term
Expected Real
Rate of Return
Equity – Int’l MSCI Net EAFE Index 16.00%9.50%
Equity – Small Cap MSCI US Small Cal 1750 Index 2.20%8.80%
Equity – Emerging MSCI Gross Emerging Mkts Free Ind 5.60%9.20%
Equity – Russell 1000 S&P 500 41.00%7.90%
Equity – US REIT MSCI REITs 4.70%9.30%
Fixed Inc - Artison High Lehman Bros High Corp Bond Ind 23.30%6.40%
Fixed Inc - Bond Index Lehman Bros GOVT/CORP 4.80%4.70%
Cash & Equivalents T-BILLS (30-day)2.40%3.10%
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
83
Note 9 – Other Post Employment Benefits (OPEB) (Continued)
B. Net OPEB Liability (Asset) (Continued)
Long-term Expected Rate of Return (Continued)
Inflation is assumed at 2.30% and expenses at 0.29% ($120,000/year). The above table shows the target asset
allocation in the US Bank. The expected real rate of return is JP Morgan Capital Asset Management.
Rate of Return
For the year ended June 30, 2025, the annual money-weighted rate of return on investments, net of investment
expense, was 12.61 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 June 30, 2025, 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 June 30, 2025 actuarial valuation include the
following:
Discount Rate 6.50%
Net Investment Return 6.50%, based on the UBS investment policy
Inflation 2.30% annual inflation
Payroll increases 2.75% annual increases
Health care Treend 7.75 % for Pre-65 and 5.10% for Post-65 increases in premium rates in 2025
3.94% for Pre-65 and 3.94% for Post-65 increase in premium rates in 2076
Mortality Pre-Retirement: CalPERS 2021 Mortality pre-retirement
Post-Retirement: CalPERS 2021 Mortality post-retirement
Disability CalPERS 2021 Experience Study for Non industrial Safety Disability
Retirement CalPERS 2021 Experience Study
2.0% @ 55 for Miscellaneous hired before January 1, 2013
2.0% @ 62 for Miscellaneous hired on or after January 1, 2013
Withdrawal CalPERS 2021 Experience Study for Miscellaneous
Discount Rate
The discount rate used to measure the total OPEB liability (asset) is based on a blend of (i) the long-term expected
rate of return on plan assets for benefits projected to be covered by PARS investments and (ii) a yield or index rate
for 20-year, tax-exempt general obligation municipal bonds rated AA/Aa or higher for any benefits not expected to
be covered by plan assets. For the measurement period ended June 30, 2025, the discount rate was 6.5 percent.
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
84
Note 9 – Other Post Employment Benefits (OPEB) (Continued)
B. Net OPEB Liability (Asset) (Continued)
Change of Assumptions
The following assumptions were changed from June 30,2024 to June 30, 2025:
1. Morbidity was updated from SOA’s “Health Care Costs – From Birth to Death” to CalPERS 2021 experience
rates.
2. Trend was updated using 2025 SOA Getzen Model for Increase Rated in Medical Premiums.
C. Change in Net OPEB Liability (Asset)
The changes in the City’s net OPEB liability (Asset) are:
Total OPEB
Liability (a)
Plan Fiduciary Net
Position (b)
Net OPEB Liability
(Asset)
(c) = (a) - (b)
Balance at June 30, 2024 40,388,740$ 38,012,829$ 2,375,911$
Changes in the year
Service cost 1,437,854 - 1,437,854
Interest on the total OPEB liability 2,643,549 - 2,643,549
Change of assumptions (1,226,828) - (1,226,828)
Differences between actual and
expected experience 578,892 - 578,892
Contribution - employer - 2,350,230 (2,350,230)
Contribution - employee - - -
Net investment income - 4,851,326 (4,851,326)
Administrative expenses - (130,113) 130,113
Benefit payments, including refunds o
Employee contributions (2,350,230) (2,350,230) -
Net Changes during July 1, 2024 to June 30, 2025 1,083,237 4,721,213 (3,637,976)
Balance at June 30, 2025 (Measurement Date)41,471,977$ 42,734,042$ (1,262,065)$
Net Increase (Decrease)
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 (asset) 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:
1% Decrease 5.50%
Current Discount
Rate 6.50% 1% Increase 7.50%
4,446,959$ (1,262,065)$ (5,947,783)$
Plan's Net OPEB Liability/(Asset)
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
85
Note 9 – Other Post Employment Benefits (OPEB) (Continued)
C. Change in Net OPEB Liability (Asset) (Continued)
Sensitivity of the Net OPEB Liability (Asset) to Changes in the Health Care Cost Trend Rates
The table below shows the Net OPEB Liability (Asset) calculated using healthcare cost trend rates that are 1
percentage point lower and 1 percentage point higher than the current assumption:
1% Decrease
Current Healthcare
Cost Trend Rate 1% Increase
(6,463,786)$ (1,262,065)$ 5,247,936$
Plan's Net OPEB Liability/(Asset)
D. OPEB Expense and Deferred Inflows of Resources Related to OPEB
For the year ended June 30, 2025, the City recognized OPEB expense of $1,237,756. As of June 30, 2025, the City
reported deferred inflows of resources related to OPEB from the following sources:
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Net difference between projected and actual
earnings on investments -$ (2,244,574)$
Differences between expected and actual experience 2,708,181 -
Changes in assumption 2,388,910 (1,286,945)
5,097,091$ (3,531,519)$
OPEB Plan
The difference between projected OPEB plan investment earnings and actual earnings is amortized over a five-year
period. The remaining gains and losses are amortized over the expected average remaining service life. The
expected average remaining service life is 6.6 years, which was determined as of July 1, 2024, the beginning of the
measurement period, for employees covered by the OPEB plan benefit terms.
Amounts reported as deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows
Measurement
Period
Ending June 30
2026 1,675,845$
2027 (131,155)
2028 158,846
2029 19,110
2030 (98,170)
Thereafter (58,904)
Total 1,565,572$
Deferred
Outflows/(Inflows)
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
86
Note 10 – 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, 2025, the City
paid the PLAN JPA premiums of $1,889,874.
Workers' Compensation Liability: The City belongs to the CSAC Excess Insurance Authority (EIA), a joint power
authority which provides excess workers' compensation liability claims coverage above the City's self-insured retention
of $500,000 per occurrence. Losses above the self-insured retention are pooled with excess reinsurance purchased to a
$50,000,000 statutory limit. EIA was established in 1979 for the purpose of creating a risk management pool for all
California public entities. EIA is governed by a Board of Directors consisting of representatives of its member public
entities. Complete financial statements for ETA may be obtained from their offices at the following address: CSAC
Excess Insurance Authority, Finance Department, EIA 75 Iron Point Circle, Suite 200, Folsom, CA 95630. For the year
ended June 30, 2025, the City paid premiums of $148,291.
It is the City's practice to obtain biennial actuarial studies for the self-insured workers' compensation liability. The
claims liabilities included in the workers' compensation internal service fund is based on the results of actuarial studies
and include amounts for claims incurred but not reported and loss adjustment expenses. Claim liabilities are calculated
considering the effects of inflation, recent claim settlement trends, including frequency and amount of payouts, and
other economic and social factors. Inflation of 2.5 percent, annual rate of return of two percent, claim severity increase
at 2.5 percent were assumed. In the current year, management used actuarial estimates based on a 90 percent confidence
level.
Settlements have not exceeded insurance coverage in the past three years.
Changes in the balances of workers' compensation and general claims liabilities during the years ended June 30 are as
follows:
2025 2024
Claims liability, beginning of year 1,671,587$ 2,222,786$
Incurred claims and changes in estimate 754,588 (268,925)
Claim payments and credits (449,444) (282,274)
Total claims liability, end of year 1,976,731 1,671,587
Less current portion (338,000) (322,000)
Non-current portion 1,638,731$ 1,349,587$
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
87
Note 11 – Net Position and Fund Balances
A. Net Investment in Capital Assets
The following is the calculation of net investment in capital assets at June 30, 2025:
Governmental Business-Type
Activities Activities
Capital assets, net of accumulated depreciation and amortization 225,967,756$ 1,835,040$
Add: deferred charges on refunding 136,879 -
Less: retention payable (346,385) -
Less: outstanding principal on capital related debts (11,915,000) -
Less: bond premium (1,989,079) -
Less: lease liabilities (8,561) -
Less: subscription liabilities (1,196,199) -
Net investment in capital assets 210,649,411$ 1,835,040$
B. Fund Balance Classifications
At June 30, 2025, fund balances are classified in the governmental funds as follows:
General Transportation
Housing
Development
Public Facilities
Corporation
Debt Service
Fund
Capital
Investments
Projects
Capital Projects
Fund
Nonmajor
Governmental
Funds Total
Nonspendable:
Loans receivable and related
interest receivable 1,012,168$ -$ -$ -$ -$ -$ 1,012,168$
Advances to other funds 3,000,000 - - - - - 3,000,000
Deposit 3,884 - - - - - 3,884
Inventories 21,383 - - - - - 21,383
Subtotal 4,037,435 - - - - - 4,037,435
Restricted for:
Public access television 1,471,890 - - - - - 1,471,890
CASP Certificate & Training 9,753 - - - - - 9,753
PARS Section 115 Trust 24,320,860 - - - - - 24,320,860
Storm drain system - - - - - 2,407,976 2,407,976
Parks and open space - - - - - 21,010,392 21,010,392
Environmental management - - - - - 955,699 955,699
Streets and road projects - 13,265,040 - - - 916,209 14,181,249
Housing programs - - 11,401,135 - - - 11,401,135
Subtotal 25,802,503 13,265,040 11,401,135 - - 25,290,276 75,758,954
Committed for:
Economic uncertainty 24,000,000 - - - - - 24,000,000
Sustainability reserve 127,891 - - - - - 127,891
Future Use Reserve 64,500,000 - - - - - 64,500,000
Subtotal 88,627,891 - - - - - 88,627,891
Assigned to:
Encumbrances 7,287,794 - - - - - 7,287,794
Capital projects - - - - 33,058,494 157,966 33,216,460
Subtotal 7,287,794 - - - 33,058,494 157,966 40,504,254
Unassigned 56,081,637 - - - - - 56,081,637
Total 181,837,260$ 13,265,040$ 11,401,135$ -$ 33,058,494$ 25,448,242$ 265,010,171$
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
88
Note 12 – Commitments and Contingencies
A. Federal and State Grants
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, 2025, 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.
B. 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.
As of June 30, 2025, the City had the following encumbrances outstanding:
Governmental Funds:
General Fund 7,287,794$
Transportation Special Revenue Fund 898,914
Housing Development Special Revenue Fund 11,084
Capital Improvements Projects Capital Projects Fund 8,198,536
Nonmajor Governmental Funds 694,981
Proprietary Funds:
Resource Recovery Enterprise Fund 476,217
Cupertino Sports Center Enterprise Fund 59,341
Internal Service Funds 712,952
Total Encumbrances 18,339,819$
C. 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. For the year ended June 30, 2025, the City abated taxes totaling $3,952,730.
D. Santa Clara County Vehicle Registration Fee (VRF)
The City is required to report VRF revenues, expenditures and fund balances for the year ended June 30, 2025:
VRF Balance as of July 1, 2024 (restated) 445,776$
VRF Revenue 392,363
VRF Interest 20,505
VRF Expended (858,644)
VRF Balance as of June 30, 2025 -$
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
89
Note 12 – Commitments and Contingencies (Continued)
E. California Department of Tax and Fee Administration (“CDTFA”) Local Tax Reallocation
On October 2, 2024, the City entered into a settlement agreement with CDTFA to reallocate sales tax revenues that
had been overremitted during the fiscal year 2025. As part of the agreement, the City committed to remit future
sales tax revenues to CDTFA with a total of $8,480,161. During the fiscal year ended June 30, 2025, the City
remitted $5,193,985 to CDTFA from sales tax revenues collection. As of June 30, 2025, the outstanding balance
owed to CDTFA was $3,286,175.
Note 13 – Concentration Risk
The City has an economic dependency on revenues generated directly or indirectly from one company. For the year
ended June 30, 2025, more than 10 percent of the City General Fund's total revenues are derived from the company.
The City's operations would be adversely impacted if there are any significant declines in taxes received from the
company.
Note 14 – Stewardship, Compliance and Accountability
A. Deficit Fund Balance/Net Position
At June 30, 2025, the following fund had a unrestricted net position (deficit):
Fund Fund Type Deficit
Retiree Medical Internal Service Fund (2,461)$
City management believes the present cash position of the Internal Service Funds are adequate to meet current
needs.
B. Excess of Expenditures over Appropriations
Total expenditures exceeded budgeted appropriations in the following funds:
Final
Funds Appropriations Expenditures Excess
Public Facilities Corporation Debt Service Fund 2,676,200$ 2,677,700$ (1,500)$
Nonmajor Governmental Funds
Environmental Management/Clean Creeks Special Revenue Fund 2,021,239 2,046,348 (25,109)
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City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
90
Note 15 – Restatements and Prior Period Adjustments of Beginning Net Position and Fund Balance
During fiscal year 2025, restatements and prior period adjustments of beginning net position and fund balances are as
follows:
June 30, 2024
As Previously Change in Accounting Error June 30, 2024
Reported Principle Corrections As Restated
Government-Wide
Governmental Activities 414,518,394$ 338,092$ 5,742,773$ 420,599,259$
Business-Type Activities 9,858,579 65,359 - 9,923,938
Total primary government 424,376,973$ 403,451$ 5,742,773$ 430,523,197$
Enterprise Funds:
Major Funds:
Resourses Recovery Enterprise Fund 5,122,605$ 8,283$ -$ 5,130,888$
Recreation Programs Enterprise Fund 2,753,355 11,489 - 2,764,844
Cupertino Sports Center Enterprise Fund 1,225,464 43,942 - 1,269,406
Nonmajor Enterprise Fund:
Blackberry Farm Nonmajor Enterprise Fund 757,155 1,645 - 758,800
Total Enterprise Funds 9,858,579$ 65,359$ -$ 9,923,938$
Internal Service Funds 6,528,882$ 44,561$ -$ 6,573,443$
Error Correction
Governmental activities are restated to report the water infrastructure beginning balance with the amount of $5,338,561,
as well as construction in progress relating to water infrastructure for $397,600. Additionally, the correction of the
beginning balance of the accumulated depreciation for machinery and equipment was made in amount of $6,612.
Implementation of GASB Statement No. 101, Compensated Absences
Effective for the fiscal year ended June 30, 2025, the City implemented GASB Statement No. 101, Compensated
Absences. This statement establishes accounting and financial reporting standards for compensated absences, including
vacation, sick leave, and other paid time off. The implementation of GASB 101 resulted in a change in accounting
principle, and prior year amounts have been restated accordingly.
Under GASB 101, a liability must be recognized for leave that is attributable to services already rendered, accumulates
and carries forward to future periods, and is more likely than not to be used or paid. This represents a shift from previous
guidance, particularly in how likelihood and eligibility are assessed. The effect of the restatement is as shown above.
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REQUIRED SUPPLEMENTARY
INFORMATION (UNAUDITED)
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Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:
Taxes 61,879,701$ 66,330,739$ 70,837,599$ 4,506,860$
Use of money and property 4,697,122 4,818,621 14,804,318 9,985,697
Intergovernmental 2,471,990 1,827,177 2,962,429 1,135,252
Licenses and permits 3,665,866 3,665,866 5,755,842 2,089,976
Charges for services 15,469,136 12,355,172 14,757,441 2,402,269
Fines and forfeitures 395,000 395,000 394,405 (595)
Other revenue 1,210,653 1,370,415 2,056,694 686,279
Total revenues 89,789,468 90,762,990 111,568,728 20,805,738
EXPENDITURES:
Current:
Administration 7,778,063 6,579,111 7,074,451 (495,340)
Law enforcement 18,648,806 18,708,806 17,386,971 1,321,835
Innovation and Technology 3,122,993 3,729,100 3,241,574 487,526
Administrative services 7,427,776 7,881,494 8,216,429 (334,935)
Recreation services 6,126,316 7,240,919 7,612,682 (371,763)
Community development 11,524,580 12,079,835 12,500,932 (421,097)
Public works 27,873,662 37,991,518 28,702,541 9,288,977
Capital outlay 190,000 538,347 1,108,602 (570,255)
Debt service:
Principal - - 553,163 (553,163)
Interest and fiscal charges - - 14,498 (14,498)
Total expenditures 82,692,196 94,749,130 86,411,843 8,337,287
Excess (deficiency) of revenues over
expenditures 7,097,272 (3,986,140) 25,156,885 29,143,025
OTHER FINANCING SOURCES (USES):
Inception of subscription liability - - 523,417 523,417
Proceeds from the sale of capital assets - - 2,912,435 2,912,435
Transfers in 15,000 348,334 348,334 -
Transfers out (7,349,598) (11,504,732) (13,199,130) (1,694,398)
Total other financing sources (uses)(7,334,598) (11,156,398) (9,414,944) 1,741,454
NET CHANGE IN FUND BALANCE (237,326)$ (15,142,538)$ 15,741,941 30,884,479$
FUND BALANCE:
Beginning of year 166,095,319
End of yea 181,837,260$
City of Cupertino
Required Supplementary Information
Budgetary Comparison Schedule - General Fund
For the Year Ended June 30, 2025
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Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:
Use of money and property 348,000$ 348,000$ 748,039$ 400,039$
Intergovernmental 8,778,004 7,504,574 5,649,963 (1,854,611)
Charges for services 15,000 15,000 2,214 (12,786)
Other revenue - - 3,433 3,433
Total revenues 9,141,004 7,867,574 6,403,649 (1,463,925)
EXPENDITURES:
Current:
Public works 3,687,487 4,721,810 4,694,339 27,471
Capital outlay 6,917,691 4,628,419 3,996,786 631,633
Total expenditures 10,605,178 9,350,229 8,691,125 659,104
Excess (deficiency) of revenues over
expenditures (1,464,174) (1,482,655) (2,287,476) (804,821)
OTHER FINANCING SOURCES(USES):
Transfers in 1,962,580 2,262,580 2,610,158 347,578
Transfers out - (693,000) (693,000) -
Total other financing sources(uses)1,962,580 1,569,580 1,917,158 347,578
NET CHANGE IN FUND BALANCE 498,406$ 86,925$ (370,318) (457,243)$
FUND BALANCE:
Beginning of year 13,635,358
End of yea 13,265,040$
City of Cupertino
Required Supplementary Information
Budgetary Comparison Schedule - Transportation Special Revenue Fund
For the Year Ended June 30, 2025
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Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:
Taxes 4,532,926$ 4,532,926$ 457,847$ (4,075,079)$
Use of money and property 145,944 145,944 351,276 205,332
Intergovernmental 218,437 170,544 241,797 71,253
Total revenues 4,897,307 4,849,414 1,050,920 (3,798,494)
EXPENDITURES:
Current:
Community development 1,423,697 1,396,013 847,299 548,714
Total expenditures 1,423,697 1,396,013 847,299 548,714
Excess (deficiency) of revenues over
expenditures 3,473,610 3,453,401 203,621 (3,249,780)
OTHER FINANCING SOURCES:
Transfers in - 53,570 94,258 40,688
Total other financing sources - 53,570 94,258 40,688
NET CHANGE IN FUND BALANCE 3,473,610$ 3,506,971$ 297,879 (3,209,092)$
FUND BALANCE:
Beginning of year 11,103,256
End of yea 11,401,135$
City of Cupertino
Required Supplementary Information
Budgetary Comparison Schedule - Housing Development Special Revenue Fund
For the Year Ended June 30, 2025
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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.
Budgets for governmental funds are adopted on a basis consistent with accounting principles generally accepted in the United
States of America. The City's legal level of budgetary control is at the fund level for all 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.
City of Cupertino
Required Supplementary Information
Notes to the Budgetary Comparison Schedules
For the Year Ended June 30, 2025
Bud et and Bud etar Accountin
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Measurement period 2023-24 2022-23 2021-22 2020-21 2019-20
Total pension liability
Service cost 4,256,243$ 4,097,215$ 3,614,486$ 3,392,942$ 3,241,719$
Interest 12,577,249 11,919,333 11,312,835 10,907,002 10,302,395
Changes of benefit terms - 201,460 - - -
Changes of assumptions - - 5,380,881 - -
Differences between expected and actual experience 2,583,077 2,085,468 (188,249) 2,212,836 444,188
contributions (9,408,506) (8,879,755) (8,451,800) (7,937,592) (6,815,494)
Net change in total pension liability 10,008,063 9,423,721 11,668,153 8,575,188 7,172,808
Total pension liability - beginning 182,272,023 172,848,302 161,180,149 152,604,961 145,432,153
Total pension liability - ending (a)192,280,086$ 182,272,023$ 172,848,302$ 161,180,149$ 152,604,961$
Pension fiduciary net position
Contributions - employer 7,230,634$ 7,183,364$ 6,396,030$ 5,957,595$ 5,308,579$
Contributions - employee 1,824,533 1,825,602 1,632,861 1,560,532 1,429,446
Net investment income 12,071,573 7,184,605 (9,612,070) 23,553,078 4,975,822
Benefit payments, including refunds of employee contribution (9,408,506) (8,879,755) (8,451,800) (7,937,592) (6,815,494)
Net Plan to Plan Resource Movemen - - - - -
Administrative expense (101,091) (86,042) (79,189) (103,981) (140,036)
Other Miscellaneous Income/(Expense - - - - -
Net change in plan fiduciary net position 11,617,143 7,227,774 (10,114,168) 23,029,632 4,758,317
Plan fiduciary net position - beginning 124,235,178 117,007,404 127,121,572 104,091,940 99,333,623
Plan fiduciary net position - ending (b)135,852,321$ 124,235,178$ 117,007,404$ 127,121,572$ 104,091,940$
Plan net pension liability - ending (a) - (b)56,427,765$ 58,036,845$ 55,840,898$ 34,058,577$ 48,513,021$
Plan fiduciary net position as a percentage
of the total pension liability 70.65%68.16%67.69%78.87%68.21%
Covered a roll3 24,019,430$ 23,043,952$ 20,455,494$ 20,427,103$ 18,662,748$
Plan net pension liability as a percentage of
covered a roll 234.93% 251.85% 272.99% 166.73% 259.95%
Notes to Schedule:
2 Includes any beginning of year adjustment.
Changes of Benefit Terms: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before
the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included
in the figures above, unless the liability impact is deemed to be material by the plan actuary.
3 Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal years ended in 2022 through 2024; 2.75% payroll growth assumption for
fiscal years ended in 2018 through 2021; 3.00% payroll growth assumption for fiscal years ended in 2014 through 2017.
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Pension Liability and Related Ratios
For the Year Ended June 30, 2025
Last Ten Fiscal Years
Changes of Assumptions: There were no assumption changes in 2023 or 2024. Effective with the June 30, 2021, valuation date (June 30, 2022, measurement date),
the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market
return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in
accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June
30, 2017, through June 30, 2021, and 7.65% for measurement dates June 30, 2015, through June 30, 2016.
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan
1 During Fiscal Year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for
Postemployment Benefit Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for
participation in the State of California’s agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB 75. Additionally,
CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017 -18, CalPERS recorded a correction to previously
reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and
Financial Reporting for Pensions (GASB 68).
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Measurement period 2018-19 2017-18 2016-17 2015-16 2014-15
Total pension liability
Service cost 3,324,361$ 3,058,629$ 2,895,549$ 2,525,314$ 2,444,939$
Interest 9,800,245 9,065,322 8,619,588 8,253,983 7,789,134
Changes of benefit terms - - - - -
Changes of assumptions - (847,606) 7,125,558 - (1,883,633)
Differences between expected and actual experience 4,144,384 1,184,340 (182,397) 696,347 372,917
contributions (6,193,271) (6,051,845) (5,346,890) (5,151,298) (4,637,005)
Net change in total pension liability 11,075,719 6,408,840 13,111,408 6,324,346 4,086,352
Total pension liability - beginning 134,356,434 127,947,594 114,836,186 108,511,840 104,425,488
Total pension liability - ending (a)145,432,153$ 134,356,434$ 127,947,594$ 114,836,186$ 108,511,840$
Pension fiduciary net position
Contributions - employer 4,654,841$ 4,263,020$ 4,183,822$ 3,659,170$ 3,301,642$
Contributions - employee 1,364,731 1,506,888 1,236,052 1,169,921 1,149,894
Net investment income 6,096,968 7,347,936 8,749,288 466,704 1,724,204
Benefit payments, including refunds of employee contribution (6,193,271) (6,051,845) (5,346,890) (5,151,298) (4,637,005)
Net Plan to Plan Resource Movemen - (216) - - -
Administrative expense (66,707) (135,263) (115,304) (47,536) (87,780)
Other Miscellaneous Income/(Expense 216 (256,867) - - -
Net change in plan fiduciary net position 5,856,778 6,673,653 8,706,968 96,961 1,450,955
Plan fiduciary net position - beginning 93,476,845 86,803,192 78,096,224 77,999,263 76,548,308
Plan fiduciary net position - ending (b)99,333,623$ 93,476,845$ 86,803,192$ 78,096,224$ 77,999,263$
Plan net pension liability - ending (a) - (b)46,098,530$ 40,879,589$ 41,144,402$ 36,739,962$ 30,512,577$
Plan fiduciary net position as a percentage
of the total pension liability 68.30%69.57%67.84%68.01%71.88%
Covered a roll4 18,461,490$ 16,809,349$ 15,595,136$ 14,336,969$ 13,504,966$
Plan net pension liability as a percentage of
covered a roll 249.70% 243.20% 263.83% 256.26% 225.94%
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Pension Liability and Related Ratios (Continued)
For the Year Ended June 30, 2025
Last Ten Fiscal Years
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan
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Fiscal Year End 2024-25 2023-24 2022-23 2021-22 2020-21
Actuarially determined contribution 7,717,621$ 7,230,634$ 7,183,364$ 6,396,030$ 5,957,595$
Contributions in relation to the actuarially
determined contribution 2 (17,717,621) (7,230,634) (7,183,364) (6,396,030) (5,957,595)
Contribution deficiency (excess)(10,000,000)$ -$ -$ -$ -$
Covered payroll 24,691,974$ 24,019,430$ 23,043,952$ 20,455,494$ 20,427,103$
Contributions as a percentage of covered payroll 71.75% 30.10% 31.17% 31.27% 29.17%
Notes to Schedule:
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Actuarial Cost Method
Amortization method/period For details, see June 30, 2021, funding valuation report.
Asset valuation method Fair Value of Assets. For details, see June 30, 2021, funding valuation report.
Inflation 2.30%
Salary increases Varies by entry age and service
Payroll Growth 2.80%
Investment rate of return
Retirement age
Mortality
6.80% net of pension plan investment and administrative expenses; includes inflation.
The probabilities of retirement are based on the 2021 CalPERS Experience Study and
Review of Actuarial Assumptions.
The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review
of Actuarial Assumptions. Mortality rates incorporate full generational mortality
improvement using 80% of Scale MP-2020 published by the Society of Actuaries.
3 Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal years ended June 30, 2022 through 2024; 2.75% payroll
growth assumption for fiscal years ended in 2018 through 2021; 3.00% payroll growth assumption for fiscal years ended in 2015 through 2017.
2 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make
additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions.
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pension
For the Year Ended June 30, 2025
Last Ten Fiscal Years
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2023-24 were derived from the June 30,
2021 funding valuation report.
1As prescribed in GASB 68, paragraph 46, the information presented in the Schedule of Plan Contributions should also be presented as of the
employer’s most recent fiscal year-end.
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Fiscal Year End 2019-20 2018-19 2017-18 2016-17 2015-16
Actuarially determined contribution 5,308,579$ 4,654,841$ 4,263,020$ 4,183,822$ 3,659,170$
Contributions in relation to the actuarially
determined contribution (5,308,579) (4,654,841) (4,263,020) (4,183,822) (3,659,170)
Contribution deficiency (excess)-$ -$ -$ -$ -$
Covered payroll 18,662,748$ 18,461,490$ 16,809,349$ 15,595,136$ 14,336,969$
Contributions as a percentage of covered payroll 28.44% 25.21% 25.36% 26.83% 25.52%
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pension (Continued)
For the Year Ended June 30, 2025
Last Ten Fiscal Years
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan
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Measurement period 2024-25 2023-24 2022-23 2021-22
Total OPEB liability
Service cost 1,437,854$ 1,312,300$ 1,260,000$ 1,015,000$
Interest 2,643,549 2,311,698 1,967,000 1,921,000
Changes of benefit terms - - - -
Difference between expected and actual experience 578,892 - 4,437,000 -
Changes of assumptions (1,226,828) 3,583,364 (492,000) -
Benefit payments, including refunds of employe
contributions (2,350,230) (2,108,622) (1,753,000) (1,691,000)
Net change in total OPEB liability 1,083,237 5,098,740 5,419,000 1,245,000
Total OPEB liability - beginning 40,388,740 35,290,000 29,871,586 28,626,586
Total OPEB liabilit - endin (a)41,471,977$ 40,388,740$ 35,290,586$ 29,871,586$
Contributions - employer 2,350,230 722,863 1,753,000 1,691,000
Net investment income 4,851,326 4,814,071 3,484,000 (6,568,000)
Benefit payments (2,350,230) (2,108,622) (1,753,000) (1,691,000)
Administrative expense (130,113) (123,483) (116,000) (117,000)
Net chan e in fiduciar net osition 4,721,213 3,304,829 3,368,000 (6,685,000)
Plan fiduciar net osition - be innin 38,012,829 34,708,000 31,340,044 38,025,044
Plan fiduciar net osition - endin (b 42,734,042$ 38,012,829$ 34,708,044$ 31,340,044$
Net OPEB liability (asset) - ending (a-b) (1,262,065)$ 2,375,911$ 582,542$ (1,468,458)$
Plan fiduciary net position as a percentage
of the total OPEB liabilit 103.04% 94.12% 98.35% 104.92%
Covered-em lo ee a roll 25,846,227$ 26,587,600$ 27,343,833$ 24,015,350$
Plan OPEB liability
as a ercenta e of covered em lo ee a roll -4.88% 8.94% 2.13% -6.11%
Notes to Schedule:
* Fiscal year 2017 was the 1st year of implementation, therefore only nine (9) years are shown.
For the Year Ended June 30, 2025
Schedule of Changes in the Net Other postemployment Benefits Liability and Related Ratios
Required Supplementary Information (Unaudited)
City of Cupertino
Sin le Em lo er Defined Benefit Other Post Em lo ment Benefit Plan
Last Ten Fiscal Years*
102
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Measurement period 2020-21 2019-20 2018-19 2017-18 2016-17
Total OPEB liability
Service cost 844,000$ 1,009,000$ 865,260$ 1,007,863$ 907,986$
Interest 2,042,000 1,985,000 2,004,581 1,876,280 1,780,898
Changes of benefit terms - - - - -
Difference between expected and actual experience (4,688,000) - (1,808,295) - -
Changes of assumptions 640,000 1,761,000 (36,407) - -
Benefit payments, including refunds of employe
contributions (1,550,068) (1,489,506) (1,423,109) (1,419,221) (1,332,975)
Net change in total OPEB liability (2,712,068) 3,265,494 (397,970) 1,464,922 1,355,909
Total OPEB liability - beginning 31,338,654 28,073,160 28,471,130 27,006,208 25,650,299
Total OPEB liabilit - endin (a)28,626,586$ 31,338,654$ 28,073,160$ 28,471,130$ 27,006,208$
Contributions - employer 1,550,068 1,489,506 1,423,109 1,419,221 1,332,975
Net investment income 8,775,796 272,722 1,259,390 2,364,652 2,959,614
Benefit payments (1,550,068) (1,489,506) (1,423,109) (1,419,221) (1,332,975)
Administrative expense (121,000) (120,708) (97,301) (53,582) (48,629)
Net chan e in fiduciar net osition 8,654,796 152,014 1,162,089 2,311,070 2,910,985
Plan fiduciar net osition - be innin 29,370,248 29,218,234 28,056,145 25,745,075 22,834,090
Plan fiduciar net osition - endin (b 38,025,044$ 29,370,248$ 29,218,234$ 28,056,145$ 25,745,075$
Net OPEB liability (asset) - ending (a-b) (9,398,458)$ 1,968,406$ (1,145,074)$ 414,985$ 1,261,133$
Plan fiduciary net position as a percentage
of the total OPEB liabilit 132.83% 93.72% 104.08% 98.54% 95.33%
Covered-em lo ee a roll 23,081,960$ 21,643,061$ 20,085,777$ 19,153,396$ 17,255,340$
Plan OPEB liability
as a ercenta e of covered em lo ee a roll -40.72% 9.09% -5.70% 2.17% 7.31%
Notes to Schedule:
* Fiscal year 2017 was the 1st year of implementation, therefore only nine (9) years are shown.
Sin le Em lo er Defined Benefit Other Post Em lo ment Benefit Plan
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Other postemployment Benefits Liability and Related Ratios (Continued)
For the Year Ended June 30, 2025
Last Ten Fiscal Years*
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2024-25 2023-24 2022-23 2021-22
Actuarially determined contribution 1,256,115$ 1,675,019$ 1,592,398$ 128,715$
2,350,230 722,863 1,753,000 1,691,000
Contribution deficiency (excess)(1,094,115)$ 952,156$ (160,602)$ (1,562,285)$
Covered-employee payroll 25,846,227$ 26,587,600$ 27,343,833$ 24,015,350$
Contributions as a percentage of covered-
employee payroll 9.09%2.72%6.41%7.04%
Notes to Schedule:
Valuation Date June 30, 2025
Timing
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age
Amortization method Level Percent of Pay, Closed, 7.5 years as of 7/1/2023
Asset valuation method Fair value of assets
Discount rate 6.50%
Amortization growth rate 2.75%
Ultimate rate of medical inflation 3.94%
Salary increases 2.75% plus merit component based on years of service
Mortality CalPERS 2021 mortality assumptions
Single Employer Defined Benefit OPEB Plan
Contributions in relation to the actuarially determined
contribution
Actuarially determined contributions are calculated based on the most recently performed
actuarial valuation
* Fiscal year 2017 was the 1st year of implementation, therefore only nine (9) years are shown.
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other postemployment Benefits
For the Year Ended June 30, 2025
Last Ten Fiscal Years*
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2020-21 2019-20 2018-19 2017-18 2016-17
Actuarially determined contribution 123,712$ 1,401,176$ 1,300,357$ 1,361,806$ 1,116,764$
1,550,068 1,489,506 1,423,109 1,419,221 1,332,975
Contribution deficiency (excess)(1,426,356)$ (88,330)$ (122,752)$ (57,415)$ (216,211)$
Covered-employee payroll 23,081,960$ 21,643,061$ 20,085,777$ 19,153,396$ 17,255,340$
Contributions as a percentage of covered-
employee payroll 6.72%6.88%7.09% 7.41% 7.72%
Notes to Schedule:
Valuation Date June 30, 2025
Timing
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age
Amortization method Level Percent of Pay, Closed, 7.5 years as of 7/1/2023
Asset valuation method Fair value of assets
Discount rate 6.50%
Amortization growth rate 2.75%
Ultimate rate of medical inflation 3.94%
Salary increases 2.75% plus merit component based on years of service
Mortality CalPERS 2021 mortality assumptions
* Fiscal year 2017 was the 1st year of implementation, therefore only nine (9) years are shown.
Single Employer Defined Benefit OPEB Plan
Contributions in relation to the actuarially determined
contribution
Actuarially determined contributions are calculated based on the most recently performed
actuarial valuation
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other postemployment Benefits (Continued)
For the Year Ended June 30, 2025
Last Ten Fiscal Years*
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SUPPLEMENTARY
INFORMATION
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Cit of Cu ertino
Ma or Governmental Funds
Other than the General Fund and S ecial Revenue Funds
This section is provided for the presentation of budget-to-actual schedules for the Public Facilities Corporation Debt Service Fund
and the Capital Improvement Projects Capital Projects Fund. Although the funds are considered to be major government funds, budget- to-
actual information in the required supplementary information 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.
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.
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Original Final Variance with
Budget Budget Actual Final Budget
EXPENDITURES:
Current:
Administration -$ -$ 1,500$ (1,500)$
Debt service:
Principal 2,115,000 2,115,000 2,115,000 -
Interest and fiscal charges 561,200 561,200 561,200 -
Total expenditures 2,676,200 2,676,200 2,677,700 (1,500)
Excess (deficiency) of revenues over
expenditures (2,676,200) (2,676,200) (2,677,700) (1,500)
OTHER FINANCING SOURCES:
Transfers in 2,676,200 2,676,200 2,677,450 1,250
Total other financing sources 2,676,200 2,676,200 2,677,450 1,250
NET CHANGE IN FUND BALANCE -$ -$ (250) (250)$
FUND BALANCE:
Beginning of year 250
End of yea -$
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Public Facilities Corporation Debt Service Fun
For the Year Ended June 30, 2025
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Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:
Use of money and property -$ -$ 821,189$ 821,189$
Intergovernmental 5,850,000 1,207,951 2,656,151 1,448,200
Total revenues 5,850,000 1,207,951 3,477,340 2,269,389
EXPENDITURES:
Capital outlay 13,810,000 6,236,342 6,057,035 179,307
Total expenditures 13,810,000 6,236,342 6,057,035 179,307
Excess (deficiency) of revenues over
expenditures (7,960,000) (5,028,391) (2,579,695) 2,448,696
OTHER FINANCING SOURCES (USES):
Transfers in 7,785,000 12,838,354 4,763,000 (8,075,354)
Transfers out (8,247,580) (9,171,268) (1,095,914) 8,075,354
Total other financing sources (uses)(462,580) 3,667,086 3,667,086 -
NET CHANGE IN FUND BALANCE (8,422,580)$ (1,361,305)$ 1,087,391 2,448,696$
FUND BALANCE:
Beginning of year 31,971,103
End of yea 33,058,494$
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Capital Improvement Projects Capital Projects Fun
For the Year Ended June 30, 2025
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Traffic Impact - This fund 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
Ca ital Pro ects Funds account for the financial resources committed to the construction or im rovement of ma or facilities.
Stevens Creek Corridor Park Capital Projects Fund -This fund accounts for the design and construction of the Stevens Creek
Corridor Park projects.
Environmental Management I Clean Creeks - This fund accounts for all activities related to operating the non-point source
pollution program. A parcel tax provides revenues.
NONMAJOR GOVERNMENTAL FUND
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.
Storm Drain Improvement - This fund 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 - This fund 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.
SPECIAL REVENUE 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.
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Storm Environmental
Drain Park Management/ Traffic
Improvement Dedication Clean Creeks Impact
ASSETS
Cash and investments 2,391,339$ 20,902,637$ 956,143$ 909,879$
Accounts receivable - - 67,557 -
Interest receivable 16,637 145,425 6,602 6,330
Total assets 2,407,976 21,048,062 1,030,302 916,209
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accruals - 37,670 21,860 -
Total liabilities - 37,670 21,860 -
Deferred inflows of resources:
Unavailable revenues - - 52,743 -
Total deferred inflows of resources - - 52,743 -
Fund balances:
Restricted 2,407,976 21,010,392 955,699 916,209
Assigned - - - -
Total fund balances 2,407,976 21,010,392 955,699 916,209
Total liabilities and fund balances 2,407,976$ 21,048,062$ 977,559$ 916,209$
Special Revenue Funds
City of Cupertino
Combining Balance Sheet
Nonmajor Governmental Fund
June 30, 2025
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Capital Projects
Fund
Total Nonmajor
Stevens Creek Governmental
Corridor Park Funds
ASSETS
Cash and investments 157,966$ 25,317,964$
Accounts receivable - 67,557
Interest receivable - 174,994
Total assets 157,966 25,560,515
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accruals - 59,530
Total liabilities - 59,530
Deferred inflows of resources:
Unavailable revenues - 52,743
Total deferred inflows of resources - 52,743
Fund balances:
Restricted - 25,290,276
Assigned 157,966 157,966
Total fund balances 157,966 25,448,242
Total liabilities and fund balances 157,966$ 25,560,515$
City of Cupertino
Combining Balance Sheet (Continued)
Nonmajor Governmental Fund
June 30, 2025
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Storm Environmental
Drain Park Management/ Traffic
Improvement Dedication Clean Creeks Impact
Revenues:
Taxes 98,721$ 999,000$ -$ -$
Use of money and property 116,075 1,012,273 46,939 43,430
Charges for services - 14,737 1,513,139 59,892
Fines and forfeitures - - 2,970 -
Other revenue - 2,499 - -
Total revenues 214,796 2,028,509 1,563,048 103,322
Expenditures:
Current:
Public works - - 2,046,348 -
Capital outlay - 126,040 - -
Total expenditures - 126,040 2,046,348 -
Excess (deficiency) of revenues over
expenditures 214,796 1,902,469 (483,300) 103,322
Other financing sources (uses):
Transfers in - - 470,443 -
Transfers out - (15,000) - -
Total other financing sources (uses)- (15,000) 470,443 -
Net Change in Fund Balance 214,796 1,887,469 (12,857) 103,322
Fund balances:
Beginning of year 2,193,180 19,122,923 968,556 812,887
End of yea 2,407,976$ 21,010,392$ 955,699$ 916,209$
Special Revenue Funds
City of Cupertino
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Fund
For the Year Ended June 30, 2025
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Capital Projects
Fund
Total Nonmajor
Stevens Creek Governmental
Corridor Park Funds
Revenues:
Taxes -$ 1,097,721$
Use of money and property 3,418 1,222,135
Charges for services - 1,587,768
Fines and forfeitures - 2,970
Other revenue - 2,499
Total revenues 3,418 3,913,093
Expenditures:
Current:
Public works - 2,046,348
Capital outlay - 126,040
Total expenditures - 2,172,388
Excess (deficiency) of revenues over
expenditures 3,418 1,740,705
Other financing sources (uses):
Transfers in - 470,443
Transfers out - (15,000)
Total other financing sources (uses)- 455,443
Net Change in Fund Balance 3,418 2,196,148
Fund balances:
Beginning of year 154,548 23,252,094
End of yea 157,966$ 25,448,242$
City of Cupertino
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)
Nonmajor Governmental Fund
For the Year Ended June 30, 2025
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Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes 95,604$ 95,604$ 98,721$ 3,117$
Use of money and property 59,000 59,000 116,075 57,075
Total revenues 154,604 154,604 214,796 60,192
NET CHANGE IN FUND BALANCE 154,604$ 154,604$ 214,796 60,192$
Fund balance:
Beginning of year 2,193,180
End of year 2,407,976$
Budgeted Amounts
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Storm Drain Improvement Special Revenue Fun
For the Year Ended June 30, 2025
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Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes -$ -$ 999,000$ 999,000$
Use of money and property 480,000 480,000 1,012,273 532,273
Charges for services - - 14,737 14,737
Other revenue - - 2,499 2,499
Total Revenues 480,000 480,000 2,028,509 1,548,509
Expenditures:
Capital outlay - 126,041 126,040 1
Total Expenditures - 126,041 126,040 1
Excess (deficiency) of revenues over
expenditures 480,000 353,959 1,902,469 1,548,510
Other Financing Uses:
Transfers out (15,000) (15,000) (15,000) -
Total Other Financing Uses (15,000) (15,000) (15,000) -
NET CHANGE IN FUND BALANCE 465,000$ 338,959$ 1,887,469 1,548,510$
FUND BALANCE:
Beginning of year 19,122,923
End of yea 21,010,392$
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2025
Budgeted Amounts
Park Dedication Special Revenue Fund
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Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Use of money and property 10,000$ 10,000$ 46,939$ 36,939$
Charges for services 1,865,000 1,865,000 1,513,139 (351,861)
Fines and forfeitures 20,000 20,000 2,970 (17,030)
Total Revenues 1,895,000 1,895,000 1,563,048 (331,952)
Expenditures:
Current:
Public works 1,912,473 2,021,239 2,046,348 (25,109)
Total Expenditures 1,912,473 2,021,239 2,046,348 (25,109)
Excess (deficiency) of revenues over
expenditures (17,473) (126,239) (483,300) (306,843)
Other Financing Sources:
Transfers in 279,000 279,000 470,443 191,443
Total Other Financing Sources 279,000 279,000 470,443 191,443
NET CHANGE IN FUND BALANCE 261,527$ 152,761$ (12,857) (165,618)$
FUND BALANCE:
Beginning of year 968,556
End of yea 955,699$
Budgeted Amounts
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Environmental Management/Clean Creeks Special Revenue Fun
For the Year Ended June 30, 2025
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Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Use of money and property 20,000$ 20,000$ 43,430$ 23,430$
Charges for services - - 59,892 59,892
Total Revenues 20,000 20,000 103,322 83,322
NET CHANGE IN FUND BALANCE 20,000$ 20,000$ 103,322 83,322$
FUND BALANCE:
Beginning of year 812,887
End of yea 916,209$
Budgeted Amounts
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Traffic Impact Special Revenue Fund
For the Year Ended June 30, 2025
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Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Use of money and property -$ -$ 3,418$ 3,418$
Total Revenues - - 3,418 3,418
Expenditures:
Capital outlay - 1,899 - 1,899
Total Expenditures - 1,899 - 1,899
NET CHANGE IN FUND BALANCE -$ (1,899)$ 3,418 5,317$
FUND BALANCE:
Beginning of year 154,548
End of yea 157,966$
Budgeted Amounts
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Stevens Creek Corridor Park Capital Projects Fun
For the Year Ended June 30, 2025
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NONMAJOR 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.
Blackberry Farm Fund - This fund accounts for activities related to operating the City-owned golf course.
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Blackberry
Farm
ASSETS
Current assets:
Cash and investments 915,697$
Interest receivable 6,423
Total current assets 922,120
Noncurrent assets:
OPEB assets 9,677
Capital assets:
Depreciable, net 123,122
Total capital assets 123,122
Total noncurrent assets 132,799
Total assets 1,054,919
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 157,757
Related to other postemployment benefits 39,081
Total deferred outflows of resources 196,838
LIABILITIES
Current Liabilities:
Accounts payable and accruals 24,618
Unearned revenue 83,834
Total current liabilities 108,452
Noncurrent liabilities:
Compensated absences 26,602
Net pension liability 380,599
Total noncurrent liabilities 407,201
Total liabilities 515,653
DEFERRED INFLOW OF RESOURCES
Related to pensions 240
Related to other postemployment benefits 27,077
Total deferred inflows of resources 27,317
NET POSITION:
Net investment in capital assets 123,122
Unrestricted 585,665
Total net ositio 708,787$
City of Cupertino
Combining Statement of Net Position
Nonmajor Enterprise Fund
June 30, 2025
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Blackberry
Farm
OPERATING REVENUES:
Charges for services 674,474$
Others 59,076
Total operating revenues 733,550
OPERATING EXPENSES:
Salaries and benefits 441,044
Materials and supplies 283,674
Contractual services 264,120
Depreciation 16,532
Total operating expenses 1,005,370
OPERATING INCOME (LOSS)(271,820)
NONOPERATING REVENUES:
Investment income 48,777
Total nonoperating revenues 48,777
INCOME (LOSS) BEFORE TRANSFERS (223,043)
TRANSFERS:
Transfers in 173,030
Total transfers 173,030
CHANGES IN NET POSITION (50,013)
NET POSITION:
Beginning of year, as previously reported 757,155
Change in accounting principle (GASB 101)1,645
Beginning of year, as restated (Note 15)758,800
End of yea 708,787$
City of Cupertino
Combining Statement of Revenues, Expenses, and Changes in Net Position
Nonmajor Enterprise Fund
For the Year Ended June 30, 2025
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Blackberry
Farm
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers 707,881$
Cash paid to suppliers for goods and services (562,498)
Cash paid to employees for services (385,130)
Net cash used in o eratin activities (239,747)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Cash received from other funds 173,030
Net cash rovided b nonca ital financin activities 173,030
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received 48,164
Net cash rovided b investin activities 48,164
Net chan e in cash and cash e uivalents (18,553)
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO STATEMENT OF NET POSITION:
Beginning of year 934,250
End of yea 915,697$
CASH AND CASH EQUIVALENTS:
Cash and investments 915,697$
Total cash and cash e uivalent 915,697$
Reconciliation of O eratin Loss t
to Net Cash Provided b O eratin Activities
Operating loss (271,820)$
Adjustments to reconcile operating loss
to net cash provided by (used in) operating activities:
Depreciation 16,532
Changes in assets and liabilities:
(Increase)/decrease in accounts receivables 2,534
(Increase)/decrease in deferred outflows of resources pension related (85,089)
(Increase)/decrease in deferred outflows of resources other postemployment benefit liabilities related (12,904)
Increase/(decrease) in accounts payable (14,704)
Increase/(decrease) in unearned revenue (28,203)
Increase/(decrease) in compensated absences 18,847
Increase/(decrease) in net pension liability 136,565
Increase/(decrease) in net other postemployment benefit liabilities (19,921)
Increase/(decrease) in deferred inflows of resources pension related (124)
Increase/(decrease) in deferred inflows of resources other postemployment benefit liabilities related 18,540
Net cash used in o eratin activities (239,747)$
For the Year Ended June 30, 2025
City of Cupertino
Combining Statement of Cash Flows
Nonmajor Enterprise Fund
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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 ost-em lo ment retirement benefits.
Equipment Revolving -Accounts for the activities related to the maintenance and replacement of the City's vehicle fleet and other
equipment.
INTERNAL SERVICE FUNDS
These funds account for goods or services provided to other departments of the City where the intent of the City is that the costs of
these goods or services are to be recovered through interdepartmental charges at the time that the goods are delivered or the services
rendered to those departments.
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 resented se aratel 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 - This fund is used to account for all expenses relating to workers’ compensation (i.e., injury claims,
insurance premiums, etc.). The costs are recovered through an annual “user fee” which is charged to all departments/funds that have
employees.
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Information Workers' Equipment
Technolog Compensation Revolving
ASSETS
Current assets:
Cash and investments 3,389,985$ 3,885,385$ 1,380,492$
Account receivable 111,221 3,566 14,075
Interest receivable 23,433 26,794 9,613
Prepaid expense 28,055 - -
Total current asset 3,552,694 3,915,745 1,404,180
Noncurrent assets:
OPEB assets 46,984 649 19,904
Capital assets:
Nondepreciable 5,031 - 262,679
Depreciable and amortizable, net 586,999 - 1,807,503
Total capital assets 592,030 - 2,070,182
Total noncurrent asset 639,014 649 2,090,086
Total assets 4,191,708 3,916,394 3,494,266
DEFERRED INFLOW OF RESOURCES
Related to pensions 1,090,981 28,644 299,260
Related to other postemployment benefits 189,754 2,619 80,384
Total deferred outflows of resource 1,280,735 31,263 379,644
Current Liabilities:
Accounts payable and accruals 78,757 - 26,687
Accrued payroll and benefits - - 72
Due to other funds - - -
Compensated absences, due within one yea 8,909 957 126
Claims payable, due within one yea - 248,000 -
Subscription liabilities, due within one year 125,593 - -
Lease liabilities, due within one yea - - 6,844
Total current liabilitie 213,259 248,957 33,729
Noncurrent liabilities:
Compensated absences, due more than one yea 216,796 11,692 49,295
Claims payable, due more than one yea - 1,131,000 -
Subscription liabilities, due more than one year 14,701 - -
Lease liabilities, due more than one yea - - 1,717
Net pension liabilities 2,632,053 69,105 721,983
Total noncurrent liabilitie 2,863,550 1,211,797 772,995
Total liabilities 3,076,809 1,460,754 806,724
DEFERRED INFLOW OF RESOURCES
Related to pensions 1,662 44 456
Related to other postemployment benefits 131,471 1,815 55,694
Total deferred inflows of resource 133,133 1,859 56,150
NET POSITION:
Net investment in capital assets 451,736 - 2,061,621
Unrestricted (deficit) 1,810,765 2,485,044 949,415
Total net ositio 2,262,501$ 2,485,044$ 3,011,036$
City of Cupertino
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
LIABILITIES
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Absences an
Long-Ter Retiree
Disabilit Medical Total
ASSETS
Current assets:
Cash and investments 50,698$ -$ 8,706,560$
Account receivable - 1,387,959 1,516,821
Interest receivable 353 - 60,193
Prepaid expense - - 28,055
Total current asset 51,051 1,387,959 10,311,629
Noncurrent assets:
OPEB assets - - 67,537
Capital assets:
Nondepreciable - - 267,710
Depreciable and amortizable, net - - 2,394,502
Total capital assets - - 2,662,212
Total noncurrent asset - - 2,729,749
Total assets 51,051 1,387,959 13,041,378
DEFERRED INFLOW OF RESOURCES
Related to pensions - - 1,418,885
Related to other postemployment benefits - - 272,757
Total deferred outflows of resource - - 1,691,642
Current Liabilities:
Accounts payable and accruals - - 105,444
Accrued payroll and benefits - - 72
Due to other funds - 1,390,420 1,390,420
Compensated absences, due within one yea - - 9,992
Claims payable, due within one yea - - 248,000
Subscription liabilities, due within one year - - 125,593
Lease liabilities, due within one yea - - 6,844
Total current liabilitie - 1,390,420 1,886,365
Noncurrent liabilities:
Compensated absences, due more than one yea - - 277,783
Claims payable, due more than one yea - - 1,131,000
Subscription liabilities, due more than one year - - 14,701
Lease liabilities, due more than one yea - - 1,717
Net pension liabilities - - 3,423,141
Total noncurrent liabilitie - - 4,848,342
Total liabilities - 1,390,420 6,734,707
DEFERRED INFLOW OF RESOURCES
Related to pensions - - 2,162
Related to other postemployment benefits - - 188,980
Total deferred inflows of resource - - 191,142
NET POSITION:
Net investment in capital assets - - 2,513,357
Unrestricted (deficit) 51,051 (2,461) 5,293,814
Total net ositio 51,051$ (2,461)$ 7,807,171$
LIABILITIES
City of Cupertino
Combining Statement of Net Position (Continued)
Internal Service Funds
June 30, 2025
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Information Workers' Equipment
Technology Compensation Revolving
OPERATING REVENUES:
Charges for services 3,361,178$ 468,984$ 1,356,136$
Other 113,073 - 42,931
Total operating revenues 3,474,251 468,984 1,399,067
OPERATING EXPENSES:
Salaries and benefits 1,508,706 47,285 526,643
Materials and supplies 931,293 50,519 351,144
Contractual services 542,683 - 82,023
Insurance and claims and premium - 336,296 -
Depreciation and amortization 180,985 - 350,516
Total operating expenses 3,163,667 434,100 1,310,326
OPERATING INCOME (LOSS)310,584 34,884 88,741
NONOPERATING REVENUES (EXPENSES):
Investment income 158,061 185,366 40,339
Gain on sale of capital assets - - 14,001
Interest expense (2,148) - -
Total nonoperating revenues 155,913 185,366 54,340
466,497 220,250 143,081
TRANSFERS:
Transfers in 664,345 11,543 120,862
Total transfers 664,345 11,543 120,862
CHANGES IN NET POSITION 1,130,842 231,793 263,943
NET POSITION (DEFICIT):
Beginning of year, as previously reported 1,094,594 2,250,845 2,742,003
Change in accounting principle (GASB 101) 37,065 2,406 5,090
Beginning of year, as restated (Note 15) 1,131,659 2,253,251 2,747,093
End of yea 2,262,501$ 2,485,044$ 3,011,036$
INCOME (LOSS) BEFORE TRANSFERS
City of Cupertino
Combining Statement of Revenues, Expenses, and Changes in Net Position
Internal Service Funds
For the Year Ended June 30, 2025
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Compensated
Absences and
Long-Term Retiree
Disability Medical Total
OPERATING REVENUES:
Charges for services 98,527$ -$ 5,284,825$
Other - - 156,004
Total operating revenues 98,527 - 5,440,829
OPERATING EXPENSES:
Salaries and benefits - 1,564,230 3,646,864
Materials and supplies 12,716 16,647 1,362,319
Contractual services - - 624,706
Insurance and claims and premium 1,100,818 - 1,437,114
Depreciation and amortization - - 531,501
Total operating expenses 1,113,534 1,580,877 7,602,504
OPERATING INCOME (LOSS)(1,015,007) (1,580,877) (2,161,675)
NONOPERATING REVENUES (EXPENSES):
Investment income 19,630 6 403,402
Gain on sale of capital assets - - 14,001
Interest expense - - (2,148)
Total nonoperating revenues 19,630 6 415,255
(995,377) (1,580,871) (1,746,420)
TRANSFERS:
Transfers in 591,000 1,592,398 2,980,148
Total transfers 591,000 1,592,398 2,980,148
CHANGES IN NET POSITION (404,377) 11,527 1,233,728
NET POSITION (DEFICIT):
Beginning of year, as previously reported 455,428 (13,988) 6,528,882
Change in accounting principle (GASB 101) - - 44,561
Beginning of year, as restated (Note 15) 455,428 (13,988) 6,573,443
End of yea 51,051$ (2,461)$ 7,807,171$
INCOME (LOSS) BEFORE TRANSFERS
City of Cupertino
Combining Statement of Revenues, Expenses, and Changes in Net Position (Continued)
Internal Service Funds
For the Year Ended June 30, 2025
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Information Workers' Equipment
Technology Compensation Revolving
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and users 3,363,030$ 465,418$ 1,384,992$
Cash paid to suppliers for goods and services (1,572,246) (386,815) (425,906)
Cash paid to employees for services (2,260,108) (56,187) (627,730)
Cash paid for insurance claims - 106,000 -
Net cash provided by (used in) operating activities (469,324) 128,416 331,356
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Cash received from other funds 664,345 11,543 120,862
Net cash provided by (used in) noncapital financing activities 664,345 11,543 120,862
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition of capital assets - - (264,441)
Principal paid (125,986) - (6,808)
Interest paid (2,148) - -
Proceeds from sale of capital assets - - 14,001
Net cash (used in) capital and related
financing activities (128,134) - (257,248)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest earnings 154,291 180,654 40,991
Net cash provided by (used in) investing activities 154,291 180,654 40,991
Net change in cash and cash equivalents 221,178 320,613 235,961
CASH AND CASH EQUIVALENTS:
Beginning of year 3,168,807 3,564,772 1,144,531
End of yea 3,389,985$ 3,885,385$ 1,380,492$
(Continued)
City of Cupertino
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2025
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Compensated
Absences and
Long-Term Retiree
Disability Medical Total
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users 98,527$ -$ 5,311,967$
Cash paid to suppliers for goods and services (1,113,534) (16,647) (3,515,148)
Cash paid to employees for services - (1,564,230) (4,508,255)
Cash paid for insurance claims - - 106,000
Net cash provided by (used in) operating activities (1,015,007) (1,580,877) (2,605,436)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Cash received from other funds 591,000 1,580,871 2,968,621
Net cash provided by (used in) noncapital financing activities 591,000 1,580,871 2,968,621
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition of capital assets - - (264,441)
Principal paid - - (132,794)
Interest paid - - (2,148)
Proceeds from sale of capital assets - - 14,001
Net cash (used in) capital and related
financing activities - - (385,382)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest earnings 23,177 6 399,119
Net cash provided by (used in) investing activities 23,177 6 399,119
Net change in cash and cash equivalents (400,830) - 376,922
CASH AND CASH EQUIVALENTS:
Beginning of year 451,528 - 8,329,638
End of yea 50,698$ -$ 8,706,560$
(Continued)
City of Cupertino
Combining Statement of Cash Flows (Continued)
Internal Service Funds
For the Year Ended June 30, 2025
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Information Workers' Equipment
Technolog Compensation Revolving
Reconciliation of Operating Income (Loss) to
to Net Cash Provided by (used in) Operating Activities:
Operating income (loss) 310,584$ 34,884$ 88,741$
Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization 180,985 - 350,516
Changes in assets and liabilities:
(Increase)/decrease in account receivable (111,221) (3,566) (14,075)
(Increase)/decrease in prepaid expense (23,375) - -
(Increase)/decrease in deferred outflows of resources related to pensions (171,743) (7,979) (83,330)
(Increase)/decrease in deferred outflows of resources related
to other postemployment benefits 93,187 590 14,517
Increase/(decrease) in accounts payable (74,895) - 7,261
Increase/(decrease) in compensated absences (96,437) (26) 3,809
Increase/(decrease) in claims payable - 106,000 -
Increase/(decrease) in net pension liabilities (454,951) (291) (3,158)
Increase/(decrease) in other postemployment benefit liabilities (157,711) (1,905) (57,043)
Increase/(decrease) in deferred inflows of resources related to pensions (2,939) (59) (625)
Increase/(decrease) in deferred inflows of resources related
to other postemployment benefits 39,192 768 24,743
Net cash rovided b (used in) o eratin activities (469,324)$ 128,416$ 331,356$
NONCASH ITEMS:
Acquisition of subscription assets (175,435)$ -$ -$
Issuance of subscription liabilities 175,435$ -$ -$
Termination of subscription liabilities (6,376)$ -$ -$
(Continued)
For the Year Ended June 30, 2025
City of Cupertino
Combining Statement of Cash Flows (Continued)
Internal Service Funds
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Compensate
Absences an
Long-Ter Retiree
Disabilit Medical Total
Reconciliation of Operating Income (Loss) to
to Net Cash Provided by (used in) Operating Activities:
Operating income (loss) (1,015,007)$ (1,580,877)$ (2,161,675)$
Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization - - 531,501
Changes in assets and liabilities:
(Increase)/decrease in account receivable - - (128,862)
(Increase)/decrease in prepaid expense - - (23,375)
(Increase)/decrease in deferred outflows of resources related to pensions - - (263,052)
(Increase)/decrease in deferred outflows of resources related
to other postemployment benefits - - 108,294
Increase/(decrease) in accounts payable - - (67,634)
Increase/(decrease) in compensated absences - - (92,654)
Increase/(decrease) in claims payable - - 106,000
Increase/(decrease) in net pension liabilities - - (458,400)
Increase/(decrease) in other postemployment benefit liabilities - - (216,659)
(Increase)/decrease in deferred inflows of resources related to pensions - - (3,623)
Increase/(decrease) in deferred inflows of resources related
to other postemployment benefits - - 64,703
Net cash rovided b (used in) o eratin activities (1,015,007)$ (1,580,877)$ (2,605,436)$
NONCASH ITEMS:
Acquisition of subscription assets -$ -$ (175,435)$
Issuance of subscription liabilities -$ -$ 175,435$
Termination of subscription liabilities -$ -$ (6,376)$
(Concluded)
For the Year Ended June 30, 2025
City of Cupertino
Combining Statement of Cash Flows (Continued)
Internal Service Funds
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STATISTICAL SECTION
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Contents:Pages
142-150
151-154
155-158
159-161
162-166
This part of the City of Cupertino'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 say about the government's overall financial health.
City of Cupertino
Description of Statistical Section Contents
June 30, 2025
Financial Trends - These schedules contain trend information to help the reader understand how
the City's financial performance and well-being have changed over time.
Revenue Capacity - These schedules contain information to help the reader assess the City's most
significant local revenue source, the property tax.
Debt Capacity - These schedules present information to help the reader assess the affordability of
the City's current level of outstanding debt and the City's ability to issue additional debt in the
future.
Demographic and Economic Information - These schedules offer demographics and economic
indicators to help the reader understand the environment within which the City's financial activities
take place.
Operating Information - These schedules contain service and infrastructure data to help the
reader understand how the information in the City's financial report related to the services the City
provides and activities it performs.
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2016 2017 2018 2019 2020
Government activities:
Net investment in capital assets 148,168,074$ 153,239,534$ 167,606,366$ 170,973,897$ 177,128,134$
Restricted 34,861,807 34,991,692 32,073,195 45,405,508 48,005,800
Unrestricted 51,164,063 59,385,309 50,457,871 51,190,017 66,493,336
Total governmental activities net position 234,193,944$ 247,616,535$ 250,137,432$ 267,569,422$ 291,627,270$
Business-type activities:
Net investment in capital assets 1,708,183$ 1,972,169$ 1,597,700$ 1,318,744$ 1,118,882$
Restricted - - - - -
Unrestricted 7,375,444 9,092,584 8,051,015 6,737,758 8,134,944
Total business-type activities net position 9,083,627$ 11,064,753$ 9,648,715$ 8,056,502$ 9,253,826$
Primary government:
Net investment in capital assets 149,876,257$ 155,211,703$ 169,204,066$ 172,292,641$ 178,247,016$
Restricted 34,861,807 34,991,692 32,073,195 45,405,508 48,005,800
Unrestricted 58,539,507 68,477,893 58,508,886 57,927,775 74,628,280
Total primary government net position 243,277,571$ 258,681,288$ 259,786,147$ 275,625,924$ 300,881,096$
City of Cupertino
Net Position by Componen
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
Source: Department of Administrative Services, City of Cupertino.
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2021 2022*2023 2024** 2025
Government activities:
Net investment in capital assets 186,503,116$ 196,915,823$ 198,450,441$ 208,703,879$ 210,649,411$
Restricted 53,711,040 69,354,217 69,129,277 71,760,460 77,670,761
Unrestricted 83,458,299 93,613,909 120,529,242 140,134,920 163,277,018
Total governmental activities net position 323,672,455$ 359,883,949$ 388,108,960$ 420,599,259$ 451,597,190$
Business-type activities:
Net investment in capital assets 2,090,530$ 2,089,569$ 2,109,592$ 2,009,420$ 1,835,040$
Restricted - 166,607 166,689 106,718 -
Unrestricted 9,374,129 8,422,930 8,148,256 7,807,800 7,409,695
Total business-type activities net position 11,464,659$ 10,679,106$ 10,424,537$ 9,923,938$ 9,244,735$
Primary government:
Net investment in capital assets 188,593,646$ 199,005,392$ 200,560,033$ 210,713,299$ 212,484,451$
Restricted 53,711,040 69,520,824 69,295,966 71,867,178 77,670,761
Unrestricted 92,832,428 102,036,839 128,677,498 147,942,720 170,686,713
Total primary government net position 335,137,114$ 370,563,055$ 398,533,497$ 430,523,197$ 460,841,925$
* 2022 restricted and unrestricted net positions are restated as result of a prior period adjustment
** 2024 balances were restated due to prior period adjustments (see Note 15 for detail)
City of Cupertino
Net Position by Component (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
Source: Department of Administrative Services, City of Cupertino.
143
FINAL
D
R
A
F
T
1
1
.
2
6
.
2
0
2
5
190
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2016 2017 2018 2019 2020
Expenses:
Governmental Activities:
Administration 3,710,388$ 2,873,744$ 5,612,733$ 6,849,046$ 7,974,520$
Law enforcement 11,316,271 12,528,328 12,674,042 13,381,113 14,698,130
Innovation and technology 575,260 1,884,165 3,244,846 3,210,343 3,637,354
Administrative services 2,994,611 5,898,479 4,415,647 4,290,818 5,175,596
Recreation services 5,758,194 10,651,557 9,352,551 7,389,915 8,763,194
Community development 6,259,734 13,775,591 16,789,351 10,470,973 10,286,317
Public works 31,313,396 32,491,244 28,995,382 31,870,165 33,339,191
Interest on long-term debt 1,077,538 1,035,738 993,038 949,438 882,837
Total governmental activities expenses 63,005,392 81,138,846 82,077,590 78,411,811 84,757,139
Business-type activities:
Resources recovery 2,997,200$ 2,991,177$ 2,594,511$ 1,735,885$ 2,213,404$
Blackberry farm 576,177 597,406 656,112 645,469 663,663
Cupertino sports center 2,299,210 2,159,243 2,633,748 3,036,037 2,883,903
Recreation programs 3,136,011 2,351,501 3,232,593 2,923,336 3,141,225
Total business-type activities expenses 9,008,598 8,099,327 9,116,964 8,340,727 8,902,195
Total primary government expense 72,013,990$ 89,238,173$ 91,194,554$ 86,752,538$ 93,659,334$
Program revenues:
Governmental activities:
Charges for services:
Administration 369,069$ 3,992,716$ 5,062,988$ 1,319,395$ 2,091,811$
Law enforcement 664,483 603,194 732,544 889,923 1,102,888
Innovation and technology 41,352 - - - -
Administrative services 359,148 3,565,627 2,635,885 3,113,731 3,889,180
Recreation services 1,421,185 2,016,159 1,589,134 1,563,262 1,309,906
Community development 10,534,457 10,902,822 8,598,935 7,470,690 5,859,847
Public works 6,358,870 6,873,487 4,720,646 4,504,104 5,657,315
Operating grants and contributions 1,851,282 2,313,632 4,819,696 2,557,470 5,794,443
Capital grants and contributions 362,491 245,288 271,587 1,082,243 1,046,756
Total governmental activities program revenues 21,962,337 30,512,925 28,431,415 22,500,818 26,752,146
Business-type activities:
Charges for services:
Resources recovery 2,664,888$ 2,792,190$ 2,559,862$ 1,750,279$ 1,821,677$
Blackberry farm 334,529 325,224 345,667 316,615 338,212
Cupertino sports center 2,224,146 2,238,023 2,403,665 2,349,468 2,365,667
Recreation programs 2,466,336 2,778,588 2,516,678 1,986,781 1,588,576
Total business-type activities program revenues 7,689,899 8,134,025 7,825,872 6,403,143 6,114,132
Total primary government program revenue 29,652,236$ 38,646,950$ 36,257,287$ 28,903,961$ 32,866,278$
(continued)
Fiscal Year
City of Cupertino
Changes in Net Position - Expenses and Program Revenues
Last Ten Fiscal Years
(accrual basis of accounting)
Source: Department of Administrative Services, City of Cupertino.
144
FINAL
D
R
A
F
T
1
1
.
2
6
.
2
0
2
5
191
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2021 2022 2023 2024 2025
Expenses:
Governmental Activities:
Administration 3,637,467$ 7,293,244$ 8,830,127$ 9,069,311$ 6,607,845$
Law enforcement 15,211,646 16,100,903 15,716,301 16,682,075 17,386,971
Innovation and technology 1,721,729 2,004,515 1,950,718 3,127,436 3,126,745
Administrative services 5,358,183 5,363,745 6,363,343 8,165,843 7,557,365
Recreation services 1,182,662 3,976,793 6,020,526 7,194,533 9,249,954
Community development 11,495,788 12,209,547 12,463,257 13,696,180 12,348,713
Public works 41,870,240 35,653,588 38,696,234 36,547,118 38,742,291
Interest on long-term debt 397,682 636,960 369,502 304,972 155,710
Total governmental activities expenses 80,875,397 83,239,295 90,410,008 94,787,468 95,175,594
Business-type activities:
Resources recovery 1,670,261$ 1,837,781$ 2,038,313 2,227,782 2,825,410
Blackberry farm 535,274 655,184 799,168 673,788 1,005,370
Cupertino sports center 2,182,900 3,396,146 3,456,539 3,113,577 1,826,303
Recreation programs 1,117,244 1,617,717 1,661,686 2,393,886 2,307,538
Total business-type activities expenses 5,505,679 7,506,828 7,955,706 8,409,033 7,964,621
Total primary government expense 86,381,076$ 90,746,123$ 98,365,714$ 103,196,501$ 103,140,215$
Program revenues:
Governmental activities:
Charges for services:
Administration 2,387,412$ 2,551,205$ 3,098,916$ 1,370,548$ 2,711,892$
Law enforcement 550,051 940,797 612,993 739,408 485,514
Innovation and technology - - - - -
Administrative services 5,232,679 7,457,032 5,419,347 6,642,671 7,878,626
Recreation services 264,426 653,994 621,587 811,979 1,189,382
Community development 5,736,587 5,768,850 5,361,837 5,549,943 7,390,115
Public works 3,966,206 4,015,183 3,290,506 3,507,250 3,514,553
Operating grants and contributions 5,998,209 7,601,210 10,881,438 4,685,153 7,079,031
Capital grants and contributions 1,792,376 1,282,617 1,593,910 2,459,727 6,136,022
Total governmental activities program revenues 25,927,946 30,270,888 30,880,534 25,766,679 36,385,135
Business-type activities:
Charges for services:
Resources recovery 1,819,861$ 1,545,683$ 1,772,252$ 2,363,496$ 1,799,649$
Blackberry farm 610,603 602,778 616,461 663,274 733,550
Cupertino sports center 1,810,194 2,796,329 3,117,580 2,362,677 1,144,857
Recreation programs 590,871 1,294,128 1,742,442 2,039,338 2,017,910
Total business-type activities program revenues 4,831,529 6,238,918 7,248,735 7,428,785 5,695,966
Total primary government program revenue 30,759,475$ 36,509,806$ 38,129,269$ 33,195,464$ 42,081,101$
City of Cupertino
Changes in Net Position - Expenses and Program Revenues (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
Source: Department of Administrative Services, City of Cupertino.
145
FINAL
D
R
A
F
T
1
1
.
2
6
.
2
0
2
5
192
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2016 2017 2018 2019 2020
Net revenues (expenses):
Governmental activities (41,043,055)$ (50,625,921)$ (53,646,175)$ (55,910,993)$ (58,004,993)$
Business-type activities (1,318,699) 34,698 (1,291,092) (1,937,584) (2,788,063)
Total net revenues (expenses)(42,361,754)$ (50,591,223)$ (54,937,267)$ (57,848,577)$ (60,793,056)$
General revenues and Transfers
Governmental activities:
Taxes:
Property taxes 11,864,027$ 13,251,840$ 14,881,533$ 17,082,005$ 18,117,304$
Property taxes in lieu of motor vehicle fee 6,330,436 6,967,237 7,552,272 8,219,090 8,489,541
Sales taxes 21,350,056 26,932,012 26,164,531 24,901,779 35,657,214
Transient occupancy tax 5,852,244 6,023,681 6,810,718 8,901,337 7,286,083
Utility user taxes 3,370,830 3,082,407 3,146,398 3,089,922 3,182,086
Franchise taxes 3,478,024 3,409,572 3,563,820 3,445,253 3,418,908
Other taxes 2,818,019 3,258,118 1,943,652 3,299,587 1,774,235
Intergovernmental 24,111 26,118 31,013 28,844 47,391
Investment earnings (loss)807,287 694,730 916,638 3,258,550 5,690,723
Miscellaneous 219,053 2,004,906 1,834,492 1,187,741 1,922,356
Gain on sale of capital assets 580 - 740,570 3,875 -
Transfers - fund closing - 272,011 - - -
Transfers (1,635,000) (1,874,120) 107,030 (75,000) (3,523,000)
Total governmental activities 54,479,667 64,048,512 67,692,667 73,342,983 82,062,841
Business-type activities:
Investment earnings 82,187 59,012 75,663 270,371 462,387
Transfers 1,635,000 1,874,120 (107,030) 75,000 3,523,000
Total business-type activities 1,717,187 1,933,132 (31,367) 345,371 3,985,387
Total primary governmen 56,196,854$ 65,981,644$ 67,661,300$ 73,688,354$ 86,048,228$
Changes in net position
Governmental activities 13,436,612$ 13,422,591$ 14,046,492$ 17,431,990$ 24,057,848$
Business-type activities 398,488 1,967,830 (1,322,459) (1,592,213) 1,197,324
Total primary governmen 13,835,100$ 15,390,421$ 12,724,033$ 15,839,777$ 25,255,172$
Asset and liability transfer from the closed City Channel/Web Internal Service Fund in 2017.
Fiscal Year
(accrual basis of accounting)
Last Ten Fiscal Years
Changes in Net Position - Expenses and Program Revenues (Continued)
City of Cupertino
Source: Department of Administrative Services, City of Cupertino.
146
FINAL
D
R
A
F
T
1
1
.
2
6
.
2
0
2
5
193
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2021 2022 2023 2024 2025
Net revenues (expenses):
Governmental activities (54,947,451)$ (52,968,407)$ (59,529,474)$ (69,020,789)$ (58,790,459)$
Business-type activities (674,150) (1,267,910) (706,971) (980,248) (2,268,655)
Total net revenues (expenses)(55,621,601)$ (54,236,317)$ (60,236,445)$ (70,001,037)$ (61,059,114)$
General revenues and Transfers
Governmental activities:
Taxes:
Property taxes 19,197,994$ 20,322,779$ 21,807,628$ 22,494,293$ 23,421,977$
Property taxes in lieu of motor vehicle fee 9,079,845 9,401,632 10,082,011 10,542,559 11,003,490
Sales taxes 42,581,070 43,646,813 34,819,341 32,167,020 17,484,041
Transient occupancy tax 2,141,058 4,404,958 7,062,150 6,906,722 7,886,009
Utility user taxes 3,074,358 3,356,389 4,103,906 3,935,917 4,214,212
Franchise taxes 3,368,286 3,479,554 3,995,018 4,313,669 4,383,827
Other taxes 3,022,333 11,117,528 2,872,571 1,970,611 3,668,729
Intergovernmental 43,675 67,762 62,072 74,801 95,136
Investment earnings (loss)4,147,907 (9,241,781) 2,801,930 11,562,914 17,722,521
Miscellaneous 3,185,110 1,948,332 444,339 1,441,717 967,701
Gain on sale of capital assets --- - -
Transfers - fund closing - - - - -
Transfers (2,849,000) (886,801) (296,481) 20,000 (1,059,253)
Total governmental activities 86,992,636 87,617,165 87,754,485 95,430,223 89,788,390
Business-type activities:
Investment earnings 35,983 (404,444) 155,921 434,290 530,199
Transfers 2,849,000 886,801 296,481 (20,000) 1,059,253
Total business-type activities 2,884,983 482,357 452,402 414,290 1,589,452
Total primary governmen 89,877,619$ 88,099,522$ 88,206,887$ 95,844,513$ 91,377,842$
Changes in net position
Governmental activities 32,045,185$ 34,648,758$ 28,225,011$ 26,409,434$ 30,997,931$
Business-type activities 2,210,833 (785,553) (254,569) (565,958) (679,203)
Total primary governmen 34,256,018$ 33,863,205$ 27,970,442$ 25,843,476$ 30,318,728$
Fiscal Year
City of Cupertino
Changes in Net Position - Expenses and Program Revenues (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Source: Department of Administrative Services, City of Cupertino.
147
FINAL
D
R
A
F
T
1
1
.
2
6
.
2
0
2
5
194
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2016 2017 2018 2019 2020
General fund:
Nonspendable 937,381$ 876,939$ 464,893$ 454,188$ 3,449,341$
Restricted 888,374 1,016,771 1,254,578 9,469,670 14,324,757
Committed - 19,000,000 19,122,754 19,123,397 19,127,891
Assigned 20,500,000 4,638,181 9,963,310 1,979,202 3,176,882
Unassigned 29,869,085 28,057,799 21,704,922 27,896,128 34,426,942
Total general fund 52,194,840$ 53,589,690$ 52,510,457$ 58,922,585$ 74,505,813$
All other governmental funds:
Nonspendable - - - - -
Restricted 33,973,433 33,974,921 30,818,617 35,935,838 33,681,043
Committed 1,398,665 1,398,665 - - -
Assigned 15,344,191 25,305,974 29,129,616 33,211,946 40,551,131
Unassigned - - - - -
Total all other governmental funds 50,716,289$ 60,679,560$ 59,948,233$ 69,147,784$ 74,232,174$
Total Governmental Funds 102,911,129 114,269,250 112,458,690 128,070,369 148,737,987
1The Cit established a trust to fund Other Post-Em lo ment Benefit contributions which is classified as a restriction in fund balance.
City of Cupertino
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
Source: Department of Administrative Services, City of Cupertino.
148
FINAL
D
R
A
F
T
1
1
.
2
6
.
2
0
2
5
195
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2021 2022 2023 2024 2025
General fund:
Nonspendable 3,444,346$ 4,055,956$ 4,000,588$ 3,449,814$ 4,037,435$
Restricted 20,140,419 18,756,482 19,088,859 23,241,194 25,802,503
Committed 19,127,891 34,127,891 34,127,891 108,627,891 88,627,891
Assigned 4,906,139 5,041,682 9,735,187 4,741,474 7,287,794
Unassigned 49,231,996 48,696,821 71,603,813 26,034,946 56,081,637
Total general fund 96,850,791$ 110,678,832$ 138,556,338$ 166,095,319$ 181,837,260$
All other governmental funds:
Nonspendable ---$ -$ -$
Restricted 33,570,621 51,106,343 46,828,676 47,836,410 49,956,451
Committed --- - -
Assigned 37,038,174 35,088,889 34,924,537 32,125,651 33,216,460
Unassigned - -- - -
Total all other governmental funds 70,608,795$ 86,195,232$ 81,753,213$ 79,962,061$ 83,172,911$
Total Governmental Funds 167,459,586 196,874,064 220,309,551 246,057,380 265,010,171
12022 balances were restated due to rior eriod ad ustments.
City of Cupertino
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
Source: Department of Administrative Services, City of Cupertino.
149
FINAL
D
R
A
F
T
1
1
.
2
6
.
2
0
2
5
196
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2016 2017 2018 2019 2020
Revenues:
Taxes 55,462,956$ 62,924,867$ 64,062,924$ 68,938,973$ 77,925,371$
Use of money and property 1,654,702 1,425,629 1,543,818 3,896,813 6,259,342
Intergovernmental 2,532,025 2,585,038 5,122,296 3,668,557 6,888,590
Licenses and permits 3,073,110 2,536,925 2,757,928 4,102,665 4,692,847
Charges for services 17,249,123 24,103,167 15,638,247 13,385,698 13,937,950
Fines and forfeitures 564,903 603,194 602,934 534,012 344,008
Other 1,289,013 2,004,904 1,834,492 1,187,741 1,922,356
Total revenues 81,825,832 96,183,724 91,562,639 95,714,459 111,970,464
Expenditures:
Current:
Administration 4,053,741 5,942,633 4,943,052 6,294,111 6,951,541
Law enforcement 10,988,735 11,939,095 12,362,621 13,108,732 14,151,413
Innovation and technology 544,718 1,864,746 2,835,768 2,843,540 3,223,185
Administrative services 2,811,117 5,054,539 4,430,300 4,197,582 4,617,787
Recreation services 5,441,200 9,361,934 8,686,076 8,996,118 7,688,935
Community development 6,102,820 7,431,292 12,907,086 9,359,835 9,310,827
Public works 15,078,174 18,623,585 18,191,714 19,955,579 22,445,948
Capital outlay:26,171,127 18,731,165 23,395,112 10,528,246 12,644,373
Debt service:
Principal repayment 2,090,000 2,135,000 2,180,000 2,220,000 2,290,000
Interest and fiscal charges 1,077,538 1,035,738 993,038 949,438 882,837
Total expenditures 74,359,170 82,119,727 90,924,767 78,453,181 84,206,846
Excess of revenues over (under) expenditures 7,466,662 14,063,997 637,872 17,261,278 27,763,618
Other financing sources (uses):
Proceeds from debt issuance - - - - -
Proceeds from debt issuance premium - - - - -
Payments to refunding agent - - - - -
Proceeds from sale of capital assets 580 - 872,250 3,875 -
Inception of subscription liability - - - - -
Transfers in 11,905,724 26,446,090 31,028,218 19,407,613 35,208,276
Transfers in - fund closing - 260,374 ---
Transfers out (15,422,213) (29,412,340) (34,348,900) (21,061,087) (42,304,276)
Total other financing sources (uses)(3,515,909) (2,705,876) (2,448,432) (1,649,599) (7,096,000)
Net change in fund balances 3,950,753$ 11,358,121$ (1,810,560)$ 15,611,679$ 20,667,618$
Debt service as a percentage of
noncapital expenditures 6.57%5.00%4.70%4.67%4.43%
Fiscal Year
City of Cupertino
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Source: Department of Administrative Services, City of Cupertino.
150
FINAL
D
R
A
F
T
1
1
.
2
6
.
2
0
2
5
197
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2021 2022 2023 2024 2025
Revenues:
Taxes 82,464,944$ 95,729,653$ 84,233,345$ 80,705,015$ 72,393,167$
Use of money and property 4,447,970 (8,501,439) 3,422,106 11,802,313 17,946,957
Intergovernmental 7,834,260 8,951,589 11,869,664 6,841,474 11,510,340
Licenses and permits 4,068,238 4,141,902 4,093,631 4,412,057 5,755,842
Charges for services 13,601,302 16,373,903 12,741,952 13,833,034 16,347,423
Fines and forfeitures 134,459 373,722 326,944 419,148 397,375
Other 3,185,110 1,948,332 1,393,059 2,418,780 2,062,626
Total revenues 115,736,283 119,017,662 118,080,701 120,431,821 126,413,730
Expenditures:
Current:
Administration 7,549,386 7,492,277 7,603,732 7,383,233 7,075,951
Law enforcement 14,776,409 15,715,815 15,276,950 16,204,350 17,386,971
Innovation and technology 1,836,725 2,063,176 1,825,667 2,284,198 3,241,574
Administrative services 5,196,299 5,525,888 5,976,301 6,716,341 8,216,429
Recreation services 4,787,914 4,729,438 5,432,183 5,517,003 7,612,682
Community development 11,177,690 12,627,702 11,693,554 11,498,725 13,348,231
Public works 24,568,155 28,542,850 28,221,856 30,031,887 35,443,228
Capital outlay:19,483,945 12,777,121 12,533,316 10,473,883 11,288,463
Debt service:
Principal repayment 2,140,000 1,880,000 2,581,181 2,587,091 2,668,163
Interest and fiscal charges 798,747 796,000 739,340 665,597 575,698
Total expenditures 92,315,270 92,150,267 91,884,080 93,362,308 106,857,390
Excess of revenues over (under) expenditures 23,421,013 26,867,395 26,196,621 27,069,513 19,556,340
Other financing sources (uses):
Proceeds from debt issuance 22,040,000 - - - -
Proceeds from debt issuance premium 3,878,704 - - - -
Payments to refunding agent (27,279,118) - - - -
Proceeds from sale of capital assets -- - - 2,912,435
Inception of subscription liability - - 964,745 - 523,417
Transfers in 12,876,969 23,089,059 11,350,697 10,789,869 10,963,643
Transfers in - fund closing -- - - -
Transfers out (16,215,969) (25,776,712) (15,076,576) (12,111,553) (15,003,044)
Total other financing sources (uses)(4,699,414) (2,687,653) (2,761,134) (1,321,684) (603,549)
Net change in fund balances 18,721,599$ 24,179,742$ 23,435,487$ 25,747,829$ 18,952,791$
Debt service as a percentage of
noncapital expenditures 4.04%3.37%4.18%3.92%3.39%
Fiscal Year
City of Cupertino
Changes in Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(modified accrual basis of accounting)
Source: Department of Administrative Services, City of Cupertino.
151
FINAL
D
R
A
F
T
1
1
.
2
6
.
2
0
2
5
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State Board of Total Assessed & Direct
Fiscal Total Equalization Secured Est. Full Market Tax
Year Secured (a) Unsecured (a) Non-Unitary Exemptions Valuation (a) Rate
2016 18,308,720,226$ 1,086,786,901$ -$ 114,223,063$ 19,395,507,127$ 5.59%
2017 20,196,258,418 1,150,311,942 - 118,257,368 21,346,570,360 5.98%
2018 22,024,906,420 1,114,123,426 - 122,805,695 23,139,029,846 6.19%
2019 23,402,123,229 1,779,936,377 - 125,245,819 25,182,059,606 6.38%
2020 24,370,718,536 1,641,863,322 - 138,025,761 26,012,581,858 6.50%
2021 25,397,331,860 2,423,984,683 - 145,644,653 27,821,316,543 6.46%
2022 27,083,468,890 1,724,247,088 - 149,658,614 28,807,715,978 6.48%
2023 29,822,398,085 1,069,629,678 - 154,098,046 30,892,027,763 6.48%
2024 31,157,956,858 1,145,368,676 - 146,726,345 32,303,325,534 6.52%
2025 32,635,351,808 1,080,630,960 - 159,770,503 33,715,982,768 6.52%
(a) Net of exemptions
Source: HdL, Coren & Cone
Data Source: Santa Clara County Assessor 2024-25 Combined Tax Rolls
This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone
City of Cupertino
(Unaudited)
Last Ten Fiscal Years
Assessed and Estimated Actual Value of Taxable Property
$0
$5
$10
$15
$20
$25
$30
$35
$40
20
1
6
20
1
7
20
1
8
20
1
9
20
2
0
20
2
1
20
2
2
20
2
3
20
2
4
20
2
5
Bi
l
l
i
o
n
s
Secured Property Unsecured Property
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199
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2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Basic Levy¹1.00000 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 0.01266 0.01050 0.01000 0.00000 0.01266 0.01080 0.00950 0.00430
County Bond 2008 Hospital Facility 0.00880 0.00860 0.00820 0.00720 0.00690 0.00690 0.00610 0.00630 0.00550 0.00550
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 0.05190 0.05090 0.04960 0.03970 0.04150 0.04030 0.03800 0.03680 0.03570 0.03000
El Camino Hospital 2003 0.01290 0.01290 0.01000 0.01000 0.01000 0.01000 0.01000 0.00900 0.00500 0.00200
Foothill De Anza College 0.02400 0.02340 0.02200 0.02170 0.02080 0.03640 0.03310 0.02910 0.02780 0.02860
Fremont High 0.05250 0.04030 0.04640 0.04300 0.04790 0.04780 0.04160 0.03710 0.04410 0.03970
Los Gatos-Saratoga High 1998 0.04230 0.04690 0.04570 0.03040 0.01770 0.01930 0.01850 0.01790 0.01370 0.01320
MidPeninsula Open Space 2014 0.00080 0.00060 0.00090 0.00180 0.00160 0.00150 0.00150 0.00130 0.00120 0.00130
Santa Clara Unified 0.09420 0.08180 0.08280 0.07070 0.11760 0.10450 0.10140 0.08670 0.08890 0.08260
Santa Clara Valley Water District 0.00570 0.00860 0.00620 0.00420 0.00410 0.00370 0.00510 0.00440 0.00410 0.00410
Saratoga Elementary 0.04490 0.04560 0.04580 0.04580 0.04640 0.04850 0.04830 0.04850 0.05960 0.04970
West Valley College 0.02320 0.01960 0.02000 0.01980 0.01860 0.03110 0.03040 0.02830 0.02580 0.02590
Total Direct & Overlapping² Tax 1.40240 1.38040 1.39146 1.34600 1.39530 1.39120 1.38786 1.35740 1.36210 1.32810
City's Share of 1% Levy Per Prop 13³0.05571 0.05962 0.06148 0.06320 0.06531 0.06515 0.06528 0.06504 0.06513 0.06509
General Obligation Debt Rate
Redevelopment Rate⁴
Total Direct Rate⁵0.05588 0.05976 0.06187 0.06381 0.06499 0.06463 0.06477 0.06482 0.06515 0.06516
Notes:
Data Source: Santa Clara County Assessor 2015/16 - 2024/25 Tax Rate Table
This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone
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 figures.
⁴Redevelopment 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.
⁵Total 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.
Last 10 Fiscal Years
Cit of Cu ertino
Direct and Overlapping Property Tax Rates
(Rate per $100 of taxable value)
Agency
¹In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing
agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of
assessed property values for the payment of any voter approved bonds.
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2025 Percentage of 2016 Percentage of
Assessed Total Assessed Assessed Total Assessed
Valuation Valuation Valuation Valuation
APPLE COMPUTER INC.8,183,380,290$ 24.27% 1,815,276,300$ 9.36%
MAIN STREET CUPERTINO LLC 397,143,509 1.18%- 0.00%
VALLCO PROPERTY OWNER LLC 371,562,150 1.10% 315,500,000 1.63%
MARKHAM APARTMENTS LP 342,914,031 1.02% 97,513,905 0.50%
CCC BUILDINGS LP 294,595,153 0.87%- 0.00%
CUPERTINO PROPERTY DEVELOPMENT LLC 220,552,913 0.65% 112,284,481 0.58%
PREG EMERSON LLC 133,741,684 0.40%- 0.00%
CUPERTINO CITY CENTER LP 123,747,688 0.37% 140,942,274 0.73%
AVERY GLENBROOK LP 118,364,235 0.35%- 0.00%
LAKE BILTMORE APARTMENTS 111,955,358 0.33%- 0.00%
Total 10,297,957,011$ 30.54%2,481,516,960$ 12.80%
Source: HdL, Coren & Cone
Taxpayer
City of Cupertino
Principal Property Taxpayers
Current Year and Nine Years Ago
(Unaudited)
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Percent of
Percent Delinquent Total Total Tax
Fiscal Total Current Tax of Levy Tax Tax Collections
Year Tax Levy Collections Collected (1) Collections (1) Collections to Tax Levy
2016 11,864,026$ 11,864,026$ 100.00% - 11,864,026$ 100.00%
2017 13,308,884 13,308,884 100.00% - 13,308,884 100.00%
2018 13,172,425 13,172,425 100.00% - 13,172,425 100.00%
2019 16,049,112 16,049,112 100.00% - 16,049,112 100.00%
2020 18,117,304 18,117,304 100.00% - 18,117,304 100.00%
2021 19,197,994 19,197,994 100.00% - 19,197,994 100.00%
2022 20,322,779 20,322,779 100.00% - 20,322,779 100.00%
2023 21,807,628 21,807,628 100.00% - 21,807,628 100.00%
2024 22,494,293 22,494,293 100.00% - 22,494,293 100.00%
2025 23,421,977 23,421,977 100.00% - 23,421,977 100.00%
(1) Per the Teeter Plan, the City receives 100% of the tax levy, while the County receives delinquencies and penalties.
Source: City of Cupertino NWS
City of Cupertino
Property Tax Levies and Collections
Last Ten Fiscal Years
(Unaudited)
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Percentage
of Estimated % of
Fiscal Certificates Actual Market Value Personal
Year of Participation of Taxable Property Per Capita Income
2016 35,835,000 0.18% 598 1.21%
2017 33,700,000 0.15% 579 1.02%
2018 31,520,000 0.12% 525 0.87%
2019 29,300,000 0.11% 488 0.81%
2020 22,040,000 * 0.10% 451 0.71%
2021 19,900,000 0.07% 334 0.48%
2022 18,020,000 0.06% 297 0.40%
2023 16,065,000 0.05% 269 0.36%
2024 16,416,895 ** 0.05% 276 0.28%
2025 13,904,079 0.04% 232 0.22%
* Bond was refinanced in 2020
Source: City of Cupertino Budget Book
** 2024 balance was restated from prior report due to adding the unamortized bond issuance premium.
City of Cupertino
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Unaudited)
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33,715,509,406$
Total Debt %City’s Share of
OVERLAPPING TAX AND ASSESSMENT DEBT:6/30/2025 Applicable (1) Debt 6/30/25
Santa Clara County 1,217,905,000$ 4.848% 59,044,034$
Foothill-DeAnza Community College District 592,800,578 12.162% 72,096,406
West Valley Community College District 631,255,000 1.806% 11,400,465
Santa Clara Unified School District 958,135,000 3.974% 38,076,285
Fremont Union High School District 717,450,088 27.143% 194,737,477
Cupertino Union School District 294,953,303 50.507% 148,972,065
El Camino Hospital District 98,789,066 0.844% 833,780
Midpeninsula Regional Open Space District 114,920,000 7.335% 8,429,382
Santa Clara Valley Water District Benefit Assessment District 24,940,000 4.848% 1,209,091
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 534,798,985$
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Santa Clara County General Fund Obligations 1,002,458,930$ 4.848% 48,599,209$
Santa Clara County Pension Obligation Bonds 317,654,990 4.848% 15,399,914
Santa Clara County Board of Education Certificates of Participation 12,072,417 4.848%585,271
West Valley-Mission Community College District General Fund Obligations 2,520,000 1.806%45,511
Santa Clara Unified School District General Fund Obligations 10,859,000 3.974%431,537
Cupertino Union School District General Fund Obligations 40,233,350 50.507% 20,320,658
City of Cupertino Certificates of Participation 11,915,000 100.000% 11,915,000
Santa Clara County Central Fire Protection District General Fund Obligations 26,475,000 46.824% 12,396,654
Midpeninsula Regional Open Space Park District General Fund Obligations 74,065,600 7.334% 5,432,712
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT 115,126,466$
Less: Santa Clara County Supported Obligations 117,322
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT 115,009,144$
TOTAL DIRECT DEBT 15,108,839$ *
TOTAL GROSS OVERLAPPING DEBT 634,816,612$
TOTAL NET OVERLAPPING DEBT 634,699,290$
GROSS COMBINED TOTAL DEBT 649,925,451$ (3)
NET COMBINED TOTAL DEBT 649,808,129$
(1)
(3)Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
Ratios to 2024-25 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.59%
Total Direct Debt ($11,915,000)0.04%
Gross Combined Total Debt 1.93%
Net Combined Total Debt 1.93%
* GFOA comment
City of Cupertino
The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were
estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the
district's total taxable assessed value.
Sources: California Municipal Statistics, Inc.
2024-25 Assessed Valuation
(Unaudited)
June 30, 2025
Direct and Overlapping Bonded Debt
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Total net debt
Total Net Legal applicable to the
Fiscal Debt Debt Applicable Debt limit as a % of
Year Limit to Limit Margin debt limit
2016 686,577,008$ -$ 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 952,399,944 - 952,399,944 -
2022 1,015,630,083 - 1,015,630,083 -
2023 1,118,339,928 - 1,118,339,928 -
2024 1,168,423,382 - 1,168,423,382 -
2025 1,264,349,354 - 1,264,349,354 -
Debt Limit:
Secured property assessed value, net of exempt real property 33,715,982,768
Adjusted valuation - 25% of assessed valuation 8,428,995,692
Debt limit - 15% of adjusted valuation 1,264,349,354
Amount of Debt Subject to Limit:
Total Bonded Debt 14,030,000
Less: Certificates of Participation not subject to debt limit (14,030,000)
Amount of debt subject to limit -
Legal Debt Margi 1,264,349,354$
Source: City of Cupertino Budget Book
Last Ten Fiscal Years
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.
City of Cupertino
Legal Debt Margin Information
(Unaudited)
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Ratio of General
Fiscal Assessed General Bonded Debt Bonded Debt to
Year Population Value Bonded Debt Per Capita Assessed Value
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 - - -
2023 59,656 30,892,027,763 - - -
2024 59,471 32,303,325,534 - - -
2025 59,831 33,715,982,768 - - -
Sources: HdL, Coren & Cone/Cupertino Budget Book
City of Cupertino
Ratio of General Bonded Debt
Last Ten Fiscal Years
(Unaudited)
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Fiscal
Year
City
Population
1
County
Population
1
City
Population
% of
Count
City Personal
Income 2
Per
Capita
Personal
Income
2
**Public
School
Enrollment
City
Unemployment
Rate % 3
County
Unemployment
Rate % 3
Median
A e 4
% of
Population
Over 25
with High
School
De ree
% of
Population
Over 25
with
Bachelor's
De ree
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%
2022-23 59,656 1,902,799 3.14% 5,214,787,000 88,156 23,486 2.3% 3.7% 41.0 97.0% 80.9%
2023-24 59,471 1,903,198 3.12% 5,924,781,000 99,624 23,233 3.5% 4.1% 40.4 97.2% 82.8%
2024-25 59,831 1,831,183 3.27% 6,290,282,000 105,134 22,990 4.2% 4.7% 41.3 97.2% 83.1%
Notes and Data Sources:
Population: California State Department of Finance. Unemployment Data: California Employment Development Department
Income, Age, and Education Data: ESRI - Demographic Estimates are based on the last available Census. Projections are developed by incorporating all of the prior
census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's boundaries
201- and later - Income, Age and education Data - US Census Bureau, most recent American Community Survey
**Reported Public School Enrollment reflects the total number of students in the Fremont Union High School District and Cupertino Union School District.
Previously published reports included Fremont Union High School District only.
City of Cupertino
Last Ten Fiscal Years
Demographic and Economic Statistics
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Business Name Business Category
99 Ranch Market Grocery Stores
Alexander's Steak House Fine Dining
Apple Fulfillment Centers
Argonaut Window & Door Contractors
Benihana Fine Dining
BJ's Restaurant & Brewhouse Casual Dining
California Dental Arts Medical/Biotech
Chevron Service Stations
Cupertino Car Wash Service Stations
Dish N Dash Fast-Casual Restaurants
Galpao Gaucho Fine Dining
Great Gas Cupertino Service Stations
Haidilao Hot Pot Casual Dining
Home Eat Casual Dining
Ingrasys Technology Office Equipment
Insight Direct Office Equipment
Insight Public Sector Office Equipment
Kura Revolving Sushi Bar Casual Dining
Lazy Dog Cafe Casual Dining
Rotten Robbie Service Stations
Safeway Grocery Stores
Shane Company Jewelry Stores
Target Discount Dept Stores
TJ Maxx Family Apparel
Whole Foods Market Grocery Stores
Source: HdL, Coren & Cone
City of Cupertino
Top 25 Sales Tax Producers
For Calendar Year 2024
(Unaudited)
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Function/Program 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Council and Commissions 1.60 1.55 2.35 2.35 2.51 2.53 7.58 7.28 7.23 7.23
Administration 10.85 10.57 14.12 15.47 15.15 17.85 19.85 24.30 21.80 19.00
Innovation & Technology 11.40 13.95 14.55 15.05 14.95 11.93 11.93 13.43 14.93 13.93
Administrative Services 12.30 12.30 12.00 14.00 16.00 15.90 16.90 18.90 17.90 17.90
Parks & Recreation 32.18 33.08 35.13 34.80 32.10 31.90 27.88 29.48 27.63 27.63
Community Development 27.30 28.18 28.08 28.13 28.29 28.49 32.49 37.49 34.39 34.29
Public Works 82.12 84.12 84.52 84.95 88.75 90.15 92.12 94.12 88.12 87.02
Law Enforcement 2.00 2.00 2.00 2.00 0.00 0.00 0.00 0.00 0.00 0.00
Total 179.75 185.75 192.75 196.75 197.75 198.75 208.75 225.00 212.00 207.00
Source: City of Cupertino Budget
City of Cupertino
Full-Time Equivalent City Employees by Function/Program
Last Ten Fiscal Years
(Unaudited)
0
50
100
150
200
250
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Public Works
Community
Development
Parks &
Recreation
Administrative
Services
Innovation &
Technology
Administration
Council and
Commissions
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2016 2017 2018 2019 2020
Law Enforcement Sheriff Response
Priority One-Respond within 5 minutes 4.90 Min. 5.07 Min 4.23 Min. 4.39 Min. 3.51 Min.
Priority Two-Respond within 9 minutes 6.56 Min. 8.00 Min. 7.49 Min. 6.23 Min. 6.37 Min.
Priority Three-Respond within 20 minutes 10.52 Min. 15.79 Min 14.79 Min. 12.11 Min. 11.96 Min.
Public Works
Street Sweeping 575 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles
Street Maintenance 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call
City of Cupertino
applications received 428 434 428
Number of encroachment permits received 121 136 134
Storm Drain Inlets Inspected/Cleaned 815 1063 1638
Roadway Signs Repaired/Replaced 404 721 346
Number of trees planted vs. removed 53/67 155/192 164/190
Parks & Recreation
Number of reservations at Quinlan Center 560 402 526
Number of rounds of golf at BBF Golf Course 28,193 27,205 28,952
Sports Center Memberships 1,989 2,015 1,850 1,952 1,802
Number of Senior Center classes offered 246 320 258
Senior Center Memberships 2,493 2,094 2,260 2,171 2,171
Quinlan Community Center Rental Revenue $104,150 $128,778 $72,948 $139,590 $139,590
Community Development
Approved Building Plan Sets 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 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 Projects 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days
Number of preliminary reviews 82 90 110
Number of planning applications received 169 138 194
Number of permits received 2322 2,321 2,534
Number of inspections requested 16026 13,625 14,596
Administrative Services
Accounts Payable Processing 7 Days 7 Days 7 Days 7 Days 7 Days
Business License Renewal Certificates 3 Days 3 Days 3 Days 3 Days 3 Days
Number of regular recruitments 21 21 28
Number of new hires 26 16 14
Number of temporary new hires 101 105 38
Number of vendor checks processes 6793 6,536 5,906
Number of payroll checks process 10387 10,301 10,802
Number of business license applications 1294 1,154 1,032
Number of journal entries posted 2830 4,521 4,558
Number of receipts processed 9766 13,913 18,992
Library
Volumes in Collection 364,557 369,924 367,979 367,101 368,461
Annual Gate Count 880,894 835,073 873,862 904,349 620,007
Annual Circulation Children's Items 1,544,095 1,448,265 1,453,173 1,535,842 1,192,880
Annual Circulation Adult and Teen Items 1,032,326 950,453 980,609 1,049,166 831,114
Annual Circulation Digital Items
Adult Classes and Events 215 242 206 207 396
Adult Classes and Events Attendance 8,855 9,242 7,622 8,304 9,986
Teen Classes and Events 78 66 79 52 57
Teen Classes and Events Attendance 3,135 2,571 2,495 1,283 8,495
Children's Classes and Events 493 440 426 424 477
Children's Classes and Events Attendance 28,532 25,857 24,675 22,851 26,032
Volunteer Hours 10,000 9,645 10,302 10,191 6,592
Sources: City of Cupertino PM & WIs and Santa Clara County Library District
City of Cupertino
Operating Indicators by Function/Progra
Last Ten Fiscal Years
(Unaudited)
Function/Program
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2021 2022 2023 2024 2025
Law Enforcement Sheriff Response
Priority One-Respond within 5 minutes 3.40 Min. 5.33 Min 6.57 Min 5.81 Min 4.85 Min
Priority Two-Respond within 9 minutes 6.07 Min. 6.94 Min. 7.46 Min. 6.32 Min 5.86 Min
Priority Three-Respond within 20 minutes 11.80 Min. 11.73 Min 12.72 Min 7.86 Min 6.20 Min
Public Works
Street Sweeping 534 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles
Street Maintenance 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call
City of Cupertino
applications received 127 128 127 111 140
Number of encroachment permits received 577 426 449 478 490
Storm Drain Inlets Inspected/Cleaned 1802 80%53%4%44%
Roadway Signs Repaired/Replaced 1151 3.5%2.0%2.0%4.0%
Number of trees planted vs. removed 187/202 211/187 153/105 42/41 136/95
Parks & Recreation
Number of reservations at Quinlan Center 8 260 405 450 422
Number of rounds of golf at BBF Golf Course 43,650 45367 37961 38984 41603
Sports Center Memberships 1,655 1186 1394 1565 1761
Number of Senior Center classes offered 100 183 235 373 439
Senior Center Memberships 1,470 210 1087 1493 1725
Quinlan Community Center Rental Revenue $5,507 $115,093 $126,670 $146,087 $168,123
Community Development
Approved Building Plan Sets 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 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 Projects 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days
Number of preliminary reviews 163 142 127 66 39
Number of planning applications received 237 301 232 262 245
Number of permits received 2,364 2380 2618 2665 3080
Number of inspections requested 13,374 11906 15181 15485 18908
Administrative Services
Accounts Payable Processing 7 Days 7 Days 7 Days 7 Days 14 Days
Business License Renewal Certificates 3 Days 3 Days 3 Days 3 Days 3 Days
Number of regular recruitments 24 33 29 21 28
Number of new hires 21 38 31 23 18
Number of temporary new hires 17 77 70 71 59
Number of vendor checks processes 4,457 4993 5130 4541 4589
Number of payroll checks process 7,816 8119 9176 9047 8731
Number of business license applications 1,061 884 969 1078 1213
Number of journal entries posted 3,915 3635 3695 4555 5341
Number of receipts processed 10,367 9353 11275 10191 10867
Library
Volumes in Collection 350,088 367,745 380,365 375,019 352,128
Annual Gate Count 128,912 387,285 683,303 743,644 785,156
Annual Circulation Children's Items 1,207,878 1,771,986 1,844,305 1,847,352 1,692,735
Annual Circulation Adult and Teen Items 750,602 1,056,451 1,190,995 1,250,904 747,135
Annual Circulation Digital Items 716,165
Adult Classes and Events 459 62 181 221 276
Adult Classes and Events Attendance 19,223 861 5,140 6,318 7,595
Teen Classes and Events 31 21 51 50 43
Teen Classes and Events Attendance 7,151 916 2,002 1,337 1,384
Children's Classes and Events 464 105 491 524 545
Children's Classes and Events Attendance 52,634 7,711 30,386 35,305 31,028
Volunteer Hours 465 4305.8 4228 4,207 4,793
Sources: City of Cupertino PM & WIs and Santa Clara County Library District
Function/Program
City of Cupertino
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
(Unaudited)
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Public Works
Centerlane Miles of Streets 142 142 142 142 142
Streetlights 2,950 2,950 2,950 2,950 2,950
Traffic Signals 48 48 52 52 52
Culture & Recreation
Parks and Open Spaces 21 21 21 21 21
Park and Landscape Acreage 169 169 169 169 169
City Trails 3 3 3 3 3
Golf Courses 1 1 1 1 1
Community Center 1 1 1 1 1
Community Hall 1 1 1 1 1
Senior Center 1 1 1 1 1
Sports Center 1 1 1 1 1
Swimming Pools 1 1 1 1 1
Tennis Courts 28 28 28 28 28
Sports Fields 41 41 41 41 41
City Library 1 1 1 1 1
Source: City of Cupertino Budget Book/GIS Team
Function/Program
City of Cupertino
Capital Assets Statistics by Function/Progra
Last Ten Fiscal Years
(Unaudited)
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2021 2022 2023 2024 2025
Public Works
Centerlane Miles of Streets 142 142 142 142 142
Streetlights 2,950 2950 2870 2870 2868
Traffic Signals 52 52 61 61 61
Culture & Recreation
Parks and Open Spaces 21 21 21 21 23
Park and Landscape Acreage 169 169 169 169 215
City Trails 3 3 5 5 5
Golf Courses 1 1 1 1 1
Community Center 1 1 1 1 1
Community Hall 1 1 1 1 1
Senior Center 1 1 1 1 1
Sports Center 1 1 1 1 1
Swimming Pools 1 1 1 1 1
Tennis Courts 28 28 28 28 28
Sports Fields 41 41 41 41 41
City Library 1 1 1 1 1
Source: City of Cupertino Budget Book/GIS Team
Function/Program
City of Cupertino
Capital Assets Statistics by Function/Program (Continued)
Last Ten Fiscal Years
(Unaudited)
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Community Economic Profile
Cupertino, with a population of 57,237 and City limits stretching across 13-square miles, is considered one of
the most prestigious cities to live and work in the Bay Area.
Economic health is an essential component to maintaining a balanced city, which provides high-level
opportunities and services that create and help sustain a sense of community and quality of life. Public and
private interests must be mutual so that success as a partnership is a direct reflection of success as a
community. The cornerstone of this partnership is a cooperative and responsive government that fosters
residential and business prosperity and strengthens working relationships among all sectors of the community.
Because Cupertino is mostly built-out city, the City of Cupertino focuses on business retention and
revitalization, while at the same time, being supportive of redevelopment projects to bring in new investment.
Cupertino is world-renowned as the home to high-tech giants, such as Apple, Inc. and Amazon, 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 aracting local and international students. The
City’s proactive economic development efforts and a high-touch approach has resulted in an innovative
environment for start-ups and growing companies to thrive, including Moxo, DURECT Corporation, Claspp,
Mirapath, Aemetis Inc, Mist Systems, and many more. The City strives to retain our companies and aract new
ones through active outreach and a responsive, streamlined, and customer-oriented entitlement process.
Cupertino is excited to have a number of mixed-use development projects offering diverse retail and dining
options, as well as providing additional housing opportunities to meet the needs of the growing community.
There are also quite a few development projects already entitled including: Westport Cupertino, Marina Plaza,
Alan Row, and Canyon Crossing. Further, City Council recently approved the 283,000 square foot mixed
Office/Commercial Apple development at 19191 Vallco Parkway.
Main Street
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The Main Street and Nineteen800 mixed-use developments continue to offer a vibrant downtown area for
Cupertino, offering a large selection of restaurants and retailers, including Alexander’s Steakhouse, Eureka!,
Oren’s Hummus, Lazy Dog, Ippudo, HaiDiLao Hotpot Restaurant, Pineapple Thai, Pressed Juicery,
Orangetheory Fitness, 85 Degree Bakery, Somi Somi, Sul & Beans, Kura Sushi, Vitality Bowls, Tan Cha, Koja
Kitchen, Bishops Cuts/Colors, Capezio, Howard’s Shoes, Philz Coffee, Pacific Catch, Holder’s Country Inn, Koi
Palace Contempo, and Meet Fresh. Housing, office, and the Residence Inn by Marrio and Main Street
Cupertino Los are available to support the thriving area. Benihana, Bowlmor, and Cupertino Ice Center also
serve as long-time anchors.
Serving as a long-time retail anchor for the community, The Marketplace has a variety of stores and restaurants
popular with students, families, and working professionals. They include Galpao Gaucho (Brazilian
Steakhouse), Daiso, Marukai Groceries, Harumi Sushi, La Patisserie Bakery, Beard Papa’s, Legend’s Pizza,
Icicles, Kong’s Tofu & BBQ, and One Pot Shabu Shabu to name a few.
The shopping center improvements to Cupertino Village reflect building upgrades and renovations, newly
constructed buildings, parking, and open space. The shopping center, located in the northeast portion of the
city, is home to 99 Ranch Market, Duke of Edinburgh Pub & Restaurant, Ume Tea, Tofu Plus, Kira Kira Beauty,
Ten Ren Tea, Fantasia Coffee & Tea, Happy Lemon, Shanghai Family Restaurant, and many other Asian
restaurants, bakeries, and shops. The property owners have also received approval to construct a new full-
service boutique hotel with 185 rooms to accommodate business and leisure travelers.
Cupertino features many other retail opportunities, including TJ Maxx and Home Goods, Whole Foods, Target,
Party City, and over 180 food and beverage establishments to serve residents and the local workforce. There are
seven hotels providing over 1,000 rooms, to serve the area: The Alo Cupertino, Cupertino Hotel, Hilton
Garden Inn, Hya House, Juniper Hotel operated by Curio, Marrio Courtyard, and the Residence Inn by
Marriott.
Another longtime retail anchor in north Cupertino is Homestead Square Shopping Center, located at
Homestead Road and De Anza Boulevard. This shopping center includes a Safeway, Starbucks, Ulta Beauty,
Ross Stores, Pet Club, Michael’s, FedEx, and numerous restaurants, such as Fish’s Wild, Pho Hoa Noodle Soup,
Yayoi Teishoku Japanese Restaurant, and Chipotle.
The City recently approved second modifications to the Rise Development. Formerly the Vallco Town Center
Development, the Rise is a mixed-use housing development with 2,669 units, of which 890 units are affordable
to lower income households. The project also includes 47 townhomes, approximately 1.95 million square feet of
office space, 226,000 square feet of retail space, and at grade open space areas.
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Apple Park Retail Store
Apple Park, Apple’s newest corporate campus, features 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 café offer the public a place to learn, explore, and shop.
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CITY OF CUPERTINO
Agenda Item
Subject: INFORMATIONAL ITEM Receive the proposed Audit Committee 2026 Schedule and
Workplan
Receive the proposed Audit Committee 2026 Schedule and Workplan
Presenter: Jonathan Orozco, Finance Manager
2:15(10)
CITY OF CUPERTINO Printed on 11/26/2025Page 1 of 1
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January 26, 2026
Regular Meeting
April 27, 2026
Regular Meeting
July 27, 2026
Regular Meeting
October 26, 2026
Regular Meeting
November/December 2026
Special Meeting
Appoint Audit Committee Chair and Vice Chair Approve Prior Meeting Minutes Approve Prior Meeting Minutes Approve Prior Meeting Minutes Approve Prior Meeting Minutes
Approve Prior Meeting Minutes OPEB & Pension Trust Performance Report for Quarter
Ending March 31, 2026
OPEB & Pension Trust Performance Report for Quarter
Ending June 30, 2026
OPEB & Pension Trust Performance Report for Quarter
Ending September 30, 2026
Review of FY 2025/26 ACFR
OPEB & Pension Trust Performance Report for Quarter
Ending December 31, 2025
Quarterly Treasurerʹs Investment Report for Quarter
Ending March 31, 2026
Quarterly Treasurerʹs Investment Report for Quarter
Ending June 30, 2026
Quarterly Treasurerʹs Investment Report for Quarter
Ending September 30, 2026
Quarterly Treasurerʹs Investment Report for Quarter
Ending December 31, 2025
Internal Audit and Fraud, Waste, and Abuse Programs
Update
Internal Audit and Fraud, Waste, and Abuse Program
Update
Internal Audit and Fraud, Waste, and Abuse Program
Update
Internal Audit and Fraud, Waste, and Abuse Programs
Update
Annual Review of City Investment Policy Fiscal Year 2025‐26 ACFR Interim Testing Update Annual Review of OPEB and Pension Trust Investment
Policies
Internal Audit Program Fiscal Year 2025‐26 ACFR Update
FY 24‐25 Agreed Upon Procedures (AUP) Review ‐
GANN Limit, Investment Policy, Storm Drain
Summary of Duties – Powers – Responsibilities of
Cupertino Audit Committee
Source: Cupertino, CA Municipal Code, Chapter 2.88.100: Audit Committee
The powers and functions of the Audit Committee shall be as follows:
To review the annual audit report and management letter;
To recommend appointment of auditors;
To review the quarterly Treasurer’s Investment report;
To recommend a budget format;
To review City investment policies and internal controls of such policies.
To recommend appointment of internal auditors;
To review internal audit reports.
To review quarterly Fraud, Waste, and Abuse Program reports. (Ord. 22-2243 § 1, 2023; Ord. 20-2208, § 1, 2020; Ord. 1679, § 1 (part), 1995)
CITY OF CUPERTINO ‐ AUDIT COMMITTEE 2026 SCHEDULE AND WORK PLAN
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