City Council Subcommittee
March 21, 2023

Finance Subcommittee Agenda
City of Campbell, 70 N. First Street, Campbell, California

NOTE: To protect our constituents, City officials, and City staff, the City requests all members of the public follow the guidance of the California Department of Health Services', and the County of Santa Clara Health Officer Order, to help control the spread of COVID-19. Additional information regarding COVID -19 is available on the City's website at www.campbellca.gov.

This Special Meeting of the Finance Subcommittee will be conducted in person as well as telecommunication and is compliant with provisions of the Brown Act.

Those members of the public wishing to participate virtually can access the meeting at: https://us02web.zoom.us/j/81651586327 Meeting ID: 816 5158 6327

Members of the public may attend this meeting in person at Campbell City Hall.

Public comment will also be accepted via email at [email protected] prior to the meeting. Please indicate in the subject line “FOR PUBLIC COMMENT.” Written comments received by 2 :00 p.m. on the day of the meeting will be posted on the website and distributed to the Subcommittee before the meeting.

SPECIAL MEETING OF THE CAMPBELL FINANCE SUB-COMMITTEE
Tuesday, March 21, 2023 4:00 p.m.

Campbell City Hall
Ralph Doetsch Conference Room
70 North First Street, Campbell CA 95008

CALL TO ORDER

PUBLIC COMMENTS

1. Presentation and Discussion of FY 202 2 Audit Results and Required Communications
• City Staff and Eide Bailly, LLP

Recommended Action: Receive and accept FY 2022 Audit Results and Required Communications and provide feedback and recommendation for acceptance by the City Council.

ADJOURN

In compliance with the Americans with Disabilities Act, assistive listening devices are available for meetings held in the Council Chambers. If you require accommodation to participate in the meeting, please contact Will Fuentes in the Finance Department, at [email protected] or (408) 866-2113.

To: Finance Sub-Committee Date: March 21, 2023
From: Norite Vong, Finance Manager
Subject: FY 2022 Audit Results and Acceptance of City’s Annual Comprehensive Financial Report and Other Reports

This information is being distributed for the Sub-Committee meeting scheduled for 4:00 p.m. on March 21, 2023, in the Doetsch Room and via telecommunication. Ahmad Gharaibeh, Partner from the City’s auditing firm, Eide Bailly LLP (Eide Bailly), will present the results of the audit as well as discuss their required communications with the City.

BACKGROUND

The Finance Department prepares an Annual Comprehensive Financial Report ( ACFR) to report the City’s financial results for the f iscal year. The financial statements, and the accounts comprising them, are subjected to an independent audit as required by Campbell Municipal Code Section 2.08.140. The City’s audit firm, Eide Bailly LLP, issued their report (opinion) on these financial statements which is contained within the ACFR document (Attachment 1).

At the conclusion of the audit process, the auditor also issues its communication to the City Council, in the form of various letters, regarding the audit process and the City’s internal control structure and reports its findings and/or recommendations for improvement (Attachments 2 and 3).

DISCUSSION

Annual Comprehensive Financial Report for Fiscal Year Ending June 30, 2022

The ACFR is divided into three basic parts: 1) Introductor y Section 2) Financial Sect ion and 3) Statistical Section. The introductory section includes a letter of transmittal, award certificate and a listing of City officials, staff, Board and Commissions. The financial section includes the auditors’ report, management discussion and analysis, basic financial statements, fund financial statements, notes to the financial statements, required supplementary information and other supplementary information. The statistical section contains various schedules of trend information that provides useful information for analytical purposes.

The ACFR document is submitted annually to the Government Finance Officers Association (GFOA) award program which grants a certificate of ac hievement for excellence in financial reporting to qualifying ACFRs. The City has rec eived this award for the past 36 consecutive years and has again submitted this year’s document for consideration.

The “Independent Auditor’s Report” reflects a n unmodified, “clean opinion” on t he financial statements, meaning that it meets the standards of generally accepted accounting principles.

City of Campbell

MEMORANDUM
Finance Department

Acceptance of City’s ACFR and Audit Report
March 21, 2023

Next is the “Management’s Discussion and Analysis,” or MD&A which begins on page 5 of the ACFR, and contains significant financial highlights for the fiscal year ending June 30 , 2022, as well as an explanation of the different types of financial statements and other information found in the ACFR. Included in the discussio n are tables which compare the audit year financial results to the prior year, and an explanation of the significant changes between years.

Fiscal Year 2022 highlights from the ACFR are as follows:

City-wide, the City ended its fiscal year with total revenues of $72.5 million, an increase of $8.1 million from the previous year, and total expenses of $60.7 million, a decrease of $0.3 million compared to the previous year. Excluding property taxes, general revenues; comprised of sales tax, transient occupancy tax and other revenues, increased $3.4 million. Other financial highlights of the past year are as follows:

City-wide:
• Total City assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $50.2 million. Of this amount, $60.3 million represents the net investment in capital assets while $22.0 million is restricted for various purposes including affordable housing, streets and roads, community development and debt service. The negative $32.1 million in unrestricted net position increased by $7.2 million since last year.
• Total net position increased from the previous year by $11.8 million primarily attributable to an increase in cash and investments, partially offset by an increase in noncurrent liabilities.

Fund level:
• Total governmental fund balances were $94.9 million at fiscal year -end, an increase of $34.5 million from the previous year.
• General Fund revenues, excluding transfers, increased $7.8 million to $56.4 million from the previous year. Related expenditures increased by $2.0 million from the previous year to $52.0 million.
• General Fund’s fund balance increased $1.0 million to $21.9 million at fiscal year-end. • Total Committed General Fund balance of $3.5 million is for future contingencies and capital improvement projects. Total Assigned General Fund balance of $3.9 million is for CalPERS retirement costs and o ther post-employment benefits, and the remainder for general government. The Total General Fund balance represent a 42.1% reserve ratio to General Fund expenditures excluding transfers out.

General Fund Highlights

The General Fund realized an excess of re venues over expenditures of $4.4 million, excluding transfers. General Fund revenues, excluding transfers, increased $7.8 million from the previous year to $56 .4 million. The City ’s three largest revenue sources each realized higher revenues than budgeted.

Property Tax is the General Fund’s largest revenue source. While budgeted at $18.6 million, actual property tax revenue received was $19.5 million. That represents $0.9 million or 5.0% greater than budgeted. The positive variance is attributed to the Educational Revenue Acceptance of City’s ACFR and Audit Report
March 21, 2023

Augmentation Fund (ERAF) from which the City received $2.1 million or $0.7 million higher than budgeted.

Sales and Use Tax is the General Fund’s second largest revenue source, budgeted at $15.6 million. The City received $16.4 million or $0.8 million over the final budget due to ongoing economic recovery from the COVID-19 pandemic. The largest categories of sales tax producers comprise of restaurants and hotels, building and construction, business and industry, and general consumer goods.

Charges for services amounted to $4.8 million, which is comprised largely of fees for services provided by the Recreation, Community Development, and Public Works departments. The City received $0.6 million or 14.7% greater than budgeted. The positive va riance is attributed to increased participation within Recreation programs as well as increased revenues from engineering fees.

General Fund expenditures, excluding transfers, were $52 .0 million, an increase of $ 2.0 million from the previous year. When compared to the final budget, general fund expenditures were $0.8 million or 1.5% under budget. The savings is attributed compl etely to the Community Development department which incurred $3.1 million in expenditures, 29.1% under budget. The positive varianc e is due to lower than expected incurred expenditures as it relates to professional services.

The General Fund’s fund balance at fiscal year -end was $21.9 million, an increase of $1.0 million from the previous year. Actual ending fund balance was greater t han projected by $4.8 million or 28.0%. This is complet ely due to the General Fund’s higher than expected revenues and lower incurred expenditures. Committed and Assigned fund balances at year end were $3.5 million and $3.9 million, respectively. These balances are utilized to fund operational costs such as ca pital projects, compensated absences, and to maintain a reserve for PERS and OPEB related costs. Unassigned fund balance of $14.5 million serves as an additional reserve for unanticipated needs that may arise including a $10.0 million reserve for economic fluctuations and $3.2 million for emergencies. A detailed listing of each reserve account, its balances, and its description can be found in Attachment 4.

Per City Administrative Financial Policies, the economic fluctuations reserve is to be set at

16.67% of operating expenditures for use during economic downturns. Due to an increase in the City ’s Fiscal Year 2023 Adopted General Fund expenditures, the reserve also increased from $9.0 million to $9.9 million at fiscal year-end. The emergency reserve, however, is to be set at 10% of revenue and used for unexpected ph ysical or fiscal emergency. Due to COVID -19 and revenue shortfalls the City e xperienced in its main revenue categories such as sales tax, charges for services and transient occupancy tax , the City utilized $3. 0 million of emergency reserves in fiscal year 2019-20. As such, its balance decreased from $5.6 million to $2.6 million in fiscal year 2019- 20. Emergency reserves were not utilized in f iscal year 2020-21 nor fiscal year 2021-22. For fiscal year ending June 30, 202 2, the emergency reserve balance increased by $0.6 million to $3.2 million, which is $2.9 million below its targeted level of $6.1 million.

The City was allocated approximately $10.0 million total over two fiscal years by the American Rescue Plan Act (ARPA). ARPA funds were sent to the City in two equal payments of approximately $5.0 million each. At its September 21, 2021 meeting, City Council provided staff with authorization via Resolution No. 12767 to offset up to $3.25 million in allowable Fiscal Year Acceptance of City’s ACFR and Audit Report
March 21, 2023

2021 General Fund expenditures with the City’s ARPA allocations. As of fiscal year ending June 30, 2021 and the presentation of this report, staff utilized only $2.21 million of the $3.25 million Council-approved ARPA allocation; thereby leaving an additional $1.04 million in the APRA fund which can be used for other allowable purposes. ARPA funds were not utilized f or the fiscal year ending June 30, 2022.

Furthermore in Fiscal Year 2022, the City did not need to draw upon its economic fluctuation or emergency reser ve. As such, the City continues to maintain strong Gener al Fund reserve balances. The GFOA recommends, at a minimum, a General Fund unrestricted fund balance of no less than two months (or 16.67%) of general fund operating expenditures. At fiscal year-end, the City maintained an unassigned reserve ratio of 24.32%. This increases to 28. 09% if the General Fund PERS reserve is also taken into account. The PERS reserve is intended to either pay down unfunded pension liabilities or mitigate pension premium increases from year to year.

Thus, an appropriate u se of the PERS reserve , pending Council discussion and authorization, could be to fund annual ongoing pension premium costs in any given year.

Written Communications Letters

The auditor , as required by audi ting standards , issues several letters regarding the audit process and results (Attachments 2 and 3) as well as any observations and/or findings related to the i nternal control structure as noted during their audit. While the City received an unmodified “clean opinion” on the financ ial statements, there was an instance of material weakness that staff identified and corrected.

The City received an approximately $650,000 loan disbursement from the State CEC for the ESCO project in August 2021. Under normal circumstances, revenues received in July and August after fiscal year end can be recorded in the prior year if it is measurable and expected per governmental accounting standards. However, there is an exception for loan disbursements, which should be recognized in the fiscal year it is received, regardless of timing. Staff has corrected this error and it does not affect the City’s ending fund balances for fiscal year 2022.

To align with best practices, in the audited financial statements, staff also reallocated $1.8 million of its net pension and OPEB liability from the General Fund to its Motor Vehicle Pool Fund and Information Technology Fund. This allocation does not affect the General Fund’s ending fund balances for fiscal year 2022.

The acceptance of the Fiscal Year 2022 ACFR and auditor’s written communication on internal controls will be agendized for the Council meeting on April 4 th. The results of this meeting will be
incorporated into the final staff report submitted to Council.

Committee Members:

Anne Bybee, Mayor
Sergio Lopez, Councilmember
Brian Loventhal, City Manager
Angelique Gaeta, Assistant City Manager
Will Fuentes, Finance Director
Norite Vong, Finance Manager
Acceptance of City’s ACFR and Audit Report
March 21, 2023

Attachments:
1) Annual Comprehensive Financial Report – Fiscal Year 2021-22 2) Auditor letter on Audit Process Results (AU-C 260)
3) Auditor letter on Internal Control Over Financial Reporting and Compliance (GAGAS) 4) General Fund Reserve Comparison FYE 6.30.21 to 6.30.22

Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2022
City of Campbell

Prepared by:

Finance Department
Will Fuentes, Finance Director

City of Campbell
Table of Contents
June 30, 2022

Introductory Section
Letter of Transmittal ................................................................................................................................................... i Certificate of Achievement ...................................................................................................................................... vii Organizational Chart ............................................................................................................................................... viii City Officials .............................................................................................................................................................. ix Commissions, Committees and Advisory Boards ....................................................................................................... x Financial Section
Independent Auditor’s Report ................................................................................................................................... 1 Management’s Discussion and Analysis .................................................................................................................... 5 Financial Section
Basic Financial Statements
Government Wide Financial Statements
Statement of Net Position ................................................................................................................................... 17 Statement of Activities ......................................................................................................................................... 18 Government Fund Financial Statements
Balance Sheet – Governmental Funds ................................................................................................................. 20 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ............................ 21 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ........................ 22 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................................................................................................... 24 Proprietary Fund Financial Statements
Statement of Net Position – Proprietary Funds ................................................................................................... 27 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds .............................. 28 Statement of Cash Flows – Proprietary Funds ..................................................................................................... 29 Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position – Fiduciary Funds ....................................................................................... 31 Statement of Changes in Net Position – Fiduciary Funds .................................................................................... 32 Notes to Financial Statements ................................................................................................................................. 33 Required Supplementary Information
Schedule of Changes in the Pension Liability and Related Ratios – CalPERS Miscellaneous Plan ....................... 78 Schedule of Pension Contributions – CalPERS Miscellaneous Plan ..................................................................... 79 Schedule of Proportionate Share of the Net Pension Liability – CalPERS Safety Plans ....................................... 80 Schedule of Pension Contributions – CalPERS Safety Plan .................................................................................. 81 Schedule of Changes in the Net OPEB Liability and Related Ratios ..................................................................... 82 Schedule of OPEB Contributions .......................................................................................................................... 83 Budgetary Comparison Schedule – General Fund ............................................................................................... 84

Budgetary Comparison Schedule – Housing Assets Special Revenue Fund ........................................................ 86 Budgetary Comparison Schedule – Other Grants Special Revenue Fund ............................................................ 87 Budgetary Comparison Schedule – ARPA Special Revenue Fund ........................................................................ 88 Notes to Required Supplementary Information .................................................................................................. 89 Supplementary Information
Description of Other Governmental Funds .......................................................................................................... 90 Combining Balance Sheet – Other Governmental Fund ...................................................................................... 92 Combining Statement of Revenues, Expenditures and Changes in Fund Balance other Governmental Funds .. 94 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget Actual – Gas Tax Special Revenue Fund ..................................................................................................................................................................... 96 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Vehicle Impact Fees Special Revenue Fund .......................................................................................................................................... 97 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Parkland Dedication Fees Special Revenue Fund .................................................................................................................................. 98 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Lighting and Landscaping District Special Revenue Fund .............................................................................................................................. 99 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Drug Enforcement Revenue Special Revenue Fund ......................................................................................................................... 100 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Environmental Services Special Revenue Fund ........................................................................................................................................ 101 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Supplemental Law Enforcement Special Revenue Fund .................................................................................................................. 102 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Community Facilities District #1 Special Revenue Fund ....................................................................................................................... 103 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Community Facilities District #2 Special Revenue Fund ....................................................................................................................... 104 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Capital Projects Fund 105 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Measure O Capital Projects Fund ..................................................................................................................................................... 106 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – 2016 LRB Debt Service Fund ................................................................................................................................................................... 107 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Measure O Debt Service Fund ................................................................................................................................................................... 108 Internal Service Funds ........................................................................................................................................ 109 Combining Statement of Net Position – Internal Service Funds ........................................................................ 110 Combining Statement of Revenues, Expenses, and Changes in Net Position – Internal Service Funds ............ 111 Combining Statement of Cash Flows – Internal Service Funds .......................................................................... 112 Custodial Funds .................................................................................................................................................. 113 Combining Statement of Fiduciary Net Position – Custodial Funds .................................................................. 114 Combining Statement of Changes in Fiduciary Net Position – Custodial Funds ................................................ 115 Statistical Section
Description of Statistical Section Contents ........................................................................................................ 116 Net Position by Component ............................................................................................................................... 117 Changes in Net Position ..................................................................................................................................... 119 Fund Balances of Governmental Funds ............................................................................................................. 120 Changes in Fund Balances of Governmental Fund ............................................................................................ 122 Assessed and Estimated Actual – Value of Taxable Property ............................................................................ 123 Property Tax Rates – All Overlapping Governments ......................................................................................... 124 Principal Property Taxpayers ............................................................................................................................. 125 Property Tax Levies and Collections .................................................................................................................. 126

Ratio of Outstanding Debt by Type .................................................................................................................... 127 Computation of Direct and Overlapping Debt ................................................................................................... 128 Computation of Legal Bonded Debt Margin ...................................................................................................... 129 Bonded Debt Pledged Revenue Coverage – Redevelopment/Successor Agency Tax Allocation Bonds ........... 130 Demographic and Economic Statics ................................................................................................................... 131 Top Ten Principal Employers .............................................................................................................................. 132 Full-Time Equivalent City Government Employees by Function ........................................................................ 133 Operating Indicators by Function/Program ....................................................................................................... 134 Capital Assets Statistics by Function/Program .................................................................................................. 135

eidebailly.com
Introductory Section
June 30, 2022
City of Campbell

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70 North First Street· Campbell, California 95008-1423 · TEL 408.866.2111 · FAX 408.379.2572 · TDD 408.866.2790

CITY OF CAMPBELL
Finance Department

March 3, 2023

Honorable Mayor, City Council, and Citizens of Campbell

It my pleasure to submit the Annual Comprehensive Financial Report (ACFR) of the City of Campbell for the fiscal year ended June 30, 2022. The report and accompanying independent audit are published pursuant to State law and the requirements of Section 2.08.080 of the Campbell Municipal Code. The financial statements are presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with Generally Auditing Standards by an independent auditing firm of licensed certified public accountants.

While traditionally addressed to the governing legislative body of the City, this report is also intended to provide relevant financial information to the citizens of the City of Campbell, City staff, creditors, investors and other concerned readers. We encourage all readers to contact the Finance Department with any questions or comments concerning this report.

Purpose and Management Responsibility

The report consists of management’s representations concerning the finances of the City of Campbell.

Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with generally accepted accounting principles (GAAP). Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As the City’s Chief Executive Officer, I assert that, to the best of my knowledge and belief, this financial report is complete and reliable in all material respects.

Further, every attempt has been made to conform to the highest standards of public financial reporting as set forth by the following organizations:

• Governmental Accounting Standards Board (GASB);
• American Institute of Certified Public Accountants (AICPA) and its Committee on Governmental Accounting and Auditing;
• Government Finance Officers Association (GFOA) of the United States and Canada; and • California Society of Municipal Finance Officers (CSMFO).

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City of Campbell
Letter of Transmittal
June 30, 2022

Audited Financial Statements

Eide Bailly LLP, a firm of licensed certified public accountants, has audited the City of Campbell financial statements. The City’s independent audit was meant to provide reasonable assurance that its financial statements are free of material misstatement. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Campbell for the fiscal year ended June 30, 2022 are presented fairly in all material respects. After a thorough evaluation of the City’s internal controls and all required financial documents, the independent auditors rendered an unmodified (“clean”) opinion that the City of Campbell’s financial statements contained herewith are fairly presented in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial Section of this report.

Organization of Report

The Management’s Discussion and Analysis (MD&A) provides a narrative introduction, overview, and analysis of the basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Campbell’s MD&A can be found immediately following the report of the independent auditors.

In addition to meeting the requirements set forth by State law, the audit was also designed to meet the requirement of the Single Audit Act of 1984 as amended in 1996 and the U.S. Office of Management and the Uniform Guidance. The standards governing Single Audit engagements require the auditor to report on the City’s internal controls and compliance with certain legal requirements with special emphasis on the administration of federal awards. For the year ended June 30, 2022 the City did expend over $750,000 on Federal financial assistance programs; and therefore, a Single Audit will be required by March 31, 2023. The Single Audit will be prepared and presented separately from the ACFR and by the required deadline.

City of Campbell Profile

The City of Campbell is located in the heart of Silicon Valley contiguous with the City of San Jose and 50 miles south of San Francisco. The City encompasses 6.7 square miles, is substantially built out, and serves a population of approximately 42,833 as of January 1, 2022. The City is comprised of a mix of residential, office and commercial retail businesses. The City is also home to a number of community festivals and celebrations throughout the year, and it prides itself on fostering a “small town” feel despite being located in the midst of a major metropolitan region. The City’s central geographic setting within Silicon Valley makes it a desirable place to live and work.

The City was incorporated March 28, 1952, as a General Law city and operates under a Council-Manager form of government that includes five council members elected by district for a term of four years. The Mayor is selected each year by majority vote of the other Council members. The Council appoints the City Manager, City Attorney, and City Clerk. The City Council members also serve as the governing board members of the Successor Agency to the dissolved City of Campbell Redevelopment Agency and the Campbell Lighting and Landscape District, which are both included in the accompanying financial reports.

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City of Campbell
Letter of Transmittal
June 30, 2022

City Services

The City provides the following services to its residents: police and contract fire protection; park and street lighting maintenance; recreational classes, services and cultural events; planning, zoning and building review and inspections; construction and maintenance of streets and roads; and leadership provided through general administrative services. Water, sewage, garbage and electric utilities are provided directly through joint powers authorities for which the City participates.

Budgetary Policy and Control

The annual budget serves as the foundation for the City of Campbell’s financial planning and control. The budget process begins in December with each City department receiving preliminary financial information. Initial appropriation requests are made in February and study sessions are held with the City Council between February and May to discuss department goals and work plans as well as to obtain Council’s input on special priorities or concerns that should be considered in developing the budget. Subsequently, the City Manager meets with each department director to discuss the budget requests and make changes where necessary. The City Manager then prepares and presents the recommended budget in late May or early June for Council’s preliminary consideration. Adoption of the operating and capital budget document takes place in June.

Requests for increases in appropriations or adjustments to capital projects require approval by the City Council.

Changes in appropriations during the year must be submitted by the City Manager to the City Council for review and approval, and must be accompanied by appropriate fiscal impact analysis.

Economic Condition and Outlook

National, State and Local Economies—While Silicon Valley is best known for its significant concentration of high technology and electronics research, development and manufacturing, the area also supports a wide variety of retail, office and personal services industries. Historically, this region has experienced cycles of expansion and contraction and has led the nation in productivity, innovation and economic growth for much of the past two decades. The region is home to numerous institutions of higher learning and education that support a broad base of research and development in advanced technology and design.

Similar to other areas of the world though, the United States, California, and the San Francisco Bay Area continued to recover from the effects of the COVID-19 pandemic while also facing inflationary pressures due to supply chain backlogs, the war in Ukraine, and other factors. Nevertheless, the nation’s economy saw GDP growth equaling 3.2% in the third quarter of 2022; following a GDP decrease equaling 0.6% in the second quarter of 2022. Such an increase in the third quarter of 2022 was the result of both pent up demand from the pandemic, but also inflation driving higher overall prices for goods and services. Due to these mixed economic factors and uncertainty, stock market prices within the Dow Jones Industrial Average decreased by 10.3% over the course of fiscal year. As inflationary concerns persist, the Federal Reserve tightens its monetary policy in response, and economic uncertainty, with both favorable and unfavorable indicators prevailing, the economy and the stock market will continue to be uneven.

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City of Campbell
Letter of Transmittal
June 30, 2022

As of the end of the fiscal year, per the California Employment Development Department (EDD) and the Bureau of Labor Statistics (BLS), the City of Campbell had an unemployment rate of 4.8%, Santa Clara County had an unemployment rate of 1.9%, California had an unemployment rate of 4.2%, and the United States had an unemployment rate of 3.6%. For comparison purposes, during the early stages of the COVID-19 pandemic, , the national unemployment rate was 11.1% in June 2020. Overall, it appears the U.S. economy will again continue to show mixed results throughout the coming fiscal year, but may or may not move towards a recession.

Local Economy

Here in the local region of the Silicon Valley, despite the lingering effects of the COVID -19 pandemic, the demand for residential housing continued to stimulate construction and development activity in FY 2021- 22 with sales transactions and median prices reflecting an under-supply in building stock. Because of the unique setting of this region, and the fact that many of the surrounding cities have limited capacity for new housing, most property values continued to greatly appreciate in FY 2021-22. This is predominantly due to the fact that demand in this region regularly exceeds the supply despite the high cost of housing. Such demand and continued growth in residential sales prices and activity was also due to low mortgage interest rates in FY 2021-22, which made home purchases less expensive. However, the housing market has recently slowed in the current fiscal year due to inflationary concerns which have caused the Federal Reserve to raise interest rates. Both home sales activity and price, while still high, have fallen since the start of the current fiscal year and are expected to decline further or stay flat until interest rates decrease.

Commercial development activity in Campbell also continued to be strong in FY 2021-22, despite staffing challenges at many businesses as well as limited staffing capacity at the City to review and process development applications. While the Silicon Valley though continues to be a leader in innovation an d productivity, interest in commercial developments in the current fiscal year will be dependent on greater economic stability in the region and nationwide.

Campbell is home to a diversified economic base of business segments located throughout the community.

There are over 5,000 businesses in the City that generated approximately $16.4 million in sales and use tax revenue, an increase of 17.4% from the previous fiscal year due to ongoing economic recovery from the COVID-19 pandemic. The largest categories of sales tax producers comprise restaurants and hotels, building and construction, business and industry, and general consumer goods.

Relevant Financial Policies

Because of the many economic and fiscal uncertainties that constantly confront the City, and to address the financial impacts created by these issues, the City has taken necessary steps to preserve its fiscal health. The City incorporates long-term financial planning into its budget process. For example, it has established financial and budgetary policies monitored by the City Council that ensure operating revenues are available to fund operating expenditures resulting in a balanced budget. The City has also designated a Reserve for Economic Fluctuations; the purpose of which is to serve as a buffer for those revenue sources most significantly impacted by downturns in the economy and enable the City to better withstand an economic recession. The City’s financial policies specify target funding of two months of General Fund expenditures. Moreover, the City’s 7-year projections include anticipated increases in retirement costs over the next several years due to changes in actuarial assumptions and underperforming retirement pool investment assets. In addition, there are other reserves set aside for both operating as well as emergency purposes to provide the City a financial “safety net” during the next economic slowdown.

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City of Campbell
Letter of Transmittal
June 30, 2022

Cash Management

The City manages a pooled investment program for all funds in which temporarily idle cash is invested in a variety of instruments. The investment program is managed in accordance with the Investment Policy approved by the City Council. Safety, liquidity, and yield in that order, are the objectives of the investment program. Investments are diversified among investment tools that include certificates of deposit, Federal agency securities and the State of California’s Local Agency Investment Fund (LAIF). Quarterly reports on investment status and activity are presented to the City Council.

Capital Improvement / Capital Asset

A five year Capital Improvement Plan is approved on an annual basis with first year projects adopted in conjunction with the operating budget. Sufficient financial commitment is made to preserving the City’s investment in its public facilities (buildings, streets, parks, equipment, etc.) to assure preservation of these assets. Equipment replacement and maintenance is projected and funded throughout its useful life. The annual capital improvement budget includes projects which funding source is reasonably assured and can be started within the fiscal year.

Major Initiatives

The City of Campbell City Council and the City’s management team have dedicated significant attention and resources accomplishing the City’s goals and objectives. And for the upcoming fiscal year, Council priorities are to address Comprehensive Long-Term Land Use Planning, Measure O Implementation, Financial Recovery, and Sustainability. The City also seeks to complete a General Plan Update and Housing Element, prioritize and maintain essential services and evaluate service level adjustments, develop a strategic staffing plan, strategically use federal ARPA funds, plan for infrastructure and building maintenance, and prepare a Climate Action Plan.

A number of capital projects were completed over the course of the fiscal year 2021-22, including the conceptual designs for the two Measure O Projects – the Library Renovation and the construction of a new Police Building, which will lead directly into the development of the construction plans for both projects. It is also worth noting the completion of a new All-Inclusive Playground at John D. Morgan Park, the Annual Street Maintenance project which focused resurfacing local and collector streets throughout the City, as well as various traffic calming and bike/ped safety improvements throughout the City. Additionally, a number of notable capital projects were also started during fiscal year 2021-22, including the Campbell Park Improvements (playground renovation and restroom replacement), the Harriet Avenue Safe Routes to School project, resurfacing the all- weather track at the Community Center (using federal CDBG funds) and various HVAC and safety upgrades at the Community Center. All of these projects are scheduled to be completed during fiscal year 2022-23.

The City also came to agreement with all its labor groups on three-year contracts that will provide employees fair compensation and benefits and the City cost certainty and control.

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City of Campbell
Letter of Transmittal
June 30, 2022

Awards (Financial and Budgetary)

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Campbell for its Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2021. The Certificate of Achievement is a prestigious national award that recognizes conformity with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized Annual Comprehensive Financial Report whose contents conform to program standards. The ACFR must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. The City has received a Certificate of Achievement for the past 33 consecutive fiscal years. We believe our current report continues to conform to the Certificate of Achievement Program's requirements, and we are again submitting it to determine its eligibility for another certificate.

The City also received the GFOA’s Distinguished Budget Presentation Award for its annual budget document for the fiscal year 2021-22. This is the 29th consecutive year of receiving this award. In order to receive this award, the budget document was judged to be proficient in several categories, including as a policy document, a financial plan, an operations guide, and a communications device.

Acknowledgements

The preparation and publication of this report was made possible by the dedicated service of the entire Finance Department under the leadership of the Finance Director and the Finance Manager. Each member of the Department has my sincere appreciation for the many contributions made in the preparation of this report. In addition, I wish to extend a special thanks to the Finance Department Staff for their hard work in producing this document.

Appreciation is also extended to City departments for their support in planning and conducting the fiscal functions of the City, the commitment of all City employees, as well as the Mayor and City Council for their support and encouragement toward achieving and maintaining the highest standards for the management of the City of Campbell’s finances. Through continued partnership with the community that we serve, the City of Campbell will continue to be a leader in effective municipal governance and maintain high quality of life.

Respectfully submitted,

Will Fuentes
Finance Director

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City Officials

City Council

Mayor – Liz Gibbons

Vice Mayor – Paul Resnikoff

Councilmember – Anne Bybee

Councilmember – Susan Landry

Councilmember – Sergio Lopez

Note: Mayor serves an annual term from December to December.

Names and positions are as of July 1, 2021.

City Administrative Staff

City Manager – Brian Loventhal

Assistant City Manager – Vacant

City Clerk – Dusty Christopherson

City Attorney – William Seligmann

Community Development Director – Rob Eastwood

Finance Director – Will Fuentes

Acting Human Resources Manager – Salina Flores

Information Technology Manager – Cecil Lawson

Police Chief – Gary Berg

Public Works Director – Todd Capurso

Acting Recreation & Community Services Director – Natasha Bissell

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Commissions, Committees, and Advisory Boards

Planning Commission Parks and Recreation Commission
Stuart Ching, Chairperson Robert Fidrych Jr., Chairperson Maggie Ostrowski, Vice Chairperson Liraz Abraham, Vice Chairperson Adam Buchbinder Frank Beitz
Nicholas Colvill Sherrie Doherty
Terrence Hines Allen Ishibashi
Michael Krey Traci Mitchell
Andrew Rivilin Sharon Teeter

Civic Improvement Commission Building Board of Appeal
William Kaufman, Chairperson Bruno Marcelic
Davis Fields, Vice Chairperson Jim Morelan
Chris Bracher Jay Perrine
Jennifer Dooley Kevin Salazar
Carol Hoffman Todd Zeman
Maryanne Yoshikawa

Historical Preservation Board Rental Fact Finding Committee D. Michael Foulkes, Chairperson William Pierce
Todd Walter, Vice Chairperson
Laura Taylor Moore
Susan Blake

Bicycle/Pedestrian Committee
Carmen Lynaugh, Chairperson
David Sadjord, Vice Chairperson
Mark Nakamura
Matt Schroeder
Barton Smith

Note: Names and Positions as of June 21, 2021
eidebailly.com

Financial Section
June 30, 2022
City of Campbell

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4040 Campbell Ave., Ste. 200 | Menlo Park, CA 94025-1053 | T 650.522.3400 | F 650.645.7393 | EOE

1 Independent Auditor’s Report

The Honorable City Council
City of Campbell, California

Report on the Audit of the Financial Statements

Opinions

We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Campbell (City), California as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2022, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter

Adoption of New Accounting Standard

As discussed in Note 17 to the financial statements, the City has adopted the provisions of Government Accounting Standards Board (GASB) Statement No. 87, Leases, for the year ended June 30, 2022.

Accordingly, a restatement has been made to the governmental activities and Internal Service Fund net position as of July 1, 2021, to restate beginning net position, and fund balance of the General Fund. Our opinions are not modified with respect to this matter.

2 Correction of Error

As discussed in Note 17 to the financial statements, certain errors resulting in an overstatement of amounts previously reported for accounts receivable, understatement of loans and an understatement of the net pension and net OPEB liabilities, as of July 1, 2021, were discovered by management of the City during the current year. Accordingly, a restatement has been made to the other grants fund balance, internal service funds and governmental activities net position as of July 1, 2021, to correct the error. Our opinions are not modified with respect to that matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we

• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.

3 • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, the Schedule of Changes in the Pension Liability and Related Ratios – CalPERS Miscellaneous Plan, the Schedule of Pension Contributions – CalPERS Miscellaneous Plan, the Schedule of Proportionate Share of the Net Pension Liability – CalPERS Safety Plans, the Schedule of Pension Contributions – CalPERS Safety Plan, the Schedule of Changes in the Net OPEB Liability and Related Ratios, the Schedule of OPEB Contributions, the Budgetary Comparison Schedules for the General Fund and each Major Special Revenue Fund, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining fund financial statements and individual schedules of revenues, expenditures, and changes in fund balance – budget and actual are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.

The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the combining fund financial statements and individual schedules of revenues, expenditures, and changes in fund balance – budget and actual are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

4 Other Information

Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated March 3, 2023, on our consideration of the City ’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City ’s internal control over financial reporting and compliance.

Menlo Park, California
March 3, 2023

5 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

Management’s Discussion and Analysis

The management of the City of Campbell, California (City) presents this narrative overview and analysis of the financial activities of the City as of, and for the fiscal year ended June 30, 2022. Since Management’s Discussion and Analysis (MD&A) is designed to focus on the current year’s activities, resulting changes, and currently known facts, we encourage readers to consider the information presented herein in conjunction with additional information furnished in the Letter of Transmittal and the accompanying Basic Financial Statements.

Fiscal Year 2021-22 Financial Highlights

City-wide, the City ended its fiscal year with total revenues of $72.5 million, an increase of $8.1 million from the previous year, and total expenses of $60.7 million, a decrease of $0.3 million compared to the previous year.

Excluding property taxes, general revenues; comprised of sales tax, transient occupancy tax and other revenues, increased $3.4 million.

Other financial highlights of the past year are as follows:

City-wide

• Total City assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $50.2 million. Of this amount, $60.3 million represents the net investment in capital assets while $22.0 million is restricted for various purposes including affordable housing, streets and roads, community development and debt service. The negative $32.1 million in unrestricted net position increased by $7.2 million since last year.
• Total net position increased from the previous year by $11.8 million primarily attributable to an increase in cash and investments, partially offset by an increase in noncurrent liabilities.

Fund level

• Total governmental fund balances were $94.9 million at fiscal year-end, an increase of $34.5 million from the previous year.
• General Fund revenues, excluding transfers, increased $7.8 million to $56.4 million from the previous year. Related expenditures increased by $2.0 million from the previous year to $52.0 million. • General Fund’s fund balance increased $1.0 million to $21.9 million at fiscal year-end. • Total Committed General Fund balance of $3.5 million is for future contingencies and capital improvement projects. Total Assigned General Fund balance of $3.9 million is for CalPERS retirement costs and other post-employment benefits, and the remainder for general government. The Total General Fund balance represent a 42.1% reserve ratio to General Fund expenditures excluding transfers out.

6 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

Overview of the Financial Statements

The City is required to present its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) as promulgated by the Government Accounting Standard Board (GASB) pronouncements. The City of Campbell’s Basic Financial Statements are comprised of three components: 1) government-wide financial statements 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other supplementary information in addition to the Basic Financial Statements.

Government-wide Financial Statements - These statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. They consist of the statement of net position and statement of activities. The statements are reported on the full accrual basis of accounting and eliminate any duplicate activity between City funds.

The statement of net position presents information on all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources including capital assets and long-term debt, with the difference between the four reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. It encompasses all revenues and expenses and reports them based on when they are earned or incurred, respectively, rather than the timing of the related cash flows.

The City has only governmental activities that are primarily supported through taxes and intergovernmental revenues. The government-wide financial statements include Campbell Lighting and Landscape District, a legally separate entity that is under the control of the City and for which the City retains financial accountability.

Fund Financial Statements - A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Campbell, like other state and local governments, uses fund accounting on a day-to-day basis to ensure and demonstrate compliance with finance- related legal requirements. These statements focus on more short-term reporting related to current revenues, expenditures and fund balances. They do not include capital assets or long-term liabilities. The City’s funds can be divided into two categories: governmental funds and fiduciary funds.

Governmental funds are used to account for essentially the same functions reported as governmental activities in the City-wide financial statements. However, unlike the City-wide financial statements, governmental fund financial statements focus on inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near- term financing requirements.

7 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

Because the focus of governmental funds is narrower than that of the government-wide statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the City-wide financial statements. By doing so, a better understanding may result of the long-term impact of the City’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City of Campbell maintains individual governmental funds. Information for the General Fund, Housing Assets Special Revenue Fund and Capital Projects Fund is presented separately in the fund statements as they are considered major funds of the City. The data for the remaining funds are shown in the aggregate in the financial statements. However, the individual fund data for each of these non-major funds is provided as supplemental information in the form of combining statements.

The City of Campbell adopts an annually appropriated budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget.

Fiduciary funds are used to account for resources held for the benefit of parties outside of the City. Fiduciary funds are not reflected in the City-wide financial statements because the resources of those funds are not available to support the City’s own programs. Accordingly, only assets and liabilities are reported for these funds. The City reports three agency funds, representing a joint powers authority, a local improvement district, and a task force. It also reports a Private Purpose Trust Fund which consists of the Successor Agency to the former Campbell Redevelopment Agency, which was dissolved by State legislation on February 1, 2012.

Notes to the Basic Financial Statements - The notes provide additional information that is essential to a full understanding of the data provided in the City-wide and fund financial statements. They can be found immediately following the financial statements.

Other Information - In addition to the basic financial statements and accompanying notes, this report also presents certain supplemental information in the form of budget and actual schedules for major governmental funds other than the general fund; combining statements for non-major governmental funds and the City’s internal service funds; and a statement of changes in assets and liabilities for the City’s fiduciary funds.

8 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

Government-Wide Financial Analysis

These City-wide financial statements provide information about the City’s overall financial picture from the perspective of all the City’s governmental funds. The analysis focuses on the net position and changes in net position at the City-wide level as presented in the statement of net position and statement of activities. Net positions for the City are summarized below as of June 30 and an analysis follows (in millions):

2022 2021
Cash and Investments 98.3$ 56.7$
Capital Assets 76.0 69.1
Other Assets 21.8 21.5
Total assets 196.1 147.3
Deferred Outflows of Resources 15.1 15.6 Noncurrent Liabilities 74.2 40.9 Other Liabilities 18.7 10.8
Net OPEB Liability 4.7 4.0
Net Pension Liability 38.1 64.2
Total liabilities 135.7 119.9
Deferred Inflows of Resources 25.3 4.6 Net Position
Net investment in capital assets 60.3 56.2 Restricted 22.0 21.5
Unrestricted (32.1) (39.3)
Total net position 50.2$ 38.4$
Governmental Activities

The changes in net position were comprised of the following elements:

• Cash and investments increased by a net of $41.6 million, which is primarily due to the issuance of Measure O Series 2022 general obligation bonds.
• Net capital assets increased by $6.9 million. The increase is due to $10.3 million in capital asset additions, entirely from an increase to construction in progress. The additions are offset by an additional $3.4 million of accumulated depreciation.
• Other assets such as taxes, leases, and notes receivables increased by a net of $0.3 million. • Deferred outflows of resources decreased $0.5 million, of which is attributed to a decrease of $1.9 million for amounts related to pensions and an increase of $1.4 for amounts related to other post- employment benefits (OPEB). These amounts include deferred contributions that will be recognized as a reduction to the net pension or OPEB liability next year, change in assumptions, and the net differences between projected and actual earnings on plan investments that is being amortized and recognized as a component of pension expense over future periods. • Noncurrent liabilities increased $33.3 million, which is a result of the issuance of the Measure O Series 2022 general obligation bonds.

9 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

• Other liabilities increased by $7.9 million primarily due to a $2.3 million increase to accounts payable and a $5.0 million increase in unearned revenues from the second tranche of American Rescue Plan Act. • Net Pension Liability decreased $26.1 million, mainly as a result of strong CalPERS investment returns of

21.3% from the 2020-21 fiscal year. The strong returns are also the primary reason for the $20.7 million increase to deferred inflow of resources.
• Net investment in capital assets increased by $4.1 million mainly due to ongoing capital projects and the issuance of Measure O bonds, which are to be used towards building a new Police Station and renovating the Library.
• Restricted net position assets have external limitations placed upon them regarding how they may be spent. These assets, which increased by $0.5 million, may be restricted for debt service, capital projects, or housing programs.

On the following page is a summary of the components that resulted in the change to net position for the fiscal year ended June 30:

2022 2021
Revenues
Program revenues
Charges for services 12.9$ 10.8$
Operating grants and contributions 4.0 7.1 Capital grants and contributions 6.7 3.5 General revenues
Property taxes 23.5 21.0
Sales and use taxes 16.4 14.0
Other taxes 7.9 6.5
Investment Income (1.1) 0.1
Miscellaneous 2.2 1.4
Total revenues 72.5 64.4
Expenses
General government 7.8 7.7
Recreation 4.9 4.3
Community development 2.9 2.9
Public safety 30.9 32.0
Public works 13.0 13.0
Interest on long term debt 1.3 1.1 Total expenses 60.8 61.0
Change in Net Position 11.7 3.4
Beginning of Year, restated 38.4 35.0 End of Year 50.1$ 38.4$
Governmental Activities
Changes in Governmental Net Position (in millions)

10 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

Government-wide net position increased $11.8 million from the prior year. Key elements of activity are as follows:

Revenues

• Within program revenues, charges for services increased $2.1 million largely due to an increase in Recreation programmatic revenues as a result of a increased participation within Recreation summer programs and the loosening of COVID-19 restrictions. While operating grants and contributions decreased $3.1 million, capital grants and contributions increased $3.2 million.

The increase is attributed to the $3.9 million CalOES State Grant to be used towards the Police Operations Building.
• Within general revenues, property tax revenues increased $2.5 million reflecting continued strength in the real estate market as assessed values on secured residential and commercial properties continue to grow. Furthermore, of the $23.5 million in Property Tax Revenues collected government-wide, $2.2 million is attributed to the levies as a result of the 2018 passage of Measure O.
• General tax revenue, other than property tax, increased by $3.4 million. The increase is attributed to an increase to sales tax and transient occupancy tax by $2.0 million and $1.1 million, respectively.
• Other revenue including investment income and miscellaneous revenue did not significantly change.

Expenses

• General Government expenses did not significantly change, increasing just $0.1 million from the prior fiscal year.
• Recreation expenses increased $0.6 million largely due to increased temporary staffing costs for increased services and programs provided.
• Community Development expenses did not significantly change, decreasing just $0.1 million from the prior year.
• Public Safety expenses decreased $1.1 million due to the sunset of a high-cost amortization base, reducing the City’s annual required contribution towards the CalPERS unfunded liability. • Public Works expenses decreased $2.0 million due to a decrease in expenses as it relates to capital projects.
• Interest on long-term debt increased $0.2 million as a result of debt service payment for the Measure O general obligation bond.

Financial Analysis of Fund Financial Statements

Combined governmental fund balances at fiscal year-end were $94.9 million, an increase of $34.5 million from the previous year. The City has Restricted, Committed, Assigned and Unassigned fund balances of $72.9 million; $3.5 million; $4.9 million and $13.6 million, respectively, at year end.

11 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

Governmental fund revenues, excluding transfers, were $72.5 million, increasing $7.7 million from the previous year. Property taxes were higher by $2.5 million due to continued strength in the real estate market as well as levies from the 2018 passage of Measure O. Sales and use tax grew by $2.0 million as the economic recovery from COVID-19 continues its positive trajectory. Other taxes such as transient occupancy tax increased for a combined $1.4 million as a result of loosening COVID-19 restrictions. Lastly, charges for services increased by $3.1 million due to an increase in Recreation programmatic revenues as a result of a increased participation.

Governmental fund expenditures, excluding transfers, increased from the prior year by a net amount of $1.5 million to $73.0 million. The majority of the increase is attributed to an increase in debt service payments.

Analysis of Major Governmental Funds

General Fund

Property Tax is the General Fund’s largest revenue source. While budgeted at $18.6 million, actual property tax revenue received was $19.5 million. That represents $0.9 million or 5.0% greater than budgeted. The positive variance is attributed to the Educational Revenue Augmentation Fund (ERAF) from which the City received $2.1 million or $0.7 million higher than budgeted.

Sales and Use Tax is the General Fund’s second largest revenue source, budgeted at $15.6 million. The City received $16.4 million or $0.8 million over the final budget due to ongoing economic recovery from the COVID- 19 pandemic. The largest categories of sales tax producers comprise of restaurants and hotels, building and construction, business and industry, and general consumer goods.

Charges for services amounted to $4.8 million, which is comprised largely of fees for services provided by the Recreation, Community Development, and Public Works departments. The City received $0.6 million or 14.7% greater than budgeted. The positive variance is attributed to increased participation within Recreation programs as well as increased revenues from engineering fees.

General Fund expenditures, excluding transfers, were $52.0 million, an increase of $2.0 million from the previous year. When compared to the final budget, general fund expenditures were $0.8 million or 1.5% under budget. The savings is attributed completely to the Community Development department which incurred $3.1 million in expenditures, 29.1% under budget. The positive variance is due to lower than expected incurred expenditures as it relates to professional services, more specifically for the General Plan Update and Housing Element.

The General Fund’s fund balance at fiscal year-end was $21.9 million, an increase of $1.0 million from the previous year. Actual ending fund balance was greater than projected by $4.8 million or 28.0%. This is completely due to the General Fund’s higher than expected revenues and lower incurred expenditures.

Committed and Assigned fund balances at year end were $3.5 million and $3.9 million, respectively. These balances are utilized to fund operational costs such as capital projects, compensated absences, and to maintain a reserve for PERS and OPEB related costs. Unassigned fund balance of $14.5 million serves as an additional reserve for unanticipated needs that may arise including a $10.0 million reserve for economic fluctuations and $3.2 million for emergencies.

12 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

Housing Assets Special Revenue Fund

The principal assets of this fund consist of long-term housing loans receivable from various housing programs which were formerly administered by the Campbell Redevelopment Agency. Limited funds are available for new homebuyers, consisting primarily of loan repayment proceeds and interest earnings. The Housing Assets fund balance did not significantly change from the prior year. Its fund balance decreased by $0.2 million from $9.0 million to $8.8 million.

Other Grants Special Revenue Fund

The Other Grants Special Revenue Fund accounts for Federal, State and local grant funds which are provided for specific purposes. The Other Grants fund balance increased by $1.2 million from the prior year primarily due the receipt of local grant reimbursements that were utilized towards capital street projects. Revenues, excluding other financing sources, totaled $3.1 million. While revenues were $1.5 million lower than the previous year, the Other Grants fund had an excess of $2.5 million revenues over expenditures.

ARPA Special Revenue Fund

The American Rescue Plan Act (ARPA) Special Revenue fund accounts for ARPA federal grant funds which are provided for specific purposes. The ARPA fund balance did not significantly change from the prior year. Its fund balance decreased by $48,225 solely due to an unrealized loss in investments.

Capital Projects Fund

The Capital Projects Fund accounts for the expenditures and financing of the City’s capital projects. Year over year, the capital projects fund balance increased by $32,985 or 3.6%. While the fund incurred over $8.9 million in capital outlay expenditures, those expenditures were financed primarily through the General Fund, various State and Local Grants, and bond proceeds.

Measure O Capital Projects Fund

The Measure O Capital Projects Fund accounts for the expenditures and financing of the City’s capital projects related to the Measure O bond. In August 2020, the City issued $20 million of general obligation bonds in the first of two series of issuances. In May 2022, the City issued an additional $30 millions of general obligation bonds to fund the construction of a police operations building as well as the renovation of the City library.

The Measure O Capital Projects fund balance increased by $31.7 million when compared to the prior year. This increase is due to the aforementioned $30 million bond issuance as well as the receipt of a $3.9 million State CalOES grant, offset by continued capital outlay expenditures of $1.8 million.

13 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

Other Governmental Funds

Other Governmental Funds are comprised of separate special revenue and debt service funds. These funds are not separately presented in the basic financial statements, but are individually presented as supplemental information. Other Governmental Funds, as a whole, increased by $0.9 million for an ending balance of $13.7 million. This increase is entirely due to the Measure O Debt Service Fund, whose fund balance increased by $2 million from increased property taxes

General Fund Budgetary Highlights

The table below summarizes the General Fund Budgetary Highlights as follows:

Variance with
Final Budget
Original Final Actual Positive(Negative)
Revenues
Property taxes 18,847,020$ 18,583,168$ 19,510,782$ 927,614$ Sales and use taxes 15,521,900 15,587,825 16,419,363 831,538 Other taxes 7,210,365 7,637,896 7,894,351 256,455 Licenses and permits 2,738,858 3,319,200 3,742,393 423,193 Fines and forfeitures 160,000 62,000 222,721 160,721 Investment income 395,900 207,282 (317,035) (524,317) Rents and leases 2,116,800 2,556,900 2,779,743 222,843 Intergovernmental 5,839,504 1,001,924 985,556 (16,368) Charges for services 3,310,465 4,223,576 4,843,231 619,655 Miscellaneous 198,368 350,164 351,275 1,111 Total Revenues 56,339,180 53,529,935 56,432,380 2,902,445 Expenditures
General government 8,119,160 8,424,463 8,013,208 411,255 Recreation 4,577,760 4,305,549 4,581,380 (275,831) Community development 2,809,540 4,399,943 3,120,856 1,279,087 Public safety 29,158,747 29,606,218 30,535,865 (929,647) Public works 5,954,661 6,064,683 5,750,103 314,580 Debt service 500 500 23,957 (23,457) Total expenditures 50,620,368 52,801,356 52,025,369 799,444 Excess (deficiency) of revenues
over (under) expenditures 5,718,812 728,579 4,407,011 3,678,432 Other financing sources (uses)
Transfers in 791,371 868,847 866,425 (2,422) Transfers out (4,363,725) (5,380,320) (4,263,095) 1,117,225 Total other
financing sources (uses) (3,572,354) (4,511,473) (3,396,670) 1,114,803 Net change in fund balance 2,146,458 (3,782,894) 1,010,341 4,793,235 Fund balance at beginning of year 20,916,450 20,916,450 20,916,450 - Fund balance at end of year 23,062,908$ 17,133,556$ 21,926,791$ 4,793,235$ Budgeted Amounts

The General Fund realized an excess of revenues over expenditures of $4.4 million, excluding transfers. General Fund revenues, excluding transfers, increased $7.8 million from the previous year to $56.4 million. When compared to the final budget, general fund revenues were $2.9 million or 5.4% greater than budgeted.

14 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

Capital Assets

The City had net capital assets of $76.0 million as of June 30, 2022. The following is a summary of the City’s capital assets for the fiscal year ended June 30:

2022 2021
Land 9.1$ 9.1$
Construction in progress 17.5 8.3
Building & improvements 26.6 26.2
Right-of-Use intangible assets 0.3 0.3
Machinery & equipment 13.3 13.1
Infrastructure 60.2 59.7
Less: Accumulated depreciation (51.0) (47.6) Net capital assets 76.0$ 69.1$
Capital Assets (in millions)

Total additions to capital assets were $10.3 million during the year consisting primarily of machinery, equipment, and construction in progress. The additions were partially offset by an increase of $3.4 million in accumulated depreciation. Additional detail on capital assets can be found in Note 5 of the notes to the basic financial statements.

Debt Administration

In August 2016, the City and its Successor Agency concurrently refinanced a combined four outstanding debt issues to achieve significant interest savings for the City and the Agency, given the low rate environment that existed for the past couple of years. In August 2020, the City issued $20 million of general obligation bonds followed by an additional $30 million issuance in May 2022 to fund a police emergency operations center and a renovated library. Additional detail regarding the City’s long-term debt can be found at Note 6 in the notes to financial statements. The Successor Agency debt is reported in a Private Purpose Trust separate from the City’s financial statement reporting entity. The debt obligations appear on the Fiduciary Funds Statement of Net Position of the ACFR. Total outstanding debt of the Successor Agency for the refunding tax allocation bonds was $16.1 million at June 30, 2022.

The City had $3.9 million in outstanding certificates of participation, $4.6 million in refunding lease revenue bonds, and $47.2 million of 2018 election general obligation bonds and $4.4 million in other debt outstanding at June 30, 2022.

15 City of Campbell
Management’s Discussion and Analysis
June 30, 2022

Economic Outlook and Next Year’s Budget

As previously stated, the nation’s economy saw GDP growth equaling 3.2% in the third quarter of 2022; following a GDP decrease equaling 0.6% in the second quarter of 2022. The third quarter increase was a result of pent up demand from the pandemic, but also inflation driving higher overall prices for goods and services. As inflationary concerns persists, the Federal Reserve tightens its monetary policy in response, and economic uncertainty, with both favorable and unfavorable indicators, prevails, the economy will continue to be uneven.

In the City of Campbell, the unemployment rate continues to improve from the peak of the pandemic. In 2020, unemployment in Campbell reach 8.5%, but have since improved to 2.2%. This reflects an unemployment rate that is lower than pre-pandemic years.

For the FY23 budget, as to ensure long-term fiscal stability and to recover from the pandemic, staff developed and Council approved several strategic and operational actions that would place the City in a more stable financial position progressing into FY23 and beyond. In developing the FY23 budget, the following information was used:

• Property tax revenues are expected to grow 6.3% compared to FY22 due to continued appreciation in the property tax base. While higher mortgage interest rates has slowed demand and sales in the commercial and residential real estate markets, the median sale price of single family homes in Campbell has remained steady.
• Sales tax revenue is estimated to increase 2% when compared to FY22. While optimistic, City staff remains conservative due to supply chain disruptions, inflationary pressures, the war in Ukraine, and lingering pandemic effects that can provide headwinds to consumer and business spending and further economic growth.
• Charges for Service is historically the City’s third largest revenue source. While it is estimated to increase by 33.1% in FY23, it will still be slightly below pre-recessionary levels of approximately $6.7 million in FY19.
• Transient Occupancy Tax is estimated to increase 33.3% in FY23 when compared to FY22. However, similar to charges for service, it will still be below pre-recessionary levels. • Employee Services costs are expected to increase by 8.0% in FY23 when compared to FY22.

Contacting the City

This financial report is designed to provide a general overview of the City of Campbell’s finances for residents, taxpayers, investors, creditors and any other interested parties. Questions about this report may be directed to the City’s Finance Department at 70 N. First St., Campbell, CA 95008 or by e-mail at [email protected].

16 City of Campbell
Government Wide Financial Statements
June 30, 2022

The Statement of Net Position and the Statement of Activities summarize the entire City’s financial activities and financial position. They are prepared on the same basis as is used by most businesses, which means they include all the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, as well as all its revenues and expenses. This is known as the full accrual basis of accounting. The effect of all the City’s transactions is considered, regardless of whether or when cash changes hands.

The Statement of Net Position reports the difference between the City’s total assets and deferred outflows of resources and the City’s total liabilities and deferred inflows of resources, including all the City’s capital assets and all its long-term debt. It focuses the reader on the composition of the City’s net position, by subtracting total liabilities and total deferred inflows of resources from total assets and total deferred outflows of resources. The Statement of Net Position summarizes the financial position of all the City’s Governmental Activities in a single column.

The City’s Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Debt Service and Capital Projects Funds. Since the City’s Internal Service Funds service these Funds, their activities are consolidated with Governmental Activities, after eliminating inter-fund transactions and balances.

The Statement of Activities reports increases and decreases in the City’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the City’s revenues and all its expenses, regardless of when cash changes hands.

The format of the Statement of Activities presents the City’s expenses first, which are listed by program.

Program revenues - that is, revenues which are generated directly by these programs - are then deducted from program expenses to arrive at the net expense of each governmental program. The City’s general revenues are then listed in the Governmental Activities column, 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 City of Campbell Lighting and Landscape District, which is a legally separate but blended component unit of the City because it is controlled by the City, which is financially accountable for its activities.

See Notes to Financial Statements 17
City of Campbell
Statement of Net Position
June 30, 2022

Governmental
Activities
Assets
Cash and investments 98,323,612$
Cash held with fiscal agent 11,945
Receivables
Taxes 3,770,743
Accounts 7,598,050
Interest 124,650
Notes and loans 7,828,726
Leases 2,429,813
Deposits 90,000
Capital assets, not depreciated or amortized 26,633,241 Capital assets, net depreciation and amortization 49,319,107 Total assets 196,129,887
Deferred outflows of resources
Amount related to pensions 12,910,854
Amount related to OPEB 2,164,212
Total deferred outflows of resources 15,075,066
Liabilities
Accounts payable 5,821,674
Accrued expenses 2,328,219
Interest payable 435,347
Deposits payable 2,345,631
Unearned revenues 7,783,104
Noncurrent liabilities
Due in less than one year
Bonds, leases, notes, loans, claims, compensated absences 6,961,434 Due in more than one year
Bonds, leases, notes, loans, claims, compensated absences 67,281,981 Net OPEB liability 4,667,047
Net pension liability 38,138,000
Total Liabilities 135,762,437
Deferred inflows of resources
Amount related to leases 2,379,188
Amount related to pensions 21,889,807
Amount related to OPEB 986,093
Total deferred inflows of resources 25,255,088
Net Position
Net investment in capital assets 60,313,314
Restricted for
Debt service 5,398,081
Streets and roads 3,968,271
Museum and adult center 22,212
Public safety 381,865
Low and moderate income housing 8,769,934
Community development 3,489,591
Unrestricted (32,155,840)
Total net position 50,187,428$

See Notes to Financial Statements 18
City of Campbell
Statement of Activities
Year Ended June 30, 2022

Net (Expenses)
Revenues and
Change in Net
Position
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions
Governmental
Activities
Governmental Activities
General government 7,780,899$ 1,814,425$ 172,906$ -$ (5,793,568)$ Recreation 4,942,719 2,864,338 347,722 - (1,730,659) Community development 2,853,912 4,516,534 628,296 - 2,290,918 Public safety 30,801,294 883,254 474,372 3,900,000 (25,543,668) Public works 13,002,919 2,793,430 2,410,103 2,845,712 (4,953,674) Interest expense and
other charges 1,319,942 - - - (1,319,942) Total governmental activities 60,701,685$ 12,871,981$ 4,033,399$ 6,745,712$ (37,050,593) General revenues
Taxes
Property 23,469,044
Sales and use 16,419,363
Transient occupancy 2,657,334
Franchise 3,690,355
Other 1,537,676
Payments in lieu of taxes 47,981
Investment income (1,114,797)
Miscellaneous 2,170,315
Total general revenues 48,877,271
Change in net position 11,826,678
Net Position At Beginning of Year, as restated 38,360,750 Net Position At the End of Year 50,187,428$
Program Revenues

19 City of Campbell
Government Fund Financial Statements
June 30, 2022

Major funds are defined generally as having significant activities or balances in the current year.

The funds described below were determined to be Major Funds by the City in fiscal year 2022. Individual other governmental (nonmajor) funds may be found in the Supplemental Section.

General Fund

Accounts for activities traditionally associated with governments, such as administration, recreation, community development, engineering, and public safety, which are not required to be accounted for in another fund.

Housing Assets Special Revenue Fund

Accounts for assets of the City’s Successor Housing Agency, formed to take over certain housing assets from the former Redevelopment Agency Low-Moderate Income Housing Fund upon its dissolution by the State of California.

Other Grants Special Revenue Fund

Accounts for Federal, State and local grant funds which are provided for specific purposes.

ARPA Special Revenue Fund

Accounts for American Rescue Plan Act (ARPA) federal grant funds which are provided for specific purposes.

Capital Projects Fund

Accounts for the expenditures and financing of the City’s capital projects.

Measure O Capital Projects Fund

Accounts for the expenditures and financing of the City’s capital projects related to the Measure O bond.

See Notes to Financial Statements 20
City of Campbell
Balance Sheet – Governmental Funds
June 30, 2022

General Fund
Housing
Assets
Other
Grants
ARPA
Fund
Capital Projects
Fund Measure O
Other
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and investments 21,131,590$ 1,122,864$ 569,055$ 2,729,927$ 3,467,118$ 50,455,024$ 14,123,891$ 93,599,469$ Cash held with fiscal agent - - - - - - 11,945 11,945 Receivables
Accounts 1,034,128 - 1,316,027 4,998,887 80,876 - 154,347 7,584,265 Taxes 3,509,578 - - - - - 261,165 3,770,743 Interest 37,072 2,043 4,017 6,065 - 50,368 25,085 124,650 Notes and loans - 7,688,726 - - - - 140,000 7,828,726 Leases receivable 2,429,813 - - - - - - 2,429,813 Due from other funds 3,346,782 - - - - - - 3,346,782 Total assets 31,488,963$ 8,813,633$ 1,889,099$ 7,734,879$ 3,547,994$ 50,505,392$ 14,716,433$ 118,696,393$ Liabilities
Accounts payable 2,712,262$ 44,045$ -$ -$ 2,600,777$ 30,142$ 316,701$ 5,703,927$ Accrued payroll 2,125,091 - - - - 13,089 136,798 2,274,978 Deposits payable 2,345,631 - - - - - - 2,345,631 Due to other funds - - 2,779,561 - - - 567,221 3,346,782 Unearned revenue - - - 7,783,104 - - - 7,783,104 Total liabilities 7,182,984 44,045 2,779,561 7,783,104 2,600,777 43,231 1,020,720 21,454,422 Deferred Inflows of Resources
Lease related 2,379,188 - - - - - - 2,379,188 Fund balances (deficit)
Restricted - 8,769,588 - - 50,462,161 13,695,713 72,927,462 Committed 3,482,825 - - - - - - 3,482,825 Assigned 3,918,437 - - - 947,217 - - 4,865,654 Unassigned 14,525,529 - (890,462) (48,225) - - - 13,586,842 Total fund balances (deficit) 21,926,791 8,769,588 (890,462) (48,225) 947,217 50,462,161 13,695,713 94,862,783 Total liabilities, deferred inflows
of resources and fund balances 31,488,963$ 8,813,633$ 1,889,099$ 7,734,879$ 3,547,994$ 50,505,392$ 14,716,433$ 118,696,393$ Capital Projects Funds Special Revenue Funds

See Notes to Financial Statements 21
City of Campbell
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Year Ended June 30, 2022

Fund balances - total governmental funds 94,862,783$
Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not current financial resources and therefore are not reported in the governmental funds balance sheet:

Capital assets 118,328,479$
Accumulated depreciation (43,762,307)
74,566,172
Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Interest on long-term liabilities is not accrued in governmental funds, but rather is recognized as an expenditures when due. All liabilities, both current and long-term, are reported in the Statement of Net Position.

Balances at year-end are:

Bonds and certificates of participation (61,679,800)
Loans (4,153,703)
Leases payable (52,491)
Compensated absences (3,909,774)
Claims payable (325,610)
Accrued interest (435,347)
(70,556,725)
OPEB related liabilities applicable to the City's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to OPEB are only reported in the Statement of Net Position as the changes in these amounts affects only the government-wide statements for governmental activities:

Deferred outflows of resources 2,093,136
Deferred inflows of resources (953,708)
Net OPEB liability (4,513,773)
(3,374,345)
Pension related liabilities applicable to the City's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to pensions are only reported in the Statement of Net Position as the changes in these amounts effects only the government-wide statements for governmental activities:

Deferred outflows of resources 12,592,191
Deferred inflows of resources (21,257,741)
Net pension liability (36,946,372)
(45,611,922)
Internal service funds are used by management to charge the costs of certain activities, such as equipment management, information technology, and workers' compensation self-insurance, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Position. 301,465
Net Position of Govenmental Activities 50,187,428$

See Notes to Financial Statements 22
City of Campbell
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds Year Ended June 30, 2022

Other Total
General Housing Other ARPA Capital Projects Governmental Governmental Fund Assets Grants Fund Fund Measure O Funds Funds
Revenues
Property taxes 19,510,782$ -$ -$ -$ -$ -$ 3,958,262$ 23,469,044$ Sales and use taxes 16,419,363 - - - - - - 16,419,363 Other Taxes 7,894,351 - - - - - - 7,894,351 Special assessments - - - - - - 1,391,231 1,391,231 Licenses and permits 3,742,393 - - - - - - 3,742,393 Fines and forfeitures 222,721 - - - - - - 222,721 Investment income (317,035) 27,263 (36,001) (48,225) - (456,316) (215,115) (1,045,429) Rents and leases 2,779,743 - - - - - - 2,779,743 Intergovernmental 985,556 - 3,118,462 - - 3,900,000 2,770,442 10,774,460 Charges for services 4,843,231 - - - - - 853,541 5,696,772 Project revenues - - - - 127,264 - - 127,264 Parkland dedication fees - - - - - - 628,296 628,296 Miscellaneous revenues 351,275 4,679 - - - - 48,063 404,017 Total revenues 56,432,380 31,942 3,082,461 (48,225) 127,264 3,443,684 9,434,720 72,504,226 Capital
Projects Fund
Special
Revenue Funds

See Notes to Financial Statements 23
City of Campbell
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds, Continued Year Ended June 30, 2022

Other Total
General Housing Other ARPA Capital Projects Governmental Governmental Fund Assets Grants Fund Fund Measure O Funds Funds
Expenditures
Current
General government 8,013,208 - - - - 96,068 6,152 8,115,428 Recreation 4,581,380 - 609,438 - - - - 5,190,818 Community development 3,120,856 272,079 - - - - - 3,392,935 Public safety 30,535,865 - - - - - 103,544 30,639,409 Public works 5,750,103 - - - - - 5,925,829 11,675,932 Capital outlay - - - - 8,935,465 1,689,033 - 10,624,498 Debt service
Principal 23,957 - - - - - 2,230,000 2,253,957 Interest and fiscal charges - - - - - - 1,131,724 1,131,724 Total expenditures 52,025,369 272,079 609,438 - 8,935,465 1,785,101 9,397,249 73,024,701 Excess (deficiency) of revenues
over (under) expenditures 4,407,011 (240,137) 2,473,023 (48,225) (8,808,201) 1,658,583 37,471 (520,475) Other financing sources (uses)
New bond issuance - - - - - - 32,506,763 32,506,763 New loans issued - - 3,368,566 - - - - 3,368,566 Transfers in 866,425 - - - 8,841,186 30,000,000 3,499,391 43,207,002 Transfers out (4,263,095) - (4,657,867) - - - (35,150,092) (44,071,054) Total other financing
sources (uses) (3,396,670) - (1,289,301) - 8,841,186 30,000,000 856,062 35,011,277 Net change In fund balances 1,010,341 (240,137) 1,183,722 (48,225) 32,985 31,658,583 893,533 34,490,802 Fund balances (deficit) at beginning
of year, as restated
20,916,450 9,009,725 (2,074,184) - 914,232 18,803,578 12,802,180 60,371,981 Fund balances at end of year 21,926,791$ 8,769,588$ (890,462)$ (48,225)$ 947,217$ 50,462,161$ 13,695,713$ 94,862,783$ Revenue Funds Projects Fund
Special Capital

See Notes to Financial Statements 24
City of Campbell
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities
Year Ended June 30, 2022

Net change in fund balances - total governmental funds 34,490,802$ Amounts reported for governmental activities in the Statement of Activities are different because:

When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the Statement of Activities, the cost of those assets is allocated over the estimated useful lives and reported as depreciation expense. As a result, fund balance decreases by the amount of financial resources expensed, whereas net position decreases by the amount of depreciation expense charged for the year.

Capital outlay 10,624,498
Depreciation expense (3,428,856)
7,195,642
Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position.

Principal payments on bonds and loans 2,253,957
Accrued interest expense related to the long-term liabilities. This amount is the difference between the amount of interest paid and the amount of interest incurred on long-term liabilities. (188,218)
Loan proceeds provide current financial sources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. (3,368,566)
Bond proceeds provide current financial sources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.
(32,506,763)

See Notes to Financial Statements 25
City of Campbell
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities
Year Ended June 30, 2022

Some expenses reported in the Statement of Activities do not require the use of current financial resources, and therefore, are not reported as expenditures in the governmental funds.

Accrued interest on leases payable 30,176
Net change in compensated absences 574,911
Net change in claims payable (79,507)
525,580
Pension expense reported in the governmental funds includes the annual required contributions. In the Statement of Activities, pension expense includes the change in the net pension liability, and related change in pension amounts for deferred outflows of resources and deferred inflows of resources. 2,735,571 OPEB expense reported in the governmental funds includes the annual required contributions. In the Statement of Activities, OPEB expense includes the change in the net OPEB liability, and related change in OPEB amounts for deferred outflows of resources and deferred inflows of resources. 49,932 Internal service funds are used by management to charge the costs of certain activities, such as equipment management, information technology, and workers' compensation self-insurance, to individual funds. The net revenue (expense) of these internal service funds are included in the governmental activities in the Statement of Net Position. 638,741 Change in net position of governmental activities 11,826,678$

26 City of Campbell
Proprietary Fund Financial Statements
June 30, 2022

Internal Service Funds

Account for City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services to other City funds be financed through user charges to those funds.

See Notes to Financial Statements 27
City of Campbell
Statement of Net Position – Proprietary Funds
June 30, 2022

Governmental
Activities
Internal
Service Funds
Assets
Current assets
Cash and investments $ 4,724,143
Accounts receivable 13,785
Deposits 90,000
Total current assets 4,827,928
Noncurrent assets
Capital assets, net of accumulated depreciation and amortization 1,386,176 Total assets 6,214,104
Deferred outflows of resources
Amount related to pensions 318,663
Amount related to OPEB 71,076
Total deferred outflows of resources 389,739 Liabilities
Current liabilities
Accounts payable 117,747
Accrued payroll 53,241
Compensated absences, current portion 54,269 Lease payable 215,201
Claims and judgments payable, current portion 495,451 Total current liabilities 935,909
Noncurrent liabilities
Compensated absences 74,967
Claims payable and judgments 3,282,149
Net OPEB liability 153,274
Net pension liability 1,191,628
Total noncurrent liabilities 4,702,018
Total liabilities 5,637,927
Deferred inflows of resources
Amount related to pensions 632,066
Amount related to OPEB 32,385
Total deferred inflows of resources 664,451 Net position
Net investment in capital assets 1,170,975 Unrestricted (869,510)
Total net position 301,465$

See Notes to Financial Statements 28
City of Campbell
Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds Year Ended June 30, 2022

Governmental
Activities
Internal
Service Funds
Operating revenues
Investment income (69,368)$
Charges for services 2,939,446
Other 93,505
Total operating revenues 2,963,583
Operating expenses
Personnel services 946,303
Services and supplies 1,876,860
Depreciation 365,731
Total operating expenses 3,188,894
Operating loss (225,311)
Transfers
Transfers in 963,652
Transfers out (99,600)
Total transfers 864,052
Change In net position 638,741
Net position at beginning of year, restated (337,276)
Net position at end of year 301,465$

See Notes to Financial Statements 29
City of Campbell
Statement of Cash Flows – Proprietary Funds
Year Ended June 30, 2022

Governmental
Activities
Internal
Service Funds
Cash flows from operating activities
Cash received from department users 2,959,349$
Cash payments to suppliers of goods and services (1,671,479) Cash payments to employees for services (1,143,618)
Net cash provided by operating activities 144,252
Cash flows from noncapital financing activities:

Cash received from other funds 963,652
Cash paid to other funds (643,968)
Net cash provided by noncapital financing activities 319,684 Cash flows from capital and related financing activities Acquisition of capital assets (47,739)
Net cash used by capital and related financing activities (47,739) Net increase in cash and cash equivalents 416,197
Cash and cash equivalents at beginning of year 4,307,946 Cash and cash equivalents at end of year 4,724,143$
Reconciliation of operating loss to
Net cash provided by operating activities
Operating loss (225,311)$
Adjustments to reconcile operating loss to net
cash provided by operating activities
Depreciation and amortization 365,731
Changes in operating assets and liabilities
(Increase) decrease in accounts receivable (4,234)
Increase (decrease) in accounts payable 14,498
Increase (decrease) in accrued payroll (781)
Increase (decrease) in compensated absences (22,610)
Increase (decrease) in claims and judgments payable 190,883 Increase (decrease) in net OPEB and related deferrals (1,695) Increase (decrease) in net pension liability and related deferrals (172,229) Net cash provided by operating activities 144,252$

30 City of Campbell
Fiduciary Fund Financial Statements
June 30, 2022

Private-Purpose Trust Fund

The private-purpose trust fund was created to account for the assets and liabilities of the Campbell Successor Agency, effective February 1, 2012. These amounts represent the assets and liabilities of the former Campbell Redevelopment Agency.

Custodial Funds

Custodial funds are used to account for assets held by the City as an agent for individuals, private organizations, and other governments. The financial activities of these funds are excluded from the government-wide financial statements but are presented in separate Fiduciary Fund financial statements.

See Notes to Financial Statements 31
City of Campbell
Statement of Fiduciary Net Position – Fiduciary Funds
June 30, 2022

Private-
Purpose Custodial
Trust Fund Funds
Assets
Cash and investments 956,370$ 2,051,446$
Cash held with fiscal agent 10 -
Accounts receivable 610 76,006
Capital assets, not being depreciated 7,123,531 - Capital assets, net of accumulated depreciation 8,335,011 - Total assets 16,415,532 2,127,452
Liabilities
Accounts payable - 237,749
Accrued interest payable 84,434 -
Long-term liabilities
Due within one year 1,555,000 -
Due in more than one year 14,495,000 -
Total liabilities 16,134,434 237,749
Net Position
Restricted for individuals and organizations 281,098$ 1,889,703$

See Notes to Financial Statements 32
City of Campbell
Statement of Changes in Net Position – Fiduciary Funds
Year Ended June 30, 2022

Private-
Purpose Custodial
Trust Fund Funds
Additions
Local government-administered contributions 1,909,593$ 812,599$ Other income - 689,061
Investment income (4,236) (4,387)
Total additions 1,905,357 1,497,273
Deductions
Professional and special services 4,450 406,889 Administrative - 1,290,641
Depreciation 697,519 -
Interest and fiscal agent costs 373,473 -
Total deductions 1,075,442 1,697,530
Change in net position 829,915 (200,257)
Net position at beginning of year (548,817) 2,089,960 Net position at end of year 281,098$ 1,889,703$

33 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 1 - Summary of Significant Accounting Policies

The financial statements of the City of Campbell, California (the City), have been prepared in accordance with Generally Accepted Accounting Principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the government’s accounting policies are described below.

Reporting Entity

The City of Campbell was incorporated March 28, 1952, under the general laws of the State of California. The City operates under a Council Manager form of government providing such services as public safety (police, contracted fire services, and building inspection), street and sidewalk maintenance, recreation, planning and zoning, and general administrative services. The accompanying financial statements present the activities of the City of Campbell (the primary government) and its blended component units, entities for which the City is financially accountable.

City of Campbell Lighting and Landscape District (the District) is a City-wide assessment District established in 1980 to provide lighting and landscape services and a funding source for these services. The District is governed by a Board composed of City Council members and lighting services are provided by City employees.

Although legally separate, this District is so intertwined with the City that it is, in substance, one and the same.

Accordingly, it is blended with the City in these financial statements. No separate financial statements are prepared for the District.

Measurement Focus and Basis of Accounting

The basic financial statements of the City are composed of the following:

• Government-wide financial statements
• Fund financial statements
• Notes to the basic financial statements

Government-Wide Financial Statements:

Government-wide financial statements display information about the reporting government as a whole, except for its fiduciary activities. These statements include a column for the governmental activities of the primary government (including its blended component units). Eliminations have been made in the Statement of Activities so that certain allocated expenses are recorded only once (by the function to which they were allocated). However, interfund services provided and used are not eliminated in the process of consolidation.

34 City of Campbell
Notes to Financial Statements
June 30, 2022

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: (1) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Government-wide financial statements are presented using the economic resources measurement focus and accrual basis of accounting, as are the proprietary fund financial statements and the fiduciary private-purpose trust fund financial statements. Under the economic resources’ measurement focus, all (both current and long- term) economic resources and obligations are reported. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources, resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, and liabilities resulting from nonexchange transactions are recognized in accordance with the requirements of GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions.

Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the government- wide financial statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure.

Fund Financial Statements

The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues, and expenditures or expenses, as appropriate.

Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Fund financial statements for the primary government’s governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and proprietary funds. Fiduciary statements include financial information for the private-purpose trust fund, and agency funds. Custodial funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations.

35 City of Campbell
Notes to Financial Statements
June 30, 2022

Governmental Funds

In the fund financial statements, governmental funds are presented using the modified-accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets.

Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses an availability period of 365 days, except property taxes which are considered to be available if collected within 60 days.

Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in lieu, transient occupancy taxes, grants and interest associated with the current fiscal period are all considered to be susceptible to accrual and so they have been recognized as revenues of the current fiscal period to the extent normally collected within the availability period. Other revenue items are considered to be measurable and available when cash is received by the government.

Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place. Imposed nonexchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first.

Government-mandated and voluntary nonexchange transactions are recognized as revenues when all applicable eligibility requirements have been met.

In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets, current liabilities, and deferred inflows of resources are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

Due to the nature of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.

Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures.

36 City of Campbell
Notes to Financial Statements
June 30, 2022

Proprietary and Fiduciary Funds

The City’s internal service funds are proprietary funds. In the fund financial statements, proprietary funds and fiduciary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds and the fiduciary funds, are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their statements of net position. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position.

Proprietary funds operating revenues, such as charges for services, result from exchange transactions associated with principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. In addition, Proprietary funds defines investment earnings as operating income.

Nonoperating revenues, such as subsidies, and taxes result from nonexchange transactions or ancillary activities.

Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as an expense. Proceeds of long-term debt are recorded as a liability in the proprietary fund financial statements. Amounts paid to reduce long- term indebtedness of the proprietary funds are reported as a reduction of the related liability.

Fund Classifications

The City reports the following major governmental funds:

The General Fund is used to account for resources traditionally associated with governments, such as administration, engineering and public safety, which are not required to be accounted for in another fund.

The Housing Assets Special Revenue Fund is used to account for resources received from the dissolution of the former Campbell Redevelopment Agency dedicated to low- and moderate-income housing activities pursuant to the California Health and Safety Code.

The Other Grants Special Revenue Fund is used to account for Federal, State and local grant funds which are provided for specific purposes.

The ARPA Special Revenue Fund is used to account for American Rescue Plan Act (ARPA) federal grant funds which are provided for specific purposes.

The Capital Projects Fund is used to account for the expenditures and financing of the City’s capital projects.

The Measure O Capital Projects Fund is used to accounts for the expenditures and financing of the City’s capital projects related to the Measure O bond.

37 City of Campbell
Notes to Financial Statements
June 30, 2022

Additionally, the City reports the following fund types:

Special Revenue Funds - These funds are used to account for specific revenues that are legally restricted to expenditure for a particular purpose.

Debt Service Fund - These funds are used to account for the activity related to the City’s share of proceeds from the 2016 Refunding Lease Revenue Bonds and 2018 election General Obligation Bonds, which were utilized chiefly to fund capital projects and refund debt related to the Police Station, City’s Community Center and deferred street maintenance projects.

Internal Service Funds - These funds are used to account for the City’s motor vehicle pool, workers’ compensation self-funded insurance program and information technology services. Departments of the City are charged for the services provided or benefits received from these funds.

Fiduciary Funds - The City maintains two types of Fiduciary Funds - a Private-Purpose Trust Fund and Custodial Funds. The Private-Purpose Trust Fund accounts for activities of the Successor Agency to the Campbell Redevelopment Agency. Custodial Funds are used to account for monies held for the West Valley Solid Waste Management Authority, 1915 Act Bonds, and the Santa Clara County Specialized Enforcement Task Fund (SCCET).

Change in Accounting Principles

GASB Statement No. 87 – In June 2017, GASB issued Statement No. 87, Leases. The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. The effect of the implementation of this standard on beginning net position and fund balance is disclosed in Note 17 and the additional disclosures required by this standard are included in Note 14.

GASB Statement No. 89 – In June 2018, the GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. GASB Statement No. 89 requires that interest costs incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred and no longer included in the historical cost of capital assets. There is no material effect of the implementation of this standard on the financial statements.

38 City of Campbell
Notes to Financial Statements
June 30, 2022

GASB Statement No. 92 – In January 2020, GASB issued Statement No. 92, Omnibus 2020. The objectives of this Statement are to establish accounting and financial reporting requirements for specific issues related to leases, intra-entity transfers of assets, postemployment benefits, government acquisitions, risk financing and insurance- related activities of public entity risk pools, fair value measurements, and derivative instruments. The requirements of this Statement are effective for reporting periods beginning after June 15, 2021 or fiscal year 2021-22, except for Statement 87 and Implementation Guide 2019-3, reinsurance recoveries, and terminology used to refer to derivative instruments are effective upon issuance. The provisions of this statement have been implemented as of June 30, 2022.

New Accounting Pronouncements

GASB Statement No. 91 – In May 2019, the GASB issued Statement No. 91, Conduit Debt Obligations. GASB Statement No. 91 clarifies the definition of conduit debt and establishes new recognition, measurement, and disclosure requirements. The new standard is effective for periods beginning after December 15, 2021.

Application of this statement is effective for the City’s year ending June 30, 2023.

GASB Statement No. 93 – In May 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates.

The objectives of this Statement is to address those and other accounting and reporting implications resulting from the replacement of an IBOR by providing exceptions for certain hedging derivative instruments to the hedge accounting termination provisions when an IBOR is replaced and providing clarification to the hedge accounting termination provisions, removing LIBOR as a benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate swap, identifying a Secured Overnight Financing Rate and the Effective Federal Funds Rate as appropriate benchmark interest rates for the qualitative evaluation of the effectiveness of an interest rate swap and providing an exception to the lease modifications guidance in Statement 87, as amended, for certain lease contracts that are amended solely to replace an IBOR as the rate upon which variable payments depend. The requirements of this Statement are effective for reporting periods beginning after June 15, 2021 or FY 2021/2022, except the removal of LIBOR as a benchmark interest rate which is effective for periods beginning after December 31, 2022 or fiscal year 2022-23. The City is evaluating the impact of this Statement on the financial statements.

GASB Statement No. 94 – In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The objectives of this Statement improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). The requirements of this Statement are effective for reporting periods beginning after June 15, 2022 or fiscal year 2022-23. The City is evaluating the impact of this Statement on the financial statements.

GASB Statement No. 96 – In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. The objectives of this Statement is to provide guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The requirements of this Statement are effective for reporting periods beginning after June 15, 2022 or fiscal year 2022-23. The City is evaluating the impact of this Statement on the financial statements.

39 City of Campbell
Notes to Financial Statements
June 30, 2022

Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until that time. The City has the following items that qualify for reporting in this category:

• Deferred outflows related to OPEB and pension plans equal to employer contributions made after the measurement date of the net OPEB liability and the net pension liability.

• Deferred outflows related to OPEB and pensions for differences between actual and expected experiences. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.

• Deferred outflows related to OPEB and pensions resulting from changes in assumptions. These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions through the plans.

• Deferred outflows related to pension plans for the changes in the employer’s proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.

• Deferred outflows related to OPEB and pensions resulting from the net differences between projected and actual earnings on plan investments of the pension plans fiduciary net position. These amounts are amortized over five years.

In addition to liabilities, the statement of net position and governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period and will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category:

• Deferred inflows related to OPEB and pensions for differences between actual and expected experiences. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.

• Deferred inflows related to OPEB and pensions resulting from changes in assumptions. These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions through the plans.

40 City of Campbell
Notes to Financial Statements
June 30, 2022

• Deferred inflows related to pensions for the changes in employer’s proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions.

These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.

• Deferred inflows related to OPEB and pension plans resulting from the net differences between projected and actual earnings on plan investments of the plan’s fiduciary net position. These amounts are amortized over five years.

• Deferred inflows related to unavailable revenues. These amounts will be recognized once cash is received in a fiscal year or with the availability period.

• Deferred inflows related to leases. These amounts will be recognized once rental and lease payments are earned.

Net Position and Fund Balance Flow Assumptions

In the government-wide financial statements, when expenses are incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted net position first.

In the governmental fund financial statements, when expenditures are incurred for purposes for which all categories of fund balances are available, the City’s general policy is to apply the expenditures against fund balance in the following order: restricted, committed, assigned, and unassigned.

Property Taxes

All property taxes and special assessments are levied and collected by the County of Santa Clara (the County) and paid upon collection to the various taxing entities including the City, Successor Agency of the former Redevelopment Agency, and Lighting and Landscape District. Secured taxes are levied on July 1 and are due in two installments on November 1 and February 1 and become delinquent on December 10 and April 10, respectively. Unsecured taxes are due on July 1 and become delinquent on August 31. The lien date for secured and unsecured property taxes is January 1 of the preceding fiscal year.

The County is permitted by State law to levy taxes at 1% of full market value at time of purchase plus other increases approved by the voters and can increase the assessed value no more than 2% per year. The City receives its proportionate share of this levy.

The City has adopted an alternative method of property tax distribution called the Teeter Plan. Under this method, the City receives 100% of its secured property tax levied in exchange for foregoing any interest and penalties collected on delinquent taxes. The City receives payments as a series of advances made by the County throughout the year. Secured property tax levy is recognized as revenue upon receipt, including the final payment, which generally is received within 60 days after the fiscal year end.

41 City of Campbell
Notes to Financial Statements
June 30, 2022

The term “unsecured” refers to taxes on personal property other than real estate, land and buildings. Property tax revenues are recognized by the City in the fiscal year they are assessed, provided they become available as defined above.

Cash and Investments

Investments are reported in the accompanying financial statements at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments in external investment pools are valued based on the stated fair value represented by the external investment pool.

Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments.

The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund’s quarterly average cash and investment balance.

For purposes of the Statement of Cash Flows, cash equivalents are defined as short-term, highly liquid investments with maturities of three months or less at the time of purchase that they present insignificant risk of changes in value because of limited interest rate risk. Cash equivalents also represent the proprietary fund’s share in the cash and investment pool of the City.

Capital Assets

Capital assets are recorded at cost where historical records are available and at an estimated historical cost where no historical records exist. Contributed capital assets are valued at their acquisition value at the date of the contribution. Generally, the City capitalizes all infrastructures with a value greater than $25,000. All other capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of more than one year. Capital assets include all public domain (infrastructure) assets consisting of certain improvements, including roads, streets, sidewalks, medians, and storm drains.

The following schedule summarizes capital asset useful lives:

Buildings and improvements 40 years
Other improvements 20 years
Right-to-use leased equipment 3 to 15 years
Machinery and equipment 3 to 20 years
Infrastructure 15 to 40 years

Depreciation has been provided using the straight-line method over the estimated useful life of the asset in the government-wide financial statements and in the fund financial statements of the proprietary funds.

42 City of Campbell
Notes to Financial Statements
June 30, 2022

Compensated Absences

Accrued vacation and sick leave are accrued as earned by employees. City employees may accrue vacation up to certain maximums as of December 31 of each calendar year, which vary depending on classification and years of service. Upon termination, they may be compensated for their vacation balance at current hourly rates.

Similarly, sick leave may be accumulated without limit and employees may be compensated upon termination based on a vesting schedule determined by years of service, compensated at current hourly rates.

For all governmental funds, a liability of these amounts is reported only if they have matured, for example, as a result of employee resignations and retirements. The remaining portion is recorded as a liability in the Statement of Net Position. For Internal Service Funds, liabilities of these amounts are recorded liabilities of those funds.

Compensated absences are typically liquidated in the General Fund.

Pensions

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 City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Postemployment Benefits Other Than Pensions (OPEB)

For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s OPEB Plan and additions to/deductions from the OPEB Plans’ fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the City’s OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Leases
The City is a lessee for a noncancellable lease of equipment. The City recognizes a lease liability and an intangible right‐to‐use lease asset (lease asset) in the government‐wide financial statements. The City recognizes lease liabilities with an initial, individual value of $5,000 or more. At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made.

The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight‐line basis over its useful life.

43 City of Campbell
Notes to Financial Statements
June 30, 2022

The City recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements. At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Use of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources, at the date of the financial statements, as well as the reported amounts of revenue and expenses/expenditures during the reporting period. Actual results could differ from those estimates.

Note 2 - Cash and Investments

Cash and Investments

Cash and investments as of June 30, 2022 are classified in the accompanying financial statements as follows:

Statement of Net Position
Cash and investments 98,323,612$
Cash held with fiscal agent 11,945
Statement of Fiduciary Net Position
Cash and investments 3,007,816
Cash held with fiscal agent 10
Total Cash and Investments 101,343,383$

Cash and investments as of June 30, 2022 consisted of the following:

Cash on Hand 9,090$
Deposits with Financial Institutions 11,839,722
Investments 89,494,571
Total Cash and Investments 101,343,383$

44 City of Campbell
Notes to Financial Statements
June 30, 2022

Investments Authorized by the California Government Code and the City’s Investment Policy

The table below identifies the investment types that are authorized for the City by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

Maximum Maximum
Maximum Minimum Percentage Investment in
Authorized Investment Types        Maturity      Credit Quality        Allowed        One Issuer U.S. Treasury Obligations 5 years None None None
U.S. Agency Securities 5 years None 75% None
Federal Instrumentality
(government sponsored enterprise) 5 years None 75% None Repurchase Agreements 1 year A/A-1 10% None
Commercial Paper 270 days * 25% 5%
A-1 or P-1 or
Banker’s Acceptance 180 days F-1 30% 5%
Medium-Term Notes 5 years A-A-1 30% 5%
Non-negotiable Time
Certificates of Deposit 5 years None 25% $1 million
Negotiable Certificates
of Deposit 5 years None 30% None
California Local Agency $75 million
Investment Fund (LAIF) N/A None None per account
AAAm or Aaa
Mutual Funds N/A or AAA/V1+ 15% 10%
AAAm or Aaa
Money Market Mutual Funds N/A or AAA/V1+ 15% 10%
Municipal and State Obligations 5 years A-A-1 None 5%

* Issuer must be U.S. general corporation having assets in excess of $500,000,000 with debt other than commercial paper rated A or higher or U.S. special purpose corporation, trust or limited liability company having program-wide credit enhancements and commercial paper rated A-1 or higher.

N/A - Not Applicable

45 City of Campbell
Notes to Financial Statements
June 30, 2022

Investments Authorized by Debt Agreements

Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Maximum Maximum
Maximum Minimum Percentage Investment in
Authorized Investment Types  Maturity Credit Quality Allowed One Issuer U.S. Treasury Bonds, Notes and Bills 5-7 years None No Limit No Limit U.S. Government Sponsored Entities 5-7 years AAA No Limit No Limit Time Certificates of Deposit -
Banks or Savings and Loans 1 year None No Limit No Limit Banker’s Acceptance 360 days A-1/P-1 No Limit No Limit
Commercial Paper 270 days A No Limit No Limit
Repurchase Agreements 30 days - 7 Years A No Limit No Limit California Local Agency $75 million
Investment Fund (LAIF) N/A None No Limit per account
Money Market Funds N/A A No Limit 10%
Investment Agreements 5-7 years A No Limit No Limit
Other Tax Exempt Organizations 7 years A No Limit No Limit California Asset Management
Program (CAMP) N/A None No Limit No Limit

Disclosures Relating to Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

46 City of Campbell
Notes to Financial Statements
June 30, 2022

Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity. For purposes of the schedule shown below, any callable securities are assumed to be held to maturity.

12 Months 13 to 24 25 to 60
Investment Type or Less Months Months Total
U.S. Government Sponsored Entities -$ 2,983,270$ 10,581,690$ 13,564,960$ California Local Agency Investment Fund 73,934,657 - - 73,934,657 Negotiable Certificates of Deposits 1,994,954 - - 1,994,954 Total Investments 75,929,611$ 2,983,270$ 10,581,690$ 89,494,571$ Remaining Maturity (in Months)

Disclosures Relating to Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual Standard & Poor’s rating as of year-end for each investment type.

Minimum
Legal Total as of Not
Investment Type Rating June 30, 2022 AA+ Rated
U.S. Government Sponsored Entities None 13,564,960$ 13,564,960$ -$ California Local Agency Investment Fund None 73,934,657 - 73,934,657 Negotiable Certificates of Deposits None 1,994,954 - 1,994,954 Total Investments 89,494,571$ 13,564,960$ 75,929,611$

Concentration of Credit Risk

The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. At June 30, 2022, the Federal Home Loan Banks securities represented more than 5% of total City investments at $9,548,810, which was approximately 11%.

47 City of Campbell
Notes to Financial Statements
June 30, 2022

Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits:
the California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2022, the City’s deposits were either federally insured or collateralized.

For investments identified herein as held with fiscal agent, the trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting government.

Investment in State Investment Pool

The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

48 City of Campbell
Notes to Financial Statements
June 30, 2022

Fair Value Measurements

The City measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy. Level 1 inputs are quoted prices in active markets for identical investments, Level 2 inputs are observable inputs other than those in Level 1; and Level 3 inputs are unobservable inputs.

Debt and equity securities classified in Level 2 are valued using the following approaches: debt securities are normally valued based on price data obtained from observed transactions and market price quotations from broker dealers and/or pricing vendors; equity securities are valued using fair value per share for each fund.

Certificates of deposit classified in level 2 are valued using broker quotes that utilize observable market inputs.

Uncategorized - Investments in the California Investment Pool are not measured using the input levels above because the City’s transactions are based on a stable net asset value per share. All contributions and redemptions are transacted at $1.00 net asset value per share.

The City has the following recurring fair value measurements as of June 30, 2022:

Quoted Observable Unobservable
Prices Inputs Inputs
Level 1 Level 2 Level 3 Total
U.S. Government Sponsored Entities -$ 13,564,960$ -$ 13,564,960$ Negotiable Certificates of Deposits - 1,994,954 - 1,994,954 Total investments -$ 15,559,914$ -$ 15,559,914 Uncategorized
California local agency investment fund* 73,934,657
Total investment portfolio 89,494,571$

* uncategorized; not subject to fair value measurement tiers.

49 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 3 - Interfund Transactions

Due To/From Other Funds

The current interfund outstanding balances result mainly from the time lag between the dates, that (1) interfund goods and services are provided (2) transactions are recorded in the accounting system, (3) payments between funds are made. These balances are normally repaid as they arise.

Current interfund balances are as follows:

Due from Other Funds Due to Other Funds Amount
General Fund Other Governmental Funds 567,221$
Other Grants Fund 2,779,561
3,346,782$

Transfers In/Out

Transfers between funds during the fiscal year ended June 30, 2022 were as follows:

Transfers Out Transfers In Amount
General Fund Other Governmental Funds (a) (b) (c) 2,733,089$ Capital Projects Fund (e) 566,354
Internal Service Funds (b) 963,652
Other Grants General Fund (d) 74,875
Capital Projects Fund (e) 4,582,992
Other Governmental Funds General Fund (a) 691,950
Capital Projects Fund (e) 3,691,840
Measure O (e) 30,000,000
Other Governmental Funds (a) 766,302
Internal Service Funds General Fund (a) 99,600
44,170,654$

Interfund transfers were principally used for the following purposes:

(a) To fund specific program expenditures
(b) To fund equipment and vehicle replacements
(c) To fund a portion of debt service payments
(d) Grant funded program expenditures
(e) Capital project expenditures

50 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 4 - Notes and Loans Receivables

First-Time Homebuyer Loan Program

The City’s Housing Assets Special Revenue Fund engages in a first-time homebuyer down payment assistance program designed to encourage home ownership among low- and moderate-income households. Under this program, a loan up to $50,000 is provided to eligible households to be used as part of the down payment for the purchase of a home in the City of Campbell. These promissory notes are secured by second deeds of trust and are due thirty years from the date the property was purchased. The notes require a payback of principal plus an 8% fee or an equity share payment, whichever is lower. The balance of the notes’ receivable arising from this program at June 30, 2022 was $507,000.

Housing Rehabilitation and Affordable Housing Loans:

The City’s Housing Assets Special Revenue Fund engages in programs designed to encourage construction or improvement in low to moderate income housing or other projects. Under these programs, grants or loans are provided under favorable terms to homeowners or developers who agree to spend these funds in accordance with the City’s terms. The balance of the loan receivable arising from these programs at June 30, 2022 was $1,410,468.

Maravilla Loans

The City’s Housing Assets Special Revenue Fund engages in programs designed to encourage home ownership among low- and moderate-income households in the Maravilla Community in the City of Campbell. Under this program, an interest free loan up to $200,274 is provided to eligible households to be used as part of the down payment for the purchase of a home in the Maravilla Community in the City of Campbell. These promissory notes are secured by second deeds of trust and are due forty-five years from the date the property was purchased. The balance of the note receivable arising from this program at June 30, 2022 was $3,515,258.

Additionally, under this program, a loan of $94,000 is provided to eligible households to be used as part of the down payment for the purchase of a home in the Maravilla Community in the City of Campbell. These promissory notes are secured by second deeds of trust, earn interest at a rate of 1% per annum, and are due thirty years from the date the property was purchased. The balance of the note receivable arising from this program at June 30, 2022 was $2,256,000.

Rehabilitation Loans

The City administers a housing rehabilitation program using Housing and Community Development Act funds.

Under the Program, individuals with incomes below a certain level are eligible to receive low or no interest loans, secured by deeds of trust, for construction work on their homes. Federal funds received by the City are deposited with a commercial bank. Upon approval of loans, the bank disburses the funds and arranges for and collects repayments.

At June 30, 2022, the City had outstanding rehabilitation loans of $140,000 in its Community Development Block Grant Special Revenue Fund.

51 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 5 - Capital Assets

Capital assets activity for the year ended June 30, 2022 is as follows:

Balance at
July 1, 2021, Balance at
as restated Additions Deletions Transfers June 30, 2022 Capital Assets, not Being Depreciated
Land 9,105,635$ -$ -$ -$ 9,105,635$ Construction in progress 8,250,169 10,624,498 - (1,347,059) 17,527,608 Total capital assets, not
being depreciated 17,355,804 10,624,498 - (1,347,059) 26,633,243 Capital Assets, Being Depreciated and Amortized
Buildings and improvements 26,215,616 - - 356,424 26,572,040 Right-to-use leased equipment 340,832 - - - 340,832 Machinery and equipment 13,061,067 - (327,544) 550,000 13,283,523 Infrastructure 59,717,519 - - 440,635 60,158,154 Total capital assets,
being depreciated 99,335,034 - (327,544) 1,347,059 100,354,549 Less Accumulated Depreciation and Amortization for
Buildings and improvements (16,840,316) (578,631) - - (17,418,947) Right-to-use leased equipment - (80,587) - (80,587) Machinery and equipment (9,608,017) (645,557) 327,544 - (9,926,030) Infrastructure (21,120,068) (2,489,812) - - (23,609,880) Total accumulated depreciation
and amortization (47,568,401) (3,794,587) 327,544 - (51,035,444) Total capital assets,
being depreciated, net 51,766,633 (3,794,587) - 1,347,059 49,319,105 Governmental Activities
capital assets, net 69,122,437$ 6,829,911$ -$ -$ 75,952,348$

Depreciation expense, including $365,731 relating to the internal service funds, was charged in the following functions in the Statement of Activities:

General government 248,600$
Recreation 247,163
Public safety 341,132
Public works 2,957,692
Total depreciation expense - governmental activities 3,794,587$

52 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 6 - Long-Term Liabilities

The following is a summary of changes in the City’s long-term liabilities for the year ended June 30, 2022:

Balance
July 1, 2021, Balance Due within
as restated Additions Reductions June 30, 2022 One Year Other Debt
2002 refunding certificates of
participation - civic center project 3,647,091$ 215,345$ -$ 3,862,436$ -$ 2016 refunding lease revenue bonds 5,175,000 - (570,000) 4,605,000 585,000 2016 refunding lease premium 636,320 - (90,903) 545,417 90,903 2018 general obligation bond,
series 2020 18,860,000 - (1,660,000) 17,200,000 1,000,000 2018 GOB, series 2020 premium 3,065,905 - (105,721) 2,960,184 105,721 2018 general obligation bond,
series 2022 - 30,000,000 - 30,000,000 2,000,000 2018 GOB, series 2022 premium - 2,506,763 - 2,506,763 89,527 California Energy Commission Loan 809,094 829,074 - 1,638,168 78,138 PG&E On-Bill Financing Loan - 2,539,492 (23,957) 2,515,535 287,490 Leases payable 340,832 - (73,140) 267,692 76,498 Other Noncurrent Liabilities
Compensated absences 4,636,531 1,886,303 (2,483,824) 4,039,010 2,152,706 Claims payable (Note 12) 3,832,820 862,368 (591,978) 4,103,210 495,451 41,003,593$ 38,839,345$ (5,599,523)$ 74,243,415$ 6,961,434$

2002 Refunding Certificates of Participation - Civic Center Project

Net proceeds of $9,678,751 from the City’s 2002 Refunding Certificates of Participation were used to prepay and refund the City’s 1993 Certificates of Participation. An additional $1,830,975 of proceeds was used to provide partial funding or renovation and expansion of the City’s Police Department and construction of an animal shelter. As of June 30, 2022, the defeased 1993 Certificates had been retired.

Capital Appreciation Certificates in the amount of $1,245,844 bear interest at rates ranging from 5.80% to

5.83%. Capital Appreciation Certificate maturities begin October 1, 2029 and continue annually through 2032.

The Capital Appreciation Certificates are subject to optional redemption in whole or in part any time after October 1, 2022. Each year the outstanding principal balance is increased for the accretion of interest associated with the Capital Appreciation Certificates. The accumulated accreted interest at June 30, 2022 is $2,616,591.

Principal and interest payments are guaranteed under an insurance policy issued by Ambac Assurance Corporation.

53 City of Campbell
Notes to Financial Statements
June 30, 2022

The amount shown in the schedule of changes include the accreted value to date. The future debt service requirements on the 2002 Refunding Certificates of Participation outstanding at June 30, 2022 are as follows:

Fiscal
Year Ending Principal Interest Total
2023 -$ -$ -$ 2024 - - - 2025 - - - 2026 - - - 2027 - - - 2028-2032 961,506 3,883,494 4,845,000 2033 284,339 1,330,661 1,615,000 1,245,845 5,214,155 6,460,000
Accumulated Accreted
Interest 2,616,591 (2,616,591) -
3,862,436$ 2,597,564$ 6,460,000$
2002 Refunding COP

2016 Refunding Lease Revenue Bonds

In August of 2016, the Campbell Joint Public Finance Authority issued 2016 Refunding Lease Revenue Bonds (the 2016 PFA Bonds), in the aggregate principal amount of $8,085,000. The bonds pay interest at a rate from 2.0% to 4.0% payable semiannually on April 1 and October 1, commencing on April 1, 2016. The bonds were issued to prepay a portion of the 1997 Refunding Certificates of Participation (Civic Center Project) (the 1997 Certificates) of the City of Campbell (the City), prepay a portion of the 2002 Refunding Certificates of Participation (Civic Center Project) (the 2002 Certificates) of the City, and pay the costs of bond issuance. There is no reserve requirement on bonds.

Fiscal
Year Ending Principal Interest Total
2023 585,000$ 172,500$ 757,500$ 2024 605,000 148,700 753,700 2025 630,000 124,000 754,000 2026 655,000 98,300 753,300 2027 680,000 71,600 751,600 2028-2031 1,450,000 58,600 1,508,600 Total 4,605,000$ 673,700$ 5,278,700$ 2016 Lease Revenue Bonds

54 City of Campbell
Notes to Financial Statements
June 30, 2022

2018 Measure O General Obligation Bonds

On August 18, 2020, the City issued $20,000,000 of general obligation bonds to fund a police emergency operations center and innovative library. The interest rate on the bonds is 0.20% to 4% and the maturity date is September 1, 2038. Payments are made semiannually on April 1 and October 1, commencing on April 1, 2021.

There is no reserve requirement on bonds.

Fiscal
Year Ending Principal Interest Total
2023 1,000,000$ 596,100$ 1,596,100$ 2024 780,000 565,500 1,345,500 2025 345,000 543,000 888,000 2026 360,000 528,900 888,900 2027 375,000 514,200 889,200 2028-2032 2,105,000 2,329,400 4,434,400 2033-2037 2,560,000 1,867,275 4,427,275 2038-2042 3,005,000 1,434,875 4,439,875 2043-2047 3,420,000 995,400 4,415,400 2048-2051 3,250,000 266,400 3,516,400 Total 17,200,000$ 9,641,050$ 26,841,050$
2018 Measure O General Obligation Bond Series 2020

In May 2022, the City issued its second and final series of tax-exempt bonds for $30,000,000. The Series 2022 bonds, which were issued at a premium, have coupon interest rates ranging from 4% to 5% with an effective interest rate of 4.06% and maturing September 1, 2050.

Fiscal
Year Ending Principal Interest Total
2023 2,000,000$ 954,646$ 2,954,646$ 2024 1,710,000 1,309,750 3,019,750 2025 1,010,000 1,241,750 2,251,750 2026 495,000 1,204,125 1,699,125 2027 520,000 1,178,750 1,698,750 2028-2032 3,025,000 5,465,625 8,490,625 2033-2037 3,855,000 4,609,375 8,464,375 2038-2042 4,915,000 3,518,125 8,433,125 2043-2047 6,270,000 2,127,000 8,397,000 2048-2051 6,200,000 516,250 6,716,250 Total 30,000,000$ 22,125,396$ 52,125,396$
2018 Measure O General Obligation Bond Series 2022

55 City of Campbell
Notes to Financial Statements
June 30, 2022

California Energy Commission Loan

On February 18, 2020, City Council authorized staff to enter into an energy services contract agreement with an ESCO (energy services company) to provide turnkey services for energy conservation upgrades and infrastructure improvements. The total cost of the project was $4,177,660. The project was financed through the California Energy Commission and the PG&E On-Bill Financing Program for $1,638,168 and $2,539,492, respectively.

Through the Energy Conservation Assistant Act, the California Energy Commission (CEC) offered a 1% interest Energy Efficiency Loan program. The CEC loan will be paid in full by June 22, 2038.

Fiscal
Year Ending Principal Interest Total
2023 78,138$ 34,126$ 112,264$ 2024 96,863 15,401 112,264 2025 97,875 14,389 112,264 2026 98,857 13,407 112,264 2027 99,848 12,416 112,264 2028-2032 514,405 46,915 561,320 2033-2037 540,755 20,565 561,320 2038 111,427 837 112,264 1,638,168$ 158,056$ 1,796,224$
California Energy Commission Loan

Pacific Gas & Electric Loan

The PG&E On-Bill Financing Program is a program that helps governmental agencies pay for energy efficient retrofit projects with no-interest loans that are repaid through monthly PG&E bills. The PG&E loan will be paid in full by March 2031 through 106 equal monthly installments.

Fiscal
Year Ending Principal Interest Total
2023 287,490$ -$ 287,490$ 2024 287,490 - 287,490 2025 287,490 - 287,490 2026 287,490 - 287,490 2027 287,490 - 287,490 2028-2031 1,078,085 - 1,078,085 2,515,535$ -$ 2,515,535$ Pacific Gas & Electric Loan

56 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 7 - Construction and other Significant Commitments

In the regular course of business, the City enters into contracts for various services and construction projects. At June 30, 2022, the City had the following construction commitments:

Remaining
Project Commitment
Campbell Park Improvement 1,168,485$
JDM Improvements - Budd 107,269
Measure O Civic Center 1,260,493
Annual Street Maintenance 984,946
All other capital projects commitments 52,554
3,573,747$

At June 30, 2022, the City had the following other significant commitments under various contracts:

Fund Amount
General Fund 711,874$
Capital Projects Fund 3,573,747
Other Governmental Funds 50,428
Internal Service Funds 81,712
Total commitments 4,417,761$

57 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 8 - Net Position and Fund Balances

Net Position

The government-wide and proprietary fund financial statements utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted, and unrestricted.

Net Investment in Capital Assets groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of these assets reduce the balance in this category.

Restricted Net Position reflects net position that is subject to constraints either (l) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or (2) imposed by law through constitutional provisions or enabling legislation. Enabling legislation authorizes the City to assess, levy, charge, or otherwise mandate payment of resources and includes a legally enforceable requirement that those resources be used only for the specific purposes stipulated in the legislation. A legally enforceable enabling legislation restriction is one that a party external to a government - such as citizens, public interest groups, or the judiciary - can compel a government to honor.

Unrestricted Net Position represents net position of the City that is not restricted for any project or purpose.

Fund Balances

Governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. Fund balances for government funds are classified as follows:

Nonspendable Fund Balance - includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example: inventories and prepaid amounts.

Restricted Fund Balance - includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers.

Committed Fund Balance - includes amounts that can only be used for the specific purposes determined by a formal action of the City’s highest level of decision-making authority, the City Council. Commitments may be changed or lifted only by a City Council resolution taking the same formal action that imposed the constraint originally. The decision-making authority is defined as City Council resolutions.

Assigned Fund Balance - includes amounts to be used by the government for specific purposes but do not meet the criteria to be classified as committed. City Council has by resolution authorized the City Manager to assign fund balance. The City Council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year’s appropriated budget. Unlike commitments, assignments generally only exist temporarily.

58 City of Campbell
Notes to Financial Statements
June 30, 2022

Unassigned Fund Balance - is the residual classification for the General Fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. In the event that funds other than the General Fund are included in the unassigned fund balance it would be a deficit.

Within this classification of fund balance, the City has established by City Council resolution, an Economic Fluctuations Reserve that is maintained at $9,955,452 to provide budget stabilization during economic downturn that could otherwise result in significant reductions in service levels and/or organizational staffing. The reserve shall not be less than $2,000,000. However, if the reserve balance falls below $4 million, or the City’s five-year financial projections indicate the reserve will fall below this minimum requirement at any time during this period, City staff shall present to Council, by the following year’s budget adoption, a plan to return to the target amount within five years. Further, within this classification of fund balance, the City has established by City Council resolution, a General Fund Emergency Reserve that shall be maintained at a level of 10% of General Fund revenues. To be used as determined by the City Council upon declaration of a physical or financial emergency.

Fund balances for all the major and other governmental funds as of June 30, 2022, were classified as follows:

Capital Other Total
General Housing and Other ARPA Projects Measure O Governmental Governmental Fund Assets Grants Fund Fund Fund Funds Funds
Restricted
Debt service -$ -$ -$ -$ -$ -$ 5,833,428$ 5,833,428$ Streets and roads - - - - - - 3,968,271 3,968,271 Museum and adult center - - - - - - 22,212 22,212 Public Safety - - - - - - 381,865 381,865 Community development - - - - - 50,462,161 3,489,591 53,951,752 Housing - 8,769,588 - - - - 346 8,769,934 Total restricted - 8,769,588 - - - 50,462,161 13,695,713 72,927,462 Committed
Compensated absences 994,762 - - - - - - 994,762 Liability insurance 105,930 - - - - - - 105,930 Available Capital
improvements Reserve 1,144,790 - - - - - - 1,144,790 Committed Capital
improvements Reserve 897,782 - - - - - - 897,782 Community Center 71,019 - - - - - - 71,019 Heritage Theater 268,542 - - - - - - 268,542 Total committed 3,482,825 - - - - - - 3,482,825 Assigned
Capital projects
(Construction Tax) 517,242 - - - 947,217 - - 1,464,459 Unemployment insurance 90,000 - - - - - - 90,000 PERS 2,252,000 - - - - - - 2,252,000 OPEB 347,321 - - - - - - 347,321 All other 711,874 - - - - - - 711,874 Total assigned 3,918,437 - - - 947,217 - - 4,865,654 Unassigned 999,999 - (890,462) (48,225) - - - 61,312 City council reserve 362,624 - - - - - - 362,624 Economic fluctuations 9,955,452 - - - - - - 9,955,452 Emergency 3,207,454 - - - - - - 3,207,454 Total unassigned 14,525,529 - (890,462) (48,225) - - - 13,586,842 Total 21,926,791$ 8,769,588$ (890,462)$ (48,225)$ 947,217$ 50,462,161$ 13,695,713$ 94,862,783$ Capital
Projects FundRevenue Funds
Special

59 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 9 - Pension Plans

The following is a summary of pension related items for the year ended June 30, 2022:

Deferred Deferred
Pension Outflows Inflows Pension
Liability of Resources of Resources Expense
CalPERS Miscellaneous 18,950,979$ 5,067,814$ 10,052,032$ 2,359,442$ CalPERS Safety 19,187,021 7,843,040 11,837,775 4,119,196 38,138,000$ 12,910,854$ 21,889,807$ 6,478,638$

Public Employees’ Retirement System (CalPERS)

General Information about the Pension Plans:

Plan Descriptions

All qualified permanent and probationary employees are eligible to participate in the City’s Safety (police) cost- sharing multiple-employer defined benefit plan or the Miscellaneous (all other) Plan, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

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 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least 5 years of services. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least 5 years of service. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: The Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. Safety members can receive a special death benefit if the member dies while actively employed and the death is job-related. Fire members may receive the alternate death benefit in lieu of the Basic Death Benefit or the 1957 Survivor Benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

60 City of Campbell
Notes to Financial Statements
June 30, 2022

The Plans’ provisions and benefits in effect for the measurement period ended June 30, 2021, are summarized as follows:

Hire date Prior to On or After On or after
Normal benefit formula 2.5%@55 2%@60 2%@62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Earliest retirement age 50 50 52
Monthly benefits, as a % of eligible compensation 2.0% to 2.5% 1.1% to 2.4% 1.0% to 2.5% Required employee contribution rates 7.75% 7% 7.25%
Required employer contribution rates:

Normal cost rate 10.55% 10.55% 10.55%
Employer portion of unfunded liability 2,538,778$ -$ -$ Hire date Prior to On or After On or after
Normal benefit formula 3%@50 2%@50 2.7%@57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Earliest retirement age 50 50 50
Monthly benefits, as a % of eligible compensation 3.00% 2.0% to 2.7% 2.0% to 2.7% Required employee contribution rates 9.00% 9.00% 13.00% Required employer contribution rates:

Normal cost rate 25.59% 19.25% 13.13%
Employer portion of unfunded liability 2,076,285$ 34,613$ 33,678$ Miscellaneous
Safety

Employees Covered

At June 30, 2021, the measurement date, the following employees were covered by the benefit terms for the Miscellaneous Plan:

Miscellaneous
Inactive employees or beneficiaries currently receiving benefits 239 Inactive employees entitled but not yet receiving benefits 174 Active employees 131
Total 544

61 City of Campbell
Notes to Financial Statements
June 30, 2022

Contributions

Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. City contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions.

Net Pension Liability

The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2020, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

Actuarial Assumptions

The total pension liabilities in the June 30, 2020 actuarial valuations were determined using the following actuarial methods and assumptions:

Miscellaneous Safety
Valuation Date June 30, 2020 June 30, 2020
Measurement Date June 30, 2021 June 30, 2021
Actuarial Cost Method Entry Age Normal Entry Age Normal Cost Method Cost Method
Actuarial Assumptions:

Discount Rate 7.15% 7.15%
Inflation 2.50% 2.50%
Salary Increase (1) (1)
Mortality (2) (2)
Post Retirement Benefit Increase (3) (3)

(1) Varies by entry age and service.
(2) The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.
(3) Contract COLA up to 2.0% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.50% thereafter.

62 City of Campbell
Notes to Financial Statements
June 30, 2022

Long-term Expected Rate of Return

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS considered 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 (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ 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 rounded 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 equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

Asset Class
Current Target
Allocation
Real Return Years
1 - 10 (a)
Real Return Years
11+ (b)
Global Equity 50.0% 4.80% 5.98%
Global Fixed Income 28.0% 1.00% 2.62%
Inflation Sensitive 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Infrastructure and Forestland 0.0% 0.00% 0.00%
Liquidity 1.0% 0.00% -0.92%
100.0%
(a) An expected inflation of 2.00% used for this period (b) An expected inflation of 2.92% used for this period

Discount Rate

The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

63 City of Campbell
Notes to Financial Statements
June 30, 2022

Changes in the Net Pension Liability

The changes in the net pension liability for the Miscellaneous Plan during the measurement year are as follows:

Total Pension Plan Fiduciary Net Net Pension
Balance at June 30, 2020 121,742,857$ 88,688,411$ 33,054,446$ Changes in the Year
Service cost 2,410,558 - 2,410,558 Interest on the total pension liability 8,542,268 - 8,542,268 Changes in assumptions - - - (396,930) - (396,930) Contribution - employer - 3,758,501 (3,758,501) Contribution - employee - 1,059,499 (1,059,499) Net investment income - 19,929,957 (19,929,957) Administrative expenses - (88,594) 88,594 Benefit payments, including refunds
of employee contributions (6,157,839) (6,157,839) - Other miscellaneous income (expense) - - - Net changes 4,398,057$ 18,501,524$ (14,103,467)$ Balance at June 30, 2021 126,140,914$ 107,189,935$ 18,950,979$ Increase (Decrease)
Differences between expected and
actual experience

Proportionate Share of Net Pension Liability - Safety Plan

The City’s Safety Plan is included in the Safety Risk Pool administered by CalPERS in its Public Agency Cost- Sharing Multiple Employer Defined Benefit Pension Plan (PERFC). As of the year-end, the City’s proportionate share of the net pension liability for the Safety Risk Pool was as follows:

Proportionate
Share of
Net Pension
Liability
Safety Plan 19,187,021$

64 City of Campbell
Notes to Financial Statements
June 30, 2022

The City’s net pension liability for the Safety Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plans is measured as of June 30, 2021, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The City’s proportionate share of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.

The City’s change in proportionate share of the net pension liability for the Plan as of the measurement dates ended June 30, 2021 and 2020 was as follows:

Safety
Proportion - Fiscal Year ended June 30, 2020 0.46782%
Proportion - Fiscal Year ended June 30, 2021 0.54672%
Change - Increase (decrease) 0.07890%

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the net pension liability of the City for the Miscellaneous Plan and proportionate share of net pension liability for the Safety Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability and proportionate share of net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Miscellaneous Safety
1% Decrease 6.15% 6.15%
Net Pension Liability 35,107,325$ 33,877,486$ Current Discount Rate 7.15% 7.15%
Net Pension Liability 18,950,979$ 19,187,021$ 1% Increase 8.15% 8.15%
Net Pension Liability 5,557,228$ 7,120,618$

Pension Plan Fiduciary Net Position

Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

65 City of Campbell
Notes to Financial Statements
June 30, 2022

Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

For the year ended June 30, 2022, the City recognized an aggregate pension expense of $6,478,638. The City recognized pension expense of $2,359,442 related to the Miscellaneous Plan and $4,119,196 related to the Safety Plan. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred
Outflows of
Deferred
Inflows of
Deferred
Outflows of
Deferred
Inflows of
Deferred
Outflows of
Deferred
Inflows of
4,926,220$ -$ 4,287,989$ -$ 9,214,209$ -$ 141,594 (238,158) 3,278,086 - 3,419,680 (238,158) Changes in assumptions - - - - - - - - 276,965 - 276,965 - Change in proportion - - - (417,809) - (417,809) - (9,813,874) - (11,419,966) - (21,233,840) 5,067,814$ (10,052,032)$ 7,843,040$ (11,837,775)$ 12,910,854$ (21,889,807)$ Pension contributions subsequent
to measurement date
Difference between expected
and actual experiences
Difference between actual and
projected contribution
Net difference between projected and
actual earnings on pension plan
investments
Safety TotalMiscellaneous

$4,926,220 and $4,287,989 reported as deferred outflows of resources related to contributions subsequent to the measurement date for the miscellaneous and safety plans, respectively, will be recognized as a reduction of the net pension liability in the year ending June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year
Ending
June 30, Miscellaneous Safety Total
2023 (2,472,453)$ (1,211,807)$ (3,684,260)$ 2024 (2,340,578) (1,622,241) (3,962,819) 2025 (2,368,109) (2,306,061) (4,674,170) 2026 (2,729,298) (3,142,615) (5,871,913) (9,910,438)$ (8,282,724)$ (18,193,162)$

Payable to the Pension Plans

At June 30, 2022, the City had no outstanding amount of contributions to the pension plans required for the year ended June 30, 2022.

66 City of Campbell
Notes to Financial Statements
June 30, 2022

Deferred Compensation Plan

City employees may defer a portion of their compensation under a City sponsored Deferred Compensation Plan created in accordance with Internal Revenue Code 457. Under this plan, participants are not taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, death or in an emergency as defined by the plan.

The laws governing deferred compensation plan assets require plan assets to be held by a Trust for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under these plans are not the City’s property and are not subject to claims by general creditors of the City, they have been excluded from these financial statements.

Note 10 - Other Retirement System

The Omnibus Budget Reconciliation Act of 1990 (OBRA) mandates that public sector employees who are not members of their employer’s existing retirement system as of January 1, 1992 be covered by either Social Security or an alternative plan. Effective July 1, 2004, the City contracted with the Public Agency Retirement System (PARS), a defined contribution plan. This Plan covers employees that are part-time, seasonal or temporary and all other employees that are not covered by another retirement system. All eligible employees covered by the Plan are fully vested. Employer liabilities are limited to the amount of current contributions.

Under PARS, employees contribute 6.2% and the City contributes 1.3% of the employees’ salary each pay period.

For the fiscal year ended June 30, 2022, total contributions of $74,942 ($61,952 employee and $12,990 employer) were made based on covered compensation of $999,203.

67 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 11 - Post-Employment Benefits Plan

General Information about the OPEB Plan:

Plan Description

The City administers Retiree Award Program which provides medical insurance benefits on a reimbursement basis to eligible retirees in accordance with various labor agreements. The City pays up to $325 per month for retiree only medical insurance premiums or the actual cost of the retiree premium, whichever is less. Eligible retirees must be retired from the City with at least 17 years of service with the City and be at least 50 years of age.

The City has established a trust with the California Employers Retiree Benefit Trust, an agent multiple-employer plan, for the purpose of holding assets accumulated for plan benefits. Copies of PERS’ annual financial reports for its OPEB Trust may be obtained from its executive office at 400 “P” Street, Sacramento, California 95814.

Funding Policy

The contribution requirements of plan members and the City are established and may be amended by City Council. The contribution required to be made under City Council and labor agreement requirements is based on the most recent actuarial study using a 10-year phase-in option.

Employees Covered:

As of the June 30, 2021 measurement date, the following current and former employees were covered by the benefit terms under the plan:

Inactive employees or beneficiaries currently receiving benefits 72 Inactive employees or beneficiaries entitled to but not yet receiving benefit payments 106 Active plan members 166
344

Contributions

The contribution requirements are established by the City and may be amended by City Council. The annual contribution is based on the actuarially determined contribution. For the fiscal year ended June 30, 2022, the City’s cash contributions were $83,833 in payments to the trust, $431,477 of cash benefits payments and an estimated implied subsidy of $144,000 and resulting in payments of $659,310.

Net OPEB Liability

The City’s net OPEB liability was measured as of June 30, 2021 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2021. A summary of the principal assumptions and methods used to determine the total OPEB liability is shown on the next page.

68 City of Campbell
Notes to Financial Statements
June 30, 2022

Actuarial Assumptions

The total OPEB liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Valuation Date June 30, 2021
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions
Discount Rate 6.15%
Expected Long-Term Rate of Return 6.15%
Inflation 2.50%
Mortality, Retirement, Disability,
Termination
2017 experience study of the California Public Employees Retirement System using data from 1997 to 2015.

Mortality Improvement Mortality projected fully generational with Scale MP-2016.

Salary Increase 3.00% per annum, in aggregate.

Medical Trend 5.8% for 2022, decreasing to an ultimate rate of 3.9% in 2076 and later years.

The actuarial assumptions used in the June 30, 2021 valuation were based on a standard set of assumptions the actuary has used for similar valuations, modified as appropriate for the City.

Long Term Expected Rate of Return

The long-term expected rate of return was determined using a building-block method in which best- estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset allocation as of year-end, are summarized in the following table:

Asset Class
Target
Allocation
Long-Term
Expected Real
Rate of Return
Global Equity 49.00% 4.50%
Global Fixed Income 23.00% 2.20%
Treasury Inflation Protection Securities 5.00% 1.30%
Real Estate Investment Trusts 20.00% 3.90%
Commodities 3.00% 1.20%
Total 100.00%

69 City of Campbell
Notes to Financial Statements
June 30, 2022

Discount Rate

The discount rate used to measure the total OPEB liability was 6.15%. The projection of cash flows used to determine the discount rate assumed that City’s contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries.

Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Changes in the Net OPEB Liability

Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability
Balance at June 30, 2020 (measurement date) 9,053,761$ 5,092,021$ 3,961,740$ Changes recognized for year
Service cost 341,663 - 341,663 Interest 617,389 - 617,389 Changes due to investment experience - 1,052,137 (1,052,137) Change due to other plan experience 684,363 - 684,363 Changes of assumptions 1,073,039 - 1,073,039 Contributions
Employer - explicit subsidy - 493,391 (493,391) Employer - implicit subsidy - 120,000 (120,000) Net investment income - 347,546 (347,546) Administrative expenses - (1,927) 1,927 Benefit payments (497,843) (497,843) - Net changes 2,218,611$ 1,513,304$ 705,307$
Balance at June 30, 2021 (measurement date) 11,272,372$ 6,605,325$ 4,667,047$ Increase (Decrease)

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate

The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current discount rate:

Discount Rate - 1%
(5.15%)
Current Discount Rate
(6.15%)
Discount Rate + 1%
(7.15%)
6,109,886$ 4,667,047$ 3,469,339$

70 City of Campbell
Notes to Financial Statements
June 30, 2022

Sensitivity of the Net OPEB Liability to Changes in Health-Care Cost Trend Rates

The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage point lower or 1-percentage point higher than the current healthcare cost trend rates:

1% Decrease Current Healthcare Cost Trend 1% Increase
3,691,279$ 4,667,047$ 5,868,527$

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB:

For the year ended June 30, 2022, the City recognized OPEB expense of $607,683. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows of
Resources
Deferred Inflows of
Resources
Employer contributions made subsequent
to the measurement date 659,310$ -$ Differences between expected and actual experience 586,035 (214,593) Changes in assumptions 918,867 (23,230) Net differences between projected and
actual earnings on plan investments - (748,270) Total 2,164,212$ (986,093)$

$659,310 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:

Fiscal Year Ended Deferred Outflows/(Inflows)
2023 10,926$
2024 17,413
2025 12,955
2026 (17,387)
2027 252,500
Thereafter 242,402
518,809$

71 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 12 - Risk Management

General Liability

Risk management activity for City exposure to torts (general liability) is accounted for as a liability on the Statement of Net Position. The City is self-insured for the first $100,000 of liability for each occurrence, and the excess (up to $20,000,000) is covered through the City’s participation in the Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA) general liability risk pool. PLAN JPA also provides $1,000,000 of employee theft coverage in the excess of the City’s $5,000 deductible. Over the past three years, no claims exceeded the coverages above.

PLAN JPA pool consists of twenty-eight member agencies within the San Francisco Bay Area. The stated purpose of the PLAN JPA pool is to provide certain levels of liability insurance coverage, claims management, risk management services, and legal defense to each participating city within the pool.

Each city was required to make an initial deposit premium based on an actuarial study of each City’s risk exposure. The premium consists of a risk portion and administrative portion. The premium is revised each year based on claims experience and risk exposure.

Workers’ Compensation

The City has a risk financing fund to account for work related injuries and accidents to City employees. This fund is accounted for as an internal service fund in which assets are set aside for claim payments. Under the California Workers’ Disability and Compensation laws, the City, as an employer, is permissibly self-insured for the first $1,000,000 of claims arising from each occurrence. The City obtains excess Workers’ Compensation insurance through a policy up to statutory limits. A premium is charged to each fund and program that budgets for part-time or full-time employees. The total charge allocated is based upon the percentage of each fund’s current-year payroll as it relates to total payroll of the City.

Liabilities of the fund are reported when it is probable that a loss has occurred, and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNR). Claims liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and number of payouts and other economic and social factors. For the past three fiscal years, no claims were settled in excess of commercial insurance coverage.

72 City of Campbell
Notes to Financial Statements
June 30, 2022

City’s Claims Liabilities

The City’s liability for uninsured claims was estimated by management based on prior year claims experience, as follows:

General Workers'
Liability Compensation Total
Balance as of July 1, 2020 208,840$ 3,342,788$ 3,551,628$ Liability for current year fiscal claims 103,822 519,641 623,463 Increase (decrease) in estimated liability 44,935 211,490 256,425 Claims paid (111,494) (487,202) (598,696) Balance as of June 30, 2021 246,103$ 3,586,717$ 3,832,820$ Balance as of July 1, 2021 246,103$ 3,586,717$ 3,832,820$ Liability for current year fiscal claims 171,371 657,841 829,212 Increase (decrease) in estimated liability 86,990 (53,834) 33,156 Claims paid (178,854) (413,124) (591,978) Balance as of June 30, 2022 325,610$ 3,777,600$ 4,103,210$

Note 13 - Joint Powers Agreements

Congestion Management Agency

The Congestion Management Agency (CMA) was formed in 1991 by a joint exercise of powers agreement between the County of Santa Clara and each of the cities of Santa Clara County for the purpose of preparing, implementing, and administering a traffic congestion management plan pursuant to California Government Code Section 66531.

The CMA financial statements are included as part of the Special Fund of the Santa Clara Valley Transportation Authority. Audited financial statements may be obtained at 3331 N. First Street, Building B-2, San Jose, California 95134-1927.

Silicon Valley Animal Control Authority

The City is a member of Silicon Valley Animal Control Authority (SVACA), established in 2000 to deliver animal control services. SVACA provides its own field services and has an agreement with the Humane Society of Santa Clara Valley to provide facilities, personnel, shelter, and animal services. SVACA is governed by a Board of Directors consisting of representatives from member cities.

During the fiscal year ended June 30, 2022, the City contributed $308,530 to SVACA for field services and sheltering costs. Audited financial statements are available from SVACA at 2340-A Walsh Avenue, Santa Clara, California 95051.

73 City of Campbell
Notes to Financial Statements
June 30, 2022

West Valley Solid Waste Management Authority

The West Valley Solid Waste Management Authority (WVSWMA) was formed on October 1, 1997 to implement and administer the West Valley Solid Waste Management Plan, manage rate studies, and negotiate the related contracts for member’s entities.

WVSWMA includes the Cities of Campbell, Monte Sereno, Saratoga, and the Town of Los Gatos. The City of Campbell maintains the financial records and provides accounting services for WVSWMA. Audited financial statements are available from the City of Campbell.

California Municipal Finance Authority

The California Municipal Finance Authority (CMFA) was created to assist local governments, non-profit organizations and business with the issuance of taxable and tax-exempt bonds aimed at improving the standards of living in California. In order for the CMFA to have the authority to serve as the issuer of the bonds for the rehabilitation of a project within the City limits, it was necessary for the City to become a member of the CMFA.

The City has no obligation with respect to the bonds issued by the CMFA, and the City has the right to withdraw from the Joint Exercise of Powers Agreement upon written notice to the Board of Directors of the CMFA.

Note 14 - Leases

Leases Receivable

The City leases a portion of the space at its Community Center to various third parties. The leases span between slightly more than one year and five years. The interest rate for the leases is a flat 2.14%. The City received $1,183,087 in monthly payments. The City recognized $1,168,858 in lease revenue and $37,949 in interest revenue during the current fiscal year related to these leases. As of June 30, 2022, the City’s receivable for lease payments was $1,360,190. Also, the City has a deferred outflow of resources associated with these leases that will be recognized as revenue over the lease terms. As of June 30, 2022, the balance of the deferred inflow of resources was $1,336,470.

The City leases land for the usage of cellular towers to various third parties. The leases span between slightly more than five year and nine years. The interest rate for the leases is a flat 2.14%. The City received $142,377 in monthly payments. The City recognized $147,130 in lease revenue and $22,152 in interest revenue during the current fiscal year related to these leases. As of June 30, 2022, the City’s receivable for lease payments was $1,069,623. Also, the City has a deferred outflow of resources associated with these leases that will be recognized as revenue over the lease terms. As of June 30, 2022, the balance of the deferred inflow of resources was $1,042,718.

74 City of Campbell
Notes to Financial Statements
June 30, 2022

Leases Payable

The City leases ten vehicles. An initial lease liability was recorded in the amount of $262,940 on July 1, 2021. As of June 30, 2022 the value of the lease liability was $215,201. The City made monthly principal and interest payments of $63,101. The leases have interest rates between 4.75% and 8.75%. The value of the right-to-use leased equipment as of the end of the current fiscal year was $209,398. The City also has three office equipment leases. An initial lease liability was recorded in the amount of $77,892 on July 1, 2021. As of June 30, 2022 the value of the lease liability was $52,491. The City made monthly principal and interest payments of $30,176.

The future principal and interest lease payments as of June 30, 2022, were as follows:

Fiscal years Ended June 30 Principal Interest
2023 76,499$ 16,781$
2024 72,900 11,085
2025 60,549 6,450
2026 57,744 2,042
Total 267,692$ 36,358$

Note 15 - Contingent Liabilities

Litigation

The City is subject to litigation arising in the normal course of business. In the opinion of the City attorney, there is no pending litigation which is likely to have a material adverse effect on the financial position of the City.

Grant Programs

The City participates in Federal and State grant programs. The amounts received or receivable from granting agencies are subject to audit adjustment by grantor agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the granting agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.

75 City of Campbell
Notes to Financial Statements
June 30, 2022

Annexation of Territory

On May 1, 2013, the City annexed approximately 103 acres from the County of Santa Clara and 24 acres from the City of San Jose as part of a territorial reorganization between these entities. As a condition to the reorganization of territory from the City of San Jose to the City, the City entered into a 40-year agreement with the City of San Jose to provide it with compensation for future net revenues it has given up as a result of the territorial reorganization. Under the terms of the agreement, the City is committed to make annual payments to San Jose based on an initial base amount for the first five years, effective fiscal year 2013-14. This base amount is subject to adjustment if certain conditions are met. In the sixth year, and every subsequent fifth year thereafter, the payment is to be adjusted by an agreed upon formula that calculates the increase/decrease in net revenues, as defined in the agreement, as a percentage, and applies it to the base payment resulting in a revised based payment amount for the ensuing five-year period. Other provisions call for a recalculation of the revised base payment in between calculation dates if certain economic conditions are met. The City expects its annual payment amount to be approximately $230,042 through fiscal 2022-23. The annual payment is revised every five years through fiscal year 2052-53.

Note 16 - Successor Agency

Capital Assets

Capital assets of the Successor Agency as of June 30, 2022 consisted of the following:

Balance Balance Due Within
July 1,2021 Additions Deletions June 30,2022 One Year
2016 Tax Allocation Refunding Bonds 17,425,000$ -$ (1,375,000)$ 16,050,000$ 1,555,000$

Long-term Liabilities

Long-term liabilities of the Successor Agency as of June 30, 2022 consisted of the following:

Balance at Balance at
July 1, 2021 Additions Deletions Reclassification June 30, 2022 Capital assets, not being depreciated
Land 7,123,531$ -$ -$ -$ 7,123,531$ Total capital assets, not
being depreciated 7,123,531 - - - 7,123,531 Capital assets, being depreciated
Buildings and improvements 18,939,961 - - - 18,939,961 Other improvements 11,805,911 - - - 11,805,911 Total capital assets,
being depreciated 30,745,872 - - - 30,745,872 Less accumulated depreciation for
Buildings and improvements (11,109,313) (309,151) - - (11,418,464) Other improvements (10,604,029) (388,368) - - (10,992,397) Total accumulated depreciation (21,713,342) (697,519) - - (22,410,861) Total capital assets,
being depreciated, net 9,032,530 (697,519) - - 8,335,011 Governmental Activities
capital assets, net 16,156,061$ (697,519)$ -$ -$ 15,458,542$

76 City of Campbell
Notes to Financial Statements
June 30, 2022

Advances from the City of Campbell

The City has advanced funds to the former redevelopment agency under the terms of a Third Amended and Restated Indebtedness Agreement. Principal was payable out of the excess of tax increment revenues over other similar liabilities and agreements. The Campbell Redevelopment Agency was dissolved on January 31, 2012 and the advance liability was transferred to the Successor Agency to be paid as an enforceable obligation.

This advance was refunded in August 2016 with proceeds from the 2016 Tax Allocation Refunding Bonds issued by the Successor Agency of the former Campbell Redevelopment Agency. The proceeds repaid to the City were utilized by the City to refund a portion of the 1997 Refunding Certificates of Participation and a portion of the 2002 Refunding Certificates of Participation as described in Note 6.

2016 Tax Allocation Refunding Bonds

Concurrently with the issue of the 2016 Refunding Lease Revenue Bonds, the City of Campbell Successor Agency issued Tax Allocation Refunding Bonds, Series 2016 in the aggregate principal amount of $22,705,000. These bonds were private placement bonds that pay interest at a rate from 1.825% to 2.15% payable semiannually on April 1 and October 1 commencing on April 1, 2017. The proceeds from the Tax Allocation Refunding Bonds, Series 2016 were used to prepay the 2002 RDA Tax Allocation Bonds, Series A, to prepay the 2005 RDA Tax Allocation Bonds, Series A, to prepay a portion of the 1997 Refunding Certificates of Participation and the 2002 Refunding Certificates of Participation, and to pay the cost of issuing the bonds.

The annual debt service requirements to amortize the 2016 Tax Allocation Refunding Bonds outstanding at June 30, 2022 are as follows:

Year Ending
June 30, Principal Interest Total
2023 1,555,000$ 334,192$ 1,889,192$ 2024 1,595,000 300,984 1,895,984 2025 1,630,000 266,871 1,896,871 2026 1,660,000 232,066 1,892,066 2027 1,705,000 196,571 1,901,571 2028-2031 7,905,000 417,798 8,322,798 Total 16,050,000$ 1,748,482$ 17,798,482$

77 City of Campbell
Notes to Financial Statements
June 30, 2022

Note 17 - Restatement of Prior Year Net Position and Correction of Error

The City adopted the provisions of Government Accounting Standards Board (GASB) Statement No. 87, Leases, for the year ended June 30, 2022. Accordingly, a restatement has been made to the governmental activities and Internal Service Fund net position as of July 1, 2021, to restate beginning net position, and fund balance of the General Fund. Additionally, an overstatement of amounts previously reported for accounts receivable and understatement of loans, and an adjustment of net OPEB and net pension liabilities and related deferrals as of June 30, 2022, were discovered by management of the City during the current year. Accordingly, a restatement has been made to the Other Grants fund balance and governmental activities.

Governmental
Activities
Net Position - Beginning 39,819,631$
Lease receivables 3,958,116
Deferred inflows of resources related to leases (3,958,116) Right-of-use Intangible Assets 340,832
Leases payable (340,832)
Adjustment to report the California Energy Commission Loan (809,094) Adjustment to remove accounts receivable related to the loan (649,787) Net Position - Beginning as restated 38,360,750$
General
Fund
Net position - Beginning 20,916,450$
Lease receivables 3,695,176
Deferred inflows of resources related to leases (3,695,176) Fund Balance - Beginning 20,916,450$
Internal
Service Fund
Net position - Beginning 1,456,262$
Adjustment to net OPEB liability and related deferrals (116,278) Adjustment to net pension liability and related deferrals (1,677,260) Right-of-use Intangible Assets 262,940
Leases payable (262,940)
Net Position - Beginning as restated (337,276)$
Other
Grants
Net position (deficit) - Beginning (1,424,397)$
Adjustment to remove accounts receivable related to the loan (649,787) Fund Balance (deficit) - Beginning as restated (2,074,184)$

eidebailly.com

Required Supplementary Information
June 30, 2022
City of Campbell

See Notes to Required Supplementary Information 78
City of Campbell
Schedule of Changes in the Pension Liability and Related Ratios – CalPERS Miscellaneous Plan Last Ten Fiscal Years*

Fiscal Year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Measurement period ended June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Total Pension Liability:

Service cost 2,410,558$ 2,407,298$ 2,335,864$ 2,318,339$ 2,334,869$ 1,958,173$ 1,794,374$ 1,803,589$ Interest on total pension liability 8,542,268 8,227,199 7,839,384 7,392,762 7,134,146 6,827,812 6,544,912 6,237,266 Differences between expected and actual experience (396,930) 613,576 1,563,454 (487,309) 166,228 (487,339) (413,601) - Changes in assumptions - - - (809,156) 5,879,356 - (1,598,990) - Changes in benefits - - - - - - - - Benefit payments (6,157,839) (5,507,392) (5,293,752) (4,779,950) (4,314,617) (4,673,560) (3,798,085) (3,467,485) Net Change in Total Pension Liability 4,398,057 5,740,681 6,444,950 3,634,686 11,199,982 3,625,086 2,528,610 4,573,370 Total Pension Liability - Beginning of Year 121,742,857 116,002,176 109,557,226 105,922,540 94,722,558 91,097,472 88,568,862 83,995,492 Total Pension Liability - End of Year 126,140,914$ 121,742,857$ 116,002,176$ 109,557,226$ 105,922,540$ 94,722,558$ 91,097,472$ 88,568,862$ Plan Fiduciary Net Position:

Contributions - employer 3,758,501$ 3,446,237$ 3,062,946$ 2,683,458$ 2,424,792$ 2,168,070$ 1,811,356$ 1,592,734$ Contributions - employee 1,059,499 1,052,758 1,050,023 1,040,310 920,368 903,290 818,954 869,838 Net investment income 19,929,957 4,262,754 5,242,422 6,387,875 7,735,412 518,527 1,566,471 10,321,563 Plan to plan resource movement - - - (189) - - (12,655) - Administrative expenses (88,594) (120,615) (58,198) (119,314) (103,210) (43,290) (79,967) - Benefit payments (6,157,839) (5,507,392) (5,293,752) (4,779,950) (4,314,617) (4,673,560) (3,798,085) (3,467,485) Other miscellaneous income/expenses - (2,611) 189 (226,579) - - - - Net Change in Plan Fiduciary Net Position 18,501,524 3,131,131 4,003,630 4,985,611 6,662,745 (1,126,963) 306,074 9,316,650 Plan Fiduciary Net Position - Beginning of Year 88,688,411 85,557,280 81,553,650 76,568,039 69,905,294 71,032,257 70,726,183 61,409,533 Plan Fiduciary Net Position - End of Year (b) 107,189,935$ 88,688,411$ 85,557,280$ 81,553,650$ 76,568,039$ 69,905,294$ 71,032,257$ 70,726,183$ Net Pension Liability - Ending (a) - (b) 18,950,979$ 33,054,446$ 30,444,896$ 28,003,576$ 29,354,501$ 24,817,264$ 20,065,215$ 17,842,679$ Plan's fiduciary net position as a percentage of
the plan's total pension liability 84.98% 72.85% 73.75% 74.44% 72.29% 73.80% 77.97% 79.85% Covered payroll $13,853,779 $13,631,359 $12,741,308 $12,620,931 $12,359,036 $11,526,124 $10,550,178 $9,939,320 Net pension liability as percentage of coverd payroll 136.79% 242.49% 238.95% 221.88% 237.51% 215.31% 190.19% 179.52%

Notes to Schedule:

Changes in Assumptions:

From fiscal year June 30, 2015 to June 30, 2016:

The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

From fiscal year June 30, 2017 to June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

* - Fiscal year 2015 was the 1st year of implementation.

See Notes to Required Supplementary Information 79 City of Campbell
Schedule of Pension Contributions – CalPERS Miscellaneous Plan Last Ten Fiscal Years*

Fiscal Year ended 2022 2021 2020 2019 2018 2017 2016 2015 Actuarially determined contribution 4,926,220$ 3,758,501$ 3,446,237$ 3,062,946$ 2,683,458$ 2,424,792$ 2,168,070$ 1,811,356$ Contributions in relation to the actuarially
determined contributions (4,926,220) (3,758,501) (3,446,237) (3,062,946) (2,683,458) (2,424,792) (2,168,070) (1,811,356) Contribution deficiency (excess) -$ -$ -$ -$ -$ -$ -$ -$ Covered payroll $12,986,215 $13,853,779 $13,631,359 $12,741,308 $12,620,931 $12,359,036 $11,526,124 $10,550,178 Contributions as a percentage
of covered payroll 37.93% 27.13% 25.28% 24.04% 21.26% 19.62% 18.81% 17.17%

Notes to Schedule:

Changes in Assumptions:

From fiscal year June 30, 2016 to June 30, 2017:

The discount rate was reduced from 7.65% to 7.15%.

* - Fiscal year 2015 was the 1st year of implementation.

See Notes to Required Supplementary Information 80 City of Campbell
Schedule of Proportionate Share of the Net Pension Liability – CalPERS Safety Plans Last Ten Fiscal Years*

Fiscal Year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Measurement period ended June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Proportion of the net pension liability 0.54672% 0.46782% 0.47274% 0.48183% 0.47999% 0.50062% 0.52828% 0.52660% 19,187,021$ 31,167,715$ 29,511,142$ 28,271,751$ 28,680,686$ 25,928,666$ 21,767,656$ 19,752,687$ Covered payroll 6,646,761$ 6,137,525$ 6,194,278$ 6,180,899$ 5,832,083$ 5,370,852$ 5,168,789$ 5,062,342$ 288.67% 507.82% 476.43% 457.41% 491.77% 482.77% 421.14% 390.19% Fiduciary net position as a percentage of the
plan's total pension liability 82.42% 73.12% 73.37% 73.39% 71.74% 72.69% 77.27% 78.83% Net pension liability as a percentage
of covered payroll
Proportionate share of the
net pension liability

Notes to Schedule:

Changes in Assumptions:

From fiscal year June 30, 2016 to June 30, 2017:

The discount rate was reduced from 7.65% to 7.15%.

* - Fiscal year 2015 was the 1st year of implementation.

See Notes to Required Supplementary Information 81 City of Campbell
Schedule of Pension Contributions – CalPERS Safety Plan Last Ten Fiscal Years*

Fiscal Year ended 2022 2021 2020 2019 2018 2017 2016 2015 Actuarially determined contribution 4,287,989$ 4,968,440$ 3,858,649$ 3,579,757$ 3,180,698$ 2,928,596$ 2,610,566$ 2,079,597$ Contributions in relation to the
actuarially determined contributions (4,287,989) (4,968,440) (3,858,649) (3,579,757) (3,180,698) (2,928,596) (2,610,566) (2,079,597) Contribution deficiency (excess) -$ -$ -$ -$ -$ -$ -$ -$ Covered payroll 6,821,979$ 6,646,761$ 6,137,525$ 6,194,278$ 6,180,899$ 5,832,083$ 5,370,852$ 5,168,789$

62.86% 74.75% 62.87% 57.79% 51.46% 50.22% 48.61% 40.23% Contributions as a percentage
of covered payroll

Notes to Schedule:

Changes in Assumptions:

From fiscal year June 30, 2016 to June 30, 2017:

The discount rate was reduced from 7.65% to 7.15%.

* - Fiscal year 2015 was the 1st year of implementation.

See Notes to Required Supplementary Information 82
City of Campbell
Schedule of Changes in the Net OPEB Liability and Related Ratios Last Ten Fiscal Years*

Fiscal Year ended 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 Measurement period ended 6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017 Total OPEB Liability:

Service cost 341,663$ 331,712$ 339,543$ 329,653$ 320,051$ Interest on total OPEB liability 617,389 587,481 582,939 549,781 518,912 Actual vs. expected experience 684,363 - (375,537) - - Assumption changes 1,073,039 - (40,651) - - Benefit payments (497,843) (474,260) (388,140) (408,022) (374,490) Net Change in Total OPEB Liability 2,218,611 444,933 118,154 471,412 464,473 Total OPEB Liability - Beginning of Year 9,053,761 8,608,828 8,490,674 8,019,262 7,554,789 Total OPEB Liability - End of Year (a) 11,272,372 9,053,761 8,608,828 8,490,674 8,019,262 Plan Fiduciary Net Position:

Contributions - employer 613,391 646,871 675,398 1,566,022 829,490 Net investment income 1,399,683 169,139 261,853 255,576 251,971 Administrative expenses (1,927) (3,830) (2,124) (5,460) (1,332) Benefit payments (497,843) (474,260) (388,140) (408,022) (374,490) Net Change in Plan Fiduciary Net Position 1,513,304 337,920 546,987 1,408,116 705,639 Plan Fiduciary Net Position - Beginning of Year 5,092,021 4,754,101 4,207,114 2,798,998 2,093,359 Plan Fiduciary Net Position - End of Year (b) 6,605,325 5,092,021 4,754,101 4,207,114 2,798,998 Net OPEB Liability - Ending (a) - (b) 4,667,047$ 3,961,740$ 3,854,727$ 4,283,560$ 5,220,264$ Plan fiduciary net position as a percentage of the
total OPEB Liability 58.60% 56.24% 55.22% 49.55% 34.90% Covered employee payroll 23,360,322$ 23,681,909$ 22,349,167$ 22,223,899$ 21,017,236$ Net OPEB Liability as percentage of covered payroll 19.98% 16.73% 17.25% 19.27% 24.84%

Notes to Schedule:

Changes in Assumptions:

From fiscal year June 30, 2017 to June 30, 2018:

The discount rate was reduced from 7.25% to 6.75%.

From fiscal year June 30, 2021 to June 30, 2022:

The discount rate was reduced from 6.75% to 6.15%.

* - Fiscal year 2018 was the 1st year of implementation.

See Notes to Required Supplementary Information 83
City of Campbell
Schedule of OPEB Contributions
Last Ten Fiscal Years*

Fiscal Year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Actuarially determined contribution 624,000$ 610,000$ 642,000$ 629,000$ 1,038,000$ Contributions in relation to the
actuarially determined contributions (659,310) (613,391) (646,871) (675,398) (1,566,022) Contribution deficiency (excess) (35,310)$ (3,391)$ (4,871)$ (46,398)$ (528,022)$ Covered employee payroll $23,935,378 $23,360,322 $23,681,909 $22,349,167 $22,223,899 Contributions as a percentage
of covered payroll 2.75% 2.63% 2.73% 3.02% 7.05%

Notes to Schedule:

Changes in Assumptions:

From fiscal year June 30, 2017 to June 30, 2018:

The discount rate was reduced from 7.25% to 6.75%.

From fiscal year June 30, 2021 to June 30, 2022:

The discount rate was reduced from 6.75% to 6.15%.

* - Fiscal year 2018 was the 1st year of implementation.

See Notes to Required Supplementary Information 84
City of Campbell
Budgetary Comparison Schedule – General Fund
Fiscal Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Property taxes 18,847,020$ 18,583,168$ 19,510,782$ 927,614$ Sales and use taxes 15,521,900 15,587,825 16,419,363 831,538 Other taxes 7,210,365 7,637,896 7,894,351 256,455 Licenses and permits 2,738,858 3,319,200 3,742,393 423,193 Fines and forfeitures 160,000 62,000 222,721 160,721 Investment income 395,900 207,282 (317,035) (524,317) Rents and leases 2,116,800 2,556,900 2,779,743 222,843 Intergovernmental 5,839,504 1,001,924 985,556 (16,368) Charges for services 3,310,465 4,223,576 4,843,231 619,655 Miscellaneous 198,368 350,164 351,275 1,111 Total Revenues 56,339,180 53,529,935 56,432,380 2,902,445 Expenditures
General government
City council 353,921 343,601 316,538 27,063 City manager 1,081,539 1,101,380 913,751 187,629 City clerk 537,161 572,244 535,646 36,598 Human resources 1,270,757 1,285,066 1,278,838 6,228 Accounting 1,868,658 1,933,484 1,977,207 (43,723) Non-departmental finance 2,188,574 2,341,854 1,967,252 374,602 COVID response 125,000 144,021 330,656 (186,635) Legal services 523,658 532,544 544,434 (11,890) Economic development 170,392 170,769 172,843 (2,074) Total general government 8,119,660 8,424,963 8,037,165 387,798 Recreation
Community services and administration 409,426 416,749 417,573 (824) Senior citizens nutrition program 215,781 253,668 248,201 5,467 Adult services 283,767 324,383 331,193 (6,810) Campbell community center 1,039,933 1,062,240 1,248,783 (186,543) Museum services 344,681 356,321 378,944 (22,623) Theater 630,013 223,547 140,828 82,719 Sports, aquatics and fitness 759,652 769,456 979,262 (209,806) Trips, tours and classes 894,507 899,185 836,596 62,589 Total recreation 4,577,760 4,305,549 4,581,380 (275,831) Community development
Community development administration 565,898 553,121 587,833 (34,712) Current planning 806,024 859,664 690,014 169,650 Policy development 155,802 1,573,591 605,610 967,981 Building 1,281,816 1,413,567 1,237,399 176,168 Total community development 2,809,540 4,399,943 3,120,856 1,279,087 Budgeted Amounts

See Notes to Required Supplementary Information 85
City of Campbell
Budgetary Comparison Schedule – General Fund
Fiscal Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Public safety
Police administration 1,413,717$ 1,515,800$ 1,626,079 (110,279)$ Communications 2,771,388 2,768,902 2,775,970 (7,068) Records 1,286,793 1,359,396 1,288,129 71,267 Special enforcement services 4,580,808 4,662,127 4,529,972 132,155 Field services 9,249,441 9,443,393 10,448,487 (1,005,094) Fire protection services 9,856,600 9,856,600 9,867,228 (10,628) Total public safety 29,158,747 29,606,218 30,535,865 (929,647) Public works
Public works administration 702,227 764,228 713,687 50,541 Transportation engineering 415,255 435,389 413,010 22,379 Engineering 1,560,126 1,463,022 1,302,780 160,242 Land development/environment programs 1,072,996 1,129,359 999,686 129,673 Maintenance administration 613,084 621,556 658,062 (36,506) Building maintenance 1,590,973 1,651,129 1,662,878 (11,749) Total Public works 5,954,661 6,064,683 5,750,103 314,580 Total expenditures 50,620,368 52,801,356 52,025,369 775,987 Excess (deficiency) of revenues
over (under) expenditures 5,718,812 728,579 4,407,011 3,678,432 Other financing sources (uses)
Transfers in 791,371 868,847 866,425 (2,422) Transfers out (4,363,725) (5,380,320) (4,263,095) 1,117,225 Total other
financing sources (uses) (3,572,354) (4,511,473) (3,396,670) 1,114,803 Net change in fund balance 2,146,458 (3,782,894) 1,010,341 4,793,235 Fund balance at beginning of year, restated 20,916,450 20,916,450 20,916,450 - Fund balance at end of year 23,062,908$ 17,133,556$ 21,926,791$ 4,793,235$ Budgeted Amounts

See Notes to Required Supplementary Information 86
City of Campbell
Budgetary Comparison Schedule – Housing Assets Special Revenue Fund Fiscal Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income 50,000$ 50,000$ 27,263$ (22,737)$ Miscellaneous revenue 215,839 215,839 4,679 (211,160) Total Revenues 265,839 265,839 31,942 (233,897) Expenditures
Current
Community development 519,912 859,995 272,079 587,916 Net change in fund balance (254,073) (594,156) (240,137) 354,019 Fund balance at beginning of year 9,009,725 9,009,725 9,009,725 - Fund balance at end of year 8,755,652$ 8,415,569$ 8,769,588$ 354,019$ Budgeted Amounts

See Notes to Required Supplementary Information 87
City of Campbell
Budgetary Comparison Schedule – Other Grants Special Revenue Fund Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income -$ -$ (36,001)$ (36,001)$ Intergovernmental 2,245,000 8,313,922 3,118,462 (5,195,460) Total Revenues 2,245,000 8,313,922 3,082,461 (5,231,461) Expenditures
Current
Public works - - 609,438 (609,438) Excess (deficiency) of revenues
over (under) expenditures 2,245,000 8,313,922 2,473,023 (5,840,899) Other financing sources (uses)
New loans issued - - 3,368,566 3,368,566 Transfers out (2,245,000) (6,484,394) (4,657,867) 1,826,527 Total other
financing sources (uses) (2,245,000) (6,484,394) (1,289,301) 5,195,093 Net change in fund balance - 1,829,528 1,183,722 (645,806) Fund balance at beginning of year, restated (2,074,184) (2,074,184) (2,074,184) - Fund balance at end of year (2,074,184)$ (244,656)$ (890,462)$ (645,806)$ Budgeted Amounts

See Notes to Required Supplementary Information 88
City of Campbell
Budgetary Comparison Schedule – ARPA Special Revenue Fund Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income -$ -$ (48,225)$ (48,225)$ Intergovernmental - - - - Total Revenues - - (48,225) (48,225) Other financing sources (uses)
Transfers out - (125,000) - (125,000) Total other
financing sources (uses) - (125,000) - 125,000 Net change in fund balance - (125,000) (48,225) 76,775 Fund balance at beginning of year - - - - Fund balance at end of year -$ (125,000)$ (48,225)$ 76,775$ Budgeted Amounts

89 City of Campbell
Notes to Required Supplementary Information
Fiscal Year Ended June 30, 2022

Note 1 - Budgets and Budgetary Data

The City adopts a budget annually for General, Special Revenue, Capital Projects and Debt Service Funds. This budget is effective July 1 for the ensuing fiscal year. From the effective date of the budget, which is adopted by the City Council and controlled by each department head, the amounts stated therein as proposed expenditures become appropriations to the various City departments. The legal level of budgetary control is at the total department level. For the General Fund, budgetary comparisons for line operating departments are presented and supporting departments, Finance and City Manager are combined as General Government. All appropriations lapse at year-end. During the fiscal year, supplemental adjustments to appropriations were adopted by City Council and have been included in the budget versus actual statements.

Annual budgets are adopted on a basis consistent with generally accepted accounting principles, except for the Museum and Adult Center and Community Development Block Grant Special Revenue Funds for which no budget was adopted in the current fiscal year. Accordingly, no budgetary comparison for these funds are presented in the financial statements.

Under encumbrance accounting, purchase orders, contracts and other commitments of the expenditures are recorded in order to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of the formal budgetary process. Encumbrances outstanding at year-end lapse and must be re- appropriated as part of the following year budget.

Excess of Expenditures over Appropriations

Expenditures exceeded budgeted appropriations in the following funds:

Final
Budget Actual
Variance with
Final Budget
Major Fund
General Fund - Recreation 4,305,549$ 4,581,380$ (275,831)$ General Fund - Public Safety 29,606,218 30,535,865 (929,647)

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Supplementary Information
June 30, 2022
City of Campbell

90 City of Campbell
Description of Other Governmental Funds
June 30, 2022

Other Governmental Special Revenue Funds

Gas Tax

Accounts for revenues and expenditures pertaining to the construction and maintenance of City streets.

Vehicle Impact Fees

Accounts for revenues and expenditures pertaining to street maintenance.

Parkland Dedication Fees

Accounts for Quimby Act monies received from developers and records expenditures related to development of designated areas.

Lighting and Landscaping District

Accounts for revenues and expenditures providing for City street lighting and landscaping.

Community Development Block Grant

Accounts for Federal Block Grant Funds used for community development, such as low-and-moderate rehabilitation grants and loans.

Drug Enforcement Revenue

Accounts for revenues received through drug related asset seizures and any drug related convictions.

Environmental Services

Accounts for revenues received from developers and franchised garbage collection to be utilized for solid waste management and storm drain improvements.

Supplemental Law Enforcement

Accounts for revenues and expenditures pertaining to grants received from enhancing law enforcement services.

91 City of Campbell
Description of Other Governmental Funds
June 30, 2022

Community Facilities District #1

Accounts for revenues and expenditures pertaining to specific ongoing maintenance of the District’s boundaries.

Community Facilities District #2

Accounts for revenues and expenditures pertaining to specific ongoing maintenance of the District’s boundaries.

Museum and Adult Center

Accounts for donations received from expenditures related to the City’s Museum and Adult Center. The City’s Museum and Adult Care Center did not have an adopted or final budget.

Other Governmental Debt Service Fund:

2016 LRB

Accounts for the City’s share of proceeds from the repayments of the 2016 Lease Revenue Bonds, which were utilized for the refunding of the City’s 1997 and 2002 COP obligations.

Measure O Debt Service Fund

Accounts for the City’s repayments of the 2020 Measure O General Obligation Bond.

92 City of Campbell
Combining Balance Sheet – Other Governmental Fund
Year Ended June 30, 2022

Vehicle Parkland Lighting and Community Drug
Gas Impact Dedication Landscaping Development Enforcement Environmental Tax Fees Fees District Block Grant Revenue Services
Assets
Cash and investments -$ 2,426,966$ 3,295,725$ 1,441,904$ 16$ 114,951$ 568,439$ Cash held with fiscal agent - - - - - - - Receivables:

Accounts 679 39,800 - 10,461 - - 103,407 Taxes 234,377 - - 8,844 - - - Interest - 5,822 8,996 1,458 - 183 1,137 Notes and loans - - - - 140,000 - - Total assets 235,056$ 2,472,588$ 3,304,721$ 1,462,667$ 140,016$ 115,134$ 672,983$ Liabilities
Accounts payable 134,649$ -$ -$ 178,820$ -$ 1,381$ 848$ Accrued payroll 38,370 - - 86,572 - - 8,213 Due to other funds 427,551 - - - 139,670 - - Total liabilities 600,570 - - 265,392 139,670 1,381 9,061 Fund balances (deficit)
Restricted (365,514) 2,472,588 3,304,721 1,197,275 346 113,753 663,922 Total fund balances (deficit) (365,514) 2,472,588 3,304,721 1,197,275 346 113,753 663,922 Total liabilities, deferred inflows
of resources and fund balances 235,056$ 2,472,588$ 3,304,721$ 1,462,667$ 140,016$ 115,134$ 672,983$ Special Revenue Funds

93 City of Campbell
Combining Balance Sheet – Other Governmental Fund
Year Ended June 30, 2022

Assets
Cash and investments
Cash held with fiscal agent
Receivables:

Accounts
Taxes
Interest
Notes and loans
Total assets
Liabilities
Accounts payable
Accrued payroll
Due to other funds
Total liabilities
Fund balances (deficit)
Restricted
Total fund balances (deficit)
Total liabilities, deferred inflows
of resources and fund balances
Total
Supplemental Community Community Museum Other
Law Facilities Facilities and Governmental
Enforcement District #1 District #2 Adult Center Measure O 2016 LRB Funds 271,290$ 2,519$ 182,087$ 22,172$ 5,797,822$ -$ 14,123,891$ - - - - - 11,945 11,945 - - - - - - 154,347 - 854 101 - 16,989 - 261,165 465 1 311 40 6,665 7 25,085 - - - - - - 140,000 271,755$ 3,374$ 182,499$ 22,212$ 5,821,476$ 11,952$ 14,716,433$ -$ -$ 1,003$ -$ -$ -$ 316,701$ 3,643 - - - - - 136,798 - - - - - - 567,221 3,643 - 1,003 - - - 1,020,720 268,112 3,374 181,496 22,212 5,821,476 11,952 13,695,713 268,112 3,374 181,496 22,212 5,821,476 11,952 13,695,713 271,755$ 3,374$ 182,499$ 22,212$ 5,821,476$ 11,952$ 14,716,433$ Debt Service FundSpecial Revenue Funds

94 City of Campbell
Combining Statement of Revenues, Expenditures and Changes in Fund Balance other Governmental Funds Year Ended June 30, 2022

Vehicle Parkland Lighting and Community Drug
Gas Impact Dedication Landscaping Development Enforcement Environmental Tax Fees Fees District Block Grant Revenue Services
Revenues
Property taxes -$ -$ -$ 1,759,234$ -$ -$ -$ Special assessments - - - 1,197,927 - - - Investment income (733) (49,339) (75,709) (11,852) - (1,479) (9,567) Intergovernmental 1,832,467 746,868 - 4,158 - 23,770 1,894 Charges for services - - - - - - 853,541 Parkland dedication fees - - 628,296 - - - - Miscellaneous revenues 292 - - 33,817 - 13,954 - TOTAL REVENUESTotal revenues 1,832,026 697,529 552,587 2,983,284 - 36,245 845,868 Expenditures
Current:

General government - - - - - - - Public safety - - - - - 3,404 - Public works 1,845,769 - - 3,911,957 - - 145,784 Debt service:

Principal - - - - - - - Interest and fiscal charges - - - - - - - Total expenditures 1,845,769 - - 3,911,957 - 3,404 145,784 EXCESS (DEFICIENCY) OF REVENUESExcess (deficiency) of revenues OVER (UNDER) EXPENDITURES over (under) expenditures (13,743) 697,529 552,587 (928,673) - 32,841 700,084 Other financing sources (uses)
Proceeds from the sale of bonds - - - - - - - Transfers in 700,300 - - 1,569,341 - - 437,000 Transfers out (1,052,071) (889,905) (1,749,192) (111,300) - - (1,192,445) Total other financing
sources (uses) (351,771) (889,905) (1,749,192) 1,458,041 - - (755,445) Net change in fund balances (365,514) (192,376) (1,196,605) 529,368 - 32,841 (55,361) Fund balances at beginning of year - 2,664,964 4,501,326 667,907 346 80,912 719,283 Fund balances at end of year (365,514)$ 2,472,588$ 3,304,721$ 1,197,275$ 346$ 113,753$ 663,922$ Special Revenue Funds

95 City of Campbell
Combining Statement of Revenues, Expenditures and Changes in Fund Balance other Governmental Funds Year Ended June 30, 2022

Revenues
Property taxes
Special assessments
Investment income
Intergovernmental
Charges for services
Parkland dedication fees
Miscellaneous revenues
TOTAL REVENUESTotal revenues
Expenditures
Current:

General government
Public safety
Public works
Debt service:

Principal
Interest and fiscal charges
Total expenditures
EXCESS (DEFICIENCY) OF REVENUESExcess (deficiency) of revenues OVER (UNDER) EXPENDITURES over (under) expenditures
Other financing sources (uses)
Proceeds from the sale of bonds
Transfers in
Transfers out
Total other financing
sources (uses)
Net change in fund balances
Fund balances at beginning of year
Fund balances at end of year
Total
Supplemental Community Community Museum Other
Law Facilities Facilities and Governmental
Enforcement District #1 District #2 Adult Center Measure O 2016 LRB Funds -$ -$ -$ -$ 2,199,028$ -$ 3,958,262$ - 145,320 47,984 - - - 1,391,231 (3,821) 92 (2,585) (364) (59,679) (79) (215,115) 161,285 - - - - - 2,770,442 - - - - - - 853,541 - - - - - - 628,296 - - - - - - 48,063 157,464 145,412 45,399 (364) 2,139,349 (79) 9,434,720 - 3,652 - - - 2,500 6,152 100,140 - - - - - 103,544 - - 22,319 - - - 5,925,829 -
- - - - 1,660,000 570,000 2,230,000 - - - - 938,974 192,750 1,131,724 100,140 3,652 22,319 - 2,598,974 765,250 9,397,249 57,324 141,760 23,080 (364) (459,625) (765,329) 37,471 - - - - 32,506,763 - 32,506,763 29,000 - - - - 763,750 3,499,391 - (143,000) (12,000) (179) (30,000,000) - (35,150,092) 29,000 (143,000) (12,000) (179) 2,506,763 763,750 856,062 86,324 (1,240) 11,080 (543) 2,047,138 (1,579) 893,533 181,788 4,614 170,416 22,755 3,774,338 13,531 12,802,180 268,112$ 3,374$ 181,496$ 22,212$ 5,821,476$ 11,952$ 13,695,713$ Debt Service FundSpecial Revenue Funds

96 City of Campbell
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget Actual – Gas Tax Special Revenue Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income 25,000$ 25,000$ (733)$ (25,733)$ Intergovernmental 1,831,540 1,848,051 1,832,467 (15,584) Miscellaneous revenue 2,500 2,500 292 (2,208) Total Revenues 1,859,040 1,875,551 1,832,026 (43,525) Expenditures
Current
Public works 2,041,915 2,047,480 1,845,769 201,711 Excess (deficiency) of revenues
over (under) expenditures (182,875) (171,929) (13,743) 158,186 Other financing sources (uses)
Transfers in 700,300 700,300 700,300 - Transfers out (845,000) (1,402,007) (1,052,071) 349,936 Total other
financing sources (uses) (144,700) (701,707) (351,771) 349,936 Net change in fund balance (327,575) (873,636) (365,514) 508,122 Fund balance at beginning of year - - - - Fund balance at end of year (327,575)$ (873,636)$ (365,514)$ 508,122$ Budgeted Amounts

97 City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Vehicle Impact Fees Special Revenue Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income 250$ 250$ (49,339)$ (49,589)$ Intergovernmental 777,000 777,000 746,868 (30,132) Total revenues 777,250 777,250 697,529 (79,721) Other financing sources (uses)
Transfers out (777,000) (3,135,382) (889,905) 2,245,477 Net change in fund balance 250 (2,358,132) (192,376) 2,165,756 Fund balance at beginning of year 2,664,964 2,664,964 2,664,964 - Fund balance at end of year 2,665,214$ 306,832$ 2,472,588$ 2,165,756$ Budgeted Amounts

98 City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Parkland Dedication Fees Special Revenue Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income 34,836$ 34,836$ (75,709)$ (110,545)$ Parkland dedication fees 400,000 400,000 628,296 228,296 Total revenues 434,836 434,836 552,587 117,751 Other financing sources (uses)
Transfers out (1,845,000) (3,271,670) (1,749,192) 1,522,478 Net change in fund balance (1,410,164) (2,836,834) (1,196,605) 1,640,229 Fund balance at beginning of year 4,501,326 4,501,326 4,501,326 - Fund balance at end of year 3,091,162$ 1,664,492$ 3,304,721$ 1,640,229$ Budgeted Amounts

99 City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Lighting and Landscaping District Special Revenue Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Property taxes 1,143,000$ 1,143,000$ 1,759,234$ 616,234$ Special assessments 1,210,000 1,210,000 1,197,927 (12,073) Investment income - - (11,852) (11,852) Intergovernmental - - 4,158 4,158 Miscellaneous revenues 27,500 27,500 33,817 6,317 Total revenues 2,380,500 2,380,500 2,983,284 602,784 Expenditures
Current
Public works 3,744,631 3,758,248 3,911,957 (153,709) Excess (deficiency) of revenues
over (under) expenditures (1,364,131) (1,377,748) (928,673) 449,075 Other financing sources (uses)
Transfers in 1,569,341 1,569,341 1,569,341 - Transfers out (111,300) (123,300) (111,300) 12,000 Total other
financing sources (uses) 1,458,041 1,446,041 1,458,041 12,000 Net change in fund balance 93,910 68,293 529,368 461,075 Fund balance at beginning of year 667,907 667,907 667,907 - Fund balance at end of year 761,817$ 736,200$ 1,197,275$ 461,075$ Budgeted Amounts

100
City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Drug Enforcement Revenue Special Revenue Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income 2,500$ 2,500$ (1,479)$ (3,979)$ Intergovernmental 5,000 5,000 23,770 18,770 Miscellaneous revenues 10,000 10,000 13,954$ 3,954 Total revenues 17,500 17,500 36,245 18,745 Expenditures
Current
Public Safety - - 3,404 (3,404) Net change in fund balance 17,500 17,500 32,841 15,341 Fund balance at beginning of year 80,912 80,912 80,912 - Fund balance at end of year 98,412$ 98,412$ 113,753$ 15,341$ Budgeted Amounts

101
City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Environmental Services Special Revenue Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income 500$ 500$ (9,567)$ (10,067)$ Intergovernmental 10,000 10,000 1,894 (8,106) Charges for services 621,464 621,464 853,541 232,077 Miscellaneous revenues 49,356 49,356 - (49,356) Total revenues 681,320 681,320 845,868 164,548 Expenditures
Current
Public works 155,628 155,616 145,784 9,832 Excess (deficiency) of revenues
over (under) expenditures 525,692 525,704 700,084 174,380 Other financing sources (uses)
Transfers in 437,000 437,000 437,000 - Transfers out (1,191,771) (1,233,934) (1,192,445) 41,489 Total other
financing sources (uses) (754,771) (796,934) (755,445) 41,489 Net change in fund balance (229,079) (271,230) (55,361) 215,869 Fund balance at beginning of year 719,283 719,283 719,283 - Fund balance at end of year 490,204$ 448,053$ 663,922$ 215,869$ Budgeted Amounts

102
City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Supplemental Law Enforcement Special Revenue Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income -$ -$ (3,821)$ (3,821)$ Intergovernmental 100,000 100,000 161,285 61,285 Total revenues 100,000 100,000 157,464 57,464 Expenditures
Current
Public safety 132,150 129,774 100,140 29,634 Other financing sources (uses)
Transfers in 29,000 29,000 29,000 - Transfers out - - - - Total other
financing sources (uses) 29,000 29,000 29,000 - Net change in fund balance (3,150) (774) 86,324 87,098 Fund balance at beginning of year 181,788 181,788 181,788 - Fund balance at end of year 178,638$ 181,014$ 268,112$ 87,098$ Budgeted Amounts

103
City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Community Facilities District #1 Special Revenue Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Special assessments 146,350$ 146,350$ 145,320$ (1,030)$ Investment income 500 550 92 (458) Total revenues 146,850 146,900 145,412 (1,488) Expenditures
Current
Community development 3,500 3,500 3,652 (152) Excess (deficiency) of revenues
over (under) expenditures 143,350 143,400 141,760 (1,640) Other financing sources (uses)
Transfers out (143,000) (143,000) (143,000) - Net change in fund balance 350 400 (1,240) (1,640) Fund balance at beginning of year 4,614 4,614 4,614 - Fund balance at end of year 4,964$ 5,014$ 3,374$ (1,640)$ Budgeted Amounts

104
City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Community Facilities District #2 Special Revenue Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income -$ -$ (2,585)$ (2,585)$ Special assessments 35,250 35,250 47,984 12,734 Total revenues 35,250 35,250 45,399 10,149 Expenditures
Current
Community development 23,000 23,000 22,319 681 Excess (deficiency) of revenues
over (under) expenditures 12,250 12,250 23,080 10,830 Other financing sources (uses)
Transfers out (12,000) (12,000) (12,000) - Total other
financing sources (uses) (12,000) (12,000) (12,000) - Net change in fund balance 250 250 11,080 10,830 Fund balance at beginning of year 170,416 170,416 170,416 - Fund balance at end of year 170,666$ 170,666$ 181,496$ 10,830$ Budgeted Amounts

105
City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Capital Projects Fund Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Project revenues -$ 508,514$ 127,264$ (381,250)$ Miscellaneous revenues - 60,000 - (60,000) Total revenues - 568,514 127,264 (441,250) Expenditures
Current
Capital outlay 6,777,634 17,752,258 8,935,465 8,816,793 Excess (deficiency) of revenues
over (under) expenditures (6,777,634) (17,183,744) (8,808,201) 8,375,543 Other financing sources (uses)
Transfers in 6,527,634 16,078,716 8,841,186 (7,237,530) Transfers out - (787,083) - 787,083 Total other
financing sources (uses) 6,527,634 15,291,633 8,841,186 (6,450,447) Net change in fund balance (250,000) (1,892,111) 32,985 1,925,096 Fund balance at beginning of year 914,232 914,232 914,232 - Fund balance at end of year 664,232$ (977,879)$ 947,217$ 1,925,096$ Budgeted Amounts

106
City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Measure O Capital Projects Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income -$ -$ (456,316)$ (456,316)$ Intergovernmental - - 3,900,000 3,900,000 Miscellaneous revenues - - - - TOTAL REVENUES - - 3,443,684 3,443,684 Expenditures
Current
Capital outlay 8,457,924 11,374,460 1,785,101 9,589,359 TOTAL EXPENDITURES 8,457,924 11,374,460 1,785,101 9,589,359 Excess (deficiency) of revenues
over (under) expenditures (8,457,924) (11,374,460) 1,658,583 13,033,043 Other financing sources (uses)
Transfers in - - 30,000,000 30,000,000 Total other
Financing sources (uses) - - 30,000,000 30,000,000 Net Change in Fund Balance (8,457,924) (11,374,460) 31,658,583 43,033,043 Fund Balance at Beginning of Year 18,803,578 18,803,578 18,803,578 - Fund Balance at End of Year 10,345,654$ 7,429,118$ 50,462,161$ 43,033,043$ Budgeted Amounts

107
City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – 2016 LRB Debt Service Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Investment income 500$ 500$ (79)$ (579)$ Expenditures
General government - - 2,500 (2,500) Debt Service
Principal 570,000 570,000 570,000 - Interest and fees 194,250 194,250 192,750 1,500 Total expenditures 764,250 764,250 765,250 (1,000) Excess (deficiency) of revenues
over (under) expenditures (763,750) (763,750) (765,329) (1,579) Other financing sources (uses)
Transfers in 763,750 763,750 763,750 - Net change in fund balance - - (1,579) (1,579) Fund balance at beginning of year 13,531 13,531 13,531 - Fund balance at end of year 13,531$ 13,531$ 11,952$ (1,579)$ Budgeted Amounts

108
City of Campbell
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget Actual – Measure O Debt Service Fund
Year Ended June 30, 2022

Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Property taxes 1,215,000$ 1,215,000$ 2,199,028$ 984,028$ Investment income - - (59,679) (59,679) Total revenues 1,215,000 1,215,000 2,139,349 924,349 Expenditures
General government 1,500 1,500 - 1,500 Debt Service
Interest and fees 2,296,000 2,296,000 2,598,974 (302,974) TOTAL EXPENDITURES 2,297,500 2,297,500 2,598,974 (301,474) Excess (deficiency) of revenues
over (under) expenditures (1,082,500) (1,082,500) (459,625) 622,875 Other financing sources (uses)
Proceeds from the sale of bonds - - 32,506,763 32,506,763 Transfers out - - (30,000,000) (30,000,000) Total other
financing sources (uses) - - 2,506,763 2,506,763 Net change in fund balance (1,082,500) (1,082,500) 2,047,138 3,129,638 Fund balance at beginning of year 3,774,338 3,774,338 3,774,338 - Fund balance at end of year 2,691,838$ 2,691,838$ 5,821,476$ 3,129,638$ Budgeted Amounts

109
City of Campbell
Internal Service Funds
June 30, 2022

Account for goods or services provided to other departments of the City where the intent of the City is that the costs of these goods or services are to be recovered through interdepartmental charges at the time that the goods are delivered, or the services rendered to those departments.

Motor Vehicle Pool

Accounts for the costs of operating maintaining and replacing vehicle and other equipment used by City departments. Rental rates charged to user departments include costs and equipment depreciation.

Workers’ Compensation Self-Insurance
Accounts for revenues derived from charges made to operating departments at rates based on the State Compensation Fund annually adjusted to ensure an adequate reserve for future claims. This fund is charged for administrative costs of settling claims, as well as material and other costs of job-related illness or injury.

Information Technology Services

Accounts for the costs of operating maintaining and replacing computer hardware and software. Rental rates charged to the user departments include operating costs and equipment depreciation.

110
City of Campbell
Combining Statement of Net Position – Internal Service Funds June 30, 2022

Motor Workers' Information
Vehicle Compensation Technology
Pool Self-Insurance Services Total
Assets
Current assets
Cash and investments 417,834$ 4,115,063$ 191,246$ 4,724,143$ Accounts receivable 508 7,379 5,898 13,785 Deposits - 90,000 - 90,000 Total current assets 418,342 4,212,442 197,144 4,827,928 Noncurrent assets
Capital assets, net of accumulated depreciation 1,101,310 - 284,866 1,386,176 Total noncurrent assets 1,101,310 - 284,866 1,386,176 Total assets 1,519,652 4,212,442 482,010 6,214,104 Deferred outflows of resources
Amount related to pensions 97,931 - 220,732 318,663 Amount related to OPEB 21,843 - 49,233 71,076 Total deferred outflows of resources 119,774 - 269,965 389,739 Liabilities
Current liabilities
Accounts payable 40,815 29,662 47,270 117,747 Accrued payroll 15,652 - 37,589 53,241 Compensated absences, current portion 18,761 - 35,508 54,269 Leases payable 215,201 - - 215,201 Claims and judgments payable, current portion - 495,451 - 495,451 .

Total current liabilities 290,429 525,113 120,367 935,909 Noncurrent liabilities
Compensated absences 17,397 - 57,570 74,967 Claims and judgments payable - 3,282,149 - 3,282,149 Net OPEB liability 47,104 - 106,170 153,274 Net pension liability 366,209 - 825,419 1,191,628 Total noncurrent liabilities 430,710 3,282,149 989,159 4,702,018 Total liabilities 721,139 3,807,262 1,109,526 5,637,927 Deferred inflows of resources
Amount related to pensions 194,245 - 437,821 632,066 Amount related to OPEB 9,952 - 22,433 32,385 Total deferred inflows of resources 204,197 - 460,254 664,451 Net position
Investments in capital assets 1,101,310 - 284,866 1,386,176 Unrestricted (387,220) 405,180 (1,102,671) (1,084,711) Total net position 714,090$ 405,180$ (817,805)$ 301,465$

111
City of Campbell
Combining Statement of Revenues, Expenses, and Changes in Net Position – Internal Service Funds Year Ended June 30, 2022

Motor Worker' Information
Vehicle Compensation Technology
Pool Self-Insurance Service Total
Operating revenues
Investment income (4,663)$ (62,175)$ (2,530)$ (69,368)$ Charges for services 1,101,068 676,386 1,161,992 2,939,446 Other 79,290 - 14,215 93,505 Total operating revenues 1,175,695 614,211 1,173,677 2,963,583 Operating expenses
Personnel services 318,055 - 628,248 946,303 Services and supplies 492,543 748,830 635,487 1,876,860 Depreciation and amortization 327,117 - 38,614 365,731 Total operating expenses 1,137,715 748,830 1,302,349 3,188,894 Operating gain (loss) 37,980 (134,619) (128,672) (225,311) Transfers
Transfers in 781,000 - 182,652 963,652 Transfers out (50,000) - (49,600) (99,600) Total transfers 731,000 - 133,052 864,052 Net change in fund balance 768,980 (134,619) 4,380 638,741 Fund balance at beginning of year, restated (54,890) 539,799 (822,185) (337,276) Fund balance at end of year 714,090$ 405,180$ (817,805)$ 301,465$

112
City of Campbell
Combining Statement of Cash Flows – Internal Service Funds Year Ended June 30, 2022

Motor Worker' Information
Vehicle Compensation Technology
Pool Self-Insurance Service Total
Cash flows from operating activities
Cash received from department users 1,175,187$ 608,786$ 1,175,376$ 2,959,349$ Cash payments to suppliers of goods and services (496,945) (567,074) (607,460) (1,671,479) Cash payments to employees for services (399,301) - (744,317) (1,143,618) Net cash provided (used)
by operating activities 278,941 41,712 (176,401) 144,252 Cash flows from noncapital
financing activities
Cash received from other funds 781,000 - 182,652 963,652 Cash paid to other funds (594,368) - (49,600) (643,968) Net cash provided by
noncapital financing activities 186,632 - 133,052 319,684 Cash flows from capital and related financing activities Acquisition of capital assets (47,739) - - (47,739) Net cash used by capital and
related financing activities (47,739) - - (47,739) Net increase (decrease) in
cash and cash equivalents 417,834 41,712 (43,349) 416,197 Cash and cash equivalents
at beginning of year - 4,073,351 234,595 4,307,946 Cash and cash equivalents
at end of year 417,834$ 4,115,063$ 191,246$ 4,724,143$ Reconciliation of opearting income (loss)
to net cash provided (used) by operating activities
Operating income (loss) 37,980$ (134,619)$ (128,672)$ (225,311)$ Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities
Depreciation 327,117 - 38,614 365,731 Changes in operating assets and liabilities
(Increase) decrease in accounts receivables (508) (5,425) 1,699 (4,234) Increase (decrease) in accounts payable (4,402) (9,127) 28,027 14,498 Increase (decrease) in accrued payroll (8,074) - 7,293 (781) Increase (decrease) in compensation absences (19,722) - (2,888) (22,610) Increase (decrease) in claims and judgements payable - 190,883 - 190,883 Increase (decrease) in net OPEB and related deferrals (521) - (1,174) (1,695) Increase (decrease) in net pension and related deferrals (52,929) - (119,300) (172,229) Net cash provided (used)
by operating activities 278,941$ 41,712$ (176,401)$ 144,252$

113
City of Campbell
Custodial Funds
June 30, 2022

Custodial Funds

Custodial funds are used to account for assets held by the City as an agent for individuals, private organizations, and other governments. The financial activities of these funds are excluded from the Entity-wide financial statements but are presented in separate Fiduciary Fund financial statements.

Account for assets held by the City on behalf of other organizations are as follows:

West Valley Solid Waste Management Authority

Accounts for the monies of the West Valley Solid Waste Management Authority. The City acts as custodian for the operating resources of the entity.

1915 Acts Bonds

Accounts for the assessments received and the payment of principal and interest under the Improvement Bond Act of 1915.

Santa Clara County Specialized Enforcement Task Fund (SCCSET)

Accounts for the monies of the Santa Clara County Specialized Enforcement Task Force. The City acts as custodian for the operating resources of the task force.

114
City of Campbell
Combining Statement of Fiduciary Net Position – Custodial Funds June 30, 2022

West Valley
Solid Waste
Management 1915 Act SCCSET
Authority Bonds Fund Fund Total
Assets
Cash and investments 453,340$ 31,573$ 1,566,533$ 2,051,446$ Accounts receivable 75,949 57 - 76,006 Total assets 529,289 31,630 1,566,533 2,127,452 Liabilities
Accounts payable 31,768 - - 31,768 Unearned revenues 205,981 - - 205,981 Total liabilities 237,749 - - 237,749 Net Position
Restricted for individuals
and organizations 291,540$ 31,630$ 1,566,533$ 1,889,703$

115
City of Campbell
Combining Statement of Changes in Fiduciary Net Position – Custodial Funds Year Ended June 30, 2022

West Valley
Solid Waste
Management 1915 Act SCCSET
Authority Bonds Fund Fund Total
Additions
Local government-administered
contributions 812,599$ -$ -$ 812,599$ Other income 96,624 - 592,437 689,061 Investment income (3,908) (479) - (4,387) Total additions 905,315 (479) 592,437 1,497,273 Deductions
Professional and special services 438,450 - - 438,450 Administrative 450,000 - 809,080 1,259,080 Total deductions 888,450 - 809,080 1,697,530 Change in net position 16,865 (479) (216,643) (200,257) Net position at beginning of year 274,675 32,109 1,783,176 2,089,960 Net position at end of year 291,540$ 31,630$ 1,566,533$ 1,889,703$

eidebailly.com

Statistical Section (Unaudited)
June 30, 2022
City of Campbell

116
City of Campbell
Description of Statistical Section Contents
Year Ended June 30, 2022

This part of the City of Campbell, California’s annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the government’s overall financial health.

Contents:

Pages
Financial Trends theses schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. 117 - 122

Revenue Capacity these schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax. 123 - 126

Debt Capacity these schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. 127 - 130

Demographic and Economic Information these schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. 131 - 132

Operating Information these schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. 133 - 135

Sources:

Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant year

117
City of Campbell
Net Position by Component
Last Ten Fiscal Years (Accrual Basis of Accounting)

$(40,000,000)
$(20,000,000)
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
Net of Related Debt Restricted Unrestricted

118
City of Campbell
Net Position by Component
Last Ten Fiscal Years (Accrual Basis of Accounting)

2013 2014 2015 2016 2017
Governmental activities: (A)
Net investments in
capital assets 15,612,650$ 17,024,512$ 22,884,579$ 26,997,661$ 34,884,223$ Restricted 20,802,425 22,841,487 21,868,884 23,616,442 17,077,829 Unrestricted 19,239,382 22,067,786 (20,170,607) (12,748,328) (12,358,383) Total governmental activities net position 55,654,457$ 61,933,785$ 24,582,856$ 37,865,775$ 39,603,669$ Primary government:

Net investments in
capital assets 15,612,650$ 17,024,512$ 22,884,579$ 26,997,661$ 34,884,223$ Restricted 20,802,425 22,841,487 21,868,884 23,616,442 17,077,829 Unrestricted 19,239,382 22,067,786 (20,170,607) (12,748,328) (12,358,383) Total primary government net position 55,654,457$ 61,933,785$ 24,582,856$ 37,865,775$ 39,603,669$ 2018 2019 2020 2021 2022
Governmental activities:

Net investments in
capital assets 38,177,017$ 47,429,206$ 48,798,520$ 56,200,867$ 60,313,314$ Restricted 15,970,726 17,211,524 20,196,004 21,541,280 22,029,954 Unrestricted (21,605,385) (24,121,289) (32,631,237) (37,922,516) (32,155,840) Total governmental activities net position 32,542,358$ 40,519,441$ 36,363,287$ 39,819,631$ 50,187,428$ Primary government:

Net investments in
capital assets 38,177,017$ 47,429,206$ 48,798,520$ 56,200,867$ 60,313,314$ Restricted 15,970,726 17,211,524 20,196,004 21,541,280 22,029,954 Unrestricted (21,605,385) (24,121,289) (32,631,237) (37,922,516) (32,155,840) Total primary government net position 32,542,358$ 40,519,441$ 36,363,287$ 39,819,631$ 50,187,428$ (A) Reported Pension Liability resulted in a negative $20.1 million of unrestricted in net position in order to comply with provision of GASB 68.

Fiscal Year Ended June 30,
Fiscal Year Ended June 30,

119
City of Campbell
Changes in Net Position
Last Ten Fiscal Years (Accrual Basis of Accounting)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Expenses:

Governmental activities:

General government 5,895,629$ 5,165,958$ 6,146,700$ 6,679,357$ 9,472,432$ 7,671,343$ 7,315,270$ 8,363,548$ 7,740,547$ 7,780,899$ Public safety 20,871,425 20,361,802 21,022,373 22,179,057 23,679,842 27,628,421 29,623,711 31,160,818 31,982,827 30,801,294 Public Works 9,397,310 9,945,032 11,194,915 10,595,886 11,122,831 15,187,009 13,981,288 15,040,395 12,994,559 13,002,919 Community Development 2,119,263 1,787,491 2,047,303 2,590,034 3,111,691 3,484,767 3,661,787 4,166,582 2,938,422 2,853,912 Recreation and Community Services 5,164,889 5,297,874 5,613,775 5,689,721 6,166,806 6,894,086 7,183,132 6,765,508 4,281,719 4,942,719 Interest on long-term debt 1,013,545 990,140 965,225 936,250 579,013 336,577 330,687 324,934 1,056,277 1,319,942 Total Primary Government Expenses 44,462,061 43,548,297 46,990,291 48,670,305 54,132,615 61,202,203 62,095,875 65,821,785 60,994,351 60,701,685 Program Revenues:

Governmental activities:

Charges of services:

General government 1,201 1,492,558 1,478,895 1,624,617 1,602,647 1,586,881 18,592 9,375 342 1,814,425 Public safety 685,552 684,986 686,364 740,750 790,163 857,212 693,216 787,204 409,743 883,254 Public Works 2,421,622 2,696,169 2,787,091 3,443,486 3,464,407 3,178,780 3,522,641 3,530,034 4,289,206 2,793,430 Community Development 3,372,735 2,851,264 2,072,487 4,375,330 3,335,990 2,947,460 2,817,123 2,257,036 2,857,170 4,516,534 Recreation and Community Services 3,592,223 3,887,599 3,831,513 3,822,648 4,136,749 4,142,115 5,946,637 4,536,171 3,225,350 2,864,338 Operating Grants and Contribution 2,313,510 3,725,646 4,133,704 5,437,108 2,316,936 2,789,656 3,512,647 4,681,319 7,135,599 4,033,399 Capital Grants and Contributions 3,117,506 1,760,526 1,744,822 3,240,726 1,688,085 534,583 634,321 2,595,822 3,537,522 6,745,712 Total Primary Government Program Revenues 15,504,349 17,098,748 16,734,876 22,684,665 17,334,977 16,036,687 17,145,177 18,396,961 21,454,932 23,651,092 Net (Expense)/Revenue:

Total primary government net revenue (28,957,712) (26,449,549) (30,255,415) (25,985,640) (36,797,638) (45,165,516) (44,950,698) (47,424,824) (39,539,419) (37,050,593) General Revenues and Other Changes in Net Position
Governmental activities:

Taxes:

Property tax 10,621,755 11,134,726 12,297,621 13,161,587 14,191,181 15,251,542 16,921,874 19,812,728 21,009,102 23,469,044 Sales Tax 12,649,768 13,115,263 13,915,291 14,818,495 14,297,751 14,859,014 15,684,222 13,965,745 14,006,163 16,419,363 Transient Occupancy Tax 2,875,976 3,417,412 4,091,923 4,439,668 4,420,208 4,554,949 4,768,870 3,144,208 1,568,908 2,657,334 Franchise Fees 2,776,192 2,917,263 3,322,031 3,319,603 3,478,916 3,586,297 3,515,547 3,527,926 3,458,300 3,690,355 Business License Taxes 625,050 647,872 662,787 683,445 694,569 698,184 693,263 664,071 666,642 659,094 Property Transfer Taxes 285,292 354,112 526,054 551,007 467,990 761,583 519,407 566,794 542,456 665,607 Construction Taxes 67,920 212,522 50,710 338,718 208,373 85,406 26,451 50,505 143,066 212,975 Motor Vehicle In Lieu 20,946 17,335 26,321 69,109 19,077 45,523 20,494 34,231 135,448 47,981 Investment earnings 329,371 621,301 529,495 487,662 171,257 181,016 1,040,069 1,062,566 122,547 (1,114,797) Miscellaneous 627,170 291,071 153,958 1,399,265 586,210 436,370 293,126 439,896 1,343,131 2,170,315 Total Primary Government 30,879,440 32,728,877 35,576,191 39,268,559 38,535,532 40,459,884 43,483,323 43,268,670 42,995,763 48,877,271 Change in Net Position
Governmental activities 1,921,728 6,279,328 5,320,776 13,282,919 1,737,894 (4,705,632) (1,467,375) (4,156,154) 3,456,344 11,826,678 Extraordinary Loss (1,159,962) (a) - - - - - - - - - Total primary government 761,766$ 6,279,328$ 5,320,776$ 13,282,919$ 1,737,894$ (4,705,632)$ (1,467,375)$ (4,156,154)$ 3,456,344$ 11,826,678$

(a) Extraordinary gain resulted from the State mandated dissolution of the Redevelopment Agency (RDA) as of 1/31/2012. (b) Housing rehabilitation loans transferred to the County due to dissolution of RDA.

120
City of Campbell
Fund Balances of Governmental Funds
Last Ten Fiscal Years (Modified Accrual Basis of Accounting)

$(20,000,000)
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
Non-Spendable Committed Assigned Unassigned Total General Fund Total General Fund Restricted Committed Assigned Unassigned

121
City of Campbell
Fund Balances of Governmental Funds
Last Ten Fiscal Years (Modified Accrual Basis of Accounting)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
General Fund
Non-Spendable 12,782$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Committed 20,748,137 22,443,923 22,930,342 25,392,112 23,896,221 21,592,089 21,743,948 5,192,639 4,296,174 3,482,825 Assigned 1,681,171 1,881,401 2,176,615 3,830,100 4,027,890 4,528,546 4,257,115 3,757,823 3,643,857 3,918,437 Unassigned 987,225 1,104,285 961,258 1,000,000 999,994 360,129 1,026,759 13,322,046 12,976,419 14,525,529 Total General Fund 23,429,315$ 25,429,609$ 26,068,215$ 30,222,212$ 28,924,105$ 26,480,764$ 27,027,822$ 22,272,508$ 20,916,450$ 21,926,791$ All Other
Governmental Funds
Restricted 20,467,472$ 22,443,840$ 21,623,743$ 23,493,450$ 16,993,836$ 15,772,926$ 17,211,524$ 20,250,454$ 40,615,483$ 72,927,462$ Committed - - - 1,223,623 - - - - - - Assigned 303,127 371,381 108,767 140,666 1,758,104 1,747,982 1,715,955 1,703,633 914,232 947,217 Unassigned (1,411,586) (44,852) (1,234,364) (2,414,736) (2,064,713) (498,452) (242,428) (311,506) (1,424,397) (938,687) Total all other
governmental funds 19,359,013$ 22,770,369$ 20,498,146$ 22,443,003$ 16,687,227$ 17,022,456$ 18,685,051$ 21,954,087$ 40,105,318$ 72,935,992$

122
City of Campbell
Changes in Fund Balances of Governmental Fund
Last Ten Fiscal Years (Modified Accrual Basis of Accounting)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Revenues
Taxes 29,913,954$ 31,811,171$ 34,881,417$ 37,324,522$ 37,768,238$ 39,809,475$ 42,145,259$ 41,269,352$ 41,967,223$ 47,782,758$ License, permits and fees 2,914,942 4,852,752 2,839,871 6,900,052 3,873,976 3,214,847 3,232,524 3,714,070 4,493,838 3,742,393 Special Assessments 1,139,132 1,309,750 1,329,637 1,369,696 1,387,853 1,377,069 1,469,308 1,391,283 1,398,933 1,391,231 Fines and forfeitures 302,199 332,100 354,445 324,137 320,193 345,627 704,030 694,347 547,469 222,721 Use of money and property 2,259,585 2,567,440 2,604,602 2,746,371 2,829,484 3,115,345 4,273,538 3,492,676 2,065,292 1,734,314 Intergovernmental revenues 2,957,860 4,626,035 3,880,357 5,346,920 4,172,179 4,630,928 3,262,896 6,466,424 10,440,661 10,774,460 Changes for services 4,150,652 4,256,235 4,422,552 4,491,002 4,623,876 4,897,185 4,784,243 3,268,310 2,566,943 5,696,772 Other 1,110,711 1,275,310 1,117,511 2,237,463 1,200,939 981,249 1,105,429 610,516 1,373,431 1,159,577 Total Revenues 44,749,035 51,030,793 51,430,392 60,740,163 56,176,738 58,371,725 60,977,227 60,906,978 64,853,790 72,504,226 Expenditures
Current:

General government 4,915,926 5,210,662 5,673,874 6,220,587 8,543,097 6,832,027 7,245,353 8,194,825 7,266,166 8,115,428 Public safety 20,379,876 20,299,917 21,049,851 23,007,615 24,544,078 25,837,666 27,423,109 29,132,295 31,419,241 30,639,409 Public works 9,012,996 9,040,957 10,305,115 10,506,080 11,493,731 12,576,675 10,940,940 11,170,432 10,748,474 11,675,932 Community development 2,087,094 1,791,094 2,063,640 2,702,702 3,230,153 3,166,797 3,387,115 3,608,339 2,938,030 3,392,935 Recreation and Community Services 4,841,625 4,983,642 5,340,786 5,611,544 6,080,395 6,235,452 6,663,662 5,854,410 4,018,010 5,190,818 Capital outlay 2,191,794 2,512,727 6,773,543 4,675,614 2,487,393 4,878,204 2,103,720 3,878,985 12,550,723 10,624,498 Debt services:

Principal repayment 715,000 740,000 775,000 810,000 625,000 595,000 605,000 535,000 1,690,000 2,253,957 Interest and fiscal changes 892,369 861,944 829,600 793,300 176,642 259,200 244,275 227,076 833,397 1,131,724 Bond issuance costs - - - - 209,762 - - - - - Payments to refunding escrow agent - - - - 6,203,790 - - - - - Total Expenditures 45,036,680 45,440,943 52,811,409 54,327,442 63,594,041 60,381,021 58,613,174 62,601,362 71,464,041 73,024,701 Excess (deficiency) of revenues over
(under) expenditures (287,645) 5,589,850 (1,381,017) 6,412,721 (7,417,303) (2,009,296) 2,364,053 (1,694,384) (6,610,251) (520,475) Other Financing Sources (Uses)
Transfers In 7,533,103 7,489,674 11,266,904 10,100,282 9,809,123 10,383,455 6,759,234 8,251,100 40,785,100 43,207,002 Transfers Out (7,478,203) (7,667,874) (11,519,504) (10,414,149) (9,659,635) (10,481,271) (6,913,634) (8,354,500) (40,239,796) (44,071,054) Extraordinary Loss (1,159,962) - - - - - - - - - Issuance of debt - - - - 8,085,000 - - - 20,809,094 33,368,566 Premium from bond issuance - - - - 1,090,835 - - - 3,171,626 2,506,763 Payments to refunding escrow agent - - - - (8,962,993) - - - - - Total other financing sources (uses) (1,105,062) (178,200) (252,600) (313,867) 362,330 (97,816) (154,400) (103,400) 24,526,024 35,011,277 Net Change in fund balances (1,392,707)$ 5,411,650$ (1,633,617)$ 6,098,854$ (7,054,973)$ (2,107,112)$ 2,209,653$ (1,797,784)$ 17,915,773$ 34,490,802$ Debt service as a percentage of
noncapital expenditures 3.8% 3.7% 3.5% 3.2% 11.8% * 1.5% 1.5% 1.3% 4.3% 5.4%

* 2017 Debt service as a percentage of noncapital expenditures is calculated by taking the sum of the principal repayment, interest and fiscal changes, and payments to refunding escrow agent by Total expenditures less capital outlay.

123
City of Campbell
Assessed and Estimated Actual – Value of Taxable Property Last Ten Fiscal Years

$-
$2,000,000,000
$4,000,000,000
$6,000,000,000
$8,000,000,000
$10,000,000,000
$12,000,000,000
$14,000,000,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Millions
Secured Unsecured

Total Total
Fiscal Secured HOPTR SBE Secured Unsecured Total Direct Year Property Exemptions Utilities Value Property Assessed (a) Tax Rate (b) 2013 6,155,290,542$ 45,424,400$ 145,750$ 6,200,860,692$ 280,367,332$ 6,481,228,024$ 1% 2014 6,903,997,112 46,993,800 145,750 6,951,136,662 284,251,723 7,235,388,385 (c) 1% 2015 7,361,679,060 46,186,046 172,250 7,408,037,356 288,458,347 7,696,495,703 1% 2016 7,912,201,031 45,357,200 172,250 7,957,730,481 273,569,603 8,231,300,084 1% 2017 8,522,484,862 45,200,400 172,250 8,567,857,512 290,398,591 8,858,256,103 1% 2018 9,158,664,046 44,251,200 172,250 9,203,087,496 276,228,712 9,479,316,208 1% 2019 9,866,148,537 43,876,000 238,500 9,910,263,037 276,847,459 10,187,110,496 1% 2020 10,724,368,314 43,384,600 238,500 10,767,991,414 295,779,677 11,063,771,091 1% 2021 11,446,319,015 42,973,000 238,500 11,489,530,515 318,127,779 11,807,658,294 1% 2022 11,967,282,485 41,654,200 238,500 12,009,175,185 363,425,707 12,372,600,892 1% Source: Santa Clara County Assessor's Office
(a) The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over-rides. These values are considered to be full market values. (b) California cities do not set their own direct tax rate. The state constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. The City of Campbell encompasses more than 20 tax rate areas. (c) Total assessed value increased 11.6% due primarily to the annexation of several County pockets in 2013.

124
City of Campbell
Property Tax Rates – All Overlapping Governments
Last Ten Fiscal Years

0.0 0.2

0.4 0.6

0.8 1.0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Per Hundred $
Axis Title
City of Campbell Housing Bond SCVWD State Project Library Retirement Hospital Facilities Bond West Valley College SCC Retirement High School Bonds Elem or Unified Schools Basic Direct Tax Rate

Elem or Hospital
Basic Unified High SCVWD West and
Expenses Direct SCC Library City of School School State Valley Housing Year Tax Rate Retirement Retirement Campbell Bonds Bonds Project College Bond Total 2013 1.0000 0.0388 0.0024 0.0000 0.0251 0.0325 0.0069 0.0289 0.0051 1.1397 2014 1.0000 0.0388 0.0024 0.0000 0.0231 0.0290 0.0070 0.0255 0.0035 1.1293 2015 1.0000 0.0388 0.0024 0.0000 0.0517 0.0284 0.0065 0.0120 0.0091 1.1489 2016 1.0000 0.0388 0.0024 0.0000 0.0467 0.0257 0.0057 0.0232 0.0088 1.1513 2017 1.0000 0.0388 0.0024 0.0000 0.0442 0.0252 0.0086 0.0196 0.0086 1.1474 2018 1.0000 0.0388 0.0024 0.0000 0.0437 0.0519 0.0062 0.0200 0.0209 1.1839 2019 1.0000 0.0388 0.0024 0.0000 0.0418 0.0487 0.0042 0.0198 0.0177 1.1734 2020 1.0000 0.0388 0.0024 0.0100 0.0415 0.0436 0.0041 0.0296 0.0169 1.1869 2021 1.0000 0.0388 0.0024 0.0100 0.0415 0.0439 0.0037 0.0311 0.0069 1.1783 2022 1.0000 0.0388 0.0024 0.0175 0.0672 0.0421 0.0051 0.0304 0.0188 1.2223

Source: Santa Clara County Assessors Office

Note: In 1978, California voters passed Proposition 13 which set property tax rate at a fixed amount of 1.00% of assessed value.

Each year, the assessed values may be increased by the California consumer price index (CPI), not to exceed 2.0%. Properties are reassessed at market value upon sale. The 1.0% tax levy is shared by all jurisdictions within the County. Based upon the Assessors report for 2019-20 the levy was distributed as follows:

School Districts 44% Community Colleges 7%
Cities 14% Special Districts 6%
Other (Successor Agencies) 11% County 18%
Total 100%

125
City of Campbell
Principal Property Taxpayers
Current Year and Ten Years Ago

Percentage of Percentage of
Taxable Total Taxable Taxable Total Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Pruneyard Regengy LLC 214,701,500$ 1 1.73%
Pruneyard Office Investors LLC 162,005,163 2 1.30% AG-SW Hamilton Plaza Owner L P 149,829,510 3 1.21% 675 Creekside Owner LLC 140,440,038 4 1.13%
Revres LLC 124,958,985 5 1.01%
Parc Residences LLC 110,931,615 6 0.89%
Bravista Parcelco II LLC 103,061,639 7 0.83%
Campbell Technology Pk LLC 85,851,070 8 0.69% 73,983,864 2 1.14% Raintree Campbell LLC 70,499,682 9 0.57%
SHI-III Campbell LLC 70,497,287 10 0.57%
Blackhawk Parent LLC 182,398,203 1 2.81%
Legacy III Campbell LLC 64,964,767 3 1.00%
Fund X PY Campbell LLC 54,882,387 4 0.85%
Bay Apartment Communities Inc 49,601,399 5 0.77%
Hamilton Plaza Investors, LLC 49,314,280 6 0.76%
Hines VAF No Cal Properties LP 43,800,000 7 0.68% Lyon The Commons Apartments LLC 43,133,250 8 0.67% Marc W Buzolich Trustree Et. Al 39,805,500 9 0.61% Brian Avery Trustee, Et. Al 27,856,343 10 0.43%
1,232,776,489$ 9.93% 629,739,993$ 9.72%
Total Net Assessed Valuation
Fiscal Year 2021-2022 12,414,255,092$
Fiscal Year 2012-2013 6,481,228,024
Source: Santa Clara Tax Assessor's Office.
2021-22 2012-13

126
City of Campbell
Property Tax Levies and Collections
Last Ten Fiscal Years

$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Total Tax Levy (a) Tax Collections

Percent
of Total
Current Percent Delinquent Total Tax
Fisal Total Tax of Levy Tax Tax Collections
Year Tax Levy (a) Collections Collected Collections Collections to Tax Levy 2013 10,621,754$ 10,621,754$ 100% -$ 10,621,754$ 100% 2014 11,134,726 11,134,726 100% - 11,134,726 100% 2015 12,297,621 12,297,621 100% - 12,297,621 100% 2016 13,161,587 13,161,587 100% - 13,161,587 100% 2017 14,191,181 14,191,181 100% - 14,191,181 100% 2018 16,058,014 16,058,014 100% - 16,058,014 100% 2019 16,882,323 16,882,323 100% - 16,882,323 100% 2020 19,812,728 19,812,728 100% - 19,812,728 100% 2021 20,965,132 20,965,132 100% - 20,965,132 100% 2021 23,464,393 23,464,393 100% - 23,464,393 100%

Source: City of Campbell Records

NOTES: Proposition 13 approved by the voters in 1978 provided for a maximum tax rate. The proceeds are apportioned to the various taxing entities on a formula basis. In 1981 – 1982 the basis of assessed valuation was adjusted to full cash value upon resale or new construction, rather than the previous 25 percent estimate. The property tax levy was not to exceed one percent.

(a) Includes RDA in total tax levy through 1/31/2012.

127
City of Campbell
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years

$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Fiscal
General
Obligation
Lease Revenue
Bonds and
Certificates of
Total
Primary
Percentage
of Personal Per
Year Bonds Loans Leases Participation (b) Government Income (a) Capita (a) 2013 -$ -$ -$ 19,614,880$ 19,614,880$ 0.6920% 485.47 2014 - - - 19,010,976 19,010,976 0.6470% 452.72 2015 - - - 18,380,066 18,380,066 0.6290% 439.12 2016 - - - 17,722,700 17,722,700 0.5742% 416.18 2017 - - - 10,359,329 10,359,329 0.3157% 242.46 2018 - - - 9,935,519 9,935,519 0.2892% 232.70 2019 - - - 9,511,787 9,511,787 0.2636% 219.93 2020 - - - 9,168,762 9,168,762 0.2175% 216.82 2021 21,925,905 - - 9,458,411 31,384,316 0.7308% 212.41 2022 52,666,947 4,153,703 267,692 9,012,853 66,101,195 1.4387% 1,543.23

Note: Debt amounts exclude any premiums, discounts, or other amortization amounts.

RDA tax allocation bonds are included in total debt through 1/31/2012.

Sources: City of Campbell
State of California, Department of Finance (population) U.S. Department of Commerce, Bureau of the Census (income)

(a) See page 131 (Demographic Statistics) for personal income and population data. (b) Certificates of Participation were refinanced in 2017. A portion of the Certificates related to the Campbell Successor Agency was repaid during the refinancing.

128
City of Campbell
Computation of Direct and Overlapping Debt
June 30, 2022

2021-22 Assessed Valuation: $12,372,600,892
Amount
Net Debt Applicable Applicable to
Outstanding Percentage (1) City of Campbell
Santa Clara County 1,146,459,991$ 2.147% 24,614,496$
West Valley - Mission Community College District 557,500,000 7.502% 41,823,650 Campbell Union High School District 371,389,999 21.348% 79,284,337 Cambrian School District 60,969,944 31.341% 19,108,590 Campbell Union School District 205,989,325 31.579% 65,049,369 Moreland School District 118,647,250 12.690% 15,056,336 City of Campbell 52,666,947 100.000% 52,666,947 City of Campbell Loans and Leases 4,421,395 100.000% 4,421,395 Midpeninsula Regional Open Space District 84,575,000 0.036% 30,447 Santa Clara County Valley Water District benefit Assessment District 48,150,023 2.147% 1,033,781 303,089,348$
Santa Clara County General Fund Obligations 1,242,064,369$ 2.147% 26,667,122$ Santa Clara County Pension Obligations Bonds 335,638,472 2.147% 7,206,158 Santa Clara County Board of Education Certificates of Participation 1,819,981 2.147% 39,075 Santa Clara County Vector Control District Certificates of Participation 1,765,021 2.147% 37,895 West Valley - Mission Community College District General Fund Obligations 49,850,000 7.502% 3,739,747 Campbell Union High School District General Fund Obligations 16,000,000 21.348% 3,415,680 Campbell Union School District General Fund Obligations 2,035,001 31.579% 642,633 City of Campbell General Fund Obligations 9,012,853 100.000% 9,012,853 Midpeninsula Regional Open Space District General Fund Obligations 99,705,556 0.036% 35,894 SUB-TOTAL OVERLAPPING GENERAL FUND OBLIGATION DEBT 50,797,057$ Less: Santa Clara County supported obligations 388,151
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT 50,408,906$ OVERLAPPING TAX INCREMENT DEBT (Successor agency): 16,050,000 100.000% 16,050,000$ TOTAL DIRECT DEBT 61,679,800$
TOTAL GROSS OVERLAPPING DEBT 353,886,405$
TOTAL NET OVERLAPPING DEBT 353,498,254$
GROSS COMBINED TOTAL DEBT 415,566,205$
NET COMBINED TOTAL DEBT (excludes County supported item) 415,178,054$ Ratios to 2021-22 Assessed Valuation:

Total Overlapping Tax and Assessment Debt 2.86%
Total Direct Debt ($61,679,800) 0.50%
Gross Combined Total Debt 3.36%
Net Combined Total Debt 3.36%
Ratios to Redevelopment Successor Agency Incremental Valuation ($1,391,224,316):

Total Overlapping Tax Increment Debt 1.15%
Source: California Municipal Statistics, Inc. and City of Campbell

OVERLAPPING GENERAL FUND DEBT

DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the town divided by the district's total taxable assessed value.

129
City of Campbell
Computation of Legal Bonded Debt Margin
Last Ten Fiscal Years

Total
Net Debt Legal
Fiscal Assessed Debt Limit Applicable Debt
Year Value 3.75% (1) to Limit Margin
2013 6,481,228,024$ 243,046,051$ -$ 243,046,051$ 2014 7,235,388,385 271,327,064 - 271,327,064 2015 7,696,495,703 288,618,589 - 288,618,589 2016 8,231,300,084 308,673,753 - 308,673,753 2017 8,858,256,103 332,184,604 - 332,184,604 2018 9,479,316,208 355,474,358 - 355,474,358 2019 10,187,110,496 382,016,644 - 382,016,644 2020 11,063,771,091 414,891,416 - 414,891,416 2021 11,807,658,294 442,787,186 18,860,000 423,927,186 2022 12,372,600,892 463,972,533 47,200,000 416,772,533 (1) Pursuant to California Government Code Section 43605 (15% of 25% of full cash value).

Source: City of Campbell Finance Department.

130
City of Campbell
Bonded Debt Pledged Revenue Coverage – Redevelopment/Successor Agency Tax Allocation Bonds Last Ten Fiscal Years

Tax Interest and Total
Fiscal Increment Fiscal Debt
Year Revenue Principal Charges Service Coverage
2013 1,377,810$ 300,000$ 1,077,810$ 1,377,810$ 1.00 2014 1,375,013 310,000 1,065,013 1,375,013 1.00 2015 1,376,201 325,000 1,051,201 1,376,201 1.00 2016 1,376,380 340,000 1,036,380 1,376,380 1.00 2017 652,867 335,000 317,867 652,867 1.00 2018 1,821,338 1,355,000 466,338 1,821,338 1.00 2019 1,595,695 1,170,000 425,695 1,595,695 1.00 2020 1,590,741 1,175,000 415,741 1,590,741 1.00 2021 1,590,737 1,200,000 390,737 1,590,737 1.00 2022 1,740,150 1,375,000 365,190 1,740,190 1.00

131
City of Campbell
Demographic and Economic Statics
Last Ten Fiscal Years

2.08%

2.10%

2.12%

2.14%

2.16%

2.18%

2.20%

2.22%

2.24%

2.26%

2.28%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
City Population % of County

$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
T otal Personal Income

$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2012 2014 2016 2018 2020 2022 2024
Per Capita Personal Income

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Unemployment Rate

Calendar Population Personal Per Capita Personal Unemployment Santa Clara City Population % 2013 40,404 2,834,381$ 70,151$ 5.8% 1,842,254 2.19% 2014 41,993 2,938,192 69,969 4.6% 1,868,558 2.25% 2015 41,857 2,921,953 69,808 2.8% 1,889,638 2.22% 2016 42,584 3,086,261 72,475 2.9% 1,927,888 2.21% 2017 42,726 3,262,837 76,367 2.5% 1,938,180 2.20% 2018 42,696 3,435,638 80,467 2.4% 1,956,598 2.18% 2019 43,250 3,607,941 83,421 2.4% 1,954,286 2.21% 2020 42,288 4,215,608 99,688 8.5% 1,961,969 2.16% 2021 41,533 4,294,776 103,406 4.5% 1,934,171 2.15% 2022 42,833 4,594,414 107,263 2.2% 1,894,783 2.26%

Sources: State of California, Department of Finance; Employment Development Department U.S. Department of Commerce, Bureau of Economic Analysis

Note: Unemployment rate for FY2011 is an average. FY2012-2016 are collected as of June 30 Per Capita Income for 2017 is adjusted using the California Department of Finance Change in Per Capita Income as reported in May 2016 (5.37%).

(1) The City annexed several County pockets effective May 1, 2013.

132
City of Campbell
Top Ten Principal Employers
Current Year and Ten Years Ago

Percentage Percentage
Number of of Total City Number of of Total City
Employer Employees Rank Employment Employees Rank Employment Chargepoint, Inc. 739 1 2.70%
8x8 Inc 554 2 2.02%
West Valley Construction 400 3 1.46%
Andro's Rostili LLC 342 4 1.25%
ZRG Partners LLC 330 5 1.20%
Barracuda Networks Inc. 315 6 1.15% 393 1 1.8%
Imperative Care Inc. 300 7 1.09%
Home Depot 287 8 1.05% 189 7 0.9%
(24)7.AI.INC 266 9 0.97%
Whole Foods Market 242 10 0.88% 250 4 1.1%
Safeway Inc 338 2 1.5%
Fry's Electronics 261 3 1.2%
Hunter Laboratories 200 5 0.9%
Yousendit Inc. 200 6 0.9%
SAAMA Technologies 182 8 0.8%
Mohler, Nixon &
Williams Accountancy 165 9 0.7%
City of Campbell 154 10 0.7%
Total City Labor Force 27,400 22,043

Source: City of Campbell - California Employment Development Department 2021-22 2012-13

133
City of Campbell
Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years

0 50
100
150
200
250
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Function General government Public safety Public works Community development Recreation & community services

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Function
General government 21.65 21.72 23.88 25.28 26.26 25.35 24.45 24.55 22.30 23.46 Public safety 68.01 69.01 70.01 70.01 73.01 74.13 76.33 76.83 72.37 74.84 Public works 47.42 50.5 53.14 54.26 56.65 56.05 55.7 55.00 51.10 49.53 Community development 10.91 11.51 13.51 15.55 16.1 16.77 16.77 16.77 15.14 12.14 Recreation and
community services 50.52 50.67 53.48 56.37 57.49 58.5 57.73 58.57 31.81 28.03 Total 198.51 203.41 214.02 221.47 229.51 230.80 230.98 231.72 192.72 188.00

Source: City of Campbell, California Budget Documents.

134
City of Campbell
Operating Indicators by Function/Program
Last Ten Fiscal Years

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Function/Program
Public safety
Fire:

Fire calls for service 70 76 90 81 67 72 90 84 78 74
Medical aid calls 1,946 1,886 1,966 2,177 2,318 2,354 2,174 2,102 2,044 2,478 Police:

Police calls for service 23,353 24,151 24,624 24,408 23,275 23,312 26,242 25,141 29,917 32,124 Law violations:

Arrests 1,660 1,835 2,141 2,183 2,027 2,080 1,898 1,347 1,657 1,963 Traffic violations 4,083 4,607 6,205 4,501 4,638 4,339 3,544 1,356 825 1,307 Parking violations 2,394 2,335 3,110 3,733 4,384 3,741 3,716 2,369 518 761 Public works
Miles of streets (major) 15 16 16 16 16 16 16 15 14 14
Miles of streets (secondary) 77 80 80 80 80 80 80 80 80 80 Potholes repaired 160 78 81 90 108 58 228 350 200 220
Culture and recreation:

Community services:

Recreation class participants 33,526 31,749 30,022 35,082 35,737 42,195 63,207 51,150 23,133 40,463 Performing Arts Center performances 7 8 8 6 6 7 6 4 0 2 Wastewater
Miles of sewers (storm) 50 50 50 50 50 59 59 59 59 59
Miles of sewers (sanitary - entire district) 618 618 618 618 618 602 602 602 602 602 Miles of sewers (sanitary - Campbell only) 158 158 158 158 158 168 168 168 168 165 Solid Waste
Refuse landfilled (tons per year) 25,514 26,555 27,398 29,422 28,386 28,300 22,082 26,460 24,943 25,573 Green waste - - - - 6,781 7,312 6,893 7,375 7,201 6,703 Recyclables processed (tons per year) 14,541 15,414 16,702 15,866 10,004 18,483 10,251 9,085 9,362 7,615 Organics (tons per year) 0 0 0 0 0 0 0 0 0 505

135
City of Campbell
Capital Assets Statistics by Function/Program
Last Ten Fiscal Years

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Function/Program
Public safety:

Fire stations 2 2 2 2 2 2 2 2 2 2
Police stations 1 1 1 1 1 1 1 1 1 1
Police patrol units 12 12 15 15 15 15 15 14 14 13
Public works:

Miles of streets 96 96 96 96 96 96 96 96 94 94
Street lights 2610 2610 2705 2705 2706 2715 2715 2800 2800 2800 Traffic Signals 43 43 44 44 44 45 45 46 45 45
Culture and recreation:

Community services:

City parks 12 12 12 12 12 12 12 12 12 12
City park acreage 87 87 87 87 87 87 87 87 87 87
Playgrounds 7 7 7 7 7 8 8 8 8 8
City trails 1 1 1 1 1 1 1 1 1 1
City trails miles 3 3 3 3 3 3 3 3 3 3
Historic house (museum) 1 1 1 1 1 1 1 1 1 1
Community gardens 1 1 1 1 1 1 1 1 1 1
Community centers 1 1 1 1 1 1 1 1 1 1
Adult centers 1 1 1 1 1 1 1 1 1 1
Sports centers 1 1 1 1 1 1 1 1 1 1
Performing arts centers 1 1 1 1 1 1 1 1 1 1
Swimming pools 1 1 1 1 1 1 1 1 1 1
Tennis courts 8 8 8 8 8 4 4 4 4 4
Baseball/softball diamonds End of Year3 3 3 3 3 3 3 3 3 3 Soccer/football fields 9 9 9 9 9 9 9 9 9 9
Library:

City Libraries 1 1 1 1 1 1 1 1 1 1

What inspires you, inspires us. | eidebailly.com
4040 Campbell Ave., Ste. 200 | Menlo Park, CA 94025-1053 | T 650.522.3400 | F 650.645.7393 | EOE 1 March 3, 2023
To the City Council of the
City of Campbell
Campbell, California
We have audited the financial statements of City of Campbell, California as of and for the year ended June 30, 2022, and have issued our report thereon dated March 3, 2023. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and Government Auditing Standards
As communicated in our letter dated June 17, 2022, our responsibility, as described by professional standards, is to form and express an opinion(s) about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting.

Accordingly, as part of our audit, we considered the internal control of City of Campbell, California solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process.

However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

We have provided our comments regarding internal controls during our audit in our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated March 3, 2023.

Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.

2 Compliance with All Ethics Requirements Regarding Independence

The engagement team, others in our firm, as appropriate, our firm, and other firms utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence.

Qualitative Aspects of the Entity’s Significant Accounting Practices

Significant Accounting Policies

Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by City of Campbell, California is included in Note 1 to the financial statements. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during the fiscal year, other than the implementation of GASB Statement No. 87, Leases. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments. The most sensitive accounting estimates affecting the financial statements are management’s estimates of pension, other postemployment benefits and claims liabilities.

Management’s estimate of the pension, other postemployment benefits and claims liabilities are based on actuarial valuations. We evaluated the key factors and assumptions used to develop the resulting liabilities, deferred inflows of resources, and deferred outflows of resources and determined that it is reasonable in relation to the basic financial statements taken as a whole.

Financial Statement Disclosures

Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting City’s financial statements relate to:

• Note 1 summarizes the City’s accounting policies and describes significant changes in accounting policies due to the implementation of new accounting standards about leases. The effect of the restatement is further described at Note 17.

• Note 9 describes the valuation of the City’s net pension liability and related deferred outflows and inflows of resources. Such amounts are sensitive to the underlying actuarial assumptions used including, but not limited to, the investment rate of return and discount rate. As disclosed, a one percent increase or decrease in the discount rate has a material effect on the City’s net pension liability.

3 • Note 11 describes the City’s postemployment benefits liability and related deferred outflows and inflows of resources are sensitive to the underlying actuarial assumptions used including, but not limited to, the discount rate and healthcare cost trend rate. As disclosed, a one percent increase or decrease in the discount rate or the healthcare cost trend rate has a material effect on the City’s net post-employment benefits liability.

Significant Difficulties Encountered during the Audit

We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements

For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole. Uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future-period financial statements to be materially misstated, even though the uncorrected misstatements are immaterial to the financial statements currently under audit.

The following misstatements that we identified as a result of our audit procedures were brought to the attention of, and corrected by, management:

An adjustment reducing the beginning net position of the governmental activities for the California Energy Commission Loan in the amount of $809,094 and an additional $649,787 as described below for a total of $1,458,881.

An adjustment reducing the beginning fund balance of the other grants fund and governmental activities net position for accounts receivable in the amount of $649,787.

Although beginning balances were adjusted, the revenues were instead recognized in the year ended June 30, 2022.

An adjustment reducing the beginning net position of the internal service funds to report the funds’ share of the net OPEB liabilities and net pension for $116,278 and $1,677,260, respectively.

Disagreements with Management

For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City financial statements or the auditor’s report. No such disagreements arose during the course of the audit.

4 Circumstances that Affect the Form and Content of the Auditor’s Report

For purposes of this letter, professional standards require that we communicate any circumstances that affect the form and content of our auditor’s report.

Our independent auditor’s report contains an emphasis of matter paragraph as follows:

Emphasis of Matter

Adoption of New Accounting Standard

As discussed in Note 17 to the financial statements, the City has adopted the provisions of Government Accounting Standards Board (GASB) Statement No. 87, Leases, for the year ended June 30, 2022.

Accordingly, a restatement has been made to the governmental activities and Internal Service Fund net position as of July 1, 2021, to restate beginning net position, and fund balance of the General Fund. Our opinions are not modified with respect to this matter.

Correction of Error

As discussed in Note 17 to the financial statements, certain errors resulting in an overstatement of amounts previously reported for accounts receivable, understatement of loans and an understatement of the net pension and net OPEB liabilities, as of July 1, 2021, were discovered by management of the City during the current year. Accordingly, a restatement has been made to the Other Grants fund balance, internal service funds and governmental activities net position as of July 1, 2021, to correct the error. Our opinions are not modified with respect to that matter.

Representations Requested from Management

We have requested certain written representations from management which are included in the management representation letter dated March 3, 2023.

Management’s Consultations with Other Accountants

In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues

In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City’s auditors.

5 Other Information Included in Annual Reports

Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in City’s annual reports, does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.

However, in accordance with such standards, we have:

The other information comprises the introductory and statistical sections which is read for consideration of material inconsistency between the other information and the basic financial statements, or if the other information otherwise appears to be materially misstated.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.

This report is intended solely for the information and use of the City Council, and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

Menlo Park, California

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Independent Auditor’s Reports
June 30, 2022
City of Campbell
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4040 Campbell Ave., Ste. 200 | Menlo Park, CA 94025-1053 | T 650.522.3400 | F 650.645.7393 | EOE

2 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

To the Honorable Mayor and Members of the City Council
of the City of Campbell
Campbell, California

We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of City of Campbell (City), California, as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated March 3, 2023. Our report included an emphasis of matters relating to the adoption of GASB Statement No. 87, Leases and correction of errors relating to an overstatement of accounts receivables, understatement of loans and understatement of net pension and net OPEB liabilities reported in the June 30, 2021 financial statements.

Report on Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as the basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control.

Accordingly, we do not express an opinion on the effectiveness of City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiency in internal control, described in the accompanying Schedule of Findings and Responses as 2022-001 that we consider to be a material weakness.

3 Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with, including Section 6666 of Title 21 of the California Code of Regulations, which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or Section 6666 of Title 21 of the California Code of Regulations and which are described in the accompanying Schedule of Findings and Responses as items 2022-001.

The City’s Response to Findings

Government Auditing Standards requires the auditor to perform limited procedures on City’s response to the findings identified in our audit and described in the accompanying Schedule of Findings and Responses. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Menlo Park, California
March 3, 2023

4 City of Campbell
Schedule of Findings and Responses
June 30, 2022

2022-001 - Material Weakness of Internal Control over Financial Reporting

Criteria
Management’s responsibilities include the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Condition
The prior year financial statements contained and error that was discovered during the current year.

Adjustments were necessary for the City’s financial statements to comply with generally accepted accounting principles for governmental entities (GAAP).

Cause
The City governmental activities reported revenues for $809,094 in the prior year that should have been reported as a loan payable. In addition, the City reported an additional $649,787 in revenue and receivable in the Other Grants fund related to that loan that should have not be recognized on the financial statements of both, the Other Grants fund and the government-wide financial statements. In addition, the City’s Internal Service fund did not report its share of the net pension and net OPEB liability in the amount of $1,793,538.

Effect or Potential Effect
The fund balance of the other grants fund was overstated by $649,787 as of July 1, 2021 but did not impact the ending funds balance of the other grants funds as of June 30, 2022 since it’s a timing difference. The net position of governmental activities was overstated by $1,458,881. The net position of the internal service fund was overstated by $1,793,538 but the governmental activities net position was not impacted with this adjustment.

Recommendation
We recommend for the City to closely monitor revenue recognition requirements related to loans as well allocate net pension and net OPEB liabilities to the internal service funds.

Management’s Response
The City will ensure that individuals responsible for reporting loans in accordance with generally accepted accounting principles identify potential liabilities and distinguish them from revenues to ensure that the amounts are fairly stated on the financial statements. Going forward, the City will ensure that it allocates to the Internal Service Fund its share of the net pension and OPEB liabilities.

5 City of Campbell
Schedule of Prior Findings and Responses
June 30, 2022

None
General Fund - Fund Balance Comparison
Fiscal Year Ending (FYE) June 30, 2021 to FYE June 30, 2022 Audited Audited
FYE 06/30/21 FYE 06/30/22 Variance Short Description
Restricted:

None -$ -$ -$ No General Fund monies are restricted by external factors Total Restricted -$ -$ -$ Committed:

General plan update 250,460$ -$ (250,460)$ Accounts for General Plan (GP) expenses and GP Maint. Fees.

Compensated absences 1,202,662 994,762 (207,900) 50% of noncurrent liability for absences.

Liability insurance 173,311 105,930 (67,381) Set at minimum of 100% of self-insured retention for claims.

Available Capital Improvements Reserve 1,609,113 1,144,790 (464,323) CIPR for General Fund funded capital projects. Target $5M.

Committed Capital Improvements Reserve 771,825 897,782 125,957 Carryover CIPR projects approved in prior years.

Community Center Facility 33,498 71,019 37,521 For use at Community Center.

Heritage Theater 255,305 268,542 13,237 For use at Heritage Theater.

Total Committed 4,296,174$ 3,482,825$ (813,349)$ Assigned:

Capital projects (Construction Tax) 532,255$ 517,242$ (15,013)$ Construction tax funded capital projects.

Unemployment insurance 90,000 90,000 - Fixed amount to pay for anticipated unemployment costs.

PERS 2,252,000 2,252,000 - Set aside for pay down of PERS, trust, or cost mitigation.

OPEB 273,000 347,321 74,321 Annual required contribution for OPEB liabilities.

Other 496,602 711,874 215,272 Set aside for operating encumbrance carryovers.

Total Assigned 3,643,857$ 3,918,437$ 274,580$
Unassigned:

Unassigned, Undesignated 1,000,000 999,999 (1) To be maintained at $1M for operating cash flow purposes.

City council reserve 362,624 362,624 - Council discretionary reserve for requests, recognition, etc.

Economic fluctuations 9,028,076 9,955,452 927,376 16.67% of Operating Expenditures for economic downturns.

Emergency 2,585,719 3,207,454 621,735 10% of Revenue for unexpected physical or fiscal emergency.

Total Unassigned 12,976,419$ 14,525,529$ 1,549,110$ TOTAL FUND BALANCE 20,916,450 21,926,791 1,010,341 Adopted GF Operating Budget 54,168,458 59,720,770 5,552,312 Unassigned as % of Budget 23.96% 24.32%
Unassigned + PERS as % of Budget 28.11% 28.09%
Unassigned Reserve Stress Test (GFOA Guidance 16.67%)
$1 million deficit in FY 2022 (1,000,000) 22.65%
$2 million deficit in FY 2022 (2,000,000) 20.97%
$3 million deficit in FY 2022 (3,000,000) 19.30%
$4 million deficit in FY 2022 (4,000,000) 17.62%
$5 million deficit in FY 2022 (5,000,000) 15.95%
Unassigned + PERS Reserve Stress Test (GFOA Guidance 16.67%) $1 million deficit in FY 2022 (1,000,000) 26.42%
$2 million deficit in FY 2022 (2,000,000) 24.74%
$3 million deficit in FY 2022 (3,000,000) 23.07%
$4 million deficit in FY 2022 (4,000,000) 21.40%
$5 million deficit in FY 2022 (5,000,000) 19.72%