Financial Report 06-30-2016BALANCE • CONNECTION • QUALITY OF LIFE
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For Fiscal Year Ended June 30, 2016
CUPERTINO
City of Cupertino, California
www.cupertino.org
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CITY OF CUPERTINO, CALIFORNIA
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR FISCAL YEAR ENDED
JUNE 30, 2016
PREPARED BY:
CITY OF CUPERTINO
ADMINISTRATIVE SERVICES DEPARTMENT
FINANCE DIVISION
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INTR OD UCTORY SE CTIO N
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INTRODUCTORY SECTION
CITY OF CUPERTINO
Comprehensive Annual Financial Report
For the Year Ended June 30, 2016
Table of Contents
Table of Contents ........................................................................................................................................... i
Letter of Transmittal. ................................................................................................................................... .iii
Organization Chart ..................................................................................................................................... viii
City Council and Directory of City Officials .............................................................................................. .ix
Commissions and Committees ...................................................................................................................... x
Certificate of Award for Excellence in Financial Reporting ........................................................................ xi
FINANCIAL SECTION
Independent Auditor's Report ................................................................................................................... 1
Management's Discussion and Analysis (Unaudited) .............................................................................. 5
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position ................................................................................................................. 22
Statement of Activities ..................................................................................................................... 23
Fund Financial Statements:
Governmental Funds:
Balance Sheet .................................................................................................................................... 26
Reconciliation of the Governmental Funds Balance Sheet with the
Statement of Net Position ................................................................................................................ 29
Statement of Revenues, Expenditures and Changes in Fund Balances ............................................. 30
Reconciliation of the Net Change in Fund Balances-Total Governmental Funds
with the Statement of Activities ...................................................................................................... 32
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget to Actual-General Fund .................................................................................................... 33
Budget to Actual-Transportation Special Revenue Fund ............................................................. 34
Budget to Actual-Housing Development Special Revenue Fund ................................................. 35
Proprietary Funds:
Statement of Net Position .................................................................................................................. 38
Statement of Revenue, Expenses and Changes in Fund Net Position ............................................... 39
Statement of Cash Flows ................................................................................................................... 40
Notes to the Basic Financial Statements ................................................................................................ 41
Required Supplementary Information (Unaudited):
Schedule of Changes in the Net Pension Liability and Related Ratios ............................................... 72
Schedule of Contributions -Miscellaneous Plan ................................................................................ 73
Schedule of Funding Progress-Defined Benefit Other Post-Employment Benefits Plan ................. 74
CITY OF CUPERTINO
Comprehens ive Annual Financial Report
For the Year Ended June 3 0, 20 16
Table of Co ntents
FINANCIAL SECTION
Other Supplementary Information:
Schedule of Reven ues, Expenditu res, and Changes in Fund Balance -
Budget and Actual -Public Facilities Corporation Debt Serv ice Fund ............................................. 76
Nonmajor Governmental Funds:
Comb ining Balan ce Sheet ................................................................................................................. 78
Combining Statement of Reven ues, Expenditures and
Changes in Fund Balances ............................................................................................................... 80
Combining Schedule of Revenues, Expend itures and
Changes in Fund Balances -Budget and Actual... .......................................................................... 82
Internal Service Funds:
Comb ining Statement of Net Position ............................................................................................... 86
Comb ining Statement of Revenues, Expen ses and
Changes in Fund Net Position ......................................................................................................... 88
Combining Statement of Cash Flows ................................................................................................ 90
STATISTICAL SECTION
Financial Trends:
Net Position/ Assets by Component -Last Ten Fiscal Years .............................................................. 97
Changes in Net Position/Assets -Last Ten Fiscal Years .................................................................... 98
Fund Balances of Governmental Funds -Last Ten Fiscal Years ...................................................... I 00
Changes in Fund Balan ces of Governmental Funds -Last Ten Fiscal Years ................................... 10 1
Revenue Capacity:
Assessed and Estimated Actual Value of Taxable Property -Last Ten Fiscal Years ....................... 102
Direct and Overlapping Property Tax Rates -Last Ten Fiscal Years ............................................... 10 3
Principal Property Taxpayers -Current Year an d Five Years Ago .................................................. 10 4
Property Tax Levies and Collections -Last Ten Fiscal Years .......................................................... I 05
Debt Capacity:
Rati os of Outstanding Debt by Type -Last Ten Fi scal Years .......................................................... 10 6
Direct and Overlapping Bonded Debt ............................................................................................... 10 7
Legal Debt Margin In formation -Last Ten Fiscal Years .................................................................. 10 8
Ratio of General Bonded Debt -Last Ten Fiscal Years ................................................................... 10 9
Demographic and Economic Information:
Demographic and Econom ic Statistics -Last Ten Fiscal Years ....................................................... 110
20 16 Employer Ranking .................................................................................................................... 111
Operating Information:
Full-Time Equivalent City Employees by Function/Program -Last Ten Fiscal Years .................... 112
Operating In dicators by Function/Program -Last Ten Fiscal Years ................................................ 113
Cap ital Asset Statistics by Function/Program -Last Ten Fiscal Years ............................................ 114
COMMUNITY PROFILE
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(Continued)
CUPERTINO
March 7, 2017
CITY OF CUPERTINO
CITY HALL
10300 TORRE AVENUE• CUPERTINO, CA 95014-3202
(408) 777-CITY • WWW.CUPERTINO.ORG
To the Citizens of Cupertino, Honorable Mayor,
Memb ers of the City Council, and City Manager
It is our pleasure to submit the Comprehens ive Annual Financial Report (CAFR) for the City of
Cupertino (the City) for the fiscal year ended June 30, 20 16. The report is prepared in accordance with
generally ac cepted accounting principles (GAAP) set by the Governmental Accounting Standards Board
(GASB). The report presents City information on an entity-wide basis and on a more detailed fund level
basis. The fund-level reports emphasize the City's major funds. A Management Discussion and Analysis
(MD&A) pres ents 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 pres ented and the completeness and fairne ss of the presentations, including all
disclosures, are the respons ibility of the management of the City. To provide a reasonable basis for
making these repres entations, management has established a comprehensive internal control framework
that is design ed to protect the City's assets and provide sufficient, reliable information for the proper
preparation of th ese financial state ments. We believe the data is accurate in al l 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 rep orts all activiti es for which the City
is considered to be financially accountab le. The general governmental funds support a full range of
services, inc luding law enforcement, community development, recreation, public works, pub lic and
environmental affairs, and general administration. Enterpri se funds account for recreation and solid waste
operations supported by user fees. This financial report incorporates data for the City of Cupertino and its
component unit, the Cupertino Public Facilities Corporation.
The City operates under a Coun cil-City Manager form of government. There are five council members,
including the Mayor, who serve staggered four-year terms. The City Coun cil appoints the City Manager
who is responsible for the daily administration of City affairs. The City Council al so appoints the City
Attorney and the City Treasurer. All other emp loyees are appointed by the City Manager.
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ECONOMIC CONDITIONS
The City of Cupertino is located in Santa Clara County at the southern end of the San Franc isco 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 Alto s. It has a re s idential population of 60,572 (based on July 20 15 U.S.
Census Bureau estimates data).
Situated at the west end of Silicon Valley, Cupertino has earned the reputation of a balanced community
with a healthy climate for business and well maintained residential neighb orhoods, community parks and
public facilities. The excellent reputation of Cupertino 's schools has been a major attract ion for fa milies
wishing to settle in close proximity to jobs in Silicon Valley. The City recognizes the importance of
quality school facilities and programs to all Cupertino residents, and works in partnership with the
schools in many programs affecting education and youth. National surveys rank the City high in
education leve ls, median household income s, and registered patent numb ers, as well as best cities in
which to live.
Cupertino is the corp orate headquarters of several notab le companies including Apple Inc., CRC Health,
DURECT, Mirapath, Seagate Technology, Bromium, and SugarCRM Inc., and home to many other well
known firms, such as Altia Systems, Cinarra, Panasonic Venture s, and Ducati North America. 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 Un ion School District.
Based on Co Star data as of the fourth quarter 20 16, over 7 .1 million square feet of office, research, and
development space existed in the City with one of the lowest vacancy rates in Silicon Valley at 2.3% for
office and 0.2% for industrial. Leas ing activity of office space has increased steadily from 20 15-20 16.
As of Novemb er 20 16, the City's unemployment rate was 2.8%, having decreased from the previous year
and we ll below the statewide rate of 5.0%.
The City features thirteen retail centers and over one hundred eighty eating establishments. The
construction and completion of three new mixe d-use projects, including Nineteen800 (formerly known as
the Ro sebowl), Main Street, and The Biltmore Adjacent Project, all have retail/restaurant tenants
including Doppio Zero , The Kebab Shop, Ku la Sushi, Icool In2 ice cream, Vitality Bowls, Lazy Dog,
Philz Coffee, Eureka!, Oren 's Hummus, Chef Hung, 85 Degrees Bakery, Meet Fresh, Target Express,
Pieology, Capezio, Howards Shoes, The Counter, and Jersey Mike's Sub s. The Saich Way Project,
located on Stevens Creek Boulevard next to Panera Bread and Peet's Coffee, is completed and includes
The Vitamin Shoppe, The Melt, Co der School, H&R Block, T-Mobile, Site for Sore Eyes, Ubreaklfix,
and Blast 82 5 Pizza. The successful redeve lopment of Homestead Square features a 24-hour Safeway as
its anchor and other tenants including Ulta, SteinMart, Ro ss, a variety of quick-casual dining options, and
Pet Club opening soon in a 10,000 SF space. The Cupertino Village Shopping Center, located on N.
Wolfe Road near Pruneridge Avenue, has completed its tw o-level parking structure and construction of
additional retail buildings (Phas es I and II) as part of its overall redevelopment of the center. Phase III of
the current approvals provides for the renovation of the existing four-building shopping center with a
contemporary architectural design, as well as the reconfiguration of the pedestrian courtyard landscape
and hardscape.
In the 20 1 6-20 17 Assessor's Annual Report for Santa Clara County, Cupertino 's net as sessment ro ll
growth increas ed from $19.40 to $21.35 million from the previous year. That equated to an increase of
10.06%, which far exceeds the county-wide average of 7.97% growth. A large portion of the increase
resulted from partial value from the new App le campus of $700 million in new construction. The value
of App le's bus iness personal property also contributed to the increase which includes investments in
computers, machinery, equipment, fixtures and furniture. The total construction value of the campus so
far, totaling $1.6 billion, represents only a fraction of the anticipated full market value when the campus is
completed.
iv
Based on second quarter 20 16 data, Cupertino experienced a 19.4% decrease in business activity, quarter
over quarter. The large decline reflects a correction to normalcy after a large increase in second quarter
20 15 of 3 3 .5% resulting primarily from the peak in new construction activity of the new Ap ple Campus.
The City is not as diversified into retail, food products, and transportation compared to the state. It
continues to receive over 64% of sales tax revenues from the business-to-business sector. The following
chart shows City sales tax variati ons over the past ten years, reflecting moderate impact from the
recession and trending growth from business-to-busine ss activity despite high single-company
concentration.
Sales Tax Trend
$10,000
$5,000
$0
2007 2008 2009 20 10 201 1 2012 2013 2014 20 15 20 16
With the economic recovery and easing of credit, commercial development act1v1ty picked up
considerably in 20 12-13 and 20 13-14 led by plan reviews of the new Apple Campus 2. Plans for the
redevelopment of the Marina shopping center into a mixed-use project, Marina Plaza, was approved in
20 16. Thi s project will include 23,000SF of retail and re staurant use, a 122-room boutique hotel, and 188
residential units including 16 below market rate units. Construction of a five story, 148-room Hyatt
House hotel is underway and will include a full-service re staurant and meeting rooms.
The City's pension and retiree medical unfunded actuarial accrued liab ilities are discussed in the Notes to
the Basic Financial Statements. The City must pay CalPERS, the state 's government pension system,
annually to reduce its long-term liability for pensions. Cupertino 's pension actuarial valuation rep ort of
June 20 15 reported a pension unfunded liability of $30.5 million with annual payments to CalPERS of
24.45% of payroll for 20 16-17 and 20 17-18, with ongoing increas es after that because of actuarial
as sumption changes. To addre ss long-term rising costs, Cupertino and state law has reduced pension
benefits for new hires and increased emp loyee contributions. As of the January 20 16 health cost actuarial
valuation report, the City has a retiree medical unfunded liability of $2.2 million with annual payments to
a retiree health plan trust at 6.74% of payroll.
Because the City contracts out police serv ices to the County Sheriff and because fire protection is handled
by a special district, the City avoids the high pension, capital, and operating costs of a City-operated
public safety fun ction. The City caps its contributi ons to employee health insurance premiums that benefit
both the City and employ ees. A build-up of operating reserves from strong revenue years, such as 20 13-
14, along with a traditional under-spending of budgets, enables the City to withstand weak revenue years
that occur periodically, such as in 2009-10.
v
$25,000 ..,.-----------------------
$20,000 +-----------------
ECONOMIC INITIATIVES
App le conti nues to grow and constru ction is nearing completion on its Ap ple Campus 2, bounded by
Interstate 280, Ho mestead Road, Wo lfe Road and Tantau A venue. With the exp anded Apple pre sence,
the City's reve nue base wil l remain concentrated am ong its top companies and top economic sector, the
volatile business-to-business area. Past rece ssions and the historic departure of a major tax provider,
Hew l ett-Pac kard, demonstrates the need for diversification of the City's revenue base and a long-term
balance of revenues and expenditures. The City des ires other revenues to mitigate the fluctuating nature
of sales taxes, hote l taxe s, user fees, and state grab s of local taxes in times of budget distress.
Legi slation ra ising the City's property tax share, the update of the utility user tax, the increase in the
tran sient occupancy tax, and refinanc ing of the City's debt are past successes to help diversify and
balance reven ues and expenditures. The City Council work program underway in 20 1 5-20 16 describes
economic deve lopment and administrative initiatives to further increase the City's property tax share;
streamline City web content and permitting for new businesses; continue sponsoring seminars and
workshops for new small businesses; increas e coordination with the Chamber of Commerce and other
re gional bu siness organ izations; stren gthen shop local habits of residents and daytime visitors; and
enhanc e business access to City services.
The City's Ec onomic Development Division comp leted an Economic Development Strate gic Plan
(ED SP) approved by City Co uncil in October 20 16. The ED SP is a three to five year plan with strategies
and goals in which to strengthen Cupertino 's business vital ity and diversity. One of the key strategies is
to deve lop the grow ing incubator/co-working entrepreneurial sectors .
ACCOUNTING AND BUDGETARY CONTROL
In developing and evaluating the City's ac counting syste m, consideration is given to the adequacy of
internal accounti ng contro ls. The City's controls are designed to provide reasonab le, but not abso lute,
assurance regard ing the safeguard ing of assets against losses from unauthorized use or disposition and the
re liabi lity of financial records for prepari ng financial statements and maintaining accountability of assets.
The concept of re asonab le assurance recognizes that the costs of a contro l should not exceed the benefits
like ly to be derived and that the evaluation of co sts and benefits requires estimates and judgments by
management.
The City's budget is a detailed operating plan that identifies estimated costs and results in re lation to
estimated reven ues . The budget includes 1) the programs, projects, services and activities to be provided
during th e fiscal year; 2) estimated revenue and fund balance available to finance the operating plan; and
3) the estimated spending requirements of the operating plan . The budget represents a process through
wh ich pol icy decisions are made, implemented and controlled .
INDEPENDENT AUDIT
City ordinance req uires an annual au dit of the financial records by an independent certified pub lic
ac counting firm selected by the City Co unci l and its audit committee. Maze an d Associate s aud ited the
vi
City's Basic Financial Statements, and their opinion thereon is included in the Financial Section of this
report.
CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Ce1iificate of Achievement for Excellence in Financial Reporting to the City of Cupertino for its CAFR
for the year ended June 30, 2015. In order to be awarded a Certificate of Achievement, a govermnent 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 pe1iod of one year only. We believe that the current report
continues to meet the Certificate of Achievement Program's requirements.
Respectfully submitted,
d.'
Lisa Taitano
Finance Manager
ACKNOWLEDGMENTS
I woul d like to express my appreciation to City employees, department heads, t he City Manager, and
members of City Council for their interest in conducting the financial operations of the City in a
responsible mam1er. Special thanks go to Yulia Rumalean, Giang Dinh, and Tina Mao of the Finance
staff for their continued support and dedication. Special recognition goes to Beth Viajar, Richard Wong,
and Mary Redwine for their efforts in the preparation and production of this report.
Reviewed by,
Kristina Alfaro
Director of Administrative Services
vii
CUPERTINO
Citizens of Cupertino
City Council
Citizen Advisory
Committees and
Commissions
City Attorney City Manager City Treasurer
City Clerk Sustainability
< Programs
Administrative Services Community Development Recreation Public Works Information Serivces
and Community
Services
Finance Building Sports Center Senior Center Capital Improvement Transportation and Communications Information
Program Development Technology
Human Resources Planning Youth Programs Facilities and Environmental Code
Community Events Programs Enforcement
Economic Emergency Community Service
Development Preparedness Relations Center
Code Neighborhood
Enforcement Watch Grounds Facilities Tree/ROW FleeUStreets D -Ill
CITY OF CUPERTINO, CALIFORNIA
Fiscal Year 2015-16
CITY COUNCIL
Barry Chang
Mayor
Savita Vaidhyanathan
Gilbert Wong
Councilmember
Darcy Paul
Councilmember
DIRECTORY OF CITY OFFICIALS
David Brandt – City Manager
Randolph Hom– City Attorney
Timm Borden – Director of Public Works
Kristina Alfaro – Director of Administrative Services
Carol Atwood – Director of Recreation and Community Services
Aarti Shrivastava – Assistant City Manager/Director of Community Development
Vice Mayor
Rod Sinks
Councilmember
CITY OF CUPERTINO, CALIFORNIA
Fiscal Year 2015-16
COMMISS IONS AND COMMITTEES
AUDIT COMMITTEE
Peter Shin
Eno Schmidt
Darcy Paul
Rod Sinks
Mark Zavislak
HOUSING COMMISSION
Harvey Barnett
Shirley Chu
Nina Daruwalla
Rajeev raman
Krista Wilson
FINE ARTS COMMISSION
Janki Chokshi
Russell Leong
Rajeswari Mahaliagan
Diana Matley
Michael Sanchez
PUBLIC SAFETY COMMISSION
NehaSahai
Bob Cascone
Robert McCoy
Gerald Tallinger
Andy Huang
SUSTAINABILITY COMMISSION
Angela Chen
Gary Latshaw
Vignesh Swminathan
Meera Ramanathan
Anna Weber
FISCAL STRATEGIC COMMITTEE
Kristina Alfaro
Rod Sinks
Timm Borden
Aarti Shrivastava
Darcy Paul
Lisa Taitano
RECREATION AND COMMUNITY
SERVICES COMMISSION
David Fung
Carol Stanek
Judy Wilson
Helen Davis
Neesha Tambe
x
LIBRARY COMMISSION
Rose Grymes
Annie Ho
Gopal Kumarappan
Jerry Liu
Ann Stevenson
PLANNING COMMISSION
Geoffrey Paulsen
Margaret Gong
Winnie Lee
Don Sun
Alan Takahashi
BICYCLE PEDESTRIAN COMMISSION
Vidula Aiyer
Gary Jones
Peter Heller
Sean Lyn
Erik Lindskog
TEEN COMMISSION
Andrew Fung
Harshitha Sriraman
Meesha Reiisieh
Anooj Vadodkar
V arsha Swamy
Annabelle Chan
Steve Yang
Rishit Gundu
ECONOMIC DEVELOPMENT
Carol Atwood
Timm Borden
Savi ta V aidhyanathan
Aarti Shrivastava
Kevin McClelland
Jason Lundegaard
Geoffrey Paulsen
Angela Tsui
Rich Abdalah
David Brandt
Anjali Kausar
Mike Rohde
Darcy Paul
INFORMATION &
COMMUNICATIONS COMMISSION
Shishir Chavan
Keita Broadwater
V aishali Deshpande
Rod Livingood
Arnold de Leon
TECHNOLOGY,
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Cupertino
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2015
Executive Director/CEO
XI
I
't
Fh
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FINANCIAL SECTION
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INDEPENDENT AUDITOR'S REP ORT
To the Honorable Mayor and City Council
City of Cupertino, California
Report on Fin ancial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Cupertino as of
and for the year ended June 30, 20 16, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements as listed in the Table of Contents.
Management's Responsibility for the Fin ancial Statements
Management is responsible for the prep aration and fair presentation of these financial statements in
accordance with accounting princ iples generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of the financial statements that are free from material misstatement, whether due to fraud
or error.
Auditor's Responsibility
Our responsibility is to express opm10ns on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptro ller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the fmancial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the fmancial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the City's preparation
and fair presentation of the fmancial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's
internal contro l. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the fmancial statements .
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
T 925.930.0902
F 925.930.0135
e maze@mazeassociates.com
w mazeassociates.com
Op inions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City as of June 30, 20 16, and the respective changes
in financial position and, where app licable, cash flows thereof and the respective budgetary comparisons
listed as part of the basic financial statements for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
Emphasis of Matters
Management adopted the provi sions of Governmental Accounting Standards Board Statement No. 72 -
Fair Value Measurement and Application which became effective during the year ended June 30, 20 16
that requires modifications of notes to the financial statements as discussed in Note l(n) and 2(f) to the
financial statements.
The City restated its General Fund's beginning fund balance, as discussed in Note l(p) to the financial
statements.
The emphas is of these matters does not constitute a modification to our opinions.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management's
Discussion and Analysis and Required Supplementary Information be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is required by
the Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic or historical
context. We have app lied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the information
for consistency with management 's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not expre ss an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to exp ress an opinion or provide any as suranc e.
Other Iriformation
Our audit was conducted for the purpose of forming opinions on the financial statem ents that collectively
comprise the City's basic financial statements as a whole. The Intro ductory Section, Other Supplementary
Information, and Statistical Section as listed in the Table of Contents are presented for purposes of
additional analysis and are not required parts of the basic financial statements.
2
The Other Supplementary Information is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records used to prepare the basic financial
statements. The information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic fmancial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the
Supplemental Information is fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the
audit of the basic fmancial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 7,
201 7, on our consideration of the City's internal control over fmancial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over
fmancial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over :financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City's internal control
over fmancial reporting and compliance.
Pleasant Hill, California
March 7, 201 7
3
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CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
5
This section describes the City of Cupertino’s financial performance for the year. Readers are
encouraged to consider the following information in conjunction with the accompanying Transmittal
Letter and Basic Financial Statements.
2015-16 FINANCIAL HIGHLIGHTS
City revenues have normalized in 2015-16 with base governmental revenues only showing a $1.5
million increase, or 2%, over 2014-15, after deducting the large one-time revenue of $23.7 million
(Gain on Sale of Capital Assets) received in 2014-15.
The City continued to make substantial investment into capital projects dedicated to street and
transportation improvements, storm drain improvements, and maintenance of and improvements to
City facilities, resulting in an increase in net capital assets of $10.06 million, after depreciation. The City’s change in net position for governmental funds was $13.4 million for governmental
activities and $13.8 million in total, reflecting the stabilization of revenues and continued large
investment in capital projects.
The City’s net pension liability for June 30, 2016, was $30.5 million, up to $2.6 million from June
30, 2015, or 9.5%. The funding ratio for the City’s pension plan with CalPERS went from 73% to
72%.
Business-type activities contributed $7.8 million to citywide revenues totaling $85.9 million.
However, the same activities contributed over $9 million to citywide expenses of $72.0 million.
This resulted in a transfer from the general fund of $1.6 million to cover the shortfall.
OVERVIEW OF THE FINANCIAL STATEMENTS
The Basic Financial Statements comprise the City-wide Financial Statements and the Fund Financial
Statements. These two sets of financial statements provide two different views of the City’s financial
activities and positions.
The City-Wide Financial Statements provide a long-term view of the City’s activities as a whole,
and comprise the Statement of Net Position and the Statement of Activities. These statements are
prepared on the accrual basis, which means they measure the flow of all economic resources of the
City as a whole. The accrual basis of accounting is similar to the accounting used by most private
sector companies. The Statement of Net Position provides information about the financial position of
the City as a whole, including all its capital assets and long-term liabilities. The Statement of
Activities provides information about all the City’s revenues and expenses, with the emphasis on
measuring net revenues and expenses for each of the City’s programs. The Statement of Activities
explains in detail the change in net position for the year. Over time, increases or decreases in net
position can be indicators of whether the financial condition of the City is improving or deteriorating.
All of the City’s activities are grouped into Governmental activities and Business-type activities, as
explained below. The Statement of Net Position and the Statement of Activities provide a summary of
these two types of activities for the City as a whole.
Governmental activities—Most of the City’s basic services are considered to be governmental
activities, including public works, law enforcement, community development, recreation, public &
environmental affairs, and general administration. These services are supported by general City
revenues such as property, sales and other taxes, and by specific program revenues such as
developer fees and grants.
The City’s governmental activities include the activities of a separate legal entity, the Cupertino
Public Facilities Corporation (the “Corporation”), because the City is considered to be financially
accountable for the Corporation. The City leases its major facilities from the Corporation, which
then uses the lease payments to pay principal and interest on the Corporation’s long-term debt.
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
6
Business-type activities—All the City’s enterprises are reported here, including solid waste
management and most of the City’s recreational operations. Unlike governmental services, these
services are supported by charges paid by users based on the amount of services used.
The Fund Financial Statements report the City’s operations in more detail than the City-wide
Financial Statements and focus primarily on the short-term activities of the City’s General Fund and
other major funds. The Fund Financial Statements measure only current revenues, expenditures,
assets, liabilities, and deferred inflows and outflows of resources; they exclude long-term assets and
liabilities. Because these statements focus on the near-term inflows and outflows of spendable
resources, such information may be useful in evaluating near-term financing requirements.
The Fund Financial Statements provide detailed information about each of the City’s most significant
funds, called major funds. Cupertino’s Fund Financial Statements include governmental, enterprise
and internal service funds as discussed below. Each major fund is presented individually, with all non-
major funds summarized and presented only in a single column. Subordinate schedules, which follow
the Notes to Basic Financial Statements, present the detail of these non-major funds. Major funds
present the significant activities of the City for the year, and may change from year to year as a result
of changes in the pattern of City’s activities and public interest. For example, the Capital Improvement
Projects Fund may or may not appear as a major fund depending on the volume of construction activity
in a certain year.
Governmental Fund financial statements are prepared on the modified accrual basis, which means
they measure only current financial resources and uses. They present essentially the same functions
reported as governmental activities in the city-wide financial statements. However, capital assets and
other long-lived assets, along with long-term liabilities, are not presented in the Governmental Fund
financial statements. Reconciliations are provided to facilitate a comparison between governmental
funds and governmental activity statements to allow a better understanding of the long-term impact of
the government’s near-term financial decisions.
Enterprise and Internal Service Fund financial statements are prepared on the full accrual basis and
include current and long-term assets and liabilities and deferred inflows and outflows of resources.
Enterprise funds are used to report the same functions presented as business-type activities in the City-
wide Financial Statements, and in more detail in the Fund Financial Statements.
Since the City’s Internal Service funds provide goods and services only to the City’s governmental and
business-type activities, their activities are reported only in total at the fund level. Internal Service
funds may not be major funds because their revenues are derived from other City funds. These
revenues are eliminated in the City-wide financial statements and any related profits or losses are
returned to the activities which created them, along with any residual net position of the Internal
Service funds. For this City, internal service activities predominantly benefit governmental rather than
business-type functions, and are therefore included within governmental activities in the City-wide
Financial Statements.
Comparisons of budget and actual financial information are included in the Basic Financial Statements
for the General Fund and other major Special Revenue Funds. Since none of the City’s Special
Revenue Funds are considered major funds, budgetary comparison schedules for these funds are
included in this document as supplemental information only.
The Notes to Basic Financial Statements provide additional detail that is essential to a full
understanding of the information provided in the City-wide and Fund Financial Statements.
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
7
CITY-WIDE FINANCIAL ACTIVITIES
This analysis 1focuses on the net position and changes in net position of the City’s Governmental
Activities (Tables 1 and 2) and Business-Type Activities (Tables 3 and 4) as presented in the City-wide
Statement of Net Position and the Statement of Activities.
Governmental Activities
Table 1
Condensed Statement of Net Position at June 30
(in thousands)
Governmental Activities
2016 2015
Assets:
Cash and investments $ 115,916 $ 121,058
Other assets 23,374 20,288
Capital assets 179,783 169,351
Total assets 319,073 310,697
Deferred Outflows of Resources:
Related to Pension (Note 10) 3,664 3,662
Liabilities:
Long term debt 35,835 37,925
Other liabilities 50,882 50,797
Total liabilities 86,717 88,722
Deferred Inflows of Resources:
Related to Pension (Note 10) 1,826 4,880
Net Position:
Net Investment in capital assets 148,168 131,426
Restricted 34,862 38,328
Unrestricted 51,164 51,004
Total net position $ 234,194 $ 220,757
The City’s change in net position from governmental activities was $13,436,612. The following
significant changes within assets, liability, and net position categories occurred:
Capital assets increased more than $10.4 million, as a result of substantial investment into
capital projects dedicated to street and transportation improvements, storm drain
improvements, and maintenance of and improvements to City facilities. Cash and investments decreased approximately $5.1 million reflecting the increase in
transportation and street improvement project expenses incurred during 2015-16. Other assets increased just over $3.0 million as a result of increased accounts receivable in
the general fund. The receivable was primarily derived from an invoice to Apple Inc. for
funds needed on-hand prior to the City executing consultant agreements with for inspection
services. The agreements are requirements of the development agreement between Apple
Inc. and the City.
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
8
Deposits payable in other liabilities increased by $2.6 million primarily due to developer
deposits that had not been recorded in the appropriate period. The City adjusted the
General Fund's beginning fund balance as of July 1, 2015, and recorded a deposit payable
liability for $2.5 million (see Note 1 (p)).
Sources of Revenue, Governmental Activities 2015-16
In 2015-16, the trend was a return to normalcy. Last fiscal year had substantial shifts across all
governmental funds resulting from restatements needed to implement GASB 68 and 71
(standardization of pension liability calculations), spikes in sales tax revenues resulting from peak
construction activity, heavy investment into CIP projects focused on transportation, and adjustments
needed to better reflect activity of development agreements and the City’s commitments outlined in
these agreements. Fiscal year 2015-16 was less eventful and shifts within the governmental funds are
returning back to longer-term trends.
Charges for
Services 25.3%
Operating Grants
& Contributions
2.4%
Capital Grants &
Contributions
0.5%
Property Tax
23.3%
Sales Tax 27.3%
Transient
Occupancy Tax
7.5%
Utility User Tax
4.3%
Franchise Tax
4.5%
Other Taxes 3.6%
Investment
Earnings 1.0%Miscellaneous
0.3%
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
9
Functional Expenses, Governmental Activities 2015-16
The Statement of Activities presents program revenues, expenses, general revenues, and the resulting
change in net position as summarized in the next table.
Recreation Services
9.2%
Administrative
Services 7 .4%
Public and
Environmental
1.1%
Community
Development 10.3%
Administration 5.6%
Law Enforcement
18.4%
Public Works 47.9%
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
10
Table 2
Condensed Statement of Activities for the Year Ended June 30
(in thousands)
Governmental Activities
Expenses 2016 2015
Administration $ 3,710 $ 3,287
Law enforcement 11,316 10,705
Public and environmental affairs 575 650
Administrative services 2,995 4,300
Recreation services 5,758 5,365
Community development 6,260 5,977
Public works 31,313 27,893
Interest on long-term debt 1,078 1,120
Total expenses 63,005 59,297
Revenues
Program revenues:
Charges for services 19,749 14,615
Operating grants and contributions 1,851 6,003
Capital grants and contributions 362 4,022
Total program revenues 21,962 24,640
General revenues:
Taxes:
Property tax 11,864 10,179
Property tax in-lieu of motor vehicle fee 6,330 5,581
Sales tax 21,350 21,750
Transient occupancy tax 5,852 5,582
Utility user tax 3,371 2,862
Franchise tax 3,478 2,850
Other taxes 2,818 2,139
Intergovernmental, unrestricted:
Motor vehicle license fee 24 24
Investment earnings 807 296
Gain on sale of capital assets 1 23,716
Miscellaneous 219 692
Total general revenues 56,115 75,671
Total revenues 78,077 100,311
Excess of revenues over expenses,
before extraordinary item and transfers 15,072 41,014
Transfers (1,635) 872
Change in net position 13,437 41,886
Beginning net position, as restated 220,757 181,398
Ending net position $ 234,194 $ 223,284
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
11
City-wide Governmental Activities Revenues
Table 2 shows that revenues from governmental activities decreased $22.2 million or 22% from last
year, finishing at $78.0 million. In 2014-15, the City had a large one-time revenue of $23.7 million
(Gain on Sale of Capital Assets) that temporarily boosted revenues. If these one-time revenues were
removed from this calculation, the change in base revenues would be $1.5 million, or 2%.
For general revenues, if the one-time gain were extracted from our calculation, general revenues would
show a $4.2 million increase, or 8%. Most of this gain was attributable to a $2.4 million increase in
property tax revenues which is more than a 15% increase. According to the Santa Clara County
Assessor’s Annual Report for 2015-16, “In 2014, Cupertino’s growth in assessed value from new
construction was $33 million. In 2015 it leaped to $958 million.” The same report showed that total
assessed value increased more than $1.7 billion for 2015-16 and that partial value of the new Apple
Campus 2 of $820 million in new construction contributed to that increase. The remaining general
revenues contributed $1.7 million to the total gain in general revenues.
Program revenues showed a decline of $2.7 million or 11%. There was a mix of changes in that
charges for services revenues increased by $5.1 million while capital and operating grants and
contributions declined by $7.8 million. The increase of $5.1 million in charges for services primarily
resulted from payments made by Apple Inc. to satisfy outstanding amounts due from both 2014-15 and
2015-16 related to the development agreement between Apple Inc. and the City of Cupertino.
The decline in capital and operating grants and contributions was mostly attributable to decreased
housing mitigation payments resulting from a decline in development that did not provide its own
housing component. In 2014-15, the City received over $4.0 million in housing mitigation payments,
but in 2015-16 that revenue source only brought in $300,000.
The other large decline occurred with federal and state grants related to transportation projects. In
2014-15, the Stevens Creek Corridor Park was completed and that project received $2.6 million in
2014-15. Additionally, $3.1 million of transportation grants were received in 2014-15 and as that
activity declined in 2015-16, those revenue sources declined to $1.7 in 2015-16.
City-wide Governmental Activities Expenses
City-wide governmental activities increased expenses by $3.7 million or 6.3%. The largest expense
contributing to this overall increase is attributable to inspection services needed for the Apple Campus
2 project. These expenses are primarily captured in the Public works activity which increased $3.4
million or 12.3% and are offset by corresponding revenues classified in the charges for services
revenue category.
Change in Net Position
The City-wide governmental net position increase of $13.4 million was significantly lower than the
increase of $41.9 million in 2014-15. This large decrease in change was mostly attributable to the
$23.7 million gain on sale of a capital asset when the City sold the portion of Pruneridge Avenue that
runs through the middle the Apple Campus 2 to Apple Inc. and the increase in capital asset additions
going from $7.4 million to $10.5 million.
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
12
Business Type Activities
Business-type activities in the City-wide Financial Statements include the City’s four enterprise funds.
Enterprise funds are used to account for recreational and solid waste management operations that are
financed and operated in a manner similar to private business enterprises where the intent is that costs
of providing services and facilities to the general public on a continuing basis be financed or recovered
primarily through user fees. The major proprietary funds section of this report provides more
information on business-type results.
As shown in Table 3, the business-type net position totaled $9.1 million at June 30, 2016, an increase
of $400,000 from the prior year with unrestricted net position increasing $771,000 and the net
investment in capital assets decreasing by $371,000. There are no substantial changes in assets,
liabilities, and net position of business-type activities.
In Table 4, revenues for all business-type activities remained flat at $7.7 million. However, operating
expenses increased substantially by $1.3 million. These increased expenses were covered by transfers
in from the general fund totaling $1.6 million, resulting in an increase in net position of $400,000.
2016 2015
Assets:
Cash and investments 10,712$ 10,357$
Other assets 309 336
Capital assets 1,708 2,080
Total assets 12,730 12,773
Deferred Outflows of Resources:
Related to pension 255 241
Other Liabilities:3,792 4,009
Total liabilities 3,792 4,009
Deferred Inflows of Resources:
Related to pension 109 321
Net Position:
Net Investment in capital assets 1,708 2,080
Unrestricted 7,375 6,604
Total net position 9,084$ 8,684$
Table 3
Condensed Statement of Net Position at June 30
(in thousands)
Business Type Activities
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
13
Table 4
Condensed Statement of Activities for the Year Ended June 30
(in thousands)
Business Type Activities
Expenses 2016 2015
Resource recovery $ 2,997 $ 2,549
Blackberry farm 576 547
Sports center 2,299 2,269
Recreation programs 3,136 2,343
Total expenses 9,009 7,708
Revenues
Program revenues:
Charges for services 7,690 7,665
General revenues:
Investment earnings 83 42
Total revenues 7,773 7,707
Excess of revenues over expenses,
before extraordinary item and transfers (1,236) (1)
Transfers 1,635 (872)
Change in net position 399 (873)
Beginning net position, as restated 8,684 9,557
Ending net position $ 9,084 $ 8,684
MAJOR GOVERNMENTAL FUNDS
General Fund
General Fund Revenues
General Fund actual revenues of $77.9 million ended $9.7 million, or 14.2%, above the original and
final budgets. Actual revenues were up $16.6 million or 27% when compared to 2014-15 actuals.
Table 5 displays the variations in actual revenues, while Table 6 shows budgeted revenues compared to
actuals.
Charges for services contributed the most to the increase in actual general fund revenues with an
increase of $12.0 million. The revenues went from $4.8 million in 2014-15 to $16.8 million in 2015-
16. The largest contributors were payments made by Apple Inc. to satisfy outstanding amounts due
from both 2014-15 and 2015-16. The outstanding amount from 2014-15 decreased charges for service
revenues by $3.8 million, further exaggerating the incremental increase in the revenue category
between 2014-15 and 2015-16. These payments were deposit requirements outlined in the
development agreement between Apple Inc. and the City of Cupertino.
Property taxes increased 16% or $2.4 million above last year. The increase is mostly due to higher
property taxes resulting from incremental assessed value of $700 million from the new construction at the
Apple Campus 2 development. The value of Apple’s business personal property also contributed to the increase
which includes investments in computers, machinery, equipment, fixtures and furniture. Higher vehicle
license fee (swap) revenues contributed $750,000 to the increase in property tax revenues.
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
14
Sales tax revenues were relatively flat with a small decline of $400,000. The remaining tax revenues
for the General Fund (Transient Occupancy, Utility User, Franchise, and Other) collectively
contributed $2.1 million to the year-over-year increase. The Other Tax revenue stream contributed the
majority of these increased revenues with a $900,000 construction tax payment made by Apple Inc.
related to its Apple Campus 2 development project.
Revenues from use of money and property increased by $589,000 due to an increase in investment
earnings and interest of $380,000 and the remainder of $209,000 was from increased activity in facility
rentals. Intergovernmental revenues decreased just over $400,000 mostly due to state grants awarded
in 2014-15, but not awarded in 2015-16. Licenses and permits included fees for reviewing building
plans, building inspections, construction, tenant improvements, and commercial/residential
installations. License and permit fees were flat from 2014-15 with a 3% decline, or $97,000. Fines
and forfeitures were flat from 2014-15 with a 1% increase, or $8,000. Other revenues went from
$523,000 in 2014-15 to $800,000 in 2015-16. The incremental revenues were the administrative
charges applied to inspection service contractual expenses related to the Apple Campus 2 project as
outlined in the development agreement between Apple Inc. and the City of Cupertino.
In 2014-15, the City had a large one-time revenue of $23.8 million as a result of selling the portion of
Pruneridge Avenue that runs through the middle of the Apple Campus 2 to Apple Inc. resulting in the
large decline in Proceeds from sale of land category. A small transfer into the General Fund occurred
in 2015-16 for $36,015 from an internal service fund.
Table 5
Revenue Changes
General Fund, Fiscal 2016 vs. 2015
(in thousands)
Increase/(Decrease)
Fiscal 2016 From Fiscal 2015
Revenue by Source Amount % of Total Amount Percent
Taxes:
Property $ 18,194 23% $ 2,442 16%
Sales 21,350 27% (400) -2%
Transient occupancy 5,852 8% 270 5%
Utility user 3,371 4% 509 18%
Franchise 3,478 4% 628 22%
Other 2,541 3% 728 40%
Use of money & property 1,362 2% 589 76%
Intergovernmental 429 1% (403) -48%
Licenses and permits 3,073 4% (97) -3%
Charges for services 16,848 22% 12,028 250%
Fines and forfeitures 559 1% 8 1%
Other 800 1% 277 53%
Total revenues $ 77,857 100% $ 16,579 27%
Other financing sources:
Proceeds from sale of land $ 1 0% $ (23,813) 0%
Total other financing sources $ 1 0% $ (23,813) 0%
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
15
Table 6
Revenue, Budget and Actual Comparisons
General Fund 2015-16
(in thousands)
Budgeted Amounts
Variance with
Final
Original Final Actual
Positive/
(Negative)
Taxes:
Property $ 16,055 $ 16,055 $ 18,194 $ 2,139
Sales 20,360 20,360 21,350 990
Transient occupancy 5,072 5,072 5,852 780
Utility user 3,100 3,100 3,371 271
Franchise 2,800 2,800 3,478 678
Other 1,400 1,400 2,541 1,141
Use of money & property 743 743 1,362 620
Intergovernmental 600 600 429 (171)
Licenses and permits 6,171 6,171 3,073 (3,098)
Charges for services 10,591 10,958 16,848 5,890
Fines and forfeitures 550 585 559 (26)
Other 697 346 800 453
Total revenues $ 68,138 $ 68,190 $ 77,857 $ 9,667
Transfers in $ 24 $ 60 $ 36 $ (24)
Proceeds from Sale $ - $ - $ 1 $ 1
General Fund Expenditures
Fiscal 2015-16 overall expenditures, at $51.9 million, were $4.8 million or 10% higher than last year.
However, this result came in 11% or $6.4 million under the original budget and 12% or $6.8 million
under the final budget. Year-over-year and budget-versus-actual results for General Fund programs
are described below and in Tables 7 and 8.
Administration remained flat from 2014-15 with only a $155,000 increase, or 4.0%, in 2015-16. Law
enforcement was higher by $705,000, or 7%, which was the automatic increase in the existing contract
with the Santa Clara County Sheriff’s Office triggered by increases in the lease and PERS costs.
Public and environmental affairs (IT) and Administrative services both experienced a decrease in
expenditures from 2014-15 to 2015-16 of 13%. For Public and environmental affairs (IT), the
decreases were across all expenditure types and result from the arrival of the City’s new Chief
Technology Officer and his strategic realignment of the department to City priorities. Administrative
services’ decrease in expenditures was primarily attributable to vacancy savings as several positions
were budgeted, but not filled for a meaningful part of the fiscal year.
Recreation services general fund expenditure experienced an 8% increase of $394,000 across its
programs. The majority of the expenditures increased in the salaries, benefits and contractual services
categories.
Community development expenditures in the General Fund increased primarily from higher
contractual expenditures in the Planning and Building divisions. Planning’s contractual expenditures
were primarily consultant services for completion of several 9212 reports. Building’s contractual
expenditures were for inspection services related to Apple Campus 2 inspections.
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
16
Public Works expenditures remained relatively flat with a $370,000 increase, or 3%. The increases
were consistently spread among all expenditure categories and do not indicate any anomalies are
issues.
Transfers out of the General Fund declined from $39.2 million in 2014-15 to $13.2 million, with $3.2
million for annual debt service, $6.3 million for capital projects in the Transportation Fund, $1.8
million to subsidize a state-mandated enforcement program and three Enterprise programs, and $1.9
million to internal service funds.
Table 7
Expenditure Changes
General Fund, Fiscal 2016 vs. 2015
(in thousands)
Increase/(Decrease)
Fiscal 2016 From Fiscal 2015
Function/Program Amount % of Total Amount Percent
Administration $ 4,052 8% $ 155 4%
Law enforcement 10,989 21% 705 7%
Public and environmental affairs (IT) 545 1% (80) -13%
Administrative services 2,811 5% (415) -13%
Recreation services 5,441 10% 394 8%
Community development 5,249 10% 1,066 25%
Public works 13,115 25% 369 3%
Capital outlay 9,657 19% 2,641 38%
Total expenditures $ 51,859 100% $ 4,835 10%
Transfers out $ 13,164 192% $ (26,013) -66%
Table 8
Expenditure Changes
General Fund 2015-16
(in thousands)
Budgeted Amounts
Variance with
Final
Original Final Actual Positive/ (Negative)
Administration $ 5,111 $ 4,827 $ 4,052 $ 775
Law enforcement 10,995 11,055 10,989 66
Public and environmental affairs 462 575 545 30
Administrative services 5,092 5,711 2,811 2,900
Recreation services 5,992 6,193 5,441 752
Community development 6,071 5,601 5,249 352
Public works 14,496 14,625 13,115 1,510
Capital outlay 9,987 10,132 9,657 475
Total expenditures $ 58,204 $ 58,718 $ 51,859 $ 6,858
Transfers out $ 9,371 $ 13,128 $ 13,164 $ 36
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
17
General Fund - Fund Balance
The General Fund carried a June 30, 2016, ending fund balance of $52,194,840, up 33% or $12.9 from
beginning of the fiscal year, after restatement for the prior period adjustment described in Note 1(p) of
the Basic Financial Statements. The City assigned $19.0 million for general economic uncertainty,
$1.4 million for economic fluctuations, and $100,000 for potential pension liabilities. Loan
receivables and prepaid expenses totaled $937,381 of non-spendable fund balance and $888,374 was
restricted for Public access television purposes.
Public Facilities Corporation
A transfer of $3,167,033 was made from the General Fund to the Public Facilities Corporation Debt
Service Fund to cover principal and interest on the 2012 Certificates of Participation lease payments.
See Notes 4 and 6 to the Basic Financial Statements and the Debt Administration section of this
analysis for more information.
MAJOR PROPRIETARY FUNDS
Resource Recovery
The City has a solid waste franchise agreement with Recology that shares collection, landfill disposal,
and recycling revenues and costs. This fund receives 17% of Recology revenues with the funds going
toward landfill costs, regulatory fees, and staffing costs that the City incurs to manage its solid waste,
recycling, and household hazardous waste programs. Because of the steady economy and stable
tonnage that Recology handled, this fund experienced a 2.8% increase in residential and commercial
revenues. These revenues, however, were offset by 17.6% higher contract expenses for landfill
disposal. Total operating revenue rose from $2,591,000 last year to $2,664,000 this year, while
expenses increased by $449,000. Net position decreased by $280,000. The fund ended the year with a
$5,454,010 net position.
Blackberry Farm
City employees, with a teaching professional contractor, staff the City-owned Blackberry Farm golf
course and pro shop. Operating revenues declined 13.8% from $388,000 to $335,000. Operating
expenses increased by $29,000 to $576,000 this year due to increased contract services costs and
capital investment in the golf course turf. Altogether, the golf course’s operating loss increased from
$159,000 last year to $242,000 this year. After a transfer in from the General Fund of $262,000
(increase of $148,000), net position increased $27,000. As of June 30, 2016, this fund’s net position
was $572,586.
Cupertino Sports Center
Tennis lesson, membership, fitness class and rent revenues of $2,224,000 increased by $72,000 or
3.3% over last year, resulting from moderate increases across the Sport Center’s major revenue
sources. Expenses, on the other hand, increased by $30,000 or 1.3%, reducing the net operating loss to
$75,000. In 2014-15, net operating loss was $117,000. This operating loss improved by $42,000 from
2014-15. Additionally, $658,000 was transferred in from the general fund. As of June 30, 2016, this
fund’s net position was $886,842.
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
18
Recreation Programs
This enterprise operates the Quinlan Community Center, Monta Vista Recreation Center, McClellan
Ranch, Creekside Park building, eight school sites, and various parks. The improved economy and
enhanced marketing helped cultural events, youth and teen programs, sports, dance and fitness classes
generate $2,466,000 in revenues that were 2.6% lower than last year. Ongoing program expenses of
$3,136,000 included full-time administrative and programming staff, part-time activity leaders, class
instructors on contract, and two capital projects to improve the Sport Center sport court and the interior
of Quinlan. This resulted in a net operating loss of $670,000 as compared to operating income of
$190,000 a year ago. This year a transfer in from the General Fund was made for $715,000. After the
transfer, the fund ended up with an increase in net position of $61,000 and a net position of
$2,170,189.
CAPITAL ASSETS
At June 30, 2016, the City had $181.5 million, net of depreciation, invested in a broad range of capital
assets used in governmental and business-type activities, as shown in Table 9 and in Note 5 to the
Basic Financial Statements. This reflects the City’s continued investment into capital projects
dedicated to street and transportation improvements, storm drain improvements, and maintenance of
and improvements to City facilities, resulting in an increase in net capital assets of $10.1 million, after
depreciation.
Table 9
Capital Assets, Net of Depreciation, at June 30
(in thousands)
2016 2015
Governmental Activities:
Land $ 62,046 $ 62,046
Easements 19,492 19,492
Construction in Progress 760 197
Buildings 19,770 21,445
Improvements other than buildings 16,974 15,890
Machinery and equipment 2,761 2,272
Roads, curbs, gutters, sidewalks, medians and bridges 50,245 43,000
Streetlights 1,613 1,721
Storm drain structures and mains 5,174 2,272
Traffic signals 948 1,015
Total Governmental Activities 179,783 169,350
Business-Type Activities
Buildings 501 516
Improvements other than buildings 1,207 1,550
Machinery and equipment 0 14
Total Business-Type Activities 1,708 2,080
Total City $ 181,491 $ 171,430
CITY OF CUPERTINO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2016
19
DEBT ADMINISTRATION
The City’s only long-term debt liability at June 30, 2016, comes from $43,940,000 in Certificates of
Participation (COPs) issued in May 2012 by the Cupertino Public Facilities Corporation. The
certificates refunded previously issued COPs that financed Wilson Park, Blackberry Farm, and
Creekside Park purchases, the Memorial Park expansion, the Quinlan Community Center construction,
the City Hall remodel, and the new library opened in 2004. The serial fixed rate debt ranging from
0.35% to 3.125% requires annual debt payments of approximately $3,168,000 that are covered by the
General Fund. The June 30, 2016, outstanding principal of $35,835,000 is due to be paid off by 2030.
More information can be found in Note 6 to the Basic Financial Statements and in the Public Facilities
Corporation discussion earlier in this analysis.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This Comprehensive Annual Financial Report is intended to provide a general overview of the City’s
finances. Further information can be provided by the City of Cupertino Finance Department, 10300
Torre Avenue, Cupertino CA 95014, phone (408) 777-3280, or by the City website at
www.cupertino.org.
This Page Left Intentionally Blank
STATEMENT OF NET POSITION AND
STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire City's financial
activities and financial position. They are prepared on the same basis as is used by most businesses,
wh ich means they include all the City's as sets and all its liabilities, as well as all its revenues and
expenses. This is known as the full accrual basis -the effect of all the City's transactions is taken into
account, regardless of whether or when cash changes hands, but all material internal transactions between
City funds have been eliminated.
The Statement of Net Position reports the difference between the City's total as sets and deferred outflows
and the City's total liabilities and deferred inflows, including all the City's capital assets and all its long
term debt.
The Statement of Net Position summarizes the financial position of all the City's Governmental Activities
in a single column, and the financial position of all the City's Business-Type Activities in a single
column ; th ese columns are followed by a Total column wh ich 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 Proj ects and Debt Service Funds. Since the City's Internal Service Funds serv ice the se
Funds, the ir activities are consolidated with Governmental Activities, after eliminating inter-fund
trans actions and balances . The City's Business Type Activities include all of its Enterprise Fund
activities.
The Statement of Activities reports increases and decreases in the City's net position. It is also prepared
on the full accrual basis, which means it includes all the City's revenues and all its expenses, regardless of
when cash changes hands . This differs from the "modified accrual" basis used in the Fund financial
statements, which reflect only current assets, current liabilities, available revenues and measurable
expenditures.
The format of the Statement of Activities presents the City's expenses first, listed by program, and
follows the se with the expenses of its business-type activities. Program revenues, that are revenues which
are generated directly by the se programs, are then deducted from program expenses to arrive at the net
expense of each governmental and business-type program. The City's general revenues are then listed in
the Governmental Activities or Business-type Activities column, as appropriate, and the Change in Net
Position is computed and reconciled with the Statement of Net Position .
Both these Statements include the financial activities of the City and the Cupertino Public Facilities
Corporation, which is a legally separate component unit of the City because it is controlled by and
financially accountab le to the City.
21
CITY OF CUPERTINO
ST A TEMENT OF NET POSITION
JUNE 30, 20 16
Governmental
Activities
ASSETS
Cash an d investm ents (Note 2) $1 11,695,321
Restricted cash an d investments (Note 2) 4,220,380
Receivables :
Accounts 11,203 ,245
Interest 52,606
Loans (Note 3) 1,523,627
Prepaid expenses and other assets 102,324
Net OPEB asset (Note 11) 10,492,537
Capital assets (Note 5):
Non-depreciable 82,297,646
Depreciab le, net of ac cumulated depreciation 97,48 5,048
Total Assets 31 9,072,734
DEFERRED OUTFLOWS OF RE SOURCES
Related to pension (Note I 0) 3,664,093
LIAB ILITIES
Accounts payab le and accruals 8,055,323
Accrued payro ll and benefits 15,72 1
Deposits 9,747,271
Unearned revenue 155 ,44 1
Compensated ab sences (Note lg):
Due in one year 381,994
Due in more than one year 2,424,192
Claims payable (N ote 9):
Due in one year 489,499
Due in more than one year 991,599
Long-term debt (Note 6):
Due in one year 2,135,000
Due in more than one year 33,700,000
Net pension liability (Note 10) 28,621,153
Total Liabilities 86,7 17,193
DEFERRED INFLOWS OF RE SOURCES
Related to pension (Note I 0) 1,8 25,690
NET POSITION (N ote 7)
Net investment in capital assets 148,1 68,074
Restricted for:
Special revenue proj ects 20,424,234
Affordab le housing 12,840,591
Debt serv ice 1,596,982
Total Restricted Net Position 34,86 1 ,807
Unrestricted 51,164,063
Total Net Position $234, 1 93 ,944
See accompanying notes to financial statements
22
Business-Type
Activities Total
$10,71 2,075 $122,407,396
4,220,380
309,387 11,5 12,632
52,606
1,523,627
102,324
10,492,537
82,297,646
1,708, 183 99, 1 93,23 1
12,729,645 33 1 ,802,379
254,989 3,91 9,082
1,1 10,847 9,166,170
289 16,010
9,747,27 1
569,535 724,976
93,436 475,430
126,702 2,550,894
489,499
99 1,599
2,135,000
33,700,000
1,89 1 ,424 30,5 12,577
3,792,233 90,509,426
108,774 1,93 4,464
1,708,183 149,876,257
20,424,234
12,840 ,59 1
1,596,982
34,86 1 ,807
7,375,444 58,539,507
$9,083 ,627 $243 ,277,571
Functions/Programs
Governmental Activities :
Administration $3,7 10,388
Law enforcement 11,3 16,27 1
Public and environmental affairs 575,260
Administrative services 2,994,611
Recreation services 5,758,194
Community development 6,259,734
Public works 31,3 1 3,396
Interest on long -term debt 1,077,538
Total Governmental Activities 63,005,392
Business-type Activities:
Resource recovery 2,997,200
Blackberry farm 576,177
Cupertino sports center 2,299,2 10
Recreation programs 3,136,01 1
Total Business-type Activities 9,008,598
Total $72,0 13,990
General revenues:
Taxes:
Property taxes
Property tax in lieu of motor vehicle fee
Sales taxes
Transient occupancy tax
Utility user tax
Franchise tax
Other taxes
Intergovernmental, unrestricted:
Motor vehi cle license fee
Investment earnings
Gain on sale of capital assets
Miscellaneous
Transfers (Note 4)
Total general revenues and transfers
Change in Net Position
CITY OF CUPERTINO
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 20 16
Revenues
Operating Capital
Charges for Grants and Grants and
Services Contributions Contributions
$369,069 $29,850
664,483 120,732
41,352
359,148
1,421,185
10,534,457 310,445
6,35 8,870 1,390,255 $362,49 1
19,748,564 1,851,282 362,49 1
2,664,888
334,529
2,224,146
2,466,336
7,689,899
$27,43 8,463 $1,85 1,282 $362,49 1
Net Position, beginning of year, as restated (Note l(p))
Net Position, end of year
See accomp anying notes to financial statements
23
Net (Expense) Revenue and
Changes in Net Assets
Governmental
Activities
($3,3 11,469)
(10,53 1,056)
(533,908)
(2,635,463)
(4,337,009)
4,585,168
(23,201,780)
(1,077,5 38)
(4 1 ,043,055)
11,864,027
6,330,436
21,3 50,056
5,852,244
3,370,830
3,478,024
2,818,019
24,111
807,287
580
219,053
(1,635,000)
54,479,667
13,436,612
220,757,332
$234,1 93,944
Business-type
Activities
($332,3 12)
(24 1,648)
(75,064)
(669,675)
(1,3 1 8,699)
(l,31 8,699)
83,187
1,635,000
1,718,187
399,488
8,684,139
$9,083,627
Total
($3,3 11,469)
(10,53 1,056)
(533,908)
(2,635,463)
(4,337,009)
4,585,168
(23,20 1 ,780)
(1,077,538)
(41 ,043,055)
(332,3 12)
(24 1,648)
(75,064)
(669,675)
(1,31 8,699)
(42,361,754)
11,864,027
6,330,436
21,350,056
5,852,244
3,370,830
3,478,024
2,8 18,019
24,1 11
890,474
580
219,053
56,1 97,854
13,836,100
229,44 1,47 1
$243,277,571
Program
Expenses
(41,043,055)
This Page Left Intentionally Blank
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 sign ificant activities or
balances in the current year.
The funds described below were determined to be Major Funds by the City for fiscal 2015-16. 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 ac counted for in another fund .
TRANSPORTATION SPE CIAL REVENUE FUND
Accounts for the City's gas tax, vehicle registration fees and grant revenues and expenditures related to
the maintenance and construction of City streets . All revenue in this fund is restricted exclusively for
street and road purposes including related engineering and admini strative expenditure s.
HOUSING DEVELOPMENT SPE CIAL REVENUE FUND
Accounts for the Federal Housing and Community Development Grant Program activities administered
through the Country. Monies collected from deve lopers that mitigate the impact of housing needs are also
included. Monies in th is fund are governed by the program's rules.
PUBLIC FACILITIE S CORPORATION DEBT SERVICE FUND
This fund accounts for the payments of principal and interest on certificates of participation issued to
provide for the fm ancing of the Civic Center, Library, Wilson Park, Memorial Park, and other City
facilities.
CAPITAL IMPROVEMENT PROJE CTS CAPITAL PROJE CTS FUND
This fund accounts for activities related to the acquisition or construction of maj or capital facilities .
25
CITY OF CUPERTINO
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 20 16
Public
Facilities
Revenue Funds Corporation
Housing Debt
General Transportation Development Service Fund
ASSETS
Cash and investments (Note 2) $54,282,490 $10,458,625 $12,3 66, 743 $5,371
Restricted cash and investments (Note 2) 4,220,3 80
Receivables:
Accounts 11,181,3 10 1,490
Interest 52,606
Loans (Note 3) 868,608 655,0 19
Due from other funds (Note 4) 450,220
Prepaid items 68,773
Other assets 3,884
Total Assets $66,907,891 $10,460,115 $13,02 1 ,762 $4,225,75 1
LIABILITIES
Accounts payable and accruals $4,794,690 $379,361 $88,596 $2,628,769
Accrued payroll and benefits 15,649
Deposits 9,747,27 1
Unearned revenue 155,44 1
Total Liabilities 14,713,05 1 379,361 88,596 2,628,769
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue -loans 92,575
Total Deferred Inflows of Resources 92,575
FUND BALANCES (Note 7):
Nonspendable 937,381
Restricted 888,374 8,682,089 12,840,59 1 1,596,982
Committed 1,398,665
Assigned 20,500,000
Unassigned 29,869,085
Total Fund Balances 52,1 94,840 10,080,754 12,840,59 1 1,596,982
Total Liabilities, Deferred Inflows of Resources
and Fund Balances $66,907,891 $10,460,115 $13,021, 762 $4,225,75 1
See accompanying notes to financial statements
26
Special
Capital
Improvement
Proj ects
Capital
Projects Fund
$15,102,4 14
$15,102,4 14
$27,606
27,606
15,074,808
15,074,808
$15,102,4 14
Other
Governmental
Funds
$1 1,120,291
7,500
$11,127,79 1
$4,637
4,637
10,853,771
269,383
11,123,154
$1 1,127,79 1
Total
Governmental
Funds
$103,335,934
4,220,380
11,190,300
52,606
1,523,627
450,220
68,773
3,884
$120,845,724
$7,923 ,659
15,649
9,747,27 1
155,44 1
17,842,020
92,575
92,575
937,3 81
34,86 1,807
1,398,665
35,844,191
29,869,085
102,91 1,129
$120,845,724
27
This Page Left Intentionally Blank
CITY OF CUPERTINO
Re conciliation of the
GOVERNMENTAL FUNDS --BALANCE SHEET
with the
STATEMENT OF NET POSITION
JUNE 30, 20 16
Total fund balances reported on the governmental funds balance sheet
Amounts reported for Governmental Activities in the Statement of Net Position
are different from those reported in the Governmental Funds above because of the following:
CAPITAL AS SETS
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 POSITION
Internal service funds are used by management to charge the costs of activities such as
information technology, insurance, equipment acquisition and maintenance, and certain
employees' benefits to governmental funds. The assets and liabilities of the internal service
funds are therefore included in the governmental activities of the statement of net position.
RECEIVABLES NOT AVAILABLE
Certain receivables are not available to pay for current period expenditures and
therefore are deferred in the governmental funds.
LONG TERM AS SETS AND LIABILITIES
The assets and liabilities below are not due and payable in the current period and therefore are not
reported in the governmental funds:
Long-term debt
Net pension liability and pension-related deferred outflows/inflows of resources
Compensated ab sences
NET POSITION OF GOVERNMENTAL ACTIVITIES
See accompanying notes to financial statements
29
$102,9 11,129
177,573,297
18,690,745
92,575
(35,83 5,000)
(26, 782, 750)
(2,456,052)
$234,193,944
CITY OF CUPERTINO
GOVERNMENTAL FUNDS
STATEMENT OF REVENUE S, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 20 16
Revenue Funds
Housing
General Development
REVENUES
Taxes $54, 786,297 $299,586
Use of money and property 1,362,393 $84,189 108,699
Intergovernmental 428,992 1,701,151 40 1,882
Licenses and permits 3,073,1 10
Charges for services 16,848,153
Fines and forfeitures 558,5 16
Other revenue 799,587 1,710
Total Revenues 77,857,048 1,787,050 810,167
EXPENDITURES
Current:
Administration 4,052,24 1
Law enforcement 10,988,735
Public and environmental affairs 544,718
Administrative services 2,811,1 17
Recreation services 5,44 1,200
Community development 5,248,84 1 853,979
Public works 13,1 15,155 1,465,970
Capital outlay 9,657,394 9,670,43 0
Debt service:
Principal
Interest and fiscal charges
Total Expenditures 51,859,40 1 11,136,400 853,979
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 25,997,647 (9,349,3 50) (43,8 12)
OTHER FINANCING SOURCE S (USE S)
Proceeds from sale of capital assets 580
Transfers in (Note 4) 36,0 15 8,574,000
Transfers (out) (Note 4) (13,163,945)
Total Other Financing Sources (Uses) (13,127,350) 8,574,000
NET CHANGE IN F UND BALANCES 12,870,297 (775,350) (43,8 12)
BEGINNING FUND BALANCES,
AS RESTATED (Note l(p)) 39,324,543 10,856,104 12,884,403
ENDING FUND BALANCES $52,1 94,840 $10,080,754 $12,840,59 1
See accompanying notes to financial statements
30
Public
Facilities
Corporation
Debt
Service Fund
$4,796
4,796
1,500
2,090,000
1,077,538
3,169,03 8
(3, 164,242)
3,167,03 3
3,167,03 3
2,79 1
1,594,191
$1,596,982
Special
Transportation
Capital
Improvement
Projects Other Total
Capital Governmental Governmental
Proj ects Fund Funds Funds
$3 77,073 $55,462,956
94,625 1,654,702
2,532,025
3,073,110
400,970 17,249,123
6,387 564,903
487,7 16 1,289,013
1,366,77 1 81,825,832
4,053 ,741
10,988,735
544,718
2,811,1 17
5,44 1,200
6,102,820
497,049 15,078,174
$3 ,042,267 3,801,036 26,171,127
2,090,000
1,077,538
3,042,267 4,298,085 74,3 59,170
(3 ,042,267) (2,93 1,3 14) 7,466,662
580
128,676 11,905,724
(2,258,268) (15,422,2 13)
(2,258,268) 128,676 (3,5 1 5,909)
(5,300,535) (2,802,63 8) 3,950,753
20,375,343 13,925,792 98,960,376
$15,074,808 $11,123,154 $102,91 1,129
31
CITY OF CUPERTINO
Reconciliation of the
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS
with the
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 20 16
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 Net Position 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
Amounts reported for governmental activities in the Statement of Activities
are different because of the following:
CAPITAL AS SETS TRANSACTIONS
Governmental Funds report capital outlays as expenditures. 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.
Expenditures for capital assets reported as :
Capital outlay
Depreciation expense is deducted from the fund balance
Net retirements are deducted from the fund balance
LONG TERM DEBT TRANSACTIONS
Principal payments
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):
Accounts receivable
Compensated ab sences
Net pension liability and pension-related deferred outflows/inflows of resources
Claims payable
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 fun ds.
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 Net Position -All Internal Service Funds
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES
See accompanying notes to financial statements
32
$3,950,753
16,597,102
(6,7 11,704)
(24,939)
2,090,000
(3,823 ,870)
94,356
591,785
156,900
516,229
$13,436,612
CITY OF CUPERTINO
GENERAL FUND
STATEMENT OF REVENUE S, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
Revenues:
Taxes
Use of money and property
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Other revenue
Amounts available for appropriation
Charges for appropriation (outflows):
Current
Administration
Law enforcement
Public and environmental affairs
Administrative services
Recreation services
Community development
Public works
Capital outlay
Total charges for appropriations
EXCESS OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Proceeds from sale of land
Transfers in
Transfers (out)
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 20 16
Budgeted Amounts
Original Final
$48,787,000 $48,787,000
742,530 742,530
600,000 600,000
6,171,000 6,171,000
10,590,878 10,957,878
550,000 585,000
696,895 346,389
68,138,303 68,1 89,797
5,110 ,505 4,826,816
10,994,684 11,054,684
462,298 574,782
5,09 1,571 5,710,774
5,99 1,882 6,1 92,890
6,070,550 5,600,63 1
14,495,667 14,624,710
9,986,674 10,132,449
58,203,83 1 58,7 17,73 6
9,93 4,472 9,472,06 1
24,000 60,0 15
(9,3 71,222) (13,127,932)
(9,347,222) (13,067,917)
$587,250 ($3 ,595,856)
BEGINNING FUND BALANCE, AS RESTATED (Note l(p))
ENDING FUND BALANCE
See accompanying notes to financial statements
33
Variance with
Final Budget
Positive
Actual Amounts (Negative)
$54, 786,297 $5,999,297
1,362,393 619,863
428,992 (171,008)
3,073,110 (3,097,890)
16,848,153 5,890,275
558,5 16 (26,484)
799,587 45 3,198
77,857,048 9,667,25 1
4,052,24 1 774,575
10,988,735 65,949
544,718 30,064
2,81 1,1 17 2,899,657
5,44 1,200 75 1 ,690
5,248,841 351,790
13,115,155 1,509,555
9,657,394 475 ,055
51,859,40 1 6,858,335
25,997,647 16,525,586
580 580
36,0 15 (24,000)
(13,163,945)
(13, 127,3 50) (59,43 3)
12,870,297 $16,466,153
39,324,543
$52,1 94,840
(36,013)
CITY OF CUPERTINO
TRANSPORTATION SPECIAL REVENUE FUND
STATEMENT OF REVENUE S, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 20 16
Budgeted Amounts
Variance with
Final Budget
Positive
Original Final Actual Amounts (Negative)
Revenues :
Use of money and property
Intergovernmental
Other revenue
Amounts available for appropriation
Charges for appropriation (outflows):
Current
Public works
Capital outlay
Total charges for appropriations
EXCESS OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
ENDING FUND BALANCE
$95 1,414 $95 1,414
95 1,414 95 1,414
1,589,76 1 1,554,304
9,390,000 9,659,554
10,979,76 1 11,213,858
(10,028,347) (10,262,444)
9,966,353 9,990,353
9,966,353 9,990,353
($6 1,994) ($272,09 1)
See accompanying notes to financial statements
34
$84,189
1,701,151
1,710
1,787,050
1,465,970
9,670,43 0
11,136,400
(9,349,350)
8,574,000
8,574,000
(775,350)
10,856,104
$10,080,754
$84,189
749,73 7
1,710
835,636
88,334
(10,876)
77,458
913,094
(1,416,353)
(1,416,353)
($503,259)
CITY OF CUPERTINO
HOUSING DEVELOPMENT SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGE S IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 20 16
Budgeted Amounts
Variance with
Final Budget
Positive
Original Final Actual Amounts
Revenues:
Taxes
Use of money and property
Intergovernmental
Licenses and permits
Amounts available for appropriation
Charges for appropriation (outflows):
Current
Community development
Capital outlay
Total charges for appropriations
EXCESS OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
BEGINNING FUND BALANCE
ENDING FUND BALANCE
$566,652 $566,652
28,000
310,943
61,306 61,306
966,90 1 627,958
898,527 875,524
40,000
938,527 875,524
28,374 (247,566)
245,238 245,23 8
245,23 8 245 ,238
$273,612 ($2,328)
See accompanying notes to financial statements
35
$299,586 ($267,066)
108,699 108,699
40 1,882 40 1,882
(6 1,306)
810,167 182,209
853,979 21,545
853,979 21,545
(43 ,812) 203,754
($43,8 12)
12,884,403
$12,840,591
(Negative)
(245,238)
(245,238)
($41,484)
This Page Left Intentionally Blank
MAJOR PROPRIETARY FUNDS
Proprietary funds account for City operations financed and operated in a manner similar to a private
business enterpri se. The intent of the City is that the cost of providing goods and servi ces be financed
primarily through user charge s.
The City has identified the funds below as major proprietary funds for fiscal 20 15-16.
RE SOURCE S RE C OVERY FUND
This fund accounts for activity related to the collection, disposal, and recycling of solid waste . A private
company has been issued an exclusive franchise to perform these services.
BLACKBERRY FARM FUND
This fund accounts for activities related to operating the City-owned golf course.
CUPERTINO SPORTS CENTER FUND
This fund accounts for the operation and maintenance of the Cupertino Sports Center.
RECREATION PROGRAMS FUND
This fund accounts for activities of the City's community centers and park facilities.
37
CITY OF CUPERTINO
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 20 16
Funds Governmental
Cupertino Activities-
Resources Blackberry Sports Recreation Internal Service
Recovery Farm Center Totals Funds
ASSETS
Current Assets:
Cash and investments (Note 2) $6,433,9 13 $800,706 $1,249,774 $2,227,682 $10,7 12,075 $8,359,387
Accounts receivable 302,144 7,243 309,387 12,945
Prepaid items 29,667
Total current assets 6,73 6,057 800,706 1,257,0 17 2,227,682 11,02 1,462 8,40 1 ,999
Noncurrent assets:
Net OPEB asset (Note 11) 10,492,537
Capital Assets (Note 5):
Depreciable, net of
accumulated depreciation 17,987 29,262 336,690 1,324,244 1,708,183 2,209,397
Total noncurrent assets 17,987 29,262 336,690 1,324,244 1,708,183 12,70 1 ,934
Total Assets 6,754,044 829,968 1,593,707 3,551,926 12,729,645 21,103,933
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 10) 83,645 25,550 55,285 90,509 254,989
LIABILITIES
Current Liabilities:
Accounts payable and accruals 657,977 35,420 202,039 215,4 11 1,110,847 131,664
Accrued payroll and benefits 289 289 72
Due to other funds (Note 4) 450,220
Compensated absences (Note lg) 31,858 18,799 5,772 37,007 93,436 47,662
Claims payable (Note 9) 489,499
Unearned revenue 110 ,144 459,391 569,535
Total current liabilities 690,124 54,2 19 317 ,955 71 1,809 1,774,107 1,1 19,117
Non-current Liabilities :
Compensated absences (Note lg) 43,20 1 25,493 7,826 50,182 126,702 302,472
Claims payable (Note 9) 991,599
Net pension liability (Note 10) 622,976 188,309 408,887 67 1,252 1,89 1 ,424
Total Liabilities 1,356,301 268,02 1 734,668 1,433,243 3,792,233 2,413,188
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 10) 27,378 14,9 11 27,482 39,003 108,774
NET POSITION (Note 7)
Net investment in cap ital assets 17,987 29,262 336,690 1,324,244 1,708,183 2,209,397
Unrestricted 5,436,023 543,324 550,152 845,945 7,375,444 16,48 1 ,348
Total Net Position $5,454,010 $572,586 $886,842 $2,170,189 $9,083,627 $18,690,745
See accompanying notes to financial statements
38
Business-type Activities-Enterprise
Programs
CITY OF CUPERTINO
PROPRIETARY FUNDS
STATEMENT OF REVENUE, EXPENSES
AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 20 16
Business-type Funds Governmental
Cupertino Activities-
Resources Blackbeny Sports Recreation Internal Service
Recovery Farm Center Totals Funds
OPERATING REVENUE S
Charges for services $2,576,077 $3 12,065 $2,222,609 $2,466,336 $7,577,087 $4,693,577
Other 88,8 11 22,464 1,537 112,8 12 29,320
Total Operating Revenues 2,664,888 334,529 2,224,146 2,466,336 7,689,899 4,722,897
OPERATING EXPENSES
Salaries and benefits 524,2 11 148,586 388,508 749,350 1,810,655 2,745,365
Materials and supplies 98,965 146,119 389,498 612,144 1,246,726 1,447,7 13
Contractual services 2,368,232 261,354 1,4 81,136 1,452,267 5,562,989 719,007
Insurance and claims and premium 576,653
Depreciation (Note 5) 5,792 20,118 40,068 322,250 388,228 695,825
Total Operating Expenses 2,997,200 576,177 2,299,2 10 3,136,011 9,008,598 6,1 84,563
Operating Income (Loss) (3 32,3 12) (241,648) (75,064) (669,675) (1,3 18,699) (1,461,666)
NONOPERATING REVENUE S
Investment income 52,789 6,756 7,953 15,689 83,187 74,462
Gain on sale of land 21,944
Total Nonoperating Revenues 52,789 6,756 7,953 15,689 83,187 96,406
Income (Loss) Before Transfers (279,523) (234,892) (67,111) (653,986) (1,235,5 12) (1,365,260)
Transfers in (Note 4) 262,008 657,732 715,260 1,635,000 1,917,504
Transfers (out) (Note 4) (3 6 ,0 15)
Change in net position (279,523) 27,116 590,62 1 61,274 399,488 516,229
Net Position-Beginning of year 5,733,533 545,470 296,22 1 2,1 08,9 15 8,684,139 18,174,5 16
Net Position-End of year $5,454,010 $572,586 $886,842 $2,170,189 $9,083,627 $18,690,745
See accompanying notes to financial statements
39
Activities-Enterprise
Programs
CITY OF CUPERTINO
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 20 16
Funds
Governmental
Cupertino Activities-
Resources Blackberry Sports Recreation Internal Service
Fann Center Totals Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $2,682,66 1 $334,529 $2,23 2,524 $2,355,439 $7,605,153 $4,709,952
Cash payments to suppliers
for goods and services (2,727,101) (3 81,7 96) (1,862,986) (2,030,258) (7,002,141) (2 ,214,064)
Cash payments to employees for salaries and benefits (554,635) (161,019) (4 18,109) (815,717) (1,949,480) (2 ,813,371)
Cash payments for judgment and claims (1,128,734)
Net cash provided (used) by operating activities
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 262,008 657,732 715,260 1,635,000 1,9 17,504
Transfers (out)
Cash Flows from Noncapital
Financing Activities 262,008 657,732 715,260 1,635,000 1,881,489
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets
Cash Flows from Capital and
Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVlTIES
Interest received 52,764 6,755 7,953 15,689 83,161 74,462
Cash Flows from Investing Activities 52,764 6,755 7,953 15,689 83,161 74,462
Net Cash Flows (546,3 11) 60,477 600,265 240,412 354,843 (73 5,705)
Cash and investments at beginning of year 6,980,224 740,229 649,509 1,987,270 10,357,232 9,095,092
Cash and investments at end of year $6,433,913 $800,706 $1,249,774 $2,227,682 $10,7 12,075 $8,359,387
Reconciliation of operating income (loss) to
net cash provided by operating activities:
Operating income (loss) ($332,3 12) ($24 1,648) ($75 ,064) ($669,675) ($1,3 1 8,699) ($1,46 1 ,666)
Adjustments to reconcile operating income to
net cash provided by operating activities :
Depreciation 5,792 20,118 40,068 322,250 388,228 695,825
Change in assets and liabilities:
Accounts receivable 17,773 9,363 27,136 (12,945)
Prepaid expense 24,206
Net OPEB asset 1,866
Due to retirement system (10,062) (4,564) (11,019) (19,470) (55,115)
Accounts payable and accruals (2 59,904) 25,677 7,648 34,153 (1 92,426) (7 1,550)
Accrued payroll and benefits (17,369) (7,779) (1 6,733) (55,43 3) (97,314) (63,626)
Deposits (6,246)
Deferred revenue 8,378 (120,260) (1 11,882)
Compensated absences 7,007 (90) (1,849) 8,536 13,604
Claims payable
Net cash provided (used) by operating activities ($599,075) ($490,536) ($1 ,346,468)
See accompanying notes to fm ancial statements
40
Business-type Activities-Enterprise
Recovery Programs
(599,075) (208,286) ----'-(4_8"-,5_71..,_) (490,536) (1,346,468)
(16,849) ___ ....... 1..,_) _ _.(_16-'-,8_50'-'-)
(16,849) ___ ....... 0..,_) _ _.(_16-'-',8_50_..,_)
($208,286) ($48,571)
(1,446,217)
(36,015)
(1,245,439)
(1,245,439)
(552,081)
($1,446,217)
CITY OF CUPERTINO
Note s to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 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 a Council -City Manager form of government and provides
services through the following departments : Administrative Service s, Community Development, City
Manager, Parks and Recreation, Public and Environmental Affairs, and Public Works . Fire services are
provided by the Santa Clara County Fire District, and the City contracts with the Santa Clara County
Sheriffs Department for police services, and with Re cology for garbage and recycling services .
The accompanying basic fm ancial statements include all funds and boards and commissions that are
controlled by the City Council. The basic financial statements include the City's blended comp onent
unit entity for which the City is considered to be fm an cially accountab le . A blended component unit,
although a legally separate entity, is in substance, part of the City's operations and so data from this unit
is combined with the City .
Blended component unit -The Cupertino Public Facilities Corporation (the Corporation) was
incorporated in May 1986, under the Nonprofit Public Benefit Corp oration Law of the State of
California. The Corporation was organized as a nonprofit corporation for the purpose of assisting the
City in the acquisition, construction, and financing of pub lic improvements which are of pub lic benefit
to the City. The Corporation, after acquiring certain properties from the City, leases these back to the
City. The lease money provides the funds for the debt service for the Certificates of Participation issued
by the Corporation to acquire the properties .
The Corporation does not issue separate financial statements, since it is reported separately in the City's
basic fm ancial statements.
(b) Me asurement Fo cus, Basis of Accoun ting and Basis of Presentation
The City's basic fm ancial statements are prepared in conformity with accounting principles generally
accepted in the United State s. The Government Accounting Standards Board (GASB) is the
acknowledged standard setting body for estab lishing accounting and financial reporting standards
followed by governmental entities in the United States.
Government-wide Statements - The Statement of Net Position and the Statement of Activities display
information about the primary government (the City) and its component units . The se statements include
the financial activities of the overall City government, except for fiduciary activities. 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 parti es.
41
CITY OF CUPERTINO
Note s to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(b) Measurement Fo cus, Basis of Accounting and Basis of Presentation (Con tin ued)
The Statement of Activities presents a comparison between exp enses 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 th ose 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 program s and (b) grants and contributions that
are restricted to meeting the operational or capital needs of a particular program. Revenues that are not
classified as program revenues, including taxes, are pres ented as general revenues. Program revenues
and direct expenses related to interfund services are inc luded and indirect expenses funded by interfund
transfers are excluded from the Statement of Activities. The Statement of Net Position eliminates
interfund balances between governmental funds and interfund balanc es between proprietary funds.
Fund Financial Statements -The fund financ ial statements provide information about the City's
funds, including fiduciary funds and blended component units. Separate statements for each fund
category -governmental, proprietary, and fiduciary -are presente d. The emphasis of fund financial
statements is on major individual governmental and enterprise funds, each of which is displayed in a
separate column . All remaining governmental funds are aggregated and reported as nonmajor funds.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions
associated with the principal activity of the fund. Exchange transactions are those in which each party
receives and gives up essentially equal value s. No noperating revenue s, such as subsidies and
inve stment earnings, result from nonexchange transactions or ancillary activities.
Maj or Funds -The City's major governmental and enterprise funds are identified and presented
separately in the fund financial statements. All other funds, called nonmajor funds, are combined and
reported in a single column, regardless of their fund type.
Major funds are defined as funds, which have either assets (plus deferred outflows), liabilities (plus
deferred inflows), revenues or exp enditures in exc ess of ten percent of their fund-type total and five
percent of the aggregate total for both governmental funds and enterprise funds . The General Fund is
always a major fund. The City may select other funds it believes should be presented as major funds .
42
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE S (Continued)
(h) Measurement Fo cus, Basis of Accounting and Basis of Presentation (Co ntin ued)
The City reported the following major governmental funds in the accompanying financial statements :
• The General Fund is the general operating fund of the City. It is used to account for all financial
resources except those that are required to be accounted for in another fund.
• The Tr ansportation Special Revenue Fund accounts for the City's gas tax, vehicle registration fees
and grant revenues and expenditures related to the maintenance and construction of City streets. All
revenue in this fund is restricted exclusively for street and road purposes including related engineering
and administrative expenses.
• The Ho using Development Sp ecial Revenue Fund accounts for the Federal Housing and Community
Development Grant Program activities administered through the County. Monies collected from
developers that mitigate the impact of housing needs are also included. Monies in this fund are
governed by the program's rule s.
• The Public Fac ilities Corporation Debt Se rvice Fund accounts for the payments of principal and
interest on certificates of participation issued to provide for the financing of City Hall, Library, Wilson
Park, Memorial Park, and other City facilities.
• Capital Improvement Projects Capital Projects Fund Accounts for activities related to the
acquisition or construction of major capital facilities.
The City reports all its enterprise funds as major funds in the accompanying financial statements:
• The Resources Recovery Fund accounts for activity related to the collection, disposal, and recycling of
solid waste . A private company has been issued an exclusive franchise to perform these services.
• The Blackberry Fa rm Fund accounts for activities related to the municipal golf course.
• The Cupertino Sp orts Center Fund accounts for the operation and maintenance of the Cupertino
Sports Center.
• The Recreation Programs Fund accounts for activities of the City's community centers and park
facilitie s.
The City also reports the following fund types:
Internal Service Funds. The se funds account for workers ' compensation, management information
systems maintenance and replacement, equipment maintenance and replacement, retiree health costs,
accrued leave payouts, and long-term disability coverage; all of which are provided to other departments
on a cost-reimbursement basis.
Basis of Accounting -The government-wide and proprietary financial statements are reported using the
economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded
when earned and expenses are recorded at the time liabilities are in curred, regardless of when the
related cash flows take place .
43
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE S (Continued)
(b) Measurement Fo cus, Basis of Accounting and Basis of Presentation (Contin ued)
Governmental funds are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Under this method, revenues are recognized when measurable
and available . The City considers all revenues reported in the governmental funds to be available if the
revenues are collected within sixty days after year-end. Expenditures are recorded when the related
fund liability is incurred, except for principal and interest on long-term debt which are re cognized as
expenditures to the extent the City has provided financial resources to a debt service fund for payment
of these liabilities that mature early in the following year. General capital asset acquisitions are reported
as expenditures in governmental funds. Proceeds from long-term debt and acquisitions under capital
leases are reported as other financing sources.
Un earned revenues are considered on a full accrual basis, while unavailable revenues are based on the
modified accrual measure .
Property taxes, transient occupancy taxes, utility taxes, franchise taxes, interest and special assessments
are susceptible to accrual . Other receipts and taxes are recognized as revenue when the cash is received.
Sales taxes collected and held by the state at year end on behalf of the City are also recognized as
revenue. Sales tax consultant payments which are contingent on revenues collected are netted against
the re lated revenues .
Under the terms of grant agreements, the City may fund certain programs with a combination of cost
reimbursement grants, categorical block grants, and general revenue . The City's policy is to first apply
restricted grant resources to such programs, followed by general revenues if ne cessary. Grant revenues
are recognized after eligibility and billing occurs, but may be a deferred inflow if not re ceived within
sixty days of year-end. Because of the cost-reimbursement and recognition nature of some grants,
certain capital project funds may carry deficit fund balances until billing and receipt of grants. The City
may also front the capital outlays with cash advances from other funds .
Non-exchange transactions, in which the City gives or receives value without directly receiving or
giving equal value in exchange, include property taxes, grants, entitlements, and donations. On the
accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied
or assessed. Revenue from grants is recognized as described above. Entitlement and donation revenues
are recognized when cash is received.
44
CITY OF CUPERTINO
Notes to the Basic Financial Stat ements
For the Year Ended June 3 0 , 20 16
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE S (C ontinued)
(c) Budgetary Practices
The budget of the City is a detai led operating plan which identifies estimated costs and results in
re lation 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 operat ing 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 ap propriation. Operating appropriations lapse at fiscal year end .
In May of each year, the City Manager submits to the City Council a proposed budget for the fiscal year
beginning July 1. Public hearings on the proposed budget are held during the month of June an d the
budgets for all fund typ es are legally adopted by Re solution prior to June 30. Original budget amounts
are presented on the accompanying budgetary statements include these legally adopted amounts .
The City's legal level of budgetary control is at th e functional level for th e general fund and at the fu nd
leve l for other funds . The City Manager is responsible for contro lling the City's expenditures in
ac cordance with the adopted budget. The City Manager is authorized to administer and tran sfer
appropriations between budget accounts within the operat ing budget when in his opinion such transfers
become necessary for ad ministrative purposes . Any rev ision which increases total appropriations must
be approved by the City Coun cil. Re quests for additi onal personnel or cap ital outlay also require the
approval of th e City Council.
Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting
principles. Budget information is presented for the general, special revenue and debt serv ice funds only.
Cap ital projects funds are budgeted on a long-term proj ect-by-project basis and, hence, budgets for these
funds are not presented in the basic financial statements .
During the fiscal year, expenditures exceeded ap propriations as follows :
Major Fund:
Excess of
Expenditures
Fund/D epartment Over
Pub lic Facilities Corporation Debt Serv ice Fun• $1,500
( d) Cash and In vestments
The City pools its cash resources, consisting of cash and investments, of all funds for inve stment except
for restricted funds general ly held by an outside fiscal agent. Cash amounts are reported net of
outstanding warrants . Inve stm ents are stated at fair value .
(e) Cap ital 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 donat ed. Public domain
(infrastru ctu re) capital assets consisting of roads, bridges, curbs, gutters, medians, sidewalks, drainage
and lighting systems have been capital ized and depreciated. Capital as sets are defined as assets with an
initial individual cost of more than $5,000 for general capital assets and $100,000 for intangible assets .
45
CITY OF CUPERTINO
Note s to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e) Cap ital Assets (Contin ued)
Depreciation is recorded using the straight-line method over the following useful lives:
Buildings
Improvements
Vehicles
Street equipment
Water equipment
Office equipment
Road, curb s, gutters, sidewalks, medians and bridge s
Streetlights
Storm drain structure and mains
Traffic signals
Years
15 -25
10 -15
4-10
3 -20
3 -50
3-5
30 -40
20
40
20
Major outlays for capital assets and improvements are capitalized as projects are constructed. For
enterprise funds, interest incurred during the construction phase is reflected in the capitalized value of
the asset constructed, net of interest earned on the invested proceeds over the same period. Some capital
assets may be acquired using federal and state grant fund s, 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) Claims and Judgm ent Payab le
Claims and judgments payable are accrued when the liability is incurred and the amount can be
reasonably estimated . Claims and judgments payable are recorded in an internal service fund for
workers ' compensation and long-term disability, and other claims and judgments are recorded in the
General Fund or enterprise funds, as appropriate.
(g ) Compensated Absences
Compensated absences comprise vested accumulated vacation and sick leave . The City's liability for
compensated ab sences is recorded in governmental or business-type activities as appropriate. The
liability for compen sated absences is determined annually. For all governmental funds, amounts
expected to be "permanently liquidated," such as what is due to be paid because of a realized
employment action, are recorded as fund liabilities; the long-term portion is recorded in the Statement of
Net Position.
Compensated ab sences are liquidated by the fund that has recorded the liability. The long-term portion
of governmental activities compensated ab senc es are liquidated primarily by the General Fund, using
the Compensated Ab sences and Long-Term Disability internal service fund to account for termination
payouts .
46
---
CITY OF CUPERTINO
Note s to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE S (Continued)
(h)
The changes in compensated ab sences for the year ended June 30, 2016 were as follows :
Governmental Business-Typ e
Activities Activities Total
Beginning Balance $2,906,788 $206,5 61 $3 ,113,349
Additions 63 0,106 27,154 65 7,260
Reductions
Ending Bal ance $2,806,186 $220,138 $3 ,026,324
Current Portion $3 81,994 $93,43 6 $475,43 0
Non-current Portion $2,424,192 $126,702 $2,550,894
Deferred Outflows/Inflows of Reso urces
fu addition to assets, the statement of financial position or balance sheet reports a separate section for
deferred outflows of resources. This separate financial statement element, de ferred outflows of
reso urces, represents a consumption of net position or fund balance that applies to a future period(s) and
so will not be recognized as an outflow of resources (expense/expenditure) until then.
fu addition to liabilities, the statement of financial position or balance sheet reports a separate section
for deferred inflows of resource s. This separate financial statement element, de ferred iriflows of
reso urces, represents an ac quisition of net position or fund balance that applies to a future period(s) and
so will not be recognized as an inflow of resources (revenue) until that time.
(i) Property Tax Calendar
All property taxes are levied and collected by the County of Santa Clara. Secured taxe s are levied on
July 1, are due in two installments on November 1 and February 1 and become delinquent after
December 10 and April 10. Unsecured taxes are levied on July 1 and become delinquent on August 31.
The lien date for secured and unsecured property taxes is January 1.
The City, in fiscal year 1993 -94, adopted an alternative method of property tax distribution (the "Teeter
Plan"). Under th is method, the City re ceives 100% of its secured property tax levied in exchange for
foregoing any interest and penalties collected on delinquent taxe s. The City receives remittances as a
series of advances made by the County during the year.
(j) In ter/ und Tr ansactions
Transactions constituting reimbursements to a fund for expenditures/expenses initially made from it that
are properly ap plicable to another fund, are recorded as expenditure s/expenses in the reimbursing fund
and as reductions of expenditure s/expenses in the fund that is reimbursed.
47
(730,708) (13,577) (744,285)
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE S (Continued)
(k) Statement of Cash Flo ws
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 ac cess pooled cash and investments in a
manner similar to a demand depo sit account.
(l) Prepaid It ems
Prepaid items are reported under the consumption method, which recognizes the expenditures/exp ense
in the period associated with the service rendered or goods consumed.
(m) Us e of Estim ates
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect
certain amounts and disclosures. Accordingly, actual results could differ from those estimate s.
(n) Implementation of Governmental Acco unting Stan dards Board (GA SB) Pronouncements
Management adopted the provisions of the following Governmental Accounting Standards Board
(GASB) Statements, which became effective during the year ended June 30, 20 16.
GA SB Statement No . 72 -Fair Va lue Me as urement and Application. The intention of this Statement is
to enhance the comparability of financial statements among governments by requiring measurement of
certain assets and liabilities at fair value using a consistent and more detailed definition of fair value and
accepted valuation techniques. It also enhances fair value application guidance and related disclosures.
(o) Fair Va lue Me asurements
Fair value is defined as the price that would be received to sell an as set or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. The City categorizes its
fair value measurements within the fair value hierarchy established by generally accepted accounting
principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair
value into three levels based on the extent to which inputs used in measuring fair value are observable in
the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities .
Level 2 inputs are inputs -other than quoted prices included within level 1 -that are observable for
an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the fair
value hierarchy, the measurement is considered to be based on the lowest priority level input that is
sign ificant to the entire measurement.
48
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 1 -SUMMARY OF SIGNIFICANT AC C OUNTING POLICIE S (Continued)
(p) Prior Period Adjustm ent
During the fiscal year ended June 30, 20 16, the City determined that the App le Campus 2 and 1-
280/Junipero Serra Channel Trail Improvements developer deposits had not been recorded in the
appropriate period. Accordingly, the City decreased the General Fund 's beginning fund balance as of
July 1, 20 15, and increased the deposit payable liab ilities for $2,526,73 6.
NOTE 2 -CASH AND INVE STMENTS
The City's pooled idle funds are invested pursuant to investment policy guidelines adopted by the City
Council. The objectives of the policy are to invest funds to the fullest extent possible and to invest in
accordance with the provisions of the California Government Code with the priority of safety, liquidity and
yield. The policy addre sses 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 typ e's portion of this pool is displayed on the Statement of Net
Position and the 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 fr rst 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 .
The City and its fiscal agents invest in individual investments and in investment pools. Individual
investments are evidenced by specific identifiable securities instruments, or by an electronic entry
registering the owner in the records of the institution issuing the security, called the book entry system.
Security instruments owned by the City are held in safekeeping by a third party custodian acting as agent
for the City under the terms of a custody agreement.
The City's investments are carried at fair value. The City adjusts the carrying value of its investments to
reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in investment
income for that fiscal year.
(b) Classification
The City's total cash and investments, at fair value, are presented on the accompanying financial
statements in the following allocation :
Cash and Investments
Restricted Cash and Investments :
Held by Fiscal Agent for Bond Repayments
Total Cash and Inve stments
49
Primary
Government
$122,407,3 96
4,220 ,3 80
$126,627,776
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 2 -CASH AND INVE STMENTS (Continued)
(c) Auth orized In vestments by th e City
The City's Investment Policy and the California Government Code allow the City to invest its pooled
idle fun ds in the following, under limits and provisions that address interest rate risk, cre dit risk, and
concentration of credit ri sk. Thi s does not include the City's investments of debt proceeds held by fiscal
agents that are governed by the provi sions of debt agreements of the City .
Authorized Investment Type
U.S. Treasury Obligations
U.S. Agency Securities *
California Local Agency Investment
Fund (LAIF)
Non-negotiable Certificates of
Deposits (time deposits)
State of California registered state
warrants, treasury notes, or bonds
California local agency bonds, notes,
warrants, or other obligations
Bond issued by the local agency
Bankers' Acceptances
Commercial Paper
Negotiable Certificates of Deposit
Repurchase Agreements
Medium Term Corporate Notes
Money market mutual funds investing
in U.S. Treasury, Government
Agency securities or repurchase
agreements collateralized by
U.S. Treasury or Government
Agency securities
Maximum
Maturity
5 years
5 years
NIA
5 years
5 years
5 years
5 years
180 days
270 days
5 years
1 year
5 years
5 years
Minimum
Credit
Quality
NIA
NIA
NIA
NIA
NIA
NIA
NIA
NIA
A-1+/P-1
NIA
NIA
A or better
Aaa/AAA
Maximum
Percentage of
Portfolio
None
None
Up to $65
million
30% ***
None
None
None
40%
25%
30%
None
30%
20%
Maximum
Investment in
One Issuer
None
None
None
10% of portfolio;
5% of issuer's net worth.**
None
None
None
None
10% of portfolio;
5% of issuer's net worth;
10% of outstanding paper of
issuer. **
10% of portfolio;
5% of issuer's net worth. **
10% of portfolio;
5% of issuer's net worth. **
10% of portfolio;
5% of issuer's net worth.**
None
* Securities issued by agencies of the federal government such as the Government National Mortgage Association (GNMA), the
Federal Farm Credit System (FFCB), the Federal Home Loan Bank (FHLB), the Federal National Mortgage Association
(FNMA), the Student Loan Marketing Association (SLMA), and the Federal Home Loan Mortgage Association (FHLMC).
**
***
Represents restriction in which the City's investment policy is more restrictive than the California Government Code.
30% maximum % of portfolio if using a private sector entity to assist in the placement of the time deposits. No maximum for
others.
50
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 2 -CASH AND INVESTMENTS (Continued)
( d) Authorized In vestments by Debt Agreements
The City must maintain required amounts of cash and investments with truste es or fiscal agents under
the terms of certain debt issues. These fun ds are unexpended bond proceeds or are pledged reserves to
be used if the City fai ls to meet its obligations under the se debt issues. The California Government
Code requires these funds to be invested in accordance with City ordinances, bond indentures or State
statute s. The City's Investment Policy allows investments of bond proceeds to be governed by
provisions of the related bond indenture s. The following identifies the investment typ es that are
auth orized for investments held by fiscal agents under the terms of the bond indentures of the related
debt issue :
Authorized Investment Type
Cash or obligations of the U.S. including U.S. Treasury obligations
Federal agencies obligations which represent full fa ith
and credit of the U.S.
Direct federal agencies obligations which are not fully
guaranteed by the full faith and credit of the U.S.
U.S. dollar denominated deposit accounts, federal funds and
bankers' acceptances with domestic commercial banks
Commercial Paper
Money market funds
Pre-refunded municipal obligations that are not callable
prior to maturity or as to which irrevocable instructions
have been given to call on the date specified in the notice
Municipal obligations or General obligations of states
California Local Agency Investment Fund (LAIF)
Shares in a California common law trust established pursuant
to Title 1, Division 7, Chapter 5 of the California Government
Code which invests exclusively in investments permitted by
Section 53635 of Title 5, Division 2, Chapter of the California
Government Code, as it may be amended.
51
Maximum
Maturity
NIA
NIA
NIA
360 days
270 days
NIA
NIA
NIA
NIA
NIA
Minimum
Credit
Quality
NIA
NIA
NIA
P-1, A-1+, A-1
P-1, A-1
Aaam or AAAm-G
Highest rating
category
Aaa, AAA, A2, A
NIA
NIA
Maximum
Percentage of
Portfolio
None
None
None
None
None
None
None
None
Up to $50
million
None
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 2 -CASH AND INVE STMENTS (Continued)
(e) In terest 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 rate s.
Information about the sensitivity of the fair values of the City's investments (including investments held
by bond truste es) to market interest rate fluctuations is provided by the following table that shows the
distribution of the City's inve stments by maturity or earliest call date :
12 Months 13 to More than
Investment or less 24 Months 24 Months Total
U.S. Treasury Securities $13,022,360 $5,008,280 $2,03 7,660 $20,068,300
U.S. Agency Notes
Federal Home Loan Mortgage Corporation 3,009,840 5,01 9,3 30 13,026,020 21,055,190
Federal National Mortgage Association 1,000,000 8,140,23 3 9,140,23 3
Federal Home Loan Banks 6,023 ,550 5,038,290 4,082,220 15,144,060
Federal Farm Credit Banks 11,070,050 11,070,050
Local Agency Investment Fund 40,677,3 81 40,677,381
Money Market Mutual Funds 6,4 14,353 6,4 14,353
Total Investments $70,1 47,484 $26, 135,950 $27,286,133 123,569,567
Cash in banks and on hand 3,058,209
Total Cash and Investments $126,627,776
The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California
Government Code Section 16429 under the oversight of the Treasurer of the State of California. The
Local Investment Advisory Board (Board) has oversight responsibility for LAIF . The Board consists of
five members as designated by State Statute. The City reports its investment in LAIF at the fair value
amount provided by LAIF, which is the same as the value of the pool share. The balance is available for
withdrawal on demand, and is based on the accounting records maintained by LAIF, which are recorded
on an amortized cost basis . Included in LAIF's investment portfolio are U.S. Treasuries, Federal
Agency obligations, time deposits, negotiable certificates of deposits, commerc ial paper, corporate
bonds, and security loans. These investments had weighted average maturity of 167 days .
Money market mutual funds are available for withdrawal on demand. At June 30, 2016, money market
mutual funds, used for pooled investment and held by fiscal agent purposes, had a weighted average
maturity of approximately 17-46 days .
52
T e
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 2 -CASH AND INVE STMENTS (Continued)
(f) Fair Va lue Hierarc hy
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair
value of the assets . Level 1 inputs are quoted prices in an active market for identical assets; Level 2
inputs are significant other observable inputs; and Level 3 inputs are significant unobservab le inputs.
The following is a summary of the fair value hierarchy of the fair value of investments of the City as of
June 30, 20 16:
Investments by Fair Value Level :
U.S. Treasury Securities
U.S. Agency Notes
Federal Home Loan Mortgage Corp oration
Federal National Mortgage Association
Federal Home Loan Banks
Federal Farm Credit Banks
Local Agency Investment Fund
Total Investments
Investments Measured at Amo rtized Cost:
Money Market Mutual Funds
Cash in banks and on hand
Total Cash and Investments
Level 1
$20,068,300
$20,068,300
Level 2
$2 1 ,055,190
9 ,140 ,233
15,144 ,060
11,070,050
40 ,677,381
$97,086,914
Total
$20,068,300
21,055 ,190
9 ,140 ,233
15,144 ,060
11,070 ,050
40,677,381
117 ,155,214
6 ,414,353
3 ,058,209
$126,627,776
Inve stments classified in Level 1 of the fair value hierarchy include U.S. Treasury Note s valued using
quoted prices in active markets. Federal Agency Securities, classified in Level 2 of the fair value
hierarchy are valued using matrix pricing techniques maintained by various pricing vendors . Matrix
pricing is used to value securities based on the securitie s' relationship to benchmark quoted prices. The
California Local Agency Investment Fund (LAIF) classified in Level 2 is valued based on the fair value
factor provided by the Treasurer of the State of California, which is calculated as fair value divided by
the amortized cost of the investment pool. Fair value is defined as the quoted market value on the last
trading day of the period. These prices are obtained from various pricing sources by the custodian bank.
Money market funds are exempt from fair value measurement and are reported at amortized cost.
53
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 2 -CASH AND INVE STMENT S (Continued)
(g) 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 stati stical rating
organization. Presented below is the actual rating as of June 30, 20 16 for each investment typ e,
including tho se with fiscal agents, as provided by Moody's ratings :
Investment Type
Money Market Mutual Funds
U.S. Agency Notes
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Federal Home Loan Banks
Federal Farm Credit Banks
U.S. Treasury Securities
Not Rate d:
Local Agency Investment Fund
Total Investments
(h) Co ncentration of Credit Risk
AAA
AAA
AAA
AAA
AAA
AAA
Not Rated
Total
$6,4 14,3 53
21,055,190
9,140,233
15,144,060
11,070,050
20,068,300
40,677,3 81
$123,569,567
The City's inve stment policy contains certain limitations on the amount that can be invested in any one
issuer. In certain cate gorie s, the se limitations are more restrictive than those required by California
Government Code Sections 53600 et seq. Excluding th ose issued or explicitly guaranteed by the U.S.
government and investments in the local agency investment fu nd and mutual funds, the City had the
following inve stments that represent 5% or more of total City-wide investments:
Issuer
Federal Home Loan Mortgage Corporation (FHLMC)
Federal National Mortgage Association (FNMA)
Federal Home Loan Banks (FHLB)
Federal Farm Credit Banks (FFCB)
54
Investment
U.S. Agency Notes
U.S. Agency Notes
U.S. Agency Notes
U.S. Agency Notes
Amount
$2 1,055,190
9,140,233
15,144,060
11,070,050
Ratings
TyPe
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 3 -LOANS RE CEIVABLE
(a) Related Party Loans
In conjunction with the City's executive housing assistance program, a loan totaling $584,3 60 has been
provided to an executive manager. The 40-year loan bears an interest rate equal to the 11th District Cost
of Funds at the time of the loan, and requires bi-weekly principal and interest payments. In addition,
there is a two 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 11th District Cost of Funds for the remainder of the loan. At
June 30, 20 16, the balance remaining on the loan was $400,7 19.
(b) Ho using Program Loans
On June 30, 1995, the City loaned $82 1,000 to Community Housing Developers, a California nonprofit
pub lic benefit corporation. The note bears interest at three percent per annum, compounded annually,
payable to the extent of surplus cash, and all unpaid principal and interest due June 30, 2035. At
June 30, 20 16, the balance remaining on the loan was $82 1 ,000.
On June 6, 1996, the City loaned $320,000 to Cupertino Community Serv ices, a California nonprofit
public benefit corporation. The note bears interest at three percent per annum and due on July 14, 2026.
At June 30, 20 16, the balance on the loan was $208,040.
In addition to these loans, the City has $93 ,868 in housing and other loans receivable at June 30, 20 16.
The se loans bear interest at 3 to 6 percent and are due by June 30, 2025.
NOTE 4 -INTERFUND TRANSACTIONS
Transfers between funds during the fiscal year ended June 30, 20 16 were as follows :
Fund Making Transfers
General Fund
Capital Improvements Projects Capital Projects Fund
City ChanueVWeb Internal Service Fund
Total Interfund Transfers
The reasons for these transfers are set forth below:
(A) To fund capital projects.
Fund Receiving Transfers
Transportation Special Revenue Fund
Public Financing Corporation Debt Service Fund
Non-major Governmental Funds
Blackberry Farm Enterprise Fund
Sports Center Enterprise Fund
Recreation Program Enterprise Fund
Internal Service Funds
Transportation Special Revenue Fund
General Fund
(B) For annual lease payment for 20 12 Certificates of Participation debt service.
(C) To support state-mandated activities including complaint response and enforcement programs.
(D) Operating subsidy from General Fund.
Amount Transferred
$6,3 15,732
3,167,033
128,676
262,008
657,732
715,260
1,917,504
2,258,268
36,015
$15,458,228
(E) To fund IT operations, personnel costs associated with staffing special project, and compensated absences and retiree health.
(F) To fund personnel costs associated with re-organizati on.
(A)
(B)
(C)
(D)
(D)
(D)
(E)
(A)
(F)
Current In teif und Balances -Current interfund balances arise in the normal course of business and are
expected to be repaid shortly after the end of the fiscal year. At June 30, 20 16, the Retiree Medical
Internal Service Fund owed the General Fund $450,220.
55
NOTE 5 -CAPITAL ASSETS
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
A summary of changes in governmental activities capital assets is as follows :
Balance at
June 30, 20 15 Additions Retirements
Governmental activities
Capital assets not being depreciated:
Land $62,045 ,969
Easements 19,49 1 ,959
Construction in progress 197,363 $16,597,102
Total capital assets not being depreciated 81,735,29 1 16,597,102
Capital assets being depreciated:
Buildings 44,335,568
Improvements other than buildings 45,900,027
Machinery and Equipment -governmental funds 2,606,556 ($24,939)
Road, curbs, gutters, sidewalks, medians and bridges 142,308,139
Streetlights 8,633,769
Storm drain structure and mains 32,085,982
Traffic signals 6,155,309
Total capital assets being depreciated 282,025,350 (2 4,939)
Less accumulated depreciation for:
Buildings (22,890,976) (1,674,458)
Improvements other than buildings (30,009,632) (1,933,567)
Machinery and Equipment -governmental funds (1,971,800) (58,590)
Road, curbs, gutters, sidewalks, medians and bridges (99,308,516) (2,03 1,335)
Streetlights (6,9 13,190) (107,448)
Storm drain structure and mains (29,8 13,579) (802,2 16)
Traffic signals (5,140,1 10) (104,090)
Total accumulated depreciation (196,047,803) (6,711,704)
Net general governmental program
Capital assets being depreciated 85,977,547 (6,711,704) (2 4,939)
Internal service fund capital assets
Machinery and equipment 7,770,93 1 1,267,382
Less Accumulated depreciation (6 ,133,09 1) (695,825)
Net internal service fund capital assets
being depreciated 1,637,840 571,557
Governmental activity capital assets, net $169,350,678 $10,456,955 ($24,939)
56
Balance at
Transfers June 30, 20 16
$62,045,969
19,491,959
($15,837,3 85) 957,080
(15,837,385) 82,495,008
44,335,568
6,473 ,772 52,373 ,799
2,58 1,617
9,276,973 15 1,585,112
36,499 8,670,268
50,141 32,136,123
6,155,309
15,837,3 85 297,837,796
(24,5 65,434)
(3 1,943,199)
(2,030,390)
(101,339,85 1)
(7,020,638)
(3 0,6 15,795)
(5,244,200)
(202, 759 ,507)
15,837,385 95,078,289
9,038,3 13
(6,828,9 16)
2,209,397
$179 '782,694
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 5 -CAPITAL ASSETS (Continued)
A summary of changes in business-type activities capital as sets is as follows :
Business-type activities:
Capital assets being depreciated:
Buildings
Improvements other than buildings
Machinery and Equipment
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and Equipment
Total accumulated depreciation
Total capital assets, being depreciated, net
Business-type activity capital assets, net
Balance at
June 30, 20 15
$68 1,914
2,044,907
262,370
2,989,191
(165,963)
(495,145)
(248,522)
(909,630)
2,079,56 1
$2,079,561
Additions
$16,850
16,850
(14,673)
(3 42,857)
(30,698)
(3 88,228)
(3 71,378)
($371,378)
Balance at
June 30, 20 16
$68 1,914
2,044,907
279,220
3,006,04 1
(180,636)
(838,002)
(279,220)
(1,297,858)
1,708,183
$1,708,183
Depreciation expense was charged to functions and programs based on their usage of the related assets .
Depreciation expense was charged to governmental activities as follows :
Governmental Activities Amount
Administration $273 ,257
Public and Environment Affairs 14,874
Administrative Services 26,301
Parks and Recreation 149 ,754
Pub lic Works 6 ,247,518
Internal Service Funds 695,825
Total $7,407,529
Depreciation expense was charged to the business-type activities as follows :
Business-Type Activities
Resources Recovery
Blackberry Farms
Cupertino Sports Center
Recreation Program
Total
57
Amount
$5,814
22,858
60,650
298,906
$3 88,228
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 6 -LONG-TERM DEBT
(a) Cupertino Public Facilities Corporation Certificates of Participation
Original Balance Balance
Issue June 30, June 30, Current
Amount 20 15 Retirements 2016 Portion
2012 Refinancing Certificates
of Participation
0.350-3.125%, due 07/0 1/2030 $43 ,940,000 $3 7,925,000 $2,090,000 $35,835,000 $2,135,000
Total long-term debt $3 7,925,000 $2,090,000 $35,835,000 $2,135,000
The Cupertino Public Facilities Corp oration issued Certificates of Participation to provide financing for
the construction of the Community Center, improvements of the City Hall and the Library in July 1986;
purchase of Wilson Park in 1989; finance the Memorial Park Expansion in 1990; and purchase the
Blackberry Farm and Fremont Older site in 1991. The Cupertino Public Facilities Corporation, as lessor,
leased real property to the City (under the Lease Agreement with the lessee) and assigned the base rental
payments to the trustee for the benefit of the owners of the certificates of participation. The rental
payments are scheduled to be sufficient in both time and amount, when the principal and interest of the
certificates are due.
On May 9, 20 12, $43 ,940,000 principal amount of 20 12 Refinancing Certificates of Participation (20 12
COPs) were issued to refund the 2002 COPs, to fund a res erve fund for the 20 12 COPs, and pay costs
incurred in connection with issuance.
The 20 12 COPs are payable by a pledge of revenues from the lease payments payab le by the City
pursuant to the Lease Agreement between the Cupertino Public Facilities Corporation and the City for
the use and possession of the Site and Facility as described in the Lease Agreement. The City also
covenanted in the Lease Agreement to include all lease payments in its annual budget. Total debt
service payments remaining on the 20 12 COPs is $44,3 88,323 payable through July 1, 203 0. For the
year ended June 30, 20 16, the bonds had $2,090,000 principal and $1,077,53 8 interest due .
(a) Cupertino Public Facilities Corporation Certificates of Participation (Contin ued)
Annual debt service requirements for the 20 12 COPs are shown below:
Governmental Activities
For the Year
Ending June 30 Principal Interest
20 17 $2,135,000 $1,03 5,73 8
20 18 2,1 80,000 993 ,03 8
20 19 2,220,000 949,43 8
2020 2,290,000 882,838
202 1 2,355,000 814,138
2022 -2026 12,885,000 2,967,288
2027 -203 0 11,770,000 910,845
Total $35,835,000 $8,553,323
58
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 7 -NET POSITION AND FUND BALANCES
Net Position is measured on the full accrual basis while Fund Balance is measured on the modified accrual
basis.
Net Position -The government-wide and proprietary fund financial statements utilize a net position
pre sentati on. Net position is categorized as follows :
Ne t investment in capital assets -This category groups all capital assets including, infrastructure, into one
component of net position. Accumulated depreciation and outstanding balances of debt that are
attributable to the acquisition, construction or improvement of these assets reduce the balance in this
category.
Restricted -This category represents net position that has external restrictions imposed by creditors,
grantors, contributors or laws or regulations of other governments and restrictions imposed by law through
constitutional provisions or enabling legislation.
Un restricted -This category represents net position of the City that do not meet the definition of "net
investment in capital assets" or "restricted."
Fund Balances -As prescribed by GA SB Statement No . 54, governmental funds report fund balance in
classifications based primarily on the extent to which the City is bound to honor constraints on the
specific purposes for which amounts in the funds can be spent. Fund balanc es for governmental funds
are made up of the followings :
Nonspendable Fund Balance -includes amounts that are (a) not in spendable form, or (b) legally or
contractually required to be maintained intact. The "not in spendable form" criterion includes items that
are not expected to be converted to cash, for examp le: prepaid items, property held for resale and long
term notes receivable.
Restricted Fund Balance -includes amounts that can be spent only for the specific purposes stipulated
by external resource providers, constitutionally or through enabling legislation. Restrictions may
effectively be changed or lifted only with the consent of resource providers.
Committed Fund Balance -includes amounts that can only be used for the specific purposes determined
by a formal action of the City's highest level of decision-making authority, the City Coun cil.
Commitments may be changed or lifted only by the City taking the same formal action (re solution) that
imposed the constraint originally.
Assigned Fund Balance -comprises amounts intended to be used by the City for specific purposes that
are neither restricted nor committed. Intent is expressed by the City Council or official to which the City
Council has delegated the authority to assign amounts to be used for specific purpo ses . Through the
adopted budget, the City Counc il establishes assigned fund balance policy levels and al so sets the means
and priority for the City Manager to fund th ese levels.
Un assigned Fund Balance -is the residual classification for the General Fund and includes all amounts
not contained in the other clas sifications. Unassigned amounts are technically available for any purpose .
In circumstances when an expenditure may be made for which amounts are available in multiple fund
balance classifications, the fund balance in General Fund will generally be used in the order of
restricted, unassigned, and then assigned reserves. In other governmental funds, the order will generally
be restricted and then assigned.
59
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 7 -NET POSITION AND FUND BALANCES (Continued)
Fund balances for all major and nonmajor governmental funds as of June 30, 2016, were distributed as
follows :
Public Capital Other
Housing Facilities Improvements Governmental
General Funds Total
Nonspendable:
Loans receivable $868,608 $868,608
Prepaid items 68,773 68,773
Subtotal 937,381 937,381
Restricted for:
Public access television 888,374 888,374
Debt service $1,596,982 1,596,982
Storm drain system $1,175,023 1,175,023
Parks and open space 9,232,995 9,232,995
Environmental management 445,753 445,753
Streets and road projects $8,682,089 8,682,089
Housing programs $12,840,591 12,840,591
Subtotal 888,374 8,682,089 12,840,591 1,596,982 10,853,771 34,861,807
Committed for:
Streets and road projects 1,3 98,665 1,398,665
Assigned to:
Economic uncertainty I 19,000,000 19,000,000
Economic fluctuation 1,400,000 1,400,000
PERS liability 100,000 100,000
Capital projects $15,074,808 269,3 83 15,344,191
Subtotal 20,500,000 15,074,808 269,3 83 35,844,191
Unassigned 29,869,085 29,869,085
Total $52,1 94,840 $10,080,754 $12,840,591 $1,596,982 $15,074,808 $11,123,154 $102,911,129
NOTE 8 -COMMITMENTS AND CONTINGENCIES
(a) Federal an d State Grant
The City participates in a number of federal and state grant programs subj ect to financial and
compliance audits by the grantors or their repre sentatives. Audits of certain grant programs, including
tho se for the year ended June 30, 20 16, have yet to be conducte d. 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.
60
Transportation Development Corporation Projects
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 8 -COMMITMENTS AND CONTINGENCIES (C ontinued)
(b) Encumbrances
The City uses encumbrances to control expenditure commitments for the year. Encumbrances represent
commitments related to executor contracts not yet performed and purchase orders not yet filled.
Commitments for such expenditure of monies are encumbered to reserve a portion of applicable
appropriations . Encumbrances still open at year end are not accounted for as expenditures and
liabilities, but as restricted, or unassigned fund balance. As of June 30, 2016, the City had the following
encumbrances outstanding :
Governmental Funds :
General Funds:
Transportation Special Revenue Fund
Capital Improvements Projects Capital Proj ects Funds
Other Governmental Funds
Total Encumbrances
(c) Lease Agreement with County of Santa Clara
$3,786,698
3,962,7 12
1,037,420
763 ,117
9,549,947
The City has an agreement, expiring in 20 19, to lease a building to the County of Santa Clara for the
purpose of providing library service to the City's residents . The lease requires a minimum annual
payment of $120,000 adjusted for Cupertino's portion of book circulation and increase of as sessed
valuation. Thi s is an operating lease with a renewable option. At June 30, 20 16, the cost and carrying
value of the building which opened in October 2004, is $2 1 ,952,133 and $1 1 ,572,526 respectively, with
$10,379,607 in accumulated depreciation.
(d) Consulting Agreement fo r Sales Taxes
The City entered into agreements with two companies to provide services consisting of the assessment
and creation of new sales and use tax revenue sources for the City. The City agreed to pay the
companies based on a sliding scale payment schedule dependent on the level of new sales tax revenue
realized by the City as defined in the consulting agreements.
NOTE 9 -LIABILITIES UNDER SELF-INSURANCE AND RI SK MANAGEMENT
(a) General and Property Liability
The City is self-insured for the first $250,000 of general and property liability for each occurrence, and
the excess (up to $10,000,000 for each occurrence and annual aggregate) is covered through the City's
participation in the Association of Bay Area Governments Pooled Liability Assurance Network (ABAG
PLAN). The risk pool consists of 30 agenc ies within the San Francisco Bay Area. The stated purpose
of the ABAG PLAN is to provide certain levels of liability insurance coverage, claims management, risk
management services, and legal defense to its participating members . ABAG PLAN is governed by a
Board of Directors, which comprises officials appointed by each participating member. Premiums paid
to ABAG are subject to possible refund based on the results of actuarial stud ies and approval by the
Board of Directors . Complete financial statements for ABAG PLAN may be obtained from their offices
at the following addre ss: ABAG PLAN, Finance Department, P.O. Box 2050, Oakland, CA 94604.
Premiums are revised each year based on the City's claims experience and risk exposure . For the year
ended June 30, 20 16, the City paid ABAG PLAN premiums of $3 62,01 1.
61
CITY OF CUPERTINO
Notes to the Basic Finan cial Statements
For the Year Ended June 30, 20 16
NOTE 9-LIAB ILITIE S UND ER SELF-INSURAN CE AND RI SK MANAGEMENT (Continued)
(b) Wo rkers' Compensation Liability
The City belongs to the CSAC Excess Insurance Authority (BIA), a joint power authority which
provides excess workers ' compensation liab ility claims coverage above the City's self-insured retention
of $500,000 per occurrence. Losses above the self-insured retention are pooled with excess reinsurance
purchased to a $50,000,000 statutory limit. EIA was estab lished in 1979 for the purpose of creating a risk
management pool for all California public entities. EIA is governed by a Board of Directors consisting of
representatives of its member public entities. Complete financial statements for EIA may be obtained
from the ir offices at the following address: CSAC Excess Insurance Authority, Finance Department,
EIA 75 Iron Point Circ le, Suite 200, Folsom, CA 9563 0. For the year ended June 30, 20 16, the City
paid prem iums of $97,7 1 1.
It is the City's pract ice to obtain biennial actuarial studies for the self-insured workers ' compensation
liability . The claims liabi lities included in the wo rkers ' compensation internal service fund is based on
the re sults of actu ar ial studies and include amounts for claims incurred but not reported and loss
adj ustm ent expen ses . Claim liabilities are calculated considering the effects of inflation, recent claim
settlement trends, including frequency an d am ount of payouts, and other econom ic and social factors .
Inflation of 2.5%, an nual rate of return of 2%, claim severity increase at 2.5% were assumed . In the
current year, management used actuarial estimate s based on a 90% confidence level.
Sett lements have not exceeded insuran ce coverage in the past three years .
Changes in the balances of workers ' compensation and general claims liabilities during the years ended
June 30 are as follows :
Claims liability, beginning of year
Incurred claims and changes in estimate
Claim paym ents and credits
Total claims liab ility, end of year
Less current portion
Non-current portion
NOTE 10 -DEFINED BENEFIT PENSION PLAN
(a) Plan Descriptions and Summary of Balances by Plan
20 16 20 15
$2,1 90,079 $2,105,897
(3 79,665) 393,05 1
(329,3 16) (3 08,869)
1,48 1 ,098 2,1 90,079
(489,499) (4 56,45 1)
$99 1,599 $1,733,62 8
The City has one defined benefit pension plan. The Miscellaneous Plan is an Agent-Multiple Employer
Plan. Benefit provisions under the Plan is established by State statute and City Ord inance . All qualified
permanent and probationary emp loyees are eligible to partic ipate in the Plan for which they are an
el igible member based on their empl oyment position with the City.
The Plan is adm inistered by the Cal ifornia Public Employ ees ' Retirement System (CalPERS) which acts
as a common investment and administrative agent for its participating member empl oyers . CalPERS
issues publicly av ai lable reports that include a full description of the pension plans regarding benefit
prov isions, assumpti ons and membership information that can be found on the CalPERS website .
62
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 10 -DEFINED BENEFIT PENSION PLAN (Continued)
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of the Miscellaneous Plan
and additions to/deductions from the Plan's fiduciary net position have been determined on the same
basis as they are reported by the CalPERS Financial Office . For this purpose, benefit payments
(including refunds of employee contributions) are re cognized when currently due and payable in
accordance with the benefit terms . Investments are reported at fa ir value.
Below is a summary of the deferred outflows of resources, net pension liab ilities and deferred inflows of
re source s by Plan:
Deferred Deferred
Outflows Net Pension Inflows
of Resources Liability of Resources
Miscellaneous $3,919,082 $3 0 ,512,577 $1,934,464
Benefits Provided -CalPERS provides service retirement and disability benefits, annual cost of living
adjustments and death benefits to plan members, who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full time employment. Members
with five years of total service are eligible to retire at age 50 with statutorily reduced benefits . All
members are eligible for non-duty disability benefits after 10 years of service. The cost of living
adjustments for each plan are app lied as specified by the Public Employees' Retirement Law. The
Pension Reform Act of 20 13 (PEPRA), Assembly Bill 340, is applicable to emp loyees new to CalPERS
and hired after December 31, 20 12. The Plans ' provisions and benefits in effect at June 30, 2016, are
summarized as follows :
Hire date
Benefit formula
Benefit vesting schedule
Benefit payments
Minimum retirement age
Monthly benefits, as a % of eligible compensation
Required employee contribution rates
Required employer contribution rates
Prior to
January 1, 20 13
2.7%@ 55
5 years service
monthly for life
50
2%to 2.7%
8.00%
23 .54%
On or after
January 1, 20 13
2.0%@ 62
5 years service
monthly for life
52
1%to 2%
6.25%
23.54%
Emp loyees Covered -As of the June 30, 2014 actuarial valuation date, the following emp loyees were
covered by the benefit terms of the Plan:
Inactive employees or beneficiaries currently receiving benefits
Inactive employees entitled to but not yet receiving benefits
Active employees
Total
63
166
107
188
46 1
CITY OF CUPERTINO
Notes to the Basic Financial Statem ents
For the Year Ended June 30, 20 16
NOTE 10 -DEFINED BENEFIT PENSION PLAN (Continued)
Con trib utions -Section 208 1 4(c) of the California Public Employees ' Retirement Law requires that the
emp loyer contribution rates for al l public employers be detennined on an annual basis by the actuary
and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for
both Plans are determ ined annually on an actuarial basis as of June 30 by CalPERS . The actuarially
determ ined rate is the estimated am ount necessary to finance the costs of benefits earned by employees
during the year, with an add itional amount to finance any unfunded accrued liab ility . The City is
required to contri bute the difference betwe en the actuarially determ ined rate and th e contribution rate of
employe es.
(b) Net Pension Liability
The City's net pension liabi lity for the Plan is measured as th e total pension liability, less the pension
plan's fiduciary net position . The net pension liability of the Plan is measured as of June 30, 20 15,
using an annual actu arial valuation as of June 30, 20 14 ro lled forward to June 30, 20 15 using stan dard
update procedures. A summary of principal assumptions and methods used to determine the net pension
liab ility is shown below.
Actuarial Ass umptions -The total pension liabilities in the June 30, 20 14 actuarial valuations were
determined using the following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Payro ll Growth
Projected Salary Increase
Investment Rate of Return
Mortality
June 30, 20 14
June 30, 20 1 5
Entry-Age Normal Cost Method
7.65%
2.75%
3.00%
Varies by Entry Age an d Service (1)
7.5% (2)
Derived using CalPERS ' Membership
Data for all Funds (3 )
( 1) Depending on age, servi ce and type of employment
(2) Net of pension plan inve stment expenses, including inflation
(3) The mortality tab le used was developed based on CalPERS' specific data. The table
includes 20 years of mortality improvements using Society of Actuaries Scale BB. For
more details on this tale, please refer to the CalPERS 20 14 experience study report
avai lable on CalPERS website .
All other actuarial assumptions used in the June 30, 20 14 valuation were based on the results of a
Janu ary 20 14 actu arial experience study for the period 1997 to 20 11, including updates to salary
increase, mortal ity an d retirement rate s. Further detai ls of the Experience Study can be found on the
CalPERS we bsite under Forms and Publicat ions.
Change of Ass umptions -GASB 68, paragraph 68 states that the long long-term expected rate of return
should be determined net of pension plan investment expense, but without reduction for pension plan
adm inistrative exp ense. The discount rate of 7.50% used for the June 30, 20 14 measurement date was
net of adm inistrative expenses. The discount rate of 7.65% used for the June 30, 20 15 measurement date
is without reduction of pension plan adm inistrative expense. All other assumptions for the June 30,
20 14 measurement date were th e same as those u sed for the June 30, 20 15 measurement date .
64
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 10 -DEFINED BENEFIT PENSION PLAN (Continued)
Discount Rate -The discount rate used to measure the total pension liability was 7 .50% for each Plan.
To determine whether the municipal bond rate should be used in the calculation of a discount rate for
each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be
different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run
out of assets. Therefore, the current 7.65% discount rate is adequate and the use of the municipal bond
rate calculation is not necessary. The long term expected discount rate of 7.65% will be app lied to all
plans in the Public Employees Retirement Fund (PERF). The stre ss test results are presented in a
detailed report that can be obtained from the CalPERS web site .
The long-term expected rate of return on pension plan investments was determined using a building
block method in which best-e stimate ranges of expected future real rates of return (expected returns, net
of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and
long-term market return expectations as well as the expected pension fund cash flows . Using historical
returns of all the funds' asset classes, expected compound returns were calculated over the short-term
(first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected
nominal returns for both short-term and long-term, the present value of benefits was calculated for each
fund. The expected rate of return was set by calculating the single equivalent expected return that
arrived at the same present value of benefits for cash flows as the one calculated using both short-term
and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate
calculated above and rounded down to the nearest one quarter of one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was
calculated using the capital market assumptions app lied to determine the discount rate and asset
allocation . These rates of return are net of administrative expenses.
New
Strate gic Real Return
Asset Class Allocation Years 1 -lO(a)
Global Equity 51.00% 5.25%
Global Fixed Income 19.00% 0.99%
Inflation Sensitive 6.00% 0.45%
Private Equity 10.00% 6.83%
Real Estate 10.00% 4.50%
Infrastructure and Forestland 2.00% 4.50%
Liquidity 2.00% -0 .55%
Total 100.00%
(a) An expected inflation of 2.5% used for this period.
(b) An expected inflation of 3.0% used for this period.
65
Real Return
Years 11 +(b)
5.71%
2.43%
3.36%
6.95%
5.13%
5.09%
-1 .05%
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 I6
NOTE 10 -DEFINED BENEFIT PENSION PLAN (Continued)
(c) Ch anges in Net Pension Liability -The changes in the Net Pension Liability for the City's
Miscellaneous Plan are as follows :
Increase (Decrease
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability I( Asset)
Balance at June 30, 2014 $104,425 ,488 $76,548,308 $27,877,180
Changes in the year:
Service cost 2,444 ,939 2 ,444,939
Interest on the total pension liability 7 ,789,134 7 ,789,134
Differences between actual and expected experience 372 ,917 372 ,917
Changes in assumptions (1,883,633) (1,883,633)
Changes in benefit terms
Contribution -employer 3 ,301,642 (3 ,301,642)
Contribution -employee 1 ,149,894 (1,149 ,894)
Net investment income 1 ,724 ,204 (1,724,204)
Administrative expenses (87,780) 87,780
Benefit payments , including refunds of emp loyee
contributions (4,637,005) ( 4,637,005)
Net changes 4 ,086,352 1 ,450 ,955 2 ,635,397
Balance at June 30, 2015 $108 ,511,840 $77,999,263 $30,512,577
Sensitivity of the Net Pension Liability to Ch anges in the Disco unt Rate -The following presents the
net pension liability of the City, calculated using the discount rate for the Plan, as well as what the
City's net pension liability would be if it were calculated using a discount rate that is I-p ercentage point
lower or I-p ercentage point higher than the current rate:
I% Decrease
Net Pension Liability
Current Discount Rate
Net Pension Liability
I% Increase
Net Pension Liability
Mis cellaneous
6.65%
$44,892,656
7.65%
$30,5 I2,577
8.65%
$I 8,594,53 I
Pension Plan Fidu ciary Net Position -Detailed information about each pension plan's fiduciary net
position is available in the separately issued CalPERS financial reports .
66
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 10 -DEFINED BENEFIT PENSION PLAN (Continued)
(d) Pension Expenses and Deferred Outflows/Inflows of Reso urces Related to Pensions -For the year
ended June 30, 20 16, the City recognized negative pension expense of $646,899. At June 30, 2016, the
City reported deferred outflows of resources and deferred inflows of resources related to pensions from
the following sources :
Pension contributions subsequent to measurement date
Differences between actual and expected experience
Changes in assumptions
Net differences between projected and actual earnings
on plan investments
Total
Deferred Outflows Deferred Inflows
of Re sources
$3,659,170
259,9 12
$3,9 1 9,082
of Res ources
($1,3 12,835)
(62 1 ,629)
($1,934,464)
The $3,659,170 reported as deferred outflows of resources related to contributions sub sequent to the
measurement date will be re cognized as a reduction of the net pension liab ility in the year ended June
30, 2017. Other amounts reported as deferred inflows of resources related to pensions will be
recognized as pension expense as follows :
Year Ended Annual
June 30 Amortization
20 17 ($93 8,234)
2018 (93 8,234)
2019 (6 1 7,777)
2020 819,693
67
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 11 -OTHER POST EMPLOYMENT BENEFITS (OPEB)
(a) Plan Description
Permanent employees who retire under the City's CalPERS retirement plan are, pursuant to their
respective collective bargaining agreements, eligible to have their medical insurance premiums paid by
the City. Retirees receive the amount ne cessary to pay the cost of his/her enrollment, including the
enrollment of his/her fam ily members, in a health benefit plan provided by CalPERS up to the
maximum received by active employees in their respective bargaining unit.
The City contracts with CalPERS for this insured-benefit plan established under the state Public
Employees ' Medical and Hospital Care Act (PEMHCA). The plan offers employees and retirees three
CalPERS ' self-funded options, setup as insurance risk pools, or offers various third-p arty 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 re solut ion. Retirees and active employees pay
the difference between the premium rate and the City's contribution. Premiums and City contributions
are based on the plan and coverage selected by actives and retirees, with the City's potential
contribution ranging from zero to $1,605 per month per employee or retiree. The responsib ility for
benefit payments has transferred to the insurers and the City does not guarantee the benefits in the event
of default by the insurers . A comprehensive annual financial report of CalPERS, inclusive of their
benefit plans, is available at
The City participates in the Public Agency Retirement System (PARS) Public Agencies Post Retirement
Health Care Plan Trust Program (PARS Trust), an agent-multiple emp loyer irrevocable trust established
to fund other postemployment benefits. The PARS Trust is approved by the Internal Revenue Code
Section 115 and invests funds in equity, bond, and money market mutual funds . Copies of PARS Trust
annual financial report is available at the City's Finance Department.
An employee is eligible for lifetime medical benefits under the OPEB Plan, along with his/her spouse or
declared domestic partner at the time of retirement, if all criteria listed below are met:
• The emp loyee was hired or the City Council member was elected prior to August 1, 2004, and the
employee has five or more full-time years of service and the City Council member has five or more
years of elected service with the City of Cupertino; or
• The employee was hired or the City Council member was elected on or after August 1, 2004, and
the emp loyee has ten or more full-time and/or elected years of CalPERS service, five years of which
must be from the City of Cupertino; and
• The emp loyee is eligib le for retirement as defined under the CalPERS retirement system; and
• The emp loyee retires from the City of Cupertino.
In addition, the eligib le emp loyee 's dependent children at the time of retirement who are under 23 years
old are eligible for medical benefits . In addition to extending the eligibility of dependents from age 23
to age 26 in accordance with the recent healthcare reform act, effective July 1, 20 10, employees that
retire or re sign from service with the City of Cupertino and who are not eligible for retiree medical
benefits can continue on the City's medical and dental plans provided that they pay the premiums in full.
68
www.calpers.ca.gov.
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 11 -OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
(b) Funding Policy
OPEB Plan contributions are set by the adopted budget . The cost of the benefits provided by the OPEB
Plan is currently being paid by the City on a fully pre-funded basis . The City has expressed intent to
fully fund the annual required contribution (ARC) each year. Based on the actuarial valuation date of
January 1, 20 16, the annual required contribution rate is 6.74% of annual covered payroll. For the year
ended June 30, 2016, the City paid $917,353 in healthcare premium payments.
(c) Annual OPEB Cost and Funded Status
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of certain events far into the future . Examp les include
assumptions about future employment, mortality, and the healthcare cost trend . Amounts determined
regarding the funded status of the plan and the annual required contributions of the employer are subj ect
to continual revision as actual results are compared with past expectations and new estimates are made
ab out the future . The schedule of funding progre ss, pre sented as required supp lementary information
following the notes to the financial statements, presents multi-year trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued
liabilities for benefits .
Proj ections of benefits for fm ancial reporting purpo ses are based on the substantive plan (the plan as
understood by the employer and the plan members) and inc lude the typ es of benefits provided at the
time of each valuation and the historical pattern of sharing of benefit costs between the employer and
plan members to that point. The actuarial methods and assumptions used include techniques that are
designed to reduce effects of short-term volatility in actuarial accrued liabilities and the actuarial value
of assets, consistent with long-term perspective of the calculations .
The other significant actuarial assumptions used to prepare the City's January 1, 20 16 actuarial
valuation include the following:
Valuation date :
Actuarial Cost Metho d:
Amortization Metho d:
Amortization Period:
Asset Valuation Method:
Actuarial Assump tions :
Discount Rate
Payroll Growth
Ultimate Rate of Medical Inflation
69
January 1, 20 16
Entry Age Normal
Level percent of pay closed
13 year
Market value
7.00%
3.00%
4.50%
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 11 -OTHER POST EMPLOYMENT BENEFIT S (OPEB) (Continued)
(c) Annual OPEB Cost and Funded Status (Contin ued)
The City's annual OPEB cost and actual contributions to the OPEB Plan for the past three years are as
follows:
Percentage of Net OPEB
OPEB Annual Actual AOC Obligation
Fiscal Year Cost (AO C) Contribution Contributed (Asset)
6/3 0/20 14 $2,295,732 $1,026,967 45% ($2,99 1,132)
6/3 0/20 15 1,584,785 9,088,056 573% (10,494,403)
6/3 0/20 16 1,227,2 19 1,225 ,353 100% (10,492,537)
The City's Net OPEB asset is re corded in the Retiree Medical Internal Service Fund and is calculated as
of June 30, 20 16 as follows :
Annual required contribution
Interest on prior year net OPEB asset
Adjustment to annual required contribution
Annual OPEB cost
Insurance premiums paid on behalf of retirees
Implicit subsidy
Decrease in net OPEB asset
Net OPEB (asset) June 30, 2015
Net OPEB (as set) June 30, 2016
$957,466
(73 4,608)
1,004,3 61
1,227,2 19
(9 17,353)
(3 08,000)
1,866
(10,494,403 )
($1 0,492,53 7)
The latest available actuarial data and funding progre ss are set forth below at their actuarial valuation
date of January 1, 20 16.
Actuarial accrued liability (AAL)
Actuarial value of planned assets
Unfunded actuarial accrued liability (UAAL)
Funded Ratio (actuarial value of plan assets/AAL)
Covered payroll (active plan members)
UAAL as a percentage of covered payroll
70
$24,483 ,554
$2,18 9,5 19
91.06%
$14,2 14,000
15.40%
(22,294,035)
CITY OF CUPERTINO
Notes to the Basic Financial Statements
For the Year Ended June 30, 20 16
NOTE 12 -CONCENTRATION RISK
The City has an economic dependency on revenues generated directly or indirectly from one company.
For the year ended June 30, 20 16, more than 10% of the City General Fund's total revenues are derived
from the company. The City's operations would be adversely impacted if there are any significant
dec lines in taxes received from the company .
NOTE 13 -SUBSEQUENT EVENT
In December 20 16, CalPERS ' Board of Directors voted to lower the discount rate from 7.5% to 7.0%
over the next three fiscal years, beginning in fiscal year 20 18. The change in the discount rate will
affect the contribution rates beginning in fiscal year 20 19 and result in increases to the normal costs and
unfunded actuarial liabilities.
71
CITY OF CUPERTINO
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 20 16
Agent Multiple Employer Defined Benefit Retirement Plan -Miscellaneous Plan
Last 10 Years*
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Measurement Date
Total Pension Liability
Service Cost
Interest
Changes of benefit terms
Differences between expected and actual experience
Changes in assumptions
Benefit payments, including refunds of employee contributions
Net change in total pension liability
Total pension liability -beginning
Total pension liability -ending (a)
Plan fiduciary net position
Contributions -employer
Contributions -employee
Net investment income
Benefit payments, including refunds of employee contributions
Admini strative expense
Net change in plan fiduciary net position
Plan fiducia ry net position -beginning
Plan fiduciary net position -ending (b)
Net pension liability -ending ( a)-(b)
Plan fiduciary net position as a percentage of the total pension liability
Covered -employee payro ll
Net pension liability as percentage of covered-employee payro ll
Notes to Schedule:
6/30/2014
$2,504,228
7,349,943
(4,35 1,614)
5,502,557
98,922,93 1
$104,425,488
2,89 1,986
1,061,884
11,379,985
(4,35 1,614)
10,982,24 1
65,566,067
$76,548,3 08
27,877,180
73 .30%
$13,080,327
213.12%
6/30/2015
$2,444,93 9
7,7 89,134
372,9 17
(1,883,633)
( 4,637 ,005)
4,086,352
104,425,488
$108,511,840
3,301,642
1,149,894
1,724,204
(4,63 7,005)
(87,780)
1,450,955
76,548,308
$77,999,263
30,5 1 2,577
71.88%
$13,504,966
225 .94%
Benefit The figures above do not include any liability impact that may have resulted from plan changes which occurred
after the actuarial valuation date . This applies for voluntary benefit changes as well as any offers of Two Years Additional
Service Credit (a.k.a. Golden Handshakes).
in GASB 68, paragraph 68 states that the long long-term expected rate of return should be determined
net of pension plan investment expense, but without reduction for pension plan administrative expense. The discount rate of
7.50% used for the June 30, 20 14 measurement date was net of administrative expens es. The discount rate of 7.65% used for the
June 30, 20 15 measurement date is without reduction of pension plan administrative expense. All other assumptions for the June
30, 20 14 measurement date were the same as those used for the June 30, 20 15 measurement date.
* -Fiscal year 20 15 was the 1st year of implementation.
Source: CalPERS Accounting Valuation
72
changes.
Changes assumptions.
CITY OF CUPERTINO
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 20 16
Agent Multiple Employer Defined Benefit Retirement Plan -Miscellaneous Plan
Last 10 Years *
SCHEDULE OF CONTRIBUTIONS
Actuarially determined contribution
Contributions in relation to the actuarially determined
contributions
Contribution deficiency (excess)
Covered-employee payro ll
Contributions as a percentage of covered-employee payroll
Notes to Schedule
Valuation date :
Methods and assumptions used to determine contribution rates:
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Inflation
Salary increases
Investment rate of return
Retirement age
Mortality
* -Fiscal year 20 15 was the 1st year of implementation.
2015 2016
$3,608,853 $3,659,170
(3 ,608,853) (3,659,1 70)
$0 $0
$13,080,327 $13,504,966
27.59% 27.09%
6/3 0/20 13 6/3 0/20 14
Entry age
Level percentage of payro ll, closed
19 Years as of the Valuation Date
15 Year Smoothed Market
2.75%
3%
7.50% Net of Pens ion Plan
Investment and Administrative
The probabilities of Retirement are
based on the 20 10 CalPERS
Experience Study for the period from
1997 to 2007.
The probabilities of mortality are
based on the 20 10 CalPERS
Experience Study for the period from
1997 to 2007. Pre-retirement and Post·
retirement mortality rates include 5
years of proj ected mortality
improvement us ing Scale AA
pub lished by the Society of
Actuaries .
Source : City of Cupertino's general ledger and CalPERS Actuarial Valuation
73
CITY OF CUPERTINO
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 20 16
Schedule of Funding Progre ss -Defined Benefit Other Post-Employment Benefits Plan:
Unfunded
Actuarial Unfunded Actuarial
Actuarial Accrued Actuarial Actuarial Liability as
Valuation Liability Value of Accrued Funded Covered Percentage of
Date Assets Ratio Covered
1/1/20 13 $24,79 1 ,457 $12,835,681 $1 1 ,955,776 51.77% $13,909,000 85.96%
1/1/20 15 23 ,370 ,871 14,770,023 8 ,600,848 63 .20% 13,800,000 62.32%
1/1/20 16 24,483,554 22,294,035 2 ,189 ,519 91.06% 14,214,000 15.40%
74
Entry Age Liability Payroll Payroll
MAJOR GOVERNMENTAL FUNDS OTHER THAN THE
GENERAL FUND AND SPECIAL REVENUE FUNDS
This section is provided for the presentation of budget-to-actual statements for the Public Facilities
Corporation Debt Service Fund. Although the fund is considered to be a major government fund, budget
to-actual information in the basic financial statements is limited to the General Fund and major Special
Revenue Funds. All other major governmental fund schedules with such information are therefore
included as Supplemental Information. The Capital Projects Funds are budgeted on a major project
length bas is and therefore not comparable on an annual basis.
PUBLIC FAC ILITIE S CORPORATION DEBT SERVICE FUND
This fund accounts for the payments of principal and interest on certificates of participation issued to
provide for the financing of the Civic Center, Library, Wilson Park, Memorial Park, and other City
facilitie s.
75
CITY OF CUPERTINO
PUBLIC FACILITIES CORPORATION DEBT SERVICE FUND
SCHEDULE OF REVENUE S, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 20 16
Final
Actual
REVENUES
Use of money and property $4,796
Total Revenues 4,796
EXPENDITURE S
Administration 1,500
Debt service:
Principal $3 ,167,538 2,090,000
Interest and fiscal charges 1,077,538
Total Expenditures 3,167,538 3,169,03 8
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (3 , 167,538) (3, 1 64,242)
OTHER FINANCING SOURCES (USE S)
Transfers in 3,167,538 3,167,033
Total Other Financing Sources (Uses) 3,167,538 3,167,033
NET CHANGE IN FUND BALANCE 2,79 1
BEGINNING FUND BALANCE 1,594,191
ENDING FUND BALANCE $1,596,982
76
Variance
Positive
(Negative)
$4,796
4,796
(1,500)
1,077,53 8
(1,077,538)
(1,500)
3,296
(505)
$2,79 1
Budget
(505)
NON-MAJOR GOVERNMENTAL FUNDS
All fun ds not considered as major funds on the Fund Financial Statements are consolidated in one column
entitled "Other Governmental Funds ." These non-major funds are identified and included in th is
supplementary section and includes the City's Special Revenue Funds and Capital Project Funds .
The Special Revenue Funds are used to account for the proceeds of sp ecific revenue sources that are
legally restricted to expenditures for specified purposes.
Storm Drain Improvement -Accounts for the construction and maintenance of storm drain
facilities including drainage and sanitary sewer facilities. Revenues were collected from
developers as a result of connections to the storm drainage sewer system.
Park Dedication -Accounts for the activity granted by the business and professions code of the
State of California in accordance with the open space and conservation element of the City's
General Plan. Revenues of this fund are restricted for the acquisition, improvement, expansion
and imp l ementation of the City's parks and recreation facilities.
Environmental Ma nagement I Clean Creeks -Accounts for all activities related to operating the
non-point source pollution program. A parcel tax provides revenue s.
Cap ital Projects Funds account for the financial resources committed to the construction or improvement
of major facilities.
Stevens Creek Corridor Park Capital Projects Fund -Accounts for the design and construction
of the Stevens Creek Corridor Park projects .
Don Burnett Bicycle-Pedestrian Bridge -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.
77
Assets
Cash and investments
Accounts receivable
Total assets
Liabilities
Accounts payable and accruals
Total liabilities
Fund balances
Restricted
Assigned
Total fund balances
Total liabilities
and fund balances
CITY OF CUPERTINO
NON-MAJOR GOVERNMENTAL FUNDS
COMB INING BALANCE SHEET
JUNE 30, 20 16
SPECIAL REVENUE FUND S
Storm Environmental
Drain Park Management/
Dedication Clean Creeks
$1,175,024 $9,23 2,995 $43 8,253
7,500
$1,175,024 $9,232,995 $445,753
$1
1,175,023 $9,232,995 $445,753
1,175,023 9,232,995 445,753
$1,175,024 $9,232,995 $445,753
78
CAPITAL
PROJECTS
FUNDS
Stevens Creek
Corridor Park
$268,645
$268,645
$4,636
4,636
264,009
264,009
$268,645
Improvement
CAPITAL
PROJECTS
FUND S
Don Burnett
Bicycle
Pedestrian
Bridge
$5,374
$5,374
$5,374
5,374
$5,374
Total
Nonmajor
Governmental
Funds
$11,120,291
7,500
$11,127,79 1
$4,637
4,637
10,853,771
269,383
11,123 ,154
$11,127,79 1
79
CITY OF CUPERTINO
NON-MAJOR GOVERNMENTAL FUND S
COMBINING STATEMENT OF REVENUES , EXPENDITURE S
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 20 16
SPECIAL REVENUE FUNDS
Storm Environmental
Drain Park Management/
Dedication Clean Creeks
REVENUES
Taxes $154,698 $222 ,375
Use of money and property 14,23 9 77,770 $2,6 16
Charges for services 33,544 367,426
Fines and forfeitures 6,387
Other revenue 487,0 10 706
Total Revenues 655,947 333,689 377,135
EXPENDITURES
Current:
Public works 497,049
Capital outlay 3,757,979 16,667
Total Expenditures 3,757,979 16,667 497,049
EXCE SS OF REVENUES
OVER (UNDER) EXPENDITURES 102,032) 317,022 (119,914)
OTHER FINANCING SOURCES (US ES)
Transfers in 128,676
Total Other Financing Sources (Uses) 128,676
NET CHANGE IN FUND BALANCES (3 , 1 02,032) 317,022 8,762
BEGINNING FUND BALANCES 4,277,055 8,9 1 5,973 436,99 1
ENDING FUND BALANCES $1,175,023 $9,232,995 $445,753
80
CAPITAL
PROJECTS
FUNDS
Stevens Creek
Corridor Pak
$26,390
26,390
(26,390)
(26,3 90)
290,399
$264,009
Improvement
3,
CAPITAL
PROJECTS
FUNDS
Don Burnett
Bicycle
Pedestrian
$5,374
$5,374
Total
Nonmajor
Governmental
Funds
$377,073
94,625
400,970
6,387
487,7 16
1,366,77 1
497,049
3,801,036
4,298,085
(2,93 1,3 14)
128,676
128,676
(2,802,638)
13,925,792
$1 1,123 ,154
81
Bridge
REVENUES
Taxes
Use of money and property
Charges for services
Fines for forfeitures
Other revenue
Total Revenues
EXPENDITURES
Current:
Public works
Capital outlay
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
CITY OF CUPERTINO
BUDGETED NON-MAJOR FUND S
COMBINING SCHEDULE OF REVENUE S, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 20 16
SPECIAL REVENUE FUNDS
STORM DRAIN IMPROVEMENT
Variance
Final Positive Final
Actual
$100,000 $154,698 $54,698 $100,000
14,239 14,239
487,0 10 487,0 10
100,000 655,947 555,947 100,000
3,757,979 3,757,979 16,667
3,757,979 3,757,979 16,667
(3,657,979) 555,947 83,333
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCES (3 ,102,032) $555,947 $83,333
BEGINNING FUND BALANCES 4,277,055
ENDING FUND BALANCES $1,175,023
82
PARK DEDICATION
Variance
Positive
Actual
$222,375 $122,375
77,770 77,770
33,544 33,544
333,689 233,689
16,667
16,667
317,022 23 3,689
317,022 $233,689
8,9 1 5,973
$9,232,995
Budget (Negative) Budget (Negative)
(3,102,032)
($3,657,979)
SPECIAL REVENUE FUND
ENVIRONMENTAL MANAGEMENT/
CLEAN CREEKS
Final
Budget
$502,000
502,000
594,954
594,954
(92,9 54)
128,679
128,679
$35,725
Actual
$2,616
367,426
6,387
706
377,135
497,049
497,049
(1 19,914)
128,676
128,676
8,762
436,99 1
$445,753
Variance
Positive
(Negative)
$2,6 16
367,426
(495 ,613)
706
(124,865)
97,905
97,905
(26,960)
(3)
(3)
($26,963)
83
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INTERNAL SERVICE FUNDS
Internal Service Funds are used to finance and account for special activities and services provided by one
department or program to other departments of the City on a cost reimbursement basis.
The concept of major funds does not extend to internal serv ice funds because they do not do business with
outside parties. For the Statement of Activitie s, the net revenues or expenses of each internal service fund
are eliminated by netting them against the operations of the City departments that generated them. The
remaining balance sheet items are consolidated with the se same fun ds in the Statement of Net Position .
However, internal service funds are still presented separately in the Fund financial statements.
In formation Te chnology -Accounts for the activities related to the maintenance and replacement
of the City's technology infrastructure .
Wo rkers ' Compensation -Accounts for the activities in support of the self-insured workers '
comp ensation program.
Equipment Revolving -Accounts for the activities related to the maintenance and replacement of
the City's vehicle fleet and other equipment.
Compensated Absences and Long-Term Disability -Accounts for accrued leave payouts and the
City's long term disability insurance program.
Retiree Me di cal -Accounts for funds set-aside for other post emp loyment retirement benefits.
City Channel/Web -Accounts for government access te levision station and website maintenance
85
CITY OF CUPERTINO
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 20 16
Compensated
Absences and
Information Workers' Equipment Long-Term Retiree
Revolving Disability Medical
AS SETS
Current Assets:
Cash and investments $2,475,94 1 $2,645,517 $2,524,856 $288,013 $87,489
Accounts receivable 12,945
Prepaid items 25,2 10
Total current assets 2,501,151 2,645,5 17 2,537,801 288,0 13 87,489
Noncurrent Assets :
Net OPEB assets 10,492,537
Capital assets, depreciable net of
accumulated depreciation 437,577 1,307,266
Total noncurrent assets 437,577 1,307,266 10,492,537
Total Assets $2,93 8,728 $2,645,517 $3,845,067 $288,013 $10,580,026
LIABILITIES
Current Liabilities:
Accounts payable and accruals $28,940 $2 $69,164
Accrued payroll and benefits 72
Due to other funds $450,220
Compensated ab sences 11,982 320 2,603
Claims payable 489,499
40,922 489,821 71,839 450,220
Non-current Liabilities:
Compensated ab sences 76,04 1 2,03 1 16,5 18
Claims payable 991,599
76,04 1 993,630 16,5 18
Total Liabilities 116,963 1,483,45 1 88,357 450,220
NET POSITION
Net investment in capital assets 437,577 1,307,266
Unrestricted 2,3 84,188 1,162,066 2,449,444 $288,0 13 $10,129,806
Total Net Position $2,82 1 ,765 $1,162,066 $3,756,7 10 $288,0 13 $10,129,806
86
Technology Compensation
City
Channel/W eh
$3 37,571
4,457
342,028
464,554
464,554
$806,582
$33,558
32,757
66,3 15
207,882
207,882
274,197
464,554
67,83 1
$532,385
Total
$8,3 59,387
12,945
29,667
8,40 1 ,999
10,492,537
2,209,397
12,70 1,934
$2 1,103,933
$131,664
72
450,220
47,662
489,499
1,1 19,117
302,472
99 1,599
1,294,071
2,413,188
2,209,397
16,48 1,348
$18,690,745
87
CITY OF CUPERTINO
INTERNAL SERVICE FUNDS
COMB INING STATEMENT OF REVENUE S, EXPENSES AND
CHAN GES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 20 16
Compensated
Ab sences and
Information Workers' Equipment Long-Term Retiree
Technology Disability Medical
OPERATING REVENUES
Charges for services $1,655,088 $958,056 $1,219,560 $8 1,197
Other 29,320
Total Operating Revenues 1,655,088 958,056 1,248,880 81,197
OPERATING EXPENSES
Salaries and related expenses 908,341 32,746 263,66 1 $9 19,219
Materials and supp lies 873 ,272 4,2 13 348,95 1
Contractual services 474,562 57 125,268
Insurance claims and premium 576,653
Depreciation 175,260 405,897
Total Operating Expenses 2,43 1,435 37,0 16 1,143,777 576,653 919,2 19
Operating Income (Loss) (776,347) 92 1 ,040 105,103 (495,456) (9 19,2 19)
NONOPERATING REVENUES (EXPENSES)
Interest income 24,168 20,724 22,096 1,959 459
Gain on sale of capital assets 21,944
Total Nonoperating Revenues (Exp enses) 24,168 20,724 44,040 1,959 459
Income (Loss) Before Tran sfers (752,179) 94 1 ,764 149,143 (493 ,497) (9 1 8,760)
Transfers in 237,000 640,004 1,000,500
Transfers (out)
Change in Net Position (5 15,179) 94 1 ,764 149,143 146,507 81,740
BEGINNING NET POSITION 3,336,944 220,3 02 3,607,567 141,506 10,048,066
ENDING NET POSITION $2,82 1,765 $1,162,066 $3,756,7 10 $288,0 13 $10, 129,806
88
Compensation Revolving
City
Channel/Web Total
$779,676 $4,693 ,577
29,320
779,676 4,722,897
62 1,398 2,745,365
22 1 ,277 1,447,713
119,120 719,007
576,653
114 ,668 695,825
1,076,463 6,1 84,563
(296,787) (1,461,666)
5,056 74,462
21,944
5,056 96,406
(2 91,73 1) (1,3 65,260)
40,000 1,917,504
(36,0 15) (36,0 15)
(2 87,746) 516,229
820,131 18,174,5 16
$532,385 $18,690,745
89
CITY OF CUPERTINO
INTERNAL SERVICE FUND S
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 20 16
Compensated
Absences and
Information Workers' Long-Term Retiree
Technology Equipment Disability Medical
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $1,655,088 $958,056 $1,235,935 $8 1,197
Cash payments to suppliers for goods and services (1,416,027) (4,268) (477,666)
Cash payments to employees (1,041,96 1) (33,492) (263,817) ($9 17,353)
Cash payment for judgment and claims (552,081)
Cash Flows from (used for) Operating Activities (802,900) 368,215 494,452 (9 17,353)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in 237,000 640,004 1,000,500
Transfers (out)
Cash Flows (used for) Noncapital Financing Activities 237,000 640,004 1,000,500
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets (2 59,359) (653,47 1)
Cash Flows from Cap ital and Related
Financing Activities (2 59,359) (653,471)
CASH FLOWS FROM INVE STING ACTIVITIES
Interest received 24,168 20,724 22,096 1,959 459
Cash Flows from Investing Activities 24,168 20,724 22,096 1,959 459
Net Cash Flows (80 1,09 1) 388,939 (136,923) 146,507 83,606
Cash and investments at beginning of year 3,277,032 2,256,578 2,66 1 ,779 141,506 3,883
Cash and investments at end of year $2,475,94 1 $2,645,5 17 $2,524,856 $288,013 $87,489
Reconciliation of operating income (loss) to net cash flows
from operating activities:
Operating income (loss) ($776,347) $92 1,040 $105,103 ($495,456) ($9 19,219)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
175,260 405,897
Change in assets and liabilities:
Accounts receivable (12,945)
Prepaid expenses 28,663
Net OPEB asset 1,866
Accounts payable and accruals (96,856) 2 (3,447)
Accrued payroll and benefits (2 8,734) (1,287) (12,721)
Compensated absences (104,886) 541 12,565
Claims payable (552,081)
Cash Flows from Operating Activities ($802,900) $368,215 $494,452 ($495,456) ($9 17,353)
90
Compensation
(576,653)
(495,456)
City
Channel Web
$779,676
(3 16,103)
(5 56,748)
(93,175)
40,000
(3 6 ,015)
3,985
(332,609)
(3 32,609)
5,056
5,056
(4 16,743)
754,314
$3 37,571
($29 6,787)
114,668
(4,457)
28,75 1
(2 0,8 84)
85,534
($93,175)
Total
$4 ,709,952
(2 ,214,064)
(2 ,813,371)
(l,128,734)
(l,446,217)
1,917,504
(36,015)
1,88 1,489
(l,245,439)
(l,245,439)
74,462
74,462
(73 5,705)
9,095,092
$8,359,387
($1,46 1 ,666)
695,825
(12,945)
24,206
1,866
(71,550)
(63,626)
(6,246)
(552,081)
91
($1,446,217)
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STA TISTICA L SE CTI ON
This Page Left Intentionally Blank
STATISTICAL SECTION
This part of the City's Comprehensive Annual Financial Report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, and required
supplementary information says about the City's overall financial health. In contrast to the financial
section, the statistical section information is not subj ect to independent audit.
Financial Tr ends
The se schedules contain trend information to help the reader understand how the City's financial
performance and wellbeing have changed over time :
1. Net Position/ Assets by Component
2. Changes in Net Position/Assets
3. Fund Balances of Governmental Funds
4. Changes in Fund Balance of Governmental Funds
Revenue Capacity
These schedules contain information to help the reader assess the City's most significant own
source revenue, property tax.
1. Assessed and Estimated Actual Value of Taxable Property
2. Direct and Overlapp ing Property Tax Rates
3. Principal Property Taxpayers
4. Property Tax Levies and Collections
Debt Capacity
The se schedules present information to help the reader as sess the affordability of the City's
current levels of outstanding debt and the City's ability to issue additional debt in the future :
1. Ratios of Outstanding Debt by Type
2. Direct and Overlapping Bonded Debt
3. Legal Debt Margin Information
4. Ratio of General Bonded Debt Outstanding
Demogr aphic 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. Demograp hic and Economic Statistics
2. 20 15 Employer Ranking
Operating Information
These schedul es 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
activiti es it performs :
1. Full-Time Equivalent Em ployees by Function/Program
2. Operating Indicators by Function/Program
3. Capital Assets Stati stics by Function/Program
Sources
Un less otherwise noted, the information in the se schedules is derived from the Comprehensive Annual
Financial Reports for the relevant year.
95
This Page Left Intentionally Blank
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Governmental Activities
Net investment in capital assets 80,343,053$ 85,173,998$ 103,341,905$ 120,405,290$ 120,724,205$ 117,440,257$ 116,343,918$ 122,081,223$ 131,425,677$ 148,168,074$
Restricted 9,265,565 9,926,770 6,661,074 8,692,175 7,721,962 7,572,865 8,351,118 24,232,367 38,327,705 34,861,807
Unrestricted 39,243,717 43,242,639 33,290,050 31,087,861 33,185,903 38,117,361 47,558,701 63,150,548 51,003,950 51,164,063
Total governmental activities net position/assets 128,852,335 138,343,407 143,293,029 160,185,326 161,632,070 163,130,483 172,253,737 209,464,138 220,757,332 234,193,944
Business-Type Activities
Net investment in capital assets 467,416 84,126 136,127 788,213 777,521 824,687 762,013 1,110,414 2,079,561 1,708,183
Unrestricted 6,977,436 7,849,147 8,949,142 9,063,616 9,779,087 10,057,331 10,865,479 10,292,210 6,604,578 7,375,444
Total business-type activities net position/assets 7,444,852 7,933,273 9,085,269 9,851,829 10,556,608 10,882,018 11,627,492 11,402,624 8,684,139 9,083,627
Primary Government
Net investment in capital assets 80,810,469 85,258,124 103,478,032 121,193,503 121,501,726 118,264,944 117,105,931 123,191,637 133,505,238 149,876,257
Restricted 9,265,565 9,926,770 6,661,074 8,692,175 7,721,962 7,572,865 8,351,118 24,232,367 38,327,705 34,861,807
Unrestricted 46,221,153 51,091,786 42,239,192 40,151,477 42,964,990 48,174,692 58,424,180 87,382,915 60,135,264 58,539,507
Total primary government net position/assets (1)136,297,187$ 146,276,680$ 152,378,298$ 170,037,155$ 172,188,678$ 174,012,501$ 183,881,229$ 220,866,762$ 229,441,471$ 243,277,571$
(1) Represents net assets thru June 30, 2012 and net position after that.
Fiscal Year Ended June 30
CITY OF CUPERTINO
Net Position/Assets by Component
Last Ten Fiscal Years
(Accrual basis of accounting)
(Unaudited)97
CITY OF CUPERTINO
Change in Net Position/Assets
Last Ten Fiscal Years
(A ccrual basis of accounting)
(Unaudited)
Fiscal Yea r Ended June 30
2007 2008 2009 2010 201 1 2012 2013 2014 2015 2016
Expenses
Governmental activities:
Administration $ 1,675,443 $ 1,636,284 $ 1,769,500 $ 1,911,665 $ 1,860,45 1 $ 1,837,072 $ 2,367,255 $ 4,529,539 $ 3,286,9 19 $ 3,710,388
Law enforcement 7,148,187 7,679,467 8,804,195 8,385,476 8,434,885 8,776,633 9,274,536 10,062,192 10,705,328 11,3 16,2 71
Public and enviromnental affairs 1,186,929 1,216,164 1,624,2 10 1,653,034 1,625,876 1,743,151 1,595,982 512,895 649,442 575,260
Administrative services 3,874,003 3,923,2 17 4,00 1,738 4,080,134 3,993 ,654 4,309,503 4,171,440 2,662,008 4,300,336 2,994,6 11
Recreation services 2,5 1 7,725 3,845,873 4,206,343 4,444,536 4,528,968 4,577,243 4,473 ,86 1 4,866,974 5,365,282 5,758,194
Community development 4,090,959 4,059,740 6,177,879 4,351,975 5,96 1 ,774 4,922,237 4,676,273 9,108,949 5,976,797 6,259,734
Public works 16,230,274 16,569,3 10 18,104,649 19,320,151 20,224,662 20,387,508 22,149,063 21,143,331 27,893,361 31,3 13,396
Interest on long-term debt 2,239,657 2,183,403 2,1 1 8,714 2,076,264 2,032,464 1,837,655 1,256,922 1,130,428 1,120,138 1,077,538
Total governmental activities expense 38,963,177 41,1 13,458 46,807,228 46,223 ,235 48,662,734 59,297,603 63,005,392
Business-type activiti es:
Resource recovery 2,122,805 2,056,06 1 1,998,184 2,0 18,147 1,80 1,599 1,566,229 1,764,993 2,159,047 2,548,461 2,997,200
Blackberry farm 975,064 450,206 495,845 457,169 457,065 460,698 463,336 571,000 547,185 576,177
Cupertino sports center 1,623,839 1,547,402 1,594,325 1,478,143 1,716,74 1 1,897,6 11 2,0 1 1,483 2,22 1 ,703 2,269,420 2,299,2 10
Recreation programs 1,830,40 1 1,853,217 1,739,892 1,854,648 1,7 53,156 1,985,6 18 2,025,4 16 2,730,765 2,342,457 3,136,011
Senior center 77 1 ,570
Total business-type activities expense 7,323 ,679 5,906,886 5,828,246 5,808,107 5,728,561 5,9 10,156 6,265,228 7,682,5 15 7 707,523 9,008,598
'° Total primary government expense 46,286,856 47,020,344 52,635,474 52,03 1,342 54,391,295 54,301,158 56,230,560 61,698,83 1 67,005,126 72,0 13,990
00
Program Revenues
Governmental activities:
Charges for services:
Administration 3,618 10,711 2,240 21,873 15,801 6,454 5,676 1,087,393 322,534 369,069
Law enforcement 1,03 1,736 799,350 869,295 811,676 797,757 696,498 637,595 725,63 1 590,378 664,483
Public and enviromnental affairs 41,352 41,352
Administrative services ---481,6 16 359,148
Recreation services 193,752 847,424 801,280 930,773 1,020,159 1,166,323 970,292 955,08 1 1,798,134 1,421,185
Community development 4,768,026 3,551,478 3,586,993 3,3 10,355 4,149,620 4,9 19,216 6,765,564 6,649,292 8,511,745 10,534,457
Public works 200,969 135,942 157,3 11 556,636 549,065 503,225 593,50 1 7,9 16,897 2,869,357 6,358,870
Operating grants and contributions 3,048,5 12 2,392,987 4,0 14,036 2,042,557 2,351,287 2,508,9 17 2,752,493 10,000,131 6,002,6 17 1,85 1,282
Capital grants and contributions 3,496,095 5,696,124 4,759,485 5,511,359 1,972,95 1 780,76 1 719,880 569,159 4,022,190 362,49 1
Total government activities program revenue 12,742,708 13,434,0 16 14,190,640 13,185,229 10,856,640 10,581,394 12,445,00 1 27,903,584 21,962,3 37
Business-type activities:
Charges for services:
Resource recovery 2,254,4 16 2,254,790 2,100,704 2,104,299 1,93 1,076 1,727,783 1,882,5 17 2,074,25 1 2,59 1,276 2,664,888
Blackberry farm 1,101,564 640,77 1 596,944 568,770 447,797 411,056 386,753 302,472 388,09 1 334,529
Cupertino sports center 1,655,169 1,605,545 1,732,282 1,578,330 1,722,700 1,965,684 2,150,139 2,188,127 2,152,498 2,224,146
Recreation programs 2,396,720 2,4 93,2 14 2,364,037 2,249,191 2,260,296 2,325,705 2,409,720 2,480,209 2,532,800 2,466,3 36
Senior center 690,603
Operating grants and contributions 14,343 14,309 14,47 1 6,895
Total business-type activities program revenue 8,1 12,8 15 7,008,629 6,808,438 6,507,485 6,361,869 6,430,228 6,829,129 7,045,059 7,664,665 7,689,899
Total primary government program revenue 20,855,523 20,442,645 20,999,078 19,692,7 14 17,2 18,509 17,011,622 19,274,130 34,948,643 32,304,588 29,652,236 (Continued)
48,391,002 49,965,332 54,016,316
24,639,923
CITY OF CUPERTINO
Change in Net Position/Assets
Last Ten Fiscal Years
(A ccrual basis of accounting)
(Unaudited)
Fiscal Yea r Ended June 30
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Net (Expense) Revenue:
Governmental activities (26,220,469) (27,679,442) (32,6 16,588) (3 3,038,006) (37,806,094) (37,809,608) (37,520,331) (26,1 12,732) (34,657,680) (4 1,043,055)
Business-type activities 789,136 1,101,743 980,192 699,378 633,308 520,072 563,90 1
Total primary government net expense 7,172,
General Revenues and Transfers
Governmental activities:
Taxes:
Property taxes 6,529,772 6,94 1,910 7,49 1,965 7,488,70 1 7,296,970 7,479,132 8,793,110 9,169,183 11,864,027
Property tax in lieu of motor vehicle fee 3,652,509 3,894,502 4,299,902 4,420,9 12 4,404,795 4,487,4 12 4,772,3 55 5,289,476 6,330,436
Incremental property tax 187,276 220,267 1,211,128 1,322,925 1,25 1,777 202,793
Sales taxes 11,252,34 1 13,154,749 14,139,190 9,930,530 14,539,243 17,326,460 18,72 1,193 19,794,036 21,350,056
Transient occupancy tax 2,511,184 2,711,590 2,140,274 2,142,137 2,536,501 3,1 12,934 3,768,504 4,590,156 5,852,244
Utility user tax 3,011,755 3,175,724 3,205,073 3,27 1,452 3,227,942 3,264,896 2,994,526 3,098,639 -3,370,830
Franchise tax 2,537,0 18 2,547,439 2,6 18,125 2,597,930 2,84 1,344 2,808,136 2,848,950 2,775,892 3,478,024
Other taxes 2,66 1 ,449 1,709,892 1,317,767 1,211,899 1,49 1,316 1,377,2 11 4,56 1,219 18,79 1,559 2,818,019
Intergovernmental ( 1) 364,261 266,789 171,62 1 166,440 259,289 29,064 30,256 25,294 24,111
Investment earnings 1,752,177 1,45 1 ,973 889,823 295,059 259,2 17 61,096 176,782 133,243 40,75 1 807,287
Miscellaneous 29 1,423 1 03,529 81,342 119 ,393 1,144,429 82,684 126,690 57,005 (2) 219,053
Gain on sale of capital assets 1,510,4 10 23,71 5,897 580
'° Extraordinary items (2) (l,130,797) '° Transfers 500,000 992,150 15 207,000 872,340
Total Government Activities 36,76 1,575 37 170,5 14 37,566,2 10 32,967,378 39,252,838 39,308,02 1 46,643 ,585 63,323,133 24,628,986 54,479,667
Business-type activities:
Investment earnings 366,596 378,828 171,804 67,182 71,486 12,338 31,573 11,238 42,53 1 83,187
Transfers 150,000 40 1,350 1,635,000
Total business-type activities 171,804 67,182 71,471 181,573 412,588 1,718,187
Total primary government 36,628,171 37,73 8,0 14 33,034,560 39,324,309 39,113 ,359 46,825,158 63 ,735,72 1 23,799 ,177 56,197,854
Change in Net Position/Assets (3)
Government activities 10,54 1,106 9,49 1 ,072 4,949,622 (70,628) 1,446,744 1,498,4 13 9,123,254 37,2 10,40 1 (10,028,694) 13,436,6 12
Business-type activities 655,732 488,42 1 1,151,996 766,560 704,779 325,410 745 ,474 399,488
Total primary government $ 11,196,838 $ 9,979,493 $ 6,101,618 $ 695,932 $ 2,151,523 $ 1,823,823 $ 9,868,728 $ 36,985,533 $ 13,836,100
(1) The 2006 state take-away of sales taxes, property taxes, and vehicle license fees is reported in this category.
(2) Asset transfer to Successor to Redevelopment Agency fiduciary trust in 2012.
(3) Represents changes in net assets thru fiscal year ended June 30, 2012 and changes in net position after that.
CITY OF CUPERTINO
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified accrual basis of accounting)
(Unaudited)
Fiscal Year Ended June 30
2007 2008 2009 2010
General Fund
Reserved $ 2,711,586 $ 2,668,914 $ 2,325,283 $ 2,308,290
Unreserved 23,634,874 16,997,569 19,871,574 13,622,828
Total General Fund 26,346,460 19,666,483 22,196,857 15,931,118
AH Other Governmental Funds
Reserved 8,555,042 11,240,851 4,180,483 5,465,423
Unreserved, reported in:
Special Revenue Funds 6,844,632 7,270,331 3,692,187 5,113,020
Capital Project Funds (472,405} 7,631,866 968,077 3,788,810
Total All Other Governmental Funds 14,927,269 26,143,048 8,840,747 14,367,253
Total Governmental Funds $ 41,273,729 $ 45,809,531 $ 31,037,60'L_ $ 30,298,371
,.._.
2011 (1) 2012 2013 2014 2015 2016 0
0
General Fund
Nonspendable $ 1,023,950 $ 1,003,438 $ 956,827 $ 3,363,065 $ 938,245 $ 937,381
Restricted 663,254 695,564 725,903 761,653 888,374
Assigned 14,739,394 17,729,297 16,400,000 16,400,000 28,849,679 20,500,000
Unassigned 3,380,279 6,669,379 17,961,579 23,197,378 8,774,966 29,869,085
Total General Fund 19,806,877 26,097,678 36,044,309 42,960,443 39,324,543 52,194,840
All Other Governmental Funds
Nonspendable 615,000
Restricted 6,314,106 6,877,301 7,625,215 24,232,367 37,566,052 33,973,433
Committed 1,398,665 1,398,665
Assigned 4,303,822 3,646,073 5,299,904 7,619,534 20,671,116 15,344,191
Unassigned (2,280,961)
Total All Other Governmental Funds 11,232,928 10,523,374 12,925,119 29,570,940 59,635,833 50,716,289
Total Governmental Funds $ 31,039,805 $ 36,621,052 $ 48,969,428 $ 72,531,383 $ 98,960,376 $ 102,911,129
(1) The City implemented GASB Statement No. 54 under which governmental fund balances are reported as nonspendable, restricted, assigned and unassigned compared to reserved and
unreserved.
CITY OF CUPERTINO
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified accrual basis of accounting)
(Unaudited)
Fiscal Year Ended June 30
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Revenues
Taxes $ 28,903,993 $ 34,589,139 $ 36,395,950 $ 30,994,583 $ 37,582,299 $ 40,265,944 $ 48,382,570 $ 72,2 11,724 $ 55,134,238 $ 55,462,956
Use of money and property 2,169,977 2,490,444 1,300,508 774,2 19 792,035 661,602 744,196 764,299 915,933 1,654,702
Intergovernmental 8,200,5 19 8,285,280 6,896,394 7,539,835 3,543,64 1 2,678,888 2,84 1,407 3,069,400 7,2 10,562 2,532,025
Licenses and permits 3,325,844 2,656,0 17 2,740,463 2,583,131 2,90 1 ,944 2,900,936 3,502,6 17 3,679,943 3,170,445 3,073,110
Charges for services 2,062,067 1,728,099 1,707,533 1,701,157 2,3 11,2 16 3,273,946 4,5 1 5,066 10,744,113 5,203,371 17,249,123
Fines and forfeitures 926,3 10 722,087 76 1,320 736,239 695,666 661,899 560,4 17 616,889 554,002 564,903
Other 154,235 95,388 80,835 689,94 1 73,881 264,302 57,828 545,052 542,429 1,289,0 13
Total revenues 45,742,945 50,566,454 49,883,003 45,0 19,105 47,900,682 50,707,5 17 60,604,101 91,63 1,420 72,730,980 81,825,832
Expenditures
Current:
Administration 1,287,101 1,351,273 1,336,92 1 1,469,004 1,528,070 1,533,070 2,005 ,176 3,957,739 3,897,70 1 4,053,741
Law enforcement 6,975,5 17 7,45 6,66 1 8,133,168 8,384,3 10 8,434,885 8,445,917 8,783,885 9,626,121 10,283,772 10,988,73 5
Public and environmental affairs 1,121,437 1,169,247 1,486,443 1,487,265 1,497,263 1,659,856 1,486,9 10 477,852 624,295 544,718
Administrative services 3,715,994 3,797,156 3,634,043 3,733,4 14 3,695,076 4,103,982 3,772,714 2,444,670 3,226,164 2,8 11,117
Recreation services 2,403,296 3,745,244 3,789,260 4,003,764 4,117,477 4,3 19,983 4,083,822 4,536,5 19 5,047,548 5,44 1,200
Community development 3,969,837 3,93 1,055 5,841,428 4,1 25,739 5,693,541 4,762,229 4,395,60 1 8,424,254 5,180,659 6,102,820
Public works 10,477,727 11,137,935 11,914,584 11,96 1,2 18 12,234,726 12,528,194 13,996,5 16 17,469,627 14,625,038 15,078,174
Capital outlay 4,292,169 8,334,093 22,262,369 4,710,360 5,28 1,927 3,523,047 4,684,676 7,1 10,974 21,760,899 26,171,127
Debt service:
Principal repayment 1,295,000 1,355,000 1,4 1 5,000 1,460,000 1,500,000 1,920,000 2,040,000 2,055,000 2,090,000
Interest and fiscal charges 2,239,657 2,183,403 2,118 ,714 2,076,264 2,032,464 1,837,655 1,256,922 1,130,428 1,120,138 1,077,538
........ Payment to refunded debt escrow agent 44,897,800 0
........ Total expenditures 37,777,735 44,46 1,067 61,93 1,930 43,41 1,338 46,0 15,429 87,6 11,733 46,386,222 57,2 18,184 67,82 1,2 14 74,3 59,170
Excess (deficiency) ofrevenues over
(under) expenditures 7,965,2 10 6,105,387 1,607,767 1,885,253 14,2 17,879 34,4 13,236 4,909,766 7,466,662
Other Financing Sources (Uses)
Bond proceeds 44,823,839
Proceeds from sale of capital assets 1,663,842 1,055,449 42 1 37,569 23,8 14,257 580
Transfers in 9,658,000 19,136,165 5,035,925 7,788,4 17 5,684,483 6,484,426 8,438,707 13,6 10,304 39,408,990 11,905 ,724
Transfers out
Total other financing sources 43,6 16,260 24,045,963
Extraordinary Item
Assets transferred to Successor Agencies
Change in fund balances $ 4,509,552 $ 4,535,802 $ $ $ 74 1,434 $ 5,58 1,247 $ 12,348,376 23,56 1,955 $ 28,955,729 $ 3,950,753
Debt service as a percentage of
noncapital expenditures (1) 10.6% 9.8% 8.9% 9.1% 8.7% 55.6% 7.6% 6.6% 5.8% 5.5%
(!) Noncapital expenditures is total expenditures less capital assets added each year to statement of net position/assets. ' ' ~ ~ ' ' ' ~ ' ' ~;)\ N~-' °' -~ °' "' ... 00 ..,; 0 N -... ' ' ' ~~-~: ' ,o 00 8 _: ' ~ ~ i ' ' ~ ~ ' ' " ~ ~ ', ' ~ " ~~ '~ ' " ~ ~ ' ' ~ ~
0 t0
Fiscal Year
2007
2008
2009
2010
2011
2012
20 13
2014
2015
20 16
(a) Net of exemptions
Source: HdL, Coren & Cone
Total
Secured (a)
10,794,99 1,704
11,5 1 2,949,952
12,637,622,059
12,979,346, 158
13,017,9 1 0,3 72
13,219,574,367
13,882,147,29 1
15,391,656,690
16,133,637,244
18,308,720,226
"' $18 c: 0 § $16 '°
$14
$12
$10
$8
$6
$4
$2
$0
CITY OF CUPERTINO
Assessed and Estimated Actual Value of Taxable Property
Last Ten Fis cal Years
(Unaudited)
State Board of
Equalization Secured
Unsecured (a) Non-Unitary Exemptions
" 0 0 N
381,307,80 1 213,610
417,564,226 -
533,413,208 1,390,000
564,277,6 11 1,3 90,000
476,3 32,025 1,3 90,000
527,3 10,3 19 1,390,000
73 8,243 ,050 1,390,000
813,1 17,019 1,390,000
965,141,148 -
1,086,786,90 1 -
00 °' 0 ..-i N ('() 0 0 ..-i ..-i ..-i ..-i 0 0 0 0 0 0 N N N N N N
Iii Secured Property Iii Unsecured Property
94,957,979
96,690,9 10
99,950,894
99,947,559
96,704,8 11
96,08 1,912
108,468,872
113,744,809
119,476,276
114 ,223,063
<:t ..-i 0 N
LJ'l ..-i 0 N
Data Source: Santa Clara County Assessor Of -201 5/1 6 Combined Tax Rolls
Total Assessed &
<.D ..-i 0 N
Est. Full Market
Valuation (a)
11,176,5 13,115
11,930,5 14,178
13,172,425,287
13,545,0 13,769
13,495,632,3 97
13,748,274,686
14,62 1,780,341
16,206,163 ,709
17,098,778,392
19,395,507,127
This re port is not to be used in support of debt issuance or conti nuing disclosure statements without the writte n consent of HdL, Coren & Cone
Prepared On 8/4/20 16 By MV
Direct
Tax
Rate
5.74%
5.87%
6.26%
6.5 1%
6.5 1%
6.24%
6.20%
5.62%
5.61%
5.59%
...... 0 w
THE CITY OF CUPERTINO
Direct and Overlapping Property Tax Rates
(Rate per $100 of taxable value)
Last 10 Fiscal Years
2006/07 2007/0 8 2008/09 2009/1 0 2010/1 1 201 1112 2012/13 2013/1 4 2014/15 2015/16
Basic Levy1 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000
County Bond 2008 Hospital Facility 0.00000 0.00000 0.00000 0.0 1220 0.00950 0.00470 0.005 10 0.00350 0.009 10 0.00880
County Library Retirement Levy 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240 0.00240
County Retirement Levy 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880 0.03880
Cupertino Elementary 0.02890 0.03370 0.03060 0.03 120 0.03080 0.02900 0.05980 0.05250 0.05400 0.05 190
El Camino Hospital 2003 0.0 1290 0.0 1290 0.0 1290 0.01290 0.0 1290 0 .01290 0.01290 0.0 1290 0.0 1290 0.0 1290
Foothill De Anza College 0.03460 0.01 130 0.01230 0.03220 0.03260 0.02970 0.02870 0.02900 0.02760 0.02400
Fremont High 0.0243 0 0.02410 0.03390 0.03060 0.03650 0.04150 0.03900 0.040 50 0.03960 0.05250
Los Gato s-Saratoga High 1998 0.03510 0.03450 0.03300 0.03520 0.03770 0.03810 0.03680 0.03510 0.05 160 0.0423 0
Santa Clara Unified 0.07970 0.027 10 0.0743 0 0.070 10 0.05 190 0.08360 0.08 190 0.07070 0.07040 0.00080
Santa Clara Valley Water District 0.00720 0.007 10 0.006 10 0.00740 0.00720 0.00640 0.00690 0.00700 0.00650 0.09420
Saratoga Elementary 0.03510 0.03630 0.03630 0.03880 0.04370 0.04440 0.04520 0.04500 0.04580 0.04490
West Valley College 0.0 1260 0.01 180 0.00320 0.01400 0.01390 0.0 1370 0.02890 0.02550 0.0 1200 0.02320
Total Direct & Overlapping2 Tax Rates 1.31160 1.24000 1.28380 1.32580 1.31790 1.34520 1.38640 1.36290 1.37070 1.40240
City 's Share of 1 % Levy Per Prop 13' 0.05725 0.05706 0.0566 1 0.05641 0.05644 0.05650 0.05652 0.05626 0.05617 0.05571
General Obligation Debt Rate
Redevelopment Rate4 1.0 4840 1.04830 1.04730 1.04860 1.0 4840 1.04760
Total Direct Rate5 0.05842 0.05870 0.06263 0.065 10 0.06507 0.0623 8 0.06204 0.05623 0.05610 0.05588
Notes :
1In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject
property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter
approved bonds.
20verlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.
'City's Share of 1 % Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may
4Redevelopment Rate is based on the largest RDA tax rate area and only includes rate(s) from indebtedness adopted prior to 1989 per C alifornia State statute. RDA direct
and overlapping rates are applied only to the incremental property values. The approval of AB Xl 26 eliminated Redevelopment from the State of California for the fiscal
year 2012/13 and years thereafter.
5Total Direct Rate is the weighted average of all individual direct rates applied to by the government preparing the statistical section information and excludes revenues
derived from aircraft. Beginning in 20 13/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to
recognized enforceable obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the
City in the same proportions as general fund revenue.
Data So urce: Santa Clara County Assessor 200610 7 -201511 6 Tax Rate Ta ble
Th is report is not to be used in support of de bt issuance or contin uing disclosure statements with out the written consent of HdL , Coren & Cone
Prepared On 8/4/20 16 By MV
Taxpayer
Apple Inc . $
Campus Holdings Inc.
Valko Property Owner
BVK Perimeter Square Retail LLC ET AL
Main Street Cupertino Aggregator LLC
Cupertino City Center Buildings
Mission West Properties LP II ET AL
SVF Cupertino City Center Corp.
Cupertino Property Development
_. Markham Apartments LP 0 ..,.
Total $
Source: HdL, Coren & Cone
CITY OF CUPERTINO
Principal Property Taxpaye rs
Current Year and Five Yea rs Ago
(Unaudited)
20 16 Percentage of
Assessed Total Assessed
Valuation Valuation
1,815,276,3 00 9.36%
1,51 1,150,025 7.79 %
315,500,000 1.63 %
168,296,699 0.87%
145,220,5 64 0.75%
140,942,274 0.73%
130,33 0,48 1 0.67%
125,4 1 2,347 0.65%
112 ,284,48 1 0.58%
97,5 13,905 0.50%
4,561,927,076 23 .53%
20 1 1 Percentage of
Assessed Total Assessed
Valuation Valuation
$ 807,920,115 5.99%
396,65 1,45 8 2.94%
85,475,396 0.63%
$ 1,290,046,969 9.56%
-0 VI
Fiscal Total
Year Tax Levy
2007 6,7 1 7,048
2008 7,162,177
2009 8,703 ,093
20 10 8,760,881
20 1 1 8,497,119
20 12 7,681,925
20 13 8,1 99,752
20 14 9,1 69,183
20 15 10,178,734
20 16 11,864,026
CITY OF CUPERTINO
Property Tax Levies and Collections
Last Ten Fiscal Years
(Unaudited)
Percent Delinquent
Current Tax of Levy Tax
Collections Collected (1) Collections (1)
6,7 1 7,048 100.00% -
7,162,177 100.00% -
8 ,703 ,093 100.00% -
8,760,88 1 100.00% -
8,497,119 100.00% -
7,68 1 ,925 100.00% -
8,1 99,752 100.00% -
9,169,1 83 100.00% -
10,178,734 100.00% -
11,864,026 100.00% -
Percent of
Total Total Tax
Tax Collections
Collections to Tax Levy
6,7 1 7,048 100.00%
7,162,177 100.00%
8,703,093 100.00%
8,760,881 100.00%
8,497,119 100.00%
7,681,925 100.00%
8,1 99,752 100.00%
9,169 ,183 100.00%
10,178,734 100.00%
11,864,026 100.00%
(1) Per the Teeter Plan, the City receives 100% of the tax levy, while the County receives delinquencies and penalties .
Source: City of Cupertino
Fiscal
Year
2007
2008
2009
20 10
20 1 1
20 12
20 13
-20 14 0 20 15 O'\
20 16
Source: City of Cupertino
CITY OF CUPERTINO
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Un audited)
Percentage
of Estimated
Certificates Actual Market Value
of Part icipation of Taxable Property
49,740,000 0.45%
48,3 85,000 0.41%
46,970,000 0.36%
45,5 1 0,000 0.34%
44,0 1 0,000 0.32%
43,940,000 0.30%
42,020,000 0.29%
39,980,000 0.25%
37,925,000 0.22%
35,83 5,000 0.21%
%of
Personal
Per Capita Income
929 1.60%
886 1.44%
853 1.36%
815 1.36%
755 1.70%
744 1.56%
705 1.41%
67 1 1.38%
633 1.28%
598 1.21 %
-0 VI
Fiscal Total
Year Tax Levy
2007 6,7 1 7,048
2008 7,162,177
2009 8,703 ,093
20 10 8,760,881
20 1 1 8,497,119
20 12 7,681,925
20 13 8,1 99,752
20 14 9,1 69,183
20 15 10,178,734
20 16 11,864,026
CITY OF CUPERTINO
Property Tax Levies and Collections
Last Ten Fiscal Years
(Unaudited)
Percent Delinquent
Current Tax of Levy Tax
Collections Collected (1) Collections (1)
6,7 1 7,048 100.00% -
7,162,177 100.00% -
8 ,703 ,093 100.00% -
8,760,88 1 100.00% -
8,497,119 100.00% -
7,68 1 ,925 100.00% -
8,1 99,752 100.00% -
9,169,1 83 100.00% -
10,178,734 100.00% -
11,864,026 100.00% -
Percent of
Total Total Tax
Tax Collections
Collections to Tax Levy
6,7 1 7,048 100.00%
7,162,177 100.00%
8,703,093 100.00%
8,760,881 100.00%
8,497,119 100.00%
7,681,925 100.00%
8,1 99,752 100.00%
9,169 ,183 100.00%
10,178,734 100.00%
11,864,026 100.00%
(1) Per the Teeter Plan, the City receives 100% of the tax levy, while the County receives delinquencies and penalties .
Source: City of Cupertino
Fiscal
Year
2007
2008
2009
20 10
20 1 1
20 12
20 13
-20 14 0 20 15 O'\
20 16
Source: City of Cupertino
CITY OF CUPERTINO
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Un audited)
Percentage
of Estimated
Certificates Actual Market Value
of Part icipation of Taxable Property
49,740,000 0.45%
48,3 85,000 0.41%
46,970,000 0.36%
45,5 1 0,000 0.34%
44,0 1 0,000 0.32%
43,940,000 0.30%
42,020,000 0.29%
39,980,000 0.25%
37,925,000 0.22%
35,83 5,000 0.21%
%of
Personal
Per Capita Income
929 1.60%
886 1.44%
853 1.36%
815 1.36%
755 1.70%
744 1.56%
705 1.41%
67 1 1.38%
633 1.28%
598 1.21 %
CITY OF CUPERTINO
Direct and Overlapping Bonded Debt
June 30, 2016
(Un audited)
2015-16 Assessed Valuation
Total Debt %
Tax and Assessment Debt: 6/3 0/20 16 Applicable (1)
Santa Clara County $ 792,585,000 4.998%
Foothill-DeAnza Community College District 584,782,455 13.580%
West Valley Community College District 419,930,3 12 1.180%
Santa Clara Unified School District 53 0,270,000 2.814%
Fremont Union High School District 365,975,088 30.148%
Cupertino Union School District 292,848,688 50.708%
El Camino Hospital District 136,280,000 1.138%
Midpeninsula Regional Open Space District 45,000,000 8.006%
Santa Clara Valley Water District Benefit Assessment 99,060,000 4.998%
Total Overlapping Tax and Assessment Debt 3,266, 73 1 ,543
Direct and General Fund Debt
Debt:
Santa Clara County General Fund Obligations $ 683,441,121 4.998%
Santa Clara County Pension Obligations 367,118,349 4.998%
Santa Clara County Board of Education Certificates of Participation 6,380,000 4.998%
Foothill-De Anza Community College District Certificates of Participation 9,723,341 13.580%
West Valley-Mission Community College District General Fund Obligations 64,180,000 0.713%
Santa Clara Unified School District Certificates of Participation 13,835,000 1.840%
Santa Clara County Vector Control District Certificates of Participation 2,890,000 4.998%
Midpeninsula Regional Open Space Park District Certificates of Participation 122,305,886 8.006%
Subtotal Overlapping General Fund Debt 1,269,873,697
Direct Debt: City of Cupertino Certificates of Participation 35,835,000 100.000%
Total Direct and Overlapping General Fund Debt 1,305,708,697
Total Direct Debt 35,835,000
Total Overlapping Debt 4,5 36,605,240
Combined Total Debt $ 4,572,440,240
Ratios to 20 14-15 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 2.10%
Total Direct Debt ($35,835,000) 0.18%
Combined Total Debt 2.62%
(1) The percentage of overlapping debt applicable to the city is estimated using taxable as sessed property value.
Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is
within the boundaries of the city divided by the district's total taxable as sessed value.
(2) Principal amount as of7/1/16.
$
$
$
$
(3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations .
Source : Mun iServices
107
19,395,507,127
City's Share of
Debt 6/30/16
39,613,398
79,4 13,457
4,955,178
14,921 ,798
1 1 0,334, 170
148,497,713
1,550,866
2,602,700
4,95 1,019
406,840,299
34,158,387
18,348,575
318,872
1,320,430
757,324
389,3 17
144,442
9,79 1,809
65,229,156
35,835,000 (2)
101,064,156
35,835,000
472,069,455
507,904,455 (3)
Overlapping
Overlapping
Overlapping
Totals by Category:
-0 00
Fiscal
Year
2007
2008
2009
20 10
20 11
2012
20 13
2014
20 15
20 16
Debt Limit:
Debt
Limit
408,373,114
43 1 ,735,623
473 ,9 1 0,827
486,725,480
488,171,639
495,734,03 9
520,580,523
577,187,126
605,0 11,397
686,577,008
CITY OF CUPERTINO
Legal Debt Margin Information
Last Ten Fiscal Years
(Unaudited)
Total Net
Debt Applicable
to Limit
Secured property assessed value, net of exempt real property
Adjusted valuation -25% of assessed valuation
Debt limit -1 5% of adjusted valuation
Amount of Debt Subject to Limit:
Total Bonded Debt
Less: Certificates of Participation not subj ect to debt limit
Amount of debt subj ect to limit
Legal Debt Margin
Total net debt
Legal applicable to the
Debt limit as a % of
Margin debt limit
408,373,114
43 1 ,735,623
473,9 1 0,827
486,725,480
488,17 1,639
495,734,039
520,580,523
577,187,126
605,0 11,397
686,577,008
$ 18,308,720,226
4,577,180,057
686,577,008
35,835,000
(3 5,835,000)
-
$ 686,577,008
Note: The Government Code of the State of California provides for a legal debt limit of 1 5% of gross assessed valuation. However, this
provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 198 1-82 fiscal year, each parcel is
now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a
conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the
time that the legal debt margin was enacted by the State of California for local governments located within the state.
Source: City of Cupertino
....... 0 '°
Fiscal
Year Population
2007
2008
2009
20 10
20 1 1
20 12
20 13
20 14
20 15
20 16
Sources : HdL, Coren & Cone
City of Cupertino
53 ,549
54,5 84
55,045
55,83 8
58,3 02
59,022
59,620
59,620
59,777
58,185
CITY OF CUPERTINO
Ratio of General Bonded Debt
Last Ten Fiscal Years
(Unaudited)
Assessed General
Value Bonded Debt
11,176,513,1 15
11,930,5 14,178
13,172,425,287
13,545,0 13,769
13,495,632,397
13,748,274,686
14,62 1, 780,341
16,206,1 63,709
17,098,778,3 92
19,395,507,127
Ratio of General
Bonded Debt Bonded Debt to
Per Capita Assessed Value
....... 0
Fiscal
Year
2006-07
2007-08
2008-09
2009-10
20 10-1 1
20 11-12
2012-13
20 13-14
20 14-15
20 15-16
City
City Cou nty Population
Population (I) Population (I) % of County
53,549 1,794,522 2.98%
54,584 1,748,976 3.12%
55,045 1,857,62 1 2.96%
55,838 1,800,876 3.10%
56,43 1 1,78 1 ,642 3.27%
59,022 1,809,3 78 3.26%
59,620 1,842,254 3.24%
59,946 1,868,558 3.21%
59,777 1,889,63 8 3.16%
58,185 1,927,888 3.02%
Source : 201 1-12 and prior, previously published CAFR Report
City of Cupertin o
Demographic and Economic Statistics
Last Ten Fiscal Years
City Personal
Income (2)
3,1 1 7,408,000
3,369,668,000
3,442,884,000
3,350,250,000
2,586, 1 20,000
2,8 1 8,655,000
2,888,768,456
2,965,595,760
3,290,3 77,494
3,298,679,878
Per Capita
Pers onal
Income (2)
58,216
61,734
62,547
59,999
44,3 57
47,756
48,453
49,47 1
55,064
56,693
**Public
School
Enrollment
9,823
10,300
10,300
10,350
10,365
10,625
29,699
29,904
29,871
29,684
Source : Muni Serv ices, LLC, U.S. Census Bureau, 20 10 American Community Survey.
County
U nemploy
City ment Rate
Rate (0/c>) (3) (%) (3)
2.8%
3.0%
3.8%
7.2%
7.3% -
6.3% -
5.4% 8.4%
4.4% 6.8%
3.1% 3.8%
3.4% 4.2%
The California Department of Finance demographics estimates now incorp orate 20 10 Census counts as the benchmark.
1.) Population Projections are provided by the California Department of Finance Projections.
2.) Income Data is provided by th e U.S. Census Bureau, 20 10 American Community Survey.
3.) Unemployment Data is provided by the EDD's Bureau of Labor Statistics Department.
4.) Median Age reflects the U.S. Census data estimation table.
Median
Age (4)
40.5
39.1
39.2
39.9
40.4
40.0
40.2
0;., of % of
Population Popu lation
Over 25 Over 25
with High
School
Degree
96.5%
96.3%
97.0%
96.7%
96.1%
96.5%
96.5%
with
Bachelor's
Degree
69.3%
72.6%
74.7%
75.5%
75.0%
74.6%
75.6%
**Reported Public School Enrollment reflects the total number of students in the Fremont Union High School District and Cupertino Union School District. Previously published reports
included Fremont Union High School District only.
......
Em
App le
Seagate Technology
Cellular Biomedicine
Magnet Systems
Jenifer's Health Ctr .
Aemetis
Scion Capital
Ciena Corp
Target
Sugar CRM Inc
CITY OF CUPERTINO
2016 Employer Ra nking
(Unaudited)
1 Oracle
2 99 Ranch Market
3 Keller Williams Realty
4 Who le Foods Market
5 Coldwell Banker
6 Cort Clearance Ctr
7 Cupertino Heathcare & Wllns s
8 Morgan Stanley Wealth Mgmt
9 Kaiser Foundation Hospitals
10 Sprouts Farmers Market
Sour ce: Report#12786983 84, 6/1/1 6 from InfoUSA.com
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12
13
14
15
16
17
18
19
20 11
CITY OF CUPERTINO
Full-Time Equivalent City Employees by Function/P rogram
Last Ten Fiscal Years
(Un audited)
2007 2008 2009 2010 201 1 2012
Council and Commissions 1.40 1.40 1.40 1.47 1.46 1.47
Administration 4.30 4.30 4.85 4.90 4.85 5.05
Public & Environmental Affairs 5.55 6.50 7.45 6.95 6.95 6.95
Administrative Services 21.63 21.88 22.33 22 .33 22 .34 22.48
Recreation & Community Services 31.96 31.76 30.77 30.78 30.78 29.78
Community Development 22 .78 23 .78 23.78 23.73 23.78 23 .43
Public Works 71.13 71.13 72 .17 72 .59 72 .59 73 .59
Total 158.75 160.75 162.75 162.75 162.75 162.75
2013 2014 2015
1.52 1.57 1.55
5.05 10.75 10.75
6.90 11.00 10.25
22.26 11.00 12.00
29.53 31.48 33.28
23.90 24.83 24 .80
73 .59 74.12 77.12
162.75 164.75 169.75
•Public Wo rks
•Community
Development
•Recreation &
Community
Services
•Admin istrative
Services
Public &
Environmental
Affairs
•Administratio n
• Council and
Commissions
2007 2008 2009 2010 20 11 2012 2013 2014 20 15 20 16
Sourc e: City of Cupertino Budget
112
2016
1.60
10.85
11.40
12.30
34.18
27.3 0
82 .12
179.75
Function/Program~
•
2007200820092010201120122013201420152016Law Enforcement Sheriff ResponsePriority One-Respond within 5 minutes4.94 Min.5.83 Min.3.88 Min.3.95 Min.4.49 Min.4.84 Min.3.76 Min.4.30 Min.4.90 Min.4.90 Min.Priority Two-Respond within 9 minutes7.15 Min.7.95 Min.5.94 Min.5.90 Min.5.76 Min.6.44 Min.5.98 Min.6.39 Min.6.56 Min.6.56 Min.Priority Three-Respond within 20 minutes15.82 Min.15.73 Min.9.40 Min.9.77 Min.9.79 Min.10.62 Min.10.29 Min.10.76 Min.10.52 Min.10.52 Min.Public WorksStreet Sweeping696 Curb Miles696 Curb Miles696 Curb Miles696 Curb Miles696 Curb Miles575 Curb Miles575 Curb Miles575 Curb Miles575 Curb Miles575 Curb MilesStreet Maintenance 24 Hrs of Call24 Hrs of Call24 Hrs of Call24 Hrs of Call24 Hrs of Call24 Hrs of Call24 Hrs of Call24 Hrs of Call24 Hrs of Call24 Hrs of CallRecreation ServicesTeen Center Memberships510444400447492576564684424491Sports Center Memberships1,3361,4191,7001,3851,5981,7761,8521,9502,0001,989Senior Center Memberships1,9352,1102,2432,2872,3872,4702,4562,6232,5492,493Local Resident Rentals at Blackberry Farm (a)--2891120135141148120107Quinlan Community Center Rental Revenue (a)--$80,000$71,000$91,000$133,000$120,000$109,342$110,033$104,150Community DevelopmentApproved Building Plan SetsWithin 5 DaysWithin 5 Days 91% Within 5 Days 96% Within 5 Days 97% Within 5 Days 93% Within 5 Days 92% Within 5 Days 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work DaysDiscretionary Land Use ApplicationsWithin 21 DaysWithin 21 Days 95% Within 21 Days 100% Within 21 Days 100% Within 21 Days 99% Within 21 Days 99% Within 21 Days 99% Within 21 Work Days 99% Within 21 Work Days 99% Within 21 Work DaysPublic Notice of Upcoming ProjectsWithin 10 DaysWithin 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 DaysAdministrative ServicesAccounts Payable Processing5 Days5 Days5 Days5 Days5 Days7 Days7 Days7 Days7 Days7 DaysBusiness License Renewal Certificates3 Days3 Days3 Days3 Days3 Days3 Days3 Days3 Days3 Days3 DaysLibrary Volumes in Collection - - - - - - - - 361,817364,557Annual Gate Count - - - - - - - - 869,762880,894Annual Circulation Children's Items - - - - - - - - 1,474,9961,544,095Annual Circulation Adult and Teen Items - - - - - - - - 999,7661,032,326Adult Classes and Events - - - - - - - - 209215Adult Classes and Events Attendence - - - - - - - - 11,8608,855Teen Classes and Events - - - - - - - - 5278Teen Classes and Events Attendence - - - - - - - - 3,3933,135Children's Classes and Events - - - - - - - - 458493Children's Classes and Events Attendence - - - - - - - - 25,52928,532Volunteer Hours - - - - - - - - 11,78610,000 Sources: City of Cupertino and Santa Clara County Library DistrictFunction/ProgramCITY OF CUPERTINOOperating Indicators by Function/ProgramLast Ten Fiscal Years(Unaudited)
2007
Public Wo rks
Centerlane Miles of Streets 142
Streetlights 2,950
Traffic Signals 39
Culture & Recreation
Parks and Open Spaces 17
Park and Lan dscape Acreage 150.8
City Trails 1
Golf Courses 1
Community Center 1
Community Hall 1
-Senior Center 1 -!:>-Sports Center 1
Swimming Pools 1
Tennis Courts 17
Sports Fields 1
City Library 1
Source: City of Cupertino
CITY OF CUPERTINO
Capital Assets Statistics by Function/Program
Last Ten Fiscal Years
(Unaudited)
2008 2009 2010 2011
142 142 142 142
2,950 2,950 2,950 2,950
39 39 39 39
17 17 18 19
150.8 150.8 151.4 152.0
1 1 1 1
1 1 1 1
1 1 1 1
1 1 1 1
1 1 1 1
1 1 1 1
1 1 1 1
17 17 17 17
1 1 1 1
1 1 1 1
2012 2013 2014 2015 2016
142 142 142 142 142
2,950 2,950 2,950 2,950 2,950
39 48 48 48 48
19 19 21 21 21
152.0 152.0 159.0 165.0 165.0
1 1 3 3 3
1 1 1 1 1
1 1 1 1 1
1 1 1 1 1
1 1 1 1
1 1 1 1
1 1 1 1 1
17 17 17 24 24
1 1 41 41 41
1 1 1 1 1
Function/Program
COMMUNITY
PR OFIL E
This Page Left Intentionally Blank
History
Cupertino owes its name and earliest mention in recorded history to the 1776 expedition led by
the Sp anish explorer Captain Juan Bautista de Anz a. Starting in Sonora, Mexico, Anza led a
group up the coast of California, aiming to establish a presidia (fort) on San Francisco Bay.
In late March, Anza left the majority of his party of men, women, and
children in Monterey to rest and pressed on through the Santa Clara Valley
to his San Francisco destination with 18 men and Pe dro Font, a diarist,
cartogr apher, and Franciscan priest.
With the ex pedition encamped in what is now Cupertino, Font christened
the creek next to the encampment the Arroyo San Joseph Cupertino in honor of his patron, San
Guiseppe (San Joseph) of Copertino, Italy. The arroyo is now known as Stevens Creek.
The village of Cupertino sprang up at the crossroads of Saratoga-Sunnyvale Road (now DeAnza
Boulevard) and Stevens Cre ek Boulevard. It was first known as
West Side, but by 1898, the post office at the Crossroads needed a
more unique name . John T. Doyle, a San Francisco lawyer and
historian, had given the name Cupertino to his winery in
recognition of the name bestowed on the nearby creek -likewise,
in 1904, the same name was applie d to the Crossroads and to the
post office as the Home Union Store in the northeast corner of the
Crossroads changed its name to The Cupertino Store .
I
Although Cup ertino's pione er settlers planted grapes in the late 1800s, many switche d to
keeping orchar ds when phylloxera, a root louse, struck the thriving wine in dustry in 1895 . As
the orchards flourishe d, the valley became known for the spring profusion of blossoms .
In the late 1940' s Cupertino was swept up in Santa Clara Valley's postwar population explosion.
Concerned by unplanne d development, higher taxes, and piecemeal annexation to adj acent
cities, Cupertino's community le aders began a drive for incorporation in 1954. The
incorporation was appr ove d in the September 27, 1955 election, and Cupertino officially became
Santa Clara County's 13th City on October 10, 1955.
A major milestone in Cupertino's development was the creation of Valko Business and
Industrial Park by some of the city's largest landowners in the early 1960's. Of the 25 property
owners, 17 de cided to pool their land to form Valko Park and six sold their land to Varian
Associ ates, a thriving young electronics firm founded by Ru ssell Varian. The name Valko was
derive d from the names of the princip al developers: Varian Associates and the Leonar d, Lester,
Cr aft, and Orlan do familie s.
117
2016 Community Economic Profile
Cupertino, with a population of 60,572 and the city limits stretching across 13 square miles, is
considered one of the most prestigious cities to live and work in the San Francis co Bay Are a.
Economic he alth is an essential comp onent to maintaining a balanced city, which provides high
level opportunities and services that cre ate and help sustain a sense of community an d qu ality
of life . Public an d private interests must be mutual so that our success as a partnership is a
direct reflection of our success as a community. The cornerstone of this partnership is a
cooperative and responsive government that fosters busine ss and residential prosperity and
strengthens working relationships among all sectors of the community.
Cupertino is considere d one of the most prestigious cities in which to live and work within
Silicon Valley and the San Francisco Bay Area. Because Cupertino is a mature, 90% built-out
city, we focus on business retention and revitalization. Cupertino is world renowned as the
home of high-te ch giants, such as Apple, Inc . and Seagate Technologies, and as a community
with stellar public schools . DeAnza College, one of the largest single -campus community
colle ges in the country, is another major employer and a magnet for attracting local an d
international students . The City's proactive economic deve lopment efforts have re sulte d in an
innovative envir onment for start-ups and growing comp anies to thrive . The City strives to
retain and attract local comp anies through active outre ach and a responsive and customer
oriente d entitlement process .
Cupertino is excited to have a number of new mixed-use development projects in final
construction phases and almost fully leased, which will provide more retail and dining options,
as well as provide additional housing opportunities to meet the needs of the growing
community.
The Main Stre et and Nineteen800 mixed-use developments have create d a vibrant downtown
are a for Cup ertino offering a large selection of restaurants and retailers, including Alexander's
Ste akhouse, Eureka!, Rootstock Wine Bar, Oren's Hummus, Lazy Dog, L YFE Kitchen, 85 Degree
Bakery, Target Express, Kula Sushi, Vitality Bowls, Fit 36, Doppio Zero, and Icool In2 Ice
Cream. Hous ing, office, and hotel rooms are available to support the are a. The AMC Theater,
Bowlmore, Ice Rink, and Silicon Valley Bay Club serve as an chors to the downtown are a.
118
The construction of new retail and commercial development strengthens existing popular
venues in Cupertino, including the Cupe rtino Marketplace. The Marketplace has a variety of
stores and restaurants popular with students, families, an d
working professionals, including Daiso, Marukai Groceries, Sup er
Cue, La Patisserie Bakery, Beard Papa's, Legend's Pizza, Aloha
Fresh, Merlion Restaurant Wingstop, and Erik's Deli Cafe .
Cup ertino Village is undergoing renovations to upgrade
buildings, parking, and open courtyard sp ace . The shopping center is home to 99 Ranch
Market Ten Ren Te a, Fantasia Coffee & Tea, Joy Luck Palace, Kee Wah Bakery, and other Asian
re staur ants, bakeries, and shops.
Cup ertino features many other stores, inclu ding TJ Maxx and Home Goods, Whole Foods,
Target, and over 180 restaurants to serve the local workforce an d residents . Cupertino features
five hotels: Cup ertino Inn, Hilton Garden Inn, Marriott Courtyard, Juniper Hotel operate d by
Curio, and The Aloft Cupertino Hotel. The Re sidence Inn by Marriott and Hyatt House are
under construction.
The redeve lopment of the Homeste ad Square Shopping Center, locate d at Homestead Road and
De Anza Boulevard, includes a 24-hour Safeway, Ulta Beauty, Ross Stores, Stein Mart,
Mich ael's, Rite Aid, FedEx Kinko' s an d numerous restaurants, such as Fish's Wild, 1000
Degreess Neapolitan Pizzeria, and Chipotle, to complement the are a.
Apple Inc .' s plans for a new corporate campus
is un der construction and will include
approximately 2.8 million square fe et of office
and R&D space north of Highway 280 between
Wolfe Road and Tantau Avenue . The City of
Cup ertino continues to provide high-level
mu nicipal services to complement the sense of
community and quality of life enjoyed by our
residents.
2016 City Pro file
119
The City of Cupertino operate s as a general law city with a City Council-City Manager form of
government. Five council members serve four year, overlapping terms, with elections held
every two ye ars. The council meets twice a month on the first an d third Tuesday at 6:45 p.m. in
the Community Hall. The meetings can be viewed on the City website .
The City has 180.75 authorized full-time benefited employee positions . City departments
include Administration (City Council, Commissions, City Clerk, City Manager, City Attorney,
Environmental Affairs, Economic Development, Code Enforcement); Administrative Services
(Finance, Human Re sources); Community Development (Planning, Building, Housing Services);
Recre ation and Community Services (Neighborhood Watch, Emergency Prep are dness); Public
Works (Engineering, Maintenance, Transportation, Solid Waste, and Storm Drain
Management); an d Information Services (IT, GIS, Communications). Police service is provide d
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 commissions/committees including
housing, telecommunications, fine arts, library, planning, audit, parks an d recre ation, bicycle
and pedestrian, teens, economic development, strategic planning, public safety and
sustainability. Members of the volunteer boards are app ointe d by the City Council and
vacancies are announced so that interested residents can apply for the positions. Residents are
kept informed about city service s and programs through the Cupertino Scene, a monthly
newsletter; the City Ch annel, Cupertino's government access cable TV channel; and the city's
website .
Housing
The me dian sales price for an existing single-family home is $1,635,000 for the time between
July an d October 2016. For housing programs in Cupertino, please see "Programs &
Applications ."
Community Health Care Facilities
Cupertino is serve d by the Cupertino Me dical Clinic, NovaCare Occupational Health Services.
Nearby hospitals inclu de Kaiser Permanente Medical Center in Santa Clara, El Camino Hospital
in Mountain View, O'Connor Hospital in San Jose, Community Hospital of Los Gatos, Stanford
Hospital in Palo Alto, and the Saratoga Walk-in Clinic in Saratoga.
Utiliti es
Gas & Electric
Phone
Cable
Solid Wa ste & Recy cling
Water
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Pacific Gas and Electric, 800-743-5000
AT&T residential service, 800-894-2355
AT&T business service, 800-750-2355
Comcast, 800-945-22 88
Re cology, 408-725-042 0
San Jose Water Comp any, 408-279-79 00
California Water, 650-9 17-0152
Sewer Service Cupertino Sanitary District, 408-253-7071
Tax Rates and Government Services
Residential, commercial, and industrial property is appraised at full market value as it existed
on March 1, 1975, with incre ases limited to a maximum of 2% annually. Property cre ate d or sold
since March 1, 1975 bears full cash value as of the time cre ate d or sold, plus the 2% annual
increase. The basic tax rate is $1 .00 per $100 (full cash value) plus any tax levied to cover
bonded indebtedness for county, city, school, and other taxing agencies. Assessed valu ations
and tax rates are published annually after July 1.
Assessed Val uation (Se cured an d Unsecured)
Cupertino: $19,395,507,127 (8/1 /16)
County : $373,922,973 (7/1 /16)
Retail Sales Tax
Grand Total = 8.7500%.
Breakdown = Cupertino 1 %, State General Fund 3.9375%, State and Local Revenue Fund
1.0625%, State Local Public Safety 0.5%, State Local Revenue 0.5%, State Education Prote ction
0.25%, County Transp ortation 0.25%, Local District (Valley Transp ortation Authority) 1.25 %.
Transp ortati on
Rail: The CalTrain station is four miles north of city. The Amtrak station is 10 miles south.
Air: The San Francisco International Airport is locate d roughly 30 miles north, and the Mineta
San Jose International Airport is located ap proximately 11 miles south.
Bus: Cupertino is serve d by the Santa Clara Valley Trans portation Au thority. The routes liste d
below pass through the City. For Cupertino-specific schedules and map s visit their online
website :
Route 23 San Jose - Mountain View/Palo Alto
Route 25 San Jose -De Anza College
Route 26 Eastridge -Lockheed
Route 36 East San Jose - V allco
Route 51 Valko -Moffett/Ames
Route 53 Westgate -Sunnyvale
Route 54 West Valley -Fair Oaks/ Tasman
Route 55 De Anza -Great America
Route 81 East San Jose -Vallco
Express 101 Camden/Branham -Palo Alto
Express 501 Palo Alto -I.B.M Bailey
Car: The City of Cupertino is in the he art of the world renowne d Silicon Valley . The major
highway transportation facilities are Interstate Route 280 and State Route 85 freew ays . The City
is linke d inte rnally by several princip al arterials and Santa Clara County expressways . Principal
arterials are De Anza Boulevard, Stevens Creek Boulevar d, and Wolfe Road. Nearby
expressways are Lawrence Expressway and Foothill Expressway .
Sister Cities
City of Cupertino recognizes the value of developing people-to-people contacts by
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strengthening the partne rships between the city an d its four sister cities of Copertino, Italy;
Hsinchu, Taiwan; Toyokawa, Jap an, and Bhubaneswar, In dia. Cupertino's sister city
partne rships have proven successful in fostering educational, te chnical, economic and cultural
exchanges. Over the ye ars, there have been many delegations vis iting both the cities as well as
many local students particip ate d in annual student exch ange programs .
Education
Winner of numerous state and national aw ards for excellence, our city's schools are widely
acknowle dged as models of quality instruction.
Cupertino Union School District
serves over 18,000 students in a 26
square mile are a that includes
Cupertino and portions of five o ther
citie s. The district has 20 elementary
schools and five mi ddle schools,
inclu ding several choice programs . Eighteen schools have received state and/or national aw ards
for edu cational excellence .
Student achievement is exceptionally high . Historic ally, district test scores place Cupe rtino
among the premier public school districts in California. The district is a leader in the
development of standards-b ased system of education and is nationally recognized for
leadership in the use of technology as an effe ctive tool for le arning. Quality teaching and parent
involvement are the keys to the district's success.
The Fremont Union High School District serve s 10,000 students in a 42 square mile area
cove ring all of Cupertino, most of Sunnyvale, and portions of San Jose, Los Altos, Saratoga, and
Santa Clara. The five high schools of the district have garnered many awards and recognition
based on both the achievement of students and the programs designe d to support stu dent
achievements . Many high schools in the district exceed their established achievement targets for
the State Academic Performance In dex. District students are encouraged to volunteer an d
provide service to organizations within the community. During their senior year, if students
complete 80 hours of service to a non-profit community organization, they are recognize d with
a "Community Service Award" me dal that may be worn at their graduation ce remonie s.
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High Tra nsfer Rates to 4-Year Universities and Colleges
(2 01 2-201 3}:
•
•
•
Univers ity of Ca lifornia: 727
Ca lifornia St ate Universities : 1,225
Private Co lleges & Unive rsities : 452
Building on its tradition of excellence an d inn ovation, DeAnza College challenges students of
every background to develop their intellect, character, and abilities; to achieve their educational
goals; and to serve their community in a diverse and changing world.
DeAnza College offers a wide range of quality programs an d services to meet the work force
development needs of our region. The college prepares current and future employees of Silicon
Valley in tr aditional classroom settings and customized training arrange d by employers .
Several DeAnza programs encourage economic development through colle ge cre dit courses,
short-term programs, services for manufacturers, technical assistance, and/or recruitment and
retention service s.
Pro grams & App lications
Community Outreach Pro grams
Leadership 95014
Leadership 95 014 is a program designe d by the City of Cupertino, Wilfred Jarvis Institute, and
other local sponsors to offer an exciting adult program that is guaranteed to enhance the
participants' leadership skills. The ten full-day sessions feature
inside looks at local governments, the social sector, local non
profit organizations, and educational institutions . This 9-month
pro gram is offe re d annually, September to May, and
applications can be found online .
Neighb orho od Block Leader Program
LEADER SHIP
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Good neighborhoods are those where neighb ors work together on common issues and look out
for each othe r. Block le aders take extra steps to connect neighb ors and build community,
making our neighborhoods safer and more harmonious . The Block Leader Program te aches
residents how to get to know their ne ighbors and how to organize activities so neighbors can
more easily communicate with each other. Block leaders are vital links between City Hall an d
the neighborhoods, an d leaders gain the inside track on neighborhood development activities .
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I
Neighborhood Watch
Neighb orhood Watch is a crime prevention program that enlists the active particip ation of
citizens in cooperation with law enforcement to reduce crime in our communitie s. It involve s:
neighbors getting to know each other and working together in a program of mutual assistance;
citizens being trained to recognize and report suspicious activities in their neighb orhoods; and
implementation of crime prevention techniques such as home security and operation
identifi cation . To organize a Neighborhood Watch program in your neighborhood, please
contact the Neighborho od Watch Coordinator at 408 .777.31 77.
eCAP
Email Community Alert Program (e CAP) was created by the Santa Clara County Sheriff's Office
to prevent and re duce crime by raising community awareness, minimizing opportunities for
crime, and incre asing the possibility of solving crimes with the public's help. Cupertino
residents may voluntarily re gister their email addre sses with the Sheriff's Office for community
alert messages. Citizens can sign-up at a Neighborhood Watch meeting or log-on to the City of
Cupertino's eCAP online registration.
Affordable Housing : BMR (Below Market Rate) Pro gram
The City of Cupertino requires 15% of all new construction be affordable to households below
120% of the County me dian income . Rental units are affordable to very low and low-income
households while ownership units are aff ordable to median and moderate-income households .
The City of Cupertino contracts with West Valley Community Services (WVCS) to screen and
place qualified households in most of the city's BMR units . WVCS maintains a waiting list of
interested persons for these BMR units . If inte reste d, please call 408.255 .8033 . More information
can be found online.
Sm art Phone Applications
Mobile 95014
City of Cupertino 's Mobile 95014 app offers latest listing of Cupertino news
and events as well as local parks, schools, and recreation offerings in the city.
This app showcases environmental services and community services such as
Block Leaders and Neighborhood Watch programs . Users can le arn about
public safety and contact City Council members and City officials. The app
al so offe rs links to Cupertino's social media sites.
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Trees 95014
Trees 95014 is an iPhone/iP ad an d Android app which provide s
details about the city-planted trees in Cupertino. Users can search
for trees by street name or by current location . The se arch results
show the picture of the tree and details such as location, height,
diame ter, and spe cies . Cupertino residents can also sign up their
tree, name their tree, an d request tree service through this app .
Eats 95014
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fof lfD9S by location:
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Eats 95014 is the local restaurant app that showcases Cupertino's
dining options such as restaurants, grocery stores, farme rs' markets, =::.1:11i::�;,"O::'��c:;;�
ba tlll ll-11 ... �,,." • _. ._..u.. of ,_. n.
and vineyards. The app provides information on the services offered =·�""''"""""•••w.
at such eating places including store hours, parking information, noise levet directions, and
website link.
Ready 95014
READY
95 014
Re ady 95014 is an app that puts safety information into the hands of Cupertino
residents . Steps to prepare and respond to eme r gencies including earthquakes,
floods, fires, and pandemics are outlined in an easy-to-understand format. The
app also stre ams Cupertino 's own AM radio station (1 670 AM) and has a map
of the City's Area Resource Centers, satellite locations opened after dis asters to
provide public assistance.
The Ge o graphic Information System (GIS) Division captures, manages, analyzes, and displays
all forms of geographically reference d information for the City of Cupertino. Through maps,
globes, reports, and charts we provide ways to view, understand, question, inte rpret, and
visualize, our City in ways th at reveal relationships, patterns, and tr ends. The GIS Program
works to help our staft citizens, business and development communities ans wer que stions and
solve problems by looking at our data in a way that is quickly understood and easily shared -
on a map!
has been redesigne d to better showcase our department's services. Among
those services is our new Open Data Portal . This site offers the ability to Se arch, Filter,
Download and use API Access to over 50 GIS layers
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Cupertin o.org/GJS
gis.cupertino.openda ta.a rcgi s.com .
The GIS Division also manages and deploys Cupertino's GIS-centric asset management system,
Cityw orks. Cupertino Fleet, Trees, Median/ROWs, Storm Drain, Streetlights, Traffic Signals,
Streets and Sidewalk/EOP divisions utilize Cityworks to manage, track, and analyze
Cupertino's infrastructure assets in the office and in the field.
Cupertino Green
Cupertino is committed to maintaining the City as a sustainable place to live, learn, work, an d
play for all the community members . To achieve this goal of
safeguarding the community's well-being and environmental health,
Cup e rtino is actively working to implement its first Climate Action
Plan (CAP) and provide residents, busine sses, and schools with clear
an d easy-to-access programs and services to jumpstart green
leadership . More information can be found online at
Social Media Sites
Facebook Sites Tw itter Sites
CUPERTINO GREEN
City of Cupertino Facebook
Cup ertino Re c & Comm. Service s
Cup ertino Teen Center Faceb ook
Cup ertino Teens & Teen Programs
McClellan Ranch Preserve Facebook
Cup ertino Senior Center Facebook
Cup ertino Sports Center Facebook
Cup ertino Block Leader Facebook
City of Cupertino Twitter
Cup ertino Fields Twitter
Cupertino Re c & Comm. Services
Community Stati stics
Facts and Figur es1
in City Limits
Median Household Income
Median Age
Registered Voters
Democrats
Republicans
American Independent
Other
No Political Party designate d
1 U.S. Census Bureau
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Yo uTube Site -City of Cupertino, City
Channel
60,5 72
$134,872
40
27,489
10,291
6,256
144
256
10,209
Pop ulation
Top 40 Sales Tax Pro ducers
First Quarter 2016, in Alphabetical Order
A2Z Development
Alamillo Bear
Alexander's Ste akh ouse
Apple Computers Corporation
Argonaut Win dow & Door
BJ's Restaurant & Brewhouse
Benihana
California Dental Arts
CEMEX canst. materials
Chevron Service Stations
Columbia Stone
De Anza College Campus Ctr.
Dynasty Chinese Food
Frener & Reifer
Demographi c Information
Goodfellow Top Grade
Granite Rock Company
Hu awei Enterprise
Insight Solutions Inc.
J C Penney Company
Mirapath
Mitsubishi Consumer El.
Permasteelis a
Pro Ins tallations
Ranch 99 Markets
Rosendin Electric
Ross Stores
Rotten Robbie Service Stn.
Safeway
American Native
Scandinavian Designs
Seagate Technology
See le
Shane Co.
Shell Service Stn .
Superior Air Handling
Target Stores
The Wiremold Company
TJ Maxx
Valero Service Stn.
Verizon Wirele ss
Whole Foods Market
Black or African In ian/ Alaska
Amen.can Hawaiian/Other
Pacific
0 0.2%
• 0 .1% or Latino
3 .6% 0 .9%
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Asian
63.3%
Islander
6%
Hispanic
Community and Recreation Services
Blackberry Farm
Blackberry Farm has been upgraded and restore d to improve the
natural habitat for native trees, animals, and fish . Imp rovements to the
park include construction of a new ticket kiosk, re-plastered pools, a
new water slide, bocce ball, horseshoe courts, and numerous upgrades
to the west bank picnic are a. The park is located at 21979 San
Fernando Avenue . Telephone : 408-777-3140.
The Blackberry Farm Golf Course is located at 221 00 Stevens Creek
Boulevard. Telephone : 408-253-920 0.
The Quinlan Community Center
The City of Cupertino's Quinlan
Community Center is a 27,000 square foot
facility that provides a variety of
re cre ational opportunities .
Most prominent is the Cu pertino Room - a
multi-purpose room that can accommodate
300 people in a banquet format.
Telephone : 408-777-3 120.
Cupertino Sports Center
The Sports Center is a great place to meet
friends. The facility features 17 tennis
courts, complete locker room facilities, an d
a fully-equip ped fitne ss center featuring
free weights, Cybex, and cardio equipment.
A teen center and a child-w atch center are
also include d. The center is located at the
corner of Stevens Creek Boulevard and
Stelling Ro ad. Telephone : 408-777-3160.
Cupertino Seni or Center
The Senior Center provides a welcome and
friendly environment for adults over age 50.
There is a full calen dar of opportunities for
learning, volunteering, and enjoying life .
There are exercise classes, computer lab
classes, and English as a second language
classes, and cultural and special interest
classes. The center al so coordinates trip s
and socials .
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The Senior Center is located at 21251
Stevens Cre ek Boulevard and is open
Monday through Friday, 8 a.m. to 5 p.m.
Telephone : 408-777-3150.
Civic Center and Library
The complex has a 6,000 square foot
Community Hall, plaza with fountain, trees,
and se ating areas. City Council meetings,
Planning Commission sessions, and Parks
and Recreation Commission sessions are
held in the Community Hall.
The 54,000 square foot library continues to
be one of the busiest libraries in the Santa
Clara County Library system. For more
information, call 408-446-1677.
Mc Clellan Ranch Park
A horse ranch during the 1930's and 40's,
this 18-acre park has the appearance of a
working ranch. Preserved on the property
are the original ranch house, milk barn,
live stock barn, and two historic buildings :
Baer's Blacksmith Shop, originally locate d
at DeAnza an d Stevens Creek, and the old
water tower from the Parish Ranch, now the
site of Memorial Park. Rolling Hills 4-H
Club members raise rabbits, chickens,
sheep, swine, and cattle . The Junior Natu re
Museum, which fe atures small live animal
exhibits and dispenses information about
bird, animal, and plant species of the area,
is also locate d at the ranch. The newly
opened Environmental Education Center
has Open House hours on Friday, Saturday,
and Sunday. McClellan Ranch is located at
22221 McClellan Ro ad. Telephone : 408-777-
3120.
Things to Do and See
Euphrat Museum of Art
The highly regarded Euphrat Mu seum of Art, at its new location next to the new Visual Arts
and Performance Center at DeAnza College, pre sents one-of-a-kind exhibitions, publications,
and events refle cting the rich diverse heritage of our are a. The Museum prides itself on its
ch anging exhibitions of national and international stature emphasizing Bay Area artists.
Mu seum hours are 10 a.m. -3 p.m. Monday through Thursday. Telephone : 408�864-5464.
Fujitsu Planetarium
The Fujitsu Planetarium on the DeAnza College campus is a must-visit Cup ertino facility for
stargazers. It hosts a variety of planetarium shows and events, including educational programs
for school group s and family astronomy evenings. For more information,
visit the website at http ://planetarium.deanza.edu or call 408-864-8814.
Flint Center
The cultural life of the Peninsula and South Bay is enhance d by programs
pre sented at the Flint Center for Performing Arts located at 21250 Stevens Creek Boulevard in
the DeAnza College campus. The center opene d in 1971 and was name d in honor of Calvin C.
Flint, the first chancellor of the Foothill-DeAnza Community College District. The box office is
open 10 a.m. -4 p.m. Tuesday through Friday and 1.5 hours prior to any performance. Box
office : 408-864-881 6; administr ative office : 408-864-882 0.
Cupertino Hi storical Society
The Cupertino Historical Society was founde d in 1966 by a group of 177 longtime residents and
is dedicate d to the preservation and exhibition of the city's history. Their museum, located at
the Quinlan Community Center, develops and expands the le arning opportunities th at it offers
to the ethnically dive rse community of the City of Cupertino . Telephone : 408-973-1495 .
Farmers ' Market
The re are two farmers' markets locate d in the City of Cupertino. One is held on Fridays from
9:00 a.m. to 1:00 p.m. at the Valko Shopping Mall parking lot behind Sears, an d the other is held
every Sunday from 9:00 a.m. to 1:00 p.m. at the Cupertino Oaks Shopping Center, 21275 Stevens
Creek Blvd.
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Califo rnia Hi story Center
The California History Center and Foundation is located on the
DeAnza College campus. The cente r has publishe d 37 volumes on
California history and has a changing exhibit program. The center's
Stocklmeir Library Archives boast a large collection of books,
pamphlet files, oral history tapes, vide otapes, and a couple thousand
student rese arch papers. The library's colle ction is for reference only.
Heritage events focusing on California's cultural and/or natural history are offered by the center
each qu arter. For more information, call 408-864-8987. The center is open September through
June, Tuesday through Thursday, from 9:30 a.m. to noon and 1:00 p.m. to 4:00 p.m.
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