Financial Report 06-30-2009CITY OF CUPERTINO, CALIFORNIA
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR FISCAL YEAR ENDED
JUNE 30., 2009
PREPARF;D BY:
CITY OF CUPERTINO
ADMINISTRATIVE SERVICES DEPARTMENT
ACCOUNTINCJ DIVISION
Carol Atwood, David Woo, Jennifer Chang, Tina Mao,
Yulia Rumalean, Dorothy Steenfott, Richard Wong
INTROD UCTO~K Y SECTION
CITY OF CUPERTIN~~, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Endecl June 30, 2009
Table of Contents
Page
INTRODUCTORY SECTION
Table of Contents . i
Letter of Transmittal iv
Organization Chart x
Commissions and Committees xi
City Council and Directory of City Officials . xii
Certificate of Award for Excellence in Financial Re-porting . xiii
FINANCIAL SECTION
Independent Auditor's Report on Basic Financial Statements. 2
Management's Discussion and Analysis 4
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets 24
Statement of Activities 25
Fund Financial Statements:
Major Governmental Funds:
Balance Sheet . 27
Reconciliation of the Governmental Funds -Balance Sheet with the
Statement of Net Assets 28
Statement of Revenues, Expenditures, a;nd Changes in Fund Balance 29
Reconciliation of the Net Change in Furid Balances Total Governmental
Funds with the Statement of Activities 30
Statement of Revenues, Expenditures, a:nd Changes in Fund Balances -
Budget and Actual:
General Fund 31
Major Proprietary Funds:
Statement of Net Assets 33
Statement of Revenue, Expenses, and Changes in Fund Net Assets . 34
Statement of Cash Flows . 35
i
CITY OF CUPERTINO, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Endedl June 30, 2009
Table of Contents
Page
FINANCIAL SECTION (Continued)
Fiduciary Funds:
Statement of Fiduciary Net Assets 37
Notes to Basic Financial Statements 39
Supplemental Information:
Major Governmental Funds Other Than the General Fund and Special Revenue Funds:
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget
and Actual:
Public Facilities Corporation Debt Service Fund . 67
Non-major Governmental Funds:
Combining Balance Sheets 70
Combining Statements of Revenues, Expen~~itures, and Changes in Fund Balance . 72
Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual 74
Internal Service Funds:
Combining Statement of Net Assets 79
Combining Statements of Revenues, Expen,~es and Changes in Net Assets . 80
Combining Statements of Cash Flows 81
Fiduciary Funds:
Combining Statement of Changes in Assets and Liabilities -All Agency Funds 83
ii
CITY OF CUPERTIN~O, CALIFORNIA
Comprehensive Annual Financial Report
For the Year Endecl June 30, 2009
Table of Contents
Page
STATISTICAL SECTION
Financial Trends:
Net Assets by Component
Changes in Net Assets
Fund Balances of Governmental Funds
Changes in Fund Balance of Governmental Funds
Revenue Capacity:
Assessed and Estimated Actual Value of Taxable Property .
Property Tax Rates, All Overlapping Governments .
Principal Property Taxpayers .
Property Tax Levies and Collections .
Debt Capacity:
Ratio of Outstanding Debt by Type
Computation of Direct and Overlapping Debt
Computation of Legal Bonded Debt Margin .
Ratio of General Bonded Debt Outstanding .
Demographic and Economic Information:
Demographic and Economic Statistics
Principal Employers
Operating Information:
Full-Time Equivalent City Government Emplo~~ees by Function
Operating Indicators by Function/Program
Capital Asset Statistics by Function/Program.
COMMUNITY PROFILE
88
90
94
96
98
99
100
101
102
103
104
105
106
107
108
109
112
iii
CITY OF CUPERTINO
CUPERTINO
November 19, 2009
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3202
(408) 777-CITY • WWW.CUPERTINO.ORG
To the Citizens of Cupertino, Honorable Mayor,
Members of the City Council, and City Manager
It is our pleasure to submit the Comprehensive Annual Financial Report (CAFR) for the City of
Cupertino (the City) for the fiscal year ended June 30. 2009. The report is prepared in accordance with
generally accepted accounting principles (GAAP) set try the Governmental Accounting Standards Board
(GASB). The report presents City information on an entity-wide basis and on a more detailed fund level
basis. The fund-level reports emphasize the City's major funds. A Management Discussion and
Analysis (MD&A) presents a comparative analysis of current and prior year results, changes in financial
position, a comparison of actual versus budget, financial highlights, trends, and disclosure of any known
significant events or decisions that affect the financial condition of the City. This transmittal letter is
designed to complement the MD&A, and should therefore be read in conjunction with it. The MD&A is
required supplementary information and is found in the Financial Section of the CAFR.
The accuracy of the data presented and the completeness and fairness of the presentations, including all
disclosures, are the responsibility of the management of the City. To provide a reasonable basis for
making these representations, management has establi;~hed a comprehensive internal control framework
that is designed to protect the City's assets and provide sufficient, reliable information for the proper
preparation of these financial statements. We believe the data is accurate in all material respects and is
presented in a manner that fairly sets forth the City's financial position. Furthermore, we believe that all
disclosures necessary to enable the reader to gain an understanding of the City's financial activity have
been included.
REPORTING ENTITY
This CAFR includes all component units and funds of the City. It reports all activities for which the City
is considered to be financially accountable. The general governmental funds support a full range of
services, including law enforcement, community de~~elopment, recreation, public works, public and
environmental affairs, and general administration. This; financial report incorporates data for the City of
Cupertino, the Cupertino Public Facilities Corporation end the Cupertino Redevelopment Agency.
The City operates under aCouncil-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 the City affairs. The City Council also appoints the
City Attorney and the City Treasurer. All other emplo}'ees are appointed by the City Manager.
iv
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. Its residential population of 55,162 expands to 71,]94 when
including the daytime workforce.
Petaluma.
U Vallejo
San
\ Ralael
Mill
Valley .Richmond
V Oakland
Sl~ •Alameda
Francisco .San Leandro
• Hayward
San •
Mateo. •Fremont
1'~n•iJir
Situated at the west end of Silicon Valley, Cupertino has
earned the reputation of a balanced community with a
healthy climate for business and well maintained
residenti,~l neighborhoods, community parks and public
facilities. The excellent reputation of Cupertino's schools
has been a major attraction for families wishing to settle in
close proximity to jobs in the Santa Clara Valley. The
City recognizes the importance of quality school facilities
and programs to all Cupertino residents, and works in
partnershlip with the schools in many programs affecting
education and youth.
~'""" Cupertino is the corporate headquarters of almost twenty
• Mountain. Miipi:a: companies including Apple, Verigy, Durect, and ArcSight
vew •Sunnyvale
•san and houses sixty high-tech firms including key divisions of
CUPERTINO ~-~~~ JO3e Hewlett-Packard. Other major employers include DeAnza
College, one of the largest single-campus community
colleges in the country, the Fremont Union High School
District, and Cupertino Union School District. Apple has
purchased over 60 acres for a major expansion north of Highway 280 along Pruneridge Avenue between
Wolfe Road and Tantau Avenue. In 2009, 3.86 million square feet of office space existed with an average
vacancy rate of 13%. The City's unemployment rate of 7.3% falls below the statewide rate of 11.2%.
Retail space encompassed 3.6 million square feet in 2009, with 150 eating establishments. The 1.2
million square feet Cupertino Square Mall comprises most of the City's redevelopment project area and
features two levels of enclosed shopping, three anchor :Mores, a new 16-screen AMC theatre, a new Strike
Cupertino bowling center, and new International Food Court. In spite of the mall's additions and remodel
and aside from the theatre being one of the top attended AMC cinemas regionally, the shopping center
continues to underperform. Moreover, financing problems hit the mall owners, resulting in a bankruptcy
filing in September 2008, a foreclosure in May 2009, ilnd eventual sale of the property in October 2009.
Retail has a better outlook outside of the mall, with a Staples office supply store, Marukai Japanese
Supermarket, and Target store, either recently opening or maintaining same store sales that were stronger
than other regions. However a local Mervyn's closed when this national clothing retailer ceased
operations and the City's largest company reported less sales tax.
The recession did not hit the City as severely as some; other municipalities in the state as property and
sales taxes, which comprise almost half of revenues, experienced year-to-year growth of 18% and 7%,
respectively. Cupertino's low number of foreclosure:: and desirability of its school districts has kept
assessed values up while 2007 parcel sales in the Cupertino Square project area boosted 2008-09
Redevelopment Agency property tax revenues. Howl;ver, fewer home sales in the higher end of the
market began to affect the City during 2008-09 and along with appeals and re-assessments by the county,
assessed value growth for the 2009-10 tax roll was ull only 2%. Much of the 2008-09 sales tax growth
resulted from the state's sales tax payment to cities methodology which entails providing estimates of a
year's receipts and then sending in a correction to actu~ll amounts in the subsequent year.
v
Estimates are based on recent history which means that changes in the economy have a lagging effect.
The City projects that sales taxes in 2009-10 will frll off 13% from 2008-09 results as underlying
weakness in retail, restaurants, and the leading business-to-business sector will emerge.
The following chart shows sales tax receipts over the p~ist ten years.
Sales Tax 'Crend
$1+6.f)OU _.~ . ___ _.._. _. ___
'l:l ~ .0~`.}q
$1 Z,OC-t1
$ i (r,Ot1n
SB.ttff~J
~~ ,t1 t10
~a.t1t~0
$? .(lU0
$0
The 2006 voter referendum on two housing project approvals, the difficult housing market, tight credit
and higher office vacancy rate continued to hurt the residential and commercial construction market in
2008-09. Development-related fees for the City were flat in 2008-09. Fee revenue growth will depend on
major commercial or residential projects approved in rf;cent years, but yet to be built, such as the mixed-
use Main Street Cupertino complex, the 24,455 sq. ft. retail expansion of Cupertino Village, the 10,582
sq. ft. retail building at Tantau Avenue and Stevens Creek Blvd., the 51,000 sq. ft. mixed-use building
and 122-room hotel at the Oaks Shopping Center, the 19.8 acre One Results Way office campus
redevelopment, and the 138-room hotel on North DeA.nza Boulevard. Foundation and podium work on
the Rose Bowl mixed-use project began in mid-2009 but ultimate construction of the structures
themselves is still pending. On the positive side, the third new retail building at the Marketplace was
completed and construction is progressing on the 20-unit Las Palmas single-family development and 116-
unit Villa Serra and Grove apartment expansion.
As anticipated, California's 2009-10 budget borrows $1,419,000 of the City's General Funds in order to
balance the state deficit. It will completely seize, without repayment, $63,000 in City Redevelopment
Agency money in 2009-10 and $13,000 in 2010-11. Furthermore, the state is delaying, until April 2010,
their release of five months worth of gasoline taxes to the city. They will also put off remitting gasoline
sales taxes to Cupertino until May 2010. State payment of the $100,000 Citizens Option for Public
Safety grant is precarious because funding for it come; from vehicle license fees. Low receipts of these
fees due to falling auto sales forced late payments of tl-~e 2008-09 grant and there are early indications of
similar problems in 2009-10.
Legislation stipulates state repayment of the General fund property tax borrowing with 2% interest by
June 30, 2013, but because of the state's forecast of large budget deficits through that time, re-payment
cannot be a certainty, nor can a re-borrowing of the funds after repayment be ruled out.
vi
?C1t?t1 }C)C)I ZC-t)? ?()t)3 2C1€r-1 _'C}#1~ .'OC-fi ?CtC-' ?t}(t~, ?{qty})
The City will use General Fund and equipment reserves to cover the General Fund shortfall until the
money comes back. A Redevelopment Agency takeavr~ay in 2008-09 was reversed by the courts and a
new lawsuit by the California Redevelopment Association was filed in October 2009 for the current hit.
City voters passed a modern telecommunication utility user tax (UUT) ordinance on November 3, 2009
in order to preserve approximately $600,000 per ~/ear in ongoing UUT revenues from wireless
communications. The City was collecting the tax under an outdated ordinance written in the days of
traditional landline service. The revenues support general City services such as parks, streets, and public
safety.
The recession demonstrates the need for diversification of the City's revenue base and along-term
balance of revenues and expenditures as described in the City's Fiscal Strategic Plan. The City needs to
find other revenues to mitigate the fluctuating nature of sales taxes, hotel taxes, user fees, and state
borrowings of local taxes in times of budget distress. It needs to reduce the concentration of sales taxes
among its top companies and top economic sector, the volatile business-to-business area. Legislation
raising the City's property tax share, the opening of a western region sales office of a major technology
solution provider, and update of the UUT are successes of the strategic plan, but many other tax or fee
initiatives in the plan have incurred opposition t~~ their implementation. The City's Economic
Development department strives to generate revenues by recruiting and retaining retail, facilitating
development, branding and outreaching to new busirn~ss, revising policies, coordinating with regional
organizations, and promoting economic vitality.
The City's unfunded retiree medical liability is a new disclosure in Note 10 to the Basic Financial
Statements. The City must expense the annual installment to payoff this long-term liability. These
financials, using a 2007 valuation, report a $21,982,000 unfunded liability with a $2,475,000 annual
expense for 2008-09. Anew 2009 valuation recently available describes a $24,305,000 unfunded
liability as of June 30, 2010 with an annual cost of $2,700,000, assuming the City continues to fund the
benefits on apay-as-you-go basis. The City has been setting aside monies annually for this purpose since
2004 and will accumulate about $9,000,000 in a separate City fund by the end of 2009-10. The City plans
to invest these assets in an irrevocable trust with higher yielding investments during 2009-10 in order to
reduce the unfunded liability and annual cost.
ECONOMIC IN:[TIATIVES
The City has taken advantage of grant and economic :stimulus opportunities from the federal American
Recovery and Reinvestment Act. So far in 2009-10 it has received $1,731,000 in various ARRA grants
for streets, energy efficiency, housing improvements, and emergency preparedness purposes. The City
amended its temporary sign ordinance to encourage will designed, pedestrian oriented signage. As part
of its service delivery automation and streamlining initiative, it has reviewed the permitting process and
continues to rollout electronic services with the goal of bringing City Hall closer to the customer with
reduced costs. The long-term fiscal strategic plan promotes the streamlining and repositioning of the
workforce as opportunities arise and the stabilizing avid repositioning of revenue sources with a heavy
vehicle street impact fee and re-evaluation of park dedication fees. Decreasing expenditures and risk
exposure with a requirement that developers maintain r~ew open space associated with their projects, that
private and public capital projects be added only if ongoing maintenance is funded, and that block
leaders, neighborhood watch programs, and certified emergency response teams be expanded are other
strategic plan elements.
vu
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 finan~~ial statements and maintaining accountability of
assets. The concept of reasonable assurance recognize: 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 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.
Cash Management
The City maintains a cash and investment pool for all City funds. The City Treasurer invests the City's
funds according to state code and the investment policy adopted by the City Council. The objectives of
the policy, in order of priority, are safety, liquidity, and yield. The policy addresses soundness of
financial institutions and the types of investments permitted by the California government code.
The City's investments consists of U.S. Treasury and Federal agency obligations, the State Treasurer's
Local Agency Investment Fund, money market funds consisting of Treasuries, Federal agency notes, and
repurchase agreements, and FDIC insured certificates of deposit. Year-end cash and investments had
market and book values of $58,227,000 and $58,158,000, respectively, with the balance down
$5,709,000 from the previous year due to major capit~~l outlays in 2008-09. The average portfolio yield
dropped to 0.74% at June 30, 2009 compared to 2.94% a year ago. Rates decreased as the Federal
Reserve maintained low rates in order to combat the :recession and tight credit market. Because of the
ongoing problems in financial markets, the City kept the portfolio mostly in conservative Treasury bonds
and bills. See Note 2 to the Basic Financial Statements for more information.
Risk Management
Risk management issues factor substantially in the City's long term financial planning. Whether through
risk pools or self-insurance programs, the City strives to maintain sufficient assets to pay expected losses,
maintain funding stability to avoid substantial fluctuation in annual expense, and monitor risk
management policies and claim administration to mitig~ite future losses.
The City maintains a program of commercial insurance combined with self-insurance for substantially all
of its governmental operations except for major construction projects and contractor-supplied services.
In such circumstances, insurance to protect the City is f~rovided by each contractor.
INDEPENDEI\~T 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 au~Jit committee. Maze and Associates Accountancy
Corporation audited the City's Basic Financial Statements, and their opinion thereon is included in the
Financial Section of this report.
viii
CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Cupertino for its CAFR
for the year ended June 30, 2008. In order to be awarded a Certificate of Achievement, a government unit
must publish an easily readable and efficiently organized CAFR. This report must satisfy both GAAP
and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that the current report
continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the
GFOA to determine its eligibility for another certificate.
Respectfully-submitted,
l
David Woo
Finance Director
ACKNOWLEDGMENTS
I would like to express my appreciation to the City employees, City Manager, and the members of the
City Council for their interest in conducting the financial operations of the City in a responsible manner.
Special thanks go to the Finance staff -Tina Mao, Yulia Rumalean, and Richard Wong -for their
continued support and dedication. Special recognition goes to Jennifer Chang, Dorothy Steenfott, and
David Woo for their efforts in the preparation and production of this report.
Reviewed by,
~~
Carol A. Atwood
Director of Administrative Services
i~s_
Citizens
of Cupertino CITY O F
City
Council
Citizen Adivisory
Commissions and
Committees
CUPERTIN4
City Attorney City Manager City Treasurer
Carol Korade David Knapp Carol Atwood
Public & Environmental
Affavs Director
Rick Kitson
Director of Director of Director of Director of
Administrative Services Community Development Parks and Recreation Public Works
Carol Atwood Aarti Shrivastava Mark Linder Ralph Qualls
IT Manager City Clerk Building Official Recreation Supervisor Sr. Recreation Supervisor CityArchitect Assistant Director
Mariyah Serraros Kimberly Smith Greg Cas[eel Sports Center Senior Center Teny Greene of Public Works -Eng.
Don McCarthy Julia Lamy Glenn Goepfert
Finance Director Human Resources City Planner Recreation Supervisor Recreation Supervisor Public Works Environmental
David Woo Director Gary Chao Youth Programs Facilities/Community Events Project Manager Programs Manager
Vacant Christine Hanel Tom Walters Carmen Lynaugh Cheri Donnelly
Code Neighborhood Economic DevelopmenU Assistant Director Senior Civil Engineer
Enforcement Watch RDA Manager of Public Works - Mai nt David Stillman
Kelly Kline Roger Lee
Emergency
Preparedness
Parks Facilities Streets Public Works
Supervisor Supervisor Supervisor Supervisor
John Bisely Chris Orr Diane Mahan Vacant
CITY OF CUPERTII~TO, CALIFORNIA
Fiscal Year 2008/09
COMMISSIONS ArID COMMITTEES
AUDIT COMMITTEE PARKS & RECREATION COMMISSION
Myoung Kang
Mark Santoro
Stanley Stemkoski
Garrett Wade
Gilbert Wong
HOUSING COMMISSION
Harvey Barnett
Radha Kulkarni
Nicole Maroko
Frances Seward
FINE ARTS COMMISSION
KC Chandratreya
John Fiegel
Christina Hackworth
Robert Harrison
Jessi Kaur
PUBLIC SAFETY COMMISSION
Charles Caldwell
Nina Daruwalla
Craig Lee
Daniel Nguyen
Tamara Pow
TEEN COMMISSION
Utkarsh Bhagi
Sruthi Damodar
Ojas Goyal
Esther Lim
Laura Liu
Nikhil Menon
Sanjana Ramachandran
Shailee Samar
Anna Kathryn Sengupta
Nirali Shah
Stephanie Szeto
TECHNOLOGY, INFORMATION &
COMMUNICATIONS COMMISSION
William Allen
Peter Friedland
Avinash Gadre
Wallace Iimura
Andrew Radle
Jeanne Bradford
David Greenstein
David Lee
Darcy Paul
Debbie Stephens Stauffer
LIBRARY COMMISSION
Adrian Kolb
Ronald Miller
Katherine Stakey
Ann Stevenson
Susanna Tsai
PLANNING COMMISSION
Paul Brophy
Lisa Giefer
David Kaneda
Winnie Lee
Marty Miller
BICYCLE PEDESTRIAN COMMISSION
Mark Fantozzi
Geoffrey Paulsen
Alan Takahashi
James Wiant
ECONOMIC DEVELOPMENT
Bob Adams
Carol Atwood
Mike Foulkes
Shawna Holmes
Kelly Kline
David Knapp
Orrin Mahoney
Marty Miller
Ralph Qualls
Aarti Shrivastava
Kris Wang
xi
CITY OF CUPERTINO, CALIFORNIA
Fiscal Year 2008/09
CITY COUNCIL
Orrin Mahoney Kris Wang
Mayor Vice Mayor
Dolly Sandoval
Councilmember
Mark Santoro Gilbert Wong
Councilmember Councilmember
DIRECTORY OF CITY OFFICIALS
David W. Knapp -City Manager
Carol Korade -City Attorney
Carol Atwood -Director of Administrative Services
Mark Linder -Director of Parks and Recreation
Ralph Qualls -Director of Public Works
Aarti Shrivastava -Director of Community Development
xii
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Cupertino
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2008
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
PNLE OFpjC h
`~~•'`OPlFI~' ~,p~
UN tF0 STATE u~
u~'I AYO ~'
CANAOp President
d~COAPOWITMIN `~
"v • ~$~il. ~s
o~~_„ ~o
CN~~aDD
Executive Director
xiii
FINANCIAL SECTION
MazE &
ASSOCIATES
ACCOUNTANCY CORPORATION
3478 Buskirk Ave. -Suite 215
Pleasant Hill, California 94523
INDEPENDENT AUDJ[TOR'S REPORT ON (925) 930-0902 • FAX (925) 930-0135
BASIC FINANCIAL STATEMENTS mazeCmazeassociates.com
www. mazeassociates. com
To the City Council
City of Cupertino, California
We have audited the basic fmancial statements of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of the City of Cupertino as of and for the
year ended June 30, 2009, which collectively comprise the City's basic financial statements as listed in the
Table of Contents. These basic fmancial statements are the responsibility of the City's management. Our
responsibility is to express an opinion on these basic fmancial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards in the United States of
America and generally accepted government audit standards issued by the Comptroller General of the
United States of America. Those standards require th~rt we plan and perform the audit to obtain reasonable
assurance as to whether the fmancial statements are free of material misstatement. An audit includes
examining on a test basis evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall fmancial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the basic fmancial 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 of Cupertino at June 30, 2009 and the results of its
operations and the cash flows of its proprietary fund types thereof and the respective budgetary comparisons
listed as part of the basic financial statements for the y~:az then ended, in conformity with generally accepted
accounting principles in the United States of America.
As described in Note 10, the City implemented the provision of GASB Statement No. 45, Accounting and
Financial Reporting by Employers of Post Employmen f Benefits other then Pensions.
In accordance with Government Auditing Standards, we have also issued our report dated September 14,
2009 on our consideration of the City of Cupertino's internal control over fmancial reporting and on our tests
of its compliance with certain provisions of laws, re;;ulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the ;cope 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 internal control
over fmancial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standazds and should be considered in assessing the results of our audit.
Management's Discussion and Analysis is required by the Government Accounting Standards Board, but
is not part of the basic component unit financial statements. We have applied certain limited procedures
to this information, principally inquir7es of manag~;ment regarding the methods of measurement and
presentation of this information, but we did not audit this information and we express no opinion on it.
2
A Professional Corporation
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a
whole. The supplemental section listed in the Table of Contents are presented for purposes of additional
analysis and are not a required part of the basic financial statements of the City of Cupertino. Such
information has been subjected to the auditing procedures applied in our audit of the basic financial
statements, and in our opinion are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
The introductory section and statistical section listed ni the Table of Contents were not audited by us, and
we do not express an opinion on these information.
~~~ ~ ~~
September 14, 2009
3
MANAGEMENT'S DISCUSSION AND ANALYSIS
This is the Administrative Services Department's report on the City of Cupertino's financial performance
for the year. Please read it in conjunction with the accompanying Transmittal Letter and Basic Financial
Statements.
2008-09 FINANCIAL HIGHLIGHTS
• The City's total net assets increased $6,102,000 during 2008-09, ending the year at $152,378,000.
• Total City revenues and expenses were $58,737,0+JO and $52,635,000, respectively, in 2008-09.
• Governmental revenues were $51,756,000, up from $49,612,000 in 2007-08.
• Governmental expenses were $46,807,000 in 2008-09, up from $41,1 ] 3,000 in the prior year.
• Revenues from business-type activities were $6,930,000 in current year, down from $7,387,000 in the
prior year.
• Expenses of business-type activities were $5,82,000 in current year, down from $5,907,000 in the
prior year.
• General Fund revenues of $41,293,000 represented a decrease of $72,000 fi-om the prior year;
General Fund expenditures increased from $31,010,000 to $32,276,000 in 2008-09.
• The General Fund experienced expenditure budget savings of $3,712,000; however, revenues fell
short of budget by $396,000. y
• With revenues exceeding expenditures by $9,016,000 and net transfers out of $6,486,000, the General
Fund balance rose $2,530,000 to end the year at $22,197,000.
OVERVIEW OF THE FINANCIAL STATEMEN'CS
The Basic Financial Statements comprise the City-wide Financial Statements and the Fund Financial
Statements; these two sets of financial statements F~rovide two different views of the City's financial
activities and position.
The City-Wide Financial Statements provide a lon;-term view of the City's activities as a whole, and
comprise the Statement of Net Assets and the Statement of Activities. These statements are prepared on
the accrual basis, which means they measure the flow of all economic resources of the City as a whole.
The accrual basis of accounting is similar to the accounting used by most private sector companies. The
Statement of Net Assets provides information abo~~t 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 all its expenses, a.so on the full accrual basis, with the emphasis on
measuring net revenues or expenses for each of the City's programs. The Statement of Activities explains
in detail the chance in Net Assets for the year. Over time, increases or decreases in net assets 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 Assets 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 enforce,nent, community development, recreation, public
information, 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
Redevelopment Agency, because the City is considered to be financially accountable for the Agency.
The Cupertino Public Facilities Corporation, from which the City leases its major facilities through
the payment of long-term debt, is also included as a component unit.
4
• Business-type activities-All the City's enterprises are reported here, including solid waste
management and some of the City's recreationz.l operations. Unlike governmental services, these
services are supported by charges paid by users bTrsed on the arnouut of the service they use.
The Fund Financial Statements report the City's operations in more detail than the government-wide
statements and focus primarily on the short-term activities of the City's General Fund and other major
funds. The Fund Financial Statements measure only current revenues, expenditures, assets, and
liabilities; they exclude long-term assets and liabilities. Because these statements focus on the near-term
inflows and outflows of spendable resources, such information may be useful in evaluating near-term
financing requirements.
The Fund Financial Statements provide detailed information about each of the City's most significant
funds, called major fiends. Cupertino's Fund Financial Statements include governmental, enterprise and
internal service funds as discussed below. Each major fund is presented individually, with all non-major
funds summarized and presented only in a single column. Subordinate schedules, which follow the Notes
to Basic Financial Statements, present the detail of these non-major funds. Major funds present the
significant activities of the City for the year, and ma~/ change from year to year as a result of changes in
the pattern of City's activities and public interest. For example, the Capital Improvement Projects Fund
may or may not appear as a major fund depending on the volume of construction activity in a certain }'ear.
Governmental Fund Financial Statements are prepared on the modified accrual basis, which means they
measure only current financial resources and uses. They present essentially the same functions reported
as governmental activities in the government-wide financial statements. However, capital assets and
other long-lived assets, along with long-term liabilities, are not presented in the Governmental Fuud
Financial Statements. Reconciliations are provided to facilitate a comparison between governmental
funds and governmental activities statements to allow a better understanding of the long-te.r•m impact of
the government's near-term financial decisions.
Enterprise attd Internal Service Fund financial statements are prepared on the full accrual basis and
include all their assets and liabilities, current and long;-term. Enterprise funds are used to report the same
functions presented as business-type activities in the government-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 o:~ly in total at the fund level. Internal Service Funds
may not be major funds because their revenues ar-e derived from other City funds. These revenues are
elinunated 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 assets of the Internal Service Fwids. 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.
Comparisons of budget and actual financial information are required iTi the Basic Financial Statements
only for the General Fund and other major funds that are Special Revenue Funds. Since none of the
City's Special Revenue Funds are considered majo- funds, budgetary comparison schedules for these
funds are included in this document as supplemental information only.
Fiduciary Fund statements provide financial information about the activity of an assessment district.
The City acts strictly as an agent for the district holding amounts collected from property owners, prior to
transferring the money to the districts' bond trustees. The City's fiduciary activities are reported in the
separate Statement of Fiduciary Net Assets and the Agency Funds Statement of Changes u~ Assets and
Liabilities. These activities are excluded from the City's other financial statements because the City
cannot use these assets to finance its own operations.
The Notes to Basic Financial Statements provide additional detail that is essential to a full
understanding of the information provided in the government-wide and fund financial statements.
CITY-WIDE FINANCIAL ACTIVITIES
This analysis focuses on the net assets and changes in net assets of the City's Governmental Activities
(Tables 1, 2 and 3) and Business-Type Activities (Taf~les 4, 5 and 6) presented in the City-wide Statement
of Net Assets and Statement of Activities that follow.
Goverrrntental Activities
Table 1
Governmental Net Assets at June 30
(in thousands)
Governmental Activities
2009 2008
Cash and investments X48,363 $55,164
Other assets 6,446 9,478
Capital assets 150,312 133.559
Total assets 205,121 198,201
Long-term debt 46,970 48.385
Other liabilities 14.858 11.473
Total liabilities 61,828 59,858
Net assets:
vlvested in capital assets, net of debt 103,342 85,174
Restricted 6,661 9,927
Unrestricted 33,290 43.242
Total net assets ~1_ 43,293 X138.343
The City's net assets from governmental activities increased $4,950,000 or 4% from the prior year. The
Change in Governmental Net Assets, Table 2, shows the increase from a revenue and expense perspective.
The change vas distributed among assets, liabilities, ar~d net asset categories as follows:
• Capital assets increased by $16,753,000 as _wo major construction projects, the Mary Avenue
Bicycle Footbridge and Stevens Creek Corridor Park, ~~~ere completed and t~~~o parcels at Sterling
Boulevard and Barnhart Avenue were purchased for a future park. Further information on these
transactions is provided in the Major Governr:~ental Funds section of this report.
• $6,801,000 of net cash was disbursed to pay for the major capital outlays.
• Other assets decreased $3,032,000 as the amount of outstanding grants due from the Santa Clara
Valley Transportation Authority (VTA) for the Mary Avenue Bicycle Footbridge project
decreased as the project winded down.
• Principal payments on the 2002 certificates of participation reduced long-term debt by
$1,415,000.
• Capital assets net of related debt rose $18, l 68,000 due to the ~ 16,753,000 capital asset increase
and $1,415,000 debt decrease.
6
• Restricted net assets fell by 53,?66,000 as Gasoline taxes and state bond monies ~~'ere expended
on street repaving projects and development impact fees ~e~ere spent on helping anon-profit
agency acquire a single family home for congregate senior housing. RemaininG net assets of
56,661,000 are restricted to future storm drain, street. housing, park acquisition, redevelopment,
public access television. and debt service purposes.
Unrestricted net assets are the part of net assets that can be used to finance day-to-day operations
or designated for certain purposes by the City Council.. without constraints established by debt
covenants or other legal requirements. 533?90,000 of unrestricted net assets existed at June 30,
2009, 59.952,000 lower than a}'ear ago. The change reflects the above descriptions of cash and
grant receivables converted into capital assets. The unrestricted net asset balance is divided into:
515,015.000 in General Funds designated for economic continGencies, disasters, state raids, and
utility user taxes, 58,889.000 for retiree health costs, equipment replacement, information
technology projects, and insurance reserves. 54.857,000 in General Funds available to balance the
five-fear operating and capital budget, 52.07,000 for open purchase orders, 51,223.000 for
housing loans given out b~' the Cit}. and 5968,000 for capital funds committed but not yet
encumbered.
Sources of Re~~enue, Go~~ernmenta! Acti~'ities, 2008-09
Other Taxes ~mectment
'`~~ Earnings Charges for
~~'~ Services
Franchise Tax I 1 1 ~~ Operatins
~'~ Contributions &
Utility User Tax r
/ Grants
6 r ~~ 4M1 8 ~7r
Transient
Occupanc}~ Tax ~ ~ Capital Grants
.,
~`%~ ~. ~
Contributions
"-'- ~4r,€ ~; 9 i~
Sales Tax. '~ ` /
~~"
27 %r ".`~ ~ !l.
~,. __ I'ri~perty Tax
~~~~
As the Sources of Revenue chart above shoe's, sales and property taxes, at 27 and 25 percent respectively,
continue to be largest providers of Governmental revenue. The division of revenue sources remained
mostly unchanged from the previous year.
7
Functional Expenses, Governmental Activities, 2008-09
Public
\0'orks
;9~~
Administration
Interest ~~~
,~ r~
Lai\'
xcement
19c~
Puhlic 5c
Enviromnental Affair:
3 ~%~
Administrative
Serrices
9 `ii
9 ~7c -
The Functional Expenses chart above includes onl}~ current year expenses. ~~~hich are discussed in detail
below. Percentages are consistent ~~ith last near. The chart does not include capital outlays or principal
pa}~ments on debt. Capital outlays are instead shoe n as additions to capital assets and principal payments
are reported as long-teen liabilit}~ reductions.
The Statement of Activities presents program revenues, expenses, and general revenues. These are all
elements of the Changes in Governmental Net assets summarized in the next table.
8
COtllmllnlll'
Development
] ?~%~
Table 2
Change in Governmental Net Assets
(in thou~~ands)
Expenses
Administration
Law Enforcement
Public and Environmental Affairs
Administrative Services
Recreation Services
Community Development
Public Works
Iliterest on long-term debt
Total expenses
Revenues
Program revenues:
Charges for services
Operating contributions and grants
Capital grants and contributions
Total program revenues
Ge-Herat revenues:
Taxes:
Property tax
Property tax in-lieu of motor vehich; fee
Incremental property tax
Sales tax
Transient occupancy tax
Utility user tax
Franchise tax
Other taxes
h~tergovernmental, unrestricted:
Motor vehicle license fee
hwestment earnings
Miscellaneous
Total general revenues
Total revenues
Excess of revenues over expenses, before transfers
Transfer-in of non-capital assets
Transfer-in of capital assets
Increase in net assets
Governmental Activities
2008-09 2007-08
$1,770 $1,636
8,804 7,680
1,624 1,216
4,002 3,923
4,206 3,846
6,178 4,060
18,104 16,569
2,119 2.183
46.807 41,113
5,417 5,345
4,014 2,393
4,760 5,696
14.191 13.434
7,492 6,942
4,300 3,894
1,211 220
14,139 13,155
2,140 2,712
3,205 3,176
2,618 2,547
1,318 1,710
172 267
890 1,452
81 103
37,566 36,178
51,757 49.612
4,950 8,499
---- 550
442
$4.4 Q $2,421
9
Revenues
Table 2 shows that total governmental revenues rase $2,144,000 or 4% over last year, finishing at
$51,756,000.
The City's Redevelopment Agency began to realize growth in incremental property tax revenues as the
sale of the Rose Bowl parcel and potential hotel site in Cupertino Square generated a property value
reassessment that resulted in $991,000 of additional property taxes for the Agency's econonuc
development and low and moderate income housing programs, more than five times higher than
previously received annually. The term increme~ual refers to the tax allocation methodology for
redevelopment agencies where upon most of the tax growth in a project area is directed toward
eliminating blight in the project area and increasing affordable housing in the City.
Grants and contributions, both operating and capita] related, rose a combined $685,000 or 8% over the
previous year as $800,000 in federal Community Development Block Grant (CDBG) money was received
and then awarded to Maitri h~corporated to finance its purchase of a transitional home for domestic
violence victims. Maly Avenue Bicycle Footbridge grant revenue declines offset a part of this rise.
The remaining $468,000 of the govennmental revenue expansion is from a mixed bag of moderate growth
in General Fund property and sales taxes partially offset by declines in investment earnings, transient
occupancy taxes, and propert}~ transfer taxes. The rf;cession had an immediate affect on the last three
areas while the first two areas will be impacted more in 2009-10. See the General Fund analysis later in
this report for further explanation.
Expenses
City-wide governmental expenses, representing non--capitalized spending, climbed $5,694,000 or 14%
over 2007-08. All areas, except for interest on the City's debt, incurred increases with Law Enforcement,
Public and Environmental Affairs, Community Development, and Public Works bearing the bulk of the
rise on an amount or percentage basis. The $1,828,000 initial recording of long-term retiree health cost
liabilities is part of this increase, affecting all governmental activities.
The county sheriff, under a Law Enforcement contract with the City, utilized 1,124,000 more dollars to
deploy more investigative, enforcement and patrol services than in previous }ears to address school
safety, home and auto burglaries, identity theft, and accident prevention concerns.
Public and Environmental Affairs began citywide efforts to reduce greenhouse gas emissions through
energy reduction and resource sustainabilit}' programs involving Cit}~ operations, residents and
businesses. An environmental affairs coordinator ~~'as hired and was instrumental in getting the City a
$526,000 Energy Efficiency and Conservation Block Grant for these initiatives from the federal stimulus
package in August 2009. In addition, a portion of the $408,000 or 34% jump in expenses went toward the
replacement of communication equipment.
Despite Community Development's lower outlays for building pernvts, inspections, and planning
reviews, reflecting the recession's effect on entitlement and construction applications, total expense for
this activity rose $2, 118,000 or 52% because of $800,000 in CDBG grant disbursements for the Maitri
domestic violence shelter plus S1,090,000 in City development impact fees awarded to Senior Housing
Solutions to aid in their purchase of a group senior living residence. School field improvements and the
passing through of a portion of the property tax growth to the county, schools, and special districts
comprised the Redevelopment Agency's $186,000 in additional outlays this year.
More street repair, design engineering, overpass and median work, building maintenance, and utility costs
caused Public Works expenditures to go up $1,535,000 or 9% over the prior year. The City took
advantage of federal grants, state bond money, and the sales tax on gasoline to address the street
maintenance backlog.
10
Chmige in Net Assets
City-wide governmental revenues in excess of expenditures fell to $4,950,000 compared to $8,499,000 of
last year, due to revenues not keeping pace with risins; expenses. $500,000 in transfers, from the Resource
Recovery enterprise to the General Fund, for reimbursement of past waste "cleanup costs stopped this year
and one-time $442,000 and $50,000 transfers of Blacl:beny Farm and Senior Center business-type capital
and non-capital assets, respectively to the General Fund occun-ed last year. After transfers, overall net
assets of governmental activities increased $4,950,000, compared to $9,491,000 during 2007-08. The
City's intense capital improvement program of the past few years, led by the Mary Avenue Bicycle
Footbridge construction, Stevens Creek Corridor Park creation, and the Sterling/Ban~hart Park
acquisition, funded by sales and property tax growth r.nd grants, has increased net assets significantly.
Net Cost acrd Revenues
Table 3 presents the net cost or revenue of the Cit}''s programs. Net cost is defined as total program cost
less the revenues generated by those specific activities; it reflects the financial burden placed on the City's
General taxpayers by each function. Net revenue represents activities that Qenerate revenues in excess of
direct costs. General taxpayers are not supporting that function; instead the net revenue generated covers
overhead provided by other City functions.
Tab] e 3
Net Cost (Revenue) of Governmental Activities
(in thousands)
I~Tet Cost (Revenue)
Of Activities
2008-09 2007-08
Administration $1,720 $1,581
Law Enforcement 7,871 6,690
Public and Environmental Affairs 1,624 1,216
Admnistrative Services 4,002 3,923
Recreation Services 3,405 2,976
Community Development 819 (87)
Public Works 11;057 9,197
Interest on Long-term Debt 2.119 2.183
Total Governmental Activities ~32,6I7 $27.679
• Administration includes activities of the City Council, Commissions, City Manager and City
Attorney. Net cost rose $139,000 due to tare ne«~ retiree health cost recognition and higher
equipment depreciation.
• The City's $1,181,000 net cost increase for Law Enforcement provided by the county sheriff lines
up with their expense increase. The delayed $40,000 Citizens Option for Public Safety grant
receipt also contributed to the net cost rise.
• New green program initiatives and equipment costs caused the net cost of Public and
Environmental Affairs to go up $408,000, matching their expense hike.
• Administrative Services includes Finance, Human Resources, Information Technology, City
Clerk, Code Enforcement and Emergency Frepar•edness. Net cost was steady behveen the two
years.
ll
Some of the City's Recreation programs are reported as business-type activities for which fees are
charged to fully recover the costs of the prop,-ams. However, many community events, programs
and services are available to the public for fr~;e or at a reduced price. The costs of administering
these general (governmental) activities are partially offset by fees for membership, classes, travel,
rentals, and leases that amounted to $801,000 in 2008-09. Net cost of recreation rose from
$2,976,000 to $3,405,000 due to retiree health costs, lower travel program revenues, and higher
depreciation.
• Community Development programs include the Planning, Building, Economic Development, and
Housing divisions, and the Redevelopment Agency. The $1,090,000 award of accumulated
development impact fees to Senior Housing Solutions to subsidize their acquisition of a senior
citizen home largely caused the activity to go from an $87,000 net revenue position in 2007-08 to
an $819,000 net cost result in 2008-09.
Public Works expenses include transportation, engineering, storm drains, and the maintenance
and improvement of the City's streets, parks, and facilities. Offsetting revenues include federal,
state, and local grants, gasoline taxes, environmental fees, facility rental, damage restitutions, and
storm drain fees totaling $7,047,000, leaving $11,057,000 as the 2008-09 net cost of public
works. $890,000 in state bond money for pavement impro~~ement projects was received late last
year, but not utilized until this year. $257,000 of federally funded pavement work was completed
this year with grant reimbursements to come next year. VTA grant payments for the Mary
Avenue Footbridge declined as the project ruched completion. All of these contributed to the
$1,860,000 net cost jump.
• Interest on loner term debt dropped slightly to $2,119,000.
Busi~tess Type Activities
Business-type activities in the City-wide Financial Statements include the City's enterprise funds.
Enterprise funds are used to account for recreational and solid waste management operations that are
financed and operated in a manner similar to private business enterprises where the intent is that the costs
of providing services and facilities to the Qeneral public on a continuing basis can be financed or
recovered primarily through user fees.
Business-type net assets totaled $9,085,000 at June 30, 2009, an increase of $1,152,000 from the prior
year with $1,094,000 of the rise going into cash and investments.
Overall revenues of $6,980,000 this year were $407,000 or 6% lower than last year. The City's Resource
Recovery solid waste disposal franchise had a $154,000 or 7~Io decline in solid waste pickup and debris
box revenues from the previous year. Blackberry Farm golf course fees were down $44,000 or 7%.
Recreation's cultural events, youth and teen programs, sports, dance and fitness classes brought in
$129,000 or 5% less than last year, but this was offsfa by $127,000 more from Sports Center tennis and
membership. Half of the total decline originates outside of operations as interest income on the surplus
cash of all the enterprises fe1155% or $207,000.
Expenses for all business-type activities were $79,000 or l~Ic below last year. Revenues over expenses,
before transfers, was $1,152,000 in 2008-09, off of the $1,480.000 outcome in 2007-08, reflecting the
tighter operating margins of the golf course, recreational, and solid waste enterprises. Last year's transfers
of solid waste, Blackberry Farm picnic area, and Sealior Center assets to the General Fund were one-time
or temporary events that were discontinued this year. The major proprietary funds section of this report
provides more information on business-type results.
12
Table 4
Business-Type Net Assets at June 30
(in thousands)
Cash and investments
Other current assets
Capital assets
Total assets
Current liabilities
Total liabilities
Net assets:
1;rvested in capital assets
Unrestricted
Total net assets
Business-Tvoe Activities
2009 2008
$9,749 $8,655
353 343
136 84
10.238 9,082
1,153 1,149
1.153 1,149
136
8.949
$9.085
84
7, 849
$7.933
Table 5
Change in Busines~~-Type l~'et Assets
(in thousands)
E?~penses
Resource Recovery
BlackbeiTy Farm
Sports Center
Recreation Programs
Total expenses
Revenues
Program revenues:
Charges for services
Operating contributions and grants
Total program revenues
General revenues:
Investment income
Total revenues
Excess of revenues over expenses, before transfers
Transfer-out of non-capital assets
Transfer-out of capital assets
Change in net assets
Business-Type Activities
2008-09 2.007-08
X1,998 52,056
496 450
1,594 1,548
1,740 1,853
5.828 5.907
6,794 6.994
14 14
6.808 7,008
172 379
6.980 7.387
1,152 1,480
---- 4( 42?
1.152 $_48$
l ..
By excluding $172,000 in interest income from the excess of revenues over expenses, overall net revenue
of business-type activities was $980,000 for 2008-09. Recreation's cultural events, youth and teen
programs, sports, dance and fitness classes comprise r--ost of this margin continuing the trend of last year.
Many of the Recreation Programs are taught by contract instructors, with the instructors getting a portion
of the enrollment fee.
Table 6
Net Cost (Revenue) of Business-Type Acti~~ities
(in thou:~ands)
Net Cost (Revenue)
Of Activities
2008-09 2D07-08
Resource Recovery $(117) $(213)
Blackberry Farm (101) (191)
Cupertino Sports Center (138) (58)
Recreation Programs (624) (640)
Total Business-type Acti~~ities
$12$.41 $8.102)
MAJOR GOVERNI\TENTAL FUNDS
General Fund
Revenares
General Fund revenues of $41,293,000 ended up $34+6,000 or 1% below the final budget and $375,000
below the original budget for the year ended June 30, 2009. This was $72,000 or less than 1% under last
year. Although essentially unchanged in total, offsetting trends comprised the stable picture. Severe
downturns in transient occupancy taxes, property transfer taxes, interest earnings, vehicle license fees,
and grant revenues were offset by increases in property and sales taxes. The recession affected some of
these areas immediately while some will be affected later because of the tax calculation and remitting
process. Also the local real estate market and mix of l:usinesses in the City has spared it from some of the
economic fallout hitting other state municipalities. TahIe 7 displays year-to-year variations, while Table 8
shows budget versus actual differences.
Property taxes ended the year at 511,743,000, rising !~% or $954,000 over last year and 6% or $663,000
higher over the original and final budget. This reflects sustained tax roll growth in 2008 because of the
City's lo~v foreclosure rates and continued demand for housing because of the popular local school
district. However, the county reported much lower assessed valuation growth for 2009 (about 2%)
because of fewer home resales and because of propert,~ value appeals and re-assessments required by state
law whenever general market values are in a decline. Therefore, the City expects 2009-JO property tax
growth to be much lower than what it has recently been. This category includes property taxes received to
replace motor vehicle license fees lost due to the state~.~-ide fee reduction in 2005.
Sales taxes increased $985,000 or 7% higher than last year to finish up at $14,139,000. It was $249,000 or
2% above the original budget and $749,000 or 6% beaer than the final budget. The results, though, mask
the underlying trend in actual receipts. In California, three-quarters of the local portion of sales taxes are
re+nitted dil-ectly to the local jurisdictions, while one-quarter is diverted to pay state bonds issued to
finance the state's budget deficit. The one-quarter po;-tion is replaced by property taxes that normally go
to the schools. The state estimates the one-quarter portion at the beginning of the fiscal year and remits
that to the cities in rivo installments during the year. The state then reconciles the estimate «-ith the actual
14
sales tax receipts for that year and trues up the difference as an adjustment the following fiscal year. The
estimates and prior-year true-up received in 2008-09 ,vas $966,000 over actual receipts and 64% over last
year. This will impact the City as a negative adjustment in 2009-10. Actual sales tax collections, however,
were down 14% from last year. The City's leading tax provider and a bellwether for sales tax results,
showed year-to-year double digit percentage declines every quarter, as computer and MP3 music device
sales from their local sales office fell. After the City saw declines in the first two quarters, it lowered its
sales tax budget by $500,000.
The four hotels in the City remitted $2,140,000 in transient occupancy taxes this year, a large drop of
21% or $571,000 off of last year and 20% or $520,000 under the original and final budget. The recession
had an immediate and hard effect on the City coffers in this area as tax receipts started falling in
November 2008 when the hotels, which all cater to business, experienced the cutback incorporate travel.
The City's 2.4% utility user tax on telephone, gas, and electric services was mostly unchanged from last
year. This $3,205,000 in revenues was $9,000 or 3 i, under the original and final budget. On November
3, 2009, voters passed an update of the local tax ordinance to ensure that this tax can continue to be
collected on contemporary telecom systems. The Ci:y has kept $1,600,000 of these revenues in General
Fund reserves until the protection of these revenues can be assured.
Franchise taxes from electric, gas, water, solid waste, and cable utilities rose 3% or $71,000 from last
year. The $2,618,000 received was in-line with this year's original and final budget.
Other taxes include business license, construction, and property transfer taxes. The county assesses the
transfer tax, at $1.10 per $1,000 in sales price, upon recording the ownership change, and gives the City
one-half of the tax. The decline in housing transactions and lower sale prices caused these receipts to fall
by 60% or $396,000 off of 2007-08 figures and 56~'/c or $335,000 off of the original and final budget.
Business license and construction taxes were comparable to last year, although only 19% of budgeted
construction taxes were realized this year, as difficulties in commercial financing delayed anticipated
building projects.
Licenses and permits were steady at $2,740,000 for 2008-09. However, they were 8% or $240,000 below
the final budget and 10% or 5440,000 below the original budget. The slump in residential construction
continued, while expected ne«~ conunercial projects did not come to fruition. Tenant improvements and
permits on existing projects kept revenues in-line with the previous year. The original budget was reduced
to meet the Lowered expectations.
Zoning, planning, and emgineeting review fees comprise two-thirds of the charges for services category,
with senior recreational programs encompassing the rest. The category declined from $1,363,000 last year
to $1,266,000 this year, a 7% drop. It finished $202,000 or 14% below the final and original budget.
Review fees were relatively flat. Senior Center earnings fell $93,000 off of last year's pace and 5194,000
off of budget, as the weak economy effected travel program bookings and trip deposits were ~~-ritten off.
Intergovernmental revenues of 5421,000 fell 36% or $238,000 from last year and were short of the final
budget by 15% or $73,000. However, it exceeded the original budget by 10%. Due to weakness in car
sales, state vehicle license fees allocated to the City ~-,sere down by $95,000 from last year. Silce the state
also started using a separate portion of these fees to pay for Citizens Option for Public Safety (COPS)
grants, the lower collection of fees caused a funding shortfall for the COPS, which left the City with
$40,000 owed in these grant dollars. The City did nut receive these monies until October 2009, after the
accrual period for 2008-09 had passed. 2007-08 also had $76,000 in one-time recognition of earlier year
COPS grants. The $100,000 total COPS funding was not original)}~ budgeted because of the state's fiscal
problems, but after the state restored the grant and established this funding mechanism, the City added it to
the budget.
General Fund cash is part of the City's pooled investment portfolio. hivestment returns of the pool are
allocated to the Fund based on the Fund's monthly •.ash balance. These returns plus the renting of City
1S
facilities comprise use of money and property revenues, which declined 42% from last year, finishing at
$1,163,000 compared to $2,016,000 last year, including unrealized gains from increases in market value
on the fixed rate securities in the portfolio. Current results were 8% and 14% under the final and original
budgets, respectively. Lower cash balances because of large outlays on the Mary Avenue Footbridge and
Stevens Creek Corridor Park capital projects and the portfolio's heavy concentration in safe short-term
Treasuries kept yields down. A further explanation of the investment picture for the year is in the
transmittal letter and in Note 2 of the Basic Financial Statements. Rent income was stable and on budget.
Fines and forfeitures year-to-year were relatively unchanged and within budget.
Transfers into the General Fund dropped 52% from $1,300,000 last year to $624,000 this year. The fund
no longer received $500,000 from the Resources 1<recovery enterprise fund for waste cleanup costs.
Additionally, there were fewer surplus dollars returnzd to the Fund from project savings in the Capital
Project Improvement Fund. The budget for transfers rose from $70,000 to $624,OOO~as decisions on
capital project savings were made.
Tabl~z 7
Revenue Changes
General Fund, Fisca12009 vs. 2008
(in thousands)
hlcrease/( Decrease)
Fiscal ='009 From Fisca12008
Revenue by Source Amount % of Total Amount Percent
Property Taxes $11,743 28% $954 9%
Sales Taxes 14, 139 34 985 7
Transient Occupancy Taxes 2,140 5 (571) (21)
Utility User Taxes 3,2.05 8 29 1
Franchise Taxes 2,618 6 71 3
Other Taxes 1,018 3 (469) (32)
Use of Money & Property 1,163 3 (852) (42)
fi~tergovernmental 421 1 (238) (36)
Licenses and Pernuts 2,740 7 84 3
Charges for Services 1,266 3 (98) (7)
Fines and Forfeitures 761 2 39 ~
Other Revenue 79 - (6) (7)
Total Revenues $4 2 ~% $~ ---%n
Transfers Ili S 624 100% S: (676) ~52~%
Tabl~z 8
Revenue Budget and Actual Comparisons
General Fund, 2008-09
(in thousands)
Budgeted Amounts Actual Over/
Original Final (Under) Final
Property Taxes $10,:65 $11,080 $1 I ,743 $663
Sales Taxes 13,x;90 13.390 14,139 749
Transient Oceupanc}~ Taxes 2,660 2,660 2,140 (520)
Utility User Taxes 3,=~00 3,300 3,205 (95)
Franchise Taxes 2,630 2,630 2.618 (12)
Other Taxes 1,`00 1,00 1,018 (482)
16
Use of Money and Property 1,~~70 1,267 1,163 (104)
Intergovernmental .385 494 421 (73)
Licenses and Pernuts 3,180 2,980 2,740 (240)
Charges for Services 1,~I68 1,468 1,266 (202)
Fines and Forfeitures 820 820 761 (59)
Other Revenue 100 100 79 (21)
Total Revenues ~~ 4 6 $41.293
Transfers In
E.a~enditures
;D70 5624 624 5----
Fiscal 2008-09 overall expenditures, at $32,276,000, were $1,266,000 or 4% higher than last year's total
of $31,010,000. However, this result came in 10% o- $3,712,000 under the final budget and 53,101,000
below the original budget. Year-to-year and budget versus actual results by General Fund department are
described below and in Tables 9 and 10.
Administration expenses of $1,337,000 were consistent with last year while finishing $146,000 or 10%
under final budget. $112,000 in budget reductions reflected savings from an existing assistant city
attorney vacancy.
Law Enforcement sheriff contract costs of $8,133,000 were under the final budget by $348,000 or 4%.
The budget contains dollars for unexpected events or : ncidences, so by the end of the year, the normal rate
of general law enforcement, service requests, emergency calls, patrol, and investigations usually brings
budget savings. Funds for improving school traffic safety was carried over from the previous year and
inserted intoythe amended budget. The results exceeded past year expenditures by 9% or $677,000,
because of increased sheriff deployment and detective investigations.
Public and Environmental Affairs expenditures increased 27% to $1,486,000 this year, in-line with its
final and original budget. The department, formerly called Public h~formation, added a new full-time
position and division to coordinate city-wide ener;y sustainability and carbon reduction initiatives.
Replacement funding for the City's commwlication equipment also was increased.
Administrative Services decreased 4% from last year and finished 15% or $620,000 under final budget.
This was an off-year for biennial City Council elections. A human resource director vacancy and lower-
than-expected insurance claim payouts caused most of the budget surplus. The final budget was 5144,000
over the original budget due to appropriations from the previous year caiz-ied over to the current year for
possible insurance and litigation.
Recreation expenditures varied little from last year, but ended up $608,000 or 14% below final budget,
which was similar to original budget. Because of the lower number of trips sold in the senior travel
program, the cost of the trips sold were accordingly down and below budgetary expectations. In addition,
start-up costs for the new Stevens Creek Corridor Park were belo~~~ budget as staffing ramped-up later
than expected and some savings were realized for ne~~~ equipment.
Community Development costs of $3,209,000 were nearly $1 nullion or 24% below the final and original
budget due to a lower amount of building activity and associated reduction in plan checking, inspections,
and development approvals. Costs dipped 6% or $209,000 from last year as the hiring of a plan check
engineer allowed the department to reduce spending on contract plan checking services.
Public Works expenditures of $10,688,000 were $614,000 or 6% over the prior year due to more design
engineering, overpass and median work, building m~.intenance, and utility costs, matching the expected
budgetary increase. It was $964,000 or 8% under final budget due to pending school traffic safety work,
17
and unneeded engineering, traffic study, and maintenance contingencies. Carried-over open purchase
orders from last year comprised the $363,000 increase from original to final budget.
Transfers out of the General Fund tumbled from $18,335,000 in 2007-08 to $7,110,000 in 2008-09, as
finally budgeted, with $3,537,000 for ongoing debt service, $1,946,000 for retiree health obligations,
$750,000 for road maintenance, $400,000 for accnied leave payouts, $377,000 for new information
technology and equipment, and $100,000 for infrastructure resen~es. The falloff was due to no new
General Fund commitments to capital projects in 2008-09, as there were plenty of existing projects that
were scheduled for completion or progress. $10,000 was added to the budget at mid-year for information
technology improvements.
Table 9
Expenditure Changes from Prior Year
General Furid, 2008-09
(in thousands)
Service Area
Increase/(Decrease)
from previous year
Amount % of Total Amount Percent
Administration $ 1,337 4% $ (14) (1)%
Law Enforcement 8,133 25 677 9
Public & Environmental Affairs 1.486 5 317 27
Administrative Services 3,634 11 (163) (4)
Recreation Services 3.789 12 44 1
Community Development 3,209 10 (209) (6)
Public Works 10.688 33 614 6
Total Expenditures 532.276 100% 51.2b6 4%
Transfers Out 57.110 100% $ 1( 1.2251 (61
Tabh~ 10
Expenditure Budget and Actual Comparison
General Furid, 2008-09
(in thousands)
Budgeted Amounts Actual Under
Original Final Final
Administration $1,595 $1,483 $1,337 $146
Law Enforcement 8,:315 8,481 8,133 348
Public & Environmental Affairs 1,191 1,613 1,486 27
Adnnistrative Services 4,110 4,254 3,634 620
Recreation Services 4,:386 4,397 3,789 608
Community Development 4,191 4,208 3,209 999
Public Works 11.:289 11,652 10,688 964
Total Expenditures 535..377 35 988 32.276 53.712
Transfers Out X7,.100 $7,110 57,110 5=--
18
Fund Balance
At June 30, 2009, the General Fund reported a total ending fund balance of $22,197,000, up 13% or
$2,530,000 from the prior year. The City designares $13,415,000 of this for economic uncertainty,
disaster contingencies, and state budget raids of local tax revenues. $1,600,000 is set-aside pending the
outcome of a November 3, 2009 utility tax ballot measure. That measure, which ensures the conti~lued
collection of the telecommunications portion of this tax, eventually passed. $1,102,000 is reserved
mostly for open purchase orders and future public access programming. $1,223,000 is earmarked as
rehabilitation and employee housing loans due back to the City. Finally, $4,857,000 in unreserved,
undesib gated funds is available to balance the five-}year operating and capital budget.
The fund balance rise resulted from revenues exceeding expenditures by $9,016,000 offset by a net
transfer out of $6,486,000. The City re-classed a $1,731,000 one-time revenue designation to address
changing conditions, establishing a $915,000 reserve: for state budget raids, adding $495,000 to utility
user tax reserves, and infusing $321,000 to undesignated reserves. The unreserved, undesignated balance
itself climbed $3,195,000, with the $2,530,000 current year surplus, $321,000 shift of one-time revenue
reserves, and $263,000 Redevelopment Agency loan payback causing most of the change. The state's
2009-10 budget, adopted on July 28, 2009, mandated a $1,419,000 borrowing of Cit}~ funds for up to
three years. State budget raid reserves and equipmf:nt replacement contingency funds will cover the
shortfall until the state pays back the City.
Public Facilities Corporation
This fund accounts for the payments of principal and interest on the 2002 certificates of participation
(COPS), which refinanced the loner term debt that funded many of the City's major parks and facilities. As
in the previous }year, General Fund transfers into the ft!nd cover the debt service payments of $3,534,000.
Capital Improvement Projects
All of the City's non-enterprise capital projects are in tlvs fund, except for the Mary Avenue Bicycle
Footbridge and Stevens Creek Corridor Park, which are in their own funds. Outlays for park, facility, and
traffic projects jumped from $752,000 in 2007-08 to $2,048,000 in 2008-09, as $1,508,000 to buy land
for the future Sterling/Barnhart Park occurred in the current year. McClellan Ranch renovations, Civic
Center fountain repairs, Library book return automation, Community Hall light>11~ upgrades, and traffic
signal modifications were some of the other projects worked on this year. Many of these projects were
funded in previous years by the General Fund. Reflecting the tight economic conditions, the General Fund
financed no new projects this year compared to providing $3,191,000 the previous year. Moreover,
$574,000 in project cost savings were transferred back to help balance the General Fund budget in 2008-
09. The General Fund, however, maintained its commitment of contributing at least $100,000 annually to
Capital Improvement Fund uncomnutted reserves, increasing that reserve to $1,599,000 by June 30, 2009,
with $900,000 toward infrastructure and $699,000 toward other potential projects.
Stevens Creek Corridor Park
This $13,577,000 project to completely re-design the picnic grounds at Blackberry Farm, to re-align and
restore the natural habitat of the creek, to renovate the swimming pool facilities, and to build the creek
trail, completed construction and opened to the public on July 4, 2009. Outlays jumped to $9,472,000
compared to $1,357,000 the previous year, as a great deal of the park's construction occurred during the
current year. The General Fund finances two-thirds of the project, with the City's recreation enterprise
fund, State grants, and the Santa Clara Valley Vv ater District (SCVWD) backing the rest of the
undertaking. SCVWD remitted $804,000 toward the project during the fiscal year, compared to none the
prior }year. Since grants and the SCVWD are billed ar.d paid on acost-reimbursement basis, an $838,000
19
fund balance deficit developed by year-end, after an $8,718,000 net usage of capital. The deficit will be
eliminated as the City claims and receives its authorized grant funding.
Mary Avenue Bicycle Footbridge
This fund accounts for the design and construction of a $14,800,000 pedestrian and bicycle bridge over
Interstate 280 at the end of Mary Avenue. The General Fund backs $1,940,000 of the project, with the rest
conung from the state general fund, grants and sales taxes provided by the Santa Clara Valley
Transportation Authority (VTA), grants and general funds from the City of Sunnyvale, and gasoline
taxes. Final plans and specifications were completed in September 2007; a contract was awarded in
November 2007; construction started in early 2008; and the bridge opened in April 2009. Capital outlays
for 2008-09 were $6,205,000 compared to $4,847,000 in 2007-08. Grants are received on a cost
reimbursement basis, with the City General Fund fronting the expenditures. As of June 30, 2009,
$838,000 of General Fund cash was advanced to the project for this purpose and is shown as a liability.
Grants received up to sixty days after year-end ate accrued as fund revenues. $3,330,000 in grant
revenues «~ere recognized for 2008-09 compared to $5,545,000 for 2007-08, reflecting the different
timing in billing and processing by the City and grantors. As of June 30, 2009, $647,000 was billed and
due as a receivable from VTA, with most of it deferred as revenue because it was not received in cash by
August 30, 2009. A $956,000 fund balance deficit exists at year-e-nd because of the deferred revenue and
because of other grants that need to be billed.
MAJOR PROPRIETARY FUNDS
Resources Recovery
The City's solid waste disposal enterprise had a $154,000 or 7% decline in solid waste pickup and debris
box revenues from the previous year due to declines in commercial services reflective of higher office
vacancy rates. Operating costs were down $58,000 or 3olc from last year with lower contract service costs
for pickup, landfill disposal, and recycling offset by higher personnel costs due to the filling of the
environmental programs manager vacancy. Operating income declined 596,000 to $117,000 this year.
With interest earnings of 5105,000, net assets increased by $222,000 ending the year at 55,690,000 in
unrestricted net assets. ~ The increase reversed the de,c-ease of 530,000 last year, mostly due to the ending
of transfers to the General Fund for waste cleanup costs.
Blackberry Farm
City employees, with a teaching professional on co~~tract, staff the City-owned Blackberry Farm golf
course and pro shop. Golfing green fees were down, as the older demographics of golf course users led to
declining customer counts. Salaries for the golf course staff and contract expenses for the golf pro did
decline slightly from last year, but water irrigation costs went up significantly beginning in Jwle 2008
because of more accurate water meters employed b:r the utility company. Overall operating revenues
dropped $44,000 to 5597,000 while expenses increased by 546,000 to $496,000 this year. Operating
income and the increase in net assets was 5101,000, nearly half of the amount in 2007-08. At June 30,
2009, unrestricted net assets were 5418,000.
Cupertino Sports Center
Tennis lesson, membership, and fitness class revenues of $1,727,000 were up over last year by 8%, led by
growth in the tennis program. With contract instructor, staff and maintenance costs flat, operating income
more than doubled from $58,000 in 2007-08 to 513,000 in 2008-09. After adding-in interest earnings,
the increase in net assets of $147,000 brought ending unrestricted net assets to 5311,000 b}~ year-end.
20
Recreation Programs
Cultural events, youth and teen programs, sports, dance and fitness classes generated earnings of
$2,364,000, which was $129,000 or S~Ic less than last year, for this enterprise operated out of the Quinlan
Community Center, Monta Vista Recreation Center. McClellan Ranch, Creekside Park building, eight
school sites, and various parks. Program expenses, including full-time administrative and programnung
staff, part-time activity leaders, and class instructors on contract correspondingly declined $113,000 from
2007-08, maintaining ayear-to-year consistent operating income of $624,000. After adding interest
earnings, the fund ended up with an increase in net assets of $674,000 and an unrestricted net asset
balance of $2,530,000. $1 million of these reserves are committed toward Memorial Park softball and
Library multi-purpose field renovations, tennis court resurfacinas, and Monta Vista Recreation Center
roofing.
CAPITAL ASSETS
At June 30, 2009 the City had $150,448,000, net of depreciation, invested in a broad range of capital
assets used in governmental and business-type activities, as shown in the following table and in Note ~ to
the Basic Financial Statements:
Table 11
Capital Assets, Net of Depreciation, at June 30
(in thousands)
2009 2008
Governmental Activities:
Land $ 60,806 $ 59,298
Construction in progress --- 9,614
Buildings 26,787 28,063
Improvements other than buildings 17,606 6,608
Machinery and equipment 1,566 1,348
Roads, curbs, gutters, sidewalks, medians and bridges 35,273 19,539
Streetlights 46 41
Storm drain structures and mains 6,701 7,436
Traffic signals 1.527 1.612
Total Governmental Activities $1 " 2 $ 3l 3.559
Business-type Activities:
Machinery and equipment 136 84
Total Business-type Activities $ ~ $
Total City $150.448 43
Capital assets increased by a net $16,805,000. Most of the gain came from the completion of two major
projects, the construction of the Mary Avenue Bicycle Footbridge and the creation of the Stevens Creek
Corridor Park out of the former Blackberry Farm picnic grounds.
21
DEBT ADMINISTRATION
The City's only lonb term debt liability comes from :56,640,000 in Certificates of Participation (COPS)
issued in 2002 by the Cupertino Public Facilities Corporation. The certificates refunded previously issued
COPs that financed the Wilson Park, Blackberry Farris, and Creekside Park purchases, the Memorial Park
expansion, the Quinlan Community Center construction, and the City Hall remodel. It provided capital for
the new library opened in 2004. The serial, fixed interest rate debt ranging from 2% to 5% requires annual
debt payments of $3,534,000 that are paid out of the General Fund. The June 30, 2009 outstanding
principal of $46,970,000 is due to be paid off by 2030.
At June 30, 2009, a total of 565,000 in special assessment district debt was outstanding. This debt is
secured by a traffic impact fee, charged as a special assessment on the three commercial parce]s in the
district. The City, which is not liable for the debt, acts solely as the district's agent for the collection and
remittance of the assessment.
More information can be found in Note 6 to the Basic Financial Statements.
ECONOI\~C OUTLOOK AND MAJOR INITIAT[VES
The impact of the economic environment and a description of the City's major initiatives for the coming
year are discussed in detail in the accompanying Transmittal Letter.
CONTACTING THE CITY'S FINANCIAL MANf~GEMENT
This Comprehensive Annual Financial Report is intended to provide a general overview of the City's
finances. Further information can be provided by the City of Cupertino Finance Department, 10300 Torre
Avenue, Cupertino CA 95014, phone (408) 777-3220, or by the City «~ebsite at www.cupertino.org.
22
CITY OF CUI'ERTINO
STATEMENT OF N)E;T ASSETS AND
STATEMENT OF ACTIVITIES
The Statement of Net Assets and the Statement of Activities summarize the entire City's financial activities
and financial position. They are prepared on the same basis as is used by most businesses, which means
they include all the City's assets and all its liabilities, as well as all its revenues and expenses. This is
known as the full accrual basis-the effect of all the City's transactions is taken into account, regardless of
whether or when cash changes hands, but all material internal transactions between City funds have been
eliminated.
The Statement of Net Assets reports the difference bf;tween the City's total assets and the City's total
liabilities, including all the City's capital assets and all its long-term debt. The Statement of Net Assets
presents similar information to the old balance sheet format, but presents it in a way that focuses the reader
on the composition of the City's net assets, by subtractin; total liabilities from total assets.
The Statement of Net Assets summarizes the financial position of all the City's Governmental Activities in a
single column, and the financial position of all the City'; Business-Type Activities in a single column; these
columns are followed by a Total column which presents the financial position of the entire City.
The City's Governmental Activities include the activities of its General Fund, along with all its Special
Revenue, Capital Projects and Debt Service Funds. Since the City's Internal Service Funds service these
Funds, their activities are consolidated with Governmental Activities, after eliminating inter-fund
transactions and balances. The City's Business Type Activities include all its Enterprise Fund activities.
The Statement of Activities reports increases and decreases in the City's net assets. It is also prepared on the
full accrual basis, which means it includes all the City' ~ revenues and all its expenses, regardless of when
cash changes hands. This differs from the "modified accrual" basis used in the Fund financial statements,
which reflect only current assets, curt•ent liabilities, available revenues and measurable expenditures.
The format of the Statement of Activities presents the C'ity's expenses first, listed by program, and follows
these with the expenses of its business-type activities;. Program revenues, that is revenues which are
generated directly by these programs, are then deducted from program expenses to arrive at the net expense
of each governmental and business-type program. The City's general revenues are then listed in the
Governmental Activities or Business-type Activities column, as appropriate, and the Change in Net Assets
is computed and reconciled with the Statement of Net Assets.
Both these Statements include the financial activities of the City, the Cupertino Redevelopment Agency, and
the Cupertino Public Facilities Corporation, which are legally separate but are component units of the City
because they are controlled by the City, which is financi~illy accountable for their activities.
2.•
CITY OF CL PERTINO
STATEMENT OF' NET ASSETS
JUNE 30, 2009
ASSETS ,
Cash and investments (Note 2)
Restricted cash and investments (Note 2)
Receivables:
Accounts
Loans (Note 3)
Prepaid expenses and other assets
Land held for housing development (Note 1 fl
Capital assets (Note 5):
Non-depreciable
Depreciable, net of accumulated depreciation
Total Assets
LIABILITIES
Accounts payable and accruals
Accrued payroll and benefits
Deposits
Unearned revenue
Compensated absences (Note I h):
Due in one year
Due in more than one year
Claims payable (Note 9):
Due in one year
Due in more than one year
Net OPEB Obligation (Note ]0)
Long-term debt (Note 6):
Due in one year
Due in more than one year
Total Liabilities
NET ASSETS (Note 7)
Invested in capital assets, net of related debt
Restricted for:
Special revenue projects
Affordable housing
Public access television
Debt service
Total Restricted Net Assets
Unrestricted
Total Net Assets
Governmental Business-Type
Activities Activities Total
$45,022,420 $9,749,184 $54,771,604
3,340,153 3,340,153
3,758,873 352,765 4,111,638
2,062,244 2,062,244
10,887 10,887
615,000 615,000
60,806,081 60,806,081
89,808,824 136,127 89,641,951
205,]21,482 10,238,076 215,359,558
7,110,390 452,609 7,562,999
437,344 37,203 474,547
1,484,816 1,484,816
31,338 627,582 658,920
153,419 35,413 188,832
2,246,069 2,246,069
411,000 411,000
1,157,000 1,157,000
1,827,077 1,827,077
1,460,000 I ,460,000
_ 45,510,000 45,510,000
_ 6t,828,453 1,152,807 62,981,260
_ 103,341,905 136,127 103,478,032
4,885,218 4,885,218
I , 122,037 1,122,03 7
597,878 597,878
_ 55,941 55,941
_ 6,661,074 6,661,074
33,290,050 8,949,142 42,239,192
$143,293,029 $9,085,269 $152,378,298
See accompanying notes to financial statements
2L.
CITY OF CL PERTINO
STATEMENT O]~ ACTIVITIES
FOR THE YEAR ENDED Ji1NE 30, 2009
Net (Expense) Revenue and
Program Revenues Changes in Net Assets
Operating Capital
Charges for Grants and Grants and Govemmental Business-type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total
Govemmental Activities:
Administration $1,769,500 $2,240 $47,462
($1,719,798)
($1,719,798)
Law enforcement 8,804,]95 869,295 64,135 (7,870,765) (7,870,765)
Public information 1,624,210 (],624,210) (1,624,210)
Administrative services 4,001,738 (4,001,738) (4,001,738)
Recreation services 4,206,343 801,280 (3,405,063) (3,405,063)
Community development 6,177,879 3,586,993 !,771,892 (818,994) (8]8,994)
Public works 18,104,649 157,311 2,130,547 $4,759,485 (11,057,306) (11,057,306)
Interest on long -term debt 2, 118,714 (2, i 18,714) (2, 118,714)
Total Governmental Activities 46,807,228 5,417,119 4,011,036 4,759,485 (32,616,588) (32,616,588)
Business-type Activities:
Resource recovery 1,998,184 2,100,704 11,471 $116,991 116,991
Blackberry fame 495,845 596,944 101,099 101,099
Cupertino sports center 1,594,325 1,732,282 137,957 137,957
Recreation programs 1,739,892 2,364,037 624,145 624,145
Total Business-type Activities 5,828,246 6,793,967 11,471 980,192 980,192
Total $52,635,474 $12,211,086 $4,028,507 $4,759,485 (32,616,588) 980,192 (31,636,396)
General revenues:
Taxes:
Property taxes
Property tax in lieu of motor vehicle fee
Incremental property tax
Sales taxes
Transient occupancy tax
Utility user tax
Franchise tax
Other taxes
intergovernmental, unrestricted;
Motor vehicle license fee
Investment earnings
Miscellaneous
Total general revenues and transfers
Change in Net Assets
7,491,965 7,491,965
4,299,902 4,299,902
1,211,128 1,211,128
14, 139,190 14, ] 39,140
2,140,274 2,140,274
3,205,073 3,205,073
2,618,125 2,618,125
1,317,767 1,317,767
171,621 171,621
889,823 17(,804 1,061.627
81,342 81,342
37,566,210 171,804 37,738,014
4,949,622 1,151,996 6,101,6]8
Net Assets-Beginning
Net Assets-Ending
See accompanying notes tc financial statements
138,343,407 7,933,273 146,276,680
$143,293,029 $9,085,269 $152,378,298
25
FUND FINANCIAL STATEMENTS
In the Fund Financial Statements only individual major funds are presented, while non-major funds are
combined in a single column. Major funds are defined generally as having significant activities or balances
in the current year.
The funds described below were determined to be Major Funds by the City for fiscal 2009. Individual
non-major funds may be found in the Supplemental section.
GENERAL FUND
The general fund is the general operating fund of the City. It is used to account for all financial resources
except those that are required to be accounted for in another fund.
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 and Memorial Park and other City
facilities.
CAPITAL IMPROVEMENT PROJECT FUND
This fund accounts for activities related to the acquisition or construction of major capital facilities.
STEVENS CREEK CORRIDOR PARK CAPITAL PROJECT FUND
This fund accounts for the development of the master plan and the design and construction of the Stevens
Creek Corridor Park.
MARY AVENUE BICYCLE FOOTBRIDGE CAPITAL PROJECT FUND
This fund accounts for the design and construction of a bicycle footbridge extension of Mary Avenue over
Interstate 280. It includes gateways, paths, residential buffering elements and landscaping.
26
CITY OF CUYERTINO
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2009
Public Capital Stevens Creek Mary Avenue Other Total
Facilities Improvement Corridor Bicycle Governmental Governmental
General _ Corporation Projects Park Footbridge Funds Funds
ASSETS
Cash and investments (Note 2) $22,615,824 $55,941 $4,602,066 $44,613 $4,631,883 $31
949
997
Cash and investments with fiscal agents (Note 2) 2,473,197 459,216 $407,740 ,
,
3
340
153
Receivables: ,
,
Accounts 1,759,822 81,190 725,346 647,260 545,255 3,758
873
Loans (Note 3) 1,222,918
839,326 ,
2
062
244
Prepaid items 7,003 ,
,
7
003
Due from other funds (Note 4) 837,629 ,
837
629
Land held for housing development (Note 1 f) 615,000 ,
615
000
Other assets 3,884 ,
3,884
Total Assets $26,447,080 $2,529,138 $1,683,256 $1,229,175 $1,055,000 $6,631,134 $42,574,783
LIABILITIES
Accounts payable and accruals $2,373,835 $2,473,197 $30,073 $1,341,954 $568,621 $131,051 $6
918
731
Accrued payroll and benefits 372,983 45,305 ,
,
418
288
Deposits 1,484,816 ,
484
816
1
Due to other funds (Note 4) 837,629 ,
,
837
629
Unearned revenue 18,589 12,749 ,
31
338
Deferred revenue 81,190 725,346 605,067 434,774 ,
1,846,377
Total Liabilities 4,250,223 2,473,197 111,263 2,067,300 2,011,317 623,879 11,537,179
Fund balance (Note 7)
Reserved for:
Encumbrances 497,484 594,454 965,782 249,238 353,705 2
660
663
Debt service 55,941 ,
,
55
941
Advances to other funds ,
Prepaid items and other assets 7
003
Loans receivable ,
1,222,918
839
326 7,003
2
062
244
Land held for housing development ,
615
000 ,
,
615
000
Low and moderate income housing , ,
Public access television
597
878 507,037 507,037
Unreserved, reported in: , 597,878
General Fund 19,871,574 19
871
574
Special Revenue Funds .
,
Capital Project Funds
3,977,539
(1,803,907)
(],205,555) 3,692,187 3,692,187
968,077
TOTAL FUND BALANCES 22,196,857 55,941 4 571,993 (838,125) (956,317) 6,007,255 31,037,604
Total Liabilities and Fund Balances $26,447,080 $2,529,138 $4.683,256_ $1,229,]75 $1,055,000 $6,631,134 $42,574,783
See accompanying notes to f nancial statements
27
CITY OF Ct; PERTINO
Reconciliat: on of the
GOVERNMENTAL FUNL>S -- BALANCE SHEET
with the
STATEMENT OF' NET ASSETS
JlJNE 30, 2009
Total fund balances reported on the governmental funds balance shf~et
Amounts reported for Governmental Activities in the Statement of Net Assets
are different from those reported in the Governmental Funds above because of the following:
CAPITAL ASSETS
Capital assets used in Governmental Activities are not current assets or financial resources and
therefore are not reported in the Governmental Funds.
ALLOCATION OF INTERNAL SERVICE FUND NET ASSE']'S
Internal service funds are not governmental funds. However, they are used by management to
charge the costs of certain activities, such as insurance and central services and maintenance
to individual governmental funds. The net current asses of the Internal Service Funds are therefore
included in Governmental Activities in the following line items in the Statement of Net Assets.
Cash and investments
Capital assets, net of accumulated depreciation
Accounts payable and accruals
Accrued payroll and benefits
Compensated absences
Claims payable
Net OPEB obligation
ACCRUAL OFNON-CURRENT REVENUES AND EXPENSES
Revenues which are deferred on the Fund Balance Sheets b~:cause they are not available currently
are taken into revenue in the Statement of Activities.
$31,03 7,604
149,176,788
13,072,423
1,135,117
(191,69)
(I 9,056)
(30,558)
(1,568,000)
(1,827,077)
1,846,377
LONG TERM ASSETS AND LIABILITIES
The assets and liabilities below are not due and payable in tie current period and therefore are not
reported in the Funds:
Long-term debt (46,970,000)
Non-current portion of compensated absences (2,368,930)
NET ASSETS OF GOVERNMENTAL ACTIVITIES
See accompanying notes t~~ financial statements
$143,293,029
2g
CITY OF CUPERTINO
GOVERNMEN'['AL FUNDS
STATEA9ENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2009
Public Capital Stevens Creek Mary Avenue Other Total
Facilities Improvement Corridor Bicycle Governmental Governmental
General Corporation Projects Park Footbridge Funds Funds
REVENUES
Taxes $34,861,876 $I,S34,074 $36,395,950
Use of money and property 1,163,492 $940 136,076 1,300,508
Intergovernmental 421,238 $20,000 $803,768 $3,329,776 2,321,612 6,896,394
Licenses and permits 2,740,463 2,740,463
Charges for services 1,265,509 442,024 1,707,533
Fines and forfeitures 761,320 761,320
Other revenue 79,042 1,793 80,835
Total Revenues 41,292,940 940 21,793 803,768 3,329,776 4,433,786 49,883,003
EXPENDITURES
Current;
Administration I , 336,921 1,336,92 I
La~v enforcement 8,133,168 8,133,168
Public information 1,486,443 1,486,443
Administrative services 3,634,043 ~ 3,634,043
Recreation services 3,789,260 3,789,260
Community development 3,209,030 2,632,398 5,841,428
Public works 10,687,626 1,226,958 11,914,584
Capital outlay 2,048,036 $9,471,586 6,204,560 4,538,187 22,262,369
Debt service
Principal 1,415,000 1,415,000
Interest and fiscal chazges 2,118,714 2 118 714
Total Expenditures 32,276,491 3,533,714 2,)48,036 9,471,586 6,204,560 8,397,543 61,931,930
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 9,016,449 (3,532,774) (2;)26,243) (8,667,818) (2,874,784) (3,963,757) (12,048,927)
OTHER FINANCING SOURCES (USES)
Transfers in (Note 4) 623,925 3,537,000 ! 00,000 775,000 5,035,925
Transfers(out)(Note 4) (7,110,000) (:173,925) (50,000) (25,000) (7,758,925)
Total Other Financing Sources (Uses) (6,486,075) 3,537,000 (173,925) (50,000) 750,000 (2,723,000)
NE-TCHANGEINFUNDBALANCES 2,530,374 4,226 (2,500,168) (8,717,818) (2,874,784) (3,213,757) (14,771,927)
BEG1NNiNGFUNDBALANCES 19,666,483 51,715 7,072,161 7,879,693 1,9]8,467 9,221,012 45,809,531
ENDING FUND BALANCES $22,196,857 $55,941 $4,571,993 ($838,125) ($956,317) $6,007,255 $31,037,604
See accompanying notes to financial statements
29
CITY OF CUPERTINO
Reconciliation of the
NET CHANGE IN FUND BALANCES -TOTAL GOVERNMENTAL FUNDS
with the
STATEMENT OI' ACTIVITIES
FOR THE YEAR EN)/~ED JUNE 30, 2009
The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of
Revenues, Expenditures and Changes in Fund Balance, which measures only changes in current assets and current
liabilities on the modified accrual basis, with the Change in 1`Iet Assets of Governmental Activities reported in the
Statement of Activities, which is prepared on the full accrual basis.
NET CHANGE IN FUND BALANCES -TOTAL GOVERNMENTAL FUNDS ($14,771,927)
Amounts reported for governnental activities in the Statement of Activities
are different because of the following:
CAPITAL ASSETS TRANSACTIONS
Governmental Funds report capital outlays as expenditure;. However,
in the Statement of Activities the cost of those assets is capitalized and allocated over
their estimated useful lives and reported as depreciation expense.
The capital asset expenditures are therefore added back to fund balance
(Net of internal service fund additions of $541,708):
Capital outlay 22,262,369
Public Works 179,724
Depreciation expense is deducted from the fund bal<<nce
(Depreciation expense is net of internal service fund depreciation
of $370,568 which has already been allocated to serviced funds) (5,860,128)
Retirement of capital assets, net of proceeds from sale (197)
LONG TERM DEBT PROCEEDS AND PAYMENTS
Repayment of bond principal is an expenditure in the governmental funds, but
in the Statement of Net Assets the repayment reduces long-term liabilities.
Repayment of debt principal is added back to fund balance 1,415,000
ACCRUAL OF NON-CURRENT ITEMS
The amounts below included in the Statement of Activities do not provide or (require) the use of
current financial resources and therefore are not reported as revenue or expenditures in
governmental funds (net change):
Non-current portion of compensated absences (34,279)
Deferred revenue 1,648,502
ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY
Internal Service Funds are used by management to charge the costs of certain activities,
such as equipment acquisition, maintenance, and insurance to individual funds.
The portion of the net revenue (expense) of these Internal Service Funds arising out
of their transactions with governmental funds is reported with governmental activities,
because they service those activities.
Change in Ne[ Assets -All Internal Service Funds 110,558
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $4,949,622
See accompanying notes tc financial statements
3 C~
CITY OF CUPERTINO
GENERAI, FUND
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN ]?UND BALANCE
BUDGET ANI~ ACTUAL
FOR THE YEAR ENDED JUNE 30, 2009
Variance with
Budgeted Amounts Final Budget
Positive
Ori ing al Final Actual Amounts (Negative)
Revenues:
Taxes $34,245,000 $34,560,000 $34,861,876 $301,876
Use of money and property 1,470,000 1,267,000 1,163,492 (103,508)
Intergovernmental 385,000 493,892 421,238 {72,654)
Licenses and permits 3,180,000 2,980,000 2,740,463 (239,537)
Charges for services 1,468,000 1,468,000 1,265,509 (202,441)
Fines and forfeitures 820,000 820,000 761,320 (58,680)
Other revenue 100,000 100,000 79,042 (20,458)
Amounts available for appropriation 41,668,000 41,688,892 41,292,940 (395,952)
Charges for appropriation (outflows)
Administration 1595,000 ],483,395 1,336,921 146,474
Law enforcement 8.315,000 8,480,671 8, 133,168 347,503
Public information 1,491,000 1,512,745 1,486,443 26,352
Administrative services 4,110,000 4,254,006 3,634,043 6]9,963
Recreation services 4.386,000 4,397,447 3,789,260 608,187
Community development 4;191,000 4,207,724 3,209,030 998,694
Public works 11.289,000 1 ],652,062 10,687,626 964,436
Total charges for appropriations 35,377,000 35,988,100 32,276,491 3,711,609
EXCESS OF REVENUES
OVER EXPENDITURES 6,291,000 5,700,792 9,016,449 3,315,657
OTHER FINANCING SOURCES (USES)
Transfers in 70,000 623,925 623,925
Transfers (out) (7,100,000) (7,110,000) (7,110,000)
Tota! other f nancing sources (uses) (7,030,000) (6,486,075) (6,486,075)
NET CHANGE IN FUND BALANCE ($739,000) ($785,283) 2,530,374 $3,315,657
BEGINNING FUND BALANCE 19,666,483
ENDING FUND BALANCE $22,196,857
See accompanying notes to financial statements
31
MAJOR PROPRIETARY FUNDS
Proprietary funds account for City operations financed and operated in a manner similar to a private
business enterprise. The intent of the City is that the cost of providing goods and services be financed
primarily through user charges.
The City has identified the funds below as major proprie~_ary funds for fiscal 2009.
RESOURCES RECOVERY FUND
This fund accounts for activity related to the collection ;md disposal of solid waste. A private company has
been issued an exclusive franchise to perform these services.
BLACKBERRY FARM FUND
This fund accounts for activities related to operating the ;;olf course.
CUPERTINO SPORTS CENTER FUND
This fund accounts for the operation and maintenance of the Cupertino Sports Facility.
RECREATION PROGRAMS FUND
This fund accounts for activities of the City's communit} center.
32
CITY OF CU?ERTINO
PROPRIETARY FUNDS
STATEMENT OF NET ASSETS
JUNE 30, 2009
Business-ryl~e Activities-Enterprise Funds Governmental
Cupertino Activities-
Resources Blackberry Sports Recreation Internal Service
Recovery Farm Center Programs Totals Funds
ASSETS
Current Assets:
Cash and investments (Note 2) $5,519,083 $468,858 $632,928 $3,128,315 $9,749,184 $13,072,423
Accounts receivable 338,099 14,666 352,765
Total current assets 5,857,182 468,858 632,928 3,142,981 10,101,949 13,072,423
Capital Assets (Note 5):
Depreciable, net of
accumulated depreciation 43,889 5,235 57,890 29,113 136,127 1,135,117
Total Assets 5,901,071 474,093 690,818 3,172,094 10,238,076 14,207,540
LIABILITIES
Current Liabilities:
Accounts payable and accruals 160,804 30,612 193,983 67,210 452,609 191,659
Accrued payroll and benefits 4,137 3,084 7,041 22,941 37,203 19,056
Compensated absences (Note Ih) 2,295 17,037 16,081 35,413
Claims payable (Note 9) 41 1,000
Unearned revenue 105,008 522,574 627,582
Total current liabilities 167,236 50,733 322,113 612,725 1,152,807 621,715
Non-current Liabilities:
Compensated absences (Note th) 30,558
Claims payable (Note 9) 1,157,000
Net OPEB Obligation (Note 10) 1,827,077
Total Liabilities 167,236 50,733 322,113 612,725 1,152,807 3;636,350
NET ASSETS (Note 7)
Invested in capital assets 43,889 5,235 57,890 29,113 136,127 1,135,117
Unrestricted 5,689,946 418,]25 310,815 2,530,256 8,949,142 9,436,073
Total Net Assets $5,733,835 $423,360 $368,705 $2,559,369 $9,085,269 $10,571,190
See accompanying notes to financial statements
33
CITY OF CUPERTINO
PROPRIETAR`.l FUNDS
STATEMENT OF REVENUE, EXPENSES
AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2009
Busine:;s-ty pe Activities-Enter prise Funds Govemmenta)
Cupertino Activities-
Resources Blackberry Sports Recreation Internal Service
Recovery Farm _ Center Programs Totals Funds
OPERATING REVENUES
Charges for services $2,100,704 $580,621 $1,727,054 $2,363,837 $6,772,216 $2,540,837
Other 14,471 ]6,323 5,228 200 36,222
Total Operating Revenues 2,115,175 596,944 1,732,282 2,364,037 6,808,438 2,540,837
OPERATING EXPENSES
Salaries and benefits 115,048 123,978 310,319 457,528 1,006,873 3,686,275
Materials and supplies 29,739 45,506 180,129 148,806 454,180 606,120
Contractual services 1,849,414 273,276 1,092,951 1,130,911 4,346,552 336,566
Insurance and claims 379,095
Depreciation (Note 5) 3,983 3,085 10,926 2,647 20,641 370,568
Total Operating Expenses 1,498,]84 495,845 1,594,325 1,739,892 5,828,246 5,378,624
OperatingIncome(Loss) 116,991 101,099 137,957 624,145 980,192 (2,837,787)
NONOPERATING REVENUES
Interest income 105,144 8,038 8,862 49,760 171,804 225,345
TotalNonoperatingRevenues ]05,144 8,038 8,862 49,760 171,804 225,345
Income (Loss) Before Transfers 222,135 109,137 146,819 673,905 1,151,996 (2,612,442)
Transfers in (Note 4) _ 2,723,000
Net transfers _ 2,723,000
Change in net assets 222,135 109,137 146,819 673,905 1,151,996 } 10,558
Net Assets-Beginning 5,511,700 314,223 221,886 1,885,464 7,933,273 10,460,632
Net Assets-Ending $5,733,835 $423,36) $368,705 $2,559,369 $9,085,269 $10,571,190
See accompanying notes to financial statements
34
CITY OF CUPL'RTMO
PROPRIETARI' FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2009
Business-ty pe Activities-Enter prise Funds
Governmental
Cupertino Activities-
Resources Black~erry Sports Recreation Internal Service
Recovery Farm Center Programs Totals Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $2,112,598 $596,944 $1,660,054 $2,332,497 $6,702,093 $2,540,837
Cash payments to suppliers
for goods and services (1,890,191) (358,697) (1,222,467) (1,258,944) (4,730,299) (1,763,773)
Cash payments to employees (111,506) (120,037) (292,809) (452,577) (976,929) (1,279,211)
Net cash provided (used) by operating activities 110,901 1 18,210 144,778 620,976 994,865 (502,147)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Medicare retiree drug subsidy 36,043
Transfers in 2,723,000
Cash Flows from Noncapital
Financing Activities 2,759,043
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchase of capital assets (1) (40,881) (31,760) (72,642) (541,707)
Cash Flows from Capital and
Related Financing Activities (1) (40,881) (31,760) (72,642) (541,707)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 105,144 8,038 8,862 49,760 171,804 225,345
Cash Flows from Investing Activities 105,144 8,038 8,862 49,760 171,804 225,345
Net Cash Flows 216,044 125,248 112,759 638,976 1,094,027 1,940,534
Cash and investments at beginning of year 5,303,039 342,610 520,169 2,489,339 8,655,157 11,131,889
Cash and investments at end of yeaz $5,519,083 $4ti8,858 $632,928 $3,128,315 $9,749,184 $13,072,423
Reconciliation of operating income (loss) to
net cash provided by operating activities:
Operating income (loss) $116,991 $101,099 $137,957 $624,145 $980,192 ($2,837,787)
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation 3,983 3,085 ]0,926 2,647 20,641 370,568
Change in assets and liabilities:
Accounts receivable (2,577) (8,385) (10,962)
Prepaid expense 1,110 1, t 10 15,919
Accounts payable and accmals (11,038) 10,085 50,613 19,663 69,323 119,012
Accrued payroll and benefits 1,756 466 1,429 4,951 8,602 864
Deposits (68,800)
Deferred revenue (72,228) (23,155) (95,383)
Claims payable 71,000
Net OPEB Obligation 1;827,077
Compensated absences 1,786 3,475 16,081 21,342
Net cash provided (used) by operating activities $110,901 $I 1.8,210 $144,778 $620,976 $994,865 ($502,147)
See accompanying notes to financial statements
35
FIDUCIARY FUNDS
Fiduciary Funds include all agency funds that account for assets held by the City as an agent for
individuals, private organizations, other governmental units and/or other funds.
Agency Funds are custodial in nature and do not involve measurement of results of operations. Such
funds have no equity since any assets are due to individuals or other entities at some future time.
Special district assessments held by the City, acting as yin agent for bond debt service payments, comprise
Agency funds. The City is not liable for re-payment of the bonds.
36
CITY OF CUPI3RTINO
FIDUCIARY 1?UNDS
STATEMENT OF FIDUCIARY NET ASSETS
JUNE 30, :'009
ASSETS
Agency
Funds
Cash and investments (Note 2) $ 115,322
Total Assets
$115,322
LIABILITIES
Deposits
$115,322
Total Liabilities $ I 15,322
See accompanying notes to financial statements
37
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINA]\fCIAL STATEMENTS
For the Year Endecl June 30, 2009
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) 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 aCouncil -City Manager
form of government and provides services thl•ough the following departments:
Administrative Services, Community 1;-evelopment, City Manager, Parks and Recreation,
Public Information, and Public Work~;/Engineering. 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 the Los Altos Garbage Company 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 units, entities 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 ~~ity's operations and so data from this unit is
combined with the City.
Blended component units - The Cupertino Public Facilities Corporation (the
Corporation) was incorporated in A7ay 1986, under the Nonprofit Public Benefit
Corporation Law of the State of C:~lifornia. The Corporation was organized as a
nonprofit corporation 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 Cupertino
Redevelopment Agency was formed in 2000 under the California Health & Safety Code
to assist in the elimination of areas considered to be in a blighted condition. The City
Council acts as the Board of Directory of the Corporation and the Agency. The Mayor
and Vice Mayor of the City have been elected President and Vice President, respectively,
of the Corporation. The City Clerk has been elected Secretary, and the City's Director of
Administrative Services has been appcinted Treasurer of both entities.
No separate financial statements are issued for the Corporation, since it is reported
separately in the basic financial statements. The Redevelopment Agency's separate
report is available from the City of Cuj~ertino's website at www.cupertino.org.
(b) Measurement Focus, Basis of Accounting and Basis of Presentation
The City's Basic Financial Statements are prepared in conformity with accounting
principles generally accepted in they United States of America. The Government
Accounting Standards Board is the acknowledged standard setting body for establishing
accounting and financial reporting standards followed by governmental entities in the
U.S.A.
39
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Endecl June 30, 2009
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Measurement Focus, Basis of Accounti ag and Basis of Presentation (continued)
Government-wide Statements: The Statement of Net Assets and the Statement of
Activities display information abou~: the primary government (the City) and its
component units. These statements include the financial activities of the overall City
government, except for fiduciary acti~~ities. These statements distinguish between the
governmental and business-type activities of the City. Governmental activities generally
are financed through taxes, intergovernmental revenues, and other nonexchange
transactions. Business-type activities are financed in whole or in part by fees charged to
external parties.
The Statement of Activities present: a comparison between expenses and program
revenues for each segment of the business-type activities of the City and for each
function of the City's governmental activities. Expenses include direct and indirect
types. Direct expenses are those that are specifically associated with a program or
function and, therefore, are clearly identifiable to a particular function. Indirect expenses
such as depreciation, information technology, insurance and equipment replacement are
included in expenses for individual activities and functions. Program revenues include
(a) charges paid by the recipients of goods or services offered by the programs, (b) grants
and contributions that are restricted t:o meeting the operational or capital needs of a
particular program and (c) development fees which are considered capital grants under
California law. Revenues that are not classified as program revenues, including taxes, are
presented as general revenues. Program revenues and direct expenses related to
interfund services are included and indirect expenses funded by interfund transfers are
excluded from the Statement of Activities. The Statement of Net Assets eliminates
interfund balances between govermnental funds and interfund balances between
proprietary funds.
Fund Financial Statements: The fund financial statements provide information about
the City's funds, including fiduciar}' funds and blended component units. Separate
statements for each fund category -governmental, proprietary, and fiduciary -are
presented. The emphasis of fund financial statements is on major individual
governmental and enterprise funds, ea~;h of which is displayed in a separate column. All
remaining governmental and enterprise funds are aggregated and reported as nonmajor
funds.
Proprietary fund operating revenues, ~:uch as charges foi• services, result from exchange
transactions associated with the principal activity of the fund. Exchange transactions are
those in which each party receives and gives up essentially equal values. Nof~operating.
revenues, such as subsidies and investment earnings, result from nonexchange
transactions or ancillary activities.
40
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINAl`ICIAL STATEMENTS
For the Year Ended June 30, 2009
(1) SUMMARY OF SIGNIFICANT ACCOUN7CING POLICIES (continued)
(b) Measurement Focus. Basis of Accounting and Basis of Presentation (continued)
Major Funds -The City's major governmental and business-type funds are identified
and presented separately in the fund financial statements. All other funds, called non-
major funds, are combined and reported in a single column, regardless of their fund-type.
Major funds are defined as funds, which have either assets, liabilities, revenues or
expenditures equal to ten percent of their fund-type total and five percent of the grand
total. The General Fund is always a major fund. The City may select other funds it
believes should be presented as major Funds.
The City reported the following major governmental funds in the accompanying
financial statements:
The General Fund is the general oper;iting fund of the City. It is used to account for all
financial resources except those that are required to be accounted for in another fund.
The Public Facilities Corporation Debt Service Fund accounts for the payments of
principal and interest on certificates of participation issued to provide for the advance
refunding of the City Hall/Library, Wilson Park and Memorial Park certificates of
participation.
The Capital Improvement Project Funcl accounts for activities related to the acquisition or
construction of major capital facilities.
The Stevens Creek Cor~~idor Park Calital Project Fund accounts for the development of
the master plan and the design and construction of the Stevens Ci•eek Corridor Park.
The Mary Avenue Bicycle Footbridge Capital Project Fund accounts for design and
construction of a bicycle footbridge extension of Mary Avenue over Interstate 280. It
includes gateways, paths, residential buffering elements and landscaping.
The City reports all its enterprise funds as major funds in the accompanying financial
statements:
The Resources Recovery Fund accounts; for activity related to the collection and disposal of
solid waste. A private company has been issued an exclusive franchise to perform these
services.
The Blackberry Farm Fzmd accounts fcr activities related to the municipal golf course.
The Cupertino Sports Center Fund accounts for the operation and maintenance of the
Cupertino Sports Facility.
4l
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Endecl June 30, 2009
(I) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Measurement Focus, Basis of Accounting and Basis of Presentation (continued)
The Recreation Programs Fund accounts for activities of the City's community center.
The City also reports the following fund types:
Internal Service Funds. These funds account for workers' compensation, management
information system maintenance and replacement, equipment maintenance and
replacement, and long-term disabilit;~ coverage; all of which are provided to other
departments on acost-reimbursement basis. Funds for retiree health costs and accrued
leave payouts are also reserved here.
Fiduciary Fund. The City acts as an ;gent for re-payment of certain special assessment
debt described in Note 6 of this sectior-. This fund accounts for the tax assessments used
for bond payments.
Basis of Accounting -The governm~;nt-wide and proprietary financial statements are
reported using the economic resource:. nteasurentent 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 tttodifted accrual basis of accounting. Under this method, revenues are
recognized when measurable attd ava.%lable. 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 rec~~rded when the related fund liability is incurred,
except for principal and interest on long-term debt which are recognized as expenditures
to the extent they have become due and payable. 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 sotrr•ces.
Unearned revenues are considered on a full accrual basis, while deferred revenues are
based on the modified accrual measure.
Fiduciary financial statements consisting of agency funds, report only assets and
liabilities, and therefore have no me;isui•ement focus. They recognize receivables and
payables on a full accrual basis.
Property taxes, transient occupancy taxes, utility taxes, franchise taxes, interest and
special assessments are susceptible to accrual. Sales taxes collected and held by the state
at year end on behalf of the City are also recognized as revenue. Other receipts and taxes
are recognized as revenue when the cash is received.
42
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2009
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Measurement Focus, Basis of Accounti~lg, and Basis of Presentation (continued)
Under the terms of grant agreements, the City may fund certain programs with a
combination of cost-reimbursement grants, categorical block grants, and general revenue.
The City's policy is to first apply restricted grant resources to such programs, followed
by general revenues if necessary. Grant revenues are recognized after eligibility and
billing occurs, but may be deferred 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 valances until billing and receipt of grants. The
City may also front the capital outlays ~,vith cash advances from other funds.
The City follows statements and interpretations of the Financial Accounting Standards
Board and its predecessors that were issued on or before November 30, 1989, in
accounting for its business-type activities, unless they conflict with Government
Accounting Standards Board pronouna~ments.
GASB 33 Non-Exchange Transaction -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 where cash is received.
(c) Budgetary Practices
The budget of the City is a detailed operating plan which identifies estimated costs and
results in relation to estimated revenues. The budget includes (1) the programs, projects,
services and activities to be provided during the fiscal year; (2) estimated revenue
available to finance the operating plan; and (3) the estimated spending requirements of
the operating plan. The budget represents a process through which policy decisions are
made, implemented and controlled. The City prohibits expending funds for which there
is no legal appropriation. Operating af~propriations 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 dw•ing
the month of June and the budgets for all fund types are legally adopted by Resolution
prior to June 30. Original budget amounts are presented on the accompanying budgetary
statements include these legally adopted amounts.
The City Manager is responsible for controlling the City's expenditures in accordance
with the adopted budget. The City Manager is authorized to transfer appropriations
within functional expenditure classifications. Any revision which requires transfers
between functional expenditure classi Eications or 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. The legal level of budgetary control is at the
departmental or project level.
43
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2009
(1)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Budgetary Practices (continued)
Budgets for governmental funds are adopted on a basis consistent with generally
accepted accounting principles. Budgf;t information is presented for the general, special
revenue and debt service funds only. ~~apital project funds are budgeted on a long-term
project-by-project basis and, hence, bu~~gets for these funds are not presented in the basic
financial statements.
(d) Cash and Investments
The City pools its cash resources, consisting of cash and investments, of all funds for
investment except for restricted funds generally held by an outside fiscal agent. Cash
amounts are reported net of outstanding; warrants.
Investments are stated at fair value.
(e) Capital Assets
Capital assets are recorded at cost or• estimated historical cost if purchased or
constructed. Donated capital assets are recorded at their estimated fair 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.
Depreciation is recorded using the straight-line method over the following useful lives:
Years
Buildings 25
Improvements 31
Vehicles 4-10
Street equipment 3-20
Water equipment 3-50
Office equipment 3-5
Road, curbs, gutters, sidev~~alks, medians and bridges 30-40
Streetlights 20
Storm drain structure and mains 40
Traffic signals 20
The City capitalizes capital assets exceeding $5,000.
Major outlays for capital assets an~3 improvements are capitalized as projects are
constructed. 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.
44
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINA>\ CIAL STATEMENTS
For the Year Endecl June 30, 2009
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e) Capital Assets (continued)
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.
(f) Land Held for Housing Development
Land held for redevelopment of $61 x,000 at June 30, 2009 is stated at the lowest of
historical cost, net realizable value or agreed-upon sales price. The land was purchased
using Federal grant funds for housing activities.
(g) Claims and Judgments Payable
Claims and judgments payable are accrued when the liability is incurred and the amount
can be reasonably estimated. Claims ~rnd judgments payable are recorded in an internal
service fund for workers' compensati~~n and long-term disability, the General Fund or
enterprise funds, as appropriate.
(h) 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 Assets. In prior
years, the governmental or proprietary fund associated with the ongoing salary and
benefit cost of the employee has liquidated the long-term liability.
Compensated absences are liquidated by the fund that has recorded the liability. The
long-teem portion of governmental activities compensated absences are liquidated
primarily by the General Fund, using the Compensated Absences and Long-Term
Disability internal service fund as the account for• termination payouts.
4 `i
CITY OF CUPERTIN~~, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended: June 30, 2009
(1)
SUMMARY OF SIGNIFICANT ACCOUNTI]yG POLICIES (continued)
The changes in compensated absences were as follows:
Governmental Business-Type
Activities Activities Total
Beginning Balance `2,434,009 $14,071 $2,448,080
Additions 463,852 21,606 485,458
Payments (498.373) (264) (498,637)
Ending Balance `.12,399,488 $35,413 $2,434,901
Current Portion $153,419 $35,413 $188,832
(i) Fund Equity
Reservations of fund balances represent those portions of fund balances which are not
available for appropriation or expenditure or are legally restricted for a specific future
use. Designated fund balances represent management's tentative plans for future use of
financial resources.
(j) Property Tax Calendar
All property taxes are levied and colle~;ted by the County of Santa Clara. Secured taxes
are levied on July 1, are due in two installments on November 1 and March 1 and become
delinquent on December 10 and April 10. Unsecured taxes are due on July 1 and become
delinquent on August 31. The lien ijate for secured and unsecured property taxes is
March 1.
The City, in fiscal year 1993-94, ~.dopted an alternative method of property tax
distribution (the "Teeter Plan"). Under this method, the City receives 100% of its
secured property tax levied in exchange; for foregoing any interest and penalties collected
on delinquent taxes. The City receive; remittances as a series of advances made by the
County during the year.
(k) Interfund Transactions
Transactions constituting reimbursements to a fund for expenditures/expenses initially
made from it that are properly ;applicable to another fund, are recorded as
expenditures/expenses in the reimbursing fund and as reductions of
expenditures/expenses in the fund that : s reimbursed.
4fi
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINA1\ CIAL STATEMENTS
For the Year Endecl June 30, 2009
(I) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(1) Statement of Cash Flows
For purposes of reporting cash flows for the City's proprietary funds, pooled cash and
investments are considered cash equivalents as the proprietary funds can access pooled
cash and investments in a manner similar to a demand deposit account.
(m) Bond Discounts and Issue Costs
Debt discounts and issuance costs are recognized in the current period. Debt discounts
and issuance costs incurred by proprie~:ary fund types are amortized over the term of the
debt using the bonds-outstanding method, which approximates the effective interest
method.
(n) Inventories and Prepaids
Inventories are accounted for under the purchases method, which considers inventories to
be recognized as an expenditure upon purchase, with inventories insignificant at year-
end. Prepaid expenses are reported under the consumption method, which recognizes the
expense in the period associated with t}re service rendered or goods consumed.
(o) Fund Name Change
During fiscal year 2008/2009, the City changed the name of the Long-Term Disability
Internal Service Fund to the Compensated Absences and Long-Term Disability Internal
Service Fund.
(2) CASH AND INVESTMENTS
The City's pooled idle funds are invested pur•sirant to investment policy guidelines adopted by the
City Council. The objectives of the policy are to invest funds to the fullest extent possible and to
invest in accordance with the provisions of thy; California Government Code with the priority of
safety, liquidity and yield. The policy addresses the safekeeping of securities, types of investment
instruments, diversification, maturities, reporting requirements, and internal control. The City
maintains a cash and investment pool that is available for use by all funds. Each fund type's portion
of this pool is displayed on the combined balance sheet as "cash and investments."
(a) Policies
California Law requires banks and savings and loan institutions to pledge government
securities with a market value of 110°% of the City's cash on deposit, or first trust deed
mortgage notes with a market value of 150% of the deposit, as collateral for• these deposits.
Under California Law this collateral is held in a separate investment pool by another
institution in the City's name and places the City ahead of general creditors of the
institution.
47
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINAI`1CIAL STATEMENTS
For the Year Ended June 30, 2009
(2)
CASH AND INVESTMENTS (continued)
The City and its fiscal agents invest i~ individual investments and in investment pools.
Individual investments are evidenced by specific identifiable securities instruments, or by
an electronic entry registering the owner in the records of the institution issuing the security,
called the book entry system. Security instruments owned by the City are held in
safekeeping by a third party custodian acting as agent for the City under the ternis of a
custody agreement.
The City's investments are carried at f<<ir value. The City adjusts the carrying value of its
investments to reflect their fair value a1 each fiscal year end, and it includes the effects of
these adjustments in interest income for that fiscal year.
(b) Classification
The City's total cash and investments, at fair value, are presented on the accompanying
statement of net assets in the following allocation:
Statement of Net Assets
Cash and investments
Restricted cash and investments:
Held by Fiscal Agent for bond repayments
Held in escrow accounts for contractor retentions
Total restricted cash and investments
Total City cash and investments
Fiduciary Funds
Cash and investments
Total Cash and investments
$54,771,604
2,473,197
866,956
3,340,153
58,111,757
115,322
$58,227,079
4,3
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINAI\!CIAL STATEMENTS
For the Year Endecl June 30, 2009
(2) CASH AND INVESTMENTS (continued)
(c) Attthorized Investments by the City
The City's Investment Policy and the California Government Code allow the City to
invest its pooled idle funds in the following, under limits and provisions that address
interest rate risk, credit risk, and concentration of credit risk. This does not include the
City's investments of debt proceeds held by fiscal agents that are governed by the
provisions of debt agreements of the City.
Maximum Minimum
Authorized Investment Type Maturity Credit Quality
U.S. Treasury obligations 5 years N/A
Federal Agency securities (A) 5 years N/A
California Locai Agency Investment
Fund
Non-negotiable Certificates of Deposit
(time deposits)
State of California registered state
warrants, treasury notes, or bonds
California local agency bonds, notes,
warrants or other obligations
Bonds issued by the local agency
Bankers Acceptances
Commercial Paper
Negotiable Certificates of Deposit
N/A N/A
5 years N/A
5 years N/A
5 years N/A
5 years N/A
180 days N/A
270 days A-l+ / P-1
5 years N/A
Repurchase Agreements
Medium Term Corporate Notes
Money market mutual funds investing
1 year N/A
Maximum
Percentage of
Portfolio
Maximum Investment
In One Issuer
None None
None None
Up to $40
million, per State
la~v None
None 10% of portfolio; 5% of
issuer's net worth
None ] 0%
None 10%
None 10%
40% None
10% of portfolio; 5% of
25% issuer's net worth; 10%
of outstanding paper of
issuer.
30% 10% of portfolio; 5% of
issuer's net worth
None 10% of portfolio; 5% of
issuer's net worth
5 years A or better 30% 10% of portfolio; 5% of
issuer's net worth
in U.S. Treasury, Government Agency N/A N/A 20% 10%
securities, or repurchase agreements
(A) Securities issued by agencies of the federal government such as the Government 7`'ational Mortgage Association, (GNMA), the
Federal Home Loan Bank (FHLB), the Federal National Mort€;age Association (FNMA), the Federal Home Loan Mortgage
Corporation (FHLMC), and the Federal Farm Credit Bank (FFCB).
49
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINA)\`CIAL STATEMENTS
For the Year Endecl June 30, 2009
(Z) CASH AND INVESTMENTS (continued)
(d) Authorized Investments by Debt A~nents
The City must maintain required amounts of cash and investments with trustees or fiscal
agents under the terms of certain debt i;~sues. These funds are unexpended bond proceeds
or are pledged reserves to be used if tht; 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, bind indentures or State statutes. The City's
Investment Policy allows investments ~~f 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 fisc;il agents under the terms of the bond indentures of
the related debt issue:
Maximum
~4aximum Minimum Credit Percentage of
Authorized Investment Type ~Iaturi Quality Portfolio
_
Aaam or
Money market mutual funds TI/A AAAm-G None
Up to $40
California Local Agency Investment million, per
Fund TJ/A N1A State law
U.S. Treasury obligations 1`!/A NIA None
U.S. Federal agency obligations (A) T!/A N/A None
Pre-refunded local agency municipal
obligations that are non-callable or Highest rating
irrevocably callable on a specified date rI/A category None
General obligations of states I`I/A A2/A None
U.S. dollar denominated deposit
accounts, federal funds and bankers
acceptances 360 days P-l, A-1+, A-1 None
Commercial paper 270 days P-1, A-1 None
Time or demand accounts or certificates
of deposits, collateralized 1`I/A N/A None
Investment agreements or other forms of
investments, including repurchase
agreements, approved by the financial
guaranty insurance carrier. td/A N/A None
(A) Securities issued by agencies of the federal government such as the Government National Mortgage
Association, (GNMA), the Federal Home Loan Bank (FHLB), the Federal National Mortgage Association
(FNMA), the Federal Home Loan Mortgage Corporation (F[-ILMC), and the Federal Farm Credit Bank
(FFCB). 50
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2009
(2)
CASH AND INVESTMENTS (continued)
(e) Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the
greater the sensitivity of its fair value to changes in market interest rates.
Information about the sensitivity of the fair values of the City's investments (including
investments held by bond trustees) to market interest rate fluctuations is provided by the
following table that shows the distri'~ution of the City's investments by maturity or
earliest call date:
U.S. Treasury Securities
Federal Agency Obligations
Local Agency Investment Fund
Government Securities Money Market funds
Non-negotiable Certificates of Deposit
Total Investments
12 Months 13 to
or less 24 Months Total
$27,916,SS0 $8,166,880 $36,083,430
4,069,390 3,059,260 7,I28,6S0
587,959 587,959
12,641,836 12,641,836
100,749 99,634 200,383
$45,316,484 $11,325,774 56,642,258
Cash in banks and on hand 717,864
Cash held in retention deposit escrow ~.ccounts 866,957
Total Cash and Investments $58,227,079
The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated
by California Government Code Section 16429 under the oversight of the Treasurer of
the State of California. The City report: its investment in LAIF at the fair value amount
provided by LAIF, which is the same a:~ the value of the pool share. The balance is
available for• withdrawal on demand, and is based on the accounting records maintained
by LAIF, which are recorded on an am~~rtized cost basis. Included in LAIF's investment
portfolio are U.S. Treasuries, Federal ~~gency obligations, time deposits, negotiable
certificates of deposits, commercial paper, corporate bonds, and security loans. At June
30, 2009, these investments had weighted average maturity of 23S days.
Money market funds are available for withdrawal on demand and at June 30, 2009,
carried investments with a SS day aver~rge maturity.
Sl
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINAr1CIAL STATEMENTS
For the Year Ended June 30, 2009
(2)
CASH AND INVESTMENTS (continued)
(~ Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. Presented below is the actual rating as of June
30, 2009 for each investment type, including those with fiscal agents, as provided by
Moody's ratings:
Investment Type AAA Total
Federal Agency Obligations $7,128,650 $7,128,650
Government Securities Money Market Funds 12,641,836 12,641,836
Totals $19,770,486 19,770,486
Exempt from Credit Rating Disclosure:
U.S. Treasury Securities 36,083,430
Not Rated:
Local Agency Investment Fund 587,959
Certificates of deposit 200,383
Total Investments $56,642,258
(g) Concentration of Credit Risk
The City's investment policy contains certain limitations on the amount that can be
invested in any one issuer. In certain categories, these limitations are more restrictive
than those required by California Government Code Sections 53600 et seq. Investments
in any one issuer, other than U.S. Treasury securities, mutual funds, and exterr-al
investment pools, that represent 5% or more of total City-wide investments are as follows
at June 30, 2009:
Issuer Investment Type Amount
Federal Farm Credit Bank Federal Agencies Obligation $4,048,140
5~:
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINA)\fCIAL STATEMENTS
For the Year Endetl June 30, 2009
(3)
(4)
RELATED PARTY LOANS
In conjunction with the City's executive housing assistance program, loans totaling $1,535,860
have been provided to three executive managers. These 40-year loans bear an interest rate equal
to the l lth District Cost of Funds at the time of the loan, and require monthly principal and
interest payments. In addition, there is a t,vo percent deferral on the interest rate for the first five
years of the loan, at which time the interest rate may be adjusted to the current 1 lth District Cost
of Funds fot• the remainder of the loan. At June 30, 2009, one of the loans was completely paid
off, and the balance remaining on the two loam; was $727,468.
INTERFUND TRANSACTIONS
Transfers between funds during the fiscal year ended June 30, 2009 were as follows:
Fund M along Transfers Fund Receiving Transfers Amount Transferred
General Fund Public Facilities Corporation Debt Service Fund $3,537,000 (A)
Capital Improveme;nt Projects Funds 100,000 (B)
Non-major govemrnental funds 750,000 (C)
Internal Service Funds 2,723,000 (D)
Stevens Creek Corridor Park Fund General Fund 50,000 (E)
Capital Improvement Projects Funds General Fund 573,925 (F)
Non-major governmental funds Non-major governmental funds 25,000 (G)
$7,758,925
Total Interfund Transfers
The reasons for these transfers are set forth below:
(A) For debt service.
(B) For capital project infrastructure reserve.
(C) To fund street maintenance.
(D) To fund retiree medical, IT, equipment replacement, and compensated absences.
(E) To return project savings to General Fund.
(F) To return project funding to General Fund.
(G) To fund the Bollinger Bike Lane project.
Internal Balances -The City-wide financial statements had no net intet•fimd receivables
and payable remaining after the elimin<<tion of all such balances within governmental and
business-type activities.
The General Fund loaned the Mary Avenue Bicycle Footbridge Capital Projects Fund
$837,629 to fund a temporary cash shortfall.
53
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2009
(5) CAPITAL ASSETS
A summary of changes in capital assets follows:
Balance at Balance at
June 30, 2008 Additions Retirements Transfers June 30, 2009
Governmental activities
Capital assets not being depreciated:
Land $59,2')8,322 $1,507,759 $60,806,081
Construction in progress:
Infrastructure 7,509,565 6,204,560 ($13,714,125)
Other capital projects 2,103,992 9,410,189 (11,514,151)
Total capital assets not being depreciated 68,911,879 17,122,478 (25,228,276) 60,806,081
Capital assets being depreciated:
Buildings 40,3 17,576 277,651 40,635,227
lmprovementsotherthanbuildings 25,814,968 311,941 11,514,151 37,681,060
Machinery and Equipment -governmental funds 1,9)3,499 158,380 ($10,255) 2,051,624
Road, curbs, gutters, side«alks, medians
and bridges 101,019,337 4,474,758 13,714,125 119,258,220
Streetlights 6,597,255 7,849 6,555,104
Storm drain structure and mains 31,659,084 57,048 31,726,132
Traffic signals 5,957,41 ] 31,988 5,999,399
Total capital assets being depreciated 213,359,130 5,3]9,615 (10,255) 25,228,276 243,906,766
Less accumulated depreciation for:
Buildings 12,294,958 1,553,202 13,848,160
Improvements other than buildings 19,247,032 827,067 20,074,099
Machinery and Equipment -governmental funds 1,518,268 ] 12,296 (10,057) 1,620,507
Road, curbs, gutters, side~~alks, medians
and bridges 81,531,071 2,456,230 83,987,301
Streetlights 6,506,460 2,617 6,509,077
Storm drain structure and mains 24,232,960 791,727 25,024,687
Traffic signals 4,355,239 116,989 4,472,228
Total accumulated depreciation 149,685,988 5,860,128 (10,057) 155,536,059
Net governmental fund program
Capital assets being depreciated 63,683,142 (540,513) (198) 25,228,276 88,370,707
Internal service fund capital assets
Machinery and equipment 4,983,608 541,708 5,>25,316
Less Accumulated depreciation 4,C 19,631 370,568 4,390,199
Net internal service capital assets
Being depreciated 563,977 171,140 I , 135, 117
Governmental activity capital assets, net $133,558,998 $16,753,105 ($198) $150,311,905
5~~
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Endedl June 30, 2009
CAPITAL ASSETS (continued)
Balance at Balance at
June 30,1008 Additions Retirements Transfers June 30, 2009
(5)
Business-q~pe nctn~ilies;
Capital assets being depreciated:
Improvements other than buildings
Machinery and Equipment
Total capital assets being depreciated
Less accumulated depreciation for:
55,053
238,113 572,642 SS,053
3]0,755
243,166 72,642 315,808
Improvements other than buildings 5,053 S,OS3
Machinery and Equipment 153,987 20,641 174,628
Total accumulated depreciation 159,040 20,641 179,681
Net capital assets being depreciated 84,126 52,001 136,127
Business-type activity capital assets, net 584,126 552,001 5136,127
Depreciation expense w as charged to function; and programs based on their usage of the related
assets. The amounts allo cated to each function or program is as follows:
Governmental Activities Amount
Administration $311,550
Law Enforcement 2,160
Public Information 16,613
Administrative Services 26,441
Recreation Service 65,507
Community Developtr~ent 600
Public Works 5,437,257
Internal Service funds 370,568
Total $6,230,696
S:i
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINA>\fCIAL STATEMENTS
For the Year Endetl June 30, 2009
(5)
CAPITAL ASSETS (continued)
Business-Type Activities Amount
Resources Recovery $3,983
Blackberry Farms 3,085
Cupertino Spo~4s Center 10,926
2,647
Total $20,641
(6)
LONG-TERM DEBT
(a) Cupertino Public Facilities Corporation Certificates of Participation
Original Balance Balance
Issue June 30, June 30, Current
Amount 2008 Retirements 2009 Portion
Governmental Activity Debt:
2002 Refinancing and Capital
Improvement Project,
2.00-5.00%, due 07/01/2030 $56,640,000 $48,385,000 $1,415,000 $46,970,000 $1,460,000
The Cupertino Public Facilities Corporation issued Certificates of Participation to
provide financing for the construction of the Community Center, remodeling of City Hall
and the Library in July of 1986, to purchase Wilson Park in 1989, to finance Memorial
Park Expansion in 1990, and to purchase Blackberry Farm and Fremont Older site in
1991. Cupertino Public Facilities Corp~~ration, as lessor, leased real property to the City
(under the lease agreement with the les~:ee) and assigned the base rental payments to the
trustee for the benefit of the owners of the certificates of participation. The rental
payments are scheduled to be sufficient in both time and amount, when the principal and
interest of the certificates are due.
On October 1, 2002, $56,640,000 principal amount of 2002 Refinancing and Capital
Improvement Project Certiftcates of Participation, (2002 COPs) were issued to finance the
costs of acquiring and constructing a ne~v public library and to refund the 1992A COPs, the
1992B COPS and the 1993A COPs ("Refunded COPS").
56
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINA)\`CIAL STATEMENTS
For the Year Endeci June 30, 2009
(6)
LONG-TERM DEBT (continued)
(a) Cupertino Public Facilities Corporation Certificates of Participation (continued)
Annual debt service requirements fot• the; Certificates of Participation are shown below:
_ Governmental Activities
For the Year
Ending June 30 Principal Interest
2010 $1,460,000 $2,073,944
2011 1,500,000 2,03Q144
2012 1,545,000 1,985,144
2013 1,600,000 1,934,931
2014 1,660,000 1, 870,931
2015-2019 9,380,000 8,283,605
2020-2024 11,750,000 5,916,093
2025-2029 14,705,000 2,960,674
2030 3,370,000 160,075
Total $46,970,000 $27,215,541
(b) 1915 Act Bonds Without City Commitment
The City acts as agent for the properh~ owners of parcels upon which assessments were
made for local improvements. The City collects the assessments and forwards the
collections to bond holdet•s. The City is not directly liable for the repayment of special
assessment district bonds as such bonds and interest payable are secured by fixed lien
assessments on real property; however, the City has determined that it is not probable that
the government would assume responsibility for all or part of the debt in the event of
default. The amount of unmatured bond principal at June 30, 2009 was $65,000.
(c) Conduit Debt
On October 1, 2001, the City authorized the issuance of the Multi-Family Housing
Revenue Bonds in an amount up to $1.6 million to assist a developer in financing the cost
of site acquisition and construction of a 24 unit multi-family rental housing pt•oject. The
bonds are payable solely out of loan repayments received from the developer. The City
has no legal or moral liability with respect to the payment of this debt.
5 "7
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINA1\'CIAL STATEMENTS
For the Year Endecl June 30, 2009
(7) NET ASSETS AND FUND BALANCES
Net Assets are measured on the full accrual basis while Fund Balance is measured on the modified
accrual basis.
Net Assets -Net Assets is the excess of all thy; City's assets over all its liabilities, regardless of
fund. Net Assets are divided into three captions. These captions apply only to Net Assets, which
is determined only at the Government-wide level, and are described below:
hwested in Capital Assets, net of related de5t describes the portion of Net Assets which is
represented by the current net book value of the City's capital assets, less the outstanding balance of
any debt issued to finance these assets.
Restricted describes the portion of Net Assets which is restricted as to use by the terms and
conditions of agreements with outside parties, governmental regulations, laws, or other restrictions
which the City cannot unilaterally alter. These principally include developer fees received for use
on capital projects, debt service requirements, and redevelopment funds restricted to low and
moderate income purposes.
Fund Balances, Reserves and Designatlor:s ~- In the Fund financial statements, fund balances
represent the net current assets of each fund. Tdet current assets generally represent a fund's cash
and receivables, less its liabilities. Portions of a fund's balance may be reserved or designated
for future expenditure.
The unreserved fund balances include amounts which have been internally designated to be set
aside and are not considered to be available for immediate appropriation. The components of the
designated fund balance for the Governmental ]?unds at June 30, 2009 are as follows:
General Fund:
Economic Uncertainty $13,415,000
Utilities Users Tax Revenue 1,600,000
Special Revenue Funds, Gas Tax Projects 799,022
Capital Project Funds:
Capital Improvement Projects 699,000
Construction in Progress - Futur<~ Projects 76,000
Infrastructure 900,000
Total designated fund balances $17,489,022
5&
CITY OF CUPERTIN~, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Endecl June 30, 2009
(8) COMMITMENTS AND CONTINGENCIES
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, 2009, 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.
The City has an agreement, expiring in 2019, t~~ lease a building to the County of Santa Clara for
the purpose of providing library service to thf; City's residents. The lease requires a minimum
annual payment of $120,000 adjusted for Cupertino's portion of book circulation and increase of
assessed valuation. This is an operating lease ~r~ith a renewable option. At June 30, 2009, the cost
and carrying value of the building which opened in October 2004, is $21,935,325 and
$18,423,269 respectively, with $3,512,056 in a~;cumulated depreciation.
(9) LIABILITIES UNDER SELF-INSURANCE AND RISK MANAGEMENT
The City is self-insured for the first $250,000 of general and automobile liability for each
occurrence, and the excess (up to $10,000,000) is covered through the City's participation in the
Association of Bay Area Governments (ABAG) Plan general liability risk pool. The pool consists
of 32 agencies within the San Francisco Bay area. The stated purpose of the ABAG pool is to
provide certain levels of liability insurance coverage, claims management, risk management
services, and legal defense to each participating city within the pool. Each city was required to
make an initial deposit premium based on an actuarial study of each City's risk exposure. The
premium consists of a risk portion and administrative portion. The premium is revised each year
based on claims experience and risk exposurE;. Complete financial statements for ABAG plan
may be obtained from their offices at the following address: ABAG Plan Corporation, Finance
Department, P.O. Box 2050, Oakland, CA 946(-4.
59
CITY OF CUPERTIN~~, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Endetll June 30, 2009
(9)
LIABILITIES UNDER SELF-INSURANCE AND RISK MANAGEMENT (continued)
The City belongs to the CSAC Excess Insur•an~;e 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 $50,000,00(1 statutory limit. EIA was established in ] 979 for
the purpose of creating a risk management pool for all California public entities. ElA is governed
by a Board of Directors consisting of representatives of its member public entities.
Changes in the balances of claim liabilities during the past two fiscal years are as follows:
Workers'
Compensation
Claims liability June 30, 2007 $1,375,000
Incurred claims 288,148
Claim payments/credits (166,148)
Claims liability June 30, 2008 1,497,000
Incurred clairru 313,642
Claim payments/credits (242,642)
Total Claims liability June 30, 2005 $1,568,000
Current portion $411,000
Non-current Portion $1,157,000
The claims liability includes those based on existing open claims plus those estimated on an
incurred but not reported basis. Allocated loss adjustment expenses, such as legal fees, were also
considered. Settlements have not exceeded insiar•ance coverage in the past three years.
60
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINA)`ICIAL STATEMENTS
For the Year Endeil June 30, 2009
(10) OTHER POST EMPLOYMENT BENEFITS (OPEB)
Permanent employees who retire under the Ci.ty's retirement plan (CALPERS) 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 plans, 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 beriveen 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 f-•om zero to $1,042 per month
per the employee or retiree. The responsibility for benefit payments has transferred to the
insurers and the City does not guarantee the t~enefits 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 cost of the benefits provided by the Plan is currently being paid by the City on a pay-as-you-
go basis. The long-term strategy for funding the benefits provided under the Plan is currently
being evaluated.
An employee is eligible for lifetime medical benefits under the 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 mere 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 t:ouncil member was elected on or after August 1,
2004, and the employee has ten or more full-time and/or elected years of CaIPERS
service, five years of which must be from the City of Cupertino; and
• The employee is eligible for retirement as defined under the Ca1PERS retirement system;
and,
• The employee retires from the City of Cupertino.
61
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINA]\"CIAL STATEMENTS
For the Year Endecl June 30, 2009
(10) OTHER POST EMPLOYMENT BENEFIT;~OPEB) (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.
The City's actuary determined the City's OPEI3 liability and contribution requirements using the
Entry Age Normal Actuarial Cost Method. As of the January I, 2007 valuation date, there were
no actuarial plan assets. The annual rate of return on future assets for benefit payments was
assumed to be 5% on apay-as-you-go basis. Inflation of 3%, annual salary increases of 3.25%,
City contribution increases of 3.5%, and healthcare cost growth ranging from 13% initially down
to 5% long-term were also assumed. The Unfunded Actuarial Accrued Liability is amortized as a
level percentage of pay (assuming 3.25% per ;/ear growth in total payroll) over a rolling twenty
year period. The payment for a given year is expressed as a percentage of projected active
member payroll for that year. PEMHCA is a community-rated plan, where the same premiums
apply for all plan participants regardless of the presence or number of active employees. There is
no implicit rate subsidy in the premiums for prey-Medicare retirees.
The City's annual OPEB cost and actual contributions to the Plan for the year ended 2009 is as
follows:
OPEB Annual P.ctual
Fiscal Year Cost (AOCI Contribution
June 3Q ZUUy $2,475,000 $647,923
Percentage of Net OPEB
AOC Obligation
Contributed (Asset)
26% $1,827,077
The City's Net OPEB Obligation (NOO) is recorded in the Retiree Medical Internal Set•vice
Fund, and is calculated as follows:
Annual required contribution $2,475,000
Annual OPEB cost 2,475,000
Contributions made -Pay-as-you-go payment (647,923)
(Decrease) increase in net OPEB obligations 1,827,077
Net OPEB obligation (asset) June 30, 2008 0
Net OPEB obligation (asset) June 30, 2009 $1,827,077
6:?
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINAI\"CIAL STATEMENTS
For the Year Endecl June 30, 2009
(10) OTHER POST EMPLOYMENT BENEFIT, ~OPEB) (continued)
The Schedule of Funding Progress presents trt;nd information about whether the actuarial value
of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for
benefits. Trend data from the January I, 2007 actuarial study is presented below, reflecting the
initial study since the implementation of new OPEB reporting requirements.
Actuarial
Actuarial Value of
Valuation Assets
Date (A)
U~ifunded
Entry Age (Overfunded)
Actuarial Actuarial
Unfunded
(Overfunded)
Actuarial
Liability as
Accrued Accrued Funded Covered Percentage of
Liability Lability Ratio Payroll Covered Payroll
1/1/2007 $0 $21,981,544 $21,981,544
(11) DEFERRED COMPENSATION PLAN
0.00% $11,118,000 197.71
Due to the passage of the Small Business Job Protection Act (Act) of 1996, and the issuance of
Governmental Accounting Standards Board Statement No. 32 "Accounting and Financial
Reporting for Internal Revenue Code Section 157 Deferred Compensation Plans," governmental
entities who have established deferred compensation plans under Internal Revenue Code Section
457 are required to establish trusts to hole: plan assets for the exclusive benefit of plan
participants and their beneficiaries. This Act supercedes previous regulations, which required
that plan assets remain the properly of the City until paid or made available to the participants,
subject only to the City's general creditors. [n compliance with the new regulations, the City
established separate trusts to hold plan assets. The value of assets held in trust under Section 457
deferred compensation plans is approximate(}~ $10,681,304 as of June 30, 2009. These assets
have been excluded from the financial statements.
(12) DEFINED BENEFIT PENSION PLAN
(a) Plan Description
Substantially all City employees are t;ligible to participate in pension plans offered by
California Public Employees Retirement System (CALPERS), an agent multiple
employer defined benefit pension elan which acts as a common investment and
administrative agent for its participating member employers. CALPERS provides
retirement and disability benefits, annrtal cost of living adjustments and death benefits to
plan members, who must be public employees and beneficiaries. The City's employees
participate in the Miscellaneous Employee Plan. Benefit provisions under both Plans are
established by State statute and City resolution. Benefits are based on years of credited
service and compensation. Audited annual financial statements are available from
CALPERS at www.calpers.ca.gov.
6.i
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINAI`1CIAL STATEMENTS
For the Year Ended June 30, 2009
(12) DEFINED BENEFIT PENSION PLAN (continued
(b) Funding_PolicX
Funding contributions for the Plan are determined annually by CALPERS on an actuarial
basis as of June 30 three years prior to funding. The City must contribute these amounts.
The Plans' provisions and benefits in effect at June 30, 2009, are summarized as follows:
Miscellaneous
Benefit vesting schedule 5 years service
Benefit payments Monthly for life
Eligible retirement age 50
Benefits, as a % of annual salary
muhiplied by years of service and
annual salary 2% - 2.7%
Requu•ed employee contribution rates 8%
Required employer contribution rates 16.456%
(c) Annual Pension Cost
CALPERS determines contribution requirements using a modification of the Entry Age
Normal Method. Under this metho~~, the City's total normal benefit cost for each
employee from date of hire to date of retirement is expressed as a level percentage of the
related total payroll cost. Normal benefit cost under this Method is the level amount the
employer must pay annually to fund ;in employee's projected retirement benefit. This
level percentage of payroll method is used to amortize any unfunded actuarial liabilities.
The actuarial assumptions used to compute contribution requirements are also used to
compute the actuarially accrued liability. The City uses the actuarially determined
percentages of payroll to calculate and pay contributions to CALPERS. This results in no
net pension obligations or unpaid contributions. Recent Annual Pension Costs, which
equal the annual required contribution to CALPERS, were as follows:
E~nnual
Pension Cost Contribution
Fiscal Year (APC) Rate
6/30/2007 $1,237,257 11.529%
6/30/2008 1,454,415 14.201
6/30/2009 1,835,521 15.560%
6~I
CITY OF CUPERTINO, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2009
(12) DEFINED BENEFIT PENSION PLAN (continued
CALPERS uses the market related value method of valuing the Plan's assets. An investment rate
of return of 7.75% is assumed, including inflation rate at 3.0%. Annual salary increases are
assumed to vary by duration of service. Chan€;es in liability due to plan amendments, changes in
actuarial assumptions, or changes in actuarial methods are amortized as a level percentage of
payroll on a closed basis over twenty years. All gains and losses are realized and amortized over
a rolling thirty year period. Market value fluctuations in the actuarial value of plan assets are
smoothed over 15 years.
CALPERS' latest available actuarial value ;which differs from market value) and funding
progress are set forth below at their actuari<l valuation date of June 30, 2007. This shows
whether the value is increasing or decreasing ever time relative to the actuarial accrued liability
for benefits.
Actuarial
Unfunded
Entry Age Unfunded Annual (Overfunded)
Valuation Accrued Value of (Overfunded) Funded Covered Liability as
Date Liability Assets Li3bilit>, Ratio Payroll of Payroll
6/30/05 $47,054,446 $41,347,290 $`i,707,156 87.9% $9,304,b90 61.3%
6/30/06 54,287,591 44,876,584 9,411,007 82.7% 10,133,914 92.9%
b/30/07 59,241,300 50,157,077 9,084,223 84.7% 10,751,350 84.5%
(13) DEFICIT FUND BALANCE
As of June 30, 2009, the Stevens Creek Corridor Park and Mary Avenue Bicycle Footbridge
Capital Project Funds had negative fund balan~:es of $838,125 and $956,137, respectively. These
balances are expected to be offset by eventual billing and receipt of all expected grant awards.
6:i
MAJOR GOVERNMENTAL FUNDS OTH)E.R THAN THE GENERAL FUND AND
SPECIAL REVENUE FUNDS
This section is provided for the presentation of Budget-to-Actual Statements for the Public Facilities
Corporation Debt Service Fund, Although the fund is considered to be a major goveznment fund, GASB
Statement 34 dictates that budget-to-actual information in the basic financial statements should be limited to
the General Fund and major Special Revenue Funds. .All other major governmental fund schedules with
such information must be included as Supplemental Information.
Public Facilities Corporationz Debt Service Furzd - Ac:counts for the accumulation of resources for and
the payments of principal and interest on certificates ~~f participation issued in 2002 to advance refund
debt that was previously issued to finance City Hall, Li~rary, Wilson Park and Memorial Park projects.
6E
CITY OF CU:PERTINO
PUBLIC FACILITIES CORPORATION DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET ANI) ACTUAL
FOR THE YEAR ENDED JUNE 30, 2009
REVENUES
Use of money and property
Total Revenues
EXPENDITURES
Debt service:
Principal
Interest and fiscal charges
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
ENDII~'G FUND BALANCE
Variance
Positive
Budget Actual (Negative)
$940 $940
940 940
$1,415,000 1,415,000
2,121,994 2,118,714 3,280
3,536,994 3,533,714 3,280
(3,536,994) (3,532,774) 4,220
3,537,000 3,537,000
3,537,000 3,537,000
$6 4,226 $4,220
51,715
$55,941
6~
NON-MAJOR GOVER1yMENTAL FUNDS
All funds not defined as major funds for the Fund Financial Statements are consolidated in one column
entitled "Other Governmental Funds." These non-major funds are identified and included in this
supplemental section and includes all of the City's 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.
Storm Drain -Accounts for the construction and maintenance of storm drain facilities including
drainage and sanitary sewer facilities.
Park Dedication -Accounts for the activity granted by the business and professions code of the
State of California in accordance with the o~~en space and conservation element of the City's
General Plan. Revenues of this fund are restricted for the acquisition, improvement, expansion
and implementation of the City's parks and recreation facilities.
Environmental Ma~aagement -Accounts for all activities related to operating the non-point source
pollution program.
Transportation -Accounts for the City's gas tax, sales tax 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.
Housing Development -Accounts for the Fed~;ral 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 rules.
Redevelopment Agency -Accounts for the Cupertino Square project area and low and moderate
income housing funds.
6~a
CITY OF CUPERTINO
NON-MAJOR GOVERNMENTAL FUNDS
COMBMING BALANCE SHEETS
JUNE 30, x:009
SPECIAL REVENUE FUNDS
Assets
Cash and im~estments
Accounts receivable
Loans receivable
Land held for housing development
Total assets
Liabilities
Accounts payable and accruals
Accrued payroll and benefits
Unearned revenue
Deferred revenue
Total Liabilities
Fund balances
Reserved for:
Encumbrances
Loans receivable
Land held for housing development
Low and moderate income housing
Unreserved, reported in:
Special Revenue Funds
Total fund balances
Total liabilities and fund balances
Storm Park Environmental Housing
Drain D:dication Management Transportation Development
$1,060,559 $578,357 $202,980 ' $828,730 $1,201,710
481,909 63,346
839,326
615,000
$1,060,559 $578,357 $202,980 $1,310,639 $2,719,382
$882 $9,556 $12,664 $106,181
$670 28,291 10,483 1,747
12,749
_ 256,2] 1 178,563
670 882 37,84? 292,107 286,491
24, ] 18
219,510 70,545
839,326
615,000
1,059,889 553,357 ]65,133 799,022 908,020
1,059,889 577,475 165,133 1,018,532 2,432,891
$1,060,559 $578,357 $202,980 $],310,639 $2,719,382
~l)
SPECIAL
REVENUE
FUND
Redevelopment
Agency
Total
Nonmajor
Governmental
Funds
$759,2]7 4,631,553
545,255
839,326
615,000
$759,217 $6,631,134
$1,768 $131,051
4, 114 45,305
12,749
434,774
5,882 623,879
39,532 353,705
839,326
615,000
507,037 507,037
206,766 3,692,187
753,335 6,007,255
$759,217 $6,631,134
7l
CITY OF CUl'ERTINO
NON-MAJOR GOVERrdMENTAL FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2009
SPECIAL REVENUE FUNDS
REVE1~'UES
Taxes
Use of money and property
Intergovernmental
Charges for services
Total Revenues
EXPENDITURES
Current:
Community development
Public works
Capital out]ay
Total Expenditures
EXCESS OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers (out)
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
BEGINNING FUND BALANCES (DEFICIT)
ENDING FUND BALANCES
Storm Park Environmental Housing
Drain ,Dedication Management Transportation Development
$66,598 $233,750 $22,598
20,367 9,624 $2,012 $27,380 72,305
1,479,005 842,607
_ 507 365,060 76,457
86,965 _ 243,881 367,072 1,582,842 937,510
2,237,588
418,148 808,810
57,047 _ 882 4,480,258
57,047 _ 882 418,148 5,289,068 2,237,588
29,918 - 242,999 (51,076) (3,706,226) (1,300,078)
775,000
(25,000)
(25,000) _ 775,000
4,918 242,999 (51,076) (2,931,226) (1,300,078)
1,054,971 - 334,476 216,209 3,949,758 3,732,969
$1,059,889 $577,475 $165,133 $1,018,532 $2,432,891
~.~
SPECIAL
REVENUE
FTTNTI
Total
Nonmajor
Redevelopment Governmental
Agency Funds
$1,211,128 $1,534,074
4,388 136,076
2,321,612
442,024
1,215,516 4,433,786
394,810 2,632,398
1,226,958
4,538,187
394,810 8,397,543
820,706 (3,963,757)
775,000
(25,000)
750,000
820,706 (3,213,757)
(67,371) 9,221,012
$753,335 $6,007,255
73
CITY OF CUPERTINO
BUDGETED NOr1-MAJOR FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AT1D ACTUAL
FOR THE FISCAL YEAI: ENDED JUNE 30, 2009
SPECIAL REVENUE FUNDS
REVENUES
Taxes
Use of money and property
Intergovernmental
Charges for services
Total Revenues
EXPENDITURES
Current:
Community development
Public works
Capital outlay
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FTNANCING SOURCES (USES)
Transfers in
Transfers (out)
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
BEGINNING FUND BALANCES (DEFICIT)
ENDING FUND BALANCES
STORM DRAIN PARK DEDICATION
Vaziance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
$50,000 $65,598 $16,598 $300,000 $233,750 ($66,250)
30,000 2),367 (9,633) 16,000 9,624 ($6,376)
507
80,000 8~i,965 6,965 316,000 243,881 (72,626)
638,669 5'x,047 581,622 50,000 882 49,118
638,669 5'',047 581,622 50,000 882 49,118
(558,669) 29,918 588,587 266,000 242,999 (23,001)
(25,000) (2`,000)
($558,669) 25,918 $588,587 $266,000
1,054,971
$1,084,889
242,999 ($23,001)
334,476
$577,475
7~I
SPECIAL REVENUE FUNDS
ENVIRONMENTAL
MANAGEMENT TRANSPORTATION HOUSiN_G DEVELOPMENT
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative) Budget
Variance
Positive
AcNal (Negative)
$4,000 $2,012 $320,000 $22,598 ($297,402)
($1,988) $]00,000 $:'7,380 ($72,620) 113,000 72,305 (40,695)
2,578,000 1,4''9,005 (1,098,995) 510,0]3 842,607 332,594
365,000 365,060 60 ''6,457 76,457
369,000 367,072 (],928) 2,678,000 I,Sf,2,842 (1,095,158) 943,013 937,510 (5,503)
2,561,293 2,237,588 323,705
451,131 418,148 32,983 823,395 868,810 14,585
5,453,114 4,480,258 972,856
451,131 418,148 32,983 6,276,509 5,289,068 987,441 2,56],293 2,237;588 323,705
(82,131) (51,076) 31,055 (3,598,509) (3,706,226) (107,717) (1,618,280
(1,300,078) 318,202
775,000 775,000
775,000 775,000
($82,131) (51,076) $31,055 ($2,823,509) (2,931,226) ($]07,717) ($1,618,280)
216,209 3,949,758
$165,133 $1,014,532
(1,300,078) $318,202
3,732,969
$2,432,891
(Continued)
75
CITY OF CIJPERTINO
BUDGETED NON-MAJOR FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AI:D ACTUAL
FOR THE FISCAL YEAR. ENDED JUNE 30, 2009
REVENUES
Taxes
Use of money and property
Intergovernmental
Charges for services
Total Revenues
EXPENDITURES
Current:
Community development
Public works
Capital outlay
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers (out)
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
BEGINNING FUND BALANCES (DEFICIT)
ENDING FUND BALANCES
SPECIAL REVENUE FUND
REDEVELOPMENT AGENCY
Variance
Positive
Budget Actual (Negative)
$814,000 $1,21],128 $397,128
10,000 4,388 (5,612)
824,000 1,215,516 39],516
520,931 394,810 126,121
520,931 394,810 126,12 I
303,069 820,706 517,637
$303,069 820,706 $517,637
(67,371)
$753,335
7E.
INTERNAL SERVICE FUNDS
The Internal Service Funds are used to account for the financing of goods or services provided by one
department to other departments of the City on a cost r~;imbursement basis.
The concept of major funds does not extend to internal service funds because they do not do business
with outside parties. For the Statement of Activities. the net revenues and 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
Assets. However, internal service funds are still presented separately in the Fund Financial Statements.
Management Information Systerns -Accounts for the activities related to the maintenance and
replacement of the City's technology infrastructure.
Workers' Compensation -Accounts for the activities in support of the self-insured workers'
compensation program.
Equipment Revoh~ing -Accounts for the activities related to the maintenance and replacement of
the City's vehicle fleet.
Compensated Absences and Long-Term Disa,hilil}~ -Accounts for the activities related to the
City's program for compensated absences payouts and long-term disability.
Retiree Medical -Contains funds set aside for other post employment retirement benefits.
7~
CITY OF CUYERTINO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET ASSETS
JANE 30, 2009
Compensated
Management Absences and
Information Workers' Equipment Long-Term Retiree
Systems Compensation _ Revolving Disability Medical Tota]
ASSETS
Cash and investments $1,715,827 $1,645,368 _ $1,942,052 $18,802 $7,750,374 $13,072,423
Total current assets 1,715,827 1,645,368 _ 1,942,052 18,802 7,750,374 13,072,423
Capital assets,
net of accumulated depreciation 339,669 _ 795,448 1,135,117
Total Assets 2,055,496 1,645,368 _ 2,737,500 18,802 7,750,374 ]4,207,540
LIABILITIES
Current Liabilities:
Accounts payable and accruals 44,638 147,021 191,659
Accrued payroll and benefits 12,293 564 6,199 19,056
Claims payable 411,000 _ 411,000
Total current liabilities 56,931 411,564 _ 153,220 621,715
Non-current Liabilities:
Compensated absences 21,404 9,154 30,558
Claims payable 1,157,000 1,157,000
Net OPEB Obligation _ 1,827,077 1,827,077
Total Liabilities 78,335 1,568,564 _ 162,374 1,827,077 3,636,350
NET ASSETS
Invested in capital assets 339,669 795,448 1,135,1 ]7
Unrestricted 1,637,492 76,804 _ 1,779,678 18,802 5,923,297 9,436,073
Total Net Assets $1,977,161 $76,804 $2,575,126 $18,802 $5,923,297 $10,571,190
~~-
CITY OF CUl'ERTINO
INTERNAL SER'JICE FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2009
OPERATING REVENUES
Charges for services
Total Operating Revenues
OPERATING EXPENSES
Salaries and related expenses
Materials and supplies
Contractual services
Insurance claims
Depreciation
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
Interest income
Total Nonoperating Revenues (Expenses)
Income (Loss) Before Transfers
Transfers in
Change in Net Assets
BEGINNING NET ASSETS
ENDING NET ASSETS
Compensated
Management Absences and
Information Workers Equipment Long-Term Retiree
Systems Compensat on Revolving Disability Medical
Total
$1,065,651 $305,053 $1,101,448 $68,685 $2,540,837
1,065,651 305,053 1,10],448 68,685 2,540,837
493,156 25,68 284,311 408,110 $2,475,000 3,686,275
303,162 302,958 606,120
242,771 93,795 336,566
315,6:11 63,444 379,095
157,687 _ 212,881 370,568
1,196,776 341,319 893,945 471,554 2,475,000 5,378,624
(13],125) (36,296) 207,503 (402,869) (2,475,000) (2,837,787)
28,699 29,9;4 32,741 1,830 132,]01 225,345
28,699 29,9;4 32,741 1,830 132,101 225,345
(102,426) (6,322) 240,244 (401,039) (2,342,899) (2,612,442)
332,000 _ 45,000 400,000 1,946,000 2,723,000
229,574 (6,322) 285,244 (1,039) (396,899) 110,558
1,747,587 83,126 2,289,882 19,841 6,320,196 10,460,632
$1,977,161 $76,804 $2,575,126 $18,802 $5,923,297 $]0,571,190
g ~'
CITY OF CUF'ERTINO
INTERNAL SERVICE FUNDS
COMBINING STATEMENTS OF CASH FLOWS
FOR THE YEAR END]:D JUNE 30, 2009
Compensated
Management Absences and
Information Wcrkers' Equipment Long-Term Retiree
Systems Compensation Revolving Disability Medical Total
CASH FLOWS FROM OPERATING ACTNITIES
Cash received from customers $1,065,651 $305,053 $1,101,448 $68,685 $2,540,837
Cash payments to suppliers for goods and services (514,453) (:?46,890) (291,063) (63,444) ($647,923) (1,763,773)
Cash payments to employees (491,585) (25,579) (353,937) (408,110) (1,279.211)
Cash Flows from (used for) Operating Activities 59,613 32,584 456,448 (402,869) (647,923) (502,147)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTNITIES
Medicare retiree drug subsidy 36,043 36,043
Transfers in 332,000 45,000 400,000 1,946,000 2,723,000
Cash Flows (used for) Noncapital Financing Activities 332,000 45,000 400,000 1,982,043 2,759,043
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchase of capital assets (269,668) (272,039) (541,707)
Cash Flows from Capital and Related
Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Cash Flows from Investing Activities
Net Cash Flows
Cash and investments at beginning of year
Cash and investments at end of year
Reconciliation of operating income (loss) to net cash flows
from operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation
Change in assets and liabilities:
Prepaid expenses
Accounts payable and accruals
Accrued payroll and benefits
Compensated absences
Claims Payable
Net OPEB Obligation
Cash Flows from Operating Activities
(269,668) (272,039) (541,707)
28,699 29,974 32,741 1,830 132,101 225,345
28,699 29,974 32,741 1,830 132,101 225,345
150,644 62,558 262,150 (1,039) 1,466,221 1,940,534
],565,183 1,582,810 1,679,902 19,841 6,284,153 11,131,889
$1,715,827 $I,ti45,368 $1,942,052 $18,802 $7,750,374 $13,072,423
($131,125)
157,687
($36,296) $207,503 ($402,869) ($2,475,000) ($2,837,787)
212,881
370,568
15,919 15,919
]5,561 ,2,239) 105,690 119,0!2
2,409 119 (1,664) 864
(838) (67,962) (68,800)
'' 1,000 7 ] ,000
1,827,077 1,827,077
$59,613 $:2,584 $456,448 ($402,869) ($647,923) ($502,147)
81
AGENCY ]~ UNDS
All Agency Funds, representing all fiduciary funds of the City, are custodial in nature and do not involve
measurement of results of operations. Such funds have no equity since any assets are due to individuals
or other entities at some future time.
These funds are presented separately from the Governmental and Fund Financial Statements.
82
CITY OF CUPERTINO
Combining Statement of Changes in Assets and Liabilities
All Agency funds
All Agency Funds
Assets
Cash and investments
Liabilities
Deposits
For the fiscal year ended June 30, 2009
Balance
June 30, 2008
Additions
Deletions
Balance
June 30, 2009
$117,308 $1,986 $115,322
$117,308 $1,986 $115,322
83
STA TISTICA.~ SECTION
gs
STATISTICAL SECTION
This part of the City's Comprehensive Annua( Financial Report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, and required
supplementary information says about the City's overall financial health. In contrast to the financial
section, the statistical section information is not subject t~~ independent audit.
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:
1. Net Assets by Component
2. Changes in Net Assets
3. Fund Balances of Governmental Funds
4. Changes in Fund Balance of Governmental Func.s
Revenue Capacity
These schedules contain information to help the reader assess the City's most significant own-source
revenues, properly tax:
1. Assessed and Estimated Actual Value of Taxable Property
2. Property Tax Rates, All Overlapping Governme~its
3. Principal Property Taxpayers
4. Property Tax Levies and Collections
Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current levels of
outstanding debt and the City's ability to issue additional debt in the future:
1. Ratio of Outstanding Debt by Type
2. Computation of Direct and Overlapping Debt
3. Computation of Legal Bonded Debt Margin
4. Ratio of General Bonded Debt Outstanding
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment
within which the City's financial activities take place:
1. Demographic and Economic Statistics
2. Principal Employers
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in
the City's financial report relates to the services the City provides and the activities it performs:
1. Full-Time Equivalent City Government Employees by Function
2. Operating Indicators by Function/Program
3. Capital Asset Statistics by Function/Program
Sources
Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual
Financial Reports for the relevant year. The City implemented GASB Statement 34 in 2002-03;
schedules presenting government-wide information include information beginning in that year.
8'7
CITY OF CUI'ERTINO
NET ASSETS BY (~OMPONENT
LAST SIX FISCAL YEARS
(Accrual basis of accounting)
Governmental Activities
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total governmental activities net assets
20(13
$79,705,041
9,081,791
24,472,451
$113,259,283
Fiscal Year Ended June 30
2004 2005 2006
$85,425,753 $86,530,017 $83,064,879
7,416,930 7,291,925 8,329,671
18,541,954 21,202,795 26,916,679
$111,384,637 $115,024,737 $118,311,229
Business-Type Activities
Invested in capital assets, net of related debt
Unrestricted
Total business-type activities net assets
Primary Government
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total primary government net assets
688,331
6,573,514
$7,261,845
80,393,372
9,081,791
31,045,965
$120,521,128
645,290
7,314,068
$7,959,358
578,962
6,028,989
$6,607,951
497,681
6,291,439
$6,789,120
86,071,043
7,416,930
25,856,022
$119,343,995
87,108,979
7,291,925
27,231,784
$121,632,688
83,562,560
8,329,671
33,208,118
$125,100,349
88
CITY OF CUPERTINO
NET ASSETS BY I~OMPONENT
LAST SIX FISCAL YEARS
(Accrual basis of accounting)
2007 2008 2009
$80,343,053 $85,173,998 $103,341,905
9,265,565 9,926,770 6,661,074
39,243,717 43,242,639 33,290,050
$128,852,335 $138,343,407 $143,293,029
467,416 84,126 136,127
6,977,436 7,849,147 8,949,142
$7,444,852 $7,933,273 $9,085,269
80,810,469 85,258,124 103,478,032
9,265,565 9,926,770 6,661,074
46,221,153 51,091,786 42,239,192
$136,297,187 $146,276,680 $152,378,298
89
CITY OF CUI'ERTINO
CHANGES IN NET ASSETS
LAST SEVEN FISCAL YEARS
(Accrual Basis of Accounting)
Fiscal Year Ended June 30
2003 2004 2005 2006
Expenses
Governmental Activities:
Administration
Law Enforcement
Public Information
Administrative Services
Recreation Services
Community Development
Public Works
Interest on Long Term Debt
Total Governmental Activities Expenses
Business-Type Activities:
Resource Recovery
Blackberry Farm
Cupertino Sports Center
Recreation Programs
Senior Center
Total Business-Type Activities Expense
Total Primary Government Expenses
$1,635,846 $1,430,523 $1,280,339 $1,354,543
6,041,831 6,090,038 6,179,326 6,577,199
763,254 710,754 824,317 9,14,024
:3,556,129 3,923,377 3,750,174 4,208,389
:?,156,972 2,234,509 2,173,936 2,359,966
:3,234,456 2,678,109 3,269,475 4,541,965
1 "1,534,128 15,546,461 14,585,232 16,384,026
3,796,472 2,317,837 2,289,526 2,262,913
33,719,088 34,931,608 34,352,325 38,603,025
1,897,425 1,793,083 2,927,060 2,101,198
1,497,420 1,353,362 1,341,712 1,302,855
,130,077 1,352,509 1,452,957 1,448,048
!,554,834 1,590,302 1,689,436 1,729,194
570,412 493,244 438,440 588,818
(1,650,168 6,582,500 7,849,605 7,170,113
$4;1,369,256 41,514,108 42,201,930 45,773,]38
Program Revenues
Governmental Activities:
Charges for Services:
Administration
Law Enforcement
Administrative Services
Recreation Services
Community Development
Public Works
Operating Grants and Contributions
Capital Grants and Contributions
Total Government Activities Program Revenues
Business-Type Activities:
Charges for Services:
Resource Recovery
Blackberry Farm
Cupertino Sports Center
Recreation Programs
Senior Center
--- --- --- $23,201
$468,110 $838,457 $694,952 722,164
294,577 16,650 --- ---
161,969 148,337 163,462 240,074
,624,181 1,903,277 4,164,792 5,286,336
348,905 325,959 286,280 201,250
:'.,388,199 2,496,689 593,b57 3,403,762
965,211 3,612,102 2,164,907 522,950
(1,251,152 9,341,471 8,068,050 10,399,737
:'.,397,439 2,398,819 2,395,282 2,203,127
,479,312 1,301,092 1,218,958 1,155,986
,109,799 1,184,860 1,385,837 1,419,672
'.,872,004 1,910,599 2,167,705 2,331,409
484,530 456,211 473,787 704,390
90
CITY OF CUI'ERTINO
CHANGES IN NET ASSETS
LAST SEVEN FISCAL YEARS
(Accrual Basis of Accounting)
2007 2008 2009
$1,675,443 $1,636,284 $1,769,500
7,148,187 7,679,467 8,804,195
1,186,929 1,216,164 1,624,210
3,874,003 3,923,217 4,001,738
2,517,725 3,845,873 4,206,343
4,090,959 4,059,740 6,177,879
16,230,274 16,569,310 18,104,649
2,239,657 2,183,403 2,118,714
38,963,177 41,113,458 46,807,228
2,122,805 2,056,061 1,998,184
975,064 450,206 495,845
1,623,839 1,547,402 1,594,325
1,830,401 1,853,217 1,739,892
771,570 --- ---
7,323,679 5,906,886 5,828,246
46,286,856 47,020,344 52,635,474
$3,618 $10,711 2,240
1,031,736 799,350 869,295
193,752 847,424 80],280
4,768,026 3,551,478 3,586,993
200,969 13 5,942 15 7,311
3,048,512 2,392,987 4,014,036
3,496,095 5,696,124 4,759,485
12,742,708 13,434,016 14,190,640
2,254,416 2,254,790 2,100,704
1,101,564 640,771 596,944
1,655,169 1,605,545 1,732,282
2,396,720 2,493,214 2,364,037
690,603 --- ---
91
CITY OF CUPERTINO
CHANGES IN NIET ASSETS
LAST SEVEN FISCAL YEARS
(Accrual Basis of Accounting)
Fiscal Year Ended June 30
2003 2004 2005 2006
Operating Grants and Contributions 61,441 84,660 28,860 135,539
Total Business-Type Activities Program Revenue .,404,525 7,336,241 7,670,429 7,950,123
Total Primary Government Program Revenues 1?,594,236 16,677,712 15,738,479 18,349,860
Net (Expense) Revenue
Governmental Activities
Business-Type Activities
Total Primary Government Net Expense
-3:,467,936 -25,590,137 -26,284,275 -28,203,288
754,357 753,741 -179,176 780,010
-$3],713,579 -$24,836,396 -$26,463,451 -$27,423,278
General Revenues and Transfers
Governmental Activities:
Taxes:
Property Taxes
Property Tax In Lieu of Motor Vehicle Fee (1)
Incremental Property Tax
Sales Taxes
Transient Occupancy Tax
Utility User Tax
Franchise Tax
Other Taxes
Transfers
Intergovernmental
Investment Earnings
Miscellaneous
Gain on Sale of Land
Total Government Activities
Business-Type Activities:
Investment Earnings
Transfers
Total Business-Type Activities
Total Primary Government
Change in Net Assets
Government Activities
Business-Type Activities
Total Primary Government
$x•,100,856 $3,944,459 $4,296,940 $4,728,811
--- --- 2,930,000 3,569,300
25,831 76,570 15,974 185,676
f~,843,792 8,654,185 9,224,661 10,671,642
1,679,225 1,632,514 1,790,917 2,054,904
,566,265 2,636,264 2,705,888 2,809,587
:,175,913 2,194,651 2,217,313 2,353,575
1,110,545 1,248,437 3,146,516 2,534,393
225,000 175,000 1,388,000 800,000
,215,866 2,460,137 978,059 -300,039
],207,017 526,560 684,952 669,820
79,280 166,714 545,155 189,262
--- --- --- 1,222,849
25,229,590 23,715,491 29,924,375 31,489,780
211,093 95,127 215,769 201,159
-225,000 -175,000 -1,388,000 -800,000
106,496 -56,228 -1,172,231 -598,841
$2.x,336,086 $23,659,263 $28,752,144 $30,890,939
-$'x,238,346 -1,874,646 3,640,100 3,286,492
860,853 697,513 -1,351,407 181,169
-$ti,377,493 -$1,177,133 $2,288,693 $3,467,661
(1) Replaced the reduced motor vehicle license fee (an intergovernmental revenue) in 2005.
92
CITY OF CUPERTINO
CHANGES IN NET ASSETS
LAST SEVEN FISCAL YEARS
(Accrual Basis of Accounting)
2007 2008 2009
14,343 14,309 14,471
8,112,815 7,008,629 6,808,438
20,855,523 20,442,645 20,999,078
-26,220,469 -27,679,442 -32,616,588
789,136 1,101,743 980,192
-$25,431,333 -$26,577,699 -$31,636,396
$6,529,772 $6,941,910 $7,491,965
3,652,509 3,894,502 4,299,902
187,276 220,267 1,211,128
l 1,252,341 13,154,749 14, l 39,190
2,511,184 2,711,590 2,140,274
3,011,755 3,175,724 3,205,073
2,537,018 2,547,439 2,618,125
2,661,449 1,709,892 1,317,767
500,000 992,150 ---
364,261 266,789 171,621
1,752,177 1,451,973 889,823
291,423 103,529 81,342
1, 510,410 --- ---
36,761,575 37,170,5]4 37,566,210
366,596 378,828 171,804
-500,000 -992,150 ---
-133,404 -613,322 171,804
$36,628,171 $36,557,192 $37,738,014
10,541,106 9,491,072 4,949,622
655,732 488,421 1,151,996
$11,196,838 $9,979,493 6,101,618
93
CITY OF CUYERTINO
FUND BALANCES OF GO~~ERNMENTAL FUNDS
LAST SEVEN FISCAL YEARS
(Modified Accrual Ba;~is of Accounting)
:Fiscal Year Ended June 30
2003 2004 2005 2006 2007
General Fund
Reserved
Unreserved
Total General Fund
All Other Governmental Funds
Reserved
Unreserved, reported in:
Special Revenue Funds
Capital Project Funds
Total All Other Governmental Funds
$3,782,689 $3,897,270 $3,864,969 $2,931,046 $2,711,586
13,099,033 12,632,286 18,313,846 23,866,568 23,634,874
$16,881,722 $16,529,556 $22,178,815 $26,797,614 26,346,460
$20,891,656 $9,784,645 $2,701,067 $4,925,900 $8,555,042
3,976,517 3,736,446 3,618,814 6,249,004 6,844,632
6,576,208 2,236,730 1,663,033 -1,208,341 -472,405
$31,444,381 $15,757,821 $7,982,914 $9,966,563 $14,927,269
The City implemented GASB Statement 34 in fiscal year 2003 and has elected to show the above information
from that date.
94
CITY OF CUI'ERTINO
FUND BALANCES OF GO~~ERNMENTAL FUNDS
LAST SEVEN FISCAL YEARS
(Modified Accrual Ba:>is of Accounting)
2008 2009
$2,668,914 $2,325,283
16,997,569 19,871,574
$19,666,483 $22,196,857
$11,240,851 $4,180,483
7,270,331 3,692,187
7,631,866 968,077
$26,143,048 $8,840,747
95
CITY OF CUP'ERTINO
CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS
LAST SEVEN FISCAL YEARS
(Modified Accrual Basis of Accounting)
Fiscal Year Ended June 30
2003 2004 2005 2006
Revenues
Taxes
Use of Money and Property
Intergovernmental
Licenses and Permits
Charges for Services
Fines and Forfeitures
Other Revenue
$20,200,250 $21,004,405 $23,614,623 $25,616,553
1,910,503 940,963 1,119,399 1,607,837
6,318,523 7,236,955 5,567,266 5,896,167
1,410,572 1,540,760 2,896,000 3,614,953
855,844 930,050 1,568,935 2,143,729
550,377 723,748 559,791 629,586
59,219 1,009,260 1,792,795 245,176
Total Revenues
Expenditures
Current:
Administration
Law Enforcement
Public Information
Administrative Services
Recreation Services
Community Development
Public Works
Capital Outlay
Debt Service
Principal Repayment
Interest and Fiscal Charges
Total Expenditures
Excess (deficiency) of Revenues Over
(under)expenditures
Other Financing Sources (Uses)
Bond Proceeds
Proceeds from Sale of Land
Payment to Refunded Debt Escrow Agent
Transfers In
Transfers Out
Total Other Financing Sources
Net Change in Fund Balances
Debt service as a percentage of
noncapital expenditures
31,305,288 33,386,141 37,118,809 39,754,001
1,474,924 1,222,581
6,015,036 5,950,849
703,431 686,798
3,475,991 3,758,806
.2,104,167 2,141,431
3,177,406 2,563,242
10,440,335 9,322,086
5,812,856 20,246,237
1,162,096
6,144,695
758,314
3,671,303
2,121,366
3,156,908
9,637,314
10,025,935
1,236,390
6,499,911
853,484
4,103,497
2,302,995
4,467,655
10,386,055
2,771,502
5,925,948 1,220,000 1,245,000 1,270,000
2,939,757 2,317,837 2,289,526 2,262,913
4•I,069,851 49,429,867 40,212,457 36,154,402
-12,764,563 -16,043,726 -3,093,648 3,599,599
57,677,519 ---
-3'x,208,286
2.x,775,538
-2.x,840,538
--- 2,422,849
4,765,307 7,904,763 8,364,084
-4,760,307 -6,936,763 -7,784,084
1 ~g,404,233 5,000 968,000 3,002,849
$:x,639,670 -$16,038,726 -$2,125,648 $6,602,448
25.3% 11.6% 11.4% 10.6%
The City implemented GASB Statement 34 in fiscal year 2003. This calculation is included only for
fiscal years from that date.
1) Noncapital expenditures is total expenditures less capital assets added each year to statement of
net assets. 96
CITY OF CLIPERTINO
CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS
LAST SEVEN Fl[SCAL YEARS
(Modified Accrual Basis of Accounting)
2007 2008 2009
$28,903,993 $34,589,139 $36,395,950
2,169,977 2,490,444 1,300,508
8,200,519 8,285,280 6,896,394
3,325,844 2,656,017 2,740,463
2,062,067 1,728,099 1,707,533
926,310 722,087 761,320
154,235 95,388 80,835
45,742,945 50,566,454 49,883,003
1,287,101
6,975,517
1,121,437
3,715,994
2,403,296
3,969,837
10,477,727
4,292,169
1,351,273
7,456,661
1,169,247
3,797,156
3,745,244
3,931,055
11,137,935
8,334,093
1,336,921
8,133,168
1,486,443
3,634,043
3,789,260
5,841,428
11,914,584
22,262,369
1,295,000 1,355,000 1,415,000
2,239,657 2,183,403 2,118,714
37,777,735 44,461,067 61,931,930
7,965,210 6,105,387 -12,048,927
1,663,842 --- ---
9,658,000 19,136,165 5,035,925
-14,777,500 -20,705,750 -7,758,925
-3,455,658 -1,569,585 -2,723,000
4,509,552 4,535,802 -14,771,927
10.6% 9.8% 8.9%
!~7
CITY OF CUPERTINO
ASSESSED AND ESTIMATED ACTUAL
VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Total Estimated Direct
Fiscal Total Assessed Ful] Market Tax
Year Secured Unsecured Exemptions Valuation Valuation Rate
2000 56,046.604.382 5600.020,466 573,148.676 56.553.278, ] 1 ~ 56.553,278.11 ~ 0.06~/~
2001 S6,986,833,011 5416,844,493 567,242,848 57,407,208,836 57,407,208,836 0.04~7~
2002 57.836,349,904 5634,624,124 582,089.594 58,662,981.335 58,662,981,335 0.04%
2003 58.119,969.820 5565,212.987 576,795?94 58,685.515.766 58,685,515.766 0.069
2004 58,689.658,802 5530.097.614 580,704.482 59.219.879,996 59? 19,879,996 0.049
2006 59.159,184,070 5367.378,773 580,678.889 59,626.841379 S9,526,841,379 0.069
2006 59.942.314.167 5 350,391.447 588.612.732 5l 0.292,966,413 510,292,965,413 0.069
2007 510,794,991.704 5381,307.801 594.957.979 511,176,113.115 511.176,513,115 0.069c
2008 S1 ],612.949,962 5417,564,226 596,640,910 511,930.51-1,178 5] 1.930,514,178 0.069
2009 512.637.622,059 5133.413.208 599.910.894 513. ] 72.425.287 513, l 72,425,287 0.07%
X14,000.000.000 -------------___-__ ----______.____.__ _.. _
s1?.oo0,000,000
X10.000,000.000
~a,ooo,ooo.ooo
~s,ooo,ooo,ooo
X4.000.000.000
s2.ooo.ooo.ooo
~o
3000 2001 2002 '_'003 2004 200> 2006 2007 2008 2009
^ S:.'ured Propcn~
^ Unsecured Ympem
Source: HdL Companies 98
CITY OF CUPERTINO
PROPERTY TAX RATES
ALL OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Basic Levy 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1,00000 1.00000 1.00000 1.00000
County Library Retirement Lery 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240
County Retirement Levy 0.03190 0.03560 0.03640 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880
Cupertino 1995 (No. 10) 0.02540 0.02640 0.02640 0.02640 0.02530 0.02610 0.02590 0.02010 0.02270 0.02030
Cupertino 2001 0.00000 0.00000 0.02110 0.00650 0.01040 0.00990 0.00910 0.00880 0.01100 0.01030
El Camino Hopital 2003 0.00000 0.00000 0,00000 0.00000 0.00000 0.00000 0.00000 0.01290 0.01290 0.01290
Foothill College 2006 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.02360 0.00000 0.00170
Foothill/DeAnza College 1999 0.00000 0.01400 0.01150 0.01080 0.01100 0.01290 0.01 190 O.OI 100 0.01130 0.01060
Fremont High 1998 0.02180 0.02390 0.02040 0.02460 0.02490 0.02680 0.02600 0.02430 0.02410 0.02190
Fremont Uniori High 2008 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0,00000 0,01200
Los Gatos/Saratoga High 1998 0.02390 0.03200 0.02240 0.05300 0.04170 0.04090 0.03710 0.03510 0.03450 0.03300
Santa Clara Unified 1997 (No. 1) 0,02250 0.01740 0.03660 0.02520 0.02630 0.03440 0.03260 0.02970 0.02680 0.02320
Santa Clara Unified 2004 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.05350 0.05000 0.00030 0.05110
Saratoga 1997 (No. 3) 0.03730 0.03650 0.02850 0.03240 0.03300 0.03390 0.03160 0.03120 0.03220 0.03210
Saratoga 2002 0.00000 0.00000 0.00000 0.00630 0.00550 0.00220 0.00400 0.00390 0.00410 0.00420
Scvwd Zone W-1 Bond 0.00170 0.00160 0.00090 0.00090 0.00120 0.00060 0.00090 0.00020 0.00040 0.00020
Scvwd State Watei• Project 0.00680 0.00590 0.00530 0.00630 0.00750 0.00860 0.00690 0.00700 0.00670 0.00590
West Valle}~ College 2004 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.01400 0.01260 0,01180 0.00320
Total Direct & Overlapping Rates 1.17370 1.19570 1.21010 1.23360 1.22800 1.23750 1.29470 1.31160 1.24000 1.28380
City's Share of 1 % Levy 0.05725 0.05725 0.05725 0.05725 0.05725 0.05725 0.05725 0.05725 0.05725 0.0566
Redevelopment Rate 1.04500 1.04840 1.04990 1.05040 1.04900 ].04840 1,04830 1.04730
Total Direct Rate 0.01697 0.01694 0.02296 0.01694 0.01733 0.01673 0.01733 0.05740 0.05867 0.06268
Source: HdL, Coren & Cone
99
CITY OF CUPERTINO
PRINCIPAL PROPERTY TAX PAYERS
CURRENT YEAR AND NINE YEARS AGO
2009 Percentage of 2000 Percentage of
Assessed Total Assessed Assessed Total Assessed
Taxpayer Valuation Valuation Valuation Valuation
Apple Inc. $610,763,043 4.83% $77,486,088 1.17%
Hewlett Packard 306,879,442 2.43% 390,949,067 6.37%
Tandem Computer --- 0.00% 198,452,582 3.23%
Cupertino Gateway Partners --- 0.00% 130,102,917 2.12%
Symantec 134,991,638 1.07% --- 0.00%
Cupertino City Center 208,000,000 1.65% 70,282,669 1.15%
Teachers Insurance & Annuity --- 0.00% 87,309,541 1.42%
Irvine Company LLC 69,693,491 0.55% 57,899,508 0.94%
ECI Tvvo Results LLC 63,240,000 0.50% --- 0.00%
GKK Cupertino Owner 89,777,290 0.71 % --- 0.00%
Cupertino Village 68,042,160 0.54 --- 0.00%
Villa Serra Apartments 58,335,514 0.46 --- 0.00%
RP SCS Cupertino Hotel 54,280,444 0.43 --- 0.00%
Compaq Computer --- 0.00% 109,501,504 1.65%
RWC LLC --- 0.00% 57,037,674 93.00%
Sumitomo Bank Leasing & Finance _ 0.00% 78,776,148 1.28%
$1,664,003,022 11.74% $],257,797,698 112.33%
Source: The HdL Companies
100
CITY OF CUPERTINO
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Percent of
Percent Delinquent Total Total Tax
Fiscal Total Current Tax of Levy Tax Tax Collections
Year Tax Lew Collections Collected Collections Collections to Tax Lew
2000 $3,075,546 $3,075,546 100.00% $0 $3,075,546 100.00%
2001 $3,209,623 $3,209,623 100,00% $0 $3,209,623 100.00%
2002 $4,024,705 $4,024,705 100.00% $0 $4,024,705 100.00%
2003 $4,126,687 $4,126,687 100.00% $0 $4,126,687 100.00%
2004 $4,021,029 $4,021,029 100.00% $0 $4,021,029 100.00%
2005 $4,312,914 $4,312,914 100.00% $0 $4,312,914 100.00%
2006 $4,914,487 $4,914,487 100,00% $0 $4,914,487 100.00%
2007 $6,717,048 $6,717,048 100.00% $0 $6,717,048 100.00%
2008 $7, 162,177 $7,162,177 100.00% $0 $7,162,177 100.00%
2009 $8,703,093 $8,703,093 100.00% $0 $8,703,093 100.00%
Source; County of Santa Clara, Department of Finance
101
CITY OF CUPERTINO
RATIO OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Governmental Activities and Primary Government
Percentage of Estimated % of
Fiscal Certificates 1915 Actual Market Value Personal
Year of Participation Act Bonds Total of Taxable Property Per Capita Income (1)
2000 47,005,000 --- 47,005,000 0.72% 904 ---
2001 44,745,000 --- 44,745,000 0.60% 885 ---
2002 42,370,000 --- 42,370,000 0.49% 838 ---
2003 54,770,000 --- 54,770,000 0.63% 1,053 ---
2004 53,550,000 --- 53,550,000 0.58% 1,018 ---
2005 52,305,000 --- 52,305,000 0.55% 994 ---
2006 51,035,000 --- 51,035,000 0.50% 948 ---
2007 49,740,000 --- 49,740,000 0.45% 902 ---
2008 48,385,000 --- 48,385,000 0.41% 877 1.53%
2009 46,970,000 --- 46,970,000 0.36% 841 1.58%
(1) Not available prior to 2008
102
CITY OF CUPERTINO
COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT
JUNE 30, 2009
2008-09 Assessed Valuation: $13,172,425,287
Redevelopment Incremental Valuation: 81,393,204
Adjusted Assessed Valuation: $13,091,032,083
Total Debt City's Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/09 % Applicable (1) Debt 6/30/09
Santa Clara County $350,000,000 4.832% $ 16,912,000
Santa Clara Valley Water District, Zone W-I 1,390,000 4.918 68,360
Foothill-DeAnza Community College District 482,349,288 13.999 67,524,077
West Valley Community College District 215,334,692 0.613 1,320,002
Santa Clara Unified School District 282,105,000 1.925 5,430,521
Fremont Union High School District 208,080,000 29.868 62,149,334
Cupertino Union School District 124,159,021 49.816 61,851,058
EI Camino Hospital District 145,820,000 1.4]2 2,058,978
Santa Clara Valley Water District Benefit Assessment 161,485,000 4.832 7,802,955
City of Cupertino 1915 Act Bonds 65,000 100. 65,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $225,182,285
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Santa Clara County General Fund Obligations $862,655,000 4.832% $ 41,683,490
Santa Clara County Pension Obligations 389,174,822 4.832 18,804,927
Santa Clara County Board of Education COP 14,530,000 4.832 702,090
Foothill-De Anza Community College District COP 25,605,000 13.999 3,584,444
Santa Clara Unified School District COP 12,980,000 1.925 249,865
Cupertino Union School District COP ],215,000 49.816 605,264
City of Cupertino Certificates of Participation 48,385,000 100. 48,385,000
Santa Clara County Vector Control District COP 4,125,000 4.832 199,320
Midpeninsula Regional Open Space Park District COP 116,673,031 7.788 9,086,496
TOTAL DIRECT AND OVERLAPPING GENERAL F UND DEBT $123,300,896
COMBINED TOTAL DEBT $348,483,181 (2)
(1) Percentage of overlapping agency's assessed valuation located within boundaries of the city.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-
bonded capital lease obligations.
Ratios to 2008-09 Assessed Valuation:
Total Overlapping Tax and Assessment Debt ,1.71
Ratios to Adjusted Assessed Valuation:
Combined Direct Debt ($48,385,000) ..........0.37%
Combined Total Debt .......................................2.66%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/09: $0
Source: Municipal Resource Consultants
103
CITY OF CUPERTINO
COMPUTATION OF LEGAL BONDED DEBT MARGIN
JUNE 30, 2008
Assessed Valuation:
Secured property assessed value, net of exempt real property $12,637,622,059
Adjusted valuation - 25% of assessed valuation
Debt limit - 15% of adjusted valuation
Amount of Debt Subject to Limit:
Total Bonded Debt $46,970,000
Less: Certificates of Participation not subject to
debt limit - 46,970,000
Amount of debt subject to limit
Legal Bonded Debt Margin
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
2000 245,747,930 0 245,747,930 0
2001 277,770,332 0 277,770,332 0
2002 321,111,800 0 321,111,800 0
2003 325,706,841 0 325,706,841 0
2004 345,745,500 0 345,745,500 0
2005 357,745,500 0 357,256,552 0
2006 376,159,758 0 376,159,752 0
2007 408,373,114 0 408,373,114 0
2008 431,735,623 0 431,735,623 0
2009 473,910,827 0 473,910,827 0
$3;159,405,514
$473,910,827
0
$473,910,827
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 198 ] -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 tl~e State of California for local governments located within the state.
Source: City Finance Department
104
CITY OF CUPERTINO
RATIO OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
Ratio of General
Fiscal Assessed Genera] Bonded Debt Bonded Debt to
Year Population Value Bonded Debt Per Capita Assessed Value
2000 52,000 $6,553,278,115 --- --- ---
2001 50,546 $7,407,208,836 --- --- ---
2002 50,546 $8,562,981,335 --- --- ---
2003 52,000 $8,685,515,766 --- --- ---
2004 52,628 $9,219,879,996 --- --- ---
2005 52,600 $9,526,841,379 --- --- ---
2006 52,600 $10,292,965,413 --- --- ---
2007 55,162 $1 ],176,513,] IS --- --- ---
2008 55,162 $11,512,949,952 --- --- ---
2009 55,840 $13,172,425,287 --- --- ---
Source; (1) State of Ca lifornia, Department of Finance, Demographics Research Unit
(2) County of S anta Clara and City Administrative Services
10~
CITY OF CUPERTINO
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Total Per Capita School Unemploy-
Fiscal County Personal Personal Enrollment ment
Year Population Population Income (4) Income (4) Grades 9-12 Rate
2000 52,000 1,682,585 ----- ----- 8,822 1.3%
2001 50,546 1,674,634 ----- ----- 8,822 2.4%
2002 50,546 1,668,309 ----- ----- 9,063 4.6%
2003 52,000 1,675,915 ----- ----- 9,108 5. I
2004 52,600 1,656,128 ----- ----- 9,147 3.7%
2005 52,600 1,759,585 ----- ----- 9,138 3.2%
2006 53,840 1,773,258 ----- ----- 9,875 2.9%
2007 55,162 1,794,522 ----- ----- 9,823 3.0%
2008 55,162 1,748,976 $3,153,407,456 $47,672 10,300 3.8%
2009 55,840 1,857,621 $2,960,056,852 $44,749 10,300 7.7%
Source: (1) State of California, Department of Finance, Demograph ics Research Unit
(2) Fremont Union High School District
(3) Department of Employment Statistics
(4) Not available prior to 2008
City
Population
of County
3.09%
3.02%
3.03%
3.10%
3.18%
2.99%
3.04%
3.07%
3.15%
3.01
106
CITY OF CUPERTINO
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO (1)
2008-09 1999-00
Percentage Percentage
Number of of Total City Number of of Total City
Employer Employees Employment (3) Employees Employment
Apple, Inc. 21,600 ---(2) 3,000 11,45%
Symantec 17,401 --- (2) 1,300 4.96%
Oracle 8,000 --- (2) 0 0.00%
Hewlett-Packard 3,000 13.33% 3,500 13.36%
DeAnza College Not Avail. 0.00% 3,000 1 1,45%
Fremont Union High School District Not Avail. 0.00% 722 2.76%
Durect Corporation 171 0.76% 0 0.00%
Arc Sight Inc. 400 1.78% 0 0,00%
Chordiant Software 285 1.27% 0 0.00%
Health Care Center at the Forum 250 I.11% 0 0.00%
Trend Micro Inc. 250 I ,11 % 0 0.00%
Target 220 0.98% 0 0.00%
Tandem Computers 0 0.00% 3,000 11.45%
Cupertino Union School District Not avail. 0.00% 1,400 5.34%
Sears Not avail. 0.00% 294 1.12%
JC Penney Not avail. 0.00% 280 1.07%
Dakota Brothers 200 0.89% 0 0.00%
(1) The City was able to obtain histori cal data only back to fiscal year 1999-00.
(2) Because employees outside of the City are included, percentage of City employment is not included.
(3) Total city labor force is 22,500 in 2009 accordi ng to the California Em ployment Deve lopment Dept.
Other Source: InfoUSA.com
107
CITY OF CUPERTINO
FULL-TIME EQUIVALENT
CITY GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
80.00
70.00
60.00
^ Council/Commissions
50.00 ^ Administration
Public/Env. Affairs
40.00 ^ Administrative Services
^ Parks & Recreation
30.00 ^Community Development
^ Public Works
20.00 ^ Redevelopment Agency
10.00
0.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Function
Council/Commissions
Administration
Public/Env. Affairs
Administrative Services
Parks & Recreation
Community Development
Public Works
Redevelopment Agency
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
0.50 0.50 0.50 0.80 0.80 0.80 1.40 1.40 1.40 1.47
4.85 4.85 4.60 4.70 4.65 4.70 4.30 4.30 4.85 4.90
4.15 4.15 4.15 4.40 4.40 4.40 5.55 6.50 7.32 6.95
18.90 17.90 19.90 20.30 20.30 20.35 21.63 21.83 22.33 22.33
24.65 28.65 35.15 32.63 33.13 32.13 31.96 28.76 30.77 30.78
18.95 18.95 19.95 20.75 20.75 19.34 20.47 23.68 23.78 21.86
66.00 69.00 70.00 70.22 70.22 71.22 71.13 71.13 72.30 72.59
0.00 0.00 0.00 0.00 0.00 0.32 0.92 1.42 1.92 1.87
Source: City of Cupertino Budget
108
NOTES
109
CITY OF CUPERTINO
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST FIVE FISCAL YEARS (1)
Function/Pro~ram
Public Information:
Access Cupertino
Public Safety Sheriff Response:
Priority One
Priority Two
Priority Three
Public Works:
Street Sweeping
Street Maintainence
Culture & Recreation:
Teen Center Memberships
Teen Dances
Sports Center Memberships
Senior Center Memberships
2005 2006 2007
3 Days 3 Days 3 Days
5.37 Min. 4.94 Min. 4.94 Min.
8.61 Min. 8.09 Min. 7.15 Min.
18.92 Min. 16.74 Min. 15.82 Min.
696 Curb Miles 696 Curb Miles 696 Curb Miles
24 Hrs of Call 24 Hrs of Call 24 Hrs of Call
441 550 510
10 10 9
916 1,021 1,336
2,000 3,100 1,93 5
Community Development:
Approved Building Plan Sets
Discretionary Land Use Applications
Public Notice of Upcoming Projects
Administrative Services:
Accounts Payable Processing
Business License Renewal Certificates
Duplication Requests
Recruitments
Within 5 Days Within 5 Days Within 5 Days
Within 21 Days Within 21 Days Within 21 Days
Within 10 Days Within 10 Days Within 10 Days
5 Days 5 Days 5 Days
3 Days 3 Days 3 Days
1 Day 1 Day 1 Day
60 Days 45 Days 45 Days
(1) Statistical information was not tracked prior to 2005.
110
CITY OF CUPERTINO
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST FIVE FISCAL YEARS (1)
2008 2009
3 Days 3 Days
5.83 Min. 3.88 Min.
7.95 Min. 5.94 Min.
15.73 Min, 9.40 Min.
696 Curb Miles 696 Curb Miles
24 Hrs of Call 24 Hrs of Call
444 400
9 6
1,419 1,700
2,110 2,243
Within 5 Days Within 5 Days
Within 21 Days Within 21 Days
Within 10 Days Within 10 Days
5 Days 5 Days
3 Days 3 Days
1 Day 1 Day
45 Days 45 Days
111
CITY OF CUPERTINO
CAPITAL ASSET STATISTICS BY
FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Function/Program 2000 2001 2002 2003 2004 2005 2006
Public Works:
Miles of Streets 450 450 450 450 450 450 450
Streetlights 3,250 3,250 3,250 3,250 3,250 3,250 3,250
Traffic Signals 39 39 39 39 39 39 39
Culture & Recreation:
City Parks ] 5 15 15 15 15 15 15
City Pat•k Acreage (1) 150.8 150.8 150.8 150.8 150.8 150.8 150.8
City Trails 1 l 1 1 l 1 1
Golf Courses 1 l 1 1 1 1 ]
Boathouse 1 1 1 1 1 1 1
Community Center 1 1 1 1 1 I 1
Community Hall 0 0 0 0 0 1 I
Senior Center ] 1 1 1 I 1 1
Sports Center 1 1 1 1 1 l 1
Swimming Pools 1 1 1 1 I 1 I
Tem~is Courts 17 17 17 17 17 17 17
Sports Fields 1 ] ] l I 1 1
City Library l 1 1 I 1 1 1
112
CITY OF CUPERTINO
CAPITAL ASSET STATISTICS BY
FUNCTIONlPROGRAM
LAST TEN FISCAL YEARS
2007 2008 2009
450 450 450
3,250 3,250 3,250
39 39 39
IS IS l5
150.8 150.8 150.8
1 1 1
l 1 l
i 1 1
1 1 1
1 1 1
1 1 1
1 l 1
1 1 1
l7 l7 17
1 1 1
1 ] 1
113
NOTES
114
COMMUNITY
PROFILE
115
NOTES
116
~stor~
Cupertino o~~,~es its name and earliest mention in recorded history to the 1776 expedition led by the Spaniard. Don Juan
Bautista de Anza, from Sonora, Mexico to the Port of San Francisco to found the presidio of St. Francis.
Leaving the majority of the party of men, ~~~omen, and children in
Monterey to rest from their tra~~els. deAnza, his diarist and cartographer,
PeU-us Font. and I8 other n~~en pressed on through the Santa Clara Valley
in ]ate March to their San Francisco destination.
With the expedition encamped in ~~.~hat is now Cupertino, Font christened
the creek ^ext to the encampment the An-oyo San Joseph Cupertino in
honor of his patron, San Guiseppe (San Joseph) of Cupertino, Italy. The
arroyo is now kno~~,•n as Stevens Creek.
The village of Cupertino sprang up at the crossroads of Saratoga- ~ ~ ~ '~ ~ ~=
Sunntiwale Road (now DeAnza Boulevard) and Stevens Creek ~ ~.. ...__.'~ "* ~ ~~~. ,_a
Boulevard. It ~~ as first kno« n as West Side: but by 1898 the post office
at the Crossroads needed a ne~~~ name to distinguish it from other similarly named to~~ ns. John T. Doyle, a San Francisco
lawyer and historian, had given the name Cupertino to his «inery in recognition of the name besto~~ed on the nearby
creek b_y Petrus Font. )n 1904 the name ~~ as applied to the Crossroads and to the post office ~a~hen the Home Union Store
incorporated under the name. The Cupertino Stores, Inc.
Many of Cupertino's pioneer European settlers planted their
land in grapes. Vineyards and wineries proliferated on
Montebello Ridge, on the lower foothills. and on the flat
lands below.
After 1906 a lot more tha~~ grape gr0\~"lIlg «as going on in
Cupertino. Orchards were thriving and new businesses ~~ere
being started. In the late 1940's Cupertino ~~-as s~~~ept up in
Santa Clara Valley's post«ar population explosion.
Concerned by unplanned development, higher ta?;es, and
piecemeal annexation to adjacent cities, Cupertino's
COI7111lulllty leaders began a drive in 1954 for incorporation.
Cupertino rancher Norman Nathanson, the Cupertino -
Monta Vista Improvement Association, and the Fact Finding
Comntittee played important roles in this movement.
Incorporation was approved in the September 27, 1955 election. Cupertino officially became Santa Clara Count}''s 13`''
City on October 10, 1955.
A major nulestone in Cupertino's development ~~as the creation by some of the city's largest landowners of Vallco
Business and Industrial Park in the early 1960's. Of the 25 property owners, 17 decided to pool their land to form Vallco
Park, six sold to Varian Associates. a thriving }'oung electronics firm, founded b}~ Russell Varian, and rivo opted for
transplanting to farms else~~,~here. The name Vallco was derived from the names of the principal developers: Varian
Associates and the Leonard, Lester, Craft, and Orlando families.
117
2009 C ' y ~"Gd-~rd-~'~!;~i,a~'d~
Cupe]ino, «ith a population of 55,000 and city limits stretching across 12 square miles, is considered to be one of the San
Francisco Bay Area's most prestigious cities in ~~hich to live and work.
Economic health is an essential component to maintaining a balanced environment, ~~'hich provides high-level
opportunities, and ser~~ices that create and help sustain a sense of communlty and quality of life. Public and private
interests must be mutual in that our success as a pa]tnership is a direct reflection of our success as a community. The
cornerstone of this partnership is that of a cooperative and responsive government that provides an environment for
business and residential prosperity and fosters strong ~~ orking relationships ~~'ith all sectors of the community.
Our economic development strategies are tailored to address the specific needs of the community. As the City of
Cupertino is a mature city ~~~ith over 909c buildout, our focus concentrates more on business retention and revitalization.
Business recruitment is site specific and targeted to industries that enhance, rather than draw front, our existing business
base.
As home to many well-kno~~~n high-tech companies, Cupertino offers a dynamic and exciting business climate. Apple
Inc., Symantec, ArcSight, and Chordiant Soft~a~are are headquartered in the city. Key divisions of He~~,lett-Packard,
Oracle, Trend Micro and IBM are located here along «~ith the ~~~esteru region office of Insight.com.
The City's proactive economic development efforts have resulted in a number of innovative, mutually beneficial
partnerships ~~ith local companies. The City strives to retain and attract local companies tlu-ough policies of balanced
growth and streamlined permitting.
Cupertino Square includes Macy's, JCPenney, and Sears as anchors and features many excltlna entertainment and eating
venues. Shoppers can enjoy the latest shoe-s at the ne~~,' AMC 16-screen theater, skating at the mall's full-size ice rink.
and bo~~-ling at the chic and upscale Strike Cupertino. They can begin or top off the evening «'ith fine-dining at the
critically-acclaimed Alexander's Steakhouse or enjoy more casual cuisine at TGI Friday's, D}malty Seafood Restaurant,
Fresh Choice and the ne~~' food court. The city features mans' other restaurants and stores to serve the local w~orkforee and
residents.
Four hotels occupy the city, ~~~ith three of them operated by Hilton, Marriott, and Kimpton.
The City of Cupertino has a history of providing high-level municipal services to complement the sense of comlllunity
and quality of life enjoyed by our constituents. The Cit}' ~~ ill continue to enhance and promote a strong local economy to
provide municipal services that make Cupertino a place that people are proud to cal] home.
118
zoo9 cry ~~a~;,~
The City of Cupertino operates as a general law city with a city council-cit}~ manager form of government. Five council
members serve four year, overlapping terms, with elections held every two years. The council meets twice a month on the
first and third Tuesday at 6:45 p.m. in the Community Hall.
The City has 162 authorized full-time benefited emplo}gees. City departments include adnunistrative services (finance,
human resources, IT, city clerk, neighborhood ~s~atch, emergency preparedness, code enforcement); community
development (planning, building, and economic development); parks and recreation; public works (engineering,
maintenance, transportation, and environmental); and public and environmental affairs. Police service is provided by the
Santa Clara County Sheriff's Department, and fire service is provided through the Santa Clara County Fire District.
Assisting the city council are several citizen advisory conunissions/conniuttees ~~-hich include housing,
telecommunications, fine arts, library, planning, audit, parks and recreation, bicycle and pedestrian, teen, and public
safety. Members of the volunteer boards are appointed by the city council and vacancies are announced so that interested
residents may apply for the positions. Residents are kept informed about city services and programs thr-ouah the
Cupertino Scene, a monthly newsletter; Cupertino's government access cable TV channel; The City Channel; and the
city's ~~~ebsite.
Housing
As of May 2009, the average price of an existing single
family home is x,1,037,664 and the average price of a
condominium/townhouse is $575,500.
Comnrrrnit)+ Healtlr Care Facilities
Cupertino is served by the Cupertino Medical Clinic,
NovaCare Occupational Health Services. Nearby hospitals
include El Camino Hospital in Mountain View, O'Connor
Hospital in San Jose, Community Hospital of Los Garos,
Kaiser Permanente Medical Center in Santa Clara, Stanford
Hospital in Palo Alto, and the Saratoga Walk-in Clinic in
Saratoga.
Utilities
Gas Relectric - Pacific Gas and Electric, 800-743-5000.
Pho~re - AT&T, residential service, 800-894-2355;
business service, 800-750-2355.
Cable - Comcast, 800- 945-2288.
Garbage -Los Altos Garbage, 408-725-0420.
Water -San Jose Water Company, 408-279-7900 and
California Water, 650-917-0152.
Se~~•er Sen~ice -Cupertino Sanitary District, 408-253-7071
Tax Rates acrd Government Sen~ices
Residential, coirunercial, and industrial property is
appraised at full market value, as it existed on March 1,
1975, with increases limited to a maximum of 2% annually.
Property created or sold since March 1, 1975 will bear full
cash value as of the time created or sold, plus the 2%
annual increase, The basic tax rate is $1.00 per $100 full
cash value plus any tax levied to cover bonded
indebtedness for county, city, school, or other taxing
agencies. Assessed valuations and tax rates are published
annually after July l .
Retail Sales Tax: Santa Clara County: 1.25%; City: 1%;
State General Fund: 6%; State Local Public Safety Fund:
0.50%; State Local Revenue Fund: 0.25%; County
Transportation Fund: 0.25%. Total: 9.25%.
Assessed Valuation: (Secured and Unsecured)
Cupertino: X13,172,425,287 (6130/09)
County: $302,708,586.624 (6/30/09)
Transportation
Rail -Southern Pacific, San Jose to San Francisco. «~ith
spur line in Cupertino.
Air -Seven Holes north of San Jose li~ternational Airport;
32 miles south of San Francisco airport.
Bus -Santa Clara County Transit Systems, Greyhound bus
lines
Highways -Interstate Route 280, State Route 85.
119
c ~ y st~~~
Facts and Figures
Population in City Limits
Median Household huome
Median Age
Sales Tax Rate
Registered Voters
Democrats
Republicans
Independent
Other
Did Not State
X5.840
S 179,000
38
9.2~°Ic
27.47
10,298
6226
379
34>
10.'~~
Top 40 Sales Ta~- Producers
Second Quarter 2009
(In .alphabetical Order)
Alexander's Steakhouse
Apple Inc.
Argonaut Windo~~~ & Door
Benihana's
BJ's Bar & Grill
California Dental Arts
Chevron Seri ice Stations
Cypress Hotel/Park Place
DeAnza College Campus Center
Dynast}~ Restaurant
Elephant Bar
Granite Rock
He~~ lett Packard
Insight Direct
JC Pennev
Jov Luck Place
LonQ's
?~'Iacy's
Marina Foods
Mervyn`s
?~'Iichael's Art; & Crafts
Mirapath
Outback Steakhouse
Ranch 99 Market
Rohde & Seh~~ arz
Rotten Robbie Service Station
Scandinavian Designs
Scientific-Atlanta. Ir~c.
Sears
Shane Diamond Je~~~elers
Shell Service Station
Sodexho Man-iott Mana~e.ment
Symantec
Target
TJ ?~9axx
Union 76 Service Station
Valero Service Station
VeriQy
Verizon ~'~'ireless
\~%hole Foods
Demographic Information
White ~0. ] ~I~
Asian 44,4%
Hispanic 4.0°Io
Black 0.7%
American Indian 0.29e
I\Tative Ha~x~aiian 0.19c
120
C ' y ~r~z~/~e~c~ea~tc~-~vSe~v~~
BluckUerr~~ Farnt
After tieing closed for nearly t~a~o years, Blackben-y
Farm will --e-open on July 4. 2009. The park has been
upgraded and restored to improve the natural habitat for
native trees, animals, and fish. Improvements to the
park include construction of a ne« ticket kiosk, re-
plastered pools, a ne~~~ water slide, bocce ball, horseshoe
courts, and numerous upgrades to the west bank picnic
area. The park is located at 21979 San Fernando
Avenue. Telephone: 408-777-3140.
The Blackberry Faun golf course is located at 22100
Stevens Creek Boulez ard. Telephone: =I08-2S3-9200.
The Quinlan Connnunih~ Center
The City of Cupertino's Quinlan Community Center is a
27,000 square toot facility that provides a variety of
recreational opportunities.
Most prominent is the Cupertino Room - a multi-
purpose room that ca~a accommodate 300 people in a
banquet format. Telephone: 408-777-3 ] 20.
Cupertino Sports Center
The Sports Center is a great place to meet friends. The
facility features ] 7 tennis courts, complete locker room
facilities, and a full}' equipped fitness center featuring
free weights, Cybex, and cardio equipment. .~ teen
center is also included as ~~ ell as a child ~~ atcla cea~ter.
The center is located at the cornea- of Stevens Creek
Boulevard and Stelling Road. Telephone: 408-777-
3160.
Cupertino Senior Center
The Senior Center provides a welcome and friendly
environment for adults over age ~0. There is a full
calendar of opportunities for learning. volunteering, and
enjoying life. There are exercise classes, a computer lab
and classes, language instruction including English as a
se-coed language, and cultural and special interest
classes. The center also coordinates trips and socials.
The Senior Center is located at 2l 2~ 1 Stevens Creek
Boulevard and is open Monday through Friday 8 a.m. to
p.m. Telephone: 408-777- 31 ~0.
Civic Center and Librar}•
The complex has a 6,000 square foot Community Hall,
plaza with fountain. trees and seating areas. City Council
meetings are no« held in the Convnunity Hall as well as
Planning Commission and Parks and Recreation
Commission.
The 54.000 square foot library continues to be one of the
busiest in the Santa Clara County Library system. For
more information call -I08--f-I6-1677.
AcClellan Ranch Park
A horse ranch during the 1930'and 40•s, t1~is 18-acre park
has the appearance of a ~~~orking ranch. Preserved on the
property are the original ranch house, milk barn, livestock
barn. and t~~o historic buildings: Baer's Blacksmith Shop.
originally located at DeAnza and Stevens Creek. and the
old ~~~ater to~~-er from the Parish Ranch, no~~~ the site of
Memorial Park. Rolling Hills 4-H Club members raise
rabbits, chickens, sheep sus-ine, and cattle and a Junior
1\ature Museum, ~~~hich features small live animal exhibits
and dispenses information about bird, animal, and plant
species of the area. McClellan Ranch is located at 22221
McClellan Road. Telephone: 408-777-3120.
121
~ti~~
Winner of numerous state and national a\vards for excellence. our
city's schools are widely acknowledged to be models of quality
1115(1UCh011.
Cupertino Union School District serves over 17.000 students in a 26
square mile area that includes Cupertino and portions of five other
cities. The district has ?0 elementar}~ schools and five middle schools,
including several choice programs. Eighteen schools have recei\'ed
state and/or national a\vards for educational excellence.
Student achievement is exceptionally hi«h. Historical]}'. district test
scores place Cupertino among the premier public school districts in
California. The district is a leader in the development of a standards-
based system of education and is nationally recognized for leadership
in the use of technolog}~ as an effective too] for learning. Qualit}~• teaching and parent involvement are the keys to the
district's success.
The Fremont Unlon Hlah School DIStI"ICt serves over 10.000 students in a 42 square mile area covering all of Cuperino,
most of Sunn}vale and portions of San Jose, Los altos, Saratoga, and Santa Clara. The five high schools of the district
have garnered many avv ards and recognition based on both the achievement of students and the programs designed to
support student achievement. Student achievement is at an all time high based on the state«~ideAcademic Performance
hldex (.API). All five high schools in the district exceeded their state established achievement tar~zets for the 2000 .API.
District students are encouraged to volunteer and/or provide service to or~Tanizations ~~ ithin the communit}~. During their
senior year, if students complete SO hours of se-rvice to anon-profit commw~ity organization. they are recognized with a
"Community Service Ava~ard" medal that ma}~ be vv~orn dw-ing their graduation ceremonies.
Cupertino is served by four local
irrstitzrtio»s of Iriglrer• education:
DeAnza College, the University of
San Francisco, 1~'atiorral University
and the UCSC Extension. In
addition to these schools,
Cupertino's localiorr offers easy
access to Stamford Urriver•sity, Santa
Clara University amd Sam Jose State
University.
Building on its tradition of excellence and mno\'atlon, DeAnza
College challenges students of every background to develop their
intelle-ct, character and abilities; to achieve their educational goals;
and to serve their community in a diverse and changing \vorld~
DeAnza College offers a wide range of qualit}~ programs and
services to meet the \\ ork force development needs of our region.
The college prepares cun"ent and future employees of Silicon
Valley in traditional classroom settings and through customized
training arranged by employers. Several DeAnza prog-I"ams
encourage economic development through college credit courses,
short-term programs. services for manufacturers. technical
assistance, and/or recruitment and retention services.
122
Th,%vu~ to- d o- wv~.cL Sew
~ulrltrat :Vlrrseunr of Art
The highly regarded Eupluat Museum of Ar-t adjacent to the Flint Center on the DeAnza College campus traditionally
presents one-of-a-kind exhibitions, publications and events reflecting the rich diverse heritage of our area. The Museum
prides itself on its changing exhibitions of national and intel7~ational statw-e, emphasizing Bay Area artists. Museum
hours are 1 1 a.m. - -~ p.m. Tuesday. «~ednesday. Thursday: 6-8 p.m. Tuesday and 1 1 a.m. - 2 p.m. Saturday. Telepl3one:
-X08-8G4-8836. -
:llirrolta De.~rr<.a Plunetarrunr
S1a1-gaZel'S ]laV'e a CUpel'hn0 raCllltV' catel-ing [O C}1e]]- ltltel'eSTS, the MlnOlta Plailetal-lUtn On 1.170 DeAI1Za College CaInpUS. It
hosts a variety of planetarium shows and events, includin~a educational prog~ralns for school groups and fanu]ti~ ash'onomy
evenings on Saturda}'s at 7:00 p.m. For more information and cwrent schedule of events, visit the ~~-ebsite at
~a ~~,-~y~.planetarium.deanza.fl~da ~r call 408-864-8814.
Flint Center
The cultural life of the Peninsula and .South Bay is enhanced by programs presented at the Flint Center for Performing
Arts located at 21250 Stevens Creek Boulevard at DeAnza College campus. The center opened in 1971 and «~as named in
honor of Calvin C. Flint, the first chancellor of the Foothill-DeAnza Conununity College District. The boa office is open
]0 a.m. - -~ p.m. A~onday through Friday and one and one half hours prior to al~y performance. Box office: 408-864-
8816; administratite office: 408-864-S820.
Cupertino Historical Society
On May 2, 1966, the Cupertino Historical Society ~~as founded as anon-profit organization by a Group of 177 longtime
residents concerned about the rapid gro~a~th in the area and its impact on the quickly vanishing Cupertino heritage. On
March 30. ] 990, the Society opened the Cupertino Historical ?~7useum dedicated to the preservation and exhibition of the
city's history. Through its exhibits the museum attempts to develop and expand the learning opportunities that it offers to
the ethnically diverse community of the Citti~ of Cupertino. The Society continues to build partnerships with the local
school districts to ensure that the history of Cupertino is offered as paI-t of the educational curriculum. The Society is
located at the Quinlan Community Center. ]0185 N. Stelling Road. Telephone: 4(18-9T-8049.
Farmers' .'Market
Residents and visitors can visit the farmers' market every Friday from 9:00 a.m. to
1:00 p.m. The market is located at the Va]]co Fashion Park behind 1\'facy's.
California History Curter
The California History Center is located on the DeAnza College campus. The center has published 39 volumes on
California history and has a changing exhibit program. The center's Stocklmeir Library Archives boasts a large collection
of books. a pamphlet file, oral history tapes, videotapes and a couple thousand student research papers. The library's
collection is for reference only. Heritage events focusing on California's cultural or natural history are offered by the
center e~aeh quarter. For more information. call 408-564-8712. The center is open September through .Tune 8:30 a.m. to
noon and 1:00 p.m. to 4:30 p.m. Monday tlu-ough Thursday.
123
NOTES
124