Cupertino City Council
July 16, 2024

CITY OF CUPERTINO, CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

WITH REPORTS ON AUDIT

BY INDEPENDENT

CERTIFIED PUBLIC ACCOUNT ANTS

FOR THE YEAR ENDED
JUNE 30, 2023
Prepared by:

The City of Cupertino Administrative Services Department Finance Divi sion

City of Cupertino
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents
INTRODU CTORY SECTION (Unaudited)
Page
Letter of Transrn ittal .................... ........... ................................. ......... ............. .............................. .... .-........................... .. i City Co uncil and Directory of City Officia ls ............... ..................... .............. ...... .............. .............. ............. ............. vii Organ izational Chart ............................... ............ ................................. ........................ ............................... ........... .... viii Comm issions and Comm ittees ................ ......................................... ............. ........ ................................. ........ .............. ix GFOA Certificate of Achievement for Exce llence in Financ ial Reporting ................. ......................................... ........ x

FINANCIAL SECTION
Independent Auditors' Report on Financial Statements ............................ ........................................... .................. I Management's Discussion and Analysis (Required Supplementary Information) (Unaudited) ............. ............ 5 Basic Financial Statements:

Government-Wide Financi al Statements:

Statement of Net Position .................. ................ ......................... ............................................. ......... ......... .... 28 Stateme nt of Activities .................................. ............................ .................... ................. ................ ................ 30 Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet ..................... ........... ................... ..................... ............................................ ...................... 34 Reconciliation of the Governmental Funds Balance Sheet
to the Government -Wide Stateme nt of Net Positio n .......................................... ........................ ....... 37 Statement of Revenues , Expen ditur es, and
Changes in Fund Balances ................................................................................................................ 38 Reco nciliation of the Gove rnmental Fund s Statemen t of Revenues, Expe nditur es, and Changes in Fund Balances to the Government -Wide State ment of Activi ties ..................... ...................................................................... .............. ............. 40 Proprietary Fund Financial Statements:

Statement of Net Position ....................... .................. ....................... ............... ..................... ......... ........... 42 State ment of Reve nues, Expenses , and Changes in Net Position .............. .................. ........................ .... 46 Statement of Cas h Flows ............... ...... ......................................... ........................................................... 48 Notes to the Basic Financ ial Statement s ............. .............. .............. ............................................. .................. ... 57 City of Cupertino
Annua l Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (Continued)
Page
FINANCIAL SECTION {Continued)
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule:

General Fund ................................................................................................................................................ I 03 Transportation Special Revenue Fund ......................................................................................................... I 04 Housing Development Special Revenue Fund ............................................................................................. 105 Notes to the Budgetary Comparison Schedules ................................................................................................ 107 Schedule of Changes in the Net Pension Liability and Relate</ Ratios- Last Ten Fiscal Years Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan ..................................... I 08 Schedule of Plan Contributions - Pension - Last Ten Fiscal Years Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan ..................................... 110 Schedule of Changes in the Net OPEB Liability and Related Ratios - Last Ten Fiscal Years Single Employer Defined Benefit Other Post Employment Benefit Plan .................................................... 112 Schedule of Plan Contributions - Other postemployment Benefits Single Employer Defined Benefit OPEB Plan ............................................................................................. 114 Supplementary Information:

Other than the General Fund and Special Revenue Funds ................... : ............................................................. 117 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual:

Public Facilities Corporation Debt Service Fund ......................................................................................... 11 9 Capital Improvement Projects Capital Projects Fund .................................................................................. 120 Nonmajor Governmental Funds:

Description ofNonmajor Governmental Funds ........................................................................................... 121 Combining Balance Sheet ............................................................................................................................ 122 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 124 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual:

Storm Drain Improvement Special Revenue Fund ................................................................................ 126 Park Dedication Special Revenue Fund ................................................................................................ 127 Environmental Management/Clean Creeks Special Revenue Fund ............................. , ........................ 128 Traffic Impact Special Revenue Fund ................................................................................................... 129 Stevens Creek Corridor Park Capital Projects Fund .............................................................................. 130 Nonmajor Enterprise Funds:

Combining Statement of Net Position .......................................................................................................... 133 Combining Statement of Revenues, Expenses and Changes in Net Position .............................................. 134 Combining Statement of Cash Flows ........................................................................................................... 135 Internal Service Funds:

Combining Statement of Net Position .......................................................................................................... 138 Combining Statement of Revenues, Expenses, and Changes in Net Position ............................................. 140 Combining Statement of Cash Flows ........................................................................................................... 142 City of Cupertino
Annua l Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (Continued)
STATISTICAL SECTION (Unaudited)
Description of Statistical Section Contents ............................................................................................................... 14 7 Financial Trends:

Net Position By Component - Last Ten Fiscal Years ............................................................................................ 148 Changes in Net Position - Last Ten Fiscal Years .................................................................................................. 150 Fund Balances of Governmental Funds - Last Ten Fiscal Years ........................................................................... 154 Changes in Fun·d Balances of Governmental Funds - Last Ten Fiscal Years ........................................................ 156 Revenue Capacity:

Assessed and Estimated Actual Value of Taxable Property - Last Five Fiscal Years .......................................... 159 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years .................................................................... 160 Principal Property Taxpayers - Last Fiscal Year and Nine Fiscal Years Ago ...................................................... 162 Property Tax Levies, and Tax Collections - Last Ten Fiscal Years ...................................................................... 163 Debt Capacity:

Ratios of Outstanding Debt by Type - Last Ten Fiscal Years ............................................................................... 164 Direct and Overlapping Bonded Debt. ................................................................................................................... 165 Legal Debt Margin lnfonnati on - Last Ten Fiscal Years ....................................................................................... 166 Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years .................................................................... 167 Demographic and Economic Information :

Demographic and Economic Statistics - Last Ten Fiscal Years ........................................................................... 168 2023 E1nployee Ranking ........................................................................................................................................ 169 Operating Information:

Full-Time Equivalent City Employees By Function/Program - Last Ten Fiscal Years ........................................ 171 Operating Indicators by Function / Program - Last Ten Fiscal Years ................................................................... 172 Capital Assets By Function - Last Ten Fiscal Years ............................................................................................. 174 Community Economic Profile ...................................................... ........................... ...................... .................... ..... 177 ")fll/JJq ljil/ 1lj/lJIIOfJll il/ll! aflvd Sfl/1

CUPERTINO
July I, 2024

CITY OF CUPERT INO

CITY HALL
10300 TORRE AVENUE• CUPERTINO, CA 95014-3202
(408) 777-CITY • WWW.CUPERTINO ORG
To the Citizens of Cupertino, Honorable Mayor,
Members of the City Council, and City Manager:

It is our pleasure to submit the Annual Comprehensive Financial Report (ACFR) for the City of Cupertino (the City), California for the fiscal year ended June 30, 2023. The report is prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) set by the Governmental Accounting Standards Board (GASB). The report presents City information on an entity-wide basis and a more detailed fund-level basis. The fund-level reports emphasize the City's major funds. A Management Discussion and Analysis (MD&A) presents a comparative analysis of current and prior year results, changes in financial position, a comparison of actual versus budget, financial highlights, trends, and disclosure of any known significant events or decisions that affect the financial condition of the City. This transmittal letter is designed to complement the MD&A and should, therefore, be read in conjunction with it. The MD&A is required supplementary information and is found in the Financial Section of the ACFR.

The accuracy of the data presented and the completeness and fairness of the presentations, including all disclosures, are the responsibility of the management of the City. To provide a reasonable basis for making these representations, management has established a comprehensive internal control framework that is designed to protect the City's assets and provide sufficient, reliable infonnation for the proper preparation of these financial statements. We believe the data is accurate in all material respects and is presented in a manner that fairly sets forth the City's financial position. Fu11hermore, we believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activity have been included.

REPORTING ENTITY
This ACFR includes all component units and funds of the City. It reports all activities for which the City is considered to be financially accountable. The general governmental funds suppo11 a full range of services, including law enforcement, community development, recreation, public works, public and environmental affairs, and general administration. Enterprise funds account for recreation and solid waste operations supported by user fees. This financial report incorporates data for the City of Cuper1ino and its component unit, the Cupertino Public Facilities Corporation.

The City operates under a Council-City Manager form of government. There are five council members, including the Mayor, who serve staggered four-year terms. The City Council appoints the City Manager who is responsible for the daily administration of City affairs. The City Council also appoints the City Attorney. The Director of Administrative Services shall also be appointed Treasurer per the Cupertino Municipal Code 2.48.020. All other employees are appointed by the City Manager.

ECONOM IC CONDITIONS
The City of Cupe1tino is located in Santa Ciara Count y at the southern end of the San Francisco Bay Pen insula. The City is comprised of 13-square miles and is bordered by the cities of San Jose, Sacatoga , Sunnyvale , Santa Clara, and Los Altos. It has a residential popu lation of 59,47 1 (California Department of Finance , January 2024) .

Situated at the west end of Sil icon Valley , Cupert ino has earned the reputation of a balanced community with a healthy climate for business and well-maintained residential neighborhood s, community parks and public faci lities. The excellent reputation ofCupe1tino's schools is a major attraction for families wishing to settle in close proximity to high paying jobs in Silicon Valley. The City recognizes the importance of quality schoo l facili ties and programs to all Cupe rtino residents, and works in partnership with the schoo ls in many programs affecting education and youth. National surveys rank the City high in education levels , average household incomes , and registered patent numbers , as well as one of the best cities in which to live and raise a fami ly.

Because Cupertino is a mature , 93% built-out city, the City of Cupertino focuses on business retent ion and revitalization. Cupert ino is world renowned as the home of high-tech giants , such as App le, Inc., and as a community with stella r public schools. De Anza College , one of the largest sing le-campus community colleges in the country , is another major emp loyer and a magnet for attracting local and international students . The City's proactive economic development effo1ts have resulted in an innovative environment for start-ups and grow ing companies to tlu·ive. The City strives to retain and attract local compa nies through active outreach and a responsive and customer -oriented entitlement process. The City is excited to have a number of new mixed-use development projects offering more retai 1 and dining options , as well as provide additiona l housing oppo1tunities to meet the needs of the growing comm unity.

According to the 2022 -2023 Assessor's Annual Report for Santa Clara County , Cupe rtino's net asse ssment roll growth increased by nearly $2,084 million , or 7.2%, from the prior year. Residential use values increased 7.2% a total of $1 ,260 million and represented 61.1 % of all growth expe rienced in the City.

Commercia l prope1ties posted an increase of $1 ,066 mi II ion, or 13. I%, due to the movement of assets from the unsecured to the secu re roll. The industrial properties repo1ted growth of $280 mill ion, or 24. 7%, on the strength of parcels adding improvement values between tax years or tenants at these sites addi ng fixtures and business assets. Unsecur ed asset s in Cupe1tino decreased by $655 .million , or 38% due to the movement of assets from the unsecured to the secured roll, which contributed to the large growth seen in the commercia l use catego ry.

The City of Cupertino has exper ienced significant fluctuations in sales tax revenues over the past several fiscal years. In FY 2018 - 19, the City received $24.9 million in sales tax revenue. This amount increased substantial ly in FY 2019 -20 to $35.7 million , and frnthe r to $42.6 million in FY 2020 -21. During FY 202 1- 22, the sales tax revenue slightly decreased to $42.2 mill ion. In FY 2022-23 , sales tax revenue has decreased to $34.8 million , to a pre-pandem ic level, driven by a return to in-person purchases.

II
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$ 10,000
$5,000
$-
20 14 2015
Sales Tax ($ in thousands)
2016 2017 2018 20 19 2020 202 1 2022 2023
The increase in sales tax revenue during FY 2020 -2 1 and FY 2021 -22 can be attr ibuted to stro ng growth in two major industry groups: Business and Industry, and State & County Pools . These grou ps expe rienced the greatest growth during the pandem ic. However, in the current fiscal yea r, these groups have returned to FY 2019 -20 leve ls. Other industry groups have shown modest but constan t growth over the yea rs, contributing to the City's diversified economic base .

Sales taxes are comprised of eight maj or industry gro ups: Business and Industry, State & County Pools, Restaurants and Hotels, Genera l Consumer Goods , Fuel and Serv ice Stations, Food and Drugs, Building and Construction, and Autos and Tra nspo11ation. For FY 2022-23, the composition of sales tax revenue received from these groups is as follows: Business and Industry (7 1.6%), State & County Pools ( 19.3%), Restaurants and Hote ls (4.1% ), General Consumer Goods (2.5%), Fuel and Service Stations (1.2%), Food and Drugs (0.8%) , Buildin g and Construct ion (0.4%), and Autos and Tran sportatio n (0.1 %).

With the economi c recove ry and easing of credit, comme rcial development activity picked up considera bly in 2012-13 and 2013 -14 led by plan reviews of the new Apple Cam pus 2. Plans for the redeve lopment of the Marina shopping center into a mixed-use project , Marina Plaza, was appro ved in 20 16. This project will include 23,000 sq. ft. of retail and restaurant use, a 122-room bout ique hotel, and 188 residential units includin g 16 below mark et rate units. Construction of a five story , 148-roo m Hyatt House hotel was completed in April 20 19 and includes a full-service restaurant and meeting rooms. Through the City 's new General Plan Amendment (GPA) Authori zat ion Process appl ications for two develo pment projects were aut horized by City Council durin g FY 20 19-20 with the De Anza Hotel and the Cupe11ino Village Hotel.

The City's pension and retiree medica l (also referred to as OPEB , Other Post-Empl oyment Benefits) unfund ed ach1arial accrued liabilities are discussed in the Notes to the Basic Financial Statemen ts. The City must pay CalPERS, the state's gove rnment pension sys tem, annually to reduce its long-term liability for pensions. Cupe11ino's Ca l PERS actuarial valuation repo11 as of June 30, 2022 repo11ed a pension unfund ed accrued liability of $41.3 million with annual payments to Cal PERS of 32.75% and 32.8 1 % of projected payroll for 2023-24 and 2024-25 , respec tively, wit h ongoing decreases afte r that. Ca!PERS' strong performance in FY 2020-21 with a return of 2 1.3%,tr iggered a reduction in the discount rate from 7% to

6.9% , leading to a greater unfunded liability for all agencies and increas ed norm~! costs and mandatory annual contribution s. To address long-te rm rising costs , Cupert ino and state law · has reduced pension benefits for new hires and increased emp loyee contrib utions. As of the June 30, 2023, the City has a Net OPEB Liabilit y of $0.5 million with ann ual payments to a retiree health plan trust at 2. 1 % of payro ll. The funding status changed from over-funded to a liability due to negative yea r-over-yea r mark et cond itions and change in demograph ic assump tions.
111
In addition to the City 's Section 115 OPEB Investment Trust established in 20 I 0, in FY 2017 -1 8, the City Council approved the establishment of a Sect ion 115 trust as patt of a pension rate stabilization program.

An initial investment of$8 million was made in FY 2018 -1 9, with additional contributions of$4 million in FY 20 I 9-20 , $2 million in FY 2020-21 , and $2 mill ion in FY 2021-22 . In FY 2022-23 instead of contr ibuting additional funds to the trust , the Council autho rized the use of trust funds to cover direct OPEB costs amounting to $1 ,385,359 to assist the City in balancing a projected deficit due to a poten tial loss of sales tax revenue due to the California Depa1tment of Tax and Fee Administration (CDTFA) Audit of one the City's sales taxpayers.

Because the City contracts out police services to the County Sheriff and because fire protection is handled by a special district , the City avoids the high pension, capital, and operating costs of a City-operated public safety function. The City caps its contribut ions to emp loyee health insurance premiums that benefit both the City and employees. A build-up of operating reserves from strong revenue years , such as 2013-14 , along with a tradit iona l under-spending of budgets , enables the City to withstand weak revenue years that occur periodically , suc h as in FY 2009 -1 0.

On March I I, 2021, the American Rescue Plan Act (ARP) of 2021 was signed into law and established the Coronavi rus State Recovery Fund and Coronavirus Local Fiscal Recovery Funds, which together make up the Coronavir us State and Local Fiscal Recover Funds ("SLFRF ").

The ARP is a $1.9 trillion economic stimulus bill. Within the ARP, the Coronavirus Local Fisca l Recovery Fund provided $350 billion for states , municipalities , countie s, tribes , and territor ies, including $130 billion for local governments split evenly between municipa lities and counties . Califo rnia cities are expected to receive more than $7 billion dollars in much needed assistance to help offset the billions of dollars in revenue sho1tfalls due to the shutdown of local economies and the billions spent protecting public health , delivering essential services , protecting vulnerab le populations , and helping small businesses survive during the pandemic.

The City received two payments totaling $9,694 ,773 in SLFRF funding , with the first payment received in May 2021 in the amount of$4 ,847,386.50 and the second payment in May 2022 . The City may use SLFRF funds to cover these eligib le costs incurred during the period that begins on March 3, 2021 and ends on December 31, 2024, as long as the award funds for the obligations incurred by December 31 , 2024 are spent by December 3 I, 2026.

On Septembe r 7, 202 I, the Cupe 1tino City Council approved a plan which allocated the ARP funding towards revenue loss which was estimated at approximately $29 million. Addit ionally, the $9.7 million in total ARP fundi ng was approved to be spent on genera l government services in the General Fund, spec ifica lly, City Work Program and spec ial project items. The City subsequent ly submitted compliance repotting allocating $3,594,028 and $6, I 00,745 for fiscal year 202 1-22 and 2022 -23, respective ly, fully repo 1ting allocated funds to offset revenue losses in transient occ upancy taxe s.

ECONOMIC INITIATIVES
With the expanded Apple presence , the City 's revenue base will rema in concentrated amo ng its top companies and top economic sector , the volatile business-to-business area. Past recessions and the historic departure of a major tax provider , Hewlett-Packard , demonstrates the need for diversification of the City's revenue base and a long-term balance of revenues and expenditu res. The City desires other revenues to mitigate the fluctuating nature of sales taxes, trans ient occupancy (hote l) taxes , user fees , and state grabs of local taxes in times of budget distress.
iv
.COVID-19 has had significant adverse impacts on the City's transient occupancy taxes, charges for services, and is sure to have long.lasting impacts on its sales tax. While the City's revenues remained strong in FY 2019-20 and are currently on pace with projections in FY 2020-21, the City's strong, untapped reserves afford the City to coi1tinue actively mitigating the impacts of the pandemic on the community.

Efforts to reduce operating costs, _additional allocations for tenants at risk of eviction and homeless assistance, public facility and· area sanitation enhancements, and small business grant assistance are all examples in FY 20 19-20 and FY 2020-21 of the City's on-going ability and commitment to overcome these challenges.

ACCOUNTING AND BUDGET ARY CONTROL
In developing and evaluating the City's accounting system, consideration is given to the adequacy of internal accounting controls. The City's controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against losses from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability of assets.

The concept of reasonable assurance recognizes that the costs of a control should not exceed the benefits likely to be derived and that the evaluation of costs and benefits requires estimates and judgments by management.

The City's budget is a detailed operating plan that identifies estimated costs and results in relation to estimated revenues. The budget includes 1) the programs, projects, services and activities to be provided during the fiscal year; 2) estimated revenue and fund balance available to finance the operating plan; and 3) the estimated spending requirements of the operating plan. The budget represents a process through which policy decisions are made, implemented and controlled.

INDEPENDENT AUDIT
City ordinance requires an annual audit of the financial records by an independent certified public accounting firm selected by the City Council and its audit committee. The Pun Group LLP audited the City's Basic Financial Statements, and their opinion thereon is included in the Financial Section of this report.

FRAUD INVESTIGATION
On September 5, 2018, former City of Cupertino employee Jennifer "Yuen-Cheng" Chang, Senior Accountant, was arrested by the Santa Clara County Sheriff's Office for embezzling $79 I ,494 in public funds through fraudulent checks between 2000 and 2014. The scheme ended in September 20 I 4 with the implementation of an upgraded financial system that tightened internal controls. Ms. Chang retired in July 20 15.

The fraudulent checks were discovered in early 2018 during a detailed review of several accounts after the new financial system was implemented. These checks, debited against a liability account, were suspicious due to their nature, size, and lack of supporting documentation.

In 2018, the Santa Clara County Sheriff's Office submitted its case to the District Attorney's Office, resulting in 68 criminal charges against Ms. Chang. At a Preliminary Hearing on December 10, 2019, Judge Pennypacker ruled that Ms. Chang would stand trial on 53 felony counts. In December 202 1, Ms. Chang pied guilty to three felony counts ·and paid $612,000 in criminal restitution to the City on January 31 , 2022.

The City is pursuing civil remedies to recover the fu ll amount embezzled, interest, and investigation costs.

V
The City has since strengthened internal controls, hired additional accounting staff to enhance segregation of duties, and approved the implementation of an internal audit function in FY 2019-20. Additionally, Moss Adams, LLP was engaged as the City's internal auditor.

CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFO/\) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Cupe1tino for its ACFR for the year ended June 30, 2022. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized ACFR. This repo1t must satisfy both GAAP and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that the current report continues to meet the Certificate of Achievement Program's requirements.

ACKNOWLEDGMENTS
I would like to express my appreciation to City employees, depaitment heads, the City Manager, members of the Audit Committee, and members of City Council for their interest in conducting the financial operations of the City in a responsible manner. Special thanks go to, Jonathan Orozco, Zeng Wang, Min Zhao, Jumaini Judoprasetijo, Vi Tran, and Amber Chang of the Finance staff for their continued support and dedication. Special recognition to Betli Viajar, Richard Wong, Giang Dinh, and Janet Liang for their efforts in the preparation and production of this repo,t. ~;:·~~
Kristina Alfaro
Director of Administrative Services
vi
Directory of City Officials
City Council
Hung Wei
Mayor
Sheila Mohan
Vice Mayor
Liang Chao
Council Member
J.R. Fruen
Cou11cil Member
Directory of City Officials
Pame la Wu - City Manager
Matt Morley - Assistant City Manager
Christop her Jensen - City Attorney
Tina Kapoor - Depu ty City Manager
Kristina Alfaro - Director of Administrat ive Services
Ben Fu - Direc tor of Commun ity Development
Chad Mosley - Director of Public Works
Rachelle Sander - Director of Parks and Recreatio n
Bill Mitchell - Chief Techno logy Officer
Vil
Kitty Moore
Council Member
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City Organizational Chart
Law Enforcement
:santa Clara Count,,
Sheriffs- Contract)
Citizens of
Cupertino
City Attorney City Manage r
Economic
Development
Admi nistrative
Services•
finance
(Accounting,
1urchasing, Budget
1 Community
Development
Building
Planning
Icade Enforcement !
Housing
Recreation and
Education
*The City Treasurer is the Director of Administrative Services Sustainability
Programs I
Commun 1tyOutrr:ach
and Neiehborhood
watch
Public Works
Development
Services
Environmental
Programs
Capital
Improvement
Program
Transportation
I Facilit ies and Fleet i
City Clerk Office of
Communicat ions
Innovation and
Technology
Infrastruct ure GIS
Multimedia Applications
Trees and ROW Streets Grounds

CITY OF CUPERTINO, CALIFORNIA
Fiscal Year 2022- 2023

COMMISSIONS AND COMMITTEES

ARTS AND CULTURE

COMMISSION
Carol Maa
Dana Ford
David Wang
Kiran Varssh neya Rohra
Vacant

AUDIT COMMITTEE
Angela Chen
Sheila Mohan
J.R. Fruen
Sophie Song
Laura Hammer

BICYCLE PEDESTRIAN

COMMISSION
Herve Marcy
Grace John
Joel Wolf
John Zhao
Ilango Ganga

HOUSING COMMISSION
Govind Tatachari
Tessa Parish
Sue Bose
Connie Cunnin gham
Angan Das

LIBRARY COMMISSIO N
Archana Panda
Janki Chokshi
Liyan Zhao
Sheefa Sreekanth
Qin Pan

PARKS AND RECREATION

COMMISSION
Carol Stanek
Hemant Buch
Jennifer Shearin
Seema Swamy
Sashikala Begur

PLANNING COMMISSION
Tejesh Mistry
David Fung
Seema Lindskog
Muni Madhdhipatla
Steven Scharf

PUBLIC SAFETY COMMISSION
Eric Shan
Rohan Pandit
Lakshminarasimha Ankireddipally
Tiffany Wang
Bobby Toda
IX

SUSTAINABILITY

COMMISSION
Anna Weber
Sonali Padgaonkar
Meera Ramanathan
Steve Poon
Vignesh Swami nathan

TEEN COMMISSION
Rachae l Ding
Geethikaa Tarra
Andrew Qin
Joyce Cheung
Dhruti Halambi
Elspeth Luu
Pranav Gupta
Rayna Shah
Sudisha Kumar
Adhya Kasamsetty

TECHNOLOGY, INFORMAT ION
& COMMUNICATIONS

COMMISSION
Eliza Du
Mukesh Garg
Emma Shearin
Rajaram Soundararajan
Prabir Mohanty
G
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Cupertino
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2022
~P-~
Execut ive Director/CEO
X

INDEPENDENT AUDITORS' REPORT
To the Honorable Mayor and the Members of the City Council of the City of Cupertino
Cupertino, California
Report on the Audit of the Financial Statements
Opinions
200 E. Sandpolnte Avenue, Suite 600 ~
Santa Ana, California 92707 \?ia
www.pungroup.cpa ~
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Cupertino, California (the "City") as of and for the year ended June 30, 2023, and the related notes to the basic financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our repo11. We are required to be independent of the City and to meet our other ethical 1·esponsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Other Matters
Change in Accounting Principle - Implementation of GASB 96 As discussed in Note 1 to the basic financial statements, the City adopted new accounting guidance, Governmental Accounting Standards Board ("GASB") Statement No. 96, Subscription-based Information Technology Arrangements. Our opinion is not modified with respect to this matter ..

Prior Period Adjustments
As discussed in the Note 14 to the basic financial statements, the City also recorded prior period adjustment in the governmental activities in the amount of $1 ,562,736 due to correction of recording loans related interest receivable.

The City also recorded prior period adjustments in the General Fund and the Housing Development Special Revenue Fund in the amount of $509,278 and $4,725,458, respectively, due to correction of recording loans related interest receivable and the restatement of unavai I able revenue related to the loans receivable to the fund balance.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WA LNUT CREEK • LAS VEGAS • PHOENIX To the Honorable Mayor and the Members of the City Council of the City of Cupertino
Cupertino, California

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial staten;ients 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.

Auditors' Responsibilitiesfor 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 auditors' report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the fi nancial statements.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the fi nancial 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.
2 To the Honorable Mayor and the Members of the City Council of the City of Cupertino
Cupertino, California

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

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the a1mual report. The other information comprises the Introductory Section and the Statistical Section are presented for purposes of additional analysis and are not a required part of the basic financial statements. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. 3 To the Honorable Mayor and the Members of the City Council of the City of Cupertino
Cupertino, California

Other Reporting Required by Govemment Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July I, 2024, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely . to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. -pu- ~ ~ / L-'f
Santa Ana, California
July 1, 2024
4 CITY OF CUPERTINO
Management's Discussion and Ana lysis (Unaudited)
For the Year Ended June 30, 2023
This section desc ribes the City of Cupe rtino' s (the "City") fin.ancial perfor mance for the year. Reade rs are enco uraged to conside r the following informatio n in conjunction with the accompanying Transmittal Letter and Basic Financia l Stateme nts.
2022-23 FINANCIAL HIGHLIGHTS
• In December 202 1, the Californ ia Depar tmen t of Tax and Fee Administration (CDTFA) infonned the City that an audit wou ld be conducted on one of the City 's major sales taxpayers. While the full impact of the audit was not known at that time, the City cease d its large annual tran sfers of excess unass igned fund balance to the Cap ital Reserve Fund. In Marc h 2023, the CDTF A verba lly notified the City of its preliminary dete rmin atio n that tax dollar s had been misallocated to the City, resu lting in an adve rse outcome for the City. In October 2023 , the City forma lly rece ived the results of the aud it and took many steps to mitigate the impact which are discussed in the City 's FY 2023 -24 and FY 2024 -25 Adopted Budgets. The City is curren tly appea ling the deci sion by the CDT F A and continues to rece ive disputed sales tax revenues. Those reve nues are set aside in a comm itted Sales Tax Repayme nt Reserve that was created in Octo ber 2023.
• The assets and deferred outflows ofresources of the City exceeded its liabilities and deferred inflows of resources at the close of the fiscal year 2022 -23 by $388. 1 million (net position). Of this amount , $ 120.5 mill ion represents u nrestricted net position , which may be used to meet the City's ongoing obligations to citizens and cred itors . • City revenues have increased in 2022 -23 with base governmenta l revenues showing a $5.9 million increase, or 6%, over 2021 -22. The primary fluctuations include an increase in use of money and prope rty and intergovernmenta l reven ues that are offset by decrease s in sales tax and charges for serv ices . Acco rding to the 2022 -23 Assesso r's Annua l Report for Santa Clara County, Cupertino's net assessment roll growth increased $2.08 billion, or 7.2% , from the prior yea r.
• Residentia l use values increased 7.2%, a tota l of $1 ,260 million , and rep resented 61 .1 % of all growth experienced in the C ity. Commercia l propert ies posted an increase of $1,066 million, or 13. 1 %, due to the movem ent of assets from the unsecured to the secure roll. The industrial propertie s report ed growth of$280 million, or 24.7% , on the strength of parcel s addi ng improvement values between tax years or tenant s at these sites adding fixtures and business assets. Unsec ured assets in Cupert ino decreased by $655 million, or 38.0% due to the movement of assets from the unsecured to the secured roll, which cont ributed to the large growth seen in the comme rcial use category. • The City experie nced a decrease of approximate ly $8.3 million, or 20% in FY 2022-23 sales tax revenues compared to the previous year. The decrease was main ly due to a return to in store versu s on line purchases. Although the City experienced dec lines in many of the sectors , including business and industry, general cons umer goods, and State and County pools, these expe riences were mitigated by stro ng performance s in the remaining major industry groups. • The City continued to make substantial investments into cap ital projects dedicated to street and transporta tion improve ments , stor m drain improveme nts, and maintenance of and improvements to City facilit ies, resulting in an increase in net capital assets of $4.3 million , or 2.0% , after depreciation. • The City's change in net position was $28 .2 million for governmenta l activitie s reflecting the continued positive experience in property tax and modes t departmental spending. • The City 's Net Pension Liab ility for June 30, 2022 , (meas urement date) was $55.8 million, increase d by $2 1.8 million from June 30, 202 1, or 64% . The Plan Fiduciary Net Position as a Perce ntage of the Total Pension Liabi lity for the City's pension plan with CalPERS decreased to 68%. In accordance with gui dance under GASB 67/68 , the assets in the Section 11 5 Trust are repo11ed as restricted cash and inve stments in the City 's General Fund. While the Sec tion 115 Trust qualifies as a "trust," the assets in the Sect ion I 15 Trust are not used to direct ly pay benefit s to beneficiaries ; rather, they are used to pay CalPERS via the CERBT Trust and as a result , the act ivities are not required to be reported in a fiduc iary fund. The Trust's ending balance as of June 30, 2023 was $19 .1 million. 5 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
• Business-type activities contributed $7.2 million to citywide revenues totaling $25.7 million, while the same activities contributed over $8.0 million to citywide expenses of$98.4 million. • As of June 30, 2023, the City reported an increased in Net OPEB Liability of $7.9 million primarily due to the investment return being less than the service cost plus interest -on Total OPEB Liability (TOL). The City's actuarial valuation generated a Net OPEB Liability of $0.6 million. The City also repot1ed deferred outflows and inflows related to OPEB of $6.2 million and $2.3 million, respectively. As of June 30, 2023, the City's OPEB plan had a funding ratio or funded ratio or status of 98%.
• On March 11, 2021, the American Rescue Plan (ARP) Act of 2021 was signed into law, establishing the Coronavirus State and Local Fiscal Recovery Funds (SLFRF). The ARP Act is a $1.9 trillion stimulus bill, with $350 billion allocated for states, municipalities, counties, tribes, and territories, including $130 billion for local governments. California cities are expected to receive over $7 billion to offset revenue shortfalls and cover costs incurred due to the pandemic.

The City of Cupertino received two payments totaling $9,694,773 in SLFRF funding: $4,847,386.50 in May 2021 and a second payment in May 2022. These funds can be used for eligible costs incurred between March 3, 2021, and December 3 I, 2024, with the funds spent by December 31, 2026. The City has discretion to use these funds within four statutory categories set by the U.S. Depa11ment of the Treasury.

On September 7, 2021, the Cupe11ino City Council approved a plan to allocate the A RP funding towards an estimated $29 million revenue loss. The $9.7 million in ARP funding was designated for general government services in the General Fund, including City Work Program and special projects. Compliance repot1ing submitted by the City allocated $3,594,028 and $6, I 00, 745 for fiscal years 2021-22 and 2022-23, respectively, fully offsetting revenue losses in transient occupancy taxes.
• The net position presentation has been updated to reflect the implementation of Governmental Accounting Standards Board (GASB) Statement No. 96, effective FY 2022-23, resulting in new asset and liability categories.

The objective of the new statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. • The City recorded a prior period adjustment, necessary to record interest receivable due to two housing development loans that the City has historically not recorded. This adjustment ensures that all financial activities are accurately reflected in the City's financial statements. Information on the Loan Receivable can be found in Note 3 - Loans Receivable, and details of the adjustment are provided in Note 14 - Prior Period Adjustment. This adjustment aims to improve transparency and accuracy in our financial reporting.

OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis is intended to serve as an introduction to the City's Basic Financial Statements. The Basic Financial Statements are comprised of the City-wide Financial Statements, the Fund Financial Statements, and the notes to the Basic Financial Statements. These two sets of financial statements provide two different views of the City's financial activities and positions.
6 CITY OF CUPERTINO
Management's Discussion and Analysis {Unaudited) (Continued) For the Year Ended June 30, 2023
The City-Wide Financial Statements provide a long-term view of the City's activities as a whole, and comprise the Statement of Net Position and the Statement of Activities. These statements are prepared on the accrual basis, which means they measure the flow of all economic resources of the City as a whole. The accrual basis of accounting is similar to the accounting used by most private sector companies. The Statement of Net Position provides information about the financial position of the City as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about all the City's revenues and expenses, with the emphasis on measuring net revenues and expenses for each of the City's programs. The Statement of Activities explains in detail the change in net position for the year. Over time, increases or decreases in net position can be indicators of whether the financial condition of the City is improving or deteriorating.

All of the City's activities are grouped into Governmental activities and Business-type activities, as explained below.

The Statement of Net Position and the Statement of Activities provide a summary of these two types of activities for the City as a whole.
• Governmental activities- Most of the City's basic services are considered to be governmental activities, including public works, law enforcement, community development, recreation, innovation and technology, and general administration. These services are supported by general City revenues such as property, sales and other taxes, and by specific program revenues such as developer fees and grants.

The City's governmental activities include the activities of a separate legal entity, the Cupertino Public Facilities Corporation (the "Corporation"), because the City is considered to be financially accountable for the Corporation.

The City leases its major facilities from the Corporation, which then uses the lease payments to pay principal and interest on the Corporation's long-te1111 debt.
• Business-type activities-All of the City's enterprises are reported here, including solid waste management and most of the City's recreational operations. Unlike governmental services, these services are suppo11ed by charges paid by users based on the amount of services used.

The Fund Financial Statements report the City's operations in more detail than the City-wide Financial Statements and focus primarily on the sho11-term activities of the City's General Fund and other major funds. The Fund Financial Statements measure only current revenues, expenditures, assets, liabilities, and deferred inflows and outflows of resources; they exclude long-term assets and liabilities. Because these statements focus on the near-term inflows and outflows of spendable resources, such info,:mation may be useful in evaluating near-term financing requirements.

The Fund Financial Statements provide detailed information about each of the City's most significant funds, called major funds. Cupertino's Fund Financial Statements include governmental, enterprise and internal service funds as discussed below. Each major fund is presented individually, with all non-major funds summarized and presented only iri a single column. Subordinate schedules, which follow the Notes to Basic Financial Statements, present the details of these non-major funds. Major funds present the significant activities of the City for the year and may change from year to year as a result of changes in the pattern of the City's activities and public interest. For example, the Capital Improvement Projects Fund may or may not appear as a major fund depending on the volume of construction activity in a certain year.

Governmental Fund financial statements are prepared on a modified accrual basis, which means they measure only current financial resources and uses. They present essentially the same functions reported as governmental activities in the city-wide financial statements. However, capital assets and other long-lived assets, along with long-term liabilities, are not presented in the Governmental Fund financial statements. Reconciliations are provided to facilitate a comparison between governmental funds and governmental activity statements to allow a better understanding of the long-term impact of the government's near-term financial decisions. 7 CITY OF CUPERTINO
Management' s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
Comparisons of budget and actual financial information are included in the Basic Financial Statements for the General Fund and other major Special Revenue Funds. For other nonmajor funds, budgetary comparison schedules for these funds are included in this document as supplemental information only.

Enterprise and Internal Service Fund financial statements are prepared on a ful I accrual basis and include current and long-term assets and liabilities and defetTed outflows and inflows of resources. Enterprise funds are used to repott the same functions presented as business-type activities in the City-wide Financial Statements, and in more detail in the Fund Financial Statements.

Since the City's Internal Service funds provide goods and services only to the City' s governmental and business-type activities, their activities are reported only in total at the fund level. Internal Service funds may not be major funds because their revenues are derived from other City funds. These revenues are eliminated in the City-wide financial statements and any related profits or losses are returned to the activities which created them, along with any residual net position of the [nternal Service funds. For this City, internal service activities predominantly benefit governmental rather than business-type functions, and are therefore included within governmental activities in the City-wide Financial Statements.

The Notes to Basic Financial Statements provide impo1tant additional detail that is essential to a full understanding of the data repo,ted in the City-wide and Fund Financial Statements.

CITY-WIDE FINANCIAL ACTIVITIES
This analysis focuses on the net position and changes in net position of the City's Governmental Activities (Tables 1 and 2) and Business-Type Activities (Tables 3 and 4) as presented in the City-wide Statement of Net Position and the Statement of Activities.
8 Assets:

CITY OF CUPERT INO
Management 's Discuss ion and Analysis (Unaudited) (Co ntin ued) For the Year Ended June 30, 2023
Table 1
Condensed Statement of Net Position at June 30
(in thousands)
Governmental Activities
2023 2022
Cash and investments $ 205,572
19,089
$ 190,003 .

Rest ricted cash and invest ments
Oth er assets
Capital assets
Total assets
Deferred Outflows of Resources:

Loss on refu nding
Related to Pens ions (Note 8)
Related to OPEB (Note 9)
Total deferred outflows of resources
Liabilities:

Long term debt
Othe r liabiliti es
Total liabilities
Deferred Inflows of Resources :

Leases Rece ivable
Related to Pension s (Note 8)
Related to OPEB (Note 9)
Total defer red inflows of resources
Net Position:

Net Inves tment in cap ital assets
Restricted
Unrestr icted
Total net position
25,222
2 19, 168
469,051
159
17,294
5,859
23,312
18,850
80,725
99,575
2,380
131
2,169
4,680
198,450
69, 129
120,529
$ 388,108
*Updated to reflect prior period adjustment (see No.te 3 and . .14). 9 17,248
20,849 *
214,927
443,027
199
8,3 17
4,786
13,302
21 ,269
58,527
79,796
2,495
11 , 16 1
2,993
16,649
196,9 16
69,355
93,6 13
$ 359,884 *

CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
The City's change in net position from governmental activities was $28.2 million. The following significant changes within assets, liability, and net position categories occurred:
• As part of the City's budget balancing efforts, the City did not make an additional contribution into its Section I 15 Pension Trust during the fiscal year. In accordance with guidance under GASB 67 /68, the assets in the Section 115 Trust are reported as restricted cash and investments in the City's General Fund.

While the Section I 15 Trust qua I ifies as a "trust," the assets in the Section I 15 Trust are noi used to directly pay benefits to beneficiaries; rather, they are used to pay CalPERS via the CERBT Trust and as a result, the activities are not required to be reported in a fiduciary fund. • Cash and investments increased by $15.6 million, or 8.2%, over the previous fiscal year. This was largely due to the City's efforts to reduce expenses as part of it's budget strategy to address the structural deficit while relying other sources of funding to.
• The City utilized the Section 115 OPEB Trust to pay for the direct benefit costs instead of relying on the General Fund to subsidize the expense. Additionally, the change in demographic assumptions and investment performance, the Net OPEB Liability grew to $0.6 million, a shift of $2.1 million from the previous year's Net OPEB Asset of$ I .5 million.
• Capital assets increased approximately $4.2 million. This consisted of continued significant capital investment into capital projects dedi.cated to street and transportation improvements, storm drain improvements, and maintenance of and improvements to City facilities that were offset with current year depreciation expense.
• Long-term debt decreased by $2.4 million or 11 .4% over the previous year and resulted from the regular debt service payment and amo11ization on the issuance premium. • Other liabilities decreased by approximately $22.2 million or 37.9%, primarily due to an increase in the City's Net Pension and OPEB Liabilities.
• Deferred Outflows Related to Pension and OPEB increased $10.1 million primarily due to actuarial changes of assumptions. Deferred Inflows of Resources Related· to Pension and OPEB increased approximately $ I 1.9 million primarily due to actuarial changes of assumptions. 10 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Cont inued) For the Year Ended June 30, 2023
Sources of Revenue, Governmental Activities
2022-23
Gain on capital assets 0.0%
Investment Earnings 2.4% Transfers -0.2%
Other Taxes 2.4%
Franchise Tax 3.4%
Utility User Tax

3.5%
Transient
Occupancy Tax 6.0%
Sales Tax 29.3%
Charges for
Services 15.5%
Operating Grants &
Contributions 9.2%
C
l s
Property Tax 26.9%
Revenue categor ies are return ing to their proportionate pre-pandemic amounts, with the exception of transient occupancy tax (TOT), which has gradually increased but has not yet returned to FY 20 18-19 levels. 11 CITY OF CUPERTINO
Management 's Discussion and Analys is (Unaudited) (Cont inued ) For the Year Ended June 30, 2023
Functional Expenses, Governmental Activit ies
2022-23
Community
Development 13.8%
Administration 9.8%
Parks and Recreations

6.7%
Administrative
Services 7.1%
Innovation and
Technology 2.2%
Public Works 43.0%
■ Administration ■ Law Enforcemen t ■ Public Works
■ Innovation and Technology ■ Administrative Services ■ Parks and Recreations ■ Community Development
Law Enforcement

17.5%
Similarly to TOT in the previous chart , Parks and Recreation was adversely affected by the pandemic , but program activity has gradually increa sed over the course of the last two fiscal years. 12 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Cont inued) • For the Year Ended June 30, 2023
The Statement of Activities prese1Jts program revenues, expenses, general revenues, and the resulting change in net position as summari zed in the next table.

Table 2
Condensed Statement of Activities for the Year Ended June 30 (in thousands)
Governmental Activities
Expenses
Administration
Law enforcement
Innovation and technology
Administrative servi ces
Parks and recreation
Community development
Public works
Interest on long-term debt
Total expenses
Revenues
Program revenues:

Charges for services
Operating grants and contributions
Capital grants and contributions
Total program revenues
General revenues:

Taxes:

Property tax
Property tax in-lieu of motor vehicle fee
Sales tax
Transient occupancy tax
Utilit y user tax
Franchise tax
Other taxes
Intergovernmental, unrestricted:

Motor vehicle license fee
Investment earnings
Gain on sale of capital assets
Miscel laneous
Total general revenues
Total revenues
Excess of revenues over expenses,
before extraordinary item and transfers
Transfers (Note 5)
Change in net position
Beginnin g net position (Restated) (Note 14)
Prior period adjustment
Ending net position
13 2023 2022
$ 8,830 $ 7,293
15,7 16 16, 100
1,95 1 2,004
6,363 5,364
6,021 3,977
12,463 12,210
38,696 35,654
370 637
90,410 83,239
18,405 21,387
10,881 7,601
1,594 1,283
30,881 30,271
2 1,808 20,323
10,082 9,402
34,819 43,647
7,062 4,405
4,104 3,356
3,995 3,480
2,873 11,118
62 68
2,802 (9,242)
444 1,948
88,051 88,504
118,932 118,775
28,521 35,536
(296) (887)
28,225 34,649
359,884 323,672
1,563
$ 388,109 $ 359,884

CITY OF CUPERTINO
Management's Discussion and Analys is (Unaudited) (Continued) For the Year Ended June 30, 2023
City-Wide Governmental Activities Revenues
Table 2 shows that revenues from governmental activities increased $0.16 million or 0.1 % from last year, finishing at $119 million. The modest increase is largely due to increases in Operating grants, property taxe s, TOT, and investment earning offset by decreases in charges for service , sales taxes, and other taxes.

Increases in the City's genera l revenues are attributable to a $1.5 million increa se in propert y tax over the prior year.

According to the 2022/23 City of Cupertino Property Tax Review from HDL (Assessor's Annual Report for Santa Clara Cou nty) the net assessment roll growth increas ed $2.1 billion million , or 7.24% , from the prior yea r. Approximately I 00% was attr ibutable to resident ial, commercial, industrial , recreational , vacant properties , Miscellaneous and Institutional use values and 2.27% decreased in Unsecured Value change.

The City experienced a sales tax decrease of $8.3 million in FY 2022-23 , decreasing by 20.2% over the previous fiscal yea r. Although the City expe rienced declines in many of the sectors including autos and trans portation , building and construction, fuel and serv ice stations , general consumer goods, and restaurants and hotels over the last two year, these experiences were mitigated by strong performance in the busine ss and industry sector and the City's county pool allocation. The decrease in sales tax was expected as consumers transitioned back to in sto re shopping from online.

In FY 2022-23, total transient occupancy tax increased $2.7 million, or 60.3%, over the prior year. The City continues on the road to recover y for this tax source, although it was antic ipated to take longe r than other area s as employers' long-term and permanent telework policies will have a substa ntial impact on the timing and extent of recovery.

Other taxes experienced a decr ease of $8.3 million , or 74.7%, which was primarily driven federa l funding received from the CARES Act and the reve nue is recognized in, FY2 l-22.

Investmen t earn ings increased by $12 .0 million over the prior year. This was due to the shift from a negative market adjust ment (4.76%) in FY 2021 -22 in the City's portfolio's rate ofret urn of .36% (net of fee) for the fiscal year (source:

Chandler Asset Management).

Program revenue s showed a modest increase of $0.6 million or 2%, and is primarily attributable to the revenue reco gnition of the remaining SLFRF funds , offset by decreases in charges for services across all program s.• City-wide Governmental Activities Expenses
City-wide governmental activities expe nses increa sed by $7.2 million , or 9%. This was primarily driven by increase s in Administration due to , Recreation due to a return to norma lcy following the globa l pandemic and Recreation and Public Works.

Change in Net Position
The City -wide governmental net position increase of $28.2 million nearly matching the previous year's $34.5 million increase, and can be best explained by budget reduction strateg ies and continued revenue recognition of the fede ral funding assistance.

Business Type Activities
Business-type activ ities in the City-wide Financial Statements include the City's four enterprise fund s. Ente rprise funds are used to account for recreational and solid waste management operations that are financed and operated in a manner similar to private busi ness enterprises where the intent is that costs of providing servic~s and facilities to the general public on a continu ing basis be financed or recovered primarily through user fees. The majo r proprietary funds section of this report provides more information on business-type results. 14 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For.the Year Ended June 30, 2023
As shown in Table 3 and Table 4, the business-type net position totaled $10.4 million at June 30, 2023, decreased by $255,000 or 2.4%, largely due to decreased cash and investments from negative operating activities. Business-type activities transferred in (net) decreased by approximately $0.5 million over the prior year. An increase in capital asset additions of $181,863 offset with $161,840 in depreciation expense res Lilted in a net increase of $20,023 over the prior year. Enterprise activities experienced an overall increase in assets due primarily to investment income which increased cash and cash equivalents. Liabilities for business-type activities increased by $268,000 or 6.5% over the previous year.

In Table 4, revenues for all business-type activities increased $1.6 million, or 26.9% and operating expenses increased by $0.45 million, as the enterprise funds continue to return to normal, pre-pandemic operations.

Table 3
Condensed Statement of Net Position at June 30
(in thousands)
Business TtQe Activities
2023 2022
Assets:

Cash and investments $ 11,373 $ 12,342
Other assets 307 230
Capital assets 2,109 2,091
Total assets 13,789 14,663
Deferred Outflows of Resources:

Related to pensions 832 565
Related to OPEB 311 256
Total deferred outflows of resources 1,143 821
Other Liabilities: 4,386 4, 118
Total liabilities 4,386 4,118
Deferred Inflows of Resources:

Related to pensions 6 498
Related to OPEB l 15 188
Total deferred inflows of resources 121 686
Net Position:

Net Investment in capital assets 2,1 10 2,090
Restricted 167 167
Unrestricted 8,148 8,423
Total net position $ 10,425 $ 10,679
15 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Contin ued) For the Year Ended June 30, 2023
Table 4
Condensed State ment of Activities for the Year Ended June 30 (in thousands)
Business Type Activ ities
Expenses
Resource recovery
Blackberry farm
Cupertino sports center
Recreation programs
Total expenses
Revenues
Program revenues:

Charges for services
General revenues:

Investment earnings
Tota l revenues
Excess of revenues over expenses,
before extraordinary item and tran sfers
Transfers
Change in net position
Beginn ing net position
Endin g net positio n

MAJO R GOVERNMENT AL FUNDS
General Fund
General Fund Revenues
2023 2022 -
$ 2,038 $ 1,838
3,456 655
1,662 3,396
799 1,6 18
7,955 7,507
7,249 6,239
156 (404)

71.405 51.835
(55 1) (1,672)
296 887
(255) (785)
101.679 11,465
$ 10,?,425 $ 101.679
General Fund actual revenues of$ ! I I million ended $16.4 million , or 17.3%, above the original budget and $24.3 million , or 18.0%, below the final' 'budget. Table 5 displays the variations in actual revenues, wh ile Table 6 shows budgeted revenues compared to actuals.

Property taxes increased $2.2 million , or 7.3%, over the prior year due to continued roll-growth. According to the 2022- 2023 Assessor's Annual Report for Santa Clara County, Cupertin o's net assessment rol I growth increased by $2.1, or

7.24%, from the prior year.
16 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continue d) For the Year Ended June 30, 2023
Sales tax decreased by 20% or $8.3 million , returning to pre-pandemic levels. Sales Tax revenue cont inues to be the City 's greatest revenue at 29 .3% of total.

Transient occupancy tax increased $2.7 million, or 60%, due to the cont inual growth following the heavy decline caused by the pandemic.

Charges for services decreased by 24%, nea rly $3.5M under the previous year.

Licen ses and permits decreased by $48,000, or I%, due to a decrease 111 permitting on animal licenses , Mech/E lec/Plumbing, and others.

Revenue b;y Source
Taxes:

Prope11y
Sales
Transient occupa ncy
Utility user
Franchi se
Other
Use of money & property
Intergovernmental
Licenses and permits
Charges for serv ices
Fines and forfeitures
Other
Total revenues
Other financing sources:

Inception of subscr iption liability
Tran sfe rs in
Total other financing sources
Table 5
Revenue Changes
General Fund, Fiscal Year 2023 vs. 2022
(in thousands)
Fiscal Year 2023
Amount % of Total
$ 3 l,890 29%
34,819 31%
7,062 6%
4,104 4%
3,995 4%
1,472 1%
3,034 3%
7,771 7%
4,094 4%
l l, l l4 10%
304 0%
1,306 1%
$ 110,964 100%
$ 965 53%
$ 861 47%
$ 1,826 LOO%
17 Increase /(D ecrease)
From Fiscal
Year 2022
Amount Percent
$ 2,165 7%
(8,318) -20%
2,657 60%
748 22%
515 15%
458 24%
8,557 - 155%
3,386 77%
(48) -lo/o
(3,478 ) -24%
(66) -l8 %
(635) -33%
$ 5,940 · 6%
$ 965
$ 846 5640%
$· 846 5640%

CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
Taxes:

Property
Sales
Transient occupancy
Utility user
Franchise
Other
Use of money & property
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Other
Total revenues
Inception of subscription liability
Transfers in
General Fund Expenditures
Table 6
Revenue, Budget , and Actual Comparisons
General Fund 2022-23
(in thousand s)
Bud_g_eted Amounts
Original Final Actual
$30,040 $30,040 $ 3 1,890
31 ,944 31 ,944 34,819
5,000 6,000 7,062
2,955 2,955 4, 104
3,230 3,230 3,995
1,788 1,788 1,472
1,275 1,275 3,034
1,434 7,946 7,77 1
3,541 34,058 4,094
11,799 14,428 11, l 14
427 427 304
I.J.2.Q_ I, 183 1,306
$94,594 $135,273 $ l 10,964
$ $ $ 965
$ 61 $861 $ 861
Over /(Under)
Final
$ 1,850
2,875
1,062
1,149
765
(3 16)
1,759
( 175)
(29,964)
(3,314)
(123)
124
$ (24,309)
$
Fiscal 2022-23 overall expenditures, at $72.6 million, were $2.1 million, or 3.0%, higher than last year. This result came in $12.4 million, or 14.6%, under the final budget. Year-over-year and budget-versus-actual results for General Fund programs are described below and in Tables 7 and 8.

Administration increased of $ 110,000 or I% from 2021-22 and is primarily due to the Economic Development and Video functions moving from Community Development and Innovation & Technology departments, respectively.

Law Enforcement was $437,000 lower by approximately 3%, which is attributed to a shift in reclassing the Santa Clara County Sheriffs reconciling year end refund payment from a miscellaneous revenue to a reduction in expenditure and the year-over-year increases to services provided.

Innovation & Technology decreased by $450,000, or 8%, over the prior year. This was driven by the Department's reorganization.

Administrative Services' expenditures increased approximately $332,000, or 6%, over the prior year largely due to increases in insurance premiums.

Parks & Recreation General Fund expenditures experienced a 15% increase, or $703,000, across its programs. The increase is attributed to the program returning to pre-pandemic level of activity. 18 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
Community Development expenditures in the General Fund decreased $5 million, or 5%, and resulted primarily from · increases in cost allocation charges.

Public Works expenditures increased by approximately $0.6 million or 2%. This is primarily represented by an increase in compensation and benefits. Various divisions and programs fluctuated over the prior year due to the addition and completion of one-time special projects.

Transfers out of the General Fund decreased from $21.4 million in 2021-22 to $12.3 million a 42%. This was due to a reduction transfers from the General Fund to the Capital Reserve.

Table 7
Expenditure Changes
General Fund, Fiscal Year 2023 vs. 2022
(in thousands)
Increase/(Decrease)
Fiscal Year 2023 From Year Fiscal 2022
Function/Program Amount % of Total Amount Percent
Administration $ 7,602 10% $ I LO 1%
Law enforcement 15,277 21% (439) -3%
Innovation and technology 1,826 3% (237) -11%
Administrative services 5,976 8% 450 8%
Parks and recreation 5,432 7% 703 15%
Community development 10,667 15% (521) -5%
Public works 23,880 33% 553 2%
Capital outlay 1,263 2% 867 219%
Debt service 645 [% 645
Total expenditures $ 72,568 100% $ 2,131 3.0%
Transfers out $ 12,344 [90% $ (9,081) -42%
19 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
Table 8
Expenditure Changes
General Fund 2022-23
(in thousands)
Budgeted Amounts
Original Final Actual
Administration $ 11,046 $ 10,275 $ 7,602
Law enforcement 16,815 16,815 15,277
Innovation and technology 3,397 2,779 1,826
Administrative services 7,209 7,164 5,976
Parks and recreation 7,462 7,663 5,432
Community development 11,349 12,782 10,667
Public works 25,581 27,184 23,880
Capital outlay 306 287 1,263
Debt service 645
Total expenditures $ 83,165 $ 84,949 $ 72,568
Transfers out $ 11,252 $ 26,124 $ 12,344
General Fund - Fund Balance
Ove r/(U nde r)
Final
$ 2,673
1,538
953
1,188
2,23 1
2,115
3,304
(976)
{645}
$ 12,381
$ (13,780)
The General Fund carried a June 30, 2023, ending fund balance of $138.6 million, up 25.2% over prior fiscal year. Loan receivables totaled $970,962 of non-spendable fund balance out of$4 ,000,588 total non-spendable. The remaining non­ spendable is related to advances, inventories, and prepaid items . The City committed $34.1 million for general economic unce11ainty and $ I 27,891 for sustainability. The City assigned $9,735,187 million for encumbrances. The City restricted $19,088,859 for the pension rate stabilization program (Section 115 Trust). $71,603,813 was classified as unassigned.

Transportation
The Transportation Special Revenue Fund carried a June 30, 2023, ending fund balance of$ I 0,6 million down I 0.5%, or $1.2 million from the beginning of the fiscal year. ln recent years this fund has accumulated fund balance year over year. The decrease in fund balance can be attributed to the progression of scheduled projects, funded by available funds.

Housing Development
The Housing Development Special Revenue Fund carried a June 30, 2023, ending fund balance of$ l 1.5 million, down

3.4%, or $0.4 million, from the beginning of the fiscal year. The decrease can be attributed to lower intergovernmental revenue recognized.

Public Facilities Corporation
On September 2911\ 2020, the City of Cupertino 2020A Certificate~ of Pa11icipation (2020 COPs) were successfully sold at very attractive interest rates in order to refund the City's 2012 Ce11ificates of Paiiicipation for debt service savings.

The 2020 COPs were very well received by investors due in large pai1 to the well-regarded Cupertino name, the top­ notch AA+ rating, the sizable armual principal amounts and short maturity, and favorable supply and demand dynamics in the California municipal market.
20 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
At the end of the order period, there were nearly eight times as many orders as there were bonds for sale. This strong investor demand enabled the underwriter to further lower yields. The refunding ultimately generated net present value savings of approximately $3.14 million, or 11.6 I% of refunded par (compared to $2.26 million, or 8.36% of refunded par, when presented to Council on September I st) and a True Interest Cost of0 .72%. Savings to the City' s General Fund amounts to approximately $494,000 per year for the next IO years, or almost $5 million in total savings. Fund balance as of June 30, 2023 was $1 ,750 lower than the previous year, which will remain at this approximate fund balance in future fiscal years.

Capital Improvement Projects
The Capital Improvement Projects Capital Projects Fund carried a June 30, 2023, ending fund balance of$34 .8 million, largely unchanged to the prior fiscal year.

MAJOR PROPRIETARY FUNDS
Resource Recovery
The City has a solid waste franchise agreement with Recology that shares collection, landfi ll disposal, and recycling revenues and costs. This fund receives revenues from Recology with the funds going toward landfill costs, regulatory fees, and staffing costs that the City incurs to manage its solid waste, recycling, and household hazardous waste programs. Total operating revenue and expenses is at $1.77 million and $2.04 million, respectively. Net position decreased by $207,128. The fund ended the year with $4.8 million in net position.

Recreation Programs
This enterprise operates the Quinlan Community Center, Monta Vista Recreation Center, McClellan Ranch, Creekside Park building, eight school sites, and various parks. These programs generated approximately $1.7 million in revenues and program expenses of approximately $ 1.7 million. This resulted in a net operating gain of $80,756. The fund ended the year with a net position of $2.8 million.

Cupertino Sports Center
Revenue increased by $ I ,307,386 or 72.2% as the activities continued to increase post-pandemic. As a result of the increase in services generating more revenue, expenses increased by $ 1.3 mill ion or 58.3%, resulting in a net operating loss of$338 ,959. This fund's net position was $ 1.9 million as of June 30, 2023.

NONMAJOR PROPRIETARY FUNDS
Blackberry Farm
City employees, with a teaching professional contractor, staff the City-owned Blackben-y Farm golf course and pro shop. Operating revenues increased from $602,778 to $6 I 6,461 or 2.27%. Operating expenses increased by $1 43,984, or 22.0%, to $799,168 this year, which ended up with the operating loss of $182,707. After a transfer in from the General Fund of $23,600 and investment earnings of 37,286, net position de.creased by $121,821. As of June 30, 2023, this fund's net position was $734,400.
21 CAPITAL ASSETS

CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
At June 30, 2023, the City had $221 million, net of depreciation, invested in a broad range of capital assets used in governmental and business-type activities, as shown in Table 9 and in Note 6 to the Basic Financial Statements. This reflects the City's continued investment into capital projects dedicated to street and transportation improvements, storm drain improvements, and maintenance of and improvements to City facilities, resulting in an increase in net capital assets of$4.3 million, after depreciation and amo1iizat ion.

Table 9
Capital Assets, Net of Depreciation and Amortization, at June 30 (in thousands)
Governmental Activities:

Land
Easements
Construction in progress
Buildings
Improvements other than buildings
Machinery and equipment
Roads, curbs, gutters, sidewalks, medians and bridges
Streetlights
Sto1m drain structures and mains
Traffic signals
Right-to-use subscription asset
Total Governmental Activities
Business-Type Activities
Construction in progress
Buildings
Improvements other than buildings
Machinery and equipment
Total Business-Type Activities
Tota l City

DEBT ADMINISTRATION
2023
$ 64,787
19,615
28,594
12,504
13,373
3,640
69,369
1,241
3,541
420
2,083
219.!167
358
1,419
262
70 2,109
$ 22 1,276
2022
$ 64,787
19,615
23,406
14,118
15,405
4,195
67,932
1,270
3,691
508
1,773
216,700
185
1,501
315
89 2,090
$ 217,017
On September 29, 2020, the City of Cupertino's 2020A Ce11ificates of Participation (2020 COPs) were successfully sold in order to refund the City's 2012 Ce11ificat_es of Participation for debt service savings. The 2020 COPs were very well received by investors due in large part to the well-regarded Cupertino name, the top-notch AA+ rating, the 'sizable annual principal amounts and sho1i maturity, and favorable supply and demand dynamics in the California municipal market. The refunding generated net present value savings of approximately $3.14 million, I 1.61 % of refunded par and a True Interest Cost of0.72%. Savings to the City' s General Fund amounts to approximately $494,000 per year for the next 10 years, or almost $5 million in total savings.
22 CITY OF CUPERTfNO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
The June 30, 2023, outstanding principal of $16,065,000 is due to be paid off by June I, 2030. More information can be found in Note 7 to the Basic Financial Statements and in the Public Facilities Corporation discussion earlier in this analysis.

CURRENTLY KNOWN FACTS AND CONDITIONS
The COVID-19 pandemic has had significant impacts on the City, both financially as well as operationally. Although revenues in transient occupancy tax and charges for services have experienced declines since the start of the pandemic, the City has put forth efforts to reduce its operating costs to mitigate the future impacts. Additionally, through the assistance of the CARES Act and American Rescue Plan Act, the City anticipates these funds will mitigate much of the revenue loss and fiscal impact of the pandemic over the short- and long-term. The City's reserves remain intact and the City does not anticipate requiring the use of these Committed and Restricted funds.

Aside from the pandemic, the City is unaware of any other facts or conditions or decisions that are expected to have a significant effect on net position or results of operations.

CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This Annual Comprehensive Financial Report is intended to provide a general overview of the City's finances. Fu1ther information can be provided by the City of Cupertino Finance Department, I 0300 Torre A venue, Cupe1tino CA 95014, phone (408) 777-3280, or by the City website at www.cupertino.org. 23 ")fllll/Q ljll/ 1lj/1JIIOf/llll/llf iJfJIJd Sf l/.l

BASIC FINANCIAL STATEMENTS
25 9Z
·'flllJ/q J/il/ ,f// lJIIOf/ llil/11! i181Jd Sfl/.1

GOVERNMENT-WIDE

FINANCIAL STATEMENTS
27 ASSETS
Curr'ent assets:

Cash and investments
Receivable s:

Accounts
Interest
Leases , due within one yea r
Inventorie s
Prepaid items
Other assets
Total current assets
No ncurrent asse ts:

Restricted cash and investments
Lease receivable, due in more than one year
Loans receivable. net
Capital assets:

Capital assets. not being dep reciated
Capital assets. being depreciated and amortized
Tota l noncurrent assets
Total asse ts
DEFEllRE D OUTFLOWS OF RESOU RCES
Defer red charges on refund ing
Related to pensions
Re lated to other postemployment benefit
Total deferred outflows of resources
See accompanyin g Notes to the Basic Financial Statements City of Cupert ino
Statement of Net Position
June 30, 2023
Governmental
Activities
$ 205.571 ,569

15.591.022
732, 160
221 ,644
21 ,383
8,243

3.884
222.149 ,905

19.088,859

2.271.395

6.373 ,278
112.996.509
106, 171 ,455
246,90 1.496
469.051.4 0 I
159,478

17.294.067

5.858 ,7 18

23.3 12.263
28 Business -Type
Act ivities Tota l
$ 11.372,546 $ 216 ,944, 115
267.1 36 15.858. I 58

39.832 771 ,992
221,644
2 1,383
8,243

3.884
11,679.5 14 233,829._'1_12_
19,088,859

2.271 .395

6.373 ,278
358.231 I I 3,354,740

1.751.361 l 07,922.8 I 6

2.109.592 249,0 11 ,088
13,789, 106 482.840 ,507
159,478
83 1,986 18,126,053
3 11 ,282 6, 170,000
I, 143,268 24,455,53 1
City of Cupertino
Statemen t of Net Position (Continued)
June 30, 2023
Governmental
Activi ties

LIABILITIES
Current liabilities :

Accou nts payable and accruals 8,094.159
Accru ed payro ll and benefits 602,421
Deposits payable 8.645.547
Interest payable 53.550
Unearned reven ues 167,673
Compe nsated absence s, due within one year 50 1, 158
Claims payable , due within one yea r 382.000
Subscription liabi lities. due within one year 783,067
Long-term debt, clue within one year 2,035.000
Total current liab ilities 21 ,264,575
Noncurrent liabilities:

Compensa ted absence s, clue in more than one yea r 4,580,402 Claims payabl e, due in more 'than one yea r 1.840.786
Subscription liabilities, due more than one yea r 1,244.223 Long-term debt, due in more than one year 16.814,7 11
Aggregate net pension liabilities 53.277,80 I
Net other postemp loymen t benefit liabi lity 552 ,638
Tota l noncurrent liabilities 78,3 10,56 1
Total liabilities 99,575, 136

DEFERRED INFLOWS OF RESOURCES
Leases 2,379,733
Related to pension s 13 1,066
Related to other poste mplo yme nl benefit 2, I 68,769
Total deferred intlows of resources 4,679,568

NET POSITION
Net investme nt in capital assets 198,450,441
Restricted for:

Public works 35,408,750
Affordable housing 11 ,492,607
Pension trust 19,088,859
Other postemp loyment benefit 3, 137,311
Debt serv ice 1,750
Total restricted 69, 129,277
Unrestricted 120,529,242
Total net position $ 388, I 08.960
See accompan ying Notes to the Basic Financia l Statements 29 Busine ss-Type
Activities Total
475.433 8.569.592
289 602.710
8,645.547
53,550

1.097,879 1.265,552
10,492 5 I 1,650
382,000
783,067
2,035 ,000

1.584.093 22,848,668
209.749 4,790 , 151
1,840,786
1,244.223
16,814,7 11

2.563.097 55,840,898

29. 362 582,000
2,802,208 81 , 112,769

4.386 ,301 103,961 ,437

2.379,733
6,305 137,37 1
11 5,231 2.284 ,000
12 1,536 4,80 I. 104
2, I 09,592 200.560 ,033
35,408,750
11 ,492 ,607
19,088,859
166,689 3,304,000
1,750
166,689 69,295 ,966
8, 148.256 128,677,498
$ 10,424 .537 $ 398.533.497
City of Cupertino
Statement of Activities
For the Year Ended June 30, 2023
Cha rges for
Expenses Services
Functions / Prog rams
Governmenta l Activities:

Administrat ion $ 8.830.1 27 $ 3,098 ,916
Law enforceme nt 15.7 16,30 I 6 12,993
Innovat ion and techno logy 1,950.7 I 8
Admin istrative serv ices 6,363,343 5.4 19.34 7
Recreat ion services 6,020 ,526 62 1,587
Community deve lopment 12,463.257 5,36 I ,837
Public works 38,696 ,234 3.290,506
Interest and fiscal charges 369,502
Tota l Governmental Activities 90,4 10,008_ 18,405, [86 Business-Type Activities:

Resource recovery 2.038,3 l 3 1.772,252
Cupertino sports center 3.456,539 3.117.580
Recreat ion programs 1,66 1.686 1,742,442
Blackbe rry fann 799.1 68 6 16.46 1
Tota l Busine ss-Type Activities 7,955,706 7,248.735
Tota l Primar y Government $ 98,365.7 14 $ 25.653.92 1
See accompanying Notes to the Basic Financial Statements 30 Program Revenues
Capital Grants
Operating Grants and
and Contr ibutions Cont ributions
$ 6. 125.745 $
1,255.790
407,090
3,092,8 13 1,593.9 10
10,881,43 8 l,59\910
_J_ I 0.881.438 $ 1.593.9 l 0
City of Cupertino
Statement of Activities (Continued)
For the Year Ended June 30, 2023
Net (Expe nse) Revenue and Changes in Net Position
Governmental Business-Type
Activities Activities Tota l
Functions /Programs
Governmental Act ivities:

Administration $ 394.534 $ $ 394,534
Law enforcement ( 13.847,518) ( 13,847,5 18)
Innovation and technolog y ( 1.950,718 ) (1,950.718)
Administrative services (943,996) (943,996)
Recreation services (5,398,939) (5,398.939)
Community deve lopment (6,694.330) (6,694,330)
Public works (30. 719.005) (30,719,005)
Interest and fiscal charges (369,502) (369,502)
Total Governmental Activities (59.529,474) (59,529,474) Busines s-Type Activities:

Reso urce recovery (266.061 ) (266,061)
Cupert ino sports center (338.959) (338,959)
Recreation programs 80,756 80.756
Blackberry farm ( 182,707) ( 182,707)
Total Business-Type Activities (706,97 1) (706,971 )
Total Primary Government (59,529,474) (706,971) (60,236,445 ) General Revenues:

Taxes:

Property taxes 2 1,807,628 21,807 ,628
Property tax in lieu of motor vehicle fee 10.082,01 I 10,082,011 Sales taxes 34.8 I 9,34 1 34,819,34 1
Trans ient occ upancy tax (TOT) 7,062, 150 7,062, 150
Utility user tax (UUT) 4. 103,906 4, 103,906
Franchise tax 3,995,0 18 3,995,0 18
Other taxes 2,872,57 1 2,872,571
Motor vehicle license fee 62,072 62,072
Investment earnings 2,80 1,930 155,92 1 2,957,85 1
Miscellaneou s 444,339 444,339
Total General Revenue s 88,050,966 155,92 1 88,206,887
Transfers (296,481) 296,481
Change s in Net Position 28,225 .0 1 I (254,569) 27,970,442 Net Position - Beginning , as restated (Note 14) 359,883,949 I 0,679, I 06 370,563,055 Net Position - Ending $ 388. I 08,960 $ I 0,424.537 $ 398,533 ,497 See accompan ying Notes lo the Basic Financia l Statement s 31 ZE

GOVERNMENTAL FUND

FINANCIAL STATEMENTS
In the Fund Financial Statements only individual major funds are presented, while nonmajor funds are combined in a single column.

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

The funds described below were detem1ined to be Major Funds by the City for the fiscal year 2022-23. Individual nonmajor funds can be found in the Supplementary Section.

General Fund - This fund is the general operating fund of the City and is used to pay for core services such as public safety, parks and recreation, community development, public works, and a host of other vital services. The revenue used to pay for these services comes primarily from local taxes such as sales tax, property tax, franchise fees, charges for services, and a variety of other discretionary sources. It also accounts for activities related to the City's investment portfolio. It is used to account for all financial resources except those that are required to be accounted for in another fu nd.

Transportation Special Revenue Fund - This fund accounts for the City's gas tax, vehicle registration fees, and grant revenues and expenditures related to the maintenance and construction of City streets. All revenue in this fund is restricted exclusively for street and road purposes, including related engineering and administrative expenditures.

Housing Development Special Revenue Fund - This fund accounts for the Federal Housing and Community development Grant Program activities administered through the County, including rehabilitation loans. Monies collected from developers that mitigate the impact of housing needs are also included. Monies in this fund are governed by the program's rules.

Public Facilities Corporation Debt Service Fund - This fund accounts for the payments of principal and interest on certificates of participation issued to provide for the financing of the Civic Center, Library, Wilson Park, Memorial Park, and other City facilities.

Capital Improvement Projects Capital Projects Fund - This fund accounts for activities related to the acquisition or construction of major capital faci Ii ties.
33 ASSETS
Cash and investments
Restricted cash and investments
Receivables:

Accounts
Interest
Loans, net
Leases
Due from other funds
Adva nces to other funds
Inventories
Prepaid items
Other assets
Total assets

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accruals
Accrued payroll and benefits
Advances from other funds
Deposits
Unearned revenue
Total liabilities
Deferred inflows of resources:

Leases
Unavailab le revenue
Total deferred in flows of resou recs
Fund balances:

Nonspe ndable
Restricted
Committed
Assigned
Unass igned
Total fund balances
Total liabilities, deferred inflows
of resources, and fund balances
Sec accompanying Notes to the Busic Financial Statements City of Cupertino
Balance Sheet
Governme ntal Funds
June 30, 2023 .
34 $
$
Special Revenue Funds
Housi ng
General Transportation Deve lopment
I 16.051.281 $ 11.425. 764 $ 6.095.719

19.088.859

13. 762.883 255,483 97.332
550.744 40.067 21,334
970,962 5.402.316

2.493,039

1.395.657
3,000,000
21,383

8.243
3,884
157.346.935 11.721.314 11.616.701

6.206 ,007 I, 134.640 124,094
602.349
8,645.547
158,400

15.612.303 1.134.640 124.094
2,379.733
798.56 1

3. 178,294

4.000 ,588
19,088,859 10.586,674 11.492.607

34. 127,891
9,735. 187
71 ,603.8 13
138,556,338 10,586.674 11.492.607
157.346.935 • $ 11.721.314 $ 11.616,70 I
(Continued)
City of Cupertino
Balance Sheet (Continued)
Governmental Funds
June 30, 2023
Pub lic Cap ital
Facilities Improvement
Corpora tion Projects Nonmajor Total
Debt Cap ital Governme ntal Governmenta l
Service Fund Projects Fund Funds Funds
ASSETS
Cas h and investmen ts $ 1,750 $ 38, 14 1,292 $ 24.916.749 $ 196,632.555 Restricted cash and investments 19.088,859
Rece ivab les:

Accounts 74,43 1 15, 134 14.205,263
Interest 87.221 699,366
Loans, net 6.373.278
Leases 2,493.039
Due from othe r funds 1.395,657
Adva nces to other funds 3.000,000
Inventories 21 ,383
Prepaid items 8,243
Other assets 3,884
Total assets 1.750 38,2 15.723 25.0 19.1 04 243,921.527 LIABILITrES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Acco unts payable and acc ruals 364.825 11 4.116 7.943,682 Accrue d payrol l and benefi ts 602.349
Adva nces from other funds 3.000.000 3,000.000
Depos its 8,645,547
Unearned revenue 9.273 167,673
Total liabilities 3,374,098 11 4, 116 20,359.251
Deferred inflows of resources:

Leases 2.379,733
Unavai lab le reve nue 74.43 1 872.992
Total deferred inflows of resources 74,43 1 3,252,725
Fund balances:

Nonspe ndab le 4,000,588
Rest ricted 1,750 24,747,645 65,917.535
Comm itted 34, 127,89 1
Ass igned 34.767. 194 157,343 44,659,724
Unass igned 71 ,603,8 I 3
Total fund balances 1,750 34,767, 194 24,904.988 220,309,551 Total liabilities, deferred inflows
of resources, and fund balances $ 1,750 $ 38,2 15,723 $ 25,0 19, 104 $ 243,921,527 (Conc luded)
Sec accompan ying Notes to the Basic Financial Statements 35 9£
·.y11v1q I/ii/ ,1;,,mo1111il/ll! il8Vd Sfl/1
City of Cupertino
Reconciliation of the Governmen tal Funds Balance Sheet to the Government-W ide Statement of Net Position
June 30, 2023
Tot al Fund Balances - T ota l Governme ntal Funds
Amou nts reported for gove rnmental activ ities in the Statement of Ne t Position were reported diffe ren tly beca use:

Capital assets used in gove rnmental activit ies were not current financial resources. Therefore , they were not reported in the Go vernmental Funds Balance Sheet.

No ndepreciable, net of $ 119,408 reported in the Internal Serv ice Fund Depreciable and amortizable,
net of$2.789 ,976 reported in the Interna l Service Fund $ 112,877.10 I
103.38 1.479
Long-term liab ilities are not due and payable in the current period and accord ingly are not reported as fund liabilities. All liabilities, both curren t and long-term. are reported in the Sta temen t of Net Position:

Bond s payable
Prem ium on bonds payab le
Deferred charge s on refunding
Sub scription liabilities. net of $ 198,494 reported in the Interna l Services Funds Interest payab le
Compensate d abse nces. net of $388,890 repo rted in the Internal Service Fund Clai ms liability. net of$1 ,654.000 repo rted in the Interna l Service Funds ( 16,065 ,000)
(2.784,7 11)
159,478
( 1.828. 796)
(53. 550)
(4,692 ,670)
(568, 786)
Net pension liabilities and the related deferred outflow s of resources and defer red inflows of resources are not due and payable in the current period or not avai lable for cur rent expend itures and are not repo rted in the governmental fund financial state ments:

Pension re lated deferred outflows of resources , net of $1,2 12,633 reported in the Internal Service Funds
Aggregate net pens ion liability, net of$3 ,735,756 reported in the Internal Servic e Funds Pension related deferred inflows of resou rces, net of $9. 190 reported in the Internal Service Funds
$ 16,08 1,434
(49,5 42,045)
( 12 1.876)
Net other postemploymen t benefit liability and the re lated deferred outflows of resources and deferred inflows of resources are not due and payable in the current' period or not ava ilable for current expen ditures and are not reported in the govern mental fund financial state ments:

Other postemployment benefits related deterred outflow s of resources. net o f $4 10.644 reported in the Internal Service Funds
Ne t Other poste mployment benefi ts liability, net of$38 ,735 repo rted in the Interna l Serv ice Funds
Other postemployment benefits related deferred inflows of resou rces, net of $152,012 reported in the Internal Serv ice Funds
$ 5.448 ,074
(5 13,903)
(2,0 16,757)
Revenue reported as unava ilable revenue in the gove rnmental funds when it is not rece ived soo n enoug h after yea r-end to be considere d available. The availab ility criteria does not app ly to the Gove rnment- Wide Financial Stateme nts and. therefo re, the reve nue is recogn ized whe n eligibility requ irements are met and earned .

Internal Service Funds were used by management to charge the cos ts o f certa in act ivities, suc h as insuran ce and equipment replaceme nt to individual funds. The assets and liab ilities of the Internal Service Funds were included in the gove rnmental act ivities in the Gove rnment-Wide Sta temen t of Net Position.

Net Position of Governmenta l Activit ies
See accompanying Notes 10 the Bas,c Financial State men ts 37 $ 220,309,55 1
2 16,258,580
(25.834 ,035)
(33,582 ,487 )
2,9 17,4 14
872.992

7. 166,945
$ 388, I 08,960
City of Cupertino
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2023
Special Revenue Funds
Housing
General Transpor tation Development
Revenues:

Taxe s $ 83,341.842 $ $ 170,824
Use of money and property 3.033.6 83 2 11.271 194,096
Intergove rnmental 7.771,411 3.385.823 196.6 16
Licenses and permits 4.093,631
Charges for services I I. 11 3,598 34.0 12 1.640
Fines and forfeitures 303,573
Other revenue 1,306.4 55 2.000 28.082
Total revenues 11 0,964, 193 3,633.106 591,258
Expenditures:

Current:

Administration 7,602,232
Law enforcement 15.276,950
Innovatio n and techno logy 1.825,667
Administ rative services 5,976,301
Recreation services 5.432 , 183
Communit y development 10,666 ,834 1,026.720
Public works 23.879 ,927 2,726,550
Capita l outlay 1,263,4 12 4.950,786
Debt service:

Principal 626, 18 1
Interest and fiscal charge s 18,540
Total expenditures 72,568,227 7,677,336 1,026,720
Excess of rev en ucs over
expenditures 38,395,966 (4,044,230) (435,462)
Other financing sources (uses):

Inception of subscrip tion liability 964,745
Transfers in 86 1,140 3,000,000 25,000
Transfers out ( 12,344,345) ( 197,491 )
Total other financin g sources (uses) ( I 0,518,460) 2,802,509 25.000 Net Change in Fund Balance s 27,877,506 ( 1,24 1,72 1) (410,462) Fund balance s:

Beginning of year, as restated (Note 14) 110,678,832 11 ,828,395 11,903,069 End of year $ 138.556,338 $ 10,586.674 $ 11 ,492.607
(Continued)
Sec accompanying Notes to the Basic Financia l Statements 38 City of Cuper tino
Statem ent of Revenues, Expenditures, and Changes in Fund Balances (Co ntinued) Governmental Funds
For the Year Ended June 30, 2023
Public Capital
Facilities Improvement
Corporation Projects Nonmajor Total
Debt Capital Governmental Governmental
Service Fund Projects Fund Funds Funds
Reven ues:

Taxes $ $ $ 720.679 $ 84.233,345
Use of money and property (5. 100) (326.69 1) 3 14,847 3.422.106 Intergovernmental 5 15.8 14 11.869. 664
Licenses and pern1its 4.093 ,63 1
Charges for services 51.675 1,54 1,027 12.74 1,952
Fines and forfeitures 23,37 1 326.944
Other revenue 56.522 1.393.059
Tota l reve nues (5. 100) 297.320 2.599.924 118.080, 70 I Expenditur es:

Current:

Administration 1.500 7.603, 732
Law enforcement 15.276.950
Innovation and technology 1.825.667
Administrative services 5.976,3 0 1
Recreation services 5.432, 183
Community development 11.693.554
Public works 1,6 15,379 28.22 1,856
Capital outlay 4.4 17.593 1.90 1,525 12,533.316
Debt service:

Principal 1.955,000 2.58 1, 181
Interest and fiscal charges 720.800 739.340
Total expenditures 2,677,300 4,4 17,593 3.5 16.904 9 1.884.080 Excess of revenues over
expenditur es (2.682.400) (4. 120.273) (9 16.980 ) 26.1 96.62 1 Other financin g sources (uses):

Inception of subscription liability 964,745
Transfers in 2.675.800 4.788,757 11.350,697
Transfers out (823,600) ( 1.7 11, 140) (15,076.576)
Total other financing s·o urccs (uses) 2,675.800 3,965, 157 ( 1,7 11, 140) (2. 76 1, 134) Net Change in Fund Balances (6.600) ( 155, 11 6) (2,628, 120) 23,435.487 f und balances:

Beginning of year. as restated (Note 14) 8.350 34,922.3 10 27.533, I 08 196,874,064 End of year $ 1.750 $ 34.767. 194 $ 24.904.988 $ 220.309.551 (Concluded)
Sec accompanying Notes lo the Basic Financial Statements 39 City of Cupertino
Reconciliation of the Governmental Funds Statement of Revenues , Expenditures, and Changes in Fund Balance s to the Governm ent-Wide Statement of Activities For the Year Ended June 30, 2023
Net Change in Fund Balances - Total Governmental Funds
Governmental activities in the Statement of Activities were reported differently because:

Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental funds.

Capital outlay. net of$527.793 reported in Internal Service Fund Depreciation amortization. net of $904.610 reported in Internal Service Funds Net ertect on disposal of capital assets
$ 11,622.819
(8.327 .056)
(476.537)
Net change in revenues that was considered unavailable in the governmental funds. These items have been reported as revenue in the Statement of Activities.

Bonds payable
Subscription liabiltiies. net or$ I 09,339 reported in the Internal Service Funds $ I. 955.000
626,181
Interest accrued on long-term debt is reported in the Statement of Activities. but does not require the use of current financial resources. Therefore. accrued interest is not reported as an expenditure in governmental funds. This amount represents the change in accrued interest from the prior year.

Amortization of bond premium and defer.red charges were recognized in interest expense on the Government-Wide Statement of Activities. but did not require the use of current financial resources. Therefore amortization of bond discount was not reported as an expenditure in the governmental funds.

Inception of subscription liability. net of$24 ,865 reported in the Internal Service Funds.

Compensated absences were reported in the Government-Wide Statement of Activities. but they did not require the use of current financial resources. Therefore. compensated absences were not reported as expenditures in the governmental funds. Compensated absences is net of $68,970 reported in the Internal Service Funds.

Certain claims expenses reported in the Statement of Activities do not require the use of current financial resources and. therefore, are not reported as expenditures in governmental funds net of $85,000 reported in Internal Service Funds.

Certain pension expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore. are not reported as expenditures in governmental funds. net of$325 .644 reported in Internal Service Funds.

Certain OPEB expenses reported in the Statement of Activities do not require the use of current financial resources and. therefore, are not reported as expenditures in governmental funds net of$2 1.395 reported in Internal Service Funds.

Internal Service Funds are used by management to charge the costs of certain activities. such as insurance and equipment replacement. to individual funds. The net revenue of the Internal Service Funds is reported in governmental activities.

Change in Net Position of Governmental Activities
See accornpan) mg Notes to the Basic Financial Statements 40 $
$

23.435.487

2.819.226
872.992

2.581.181
(53.550)
424.249
(964,745)
(322.269)
(568,786)
( 1.244,041 )
(4,686)

1.249.953

28.225,011

PROPRIETARY FUND

FINANCIAL STATEMENTS
Proprietary funds account for City operations financed and operated a in manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be fi nanced primarily through user.charges.

The City has identified the funds below as major proprieta1y funds for fiscal year 2022-2023.

Resources Recovery Fund - This fu nd accounts for activity related to the collection, disposal, and recycling of solid waste. A private company has been issued an exclusive franchise to perfom, these services.

Recreation Programs Fund- This fund accounts for activities of the City's community centers and park facilities.

Cupertino Sports Center Fund - This fund accounts for the operation and maintenance of the Cupe1tin o Sports Center. 41 ASSET S
Current assets:

Cash and investments
Accounts receivable
Interest receivable
Tota l current assets
Noncurrent assets:

Capital assets:

Nondepreciable
Depreciable and amortizable, net
Total noncurrent assets
Total assets

DEFE RRED O UTF LOWS OF RESOURCES
Related to pensions
Related to other postemployment benefit
Total deferred outflows of resources
See accompany ing Notes to the Basic f-inancial Statements City of Cupertino
Statement of Net Position
Prop rietary Funds
June 30, 2023
Business-Type _Activities - Enterprise Funds
$
42 Resources
Recove_Q'.

5.351.316
222.326

18.754

5.592.396

5.592,396
326,269
I 04,839
43 1,108
$
Recreation
Programs

3.484 .602
41 ,981
12,2 10

3.538.793
220,888
492.149
713,037

4.25 1.830
24 1,077
106,877
347,954
$
Cupertino
Sports
Center
1,639,687
1,000

5.732
1,646,±!2_

1.241.170
1,24 1, 170
2,887.589
163. I 34
8 1.087
244.221
City of Cupertino
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2023
Busine ss-Type Activities
Enter prise Funds
Current assets:

Cas h and investments
Accounts receivable
Interest receivable
ASSETS
Total current assets
Noncurrent assets:

Capital assets:

Nondeprec iable
Depreciable and amortizable , net
Tota l noncurrent assets
Tota l assets

DEFE RRED OUTFLOWS OF RESOURCES
Related to pensions
Related to other postemployment benefit
Total deferred outflows of resources
See accompanying Notes to the Basic Financial Statements $
43 Nonmajor
Enterprise
Fund
896,94 1

1.829

3.136
901,906
137.343
18,042
155,385
1,057,291
101.506
18,479
119,985
$
Total

11.372,546
267, 136
39,832

11.679,5 14
358.23 1
1,751.361
2, I 09,592
13,789,106
831,986
3 11 ,282

1.143.268
$
Governmental
Activities
Internal
Service
Fund s

8.939 ,014
1,385,759
32,794
10,357,567
119,408
2,789,976
2,909,384
13,266 ,951

1.2 12,633
4 10,644
1,623,277
City of Cupertino
Statement of Net Position (Conti nued)
Proprietary Funds
June 30, 2023
Business-Type Activities - Enterprise Funds

LIABILITIES
Current liabilities:

Accounts payable and accruals
Accrued payroll and benefits
Due to other funds
Compensated absences
Claims payable
Unearned revenue
Subscription liabilities
Total current liabilities
Noncurrcnt liabilities:

Compensated absences
Claims payable
Net pension liability
Net other postemployment benefit liability
Subscription liabilities
Total noncurrent liabilities
Total liabilities

DEFERRED INFLOWS OF RESOURCES
Related to pensions
Related to other postemployment benefit
Total deferred inflows of resources

NET POSITION
Net investment in capital assets
Restricted
Unrestricted
Total net position $
See accompanying Notes to the Basic Financial Statements 44 Resources
Recoverx_

98.762
289

3.062
102.11 3
6 1.21 4
1,005, 136

9.889
1,076,23 9

1.178.352

2.473
38,809
4 1.282
56, 141
4,747.729

4.803.870 $
Recreation
Pro~rams
244.7 11

4.623
488. 175
737.509

92.41 6
742,684

10.08 1
845, 18 1

1.582.690

1.827

39.564
4 1.39 1
7 13.037
57,232

2.205.434

2.97 5.703 $
Cupertino
Sports
Center
112,984

2.349
5 17,48 I
632.8 14
46,962
502.568

7.649
557, 179

1.189.993

1.236
30,0 17
3 1,253

1.24 1, 170
43,42 1
625,973

1.9 10.564
(Continued)

LIABILITIES
Current liabilities:

Accounts payable and accruals
Accrued payroll and benefits
Due to other funds
Compensated absences
Claims payable
Unearned revenue
Subscription liabilities
Total current liabilities
Noncurrent liabilities:

Compensated absences
Claims payable
Net pension liability
Net other postemployment benefit liability
Subscription liabilities
Total noncurrent liabilities
Total liabilities

DEFERRED INFLOWS OF RESOURCES
Related to pensions
Related to other postemployment benefit
Total deferred intlows of resources

NET POSITION
Net investment in capital assets
Restricted
Unrestricted
Total net position
City of Cupertino
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2023
Business-Type Activities
Enterprise Funds
$
Nonmajor
Enterprise
Fund
18,976
458

92.223
11 1.657

9.157
3 12. 709
1,743
323.609
435,266
769
6,84 1
7,6 10
155,385
9,895
569, 120
734.400 $
Total
475,433
289
10,492

1.097,879
1,584,093
209.749
2,563.097
29,362

2.802,208
4,386,30 I
6,305
11 5.23 1
12 1,536
2, 109,592
166,689
8, 148,256
I 0,424.537
See accompanying Notes lo the Basic Financial Statements 45 $
Governmental
Activities
Internal
Service
Funds
150,477
72 1,395,657
38,354
292,000
125,990
2,002,550
350.536
1,362,000
3,735,756
38,735
72,504
5,559,531
7,562,08 I
9, 190
152,012
16 1,202
2,789.976
4 10,644
3,966,325

7. 166.945
(Concluded)
City of Cupertino
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2023
Business-Type Acti vities - Enterpri se Funds
Cupertino
Resources Recreation Sports
Recovery Programs Center
OPERATING REVENUES:

Charges for services $ 1.673,40 I $ 1,59 1,303 $ 2,756,264 Other 98.85 1 15 1, 139 36 1,3 16
TOTAL OPERATING REVENUES I. 772.252 I, 742.442 3, I I 7~58Q OPERATING EXPENSES:

Sala ries and benefits 487.020 482,65 1 355. 109
Materials and supp lies 284,671 26 1,484 448,263
Contractual services 1,266, I 09 870.494 2,541 ,729
Insurance and claims and premium
Depreciation and amortizat ion 513 47,057 111,438
TOTAL OPERATING EXPENSES 2,038,3 13 1,66 1.686 3,456,539 OPERATING INCOME (LOSS) (266,06 1) 80,756 (338.959)
NONOPERATING REVENUES (EXPENSES):

Investment income (loss) 58,933 45,346 14,356
Gain on sale of capital assets
Interest expense
Total Nonoperating Income (Expenses) 58,933 45,346 _ 14,356

NET INCOME (LOSS) BEFORE TRANSFERS
AND CAPITAL CONTRIBUTIONS (207,128) 126,102 (324,603)
TRANSFERS AND CAPITAL CONTRIBUTIONS:

Transfers in 376,000
Transfers out ( 103, 119)

TOT AL TRANSFERS AND
CAPITAL CONTRIBUTIONS 272,881
CHANGES IN NET POSITION (207, 128) 398,983 (324,603)
NET POSITION:

Beginning of year 5,010,998 2,576,720 2,23 5, 167
End of year $ 4,803.870 $ 2.975.703 $ 1.9 10.564
(Co ntinued)
See accompan ying Notes to the Basic rin ancial Statements 46 City of Cupertino
Statement of Revenues, Expenses, and Changes in Net Position (Continued) Proprietary Funds
For the Year Ended June 30, 2023
Enterprise Funds
Nonmajor
Enterprise
Fund Total
OPERATING REVENUES:

Charges for services $ 570,038 $ 6,591,006
Other 46,423 657,729
TOTAL OPERATING REVENUES 616,46 1 7,248,735
OPERATING EXPENSES:

Salaries and benefits 233,0 I 3 1,557,793
Materials and supplies 208.348 1,202,7 66
Contractual services 354,975 5,033,307
Insurance and cla ims and premium
Depreciatio n and amortization 2,832 161,840
TOTAL OPERA TrNG EXPENSES 799,168 7,955,706
OPERA TING INCOME (LOSS) ( 182.707) (706,97 1)
NONOPERATING REVENUES (EXPENSES):

Investment income (loss) 37.286 155.92 1
Gain on sale of capital assets
Interest expe nse
Total Nonoperating Income (Expenses) 37.286 155,92 1

NET INCOME (LOSS) BEFORE TRANSFERS
AND CAPITAL CONTRIBUTIONS ( 145,421 ) (551.050)
TRANSFERS AND CAPITAL CONTRIBUTIONS:

Transfers in 23.600 399,600
Transfers out (103, 119)

TOTAL TRANSFERS AND
CAPITAL CONTRIBUTIONS 23,600 296,48 1
CHANGES IN NET POSITION (12 1,821) (254,569)
NET POSITION:

Beginning of year 856,22 1 10,679, 106
End of year $ 734.400 $ I 0.424.537
See accompanying Notes to the Basic Financial Statements 47 Activities
Interna l
Service
Funds
$ 4,606,283
1,385,759
5,992,042
4,289,604
1,279,946
6 I 7,432
1,086,999
904,610
8, 178,591
(2, 186,549)
(22, 193)
30, 158
(861)

7. 104
(2, 179,445)

3.429.398
3,429,398
1,249,953
5,916,992
$ 7, 166.945
(Concluded)
City of Cupertino
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2023
Business-Type Acti vities - Enterprise Funds
Cupertino
Resources Recreat ion Spo rts
Recover y Programs Cen ter

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $ 1,596. 163 $ 1.795,593 $ 3,099,825 Cash paid to suppliers for goods and services ( 1,553.924) ( 1, 12 1,474) (2,939,258) Cash paid to employees for services (664.327) (705,749) (49 1,404) Recove1y for insurance claims
Net Cash Provided by (Used in) Operating
Activities (622.088) (3 1.630) (330,837)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash recei ved from (pa id to) other funds 272,88 !
Net Cash Provided by (Used in)
Noncapital Financing Activities 272,881

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (36,220) (8,300)
Principal paid
Interest paid
Proceed from sale of capital assets
Net Cash (Used in) Capital and
Related Financing Activities (36,220) (8.300)

CASH FLOWS FROM INVESTING
ACTIVITIES:

Investment income (loss) ___iQ,_ 179 33,136 8,624
Net Cash (Used in) Provided by
Investing Activities 40.179 33, 136 8,624
Net Change In Cash and Cash
Equivalents (58 1,909) 238,167 (330,513)
CASH AND CASH EQUIVALENTS:

Beginning of yea r 5,933,225 3,246.435 1.970,200
End of year $ 5.351.31(>_ 3,484,602 $ 1.639.682
CASH AND CASH EQUIVALENTS:

Cash and investments $ 5,351,3 16 $ 3,484,602 $ 1,639,687 Total cash and cash equivalents $ 5.351.316 $ 3,484.602 $ 1.639.687 (Con tinued)
See acco mpan ying Notes to the Basic Financial Statements 48 City of Cupertino
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2023
Business -Type Act ivitie'S Governmen tal
Enterpr ise Funds Activities
Non major I nlerna l
Enterprise Serv ice
Fund Total Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $ 6 12,394 $ 7. 103,975 $ 4,606,283 Cas h paid lo suppliers for goods and services (582,924) (6, 197,580) (2,952,729) Cas h paid to employees for serv ices (245,31 1) (2.1 06,79 1) (3,873,595) Recove ry for insurance claims 85,000
Net Cash Provided by (Used in) Operating
Activities (2 15,84 1) ( 1,200,396) (2, 135,041)

CASH FLOWS FROM NON CA PIT AL
FINANCING ACTIVITIES:

Cas h received from (paid to) other funds 23,600 296,481 4,285.85 I Net Cash Provided by (Used in)
Noncapital Financing Activities 23,600 296,481 4,285.851

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (137,343) ( 181,863 ) (527. 793) Principal paid ( I 09,339)
I nteresl paid (86 1)
Proceed from sale of capita l assets 30, 158
Net Cash (Used in) Capital and
Related Financing Activities ( I 37,343) ( 181,863) . (60 7,835)

CASH FLOWS FROM INVESTING
ACTIVITIES:

Investment income (loss) 34, 150 11 6,089 (54,987)
Net Cash (Used in) Provided by
Investing Activities 34, 150 116.08 9 (54,987)
Net Change In Cash and Cash
Equivalents (295,434) (969 ,689) 1,487,988
CASH AND CASH EQUIV A LENTS:

Beginning of year I, I 92,375 12,342,235 7,45 1,026
End of year $ 896.94 1 $ 11.372.546 $ 8.939.0 14
CASI-I AND CASH EQUIVALENTS:

Cash and invest ments $ 896,94 1 $ 11,372.546 $ 8,939,0 14 Total cash and cash equivalents $ 896.94 1 $ 11.372. 546 $ 8.939.0 14 (Co ncluded)
See accompanying Notes to the Basic Financial Statements 49 City of Cupertino
Statement of Cash Flows (Continue d)
Proprieta ry Funds
For the Year Ended June 30, 2023
Busine ss-Type Activities - Enterprise Funds
Reco ncilia tion of Operatin g Income (Loss) to
Net Cash Prov ided by (Us ed in) Opera ting Ac tivities:

Operating income (loss)
Adjustments to reconcil e to net cash provided by
Operating activities:

Deprecia tion and amortization
Changes in assets and liabilities:
(lncrea se)/decrease in accou nts recei vables
(lncrea se)/dec rease in deferred outflows of resources related to pensio ns
(lncrease)/decrea se in deferred outflows of resources
related to OPEB
Increase/( decrease) in accounts payable
lncrea se/(decreas e) in unearned revenue
lncrease/(dec rease) in compensated absences
lncrea se/(decrease) in claims payable
lncrease /(dec rease) in net pension liabilities
lncrease/(decrease) in other postemployment benefit liabilities lncrease/(dec rease) in deferred inflows of resources
related to pensions
lncrease/(decrease) in defe rred inflows of resources
related to OPE B
Net Cash Provided by (Used in) O perat ing Activities
See accompanying Notes to the Basic Financial Statements $
50 Resources
Recove ~
$ (266.06 1)
5 13
(92.396)
( I 13.387)
(8,356)
(3, 144)
(83,693)
4,740
123,045
14,890
( 186,791 )
( 11,448)
(622.088}
Recreat ion
Program s
$ 80.756
47,057
(4 1.423)
( 65.682)
(39,534)
10,504
94,574

5.528

2.046

46.933
(150.417 )
(2 1,972) -s; (3 1.630)
-
$
-
$
Cupertino
Spor ts
Center
(338,959)
111,438
(44,533)
(2.110)

50.734
( 17,755)
2,627
17,988

64.86 1
( 128,578)
{46,5502
(330.837)
(Cont inued)
City of Cuper tino
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2023
Business -Type Activities
Ente rprise Funds
Reconciliati on of Opera ting Incom e (Loss) to
Net Cash Prov ided by (Use d in) O perating Activities:

Operating income (loss)
Adjust ments to reconcile to net cash provide d by
Operating activities:

Depreciation and amortiza tion
Cha nges in assets and liabilities:
(lncrease) /decrease in accounts receivables
(lncrease) /decrease in deferred outflows of resources
related to pensions
(lncrease )/decrease in deterred outnows of resources
related to OPEB
lncrease /(dec rease ) in account s payab le
lncrease /(decrease) in unearned revenue
lncrease/(decrease) in compe nsated absences
lncrease/( dec rease) in claims paya ble
lncrease/(dec rease) in net pension liabilities
lncrease /(dec rease) in othe r postemploy ment benefit liabilities lnc rease/(dec rease) in defer red inflows of resources re lated to pensions
lncrease/(decrease) in defe rred in nows o f reso urces related to OPEB
Net Cash Provided by (Us ed in) O pera ting Activities
See accompanying Notes to the Basic Financial Statements $
$
5 1
Nonmajor
Enterprise
Fund
(182,707)

2.832
( 1.659)
(42,810)
(5.380)
(19,60 1)
(2.408)
(9.290)
62,474
1,743
(25.876)
6,841
(215.84 1)
$
$
Toals
(706,97 1)
16 1,840
(135,478)
(266,4 12)
(55,380)
38,493
(9.282)

3.605
205,553
128,427
(49 1.662)
(73,129)
( 1.200.396)
$
$
Governmenta l
Activities
Interna l
Service
Funds
(2,186.549)
904.6 10
(1.385.759)
(693.504)
(64,342)
3 1,648

68.970

85.000
1,809,8 13
119,864
(790.665)
(34,127)
{2. 135.041)
(Concl uded)
'.'fllllJq J/i1J rljJ/JIIOf/lli1/ll! i1fi1Jd S/1/.1

NOTES TO THE BASIC FINANCIAL STATEMENTS
53 .}fl/lJ/q lji1/ 1lj/lll/Of/lli1/llf i18lld Sfl/,L
City of Cupertino
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Accounting Policies · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · A. Financial Reporting Entity · · · .. · · .. · · · · .... .. · .... .. · · .. · .. .......... .. · .. · · · · · .. · · .... .. · · · · · .. · .. · .. · .. · : .......... · · 57 B. Basis of Presentation··········· ··· ···· ··· ··· ······· ·· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 58 C. Measurement Focus, Basis of Accounting and Financial Statements Presentation · · · • · • · • · • · • · · · · · · · · · · · · · · · · · · 58 D. Cash, Cash Equivalents, and Investments· .. · .. .. ···· ·· .... · .. ·· .. · .. ·· · .. .. ·· .. ···· .. ·· .... ·· .. ·· ·· ·· ·· ...... .. .. ·· ··· 61 E. Fair Value Measurements • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · • · • · • · • · • · · · · · · · · · · · · · · · · · · • · • · • · · · · · · · · · · · · · · · · · · 62 F. Receivables·· ···· ··············· ··· ·· ····· ·· ·· ···· ·· ········· ···· ·· ······ ········· ····· ·· ·· ············ · ··· ···· · ······ ···· ·· 62 G. Leases Receivables···· ···· ··················· ·· ·· ········ ··· ··· ····· ······ ···· ········ ··· ··· ··· ········ · ··· ········· ···· ·· 62 H. Inventories .. ·.. · · · · · · .. · .... .. · .. · .. .. · .. · ...... · · .. .. · · · · · · · .. · · .. · · .......... .... · .. · .. .. .. .. .. · .. · .. · .... .. · · .... .. · · .. 63 I. Prepaid Items···· ···· ·· ········ ······ ······· ····· ·· ····· ··· ··· ····· ···· ···· · ·· ···· ············· ··· ·· ····· ····· ·· ··· ····· ·· ·· 63 J. Interfund Transactions··· · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · • • · · · · · · · • · · · · · • · · · • · • · • · · · · · · · · · · · • · · · · · · · · · · · · 63 K. Capital Assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · · • · · · · · · · · · · · · · · · · · · · · · • · · · • · • · • :. · · · · · · · · · · · · · · · · · · · · · · · · · · · · 63 L. Deferred Outflows of Resources and Deferred I ntlows of Resources··· ········ ··· ····· ······ ·· ······ · ··· ·· ··· ···· 64 M. Interest Payable • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · • · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 64 N. Unearned Revenue · · .. · · · .. .... .. .. .. · .. · · .. · · .. · .... · .... .. · · .. · · .. · · · · .. · .... · · .. · · .... .. · · · · · .... · · .. · .. · · ...... · .... · · 64

0. Compensated Absences·· ··········· ··· ···· ···· ···· ·· ····· ······· ···· · ······· •·•···· ···· ······· ··· ··· ·· ·· ··· ······ ···· ···· 65 P. Claims and Judgement Payable··· ······ ···· · ·· ··· ····· ··· ······ ··· ·· ··········· ···· ·· ··· ······ ····· ··· ·· ··· ·· · ·· ···· ···· 65 Q. Subscription Liabilities···· .... ·· ·· .. ···· · · ..... · .. .. .... · .. .. ...... · ...... ... · .. .. .. .. .... · .. · .. · .. · .. ·· .. ····· ... · .. ···· 65 R. Long-Term Debt······ • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · · • · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 65 S. Pensions··· · .. ···· · · · · · .. · · · · · · · .. · · · · · · · · · · · .. .... · · .. · .... .. · .. · · .. · · .. · · .. .... · --: · · ...... · · · · · ... .... · · ..... .. ... · · 66 T. Other Postemployment Benefits ("OPEB") Plan····· ·· ······· ······· ··· ··· ··· ···· ·· ········· ···· ·· ·· ···· ·· ··· ·•······ 66 U. Net Position • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · • • · • · · · · · · • · • · • · · · • · • · · · · · · · · · · · · · · · • · • · • · · · · · · · · · · · · · · · · · · · 67 V. Fund Balances···· • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · • · • · · · · · · · · · · · · · · · · · · · · · · · · · • · • · · · • · · · · · · · · · · · · · · · · · · · 67 W. Property Taxes • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · · · · · · · · · · · · · · · · · · · · · · · · · · · • · • · • · • · • · · · · · · · · · · · · · · · · · · · · · 68 X. Use of Estimates· • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · • · • · • · • · • · • · · · · · · · • · · · · · • · · · · · · · · · · · · · 68 Y. Implementation of New GASB Pronouncements .. · .. .... .. · · · · · .. .. ...... .. .. · · · .. ... .. .... .. .... · .. ... · .. · · · .. · · · · 69 Z. Upcoming New GANB Pronouncements .. ·· .. .... ·· .... .. · · · .. .. · · · · .. · · .. · .. · · · · .. · .... .... · · .. · .... · .... .. · .. · · · · 69 Note 2 - Cash and Investments · · .. .. · · · .. .. · · .... .. · .. · .. · .. · .... · .. · · · .. · · ...... · · .... .... · ...... · .. · · · · · .... · .. · .... · .... 70 A. Deposits······· ···· • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · · • · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 71 B. Investments Authorized by the California Government Code and the City's Investment Policy · · · · · · · · · · · · · · 72 C. Investments Authorized by Debt Agreements ·········· ········· ······· • • • • • • • · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 73 D. Risk Disclosures ·· ····· ····· ······ ······· · ·· ···· ·· ······ ···· ······ ··· ··· ···· ······· ··· ···· ······ ·· ··········· ·· ··· ········ · 73 E. Fair Value Measurement Disclosure .. ···· ·· · .... ·· ·· .. · .. ··· ........ · ...... ·· .. .. ·· .. · .... ·· .. ··· ...... .. .. · .... ·· .. ··· 76 F. Investment in Local Agency Investment Fund (LAIF)-- · .. · · .. .. · .. .... ... · .... .. ......... .... · .... .. .. · ...... ... .. · 76 Note 3 - Loans Receivable • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · · · · · · · • · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·, · · · · · 77 Note 4 - Leases Receivable and Lease-Related Deferred Inflows of Resources··· ···· ···· ·· ···· ····· ······ ···· ···· · · 77 Note 5 - Interfund Transactions····· ··· ··· · .. · .. · · ... .. · · ..... · ·: ·•···•·· ·•· •·•· ·············· ····· .. . · ... . · · · · · .. . ·· ··· · 78 A. Advances • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • · • · • · • · • · • · • · • · • · • · · · • · · · · · · · · · · · · · · · · 78

8. Due from and To other Funds .... .. .... .. .. · .. · · · .. .... · .. · .. .. .... .. .... · .. ...... · .. .. .. · .. .. · .. · .. .. .. ......... · 79 C. Transfers in and Out • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • · · · · • • · · · · · • • • · · · · · · · · · · · · · · · · · · · • · · · · · • · • · · · · · · · · · · · · 79 55 City of Cupertino
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023
Page
Note 6 - Capital Assets ···· ···· ·· · ···· ·· ···· ······ ········ ··· · ···· ····· ···· ···· ··· ··· ·· · ····· ··· ··· ···· ·· ···· ·· ······ ·· ········ ···· 80 A. Governmental Activities· · · · ··· · •· · · · · • · • ·• · · · · · •· •·· · • ·• • • • • •• • • • • • •• • • • • ·• • • • • • • • • • • • • • • •• •••• • • • • • • • •• • • • • ··•· •• • • • • 80 B. Business-Type Activities ··· ········· ······ ··· • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 81 Note 7 - Long-Term Liabilities · · · · · · · · · · · · · · · · · · · • · · · • · • · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 82 A. Governmental Activities· ···· ····· ····· ·· ·· ······· ·· ····· .. ••••••••• .. •••••••• • • • • • • • • • • • • • • • • • • • .. • • • • .. • • • • • • 82 B. Business-Type Activities ··· ···· ······· ··· · · · · • · · · · •• • •· • • • • • • • • • • • • •• •• • • • •• • • • • • • • • ••• • • • • • • • • • • • • • ·• • • • • • • • • • • • • • • • • 84 Note 8 - Defined Benefit Pension Plan······ ··· · · · · · · · · · · · · • · • · • • · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 84 A. General Information about the Pension Plan · · · • · · · · · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • .. • • • • • • • • • • • • • • • • • • • .. • • • • • • • 84 B. Net Pension Liability · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · • · · · · · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 86 C. Changes in the Net Pension Liability · ··· ··· · ····· ···· ···· ··· .. •••• • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 88 Note 9 - Other Post Employment Benefits (OPEB)· · · · · · ·· · · · ·· · · • • •• • • •• • •• •• • • • • • • •• • • • • • • • • • • • • • • • • ••• •• • • • • • • • • • • 90 A. General Information about the OPEB Plan · · · · • · · · • · • · .. • • • • • • • • .... • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 90 B. Net OPEB Liability · · · · · · · · · · · · · · · · · · · · · · · · · · · · · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 91 C. Change in Net OPEB Liability · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 94 D. OPEB Expense and Deferred Inflows of Resources Related to OPEB • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 95 Note 10 - Liabilities Under Self-Insurance and Risk Management • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 95 Note 11 - Net Position and Fund Balances · · · · · · · · • · • · • • • .. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • .. • • • • • • • • 96 A. Net Investment in Capital Assets···· ··· ·· · ···· ··· ···· ····· ····· · ····· ·· ····· ·· ···· ·· •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 96 B. Fund Balance Classifications · · · · · · · · · • · • · • · • · · · • · · • · · • · · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 97 Note 12 - Commitments and Contingencies ·· · · · · · · · · · • · · · · · · · · · · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 97 A. Federal and State Grants··· ········ ··· ···· ········ ··· ····· ···· ···· ·· ··· ······· ······ ··· ······ ··········· ······· · ······ ··· · 97 B. Encumbrances······ ·· ····· ···· ·· ···· ····· · · · · · · ·• · · · ·· •·• ·• • • • • • • • • • • • • • •• • • • • • • •• • • • • ·•· • • • • • • • • • •• • •• • • • • •• • ••• • • •• • • • • • 98 C. Consulting Agreement for Sales Taxes···· ······ · · · · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 98 D. Santa Clara County Vehicle Registration Fee (VRF)· • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 98 E. Unasserted Claim ··· ···· ··· ····· ···· ··· ··· · · · · · · · · · · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 99 Note 13 - Concentration Risk· ····· ···· ·· ······ · · · · · · · · • · • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 99 Note 14 - Prior Period Adjustments ·· ····· ···· ····· ··· · ···· ···· ········· ····· ······· ··· ·· ··· ·· · ·· ···· ···· ···· ··· ··· ·· ·· ··· ···· 99 A. Government-Wide Financial Statements·· ·· ····· ·· .-.······· :.··· ····· ·· ··· ··· ···· ····· ·· ·· ·· ······ ···· ·· ··· ·· · ······· · 99 B. Governmental Fund Financial Statements · · · · • · • ·• · • · • · · · · :. ••• ·" • .. • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • • • • • .. • • • • • • • • • • • • 99 56 City of Cupertino
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
Note 1 - Summar y of Significant Accounting Policies
A. Financial Reporting Entity
The City of Cupertino, California (the "City") was incorporated on October 3, 1955, under the laws of the State of California. The City operates under a Council - City Manager form of government and provides services through the following departments: Administrative Services, Community Development, City Manager, Parks and Recreation, Innovation and Technology, and Public Works. Fire services are provided by the Santa Clara County Fire District, and the City contracts with the Santa Clara County Sheriffs Depaiiment for pol ice services, and with Recology for garbage and recycling services.

The accompanying basic financial statements include all funds and boards and commissions that are controlled by the City Council. The basic financial statements include the City's blended component unit entity for which the City is considered to be financially accountable. A blended component unit, although a legally separate entity, is in substance, part of the City's operations and so data from this unit is combined with the City.

Blended Component Unit
In evaluating how to define the City for financial repo1iing purposes, management has considered all potential component units. The primary criteria for including a potential component unit within the reporting entity are the governing body's financial accountability and a financial benefit or burden relationship and whether it is misleading to exclude. A primary government is financially accountable and shares a financial benefit or burden relationship, if it appoints a voting majority of an organization's governing body and it is able to impose its will on the organization, or ifthere is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government. A primary government may also be financially accountable if an organization is fiscally dependent on the primary government regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government, or a jointly appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government.

Management determined that the following component unit should be blended based on the criteria above:

Although the following is legally separate from the City, it has been "blended"· as though it is part of the City because the component unit's governing body is substantially the same as the City's and there is a financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component unit; and/or the component unit provides services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though it does not provide services directly to it.

The Cupertino Public Facilities Corporation (the "Corporation") - The Corporation was incorporated in May 1986, under the Nonprofit Public Benefit Corporation Law of the State of California. The Corporation was organized as a nonprofit corporation solely for the purpose of assisting the City in the acquisition, construction, and financing of public improvements which are of public benefit to the City. The Corporation, after acquiring certain properties from the City, leases these back to the City. The lease money provides the funds for the debt service for . the Ce1iifica tes of Paiiicipation issued by the Corporation to acquire the properties. The Corporation does not issue separate financial statements, since it is reported separately in the City's basic financial statements.

The City had no discretely presented component units.
57 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Accounting Policies (Continued) B. Basis of Presentation
Financial statement presentation follows the recommendations promulgated by the Governmental Accounting Standa rds Board ("GAS B") commonly referred to as accounting principles genera lly accepted in the United States of America ("U.S . GAAP"). GASB is the accepted standard-sett ing body for establishing governmental accou nting and financial reporting standa rds.

C. Measurement Focus, Basis of Accounting and Financial Statements Presentation The accounts of the City are organ ized on the basis of funds, each of which is conside red a sepa rate accounting entity . The operations of each fund are accounted for by providing a separate set of self-balancing accounts that com prise its assets , liabilities, fund equity, revenues and expenditures or expenses, as appropriate . Fund accounting segregates funds according to their intend ed purpose and is used to aid manag ement in demonstrat ing compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements.

Government-wide Statements
The City 's Government-Wide Financial Statemen ts include a Statement of Net Position and a Statement of Activitie s. These statements present summaries of gove rnmen tal and business-type activities for the City acco mpanied by a total co lumn. Fiduciary activities of the City are not included in these statements.

These financial statements are presented on an "economic resour ces" measurement focus and the accrual basis of accounti ng. Accordingly , all of the City's asset s, deferred outflows of resources , liabilities, and deferred inflows of resources , including capital assets , as we ll as infrastructure assets , and long-te1111 liabilities , are includ ed in the accompanying Statement of Net Position. The Statement of Activities presents chang es in net position. Under the accrua l basis of accou nting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liabil ity is incurred.

Certain types of transaction s are reported as program revenues for the City in three categor ies:
► Charges for services
► Operating grants and contribut ions
► Cap ital grants and contributions
Ce1iain eliminations have been made in rega rds to interfund act1v1t1es, payables and receivables. All internal balances in the Statement of Net Position have been el iminated except those representi ng balances between the governmenta l activities and the busine ss-type activities, which are presen ted as internal balances and eliminated in the total primar y government column. In the Statement of Act ivities and Changes in Net Position , internal service fund transactions have been elimin ated; however , those transactions between gove rnmental and business-type activities have not been eliminated. The follo wing interfund activities have been eliminated:
► Due to/from other fund s
► Transfers in/out
58 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Accoun ting Policies (Continued) C. Measurement Focus, Basis of Accounting and Financial State ments Presentation (Continued) Governmental Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and nonmajor funds aggregated. An accompanying schedule is presented to reconcile and explain the difference s in net position as presented in these statements to the net position presented in the Government-Wide Financial Statements. The City has presented all major funds that met the applicable criteria.

A II governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly , only current assets and current liabilitie s are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financin g uses) in net current assets.

Under the modifi ed accrual basis of accounting, revenues are recognized in the accounting period in which they become both " measurable" and "ava ilable" to fin ance expenditures of the current period.

Revenues are recognized as soon as they are both " measurable" and "ava ilable" . Revenues are considered to be available when they are collectible within the current period as soon enough thereafter to pay liabili ties of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. The primary revenue sources, which have been treated as susceptib le to accrual by the City, are property taxes, sales tax, intergovernmental revenues and other taxes. Expendit ures are recorded in the accounting period in which the related fund liabili ty is incurred.

The Reconciliation of the Fund Financial Statements to the Government -Wide Financial Statements is provided to explain the difference s.

The City reports the following major Governmental Funds:
).- General Fund- The General Fund is the general operating fund of the City. It is used to account for all financial resources except those that are required to be accounted for in another fund. ► Housing Development Special Revenue Fund - The Housing Development Special Revenue Fund accounts for the Federal Housing and Communi ty Development Grant Program activ ities admini stered through the County .

Monies collected from developers that mitigate the impact of housing needs are also included. Monies in this fund are governed by the program's rules. Management considers this fund qualitativel y major and has elected to present this fund as such, even if mathematically it does not qualify per applicable GAS B requirements. ► Transportation Special Revenue Fund - The Transportation Special Revenue Fund accounts for the City 's gas tax, vehicle registration fees and grant revenues and expenditures related to the maintenance and construction of City streets. All revenue in thi s fund is restricted exclusively for street and road purposes includ ing related engineering and administ rative expenses. Management considers this fund qualitatively major and has elected to present this fund as such, even if mathematically it does not qualify per applicable GASB requirements. ► Public Facilities Corporation Debt Service Fund - The Public Facilitie s· Corporation Debt Service Fund accounts for the payments of principal and interest on certificates of participation issued to provide for the financing of City Hall , Library , Wilson Park, Memorial Park, and other City facil ities. Management considers this fund qualitatively major and has elected to present this fund as such, even i f mathematicall y it does not qualify per applicable GASB requirements.
59 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting and Financial Statements Presentation (Continued) Governmental Fund Financial Statements (Continued)
► Capital Improvement Proiects Capital Proiects Fund - The Capi tal Improvement Projects Capital Projects Fund Accounts for activ ities related to the acquisition or construction of major .capital facilities .

Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses and Chang es in Fund Net Position , and a Statement of Cash Flows for each major Proprietary Fund.

A separate colum n representing intern al service funds is also presented in these statements. However , internal service balances and activities have been comb ined with the governmenta l activities in the Government-Wide Financial Statements. The City 's internal service funds include two individ ual funds which provide services directly to other City funds. These areas of service include Central Garage and Prin t Shop.

Proprietary funds are acco unted for using the "economic resources" measurement focus and the accru al basis of accounting. Accordingl y, all assets and liabilities (whethe r cur rent or noncurrent) are included on the Statement of Net Position. The Statem ent of Revenues , Expenses and Changes in Fund Net Position present s increases (revenues) and decreases ( expenses) in total net position. Under the accrua l basis of accounting , revenues are recognized in the period in whic h they are earn ed while expenses are recog nized in the period in which the liability is incurr ed.

In these funds, rece ivables have been recorded as revenue and provis ions have been made for uncollectib le amounts.

Operating revenue s in the proprietary funds are those revenue s that are generated from the primary operations of the fund. All othe r reven ues are repo1ted as nonoperating revenues. Operating expenses are those expenses that are essential to the primar y operat ions of the fund. Al l other expense s are reported as nonoperating expenses.

The City reports the following major propri etary funds:
► Resources Recoverv Enterprise Fund - The Resources Recover y Enterpri se Fund account s for activity related to the collection, disposal, and recycling of solid waste. A private company has been issued an exclu sive franchi se to perform these service s.
► Recreation Programs Enterprise Fund - The Recreation Program s Enterprise Fund account s for activities of the City's community cente rs and park facilities.
► Cupertino Sports Center Enterprise Fund - The Cupettino Sports Center Enter prise Fund acco unts for activiti es of the City's sports center facility.

The City also report s the following fund as proprietary fund type:
► Internal Serv ice Funds. Thes e fund s accou nt for managemen t information systems maintenance and replacement , wor kers' comp ensation, equipment maintenance and replacement, accrued leave payouts , and long-term disability, retiree health costs , coverage which are provided to other department s on a cost­ reimbu rsement basis.
60 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting and Financial Statements Presentation (Continued) Basis of Accounting
The government-wide and proprietary financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method. revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt which are recognized as expenditures to the extent the City has provided financial resources to a debt service fund for payment of these liabilities that mature early in the following year. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds from long-term debt and acquisitions under capital leases are reported as other financing sources.

Unearned revenues are considered on a full accrual basis, while unavailable revenues are based on the modified accrual measure.

Property taxes, transient occupancy taxes, utility taxes, franchise taxes, interest and special assessments are susceptible to accrual. Other receipts and taxes are recognized as revenue when the cash is received. Sales taxes collected and held by the state at year end on behalf of the City are also recognized as revenue. Sales tax consultant payments which are contingent on revenues collected are netted against the related revenues.

Under the terms of grant agreements, the City may fund certain programs with a combination of cost reimbursement grants, categorical block grants, and general revenue. The City's pol icy is to first apply restricted grant resources to such programs, followed by general revenues ifnec essary. Grant revenues are recognized after eligibility and billing occurs, but may be a deferred inflow if not received within sixty days of year-end. Because of the cost­ reimbursement and recognition 11<;1ture of some grants, certain capital project funds may carry deficit fund balances until billing and receipt of grants. The City may also front the capital outlays with cash advances from other funds.

Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements, and donations. On the accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenue from grants is recognized as described above. Entitlement and donation revenues are recognized when cash is received.

D. Cash, Cash Equivalents, and Investments
The City pools its cash resources, consisting of cash and investments, of all funds for investment except for restricted funds generally held by an outside fiscal agent. Cash amounts are reported net of outstanding warrants.

Investments are stated at fair value, except for m_oney market mutual funds which are reported at amortized cost.

Adjustments to fair value, as well -as d}vidimd and interest income received is recorded by the City in its governmental funds in the Use of money and , property caption while proprietary funds- report these items as Investment income.

The statement of cash flows requires presentation of "cash and cash equivalents". For the purposes of the statement of cash flows, the City considers all proprietary fund pooled cash and investments as "cash and cash equivalents", as such funds are available to the various funds as needed. 61 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note I - Summary of Significant Accounting Policies (Contin ued) D. Cash, Cash Equivalents , and Investments (Continued) Certain disclosure requirements, if applicable, for Deposits and Investment Risks in the following areas:
)., Interest Rate Risk
► Credit Risk
Overall
Custodial Credit Risk
Concentration of Credit Risk
► Foreign Currency Risk
In addition, other disclosures are specified including use of ce11ain methods to present deposits and investments, highly sensitive investments, credit quality at year-end and other disclosures.

E. Fair Value Measurements
U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the financial statements, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Levels of inputs are as follows:

The three levels of the fair value measurement hierarchy are described below:
► Level 1 - Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
► Level 2 - Inputs, other than quoted prices included in Level l , that are.observable for the assets or liabilities through corroboration with market data at the measurement date. ► Level 3 - Unobservable inputs that reflect management' s best estimate of what market pa11icipants would use in pricing the assets or liabilities at the measurement date.

If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement.

F. Receivables
Receivables include such items as taxes, intergovernmental revenues, charges for services, miscellaneous accounts receivable, and interest receivable. No allowance for doubtful accounts has been established, as the City believes all amounts are considered to be collectible in the normal course of business.

G. Leases Receivabl es
The City is a lessor for leases of buildings and land and recognizes leases receivable and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying asset are not included in the measurement of the lease receivable. 62 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note I - Summary of Significant Accounting Policies (Continued) G. Leases Receivables (Continued)
At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the pr.incipal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the .deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.

Key estimates and judgments include how the City determines ( 1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts. ► The City uses the incremental borrowing rate (TBR) provided by the City's financial institution for existing leases or the current rate at the time a new lease is executed. ► The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.
► Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

H. Inventories
Inventories consist of fuel.

I. Prepaid Items
Prepaid items are reported under the consumption method, which recognizes the expenditures/expense in the period associated with the service rendered or goods consumed.

J. Interfund Transactions
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" or "advances to/from other funds" (i.e., the current portion of interfund loans). Any residual balances outstanding between the governmental activities and business­ type activities are reported in the Government-Wide Financial Statements as "internal balances".

K. Capital Assets
Capital assets are recorded at cost or estimated historical cost if purchased or constructed. Donated capital. assets_ -are recorded at their estimated acquisition value on the date donated. Public domain (infrastructure) c~pital assets consisting of roads, bridges, curbs, gutters, medians, sidewalks, drainage and I ighting systems have been capitalized and depreciated. Capital assets are defined as assets with an initial individual cost of more than $5,000 for general capital assets and $100,000 for intangible assets.
63 City of Cupertino
Notes to the·Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Acco untin g Policies (Continued) K. Capital Assets (Continued)
Depreciation is recorded using the straight-line method over the following useful li ves:

Buildings
Improvements
Vehicles
Street equipment
Water equipment
Office equipment
Road, curb s. gutters . sidewalks . medians and bridges Streetlights
Storm drain struct ure and mains
Traffic signals
15 - 25 years
10 - 15 years
4 - IO years
3- 20 years
3- 50 years
3- 5 years
30 - 40 years
20 years
40 years·
20 years
M ajor outlays for capital assets and improvements are capita lized as projects are constructed. For enterpri se funds, interest incurred duri ng the construction phase is reflected in the capital ized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Some capital assets may be acquired using federal and state grant funds, or they may be contributed by developers or other governments. These contri butions are accounted for as revenues at the tim e the capital assets are contributed.

Right-of-Use Subscription Asset£
Subscription assets are recorded at the amount of the initia l measurement of the SBITA liabilities ('·subscript ion liabilitie s") and adjusted by any subscription payments to the SBITA vendor at or before the commencement of the subscription term, less any incentives received from the SBITA vendor at or before the commencement of the subscript ion term along with subscription implement ation costs. Subscription assets are amortized over the shorter of the subscripti on term or the useful li fe of the underlying information technology assets.

L. Deferred Outflows of Reso urces and Deferred Inflows of Reso~rces The Statement and Net Position and the Balance Sheet repori separate sections for deferred outflows of resources, and deferred inflows of resources, when applicable.

Deferred Outflows o(Resources represent a consumpti on of net assets that applies to future periods.

Deferred Inflows o(Resources represent an acquisition of net assets that applies to future periods.

M. Interest Payable
In the government-wide financial statements, interest payable on long-term debt is recognized as the liability is incurred for governmental activities and business-type activities.

N. Unearned Revenue
Unearned revenue is reported for transactions for which revenue has not yet been earned. Typical transactions recorded as unearned revenues are prepaid charges for services. 64 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Accounting Policies (Continued)

0. Compensated Absences
Compensated absences comprise vested accumulated vacation and sick leave. The City's liability for compensated absences is recorded in governmental or business-type activities as appropriate. The liability for compensated absences is determined annually. For all governmental funds, amounts expected to be "permanently liquidated," such as what is due to be paid because of a realized employment action, are recorded as fund liabilities; the long­ term portion is recorded in the Statement of Net Position.

Compensated absences are liquidated by the fund that has recorded the liability. The long-term portion of governmental activities compensated absences are liquidated primarily by the General Fund, using the Compensated Absences and Long-Term Disability internal service fund to account for termination payouts.

P. Claims and Judgement Payable
Claims and judgments payable are accrued when the liability is incurred and the amount can be reasonably estimated. Claims and judgments payable are recorded in an internal service fund for workers' compensation and long-term disability, and other claims and judgments are recorded in the General Fund or enterprise funds, as appropriate.

Q. Subscription Liabilities
The City recognizes subscription liabilities with an initial, individual value of $5,000 or more with a subscription term greater than one year in the govenunent-wide and proprietary fund financial statements. Variable payments based on future performance of the City, usage of the underlying information technology assets, or number of user seats are not included in the measurement of the subscription liability.

At the commencement of a subscription, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription tenn. Subsequently, the subscri ption liability is reduced by the principal portion of subscription payments made.

Key estimates and judgments related to subscription liabilities include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription tenn, and (3) subscription payments.
► The City uses incremental borrowing rate provided by the financial institution at July 1, 2022 for existing subscription or the current rate at the time a new subscription is executed. ► The subscription term includes the noncancellable period of the SBlTA. Subscription payments included in the measurement of the subscription liability are composed of fixed payments.

The City monitors changes in circumstances that would require a remeasurement of its SBITA and will remeasure any subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

R. Long-Term Debt
Government-Wide Financial Statements
Long-term debt and other financial obligations are reported as liabilities in the statement of net position. 65 City of Cupertino
Notes to the Basic Fi.nancial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Accounting Policies (Continued) R. Long-Term Debt (Continued)
Government-Wide Financial Statements (Continued)
Bond premiums and discounts, as well as gains and losses on refunding, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable premium or discount.

Issuance costs are expensed in the year of issuance.

Fund Financial Statements
The fund financial statements do not present long-tenn debt but are shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position.

S. Pensions
For purposes· of measuring the net pension liability, deferred outflows ofresources and deferred inflows ofresources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans' fiduciary net position have been determined on the same basis as they are reporied by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are repo1ied at fair value.

The following timeframes are used for pension reporiing:

Valuation Date
Measurement Date
Measurement Period
June 30, 202 1
June 30, 2022
July I, 2021 to June 30, 2022
Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amoriized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferTed outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

General Fund is typically used to liquidate pension liabilities to governmental funds.

T. Other Postemployment Benefits ("OPEB") Plan
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's OPEB Plan and additions to/deductions from the OPEB Plans' fiduciaiy net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit tenns. Investments are reported at fair v~lue. 66 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Accounting Policies (Continued) T. Other Postemployment Benefits ("OPEB") Plan (Continued) The fo llowi ng timeframes are used for OPE B repor ting: .

Valuation Date
Measurement Date
Measurement Period
June 30; 2023
Ju ne 30, 2023
July I, 2022 to June 30. 2023
Gains and losses related to changes in total OPEB liabi lity and fiduciary net position are recogn ized in OPEB expense syste matically over time. The first amortized amounts are recognized in OPEB expense for the yea r the gain or loss occurs. The remaining amo unts are categor ized as deferred outflows and deferred inflows of resou rces related to OPEB and are to be recognized in future OPEB expense. The amortization period differ s depending on the source of the ga in or loss. The difference between projecte d and actual earnings is amo rtized straight-li ne over 5 years. All other amou nts are amorti zed straight-line over the average expected remaining serv ice lives of all members that are provided with benefits (active, inact ive, and retired) as of the beginning of the meas urement period.

General Fund is typically used to liquidate OPEB liabilities to governmental funds.

U. Net Position
In gove rnmental-wide and propr ietary fund financial statements, net position s are categor ized as follows:

Net Investment in Capital Assets - This catego ry consists of cap ital assets , net of acc umu lated depreciation /amortization , reduced by the outstanding balances of debt that are attributab le to the acquis ition, construction , or improveme nt of those assets and retentio n payable.

Restricted - Thi s category represents net position that has external restrictions imposed by cred itors, grantors, contributor s or laws or regulations of othe r governments and restrictions impo sed by law through constitutional provisions or enabli ng legis latio n.

Unrestricted - This category represe nts net position of the City that do not meet the definition of "net investme nt in capital assets" or "rest ricted."
When expenses are incurred for purposes for which both restricted and unrestrict ed net position are avai lable, the City's policy is to apply restricted net position first, then unrestricted net position as they are needed.

V. Fund Balances
As prescribed by GASB Statemen t No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constrai nts on the specific purposes for which amoun ts in the funds can be spent. Fund balances for gove rnmenta l fund s are made up of the followings:

Nonspen dable Fund Balance - includ es amount s that are (a) not in spendabl e form, or (b) legally or contractua lly required to be maintained intact. The "not in spendable form " criterion includes items that are not expecte d to be converted to cas h, for example: prepa id items, prope1ty held for resale and long term notes receivable. 67 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Account ing Policies (Continued) V. Fund Balances (Continued)
Restricted Fund Balance - includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restricti9ns may effectively be changed or I ifted only with the consent of resource providers.

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

Assigned Fund Balance - comprises amounts intended to be used by the City for specific purposes that are neither restricted nor committed. Intent is expressed by the City Council or official to which the City Council has delegated the authority to assign amounts to be used for specific purposes. Through the adopted budget, the City Council establishes assigned fund balance policy levels and also sets the means and priority for the City Manager to fund these levels.

Unassigned Fund Balance - is the residual classification for the General Fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. Only the General Fund reports unassigned positive fund balance. A governmental fund other than the General Fund may report a negative unassigned fund balance if expenditures incurred for a speci fie purpose exceed the amounts that are restricted, committed or assigned to those purposes.

In circumstances when an expenditure may be made for which amounts are available in multiple fund balance classifications, the fund balance in General Fund will generally be used in the order of restricted, unassigned, and then assigned reserves. In other governmental funds, the order will generally be restricted and then assigned.

W. Property Taxes
Propertv Tax Calendar - All property taxes are levied and collected by the County of Santa Clara. Secured taxes are levied on July I, are due in two installments on November I and February I and become delinquent after December IO and April I 0. Unsecured taxes are levied on July I and become delinquent on August 3 1. The lien date for secured and unsecured property taxes is January I.

The City, in fiscal year 1993-94, adopted an alternative method of property tax distribution (the "Teeter Plan").

Under this method, the City receives I 00 percent of its secured property tax levied in exchange for foregoing any interest and penalties collected on delinquent taxes. The City receives remittances as a series of advances made by the County during the year.

X. Use of Estimates
The preparation of the basic financial statements in accordance with U.S. GAAP requires management to make estimates-and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
68 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Signifi cant Accounting Policies (Continued) Y. Implementation of New GASB Pronouncements
GASB Statement No. 91 In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations (GASB Statement No. 9 I), to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with ( I) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial repo1iing of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. Implementation of this Statement did not have a significant effect on the City's financial statements for the fiscal year ended June 30, 2023.

GASB Statement No. 94 In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements (GASB Statement No. 94) to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). This Statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs).

Implementation of this Statement did not have a significant effect on the City's financial statements for the fiscal year ended June 30, 2023.

GASB Statement No. 96 ln May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements (GASB Statement No. 96), to provide guidance on the accounting and financial reporting for subscription based information technology arrangements (SBITAs) for government end users (govenunents).

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 ofa SBITA; and (4) requires note disclosures regarding a SBITA. Implementation of this Statement had a significant effect on the City's financial statements for the fiscal year endedJune30,2023.

GASB Statement No. 99 - In April 2022, the GASB issued Statement No. 99, Omnibus 2022. The objectives of this Statement are to enhance comparability in accounting and financial repo1iing and to improve the consistency of authoritative literature by addressing ( I) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The Statement is effective immediately for the requirements related to extension of the use of LI BOR, accounting for SNAP distributions, disclosures ofnonrnonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63. The Statement is effective for fiscal year years beginning after June 15, 2022 for requirements related to leases, PPPs, and SBITAS. Implementation of this Statement did not have a significant effect on the City's financial statements for the fiscal year ended June 30, 2023.

Z. Upcoming New GANB Pronouncements
The City is currently evaluating its accounting practices to determine the potential impact on the financial statements for the following GASB Statements:

In June 2022, GASB issued Statement No. I 00, Accounting Changes and Error Corrections - an Amendment of GASB Statement No. 62. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. Application of this statement is effective for the City's fiscal year ending June 30, 2024. 69 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 1 - Summary of Significant Acco unting Polic ies (Continued) Z. Upcoming New GANB Pronouncements (Con tinued)
In June 2022, GASB issued Statement No. IO I, Compensated Absences. The objective of this Statement is to better meet the info1111ation needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Application of this statement is effective for the City' s fiscal year ending June 30, 2025.

In December 2023, GASB issued Statement I 02, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government's vulnerabilities due to certain concentrations or constraints. That objective is achieved by requiring governments to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. The statement also requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued. Application of this statement is effective for the City's fiscal year ending June 30, 2025. Earlier application is encouraged.

In April 2024, GASB issued Statement I 03, Financial Reporting Model Improvements - The objective of this Statement is to improve key components of the financial reporting model. The purposes of the improvements are to (a) enhance the effectiveness of the financial repo1ting model in providing information that is essential for decision making and assessing a government's accountability and (b) address certain application issues identified through pre-agenda research conducted by the GASB. Application of this statement is effective for the City's fiscal year ending June 30, 2027. Earlier application is encouraged.

Note 2 - Cash and Investments
The City had the following cash and investments at June 30, 2023:

G>vernment-Wide
Statement ofNet Position
G>vernmental Business-Type
Activities Activities Total
Cash and investments $ 205,571.569 $ 11,372,546 $ 216,944.115 Restricted cash and investments:

Held by fiscal agent for pension 19.088,859 19,088.859
Total cas h and investments $ 224.660.428 $ 11.372,546 $ 236,032.974 70 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 - Cash and Investments (Continued)
The City's cash and investments at June 30, 2023, in more detail:

Cash on hand $ 3,586
Depos its with financial institutions 47,281.61 I
Total cash 47,285,197
Investments 169,658,918
Investments with PARS 19,088,859
Total investments 188,747,777
Total cash and investments $ 236,032.974
A. Deposits
The carrying amounts of the City's demand deposits were $47,281,61 1 at June 30, 2023. Bank balances at that date were $48,018,306 the total amount of which was collateralized or insured with accounts held by the pledging financial institutions in the City's name as discussed below.

Cash and Investments with PARS were related to the City's Pension Trust.

The California Government Code requires California banks and savings and loan associations to secure the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name.

The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City's total cash deposits. The City may waive collateral requirements for cash deposits, deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation ("FDIC"). The City did not waive the collateral requirement for deposits insured by FDIC.

The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances.

Interest income from cash and investments with fiscal agents is credited directly to the related fund. 71 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 - Cash and Investm ents (Continued)
B. Investments Authorized by the California Governmen t Code and the City's Investment Policy The following table identifies the investment types that are authorized for the City by the California Government Code (or the City's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code ( or the City's investment pol icy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy: This does not include the City's investments of debt proceeds held by fiscal agents that are governed by the provisions of debt agreements of the City.

Authorized Investment Type
U.S. Treasury Oblig;itions
U.S. Agency Securities•
California Local Agency Investment Fund (LAIF)
Non-neb'lltiable Cenificates of Deposits (time deposits) Slate ofCalifomia registered state
warrants. lrcasury notes. or bonds
Califomia local a1,:ncy bonds. notes.
warrants, or other obli~t ions
Bond issued by the local agency
Bankers' Acceptances
Commercial Paper
Ne1'lltiablc Cenificates of Deposit
Repurchase Agreements
Medium Tenn Corperate Notes
Money market mutual funds investing
in U.S. Treasury. Government Agency
seaLriti"-'S or repurchase 31:feemcnls
collateralizecl by U.S. Treasury or
Government Agency securities
Supernationals
~la.ximum
Maturity
5 years
5 years
NIA
5 years
5 years
5 years
5 years
180 days
270 days
5 years
I year
5 years
5 years
5 years
~linirnum Credit
Quality
NIA
NIA
NIA
NIA
NIA
NIA
NIA
NIA
A-l+P-1
NIA
NIA
A or better
Aaa/AAA
AA or bater
tvla\llmun
Percent •b"' of
Pon folio
None
None
Up to S65 million
30%*•·
None
None
None
40~.
25%
30%
None
25%
20%
30%
'Securities issued by ab>e11cies oft he federal govemment such as the Government National Mon~i,oe Association (GNMA). •• Represe111s restric1ion in which the City's investment policy is more restrictive than the CaJifomia Government Code. '" 30% maximum percent of ponfolio if using a private sector entity to assist in the placement of the time deposits. No maximum 72 M a,\lmum Investment in
One Issuer
None
None
None
10% of ponfolio:
5% of issuer's net worth **
lone
None
None
!\one
I 0% of poI1 folio; 5% of issuer's
net worth; JO% ofoulstanding
paper of Issuer. ••
JO~, ofponfo lio: 5~, of issuer's
net worth. ••
I 0% of pon folio; 5% of issuer's
ne1 worth. ••
JO% of ponfolio: 5% of issuer's
net worth. ••
None
I0¾of ponfolio
City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 - Cash and Investments (Continued)
C. Investments Authorized by Debt Agreements
The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with •c ity ordinances, bond indentures or State statutes. The City's Investment Policy allows investments of bond proceeds to be governed by provisions of the related bond indentures. The following identifies the investment types that are authorized for investments held by fiscal agents under the terms of the bond indentures of the related debt issue:

Authori zed Investment T ype
Cash or obligations of the U.S. including U.S. Trea su ry obligat ions Federal agencies obligations wh ich represent
full faith and credit of the U.S.

Direct federal agencies obligations wh ich are not
fully guaranteed by the full faith and credit of the U.S.

U.S. dollar denominated deposit accounts , federal fui1ds and bankers' acceptances w ith domest ic commercial banks
Commercial Paper
Money market funds
Pre-refunded municipal obligations that are not callable prior to maturity or as to wh ich irrevocable instructions have been given to call on the date specified in the notice
Municipa l obligations or General obligations of states California Local Agency Investment Fund (LA IF)
Shares in a California commo n law trust established pursuant to Titl e I, Divisio n 7, Chapter 5 of the California Government Code wh ich invests exclusively in investments permitted by Section 53635 of Title 5, Division 2. Chapte r of the California Government Code. as it may be an1ended.

D. Risk Disclosures
Disclosures Relating to Interest Rate Risk
Maximum
Maturity
NIA
NIA
NIA
360 day s
270 days
NIA
NIA
NIA
NIA
NIA
Maximum
Minimum Credit Percenta ge of
Quality Portfolio
NIA None
NIA None
NIA None
P-1. A-I+, A-I None
P-1. A-I None
Aaan, or AAAm -G None
Highest
Rating Category None
Aaa.. AAA. A2, A None
NIA Up to $65 million
NIA None
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 ofan 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 pottion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and 1 iquidity .needed for operations.
73 City of Cupertino
Notes to the Basic Financial Statem ents (Continued)
For the Year Ended June 30, 2023
Note 2 - Cash and Investments (Continued)
D. Risk Disclosures (Continued)
Disclosures Relating to Interest Rate Risk (Continued)
Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity:

Remaining Maturity (In Months)
12 Months of More than 24
Investment Type less 13 lo 24 Months Months Total
U.S. Treasury Securities $ 4,588;328 $ 12,214,180 $ 36,160,305 $ 52,962,813 Corporate Notes 1,454,667 19,059,694 19,537.835 40.052,196 U.S. Agency Notes:

Federal Home Loan Mottgage Corporation 836,535, 2,232,499 3,408.904 6,477,938 Federal National Mortgage Assoc iation 8,574,094 4,540.665 13,114,759 Federal Home loan Banks 1,463,544 1,943,320 3,406,864
Municipal Bonds 726,12 1 726,12 1
Asset -Backed Securities 329,142 4,647,343 11,558.949 16,535,434 Supranationals 2,747,746 6,683,579 9,431.325
Collateralized Mo1tgage Obligations 1,261,927 4,392,528 5,654,455 Local Agency Investment Fund 21,099,954 21,099,954
Money Markel Mutual Funds 197,059 197,059
Restricted investment with PARS 19,088,859 19,088,859
Total inves tments $ 51,805,834 $ 50,659,178 $ 86,282,765 188,747,777 Cash in banks and on hand 47,285,197
Total Cas h and lnves tments $ 236,032,974
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfi ll its obligation to the holder of the investment. This is measured by the assignment ofa rating by a nationally recognized statistical rating organization.

Presented below is the minimum rating required by (where applicable) the California Government Code, the City's investment policy, or debt agreements, and the actual rating, by Standard and Poor's or Moody's', as of June 30, 2023 for each investmen.t type:
74 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 - Cash and Investments (Continu ed)
D. Risk Disclo sures (Continued)
Disclosures Relating to Credit Risk (Continued)
Investment Type Total AAA AA A Not Required
U.S. Treasul)' Securities $ 52,962,813 $ 52.962,813 $ $ $ Corporate Notes 40,052.196 12.415.464 27,636,732
U.S. Agency Notes
Federal Home Loan Mortgage Corporation 6,477,938 6.477.938 Federal National Mortgage Association 13,114,759 13,114,759 Federal Home Loan Banks 3,406,864 3.406,864
Municipal Bonds 726.121 726,121
Asset-Backed Securities 16,535,434 16.535.434
Supranationals 9.431,325 9,431.325
Collateralized Mo1tgage Obligations 5.654,455 5.654,455 Local Agency Investment Fund 21,099.954 21.099,954
Money Market Mutual Funds 197,059 197,059
Restricted investment with PARS 19,088,859 19,088.859
Total Investments $ 188,747,777 $ !08.506. 768 $ 12,415.464 $ 27,636,732 $ 40,188,813 Disclosu res Relating to Concen tration of Credit Risk
The investment policy of the City contains no lirriitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. At June 30, 2023, the following investment represent 5% or more of total City investments:

Iss uer Investment Type Amo unt Percentage
Federal National Mo,t gage Ass ociation (FNMA) U.S. Agency Note s $13,114,759 7% Disclosu res Relating to Custodia l Credit Risk
Custodial credit risk is the risk that, in the event of the failure of the counter party, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. All securities, with the exception of LA IF and other pooled investments, are held by a third-party custodian. 75 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 - Cash and Investment s (Continued )
E. Fair Value Measurement Disclosure
At June 30, 2023, investments are reported at fair value. The following table presents the fair value measurement of investments on a recurring basis and the levels within GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2023:

Investments by Fair Value Level
U.S. Treasury Securities
Corporate Notes
U.S. Agency Notes
Federal Home Loan Mortgage Corporation
Federal National Mortgage Assoc iation
Federal Home Loan Banks
Asset -Backed Securities
Collateralized Mortgage Obligations
Supranationals
Municipa l Bond s
Quoted Prices
in Active
Markets for
Identica l Asse ts
(Leve l I)
$ 52,962.813 $
Significan t
Other
Observable
Inp uts
(Level 2)

40.052.196

6.477,938

13.114.759

3.406,864

16.535.434
5,654,455

9.43 1.325
726, 12 1
Total Investments $ 52.962,813 $ 95.399,092
Investments Meas ured at Amortized Cost:

Money Markel Mutu al Funds - Rest ricted lor Pension (PA RS) Money Marke l Mutual Funds
lnvestments Exempt from Fair Value Hierarch y:

Loca l Age ncy Invest ment Fund
Cash in banks and on hand
Total Cash and Investments
F. Investment in Local Agency Investment Fund (LAIF)
Total
$ 52.962,813

40.052.1 96

6.477.938

13.114.759

3.406.864

16.535.434

5.654.455

9.431.325
726.121
I 48.361.905

19.088,859
197,059
21,099.954

47.285.197
$ 236,032.974
The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City' s investments in LAIF at June 30, 2023 included a portion of pool funds invested in Structure Notes and Asset-Backed Securities:

Structured Notes are debt securities (other than asset-backed securities) whose cash-flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options.

Asset-Backed Securities, the bulk of which are mortgage -backed securities, entitle their purchasers to receive a share of the cash flows from pool of assets such as principal and interest repayments from a pool of mortgages (such as Collateralized Mortgage Obligations) or credit card receivables. 76 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 - Cash and Investments (Continued)
F. Investment in Local Agency Investment Fund (LAIF) (Continued) As of June 30, 2023, the City had $2 1,099,954 invested in LAlF, which had invested 2. 78% of the pool investment funds in Structured Notes and Asset-Back Securities. LAlF determines fair value on its investment po11folio based on market quotations for those securities where market quotations are readily avai I able and based on amo11ized cost or best estimate for those securities where market value is not readily available. LAIF is repo11ed at amortized cost, which approximates fair value.

Note 3 - Loans Receivable
Housing Prog ram Loans
On June 30, 1995, the City loaned $82 1,000 to Community Housing Developers, a California nonprofit public benefit corporation. The note bears interest at three percent per annum, compounded annually, payable to the extent of surplus cash, and all unpaid principal and interest due June 30, 2035. As of June 30, 2023, the balance remaining on the loan was $ 1,878,389 including principal and interest in the amounts of $821,000 and $ 1,057,389, respectively. The loan was issued using resources in the amount of $417,000 and $404,000 in the General Fund and the Housing Development Special Revenue Fund, respectively and is considered governmental activities.

On June 6, 1996, the City loaned $320,000 to Cupe11ino Community Services, a California nonprofit public benefit corporation. The note bears interest at three percent per annum and due on July 14, 2026. As of June 30, 2023, the balance on the loan was$ I 35,871. The loan was issued using resources in the Housing Development Special Revenue Fund and is considered governmental activities.

On September 11, 2017 the City loaned $3,672,000 to Stevens Creek, L.P., a California limited pai1nership. The note bears interest at three percent per annum for 55 years. After the completion of construction of the development, no later than April 30th of each calendar year, the Developer shall make repayments of the loan in an amount equal to the City loan percentage of the lenders' share of residual receipts. The payments shall be credited first against accrued interest and then against outstanding principal of the loan, and shall be accompanied by the developer's report of residual receipts. As of June 30, 2023, the balance remaining on the loan was $4,359,018 including principal and interest in the amounts of $3,672,000 ana $687,018, respectively in the Housing Development Special Revenue Fund and is considered as governmental activities.

Note 4 - Leases Receivable and Lease-Related Deferred Inflows of Resources The City leases various City assets to other entities via contractual arrangements under the provisions of GASB Statement No. 87, Leases. The leases include land leases utilized for cell phone towers as well as property leases of the McClellan Ranch House and the Cupertino Public Library. The City receives fixed payments from the lessees, with a total of $220,308 recognized as rental revenue and $3 1,333 recognized as interest revenue on the lease for the year ended June 30, 2023 and a receivable for the remaining payments under the leases of $2,493,039.

A summary of changes in lease receivable for the year ended June 30, 2023 is as follows:

Balance
July I, 2022
$ 2,495,226 $
Additions
218,121
Retirements
Balance
June 30, 2023
$ (220,308) $ 2,493.039
77 $
Current
Portion
221,644 $
Long-term
Portion
2,271,395
City of Cupertino
Notes to the·Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 4 - Leases Receivable and Lease-Related Deferred Inflows of Resources (Continued) At Jun e 30. 2023, the required payments for these leases, including interest, are:

Year Ending NPV Leases Total Lease
June 30, Receivable lnteres t Payment
2024 $ 221.644 $ 29,203 $ 250,847
2025 215.649 27,022 242,671
2026 216,753 24,745 241,498
2027 227.844 22,348 250,192
2028 238.976 19,832 258,808
2029-2033 930.850 60,105 990,955
2034-2038 335,529 17,807 353,336
2039-2041 105,794 1,720 !07,514
Tota l $ 2,493,039 $ 202,782 $ 2,695,821
At June 30, 2023, the amounts reported as defe rred inflows of reso urces relate d to leases will be recognized as lease reve nue as follows :

Year End ing
June 30, Amount
2024 $ 263,427
2025 248,416
2026 236,054
2027 236,054
2028 236,054
2029-2033 822,454
2034-2038 259,170
2039-2041 78,104
Tota l $ 2,379,733
Note 5 - Interfund Transactions
A. Advances
Interfund advances are balances between funds that are not expected to be repaid within the current fiscal year. As of June 30, 2023; the General Fund advanced $3,000,000 to the Capital Impro vement Projects Cap ital Projects Fund for advance funding of planned projects that will be repaid in subsequent yea rs. 78 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 5 - Interfund Transactions (Continued)
B. Due from and To other Funds
At June 30, 2023, the City has the following due from and to other funds:

I Due From Other Funds
Governmental Funds:

General Fund
Due to Other Funds
Internal Serv ice
Funds Total
$ 1,395,657 $ 1,395,657
$ 1,395,657 $ 1,395,657
These interfund balances represent routine sho,t-term cash flow assistance.

C. Transfers in and Out
Transfers between funds during the fiscal year ended June 30, 2023 were as follows:

Transfers In
G:tvemmental Funds Pro~riela!! Funds
Capiial
Housing Public Facilities Improvement Recreation
Transponation Devclopmenl Corporation Projects Prog rams Non major Special Revenue Special Revenue Debt Capital Project Entequise Enterprise !Transfers Out I Cteneral Fund Fund Fund Service Fund Fund Fund Fund Go\'ernmentnl Funds:

General Fund $ s 3,000.000 $ 25,000 s 2,675,800 s 2,838,147 s 376,000 s Transponation
Special Revenue Fund 197.491
Capitnl Improvement Projects
Capital Projects Fund 800,000 23,600
Non major Ciovemmcntal Funds 61,140 1,650,000
Proprietary Funds:

Recreation Progra ms Enterprise Furrd 103, 119
$ 861,140 s 3.000,000 s 25.000 s 2,675,800 s 4,788.757 $ 376,000 23,600 Internal
Service
Funds Total
$ 3,429,398 S 12,344,345
197,491
&23.600

1.711.140
103.119
$ 3.429,398 S 15,179.695
Transfers provided funding for operating subsidies, capital projects, capital acquisitions, internal service funds personnel costs associated with staff special project, compensated absences and retiree health, and debt service. 79 Note 6 - Capital Assets
City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
A. Governmental Activities
A summary of changes in capital assets of the gove rnmental activities for the year ended June 30, 2023 is as fo llows :

Balance
July I, 2022 Balance
(As Restated ) Additions Deletions Transfers June 30. 2023 Gowrnmental Acti\itie s :

General Government Capital Asse t:

CaJital ass ets not being depre ciated:

Land $ 64,786,669 s s s S 64.786,669
Easeme nts 19,615,039 19,615,039
Constnict ion in progress 23,398,649 10,658.074 (476,537) (5,104,793) 28,475.393 Total general go, l.!rnment capital assets not being depr eciated 107.800,357 10,658,074 (476,537) __ (5) 04,793) 11 2,877,101 CaJital ass ets being depreciated:

Buildings 47,763,913 47.763,9 13
lmprovem ents other than buildings 61,263,926 359,435 61 ,623,361 Machinery and equ ipment 4,529,929 45,697 4,575,626
Roads. curbs, gutters, sidewalks , medians
and bridges 183,534,212 4,275,603 187,809,815
St reel lights 9.302,437 402,243 9,704,680
Stonn drain stmcturc and mains 37,373,158 37,373,158
Traffic signals 6.418.246 2 1.815 6.440.061
Total capital ass ets being depr eciated 350.185,821 5,104,793 355.290,614 Less accumulat ed depreciation for:

Building s (33,646.294) ( 1,612,633) (35,258,927)
Improvement s otherlhan buildings (45,859,016) (2.390,853) (48,249,869) Machinery and eq uipmenl (3,306, II 0) (2 18,247) (3,524,357) Roads, curbs, gullers , s idewalks, medians and bridge s (115,601,625) (2,839.730) ( 118,441,355) Street lights (8,031,745) (431,927) (8,463,672)
Stonn dra in strncture and mains (33,682,048) ( 149,952) (33,832,000) Traffic signa ls (5,910,218) ( 109,425) (6,0 19,643)
Total accumulated depreci ation (246,037,056) (7,752,767) (253,789,823) Total capital assets being depreciate,~ net 104,148,765 (7,752,767) 5,104.793 IO 1,500.791 Intangible asset s, being amorti zed
Right-to-use subscript ion asset s 1,490,232 964,745 2,454,977 Total int angibl e assets , being amortized 1.490,232 964,745 2.454,977 Less accumulated .amortization for:

Righi-to -use subscription assets (574,289) (574,289)
Total accumulated amortization (574.289) (574,289)
Tota l intan gible ass ets, being amortized, net 1,490,232 390,456 1,880,688 Total general go\'Crnment ca1lital as set, net 213,439,354 3,295,763 (476,537) 21 6,258.580 Internal Se nice fund Capital Ass ets:

Ca1ital ass ets not being depreciated:

Constrnction in progress 7,828 527,792 (4 16,212) I 19,408 Total internal fund capital
assets not being depreciated 7,828 527,792 (416,212) 119,408 Ca1ital assets being depreciated:

Machine ry and equipment 12,769,434 (118,475) 416.212 13.067,171 Less accumulated deprec iation (9,798,894) (798.599) I 18,475 (I 0.4 79,0 I 8) Total internal fund ca1ital
ass ets being depreciate<~ net 2.970,540 (798,599) 416,212_ 2,588,153 Intan gible ass ets, lx-ing amorti zed
Right-to -use sub scription asse ts 282.968 24.866 307,834 Tota l intan g i~ e asse ts, being amorti zed 282.968 24.866 307,834 Less acc umulated amortizati on for :

Right•to•use subscriptio n assets (106.01 I) ( 106.01 I) Total accumulat ed amortizati on (1 06.0 1 I) (106,011) Total intangible asse ts, being amorti zed, net 282,968 (81,145) 201,823 Total internal s enice fund capital assets, net 3,261,336 (35 1,952) 2,909,384 Gowr nmental acth iti es capital assets , net S 216,700,690 $ 2,943,811 $ (476,537) s S 2 19,167,964 80 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 6 - Capital Assets (Continued)
A. Governmental Activities (Continued)
B.

Depreciation and amor tization expenses were charged to functions and programs based on their usage of the related assets. Deprecia tion and amortizat ion expenses were charged to govern mental act ivities as follows:

Governmental Activities Deerecia tion Amortizat ion
Admin istration $ 189,942 $ 49.676
Inn ovation and technology 16,281
Ad ministrative services 29,461 16,138
Parks and recreation 169,010 63.689
Community develop ment 147.707
Public wo rks 7.348,073 297,079
Subto tal 7,752,767 574,289
Interna l Service A llocat ion
Ad min is trat ion 247,725 9,170
Inn ovat ion and technolog y 21,642
Administrative serv ices 55,264 2,979
Parks and recreation 73,072 11,757
Communit y deve lopment 27,266
Public wo rks 400,896 54,839
Subtota l 798,599 106,01 I
Total - Governmenta l Activ ities $ 8,551.366 $ 680,300 Business-Type Activities
A summary of changes in capita l assets of the business -typ e activit ies for the yea r ended June 30, 2023 is as follow s:

Balance Balance
July I, 2022 Additions Deletions Transfers June 30, 2023 Business-type activities:

Capital assets not being depreciated:

Construction in progress $ 184,667 $ 181,863 $ (8,299) $ $ 358,231 Total capital assets not being depreciated 184,667 181,863 (8,299) 358,23 1 Capital assets being depreciated:

Buildings 2.073,689 2.073,689
Improvements other than bui ldings 2, 175,914 2,175,914 M achinety and equipment 743,453 8.299 751. 752
Total capital assets being depreciated 4,993,056 8,299 5,001,355 Less accumulated depreciation for:

Buildings (573,223) (81,796) (655,019)
Improvements other than buildings (1,860,740) (5 1.912) (1,912,652) Machinety and equipment (654,191) (28, 132) (682,323)
Total accumulated depreciation (3,088,154) (161,840) (3,249,994) Total capital assets being depreciated, net 1,904,902 (161,840) 8,299 1,751,361 Busi ness-type activity capital assets, net $ 2,089,569 $ 20,023 $ $ $ 2, 109,592 81 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 6 - Capital Assets (Continued)
B. Business-Type Activities (Continued)
Depreciation expe nse was charged to the business -type activities as follow s:

Business-Type Acti vities Deereciation
Cupertino spo1ts center $ 111.438
Recreation program 47,057
Blackbeny farm 2.832
Resources recovery 513
Total $ 161,840
Note 7 - Long-Term Liabilities
A. Governmental Activities
A som mary of changes in long-term liabilit ies for governmental act ivities for the year ended June 30, 2023 is as follows:

Balance
July I, 2022 Balance Current Long -tem1
(As Restated) Additions Retirements June 30, 2023 Portion Portion 2020A Certificates of Participation $ 18,020,000 $ $ ( 1,955,000) $ 16,065,000 $ 2,035,000 $ 14,030,000 Issuance Premium 3,248,829 (464,118) 2,784,711 2,784,711 Subsc ription liabilities 1,773,200 989,61 1 (735,521) 2,027,290 783,067 1,244,223 Claims payable 1,569,000 765, 116 (111,330) 2,222,786 382,000 1,840,786 Compensated absences 4,690,321 797,673 (406,434) 5,081,560 501,158 4,580,402 Total long-tenn liabilities $ 29,30 I ,350 $ 2,552,400 $ (3,672,403) $ 28, 181,347 $ 3,701,225 $ 24,480,122 2020 A Certificates of Partici[!ation
The Cupe11ino Public Facilitie s Corporation issued Certificates of Participation to prov ide financing for the construction of the Commu nity Cente r, improvements of the City Hall and the Library in July 1986; purcha se of Wilson Park in 1989; finance the Memoria l Park Expansion in 1990; and purcha se the Blackbe rry Farm and Fremont Olde r site in 1991. The Cupe11ino Public Facilitie s Corporat ion, as lesso r, leased real property to the City (under the Lease Agreement with the lessee) and assigned the base renta l payments to the trustee for the benefit of the owners of the ce11ificates of pa11icipation. The _renta l payments wh ich represent the pledged revenue s are scheduled to be suffic ient in both time and amount , when the principal and interest of the ce11iftcates are due, which was the case for the year ended June 30, 2023.

On May 9, 2012, $43,940 ,000 principal amount of 2012 Refinancin g Certificates of Participa tion (20 12 COPs) were issued to refund the 2002 COPs, to fund a reserve fund for the 20 12 COPs, and pay costs incurred in connection with issuance .

On September 29, 2020 , $22,040 ,000 principal amount of 2020A Certificates of Pa11icipation (2020 COPs) were issued to refund the 2012 COPs and pay costs incurred in conne ction with issuance. The proceeds were placed into an escrow account , along with fund s from the City 's 20 I 2 COPs Reserve and on October 30, 2020 , the 20 12 COPS were prepaid , resulting no amounts outstanding as of June 30, 2023 for the 2012 CO Ps. The result of the transact ion was an economic gain of $3,133,8 19.
82 City of Cupert ino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 7 - Long-Term Liabilities (Continued)
A. Governmenta l Activities (Continued)
2020 A Certificates of Participation (Continued)
The 2020A COPs are payable by a pledge of revenues from the lease payments payable by the City pursuant to the Lease Agreement between the Cupertino Public Facilities Corporation and the City for the use and possession of the Site and Facility as described in the Lease Agreement. The City also covenanted in the Lease Agreement to include all lease payments in its annual budget. Total debt service payments remaining on the 2020 COPs is $ 18,736,200 payable through June I, 2030. For the year ended June 30, 2023, the bonds had $1,955,000 of principal and $720,800 interest due. The annual debt service requirements on these certificates are as follows:

Year Ending
June 30, PrincieaI Interest Total
2024 $ 2,035.000 $ 642,600 $ 2,677,600
2025 2,115.000 561,200 2,676,200
2026 2,200,000 476,600 2,676.600
2027 2,285,000 388,600 2.673.600
2028 2,380.000 297.200 2,677,200
2029-2030 5,050.000 305,000 5.355,000
Total $ 16.065,000 $ 2,671,200 $ 18,736,200
Subscription Liabilities
The City has entered into subscriptions for information technology arrangements. The terms of the arrangements range from 24 to 63 months with implicit rates used between 1.710% to of3 .331%. Principal and interest to maturity are as follows:

Year Ending
June 30, Principal Interes t Total
2024 $ 783,067 $ 43,045 $ 826,112
2025 710,777 26,433 737,210
2026 481,502 11 ,133 492,635
2027 51,944 1,424 53,368
Total $ 2,027,290 $ 82,035 $ 2,109.325
Compensated Absences
The long-term portion of compensated absences payable has been accrued for the Governmental Activities on the Government-Wide Financial Statements. In prior years, the General Fund has typically been used to liquidate the liability. The balance outstanding at June 30, 2023 was $5,081,560.

Claims Paya ble
Refer to Note IO for more details.
83 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 7 - Long-Term Liabilities (Continued)
B. Business-Type Activities
The following is a summary of changes in long-term liabilities for business-type activities for the year ended June 30, 2023:

Compensa ted absences
Total long-tenn liabilities
Compensated Absences
Balance
Juli'. I, 2022
$ 216,636 $
$ 216,636 $
Additions Retirements
52,873 $ (49,268)
52,873 $ (49,268)
Balance Current Long-tem1
June 30, 2023 Portion Portion
$ 220,241 $ 10,492 $ 209,749
$ 220,241 $ 10,492 $ 209, 749
All vested vacation and compensatory leave time is recognized as an expense and as a liability in the business-type funds at the time the liability vests. All of the enterprise funds of the City have been used to liquidate the liability.

The balance outstanding at June 30, 2023 was $220,241.

Note 8 - Defined Benefit Pension Plan
Below is a summary of the deferred outflows of resources, net pension liabilities and deferred inflows of resources by Plan at June 30, 2023:

Deferred Outflows of
Resources Net Pens ion Liabilit2:'._
DefeJl'ed Inflows of
Resources
1\11 iscellaneous Plan $ 18,126,053 $ 55,840,898 $ 137,371 A. General Information about the Pension Plan
Plan Descriptio_n
The City contributes to the California Public Employees' Retirement System ("CalPERS"), an agent multiple­ employer public employee defined benefit pension plan. Cal PERS acts as a common investment and administrative agent for participating public entities within the State of California .. Benefit provisions and al.I other requirements are established by state statute and City ordinance. A full description of the pension plan regarding number of employees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership infonnation are listed in the Annual Actuarial Valuation Report. This report and CalPERS' audited financial statements are publicly available reports that can be obtained at CalPERS' website at www.calpers.ca.gov under Forms and Publications.

Benefit Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits -to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. A II members are eligible for non-duty disability benefits after IO years of service.

The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law. 84 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 8 - Defined Benefit Pension Plan (Continued)
A. General Information about the Pension Plan (Continued) Benefit Provided (Continued)
The Pension Reform Act of2013 (PEPRA), Assembly Bill 340, is applicable to employees new to CalPERS and hired after December 31 , 20 I 2. The Plans' provisions and benefits in effect at June 30, 2023, are summarized as follows:

Benefit fonnula
Benefit vestin g schedule
Benefit payments
Minimum retirement age
Monthl y benefits , as a% of eligible compensation
Required employee contri but ion rates
Required employe r contributi on rates
Hire date
Prior to Jan uaIy I ,
2013

2.7%@55
5 years serv ice
monthly for lite
50 2% to 2.7%

8.00%

9.74%
On or after Janua1y I,
2013

2.0%@62
5 years serv ice
monthly for life
52 1% to 2%

7.00%

9.74%
Participant is eligible for non-industrial disability retirement if becomes disabled and has at least 5 years of credited service. There is no special age requirement. The standard non-industrial disability retirement benefit is a monthly allowance equal to 1.8 percent of final compensation, multiplied by service. Industrial disability benefits are not offered.

An em.ployee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, where interest is currently credited at 7 .5 percent per year, plus a lump sum in the amount of one-month salary for each completed year of current service, up to a maximum of six-months salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months preceding death.

Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated survivor(s), or to the retiree's estate.

Benefit terms provide for annual cost-of-living adjustments to each employee's retirement allowance. Beginning the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a compound basis by 2 percent.

Emplovees Covered by Benefit Terms
As of the June 30, 2021 actuarial valuation date (most current), the following employees were covered by the benefit terms of the Plan:

Active employees
Trans fe1Ted and tenninated employees
Retired Employees and Beneficiaries
Total
85 205
169
273
647
City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Yea·r Ended June 30, 2023
Note 8 - Defined Benefit Pensio·n Plan (Continued)
A. General Information about the Pension Plan (Continued) Contributions
Section 20814( c) of the California Public Employees' Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July I following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by Ca!PERS. 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.

B. Net Pension Liability
Actuar ial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2021 valuation was rolled forward to determine the June 30, 2022 total pension liability, based on the following actuarial methods and assumptions:

Actuar ial Cost Method
Actuarial Assumption s:

Discount Rate
Inflation
Salary Lncreases
Mo1tality Rate Table1
Post Retirement Benefit Increase
Entry Age Nonml in accordance with the requirement of GASB Statement No. 68

6.90%

2.30%
Varies by Ent1y Age and Se,vice
Derived using CalPERS' Membership Data for all Funds .

The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter
1The mo1tality table used was developed based on CalPERS-specific data. The probabilities of m01tality are based on the 2021 CalPERS Experience Study tor the period from 2001 to 2019. Pre-retirement and Post-retirement mo1tality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS S'i()erience Study and Review of Actuarial Ass umptions repo,t from November 2021 that can be found on the CalPERS website.

Change of Assumptions
Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, Cal PERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected po1ifolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. 86 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 8 - Defined Benefit Pension Plan (Continued)
B. Net Pension Liability (Continued)
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was dete1111ined 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 took into account both short-term and long-term market return expectations. Using historical returns of all of the funds' asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows:

Asset Class 1
Global Equity - Cap-weighted
Global Equity - Non-Cap -weighted
Private Equity
Treasu1y
Mo1tgage-backed Securit ies
In vestment Grade Corporates
High Yield
Emerging M arket Debt
Private Debt
Real Assets
Leverage
1 An expected in flat ion o f2.30% used for this period.

Assumed
Asset
Allocation

30.00%

12.00%

13.00%

5.00%

5.00%

10.00%

5.00%

5.00%

5.00%

15.00%
-5.00%
I00.00%
?
- Figures are based on the 2021 Asset Liability Management study.

Discount Rate
Real Return , ,2

4.54%

3.84%

7.28%

0.27%

0.50%

1.56%

2.27%

2.48%

3.57%

3.21%
-0.59%
The discount rate used to measure the total pension liability was 6.90%. The projection of cash tlows 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. 87 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 8 - Defined Benefit Pension Plan (Continued)
C. Changes in the Net Pension Liability
The following table shows the changes in net pension liability for the City's Miscellaneous Plan recognized over the measurement period.

Miscellaneous Plan
Increase (Decrease )
Total Pens ion
Liabili~
Plan Fiduciary Net
Position (b)
Net Pens ion Liability
(c) = (a) - (b)
Balance at June 30, 2021 (Valuation Date) $ 161,180,149 $ Changes in the y ear:

Service cost 3.614.486
Interest on the tota l pensio n liability 11.312,835
Change of Benefit Te1111s
Change of Assu mption s 5.380,881
Differences between actual and expected experie1 ( 188.249) Contribution - employe r
Contribution - employee
Net invest ment inco me
Administrative expenses
Other miscellaneous income/(expenses)
Benefit payments, includ ing refunds o f employee
contributions (8,451,800)
Net Changes during July I, 2021 to June 30, 2022 11,668,153 Balance at June 30, 2022 (Measurement Date) $ 172,848,302 $ Sensitivity of the Net Pension Liability to Changes in the Discount Rat~ 127,12 1.572

6.396,030
1,632,861
(9,612,070)
(79.189)
(8,451,800)
(10,114,168)
117,007,404
$
$
34,058,577
3,614,486

11.312,835
5,380.881
(188,249)
(6,396,030)
( 1.632,861)
9,612.070
79,189
21,782,321
55,840,898
The following presents the net pension liability of the plans as of the measurement date, calculated using the discount rate of 6.90%, as well as what the net pension liability would be if it were calculated using a discount rate that is I percentage-point lower (5.90%) or I percentage-point higher (7.90%) than the current rate:

Miscellaneous Plan
Pension Plan Fiduci ary Net Position
Plan's Net Pens ion Liability/(Asset)
Discount Rate
- I% (5.90%)
$ 79,168,477
Current Discount
Rate (6.90%)
$ 55,840,898
Discount Rate
+ 1% (7.90 % )
$ 36,670,370
Detarled information about the plan's fiduciary net position is available in the separately issued CalPERS financial report.
88 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 8 - Defined Benefit Pension Plan (Continued)
C. Changes in the Net Pension Liability (Continued)
Pension Expense (Credit) and Deferred Outflows and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2023, the City recognized pension expe nse of $8,200,508. As of June 30, 2023 , the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Misce llaneous Plan
Deferred outflows Deferred inflows
of Resources of Re sou recs
Pension contribution made after measurement date $ 7.183,364 $ Changes o f assumptions 3.926.589
Difference betwee n e)q>ected and actual expe rience 1.057,512 ( 137.371) Net difference between projected and actual earning on
pension p Ian investments 5,958,588
Total $ 18, 126,053 $ ( 137.371)
The amounts above are net of outflows and inflows recognized in the 2021-22 measurement period expense.

The expected average remaining serv ice lifetime ("EARSL ") is calculated by div iding the tota l future service years by the total numb er of plan pa11icipants (active, inactive, and retired ). The EARSL for the miscellaneous plan for the 202 1-22 measurement period is 3. 7 years, wh ich was obtained by dividing the total service years of 2,275 (the sum of remain ing serv ice lifetimes of the act ive em ployees) by 6 12 (the total number of participants: active, inactive , and retired).

The $7, 183,364 of contribut ions for the fiscal year ended June 30, 2023 reported as deferred outflows of resources related to contr ibutions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year end ing June 30, 2024.

Other amounts reported as deferred inflows of resources related to pensions wi II be recognized as pension expense as follows:

Measurement
Period
Ending June 30
2023
2024
2025
2026
2027
Thereafter
Total
89 Deferred
0 U tfl O\\S / (In fl O\~ )
$ 3,069,776
$
2,637,405
1,426,385
3,671,752
I0,805,318
City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 - Other Post Employment Benefits (OPEB)
A. General Information about the OPEB Plan
Plan Description
Permanent employees who retire under the City's CalPERS retirement plan are, pursuant to their respective collective bargaining agreements, eligible to have their medical insurance premiums paid by the City. Retirees receive the amount necessary to pay the cost of his/her enrollment, including the enrollment of his/her family members, in a health benefit plan provided by CalPERS up to the maximum received by active employees in their respective bargaining unit.

The City contracts with CalPERS for this insured-benefit plan established under the state Public Employees' Medical and Hospital Care Act (PEMHCA). The plan offers employees and retirees three CalPERS' self-funded options, setup as insurance risk pools, or offers various third-party insured health plans. The plan's medical benefits and premium rates are established by CalPERS and the insurance providers. The City contribution is established by City resolution. Retirees and active employees pay the difference between the premium rate and the City's contribution. Premiums and City contributions are based on the plan and coverage selected by actives and retirees, with the City's potential contribution ranging from zero to $1,605 per month per employee or retiree. The responsibility for benefit payments has transferred to the insurers and the City does not guarantee the benefits in the event of default by the insurers. A comprehensive annual financial report of Cal PERS, inclusive of their benefit plans, is available at www.calpers.ca.gov.

The City participates in the Public Agency Retirement System (PARS) Public Agencies Post Retirement Health Care Plan Trust Program (PARS Trust), an agent-multiple employer irrevocable trust established to fund other postemployment benefits. The City Council adopted the PARS Public Agencies Post-Retirement Health Care Plan Trust, including the PARS Public Agencies Post-Retirement Health Care Plan, to fund medical insurance costs for its retired employees, effective February 17, 20 I 0. The City Council appointed the City Treasurer, or his/her successor or his/her designee as the City's plan administrator. The plan administrator is authorized to execute the PARS legal documents on behalf of the City and to take whatever additional actions necessary to maintain the City's participation in the Program and to maintain compliance of any relevant regulation issued or as may be issued; therefore, authorizing him/her to take whatever additional actions are required to administer the City's PARS Plan. The PARS Trust is approved by the Internal Revenue Code Section 115 and invests funds in equity, bond, and money market mutual funds. Copies of PARS Trust annual financial report is available at the City's Finance Department.

An employee is eligible for lifetime medical benefits under the OPEB Plan, along with his/her spouse or declared domestic partner at the time of retirement, if all criteria listed below are met:
• The employee was hired or the City Council member was elected prior to August I, 2004, and the employee has five or more full-time years of service and the City Council member has five or more years of electe_d service with the City of Cupertino; or
• The employee was hired or the City Council member was elected on or after August I, 2004, and the employee has ten or more full-time and/or elected years of CalPERS service, five years of which must be from the City of Cupe1iino; and
• The employee is eligible for retirement as defined under the CalPERS retirement systeni"; and the employee retires from the City of Cupe1iino.
90 City of Cupertino
Notes to the Basic Financial -Statements (Continued)
For the Year Ended June 30, 2023
Note 9 - Other Post Employment Benefits (OPEB) (Continued) A. General Information about the OPEB Plan (Continued)
Plan Description (Continued)
In addition, the eligible employee's dependent children at the time of retirement who are under 23 years old are eligible for medical benefits. In addition to extending the eligibility of dependents from age 23 to age 26 in accordance with the recent healthcare refonn act, effective July I, 20 I 0, employees that retire or resign from service with the City of Cupe1iino and who are not eligible for retiree medical benefits can continue on the City's medical and dental plans provided that they pay the premiums in full.

Plan Members Covered by Benefit Terms
At June 30, 2023 (the latest information available), Plan membership consisted of the following:

Inactive plan members or beneficiaries currently receiving benefit payments Inactive plan members entitled to but not yet receiv ing benefit pay ments Active plan members
Contributions
156
0 171
327
OPEB Plan contributions are set by the adopted budget. The cost of the benefits provided by the OPEB Plan is currently being paid by the City on a fully pre-funded basis. Based on the actuarial valuation date of June 30, 2023, the annual required contribution rate is 7 .3 percent of annual covered payroll. For the year ended June 30, 2023, the City paid $ I ,753,000 in healthcare premium payments including implied subsidy. Plan members are not required to contribute to the plan.

B. Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2023 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of July I, 2023. Standard actuarial update procedures were used to project/discount from valuation to measurement dates.

Investment Rate of Return
The long-term expected rate of return on OPEB plan investments was detennined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of geometric real rates of return for each major asset class included in the target asset allocation as of June 30, 2023 (see the discussion of the Plan's investment policy) are summarized in the following table: •
91 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 - Other Post Employment Benefits (OPEB) (Continued) B. Net OPEB Liability (Continued)
Investment Rate of Return {Continued)
Asset Class
Fixed income - core
Fixed income - high yield
Equit ies - domestic
Equities - developed foreign
Equities - emerging foreign
Real estate
Cash
Investment Policy
Long-Term
Expected Real Rate
ofRet um

5.17%

8.06%

6.96%

9.94%

11.22%

7.67%

2.95%
The Plan's policy in regard to the allocation of invested assets is established and may be amended by the City Council by a majority vote of its members. It is the policy of the City Council to pursue an investment strategy that reduces risk through the prudent diversification of the portfolio across a broad selection of distinct asset classes.

The Plan's investment policy discourages the use of cash equivalents, except for liquidity purposes, and aims to refrain from dramatically shifting asset class allocations over short time spans. The following was the City Council' s adopted asset allocation policy as of June 30, 2023:

Concentrations
Asset Class
Fixed income
Equities
Real estate
Commodities
Cash
Total
Target Allocation

29.00%

63.00%

5.00%

2.00%

1.00%
100.00%
The Plan did not have investments outside of mutual funds that comprise five percent or more of the Plan's total fiduciary net position.

Rate ofReturg
For the year ended June 30, 2023, the annual money-weighted rate of return on investments, net of investment expense, was I 0.94 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 92 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 - Other Post Employment Benefits (OPEB) (Continued) B. Net OPEB Liability (Continued)
Actuarial Assumpt ions
The total OPEB liability was determined by an actuarial valuation as of July I, 2023, using the previously listed actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified. Mortality rates were based on the CalPERS mortality assumptions.

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with long-term perspective of the calculations.

The other significant actuarial assumptions used to prepare the City's June 30, 2023 actuarial valuation include the following:

Valuation date:

Meas urement date:

Actuarial Cost Method:

Amo1tization Method:

A11101tization Period:

Asset Valuation Method:

Actuarial Assumptions:

Discount Rate
Amo1tization growth rate
Ultimate Rate of Medical Inflation
Salary increases
Mo1tality
Discount Rate
June 30. 2023
June 30, 2023
Entry Age No nna!
Leve l percent of pay closed , 5.5 yea rs as of.lune 30, 2023 10 year
Market value of Assets

6.50%

2.75%

4.25%

2.75% plus merit componen t based o n years of service
Ca!PERS mo1tality assumptions
The discount rate used to measure the total OPEB liability was 6.5 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
93 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 - Other Post Employment Benefits (OPEB) (Continued) C. Change in Net OPEB Liability
Changes in the Net OPEB Liabil ity: The changes in the City's net OPEB liabil ity (asset) are:

Net Increase (Decrease)
Total OPEB Plan Fiduciary Net
Liability (a) Position (b)
Balance at June 30, 2022 $ 29,87 1,000 $ 31,340.000
Changes in the year
Se1vice cost 1,260,000
Interest on the total OPEB liability 1.967.000
Change of assu mptions (492,000)
Differences between actual and
expected experience 4,437.000
Cont1ibut ion - employer 1.753.000
Contribution - employee
Net investment income 3,484,000
Ad min is trative expenses (116.000)
Benefit payments. including refunds of
Employee contributions ( I, 753.000) ( I, 753,000)
Net Changes during July I, 202 1 to June 30. 2022 5.419,000 3,368,000 Balance at June 30, 2023 (Measurement Date) $ 35,290,000 $ 34,708,000 Sensitivity of the net OPEB Liability (Asset} to Changes in the Discount Rate Net OPEB Liability
(Asset)
(c) = (a) - (b)
$ (1,469.000)
1,260,000
1,967.000
(492.000)

4.437.000
(1,753.000)
(3,484,000)
116,000
2,051.000
$ 582,000
The fo llowing presents the net OP EB asset of the City, as well as what the City' s net OPEB liability would be if it were calculated using a disc ount rate that is one- percent age-poin t lowe r (5.5 perc ent) or one-percent age-point higher (7.5 percent) than the current discount rate:
$
Plan's Net OP EB Liabili__.ty'-/(,._A_s_s_et.,_) ____ _ 1 % Decrease

5.50%
Current Discount
Rate 6.50%
4,827,000 $ 582,000 $
1 % Increase

7.50%
(2,959,000)
Sensitivity of the Net OPEB Liability (Asset) to Changes in the Health Care Costirend Rates The following prese nts the net OPEB asset of the City, as well as what the City 's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one-perce ntage-point lower (dec reas ing to 3.5 percent) or one-percentage-point higher (increas ing to 5.5 percent) than the current healthcare cost trend rates:
$
Plan's Net OPEB Liabili_,ty'-/(,_Ac.:.s.:...se'-'t"-) ____ _ I% Decrease
Current Healthcare
Cost Trend Rate
(3,11 9.000) $ 582,000 $
94 I% Increase

5.1 10.000
City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 - Other Post Employment Benefits (OPEB) (Continued) D. OPEB Expense and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2023, the City recognized OPEB expense of $1,779,000. As of June 30, 2023, the City reported deferred inflows of resources related to OPEB from the following sources:

OPEB Plan
Deferred Outflows Deferred lnllo\\'s of
of Resources Res ource s
Net difference between projected and actual
eamings on investme nts $ 1,864.000 $
Differences betwee n expected and actual experience 3,697,000 1,874.000 Changes in assumptio n 609,000 410,000
$ 6,170,000 $ 2,284,000
The difference between projected OPEB plan investment earnings and actual earnings is amortized over a five-year period. The remaining gains and losses are amo11ized over the expected average remaining service life. The expected average remaining service life is 6 years, which was determined as of June 30, 2022, the beginning of the measurement period, for employees covered by the OPEB plan benefit terms.

Amounts repo11ed as deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:

Measurement
Period
Ending June 30
2024
2025
2026
2027
2028
Thereafter
Total
Note 10 - Liabilities Under Self-Insuran ce and Risk Management Deferred
Outflo\\'s/(Inllow.;)
$ 696,000
(8.000)
2,176,000
367,000
655,000
$ 3,886,000
General and Property Liability: The City is self-insured for the first $250,000 of general and property liability for each occurrence, and the excess (up to $ 10,000,000 for each occurrence. and annual aggregate) is covered through the City's pat1icipation in the Pooled Liability Assurance Network Joint Powers Authority (PLAN JP A - formerly the Association of Bay Area Governments Pooled Liability Assurance Network or ABAG PLAN). The risk pool consists of28 agencies within the San Francisco Bay Area. The stated purpose of the PLAN JPA is to provide certain levels of liability insurance coverage, claims management, risk management services, and legal defense to its pa11icipating members.

PLAN JPA is governed by a Board of Directors, which comprises officials appointed by each participating member.

Premiums paid to PLAN JPA are subject to possible refund based on the results of actuarial studies and approval by the Board of Directors. Complete financial statements for PLAN JPA may be obtained from their offices at the following address: PLAN JPA, c/o Sedgwick, 1750 Creekside Oaks Drive Suite 200, Sacramento, CA, 95833. Premiums are revised each year based on the City's claims experience and risk exposure. For the year ended June 30, 2023, the City paid the PLAN JPA premiums of$ 1,263, l9I.
95 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 10 - Liabilit ies Under Self-Insurance and Risk Management (Cont inued) Workers' Compensation Liability: The City belongs to the CSAC Excess Insurance Authority (EIA), a joint power authority which provides excess workers' compensation liability claims coverage above the City's self-insured retention of $500,000 per occurrence. Losses above the self-insured retention are pooled with excess reinsurance purchased to a $50,000,000 statutory limit. EIA was established in 1979 for the purpose of creating a risk management pool for all California public entities. EIA is governed by a Board of Directors consisting of representatives of its member public entities. Complete financial statements for ETA may be obtained from their offices at the following address: CSAC Excess Insurance Authority, Finance Department, EIA 75 Iron Point Circle, Suite 200, Folsom, CA 95630. For the year ended June 30, 2023, the City paid premiums of $158,781.

It is the City's practice to obtain biennial actuarial studies for the self,insured workers' compensation liability. The claims liabilities included in the workers' compensation internal service fund is based on the results of actuarial studies and include amounts for claims incurred but not reported and loss adjustment expenses. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends, including frequency and amount of payouts, and other economic and social factors. Inflation of 2.5 percent, annual rate of return of two percent, claim severity increase at 2.5 percent were assumed. In the current year, management used actuarial estimates based on a 90 percent confidence level.

Settlements have not exceeded insurance coverage in the past three years.

Changes in the balances of workers' compensation and general claims liabilities during the years ended June 30 are as follows:
2023 2022
Claims liability, beginning of yea r $ 1,569,000 $ 1,374,000 Incurred claims and changes in est imate 1,122,626 671,344 Claim payments and credits (468,840) (476,344)
Total claims liability, end of year 2,222,786 1,569,000 Less cu1Tent po1tion . (382,000) (282,000)
Non-cu1Tent portion $ 1,840,786_ $ 1,287,000
Note 11 - Net Position and Fund Balances
A. Net Investment in Capital Assets
The following is the calculation of net investment in capital assets at June 30, 2023:

Cap ital assets , net of accumulated dep reciation and amortizat ion Add : deferred charges on refunding
Less : outstand ing pri ncipa l on capita l related debts Less: bond premi um
Less: subsc ription liabilities
Net investme nt in cap ital asset s
96 Governmenta l Business-Type
Activities Activit ies
$ 219, 167,964 $ 2, I 09.592
159,478
(16,065 ,000)
(2.784 ,711)
(2.027 ,290)
$ 198,450,441 $ 2, I 09,592
City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 11 - Net Position and Fund Balances (Continued)
B. Fund Balance Classifications
At June 30, 2023, fun d balanc es a re classified in the governmental funds as follows:

Capital
Public Facilities lnvestmenls
Cofl)Ornlion Projects Non major
Housing Debt Service Capital Projects Governmental
General Transeortation Developirenl Fund Fund Funds To1al Nonspendable:

Loans receivable s 970,962 s s 5,402,316 s s $ $ 6,373.278 Advances to olher funds 3,000,000 3,000,000
Inventories 21,383 21,383
Prepaid items 8,243 8,243
Sublotal 4,000,588 5,402,316 9,402,904
Rest ricted for:

Public access lelevision
Debt service
PARS Section 11 5 T111st 19.088,859 19,088,859
Public safety power shuloff
Debi services 1,750 1,750
Stonn drain system 3,993,672 3.993.672
Parks and open space 18,763,732 18,763,732
Environnl!ntal Jro.nagemenl 1,220,134 1,220,134
Streets and road projects 10,586,674 770,107 11 ,356,781 Housing programs 11,492,607 11,492.607
Sublotal 19,088,859 10,586,674 11,492,607 1,750 24,747,645 65,917.535 Conunitted for:

Economic uncertainty 24,000,000 24,000,000
Sustainability reserve 127.891 127.891
Capital project reserve 10,000,000 10,000,000
Subtolal 34,127,891 34,127,891
Assigned to:

Encumbrances 9,735,187 9,735,187
Capital projecls 34,767,194 157,343 34,924,537
Subtota l 9,735,187 34,767,194 157,343 44,659,724
Unassig ned 71,603,813 71,603,813
Total s I 38.556,338 $ 10,586,674 $ 16,894,923 $ 1,750 s 34,767,194 $ 24,904,988 $ 225,711 ,867 Note 12 - Commitments and Contingencies
A. Federal and State Grants
The City participate s in a number of fede ral and s tate grant program s s ubject to financi a l and compl iance audit s by the grante rs o r their repre s entative s . Aud its of ce1iain g rant programs , includin g those for the year ended June 30, 2023, have yet to be conducted. The amount , if any , of expe nditure s that may be d isallowed by the granting agenci es cannot be d e termined at thi s tim e. M a n agement believe s that suc h dis allowance s , if any, w ou ld not have a material effect on the financial statements.
97 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 12 - Commitments and Contingencies (Continued)
B. Encumbr.ances
The City uses encumbrances to control expe nditu re commitment s for the year. Encumbran ces represent comm itments related to executor contracts not yet performed and purchase orders not yet filled. Commitments for such expenditure of monies are encumbered to reserve a portion of applicable appropriation s. Encumbra nces still open at year end are not accounted for as expenditures and liab ilities, but as restrict ed, or ass igned fund balance.

As of June 30, 2023 , the City had the followi ng encumbranc es outstanding:

Governmental Funds:

General Fund
Transportation Special Revenue Fund
Capital Improvements Projects Capital Projects Fund
Housing Development Special Revenue Fund
Non major Governmental Funds
Proprietary Funds:

Resource Recove1y Enterprise Fund
Cupertino Sports Center Enterpri se Fund
Nonmajor Enterprise Fund
Internal Se1vice Funds
Total Encumbrances
C. Consulting Agreement for Sales Taxes
$ 9,735,187
1,998,991
1,994,887
3,666
2,106.625
284,540
7,925
5,858
1,001.388
$ 17,139,067
The City entered into agreements (commitments) with two compan ies to provide services consisting of the assessment and creation of new sales and use tax revenue sources for the City. The City agreed to pay the companies based on a sliding scale payment schedule dependent on the level of new sales tax revenue realized by the City as defined in the consulting agreements. These agreements qualify as tax abatements under the provisions of GASB Statement 77. For the year ended June 30, 2023, the City abated taxes total ing $9,056,208.

D. Santa Clara County Vehicle Registration Fee (VRF)
The City is required to report VRF revenue s, expenditures and fund balances for the year ended June 30, 2023:

VRF Balance as of July I. 2022 $
VRF Revenue 343,735
YRF Interest
VRF E'\j)ended (343,735)
VRF Balance as or June 30, 2023 $ ========
98 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 12 - Comm itments and Contingenc ies (Continu ed)
E. Unas serted Claim
The City is aware of a probable reallocation of sales and use tax revenues pursuant to Revenue and Taxation Code Section 7209. Given the limited information available about this matter, the City is not able to predict the likelihood of an unfavorable outcome or the amount or the range of any potential loss. However, the City had $56.S million reserved for the potential reallocation.

Note 13 - Concentration Risk
The City has an economic dependency on revenues generated directly or indirectly from one company. For the year ended June 30, 2023, more than IO percent of the City General Fund's total revenues are derived from the company.

The City's operations would be adversely impacted if there are any significant declines in taxes received from the company.

Note 14 - Prior Period Adjustments
A. Government-Wide Financial Statement s
The beginning net position was restated as following:

Net positio n at July I, 2022 , as previous ly repor ted Correction on the interes t receivable related to loans Net position at July I, 2022, as restated
B. Governmental Fund Financial Statements
The beginning fund balance was restated as following:

General Fund
Fund balances at Jul y I. 2022. as previously reported $ I I 0, I 69,554 $ Interest receivab le related to loans 509,278
Restatement o f unavailable revenue from loan receivable to fund balance ----- - -
Fund balances at J uly I, 2022 , as restated $ 11 0,678,832 $ Governme ntal
Act ivities
$ 358 .32 1,213
1,562 ,736
$ 359,883,949
I-lousing
Development
Specia l
Revenue Fund
7, 177.6 1 I
1,053 ,458
3,672,000
11 ,903,069
=======
99 T otal
$ 11 7,347.165

1.562. 736

3.672 ,000
$ 12 1.0 19, 165
001
'!fllll/q J/;JJ 1tiJIJIIO//ll;J/U/ ;,find S/1/.L

REQUIRED SUPPLEMENTARY

INFORMATION (UNAUDITED)
IOI
l'.01
"!flW/q I/ii/ 1lj JJJIIO/Jll il/ll/ i/fJVd S/1/.l
City of Cupertino
Required Supplementary Information
Budgetary . Comparison Schedule - General Fund
-For the Year Ended June 30, 2023 ...

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes:

Property $ 30,039,574 $ 30,039,574 $ 3 1,889,638 $ 1,850.064 Sales 31,944,089 3 1,944.089 34.8 19,341 2,875,252
Transient occupancy 5,000,000 6,000.000 7,062, 150 1,062, 150 Utility user 2,955,404 2.955,404 4, I 03,906 I, 148.502 Franchise 3,230, I 0 1 3.230, 10 I 3,995,0 18 764,9 17
Other 1,787,69 1 1,787,69 1 1,471,789 (315,902)
Use of money and property 1,275, 11 3 1,275. 11 3 3,033,683 1.758,570 Intergovernmental 1,434,491 7.946,05 I 7,77 1,411 ( 174,640) Licenses and pern1its 3,541,0 12 34,057,523 4,093,631 (29,963, 892) Charges for services 11,798,652 14.427,740 11 , 11 3,598 (3,3 14, 142) Fines and forfeitures 427,000 427,000 303,573 ( 123,427) Other revenue I, 160,437 I, 182,892 1,306.455 123,563
Total revenues 94,593,564 135,273, 178 11 0.964. 193 (24,308.985) EXPENDITUUES:

Current:

Administration I 0.944,795 10. 164.030 7,602.232 2,561 ,798 Law enforcement 16,8 14,5 19 16,814.5 19 15,276.950 1,537,569 Innovation and technology 3,32 1,862 2,774,746 1,825,667 949.079 Administrative services 7.386,069 7,278.86 1 5,976,301 1,302,560 Recreation services 7,461,888 7,663.132 5,432, 183 2,230,949 Community development 11 ,348,827 12,78 1,783 10,666.834 2,1 14,949 Public works 25,580,835 27, 184,374 23,879,927 3,304,447 Capital outlay 306.000 287.292 1,263.4 12 (976, 120)
Debt service:

Principal 626, 181 (626, 181)
Interest and fiscal charges 18.540 (18,540)
TOTAL EXPENDITURES 83, 164,795 84,948,737 72,568,227 12,380,510

EXCESS OF REVENUES OVER
EXPENDITURES 11 ,428,769 50,324,44 1 38,395,966 (11 ,928,475) OTHER FINANClNG SOURCES (USES):

Inception of subscription liability 964,745 964.745
Transfers in 6 1, 140 86 1, 140 86 1, 140
Transfers out ( 11 ,996,300) ( 12,453,2 13) ( 12,344,345) I 08,868 Total other financing sources (uses) ( 11 ,935, 160) ( 11 ,592,073) ( I 0,518,460) 1,073,6 13 NET CHANGE IN FUND BALANCE $ (506,391) $ 38,732.368 27,877,506 $ ( I 0,854.862) FUND BALANCE:

Beginning of year, as restated (Note 14) 11 0,678,8-32
End of year $ 138,556,338
103
City of Cupe rtino
Required S upplementa ry Information
Budgetary Comparison .Schedule - Transpor tation Special Revenue Fund For the Year Ended June 30, 2023
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property $ $ $ 2 11 ,271 $ 211.271
Intergovernmenta l 3,008.043 3.008,043 3,385,823 377,780 Charges for services 1,654 1,654 34,012 32.358
Other revenue 2.000 7,000
Total revenues 3.009.697 3.009,697 3,633.106 623.409
- --
EXPENDITURES:

Current:

Public works 4, 181,513 3.03 1.02 1 2,726,550 304,47 1
Capital outlay 3,2 17,800 4,944.938 4.950,786 (5,848)
TOTAL EXPENDITURES 7,399,3 13 7.975,959 7,677,336 298,623

EXCESS OF REVENUES OVER
EXPENDITURES (4.389,6 16) (4,966 .262) ( 4.044.230) 922,032 OTHER FINANCING SOURCES (USES):

Transfers in 3,000,000 3.000,000 3,000,000
Transfers out ( 197,49 1) ( 197,491)
Total other financing sources (uses) 3,000,000 2,802,509 2,802,509 NET CHANGE IN FUND BALANCE $ ( 1.389.6 I 6) $ (2. I 63. 753) ( 1,24 1,721) $ 922.032 FUND BALANCE:

Beginning of year 11,828,395
End of year $ 10,586 ,674
104
City of Cupertino
Required Supplementary Information
Budge tary Comparison Schedule - Housing Development Special Revenue Fund For the Year Ended June 30, 2023
Orig inal Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 8.002,202 $ 8.002,202 $ 170,824 $ (7,83 1,378)
Use of money and property 3,300 3.300 194,096 190,796
lntergovemme ntal 492. 181 492, 181 196.6 16 (295.565)
Charges for services 1,640 1,640
Other revenue 28,082 28.082
Total revenues 8,497,683 8,497,683 591,258 (7,906,42 5) EXPENDITURES:

Current:

Commu nity development 1,777,397 2,058,3 10 1,026.720 1,031.590 TOTAL EXPENDITURES 1,777,397 2.058,3 10 1,026,720 1,03 1.590

EXCESS OF REVENUES OVER
EXPENDITURES 6.720,286 6.439,373 (435, 462) (6,874,835) OTHER FINANCING SOURCES:

Transfers in 25,000 25,000 25,000
Total other financing sources 25,000 25,000 25,000
NET CHANGE IN FUND BALANCE $ 6.745.286 $ 6.464.373 (4 10,462 ) $ (6.874.835) FUND BALANCE:

Beginning of year, as restated (Note 14) 11 ,903,069
End of year $ 11 ,492,607
105
901
")flllJ/q J/il/ 1ljJIJIIO/JllilJII/ iliJIJd S/1/.1
Budget and Budgetary Accounting
City of Cupertino
Required Supplementary Information
Notes to the Budgetary Comparison Schedules
For the Year Ended June 30, 2023
The budget of the City is a detailed operating plan which identifies estimated costs and results in relation to estimated revenues.

The budget includes ( I) the programs, projects, services and activities to be provided during the fiscal year; (2) estimated revenue available to finance the operating plan; and (3) the estimated spending requirements of the operating plan. The budget represents a process through which policy decisions are made, implemented and controlled. The City prohibits expending funds for which there is no legal appropriation. Operating appropriations lapse at fiscal year end.

In May of each year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning July I. Public hearings on the proposed budget are held during the month of June and the budgets for all fund types are legally adopted by Resolution prior to June 30. Original budget amounts are presented on the accompanying budgetary statements include these legally adopted amounts.

Budgets for governmental funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. The City's legal level of budgetary control is at the functional level for the general fund and at the fund level for other funds. The City Manager is responsible for controlling the City's expenditures in accordance with the adopted budget.

The City Manager is authorized to administer and transfer appropriations between budget accounts within the operating budget when in his opinion such transfers become necessary for administrative purposes. Any revision which increases total appropriations must be approved by the City Council. Requests for additional personnel or capital outlay also require the approval of the City Council.
107
City of Cupertino
Requir ed Suppl ementar y Information (Unaudit ed)
Schedul e of Chan ges in the Net Pension Liability and Related Ratios For the Year E nded Jun e 30~, _20_2_3 ______ _
Last Ten f iscal Years 1
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneons Plan Measurement period 2021-22 2020-2 1 2019-20 2018- 19
Total 11ension liability
Service cost $ 3,614,486 $ 3,392.942 $ 3,241,719 $ 3.324,361 Interest 11 ,312,835 10,907,002 10,302.395 9,800.245
Changes of benefit tenns
Changes of assumptions 5,380,881
Differences between expected and actual experience ( I 88,249) 2,212,836 444. 188 4,144,384 Benefit payments, including refunds of employee
contributions (8,451,800) (7,937,592) (6,815,494) (6, I 93,271) let change in total pension liability 11,668,153 8,575.188 7, 172,808 11 ,075,7 19 Total pension liability - beginning 161,180,149 152,604,961 145,432,153 134,356,434 Total pension liability - ending (a) $ 172,848,302 $ 161, 180,149 $ 152,604,96 1 $ 145,432, 153 Pension fiduciary net 11osition
Contributions - employer $ 6,396,030 $ 5,957,595 $ 5,308,579 $ 4,654,841 Contributions - employee 1,632,861 1,560,532 1,429,446 1,364,731 Net investment income (9,612,070) 23,553,078 4,975,822 6,096,968 Benefit payments. including refunds of employee
contributions (8.45 1,800) (7,937,592) (6,815,494) (6,193,27 1) Net Plan to Plan Resource Movement
Administrative expense (79,189) (103,981) ( 140,036) (66,707) Other Miscellaneous lncome/(Expensef 216
Net change in plan fiduciary net position ( 10,114,168) 23,029,632 4,758,3 17 5,856,778 Plan fiduciary net position - beginning
j
127,121,572 !04.091 ,940 99.333,623 93,476,845
Plan fiduciary net position - ending (b) $ 11 7,007,404 $ 127,121,572 $ I 04,09 1,940 $ 99,333,623 Plan net pension liability - ending (a) - (b) $ 55,840,898 $ 34,058,577 $ 48,513,02 1 $ 46,098,530 Plan fiduciary net position as a percentage 67.69% 78.87% 68 2 1% 68.30% of the total pension liability
Covered payroll' $ 20,455,494 $ 20,427,103 $ 18,662,748 $ 18,46 1,490 Plan net pension liability as a percentage of covered
payroll 272.99% 166.73% 259.95% 249 .70%
2017-18
$ 3,058,629
9,065,322
(847,606)
I, 184,340
(6,051,845)
6,408,840
127,947,594
$ 134,356,434
$ 4,263,020
1,506,888
7,347,936
(6,051,845)
(2 16)
(135,263)
(256,867)

6.673,653
86,803,192
$ 93,476,845
$ 40,879,589

69.57%
$ 16,809,349
243.20%
'Historical infonnation is presented only for periods after GASS 68 was implemented in 2013- 14. Additional years of information will be displayed as it becomes available.
2 During Fiscal Year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions (GASS 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California's agent OPEB plan Accordingly, Cal PERS recorded a one-time expense as a result of the adoption of GASS 75. Additionally, CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017 - 18, Cal PERS recorded a correction to previously reported financial statements to properly renect its proportionate share of activity related to pensions in accordance with GASS Statement No. 68, Accounting and f inancial Reporting for Pensions (GASS 68).
3 Includes any beginning of year adjustment
' Includes one year's payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for tiscal years ended June 30, 20 18-21; 3.00% payroll gro\\1h assumption for fiscal years ended June 30, 20 14- 17.

Notes to Schedule:

Changes of Benefit Tenns: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date arc not included in the figures above, unless the liability impact is deemed to be material by the plan actuary.

Changes of Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to

6.90%. In detennining the long-term expected rate of return, Cal PERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project comp ound (geometric) returns over the long term. The discount rate used to discount liabilities was mformed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 Cal PERS Experience Study and Review of Actuarial Assumptions The accounting discount rate was

7. 15% for measuremem dates 20 17 through 202 I, 7.65% for measurement dates 20 I 5 through 2016, and 7 50% for measurement date 2014 108
City of Cupertino
Required Supp lementary Information (Unaudited)
Schedule of Changes in the Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan Measurement period 2016-17 2015-16 20 14-15 20 13-14
Total pension liability
Service cost $ 2,895.549 $ 2,525,314 $ 2,444,939 $ 2,504,228 Interest 8,6 I 9,588 8,253,983 7,789,134 7,349,943
Changes of benefit terms
Changes of assumptions 7, 125,558 ( 1,883,633)
Differences between expected and actual experie nce ( 182,397) 696,347 372,917 Benefit payments, including refunds of emp loyee
contr ibutions (5,346,890) (5, 15 I ,298) (4,637,005) (4,351,614) Net change in total pension liability 13, 111,408 6,324,346 4,086 ,352 5,502,557 Total pension liability - beginning I 14,836, 186 I 08,5 11 ,840 104,425,488 98,922,931 Total pension liability - ending (a) $ 127,947,594 $ 114,836, I 86 $ I 08,5 11 ,840 $ 104,425,488 Pension fiduciary net position
Contribut ions - employer $ 4. 183,822 $ 3,659, 170 $ 3,30 I ,642 $ 2,891,986 Contributions - employee 1.236,052 1, 169,92 1 I, 149,894 1,06 I ,884 Net investment income 8,749,288 466,704 1,724,204 11 ,379,985 Benefit payments, including refunds of employee
contribu tions (5,346,890) (5, I 5 1,298) (4,637,005) (4,351,6 14) Net Plan to Plan Resource Movement
Administrative expense ' (1 15,304)
Other Miscellaneo us lncomc/(Ex pense)'
(47,536) (87,780)
Net change in plan fiduciary net position 8,706,968 96,96 1 1,450,955 ! 0,982,241 Plan fiduciary net position - beginning' 78,096,224 77,999,263 76,548,308 65,566,067 Plan fiduciary net position - ending (b) $ 86,803, 192 $ 78,096,224 $ 77,999,263 $ 76,548,308 Plan net pension liability - ending (a) - (b) $ 41 , 144,402 $ 36,739,962 $ 30,5 12,577 $ 27,877,180 Plan fiduciary net position as a percentage 67.84% 68.0 1% 71 .88% 73.30% of the total pension liability
Covered payroll' $ 15,595, 136 $ 14,336,969 $ 13,504,966 $ 13,080,327 Plan net pension liability as a percentage of covered
payroll 263.83% 256.26 % 225 .94% 213.12%
109
City of Cupertino
Required Supplem entary Information (Unaudit ed)
Schedule of Plari Contributio ns - Pen sion
For the Year Ended June 302 2023
Last Ten Fiscal Years
Agent Multipl e Emp loyer Defined Benefit Retir ement Plan - Miscellaneou s Plan Fiscal Year End 2022 -23 202 1-22 2020 -2 1 20 19-20 20 18-1 9 Actuarially determi ned contribution
1 $ 7, 183,364 $ 6.396 .030 $ 5.957.595 $ 5.308.579 $ 4,654.84 1 Contribut ions in relation to the actuarially
determined contribution
1 (7. 183,364) (6,3 96.030) (5.957 .595) (5.308,579) (4,654 ,841) Contribution deficiency (excess) $ $ $ $ $
Covered payroll
1 $ 2 1,028 ,248 $ 20,455,494 $ 20,427 ,1 03 $ I 8.662,748 $ 18,46 1.490 Contributions as a percentage of covered
payroll
2 34. 16% 3 1.27% 29.17% 28.44% 25.2 1%
1 Employers are ass umed to make contributions equal to the actuar ially detennined contributions. However. so me employers may choose to make addi tional cont ributions towards their unfunded liabi lity. Employer co ntributions for such plans exceed the actuaria lly determined contributions . 2 Includes one year ·s payroll growth using 2.80% payroll growth ass umption for fiscal year ended June 30, 2022: 2. 75% payroll gro,-vth assumption for fiscal years ended June 30, 20 I 8- 2 1: 3.00% payro 11 growth assumption for fiscal years ended June 30. 20 I 4- 17.

Notes to Schedule :

The actuarial methods and assumptions used to set the actuar ially determined con tributions for Fiscal Year 2022 -23 were deri ved from the June 30. 2020 funding valuation report.

Methods and assumptions used to detem,ine contribution rates :

Actuarial cost method
Amortizat ion method
Asset valuation method
Inflatio n
Salary increases
Payroll Growth
Investment rate of return
Retire ment age
Mortality
Entry Age Actuar ial Cost Method
Level percentage of payroll, closed
Fair Value of Assets

2.50%
Varies by entry age and service

2.75%

7.00% net of pension plan investment and administrati ve expe nses: inc ludes inflation.

The probabilities of retirement are based on the 20 17 CalPERS Experience study for the per iod from I 997 to 2015.

The probab ilities of mortality are based on the 20 17 Cal PERS Experience Study, for the per iod from I 997 to 20 I 5. Pre-retireme nt and post-retireme nt mortal ity rates include 15 years of projected mortality improvement using 90% of Scale M P-20 16 published by the Society of Actuar ies.

I 10
City of Cupertino
Required Supp lementa ry Information (Unaudited)
Schedule of Plan Contributions - Pension (Continued)
For the Year Ended June 30, 2023
Last Ten Fiscal Yea rs
Agent Multiple Emplo yer Defined Benefit Retirement Plan - Misce llaneou s Plan Fiscal Year End 2017-1 8 2016- 17 20 15- 16 20 14-15
Actuarially determined contribution $ 4,263,020 $ 4.1 83,822 $ 3.659, 170 $ 3.30 I ,642 Contributions in relation to the actuarially
determined contribution I (4,263 ,020) (4,183,822) (3,659.170 ) (3.30 1.642) Contribution deficiency (excess) $ - $ $ $
Covered payroll2
$ 16,809.349 $ 15.595.136 $ 14,336,969 $ 13,504,966
Contributions as a percentage o f covered
payroll2

25.36% 26.83% 25.52% 24.45%
111
20 13- 14
$ 2.89 1,986
(2.89 1,986)
$
$ 13,080,327

22.11%
City of Cupertino
Required Supplementary · Information (Unaudited)
Schedule of Changes in the Net OPEB Liability and Related Ratios For the Year Ended June 30, 2023
Last Ten Fiscal Years*
Expressed in lhousands
Single Employer Defined Benefit Other Post Employment Benefit Plan Measurement period 2022-23 2021-22
Total OPEB liability
Service cost $ 1.260 $ 1,015
Interest 1,967 1,92 1
Changes of benefit terms
Difference between expected vs actua l ex perience 4,437 Changes or assump tions (492)
Benefit payments. including refunds of employee contribu tions (1,753) ( 1.69 f) Net change in total OPEB liability 5.419 1,24 5
Total OPEB liability - beginning 29.871 28.626
Total OPEB liability - ending (a) $ 35,290 $ 29,871
Contributions - employer • 1.753 1.691
Net investment income 3.484 (6.568)
Benefit payments (1,753) ( 1.69 I)
Adm inistrative expense ( 11 6) ( 117)
Net change in fiduciary net position 3,368 (6,685)
Plan fiduciary net position - beginning 31,340 38.025
Plan fiduciary net position - ending (b) $ 34,708 $ 31 ,340 Net OPEB liability (asset) - ending (a-b) $ 582 $ ( 1,469) Plan fiduciary net position as a percentage 98.35% 104.92% of the total OPEB liability
Covered employee-payroll" $ 27,344 $ 24,015
Plan OPEB liability as a percentage of covered payroll 2.13% -6.12% Notes to Schedule:
* Fiscal year 20 17 was the 1st year of implementation , therefore only seven (7) years are shown. 11 2
2020 -21
$ 844
2,042
(4.6 88)
640
( 1,550)
(2,712)
3 1)38
$ 28,626
1,550

8.776
( 1,550)
( 121)

8.655
29,370
$ 38,025
$ (9,399)
132.83%
$ 23,082
-40.72%
2019-20
$ 1,009
1,985

1.412
(I , 141)
3,265
28,073
$ 3 1,338
1, 141
2 19
( 1.141 )
(67)
152

29.2 18
$ 29,370
$ 1,968

93.72%
$ 21,643

9.09%
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net OPEB Liability and Related Ratios (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years*
Expressed in thousan ds
Single Employer Defined Benefit Other Post Employment Benefit Plan Meas urement period 2018 -19
Total OPEB liability
Service cost $ 865
Interest 2,005
Changes of benefit terms
Actual vs. expected expe rience ( 1,808)
Changes of assu mptions (37)
Benefit payment s, including refunds of emp loyee contr ibutions ( 1,423) Net change in total OPEB liability (398)
Total OPEB liability - beginning 28,471
Total OPEB liability - ending (a) $ 28,073
Contributi ons - emp loye r 1,423
Net investment income 1,259
Bene fit payments ( 1,423)
Admin istrative expense (97)
Net change in fiduciary net position 1, 162
Plan fiduciary net position - beginning 28,056
Plan fiduciary net position - ending (b) $ 29,2 18
Net OPEB liability (asset) - ending (a-b) $ (I , 145)
Plan fiduciary net position as a percentage 104.08 %
of the total OPEB liability
Covered employee-payroll ' $ 20,086
Plan OPEB liability as a percentage of covered payroll -5.70% Notes to Schedule:
* Fiscal year 20 17 was the I" year of implementation , therefor e only seve n (7) yea rs are shown. 11 3
20 17- 18
$ 1.008
1,876
( 1,419)
1,465
27,006
$ 28,471
1,419
2,365
( 1,419)
(54)
2,31 1
25,745
$ 28,056
$ 415

98.54%
$ 19, 153

2.1 7%
2016-17 .
$ 908

1.781
( 1,333 )
1,356
25,650
$ 27.006
1,333

2.960
( 1,333)
(49)
2,911
22,834
$ 25,745
$ 1,261

95.33%
$ 17,255

7.3 1%
City of Cupertino
Required Supplementary Informat ion (Una udited)
Schedule of Plan Contribu tions - Other postemp loyment Benefits For the Year Ended June 30, 2023
Last Ten Fiscal Years*
Single Employer Dclined Benclit OPEB Plan
2022-23 2021-22 2020 -2 1 20 19-20 2018-19
Actua rially detem1ined contribution $ 147 $ 129 $ 124 $ 1,40 1 $ 1,300 $ Contrib utions in relation lo the actuarially
determ ined contribut ion 1,753 1,691 1,550 1, 141 1,423 Contribution deficiency (excess) $ ( 1,606) $ ( 1.562) $ (1,426) $ 260 $ ( 123) $ Cove red payroll $ 27,344 $ 24,0 15 $ 23,082 $ 21,643 $ 20,086 $ Contrib utions as a perce ntage of covered
payroll -6.41% -7.04% -6.72% -5.27% -7.08%
• - Fiscal year 20 I 7 was the I st year of implemen tation, 'therefore only seven (7) years are shown .

Notes to Schedule:

Valuation Date 7/ 1/20 23
2017-18 20 16-17
1,362 $ 1, 117
1,419 1,333
(57) $ (216)
19, 153 $ 17,255
-7.41 % -7.73%
Timing
Actuaria lly detenni ned contribut ions are calculated based on the most recently performed actua rial valuation , wh ich for the fiscal year end 2023, was the 7/ 1/2023
Methods and assumptions used to determine cont ribution rates:

Actuarial cost method
Amortizat ion method
Asset valuation method
Discoun t rate
Amortization growth rate
Ultimate rate of medical inflation
Salary increases
Mortality
Entry Age
Leve l Percent of Pay. Closed , 5.5 year s as of7/ 1/2023 Market value of assets

6.50%

2.75%

4.250%

2.75% plus merit component based on years of serv ice
CalPERS mortality assumption s
11 4
115

SUPPLEMENTARY

INFORMATION
911
'>[IIIJ/q ljiJ/ llllJIIO!J lliJ/ll! 1181Jd S!l/1
City of Cupertino
Major Governmental Funds
Other than the General Fund and Special Revenue Funds
This section is provided for the presentation of budget-to-actual schedules for the Public Facilities Corporation Debt Service Fund and the Capital Improvement Projects Capital Projects Fund. Although the funds are considered to be major government funds. budget- to­ actual information in the required supplementary information is limited to the General Fund and major Special Revenue Funds. All other major governmental fund schedules with such information are therefore included as Supplemental Information.

Public Facilities Corporation Debt Service Fund - This fund accounts for the payments of principal and interest on certificates of participation issued to provide for the financing of the Civic Center. Library. Wilson Park, Memorial Park. and other City facilities.

Capital l111prove111e11t Projects Capital Projects Fund - This fund accounts for activities related to the acquisition or construction of major capital facilities.
117
811
·JjtW/q I/ii/ rlif tJI/O//ll il/11/ i1811d S/1/1
City of Cupertino
Schedu le of Revenues, Exp~nditures, and Changes in Fund Balance - Budget and Actual Public Facilities Corporation Debt Service Fund
For the Year Ended June 30, 2023
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property $ $ $ (5, I 00) $ (5.100)
Total revenues (5,1 00) (5.100)
EXPENDITURES:

Current:

Administration 1,500 ( 1.500)
Debt service:

Princ ipal 1.955,000 1,955,000 1,955,000
Interest and fiscal charges 720,800 720.800 720,800
Total expenditures 2,675.800 2,675.800 2.677,300 ( 1,500)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (2.675.800) (2,675, 800) (2,682,400) (6,600) OTHER FINANCIN SOURCES:

Transfers in 2,675,800 2.675,800 2,675.800
Total other financing sources 2,675.800 2,675.800 2,675,800 NET CHANGE IN FUND BALANCE $ $ (6.600) $ (6.600)
FUND BALANCE:

Beginning of year 8.350
End of year $ 1,750
119
City of Cupertino
Schedule of Revenues, Expenditures , and Changes in Fund Balance - Budget and Actual Capital Improvement Projects Capital Projects Fund
For the Year End_ed_ June 30, 2023
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property $ $ $ (326.69 1) $ (326.69 1) I ntergovemmental 5.320.973 515.8 14 (4,805 . I 59)
Charges for services 51 ,675 51.675
Other revenue 6 10.93 1 56,522 (554.409)
Total revenues 5.931.904 297,320 (5.634. 584)
EXPENDITURES:

Capital outlay 3,6 10,000 5.83 1,8 I 8 4,4 17.593 1,414,225 TOTAL EXPENDITURES 3,610,000 5,831,818 4.417.593 1,414,225

EXCESS OF REVENUES OVER
EXPENDITURES (3,6 10,000) 100.086 (4. 120,273) (4,220,359) OTHER FINANCING SOURCES (USES):

Transfers in 2,500.000 6.454.3 11 4,788.757 ( 1.665.554) Transfers out (23.600) (2,489, 154) (823,600) 1,665,554 Total other financing sources (uses) 2.476 ,400 3,965, 157 3,965. 157 NET CHANGE IN FUND BALANCE $ ( 1.133.600) $ 4.065.243 ( 155, 116) $ (4,220,359) FUND BALANCE:

Beginning of year 34,922.3 10
End of year $ 34,767, 194
120

NONMAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS
All funds not considered as major ftmds on the Fund Financial Statements are consolidated in one column entitled "Other Governmental Funds." These non-major funds are identified and included in this supplementary section and includes the City's Special Revenue Funds and Capital Project Funds.

The Special Revenue Funds are used to account . for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes.

Storm Drain Improvement - This fund accounts for the construction and maintenance of storm drain facilities including drainage and sanitary sewer facilities. Revenues were collected from developers as a result of connections to the storm drainage sewer system.

Park Dedication - This fund accounts for the activity granted by the business and professions code of the State of California in accordance with the open space and conservation element of the City's General Plan. Revenues of this fund are restricted for the acquisition, improvement, expansion and implementation of the City's parks and recreation facilities.

Environmental Management I Clean Creeks - This fund accounts for all activities related to operating the non-point source pollution program. A parcel tax provides revenues.

Traffic Impact - This fund accounts for development impact fees and related that ensure that new development and redevelopment projects pay their "fair share" to mitigate traffic impacts.

CAPITAL PROJECTS FUNDS
Capital Projects Funds account for the financial resources committed to the construction or improvement of major facilities.

Stevens Creek Corridor Park Capital Projects Fund - This fund accounts for the design and construction of the Stevens Creek Corridor Park projects.
121
ASSETS
Cash and investments
Accounts receivable
Interest receivable
Total assets

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accruals
Total liabilities
Fund balances:

Restricted
Assigned
Total fund balances
Total liabilities and fund balances
City of Cupertino
Combining -Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
Special Revenue Fund s
Storm Environm ental
Drain Park Management/
~ovemen t Dedicat ion Clean Creeks
$ 3.985.84 1 $ 18,778.647 $ 1.227.519
15, 134

14.071 66,271 4, 171

3.999.912 18.844.9 18 1.246,8 2_±_
6,240 81,186 26,690
6,240 81, 186 26.690

3.993 ,672 18,763,732 1.220, 134
3,993,672 I 8,763 ,732 1,220, 134
$ 3.999.9 12 $ __J_8_Jl_44. 9 18 $ 1.246.824
122
Traffic
Impact
$ 767,399
2,708
770,107
770.107
770, 107
_j_ 770.107
ASSETS
Cash and investments
Acco unts rece ivab le
Interest rece ivable
Total assets
City of Cupertino
Combining Balanc~ Sheet (Continued)
. Non major Governmental Funds
June 30, 2023

LIABILITIES AND FUND BALANCES
Liabilities:

Accoun ts payable and accruals
Total liabilities
Fund balances:

Restricted
Assigned
Total fund balances
Total liabilities and fund balances
123
• Cap ital Projects
Fund
$
$
Stevens Creek
Corridor Park
157,343
157.343
157.343
157,343
157.343
Total Nonmajor
Governmental
Fund s
$
$

24.916,749
15, 134
87,221

25.0 I 9. 104
114, 116
114. 116

24.747,645
157.343

24.904.988
25,0 19.104
City of Cupertino
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Specia l Revenue Funds
Storm Environmental
Drain Park Management/ .
~ovement Dedication Clea n Creeks
Reve nues:

Taxes $ 73,912 $ 646,767 $ $
Use of money and property 2 1,801 277.663 4.476
Charges for services 4,810 1.498,017
Fines and forfeitures 23,37 1 -
Tota l revenues 95,713 929,240 1,525.864
Expenditures:

Current:

Public works 1,6 15.379
Capital outla y 135,840 1,757,252
Total expenditures 135,840 1,757,252_ 1.615,379
Revenues over (under)
expenditures (40.127) (828,0 12) (89,515)
Other finan cing source s (uses):

Transfers out ( 1.7 I I. 140)
Total other _finan cing sources (uses) ----
(1.7 11.140)
Net Change in Fund Balances (40, 127) (2,539, 152) (89,5 15) Fund balances:

Beginning of year 4,033,799 21,302.884 1,309,649
End of year $ 3.993.672 $ 18,763,732 _J_ 1.220. 134 $
124
Traffic
Impact
11,710

38.200
49,9 10

49.9 10 .
49,9 10
720, 197
770.107
City of Cupertino
Combining Statement of Revenues, Expe nditures, and Changes in Fund Balance (Con tinued) Nonmajor Governmental Funds
Revenue s:

Taxes
Use of mone y and property
Charges for services
Fines and forfeitures
Total revenues
Expenditure s:

Current:

Publ ic works
Capita l out lay
Total expenditures
Revenues over (under)
expenditure s
Other financing sources (uses):

Transfer s out
Tota l other finan cing source s (uses)
Net Change in Fund Balances
Fund balance s:

Beginning of year
End o f year
For the Year Ended June 30, 2023
125
Capital Projects
$
$
Fund
Stevens Creek
Corridor Park
$
(803)
(803)
8,433

8.433
(9.236)
(9.236 )
Total Nonmajor
Governmental
Funds
720,679
3 14,847
1,54 1,027

23.37 1
2,599,924
1,615.379
1,901 ,525
3,5 16,904
(916.980)
(1 ,71 1.140)
( 1,711, 140)
(7,628, 120)
166,579 27.533. 108
157,343 =$ = ===24=.9=0=4.=9=88=
City of Cupertino
Schedule of Revenues , Expenditures, and Changes in Fund Balance - Budget and Actual Storm Drain Improvement Special Revenue Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes $ 201.229 $ 201.229 $ 73,9 12 $ ( 127.317)
Use of money and property 2 1,801 21 ,801
Tota I revenues 201.229 201,229 95.7 13 ( 105,516)
Expenditures:

Capital outlay 135,840 135,840
Total expend itures 135.840 135,840
Net Change in Fund Balance $ 201.229 $ 65,389 (40. 127) $ (105,516) Fund balance:

Beginning of year 4,033,799
End of year $ 3,993.672
126
City of Cupertino
Schedule of Revenues, Ex penditures, and Changes in Fund Ba.lance - Budget and Actual Park Dedication Special Revenue Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes $ $ $ 646,767 $ 646,767
Use of money and property 277.663 277,663
Charges for services 4,810 4,810
Total Revenues 929,240 929,240
Expenditures:

Capital outlay 1.832,007 1,757,252 74,755
Total Expenditu res 1.832.007 1,757,252 74,755

REVENUE OVER
(UNDER) EXP END ITURES (1,832,007 ) (828,0 12) 1,003,995 Other Financing Sources (Uses):

Transfers out ( 1.650,000) (1,7 11, 140) (6 1, 140)
Total Other Financing Sources (Uses) ( 1.650.000) (1 ,71 1,140) (6 1, 140) NET CHANGE IN FUND BALAN CE $ $ (3,482,007) (2,539, 152) $ 942,855 FUND BALANCE:

Beginning of Year 2 1,302,884
End of Year $ 18,763.732
127
City of Cupertino
Schedule of Revenues, Expenditu res, and Chang es in Fund Balanc e - Budget and Actual Environmental Man agement/C lean Creeks Special Revenue Fund Revenue s:

Use of money and property
Charges for services
Fines and forfeitures
Total Revenue s
Ex pend itures:

Current:

Public works
Total Expenditure s

NET CHANGE IN FUND BALANCE
FUND BALANCE:

Beginning of Year
End of Year
For the Year Ended June 30, 2023
Budfeted Amounts
Orifinal Final
$ 2,248 $ 2,248
1,510.555 1,510.555
68,669 68,669
1,512,803 1,512.803
2,067,399 1,724,715
2,067,399 1,724.715
$ (554.596) $ (211,912)
128
$
1 Actual
Amounts

4.476

1.498.017
23,371
1,525,864

1.615,379
1,615,379
(89,515)
1,309,649

1.220,134
Variance with
Final Budget
Positive
(Negative)
$ 2.228
( 12.538)
(45,298)
_______J__!_Q_,310)
109,336
I 09,336
$ 122,397
City of Cupertino
Schedule of Revenues , Expenditures , and Changes in Fund Balance - Budget and Actual Traffic Impact Special Revenue Fund
Revenues:

Use of money and property
Charges for services
Total Revenues

NET CHANGEIN FUNDBALANCE
FUND BALANCE:

Beginning of Year
End of Year
For the Year Ended June 30, 2023
Budgeted Amounts
Original Final
$ $
$ $
129
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 11,710 $ 11,71 0
38,200 38,200
49,910 49,9 10

49.9 10 $ 49,9 10
720, 197
$ 770.107
City of Cupertino
Schedule of.Revenues, Expenditures , and Changes in Fund Balance - Budget and Actual Stevens Creek Corridor Park Capital Projects Fund
Revenue s:

Use of money and property
Total Revenu es
Expenditures:

Capital outlay
Total Expenditure s

NET CHANGE INFUNDBALANCE
FUND BALANCE:

Beginning of Year
End of Year
For the Year Ended June 30, 2023
Budgeted Amounts
Original Final
$ $
8,543
8,543
$ $ (8,543)
130
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ (803) $ (803)
(803) (803)

8.433 110
8,433 11 0
(9,236) $ (693)
166,579
$ 157.343

NONMAJOR ENTERPRISE FUND
Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise.

The intent of the City is that the cost of providing goods and services be financed primarily through user charges.

The City has identified the fund below as a nonmajor proprietary fund for fiscal 2022-23.

Blackberry Farm Fund - This fund accounts for activities related to operating the City-owned golf course.

L3I
This page i11te11tio11al(v left blank.
132
ASSETS
Current assets:

Cash and investments
Accounts receivable
Interest receivable
Total current asse ts
Noncurrcnt asse ts:

Cap ital assets:

Nondeprec iable
Depreci able, net
To tal capi tal assets
Total noncurrent assets
Total assets
City of Cupertino
Combining Statement of Net Position
Nonmajor Enterpri se Fund
June 30, 2023

DEFERRED OUTFLO WS OF RESOURCES
Relate d to pensions
Related to other postemp loyment benefit
Total deferred outnow s of resource s

LIABI LITIES
Current Liabili ties:

Accou nts payab le and accruals
Compe nsated absences , cur rent port ion
Unearned reven ue
Total current liabilitie s
Noncurrent liabiliti es:

Compe nsated abse nces
Net pension liabi lity
Net other postemp loymen t benefit liability
Tota l non current liabilitie s
Total liabilities
DEFERRED INFLO\V OF RESOURCES
Related to pensions
Related to other postemploymen t benefit
Total deferred inflows of reso urces
NET POSITI ON:

Net inves tment in capital asset s
Unres tric ted
. Total net position
l3 3
$
$ .

Blackberry
Farm
896,94 1
1,829
3, 136
90 1,906
137,343
18,042
155,385
155,385
1,057,29 1
IO 1.506
I 8.479
11 9,985

18.976
458
92,223
111.657
9, 157
3 I 2,709
1,743
323,609
435 ,266
769
6,84 1
7,610
155,385
579 ,0 15
734 ,400
City of Cupertino
Combining Statement of Revenues, Expenses, and Changes in Net Position Nonmajor Enterp rise Fund
For the Year Ended Jun e 30, 2023
OPERA TING REVENUES:

Charges for services
Others
Total operating revenues
OPERATING EXPENSES:

Salaries and benefits
Materia ls and supplies
Contractual service s
Depreciation
Total operating expenses

OPERATING INCOME (LOSS)
NONOPERATING REVENUES:

Investmen t income
Total nonoperating revenues

INCOME (LOSS) BEFORE TRANSFERS
TRANSFF:RS:
i·ransfers in
Total transfers

CHANGES IN NET POSITION
NET POSITION:

Beginning of year
End of yea r
134
Blackberry
Farm
$ 570.038
46,423
616,461
233.0 13
208,348
354,975
2,832
799,168
(182,707)
37,286
37,286
( 145.421)
23,600

23.600
( 121,82 1)
856,221
$ 734,~00
City of Cupertino
Com bining Statement of Cash Flows
Nonmajor Enterprise Fund
For the Year Ended June 30, 2023

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers
Cash paid to suppliers for goo ds and serv ices
Cash paid to employees for services
Net cash (used in) operating activities

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash received from other funds
Net cash provided by noncapital financing activities
CASH FLOWS FROi\11 CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acqu isition or cap ital assets
Net cash (used in) capital and related
financing activities
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received
Net cash provided by investing activities
Net change in cash and cash equivalents

RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO STATEMENTOF NET POSITION:

Beginni ng of year
End of year
CASH AND CASH EQUlVALE NTS:

Cash and investments
Total cash and cash equivalents
Reconciliation of Operating Income (Loss)
to Net Cash (used in) Operating Activities:

Operating income (loss)
Adjustments to reconcile opera ting income (loss)
to net cash provided by (used in) operating activities:

Depreciat ion
Changes in assets and liab ilities:
(lncrease) /decrea se in accou nts receivables
(lncrease)/decrease in deferred outflows of resou rces pens ion related (lncrease)/dec rease in deferred outflows of resou rces O PEB related lncrease /(decrease) in accoun ts payable
Increase/( decrease) in unearned revenue
Increase/( decrease) in compensa ted absences
lncrease/(decrease) in net pension liabilit y
lncrease/(decrease) in O PEB
lncrease/(decrease) in deferred inflows of resour ces pens io n related lncrease/( decrease) in deferr ed inflows of resources OPEB related Net cash (used in) operating activities
135
$
$
$
$
$
$
Blackber ry
Farm
612,394
(582,924)
(245.3 11)
(2 I 5,84 1)

23.600

23.600
( 137,343)
( 137.343)

34. 150
34, 150
(295,434)
I, 192,375
896.941
896,941
896.941
( 182.707)
2,832
( 1,659)
(42,8 I 0)
(5,380)
( 19,60 1)
(2.408)
(9.290)
62,474
1,743
(25.876)
6,84 1
(2 15.84 1)
9£1
')fl/U/q I/ii/ lli/VII0 //1/il/ll! nflud S/1{.L
·1NT-ERNAL SERVICE FUNDS
These funds account for goods or services provided to other departments of the City where the intent of the City is that the costs of these goods or services are to be recovered through interdepartmental charges at the time that the goods are delivered or the services rendered to those departments.

The concept of major funds does not extend to internal service funds because they do not do business with outside parties. For the Statement of Activities, the net revenues or expenses of each internal service fund are eliminated by netting them against the operations of the City departments that generated them. The remaining balance sheet items are consolidated with these same funds in the Statement of Net Position. However, internal service funds are still presented separately in the Fund financial statements.

Information Technology - Accounts for the activities related to the maintenance and replacement of the City's technology infrastructure.

Workers' Compensation - This fund is used to account for all expenses relating to workers' compensation (i.e., injury claims, insurance premiums, etc.). The costs are recovered through an annual "user fee" which is charged to all departments/funds that have employees.

Equipment Revolving - Accounts for the activities related to the maintenance and replacement of the City's vehicle fleet and other equipment.

Compensated Absences and long-Term Disability - Accounts for accrued leave payouts and the City's long term disability insurance program.

Retiree Medical - Accounts for funds set-aside for other post-employment retirement benefits. 137
ASSETS
Current assets:

Cash and investment s
Accounts receivable
Interest receivable
Total cur rent assets
No ncurrent assets:

Capital assets:

Nondeprec iable
Depreciable and amortizable. net
Total capital assets
Tota l noncurre nt assets
Total assets
DEF ERRED INFLO \V OF RESOURCES
Related to pensions
City of Cupertino
Combining Statement of Net Position
Internal Service Funds
June 30, 2023
Information
Technology
$ 3.437.1 13
I 1,734

3.448 ,847
764,856
764,856
764,856
4,213,703
935,304
Related to other postemployment benefit liability 311.746 Tota l deferred outflows of reso urces 1.247.050

LIABILIT IES
Current Liabilities :

Accounts payable and accruals 7 1.950
Accrued payroll and benefits
Due to other funds
Compensated absences 32,052
Claims payable
Subscription liabil ities 125.990
Tota l current liabilitie s 229,992
i\o ncurrent liabilitie s:

Compensated absences 292.942
Claims payable
Subscription liabilities 72,504
Net pension liability 2,88 1,390
Net other postemployment benefit liability 29.406
Tota l noncurrent liab ilities 3,276,242
Tota l liabilitie s 3,506.2 34

DEFERRED INFLO W OF RESOURCES
Related to pensions 7.088
Relatecl to other postemployment benefit liability 115.402 Tota l d~ferred inflows of reso urces 122,490
NET POSITION:

Net investment in capital assets 566.362
Restricted 166.938
Unrestricted 1,098,729
Total net position $ 1,832,029
138
Workers' Equipment
Compensat ion Revo lvi.ng
$ 3.841.250 $ 94 1, 189
13,429 4,870
3,854_,_679 946.059
11 9,408
2,025,120
2, 144,528
2, 144,528

3.854,672_ 3,090 ,587
23,564 253. 765

3.328 95,570
26,892 349,335

78.527
72 1,285 5,017
292,000
293.285 83,616
11 ,742 45,852

1.362,000

72.593 781,773
3 14 9,015
1,446 ,649 836,640
1,739,934 920,256
179 1,923
1,232 35,378
1,41 1 37,30 1
2, 144,528

1.782 51, 177
2, 138,444 286,660
$ 2, 140,226 $ 2,482,365
City of Cupertino
Combining Statement of Net Position (Continued)
Interna l Service Funds
June 30, 2023
Compensa ted
Absences and
Long- Term Retiree
Disabil ity Medical Tota l

ASS ETS
Current assets:

Cash and investment s $ 709.564 $ 9,898 $ 8,939,0 14
Accounts rece ivab le 1,385,759 1,385,759
Interest receivable 2,761 32,794
Total current assets 712.325 1.395,657 I 0,357,567
Nonc urren t asse ts:

Capital assets:

Nondepreciable 119.408
Deprecia ble and amort izab le, net 2,789 ,976
Total capital assets 2,909.384
Tota l noncurrent assets 2,909,384
Total assets 712.325 1,395.657 13.266,95 1

DEFERRED INFLOW OF RESOURCES
Related to pensions 1.2 12,633
Related to other postemp loyme nt benefit liability 4 10,644 Total deferred outflows of resources 1,623,277
• LIABILITIES
Current Liabilities:

Accou nts payable and accruals 150,477
Accrued payroll and benefits 72
Due to other funds 1,395.657 1,395,657
Compe nsated absences 38,354
C laims payable 292,000
Subscr iption liabilities 125,990
Tota l curren t liabi lities 1,395 ,657 2,002,550
Noncurrcnt liabi lities:

Compensated absences 350,536
Claims payable 1,362 ,000
Subscription liabilities 72,504
Net pension liability 3,735,756
Net other postemployment benefit liabili ty 38,735
Tota l noncurrent liabilitie s 5,559,531
Total liabi lities 1,395,657 7,562,081

DEFERRE D INFLOW O F RESO URCES
Re lated to pensions 9, 190
Related to other postemployment benefit liabi lity 152,0 12 Total deferred in nows of resources 161,202
NET POSIT ION:

Net investment in capital assets 2,7 10,890
Restr icted 2 19,897
Unrestricte d 7 12,325 4,236, 158
Total net position $ 7 12,325 $ $ 7, 166,945
139
City of Cupertino
Combining Statement of Revenues, Expenses, and Changes in Net Position Interna l Service Funds
For the Year Ended June 30, 2023
Information Workers '
Technolog y Compensa tion
OPERATING REVENUES:

Charges for service s $ 2,485,218 $ 436,462
Other
Total operating revenues 2,485.218 436,462
OPERATING EXPENSES:

Salaries and benefits 2,309.184 42,636
Materials and supplies 867,945 28,369
Contract ual serv ices 530.557
Insurance and cla ims and premium 470.630
Depreciat ion and amo rtization 327,470
Total operating expenses 4,035,156 54 1,635
OPERATING INCOME (LOSS) (1 ,549,938) ( I 05, 173)
NONO PERA TING REVENUES (EXPENSES):

Investment income (30.8 19) 18,646
Gain on sale of capital assets
Interest expen se (86 1)
Total nonoperating revenues (3 1,680) _l_ll,_646
INCOME (LOSS) BEFORE TRANSFERS ( 1,58 1,618) (86,527)
TRANSFERS:

Transfers in 2,537 ,500
Total transfers 2,537.500
CHANGES IN NET POSITION 955.882 (86,527)
NET POSITION:

Beginn ing of year 876, 147 2,226,753
End of year $ 1,832 ,029 $ 2, I 40,2_2Q_
140
Equipment
Revol ving
$ 1.568,633
1,568,633
556,909
357,803
86,875
577, 140
1,578,727
( I 0,094)

12.099
30, 158
42,257
32)63
32, 163
2,450,202
$ 2,482,365
City of Cupertino
Combining Statement of Reven ues, Expenses , and Changes in Net Position (Continued) Internal Service Funds
For the Year Ended June 30, 2023
Compensated
Absences and
Long-Term Retiree
Disabil ity Medical Tota l
OPERA TING REVENUES:

Charges for services $ 115,970 $ $ 4,606 ,283
Other 1,385,759 1,385,759
Total operating revenues 115,970 1,385,759 5,992.042
OPERATING EXPENSES:

Sala ries and benefits 1,380,875 4,289,604
Materials and suppl ies I 1.047 14,782 1,279,946
Contractual services 6 I 7,432
Insurance and claims and premium 616.369 1.086,999
Depreciation and amo rtization 904,6 10
Total operating expenses 627.416 1,395,657 8, 178,59 1
OPERATING INCOME (LOSS) (511 ,446) (9,898) (2.1 86,549) NONOPERATING REVENUES (EXPENSES):

Investment income 4,435 (26,554) (22. 193)
Gain on sale of capital assets 30.15 8
Interest expense (86 1)
Total nonoperating revenues 4,435 (26,554) 7, 104
INCOME (LOSS) BEFORE TRANSFERS (507,0 11 ) (36,452) (2, 179,445) TRANSFERS:

Transfers in 882,000 9,898 3,429,398
Total transfers 882,000 9.898 3,429,398
CHANGES I ' ET POSITION 374.989 (26,554) 1,249,953
NET POSITION:

Beginning of year 337:336 26,554 5,916,992
End of year $ 712,325 $ $ 7, 166.945
141
City of Cupertino
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2023
In formation
Tech nology

CAS H FLOWS FROM OPERATING ACTIV ITIES
Cas h received from customers and users $ 2,485.218
Cash paid to supp liers for goods and services (1,397,669) Cash paid to employees for services ( 1.974. 702)
Cash paid for insurance cla ims
Net cash provided by (used in) operat ing activitiei (887.153)

CAS H FLOWS FROM NONCAPIT AL
FINANC ING ACTIVITIES:

Cash received (paid) from other funds 2.537.500
Net cash provided by (used in) noncapital financ ing activities 2.537.500

CAS H FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets ( 173,8 13)
Principal paid ( I 09.339)
Interest paid (86 1)
Proceeds from sale of capital assets
Net cash (used in) capita l and related
financing activities (284.013)
CASH FLOWS FROM INVEST ING ACT IV ITIES:

Interest earnings (42.553)
Net cash provided by (used in) investing activitie s (42.553) Net change in cash and cash equivalents 1,323.781
CASH AND CASH EQU IVALEN TS:

Beginning of year 2.113.3 32
End of year $ 3 437, 1 IL
Reconciliation of Operating Income (Loss) to
to Net Cas h Provided by (Used in) Operating Activities:

Operat ing income (loss) $ ( 1.549.938)
Adjustments to reconcile opera ting income (loss)
to net cash provided by (used in) operating activ ities:

Depreciation and amortization 327.470
Changes in assets and liabilities:
(Increase )/dec rease in accounts receviables
(lncrea se)/decrease in deferred outflows of resources related to pensions (55 1,497) (lncr ease)/dec rease in deferred outflows of resou rces related to O PEB (49.897 ) lncrease/(dec rease) in accounts payab le 8" .).)
lncrease/(decrease) in compensated absences 40. 142
lncrease/(dec rease) in claims payable
lncrease/(decreas e) in net pension liabilities 1,448,629 lncrease/(decrease) in other postemployment benefit liabilities 88,29 1 lncrease/(decrease) in deferred inflows of resource s related to pensions (62 1.047) lncrease/(decrea se) in deferred inflows of resources related to OP EB (20. 139) Net cash provided by (used in) operating activities $ (887 ls;D 142
Workers' Equipment
Compensa tion_ Revolving
$ 436,462 $ 1,568,633
(498,999) (413,86 3)
(42,379) (475,639 )

85.000
( 19.916) 679.13 1
(539,204)
(539.204 l
(353,980)

30.158
(323.8 22)

5.2 17 7.229

5.2 17 7.229
(14,699) ( 176,666)

3.855.949 I.I 17.855
$ 3 841 250 $ 941. 189
$ ( 105, 173) $ ( 10,094)
577, 140
(10, 154) ( 131,853)
618 ( 15.063)
30,815
616 28.2 12

85.000
23,775 337,409

1.052 30,52 1
( 15.019) ( 154,599)
(63 t l ( 13.357)
$ ( 19 916) $ 679 13 I
(Continued)
City of Cupertino
Combining Statement of Cash Flows (Continued)
Internal Serv ice Funds
For the Year Ended June 30, 2023
Compensated
Abse nces and
Long- Term Retiree
Disability Medical Total

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customer s and users $ 115,970 $ $ 4.606 .283 Cash paid to supp liers for goods and se rvices (627.4 16) ( 14,782) (2,952.729) Cash paid to employees for services ( 1,380.875) (3,873,595) Cash paid for insurance claim s 85.000
Net cash provided by (used in) operating activitiei (5 11 .446} ( 1.395.657} (?.135.041 ) CASI-I FLOWS FROM NONCAPlT AL
FINANCING ACTIVITIES:

Cas h rece ived (paid) from other fund s 882. 000 1.405.555 4.285.85 1 Net cash provided by (used in) noncapital financing activities 882.000 1.405.555 4.? 85.85 1

CASI-I FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition o r cap ital asse ts (527. 793)
Principal paid ( I 09.339)
Interest paid (86 1)
Procee ds from sale of capital assets 30. 158
Net cash (used in) capital and related
financing activities (607 .835)
CASH FLOWS FROM lNVESTING ACTIVITIES:

Interest earnings 1.674 (26.554 l (54.987)
Net cash provided by (used in) investing activities 1.674 (26.55 4) (54.987) Net change in cash and cash equivalents 372 .228 ( 16,656) 1,487,988 CASH AND CASH EQUIVALENTS:

Beginning of yea r 337.336 26.554 7.45 1.026
End of year $ 109 ~64 $ 9 898 $ 8 939 0 14
Reconciliation of Operating Income (Loss) to
to Net Cash Provided by (Used in) Operating Activities:

Operating income (loss)
Adjustments to reco ncile opera ting income (loss)
$ (5 11.446) $ (9.898) $ (2, 186.549)
to net cas h provided by ( used in) opera ting activities:

Depreciation and amortization 904,6 10
Changes in asse ts and liabilit ies:
(l ncrease)/ decre ase in acc ount s recev iab les ( 1,385,759) ( 1,385,759) (lncrease)/ decrease in de terred outflo ws of resources related to pensions (693, 504 ) (Increase)/ dec rease in de ferred outno ws of resources related to OPEB (64,342 ) lncrease/( decrease) in acco unts payab le 31.648
Increase/( decrease) in compensated absences 68,970
lncrease/( decrease) in claims payab le 85,000
Increase/( decrease) in net pension liabilities 1,809,8 13 Increase/( decrease) in o ther postemployme nt benefit liab ilities 11 9.864 (l ncrease)/decrease in defe rred in nows o f resources related to pensions (790,66 5) lncrease/( decrease) in defe rred inflows of resou rces related to O PEB (34. 127) Net ~ash provided by (used in) operating activities $ (5 11 446 ) $ ( I 39 j 6j7l $ (? I 1j,04 I l (Co ncluded )
143
This page i11te11tio11al~v left blank.
144

STATISTICAL SECTION
145
91'1
)fllll/q Jfil/ llj/lJII O/Jllil/11/ ilfill d S/1/.1
City of Cupertino
Description of Statistical Section Contents
June 30, 2023
This part of the City of Cupertino's annual comprehensive financial report presents detailed information as a . context for understanding what the information in the financial · statements, note disclosures, and required supplementary information say about the government's overa ll financial health.

Contents:

Financial Trends - These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.

Revenue Capacity - These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax.

Debt Capacity - These schedules present information to help the reader assess the affordability of the City's current level of outstanding debt and the City's ability to issue additional debt in the future.

Demographic and Economic Information - These schedules offer demographics and economic indicators to help the reader understand the environment within which the City's financial activities take place.

Operating Information - These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report related to the services the City provides and activities it performs.
147
Pages
148- 157
159-163
164-167
168-169
170-175
Government activ ities:

Net investment in cap ital asset s
Restr icted
Unrestricted
Total governmental activitie s net position
Business -type activities:

Net investment in capital asset s
Restric ted
Unrestricted
Total business-type activit ies net posit ion
Primary government:

Net investment in cap ital assets
Restricted
Unres tricted
Total primary governme nt net position
City of Cupertino
Net Position by Component
Last Ten Fiscal Years
(accrual basis of account ing)
2014 2015
$ 122,08 1.223 $ 131.425.677

24.232.367 38.327.705
63, 150.548 51.003.950
$ 209,464 . I 38 _ $ 220. 757,332
$ 1, 110,414 $ 2.079.56 1
10,292,210 6.604.578
$ 11,402, 624 $ 8,684, 139
$ 123, 19 1.637 $ I 33,505,238
24,232,367 38,327,705
73,442,758 57,608,528
$ 220,866 ,762 $229, 44 1,471
Source: Department of Administrative Services, City of Cupertino. 148
Fiscal Year
2016 2017 2018
$ 148, 168.074 $ 153.239,534 $ 167,606.366
34,86 1,807 34,991,692 32,073, 195
51, 164,063 59,385,309 50,457,871
$ 23_4, 193,944 $ 247,6 16,535 $250 , 137,432
$ 1,708,183 $ 1.972, 169 $ 1,597.700

7.375,444 9,092,584 8.051,015
$ 9.083,627 $ 11,064,753 . ~ 648. 7 15
$ 149,876,257 $ 155.211.703 $ 169,204.066
34,86 1,807 34,99 1.692 32,073, 195
58,539,507 68,477,893 58,508,886
$ 243_,277,57 1 $ 258,681,288 $ 259.786, 147
City of Cupertino
Net Position by Component (Continu ed)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2019 2020 2021
Government activities:

Net investment in cap ital assets $ 170,973.897 $177 , 128, 134 $ 186,503 , 116 Restricted 45.405,508 48,005.800 53.71 1,040
Unrestricted 5 1, 190,0 17 66,493,336 83.458.299
Total governme ntal activities net position $ 267.569,422 $29 1,627,270 $ 323,672,455 Business-type activities:

Net investment in capital assets $ 1,318,744 $ 1, 118,882 $ 2.090.530 Restricted
Unrestricted 6,737,758 8, 134,944 9,374, 129
Total business -type activities net position $ 8,056,502 $ 9,253,826 $ 11 ,464,659 Primary government:

Net investment in cap ital assets $ 172,292,641 $ 178,247,016 $ 188,593.646 Restricted 45,405 ,508 48,005,800 53,7 11 ,040
Unrestricted 57,927,775 74,628,280 92,832,428
Tota l prima_ry government net position $ 275,625 ,924 $ 300,88 1,096 $ 335, 137, 114 * 2022 restricted and unrestricted net positions are restated as result ofa prior period adjustment Source: Deparhnent of Administrati ve Serv ices, City of Cupertino. 149
2022* 2023
$ I 96,9 I 5,823 $ 198,450,44 1
69,354,2 17 69, 129.277
93,6 13,909 120,529.242
$ 359,883,949 $ 388, I 08,960
$ 2,089 ,569 $ 2.1 09,592
166.607 166,689
8,422 ,930 8,148,256
$ 10,679, 106 $ I 0,424,537
$ 199,005,392 $ 200,560 ,033
69,520,824 69,295,966
I 02,036,839 128,677 ,498
$ 370,563,055 $ 398,533,497
City of Cupertino
Changes in Net Position - Expenses and Program Revenues Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Vear
2014 2015 2016 2017 2018
Expenses:

Governmental Activities:

Admini stratio n $ 4,529,539 $ 3,286 ,919 $ 3.7 10.388 $ 2.873.744 $ 5.6 12.733 Law enforcement 10.062. 192 I 0. 705,328 11.3 16.271 12,528,328 12,674 .042 Innovation and technology 512,895 649,442 575,260 1.884, 165 3,244 ,846 Admini strative services 2,662 ,008 4,300.336 2.994 ,6 11 5,898.479 4,415 ,647 Recreation services 4.866,974 5,365.282 5,758, I 94 I 0,65 1,557 9,352 ,55 1 Community deve lopment 9, 108.949 5,976,797 6,259,734 13,775,59 1 16.789,351 Public works 2 1.1 43,33 I 27,893.36 I 3 1,3 13,396 32,49 1.244 28,995,382 Interest on long-tern1 debt 1, 130,428 1, 120, 138 1,077,538 1,03 5,738 993,038 Total gove rnmental activities expen ses 54,0 16,3 16 59,297,603 632005,392 8 1, 138,846_ 82.077.590 Business-type activ ities:

Resources recovery $ 2, 159,047 $ 2.548,46 1 $ 2.997,200 $ 2,99 1, 177 $ 2,594,5 11 Blackberry farm 57 1,000 547, I 85 576, 177 597,406 656, 11 2 Cupe rtino sports cente r 2,22 1.703 2,269,420 2,299,2 10 2,159,243 2,633 ,748 Recreation programs 2,730,765 2,342,457 3, 136,01 I 2,35 1,501 3,232,593 Total business-type activities expenses 7,682,515 7,707,523 9.008 ,598 8,099,327 9, 116.964 Tota l primary government expenses $ 6 I ,698,83 1 ....1.._g_005, 126 $ 72,0 13,990 $ 89,238, 173 $ 9 1, 194,554 Program revenues:

Governmental activities:

Charges for services :

Administra tion $ 1.087.393 $ 322,534 $ 369,069 $ 3,992,716 $ 5,062.988 Law enforcement 725,63 1 590,378 664,483 603, 194 732,544 Innovation and technolo gy 41.352 41 ,352
Admini strative services 481,616 359, 148 3.565.627 2,635,885 Recreation services 955 ,08 I 1.798. 134 1,42 1, 185 2,0 16, 159 1,589. I 34 Com munity development 6,649 ,292 8,5 11.745 10,534,457 10.902.822 8,598.935 Public works 7,9 I 6,897 2,869,357 6.358,870 6,873,487 4,720.646 Operating grants and co ntribution s I 0,000, 13 1 6.002,6 17 1,851,282 2,3 13,632 4,8 I 9,696 Capital grants and contribution s 569,159 4.022 , 190 362,491 245,288 27 1,587 Tota l governmental activitie s program revenues 27,903,584 24,639,923 2 1,962,337 30_,5_ 12,925 28,43 1,4 15 Business-type activities:

Charges for services:

Resource s recovery $ 2,074 ,25 1 $ 2.59 1,276 $ 2.664 ,888 $ 2,792. I 90 $ 2,559,862 Blackbe rry farm 302,472 388,091 334,529 325,224 345,667 Cupertino sports center 2,188, 127 2, 152.498 2.224, 146 2,238 ,023 2,403 ,665 Recreatio n programs 2,480 ,209 2,532.800 2.466,336 2,778,588 2,516,678 Total business-type activ ities program revenues 7,045,059 _ _7.664,665 __ 7,689 ,899 8, 134,025 7.825,872 Tota l primary govern ment program revenues $ 34,948 ,643 $ 32,304,588 $ 29,652,236 $ 38,646,950 $ 36,257 ,287 (conlinued)
Source: Department of Administrative Services, City of Cupertino. 150
City of Cupertino
Changes in Net Position - Expenses and Program Reve nues (Continued) Last Ten Fiscal Years
(accrual basis of accounting)
2019 2020 2021 2022 2023
Expenses:

Governmental Activit ies:

Administration $ 6,849,046 $ 7.974.520 $ 3,637,467 $ 7,293,244 $ 8,830, 127 Law enforcemen t 13,381,1 13 14,698, 130 15,211,646 16, 100,903 15, 716,30 I Innovation and technolog y 3,210,343 3,637,354 1,72 I ,729 2,004,515 1,950,7 I 8 Administrative services 4.290,818 5, 175,596 5,358, 183 5,363,745 6,363,343 Recreation services 7,389,915 8,763, I 94 I, 182,662 3,976,793 6,020,526 Community development I 0,470,973 10.286,317 11,495,788 12,209.547 12,463.257 Public works 31,870, 165 33,339, 191 4 1,870,240 35.653 ,588 38,696,234 I nteresl on long-term debt 949,438 882,837 397,682 636,960 369,502 Total governmental activities expense s 78,411,8 11 84.757, 139 80,875,397 83,239,295 90,410,008 Business-type activities:

Resources recovery $ 1,735,885 $ 2,213,404 $ 1,670.261 $ 1,837,78 1 2,038,3 13 Blackberry farm 645.469 663,663 535.274 655, 184 799, 168 Cupertino sports center 3.036,037 2,883.903 2, 182,900 3,396, 146 3,456,539 Recreation programs 2,923.336 3,14 1,225 1, 117,244 1,6 17,717 1,661,686 Total business-type activities expenses 8,340,727 8.902, 195 5,505,679 7,506,828 7,955,706 Total primary government expenses $ 86,752,538 $ 93,659.334 $ 86.381 ,076 $ 90,746 , 123 $ 98.365,7 14 Program revenu es:

Governmental activities:

Charges for services:

Administration $ 1,3 19,395 $ 2,091,8 11 $ 2,387,4 12 $ 2,551,205 $ 3.098.916 Law enforceme nt 889,923 I , I 02,888 550,051 940,797 6 12,993 Innovat ion and techno logy
Administrat ive services 3, 11 3,731 3,889, 180 5,232,679 7,457,032 5,419,347 Recreation service s 1,563,262 1,309,906 264,426 653,994 621,587 Comm unity develo pment 7,470,690 5,859,847 5. 736,587 5.768,850 5,361,837 Public works 4,504, 104 5,657.315 3,966,206 4,0 15, 183 3,290,506 Operating grants and contribut ions 2,557,470 5.794,443 5,998,209 7,60 1,210 10,88 1,438 Capita l grants and contr ibutions 1,082,243 1,046.756 1.792.376 1,282,617 1,593,9 10 Tota l governmental activities program revenues 22,500,8 18 26,752, 146 25,927,946 30,270,888 30,880,534 Business-type activities:

Charges for service s:

Resources recovery $ 1,750,279 $ 1,821,677 $ 1,8 19,861 $ 1,545,683 $ 1,772,252 Blackberry farm 3 16.615 338,212 6 10,603 602.778 616,46 1 Cupertino sports center 2,349,468 2,365,667 1,8 10, 194 2,796,329 3, 117,580 Recreation (Jrograms 1,986,78 1 1,588,576 590,87 1 1,294,128 1,742,442 Total business-type activities program revenues 6,403, 143 6, 114, 132 4.83 1,529 6,238 ,918 7,248,735 Total primary government program revenues $ 28,903,96 1 $ 32,866,278 $ 30,759,475 $ 36,509,806 $ 38,129,269 Source: Department of Administr ative Services, C ity of Cupertino . 151
City of Cupertino
Changes in Net Position - Expenses and Program Revenues (Con tinued) Last Ten Fisca l Years
(accrual basis o_f'accounting)
Fisca l Year
2014 2015 2016 201 7 2018
Net revenu es (expenses):

Governmental activitie s $ (26, 112,732) $ (34,657 ,680) $ (41.043. 055) $ (50.625,92 1) $ (53,646 , 175) Business -type activities (637.456) (42,858) ( 1.318,699) 34,698 ( 1,29 1,092) Total net revenues (expe nses) $ (26,750, 188) $ (34,]00,538) $ (42.36 I ,754) $ (50,591,223) $ (54.937 ,267) Genera l revenues and Tran sfers
Governmental activ ities:

Taxes:

Property taxes $ 9.169, 183 $ 11,864,027 $ 13,25 1,840 $ 14,881,533 Property taxes in lieu of motor vehicle fee 5.289,476 6,330.436 6,967,237 7,552,272 Sales taxes 19,794,036 21 ,350,056 26,932,012 26, 164,53 1 Transient occupancy tax 4,590, 156 5,852,244 6.023,681 6,810,718 Utility user taxes 3,098,639 3,370,830 3,082,407 3,146,398 Franchise taxes 2,775,892 3,478,024 3,409,572 3,563,820 Other taxes 18,79 1,559 2,818,0 I 9 3,258, 118 1,943 ,652 Intergovernmental 25,294 24, 111 26, 118 3 1.013
Investment earnings (loss) 133,243 40,75 1 807.287 694.730 9 16,638 Miscellaneous 57,005 (2) 2 19,053 2.004.906 1,834,492
Gain on sale of capital assets 23,715,897 580 740,570
Transfers - fund closing
1 272,011
Transfe rs (40 1,350) 872,340 ( 1,635,000) (1,874 , 120) 107,030 Total governmental activities ~ 3 2 3, I 3 3 24,628,986 54,479.667 64,048 ,512 67,692,667 Business-type activities:

Investment earnings 11,238 42,561 82,187 59,012 75,663
Transfers 401,350 (872,340) 1.635,000 1,874,120 ( 107,030) Total business -type activities 4 12,588 (829,779) 1,7 17,187 1,933,132 (3 1,367) Total primary government $ 63,735,721 $ 23,799 ,207 $ 56, 196,854 $ 65,98 1,644 $ 67,661 ,300 Changes in net position
Governmental activities $ 37,210,40 I $ ( I 0,028,694) $ 13,436,612 $ I 3,422,591 $ 14,046,492 Business-type activit ies (224,868) (872,637) 398,488 1,967,830 (1 ,322.459) Total primary government $ 36,985;533 $ ( I 0,_90 I ,331) $ 13,83 5,100 $ 15,390,42 1 $ 12,724,033 Source : Department of Admin istrative Serv ices, City or Cupertino. 152
City of Cupertino
Changes in Net Position - Expenses and Program Revenues (Continued) Last Ten Fiscal Years
(accrual basis of account ing)
Fiscal Year
2019 2020 2021 2022 2023
Net revenues (e xpenses) :

Governmental activities $ (55,910,993) $ (58,004,993) $ (54,947.451) $ (52,968,407) $ (59,529,474) Business-type activities ( 1,937,584) (2,788,063) (674, 150) ( 1,267,910) (706.971 ) Total net revenues (expenses ) $ (57,848,577) $ (60. 793,056) $ (55,621.60 I) $ (54.236,3 17) $ (60,236,445) General reven ues and Transfer s
Governmental activities:

Taxes:

Property taxes $ 17,082,005 $ 18, 11 7.304 $ 19, 197.994 $ 20,322,779 $ 2 1,807,628 Prop_erty taxes in lieu of motor vehicle fee 8,219,090 8.489,541 9.079,845 9.401,632 10,082,01 1 Sales taxes 24,90 1,779 35,657,2 14 42,581,070 43,646,813 34.819.34 1 Transient occupa ncy tax 8,901,337 7,286,083 2, 141,058 4,404,958 7,062, 150 Utility user taxes 3,089,922 3, 182,086 3,074,358 3,356,389 4, 103,906 Franchise taxes 3,445,253 3,41 8,908 3,368,286 3,479,554 3,995,018 Other taxes 3,299,587 1,774,235 3,022,333 11 , 117,528 2,872,571 Intergovernmental 28,844 47,39 1 43,675 67,762 62,072
Investment earn ings (loss) 3.258,550 5,690.723 4, 147.907 (9,24 1,78 1) 2,80 l,930 Misce llaneo us 1, 187,741 1.922,356 3. 185. 11 0 1,948,332 444,339 Gain on sale of capita l assets 3.875
Transfers - fund closing
I
Transfers (75,000) (3,523.000 ) (2.849,000) (886,801) (296,48 1) Total govern mental activities 73,342,983 82,062.84 1 86,992.636 87.6 17, 165 87.754 ,485 Business-type activities:

Investment earnings 270,37 1 462,387 35,983 (404,444) 155,92 1 Transfers 75.000 3,523,000 2.849.000 886,801 296,481
Total business-type activities 345,37 1 3,985.387 2.884,983 482,357 452,402 Tota l primary govern ment $ 73,688,354 $ 86,048,228 $ 89,877,619 $ 88,099,522 $ 88,206,887 Changes in net position
Governmental activities $ 17.431.990 $ 24,057,848 $ 32,045, 185 $ 34.648.758 $ 28,225,0 11 Business-type activities ( 1,592,2 13) I, 197,324 2.2 10,833 (785.553) (254,569) Total primary government $ 15,839,777 $ 25,255, 172 $ 34,256,0 18 $ 33.863,205 $ 27,970,442 1 Asset and liability transfer from the closed City Channel/Web Internal Service Fund in 201 7.

Source· Departme nt of Admini strative Serv ices, City of Cupertino. [53
City of Cupertino
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2014 2015 2016 2017 2018
General fond:

Nonspendable $ 3,363,065 $ 938,245 $ 937,38 1 $ 876,939 $ 464,893 Restricted 761.653 888.374 1,016,77 1 1,254,578
Committed 19,000.000 19, 122.754
Assigned 16.400,000 28,849,679 20,500,000 4,638, 181 9,963,310 Unass igned 23.197 ,378 8,774,966 29,869,085 28,057 ,799 2 1,704,922 Total general fund ~960 ,443 $ 39,324,5LIL $ 52,194,840 $ 53,589,690 $ 52,510,457 All other governmental funds:

Nonspendabl e
Restricted 24,232,367 37,566,052 33,973,433 33,974.92 1 30,8I8 ,617 Committed 1,398,665 1,398,665 1,398,665
Assigned 7,619,534 20,67 1,116 15.344.19 1 25,305.974 29, 129,6 16 Unassigned (2,280,96 1)
Total all other governmental funds $ 29,570,940 $ 59,635,833 $ 50,716,289 $ 60,679,560 $ 59,948,233 Total Governmental Fund s 72,531 ,383 98_,_960,376 102.911, 129 114,269.250 11 2,458.690 Source : Department o f Administrative Services , City of Cupertino. 154
Genera l fund:

Nonspe nclable
Restricted
Committed
Assigned
Unassigned
Total general fund
All other governmental fu nds:

No nspenclable
Rest ricted
Comm itted
Assigned
Unassigned
City of Cupertino
Fund Balances of Governmental Funds (Continued)
.. Last Ten Fiscal Years
(modified accrual basis of accounting)
Fisca l Year
20]9II J 2020 2021
$ 454, 188 $ 3,449,34 1 $ 3,444.346

9.469.670 14,324,757 20, 140,4 I 9

19. 123.397 19.127,891 19.127.89 1
1,979,202 3, 176,882 4.906, I 39
27,896, 128 34,426,942 49,23 1,996
$ 58,922,585 $ 74,505,813 $ 96,850,79 1
35,93 5,838 33,68 1,043 33.570,62 1

33.2 11 ,946 40,55 1.1 3 I 37,038.174
Total all other gove rnmental funds $ 69, 147,784 $ 74,232, 174 $ 70,608,795 Total Governmenta l Funds 128.070,369 148.737.987 167,459,586 2022{7)
$ 4,055,956 $
I 8,756,482
34, 127,891

5.04 1,682
48,696,82 1
$ 110.678.8 32 $
$
51, I 06,343

35.088,889
$ 86, 195,232 $
196,874,064
1The Citv establ ished a trust to fund Other Post-Employme nt Benefit contribut ions. which is classified as a restriction in fund balance. 2 2022 balances were restated clue to prior period adjustments.

Source: Department of Admin istrative Services, City of Cupert ino. 155
2023
4,000 ,588
19,088,859
34, 127,89 1
9,735 , 187
71,603,813
I 38.556,338
46,828,676
34,924.537
81 ,753,213
220,309 ,55 1
City of Cupertino
Changes in Fund Balances of Governmental Funds
Last Ten Fisca l Years
'(mod(fied accrual basis of accounting)
Fiscal Year
2014 2015 2016 2017 2018 - -~~-
Revenues:

Taxes $ 72.211.724 $ 55.134.238 $ 55,462 ,956 $ 62.924 ,867 $ 64.062.924 Use of money and property 764,299 9 15.933 1,654.702 1.425,629 1,543,8 18 Intergovernmental 3,069,400 7,2 I 0,562 2,532.025 2,585,038 5,122,296 Licenses and penn its 3,679,943 3, 170.445 3,073.1 10 2,536.925 2,757,928 Charges for services 10,744, 11 3 5,203.37 1 17,249, 123 24, I 03, 167 15,638,247 Fines and forfeitures 6 16.889 554,002 564,903 603, 194 602,934 Other 545,052 542,429 1.289,0 13 2,004.90 4 1,834,492
Total revenues 91,63 1.420 72.730 ,980 81 ,825,832 96, 183. 72_4_ 9 1,562,639 Expenditures:

Current:

Administration 3,957,739 3,897,70 1 4.053 ,74 1 5,942.633 4.943 ,052 Law enforcement 9,626, 121 10.283,772 I 0.988.735 11,939,095 12,362 ,621 Innovation and technology 477,852 624,295 544,7 18 1,864,746 2,835,768 Administrative services 2,444,670 3.226 , 164 2.8 11 , 117 5,054,539 4,430 ,300 Recreation services 4,536,519 5,047.548 5,44 1,200 9,361,934 8,686.076 Community development 8,424,254 5, 180,659 6, I 02.820 7.431,292 12,907.086 Public works 17,469,627 14,625 ,038 15,078, 174 18,623,585 18, 19 1,7 14 Capital outlay: 7,110,974 21,760,899 26, 171, 127 18,731, 165 23,395. 11 2 Debt service:

Principal repayme nt 2,040 ,000 2,055,000 2,090.000 2, 135,000 2, 180.000 Interest and fiscal charges I, 130,428 I, 120, 138 1,077,538 1.035,738 993,038 Total expe nditures 57,218.184 67,82 1,2 14 74,359, 170 82, 11 9,727 90,924,767 Excess of revenues over (under) expe nditure s 34,413,236 4.909,766 7,466,662 14,063,997 637,872 Other financing sources (uses):

Proceeds from debt issuance
Proceeds from debt issuance premium
Payments to refunding agent
Proceeds from sale of capita l assets 37,569 23,814,257 580 872.250 Inception of subscrip tion liability
Transfers in 13,6 10,30 4 39,408,990 11.905, 724 26,446,090 3 1,028,218 Transfers in - fund closing 260,374
Transfers out (24.499 , 154) (39, 177,284) (15,422,2 13) (29,4 12,340) (34,3 48.900) Total other financing sources (uses) ( I 0.851.28 1) 24,045,963 (3,5 15,909) (2,705,876) (2,448,432) Net change in fund balances $ 23,56 1,955 $ 28,955,729 $ 3,950,753 $ 11 ,358, 12 1 __!___11,8 10,560) Debt service as a percentage of
noncapital expenditures
/

0.00% 0.00% 6.57% 5.00% 4.70%
Source: Department of Administrative Services, City of Cupertino_ 156
City of Cupertino
Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years
(mod(fied accrual basis of accounting)
Fiscal Year
2019 2020 2021 2022 2023
Revenues:

Taxes $ 68,938.973 $ 77,925,371 $ 82,464,944 $ 95. 729,653 $ 84.233.345 Use of money and property 3,896.8 13 6,259,342 4,447,970 (8,50 1.439) 3,422, 106 Intergovernmenta l 3,668,557 6,888,590 7,834,260 8.95 1,589 11 ,869,664 Licenses and perm its 4, I 02,665 4.692,847 4.068,238 4. 14 1,902 4,093,63 1 Charges for services 13,385,698 13.937,9 50 13,60 1,302 16,373,903 12.741,952 Fines and forfeitures 534.012 344.008 134,459 373. 722 326.944 Other I, 187.741 1,922,356 3.185, 11 0 1,948.332 1,393,059 Total revenues 95,7 14,459 111,970,464 115,736.283 119.017.662 118.080,70 I Expenditures:

Current:

Admi nistration 6.294.111 6,95 1.541 7,549,386 7.492.277 7.603,732 Law enforcemen t 13. 108,732 14, 15 1.41 3 14,776.409 15,715.815 15,276.950 Innovation and technology 2,843.540 3,223, 185 1,836,725 2.063. 176 1.825.667 Admi nistrative services 4, I 97.582 4,6 17,787 5, 196,299 5.525.888 5,976.30 I Recreation services 8,996, 11 8 7,688.935 4,787,9 14 4. 729.438 5.432. 183 Commun ity development 9.359,835 9,3 10,827 11 , 177,690 12,627,702 11.693.554 Public works 19,955,579 22,445 ,948 24,568, 155 28,542,850 28,22 1,856 Capital outlay: I 0.528.246 12.644,373 19,483,945 12,777, 121 12,533,3 16 Debt serv ice:

Principal repayment 2.220,000 2,290,000 2, 140.000 1,880,000 2,581, 181 Interest and fiscal cha rges 949,438 882,8 37 798,747 796,000 739,340 Total expend itures 78.453.18 I 84,206,846 92,3 15,270 92,150,267 9 1,884,080 Excess of revenues over (under) expendit ures 17,261,278 27,763,6 18 23.42 1,0 13 26,867.395 26, 196.621 Other financing sources (uses):

Proceeds from debt issuance 22,040,000
Proceeds from debt issuance premium 3.878,704
Payments to refunding agent (27,279.1 18)
Proceeds from sale of capital assets 3,875
Incept ion of subscription liability 964,745
Tran sfers in 19,407.6 I 3 35.208 ,276 12.876,969 23,089,059 11.350,697 Transfers in - fund clos ing
Transfers out (2 1,06 1,087) (42,304,276) ( 16.2 15,969) (25,776,712) (15,076,576) Tota l other financing sources (uses) ( 1,649,599) (7,096,000) (4,699,4 14) (2,687,653) (2,76 1,134) Net change in fund balance s $ 15,6 11,679 $ 20,667,618 $ 18,72 1,599 $ 24, 179,742 $ 23.435,487 Debt serv ice as a percentage of
noncapital expe nditures 4.67% 4.43% 4.04% 3.37% 4.18%
Source : Department of Administrativ e Services, City of Cup ertino . 157
This page i11te11tio11al~v left blank
158
City of Cupertino
Assessed and -Estimated Actual Value of Taxable Property Last Ten Fiscal Years
Total
Fisca l Year Secured (a)
2014 $ 15,39 1,656,690
2015 16, 133,637,244
20 16 18,308,720,226
2017 20,196,258 ,418
2018 22,024,906,420
2019 23,402, 123,229
2020 24,370,7 18,536
2021 25,397 ,33 1,860
2022 27,083,468 ,890
2023 29,822,398 ,085
VI $35
C:
,g
ii:i $30
$25
$20
$15
$10
$5
$0
'SI" .-<
0 N
(a) Net of exemption s
Source: HdL, Coren & Cone
$
Unsecured (a)
813,117,019
965, 141 , 148
1,086, 786,90 I
I, 150,3 I 1,942
I, I 14, 123,426
1,779,936,377
1,64 1,863,322
2,423,984,683
1,724,247,088
1,069,629,678
Lr) <D .-< .-<
0 0
N N
(Unaud ited)
State Board of
Equalization
Non-Unitar y
$ 1,390,000
,..._
.-<
0 N
00 .-<
0 N
Secured
Exemeti ons
$ t'1 3,744,809
0)
.-<
0 N
119,476,276
114,223,063
118,257,368
122,805,695
125,245,8 19
138,025 ,761
145,644,653
149,658,614
154,098,046
0 N
0 N
II Secured Property Id Unsecured Property
Data Source: Santa Clara County Assessor 2013-14 - 2022-2 Combined Tax Rolls $
.-<
N
0 N
Total Assessed &
Est. Full Market
Valuation (a)
16,206,163,709
17,098,778,392
19,395,507 , 127
21 ,346,570,360
23,139 ,029,846
25,182,05 9,606
26,012,581 ,858
27,82 1,3 16,543
28,807,7 15,978
30,892 ,027,763
N
N
0 N
CV)
N
0 N
Direct
Tax
Rate

5.62%

5.6 1%

5.59%

5.98%

6.19%

6.38%

6.50%

6.48%

3.55%

7.24%
_______________________ __,__I.Su_ ______________________ _ Agency
Basic Levy'
Co. Hou sing Bond 20 16
County Bond 2008 Hosp ital Facility
· County Library Retirement Levy
County Retirement Levy
Cupe rtino Elementary
El Camino Hospital 2003
Foothill De Anza College
Fremont High
Los Gatos-Saratoga High 1998
Mid Peninsu la Open Space 2014
Santa Clara Unified
Santa C lara Valley Wate r District
Saratoga Elementary
West Valley College
Total Direct & Overlapping' Tax Rates
City's Share of I% Levy Per Prop 13'
General Obiligatio n Debt Rate
Redevelopment Rate'
Tota l Direct Rate'
Notes:

City of Cupertino
Direct and Overlapping Property Tax Rates
(Rate per $100 of taxable value)
Last 10 Fiscal Years
2013-1 -t 2014-15 20 15-1 6 20 16-17 20 17-18

1.00000 1.00000 1.00000 1.00000 1.00000

0.00000 0.00000 0.00000 0.00000 0.01266

0.00350 0.009 I 0 0.00880 0.00860 0.00820

0.00240 0.00240 0.00240 0.00240 0.00240

0.03880 0.03880 0.03880 0.03880 0.03880

0.05250 0.05400 0.05 190 0.05090 0.04960

0.0 1290 0.0 1290 0.01290 0.0 1290 0.01000

0.02900 0.02760 0.02400 0.02340 0.02200

0.04050 0.03960 0.05250 0.04030 0.04640

0.035 10 0.05 I 60 0.04230 0.04690 0.04570

0.00000 0.00000 0.00080 0.00060 0.00090

0.07070 0.07040 0.09420 0.08 180 0.08280

0.00700 0.00650 0.00570 0.00860 0.00620

0.04500 0.04580 0.04 490 0.04560 0.04580

0.02550 0.0 1200 0.02320 0.0 1960 0.02000

1.36290 1.37070 1.40240 1.38040 1.39146

0.05626 0.056 17 0.0557 1 0.05962 0.06 148

0.05623 0.05610 0.05588 0.05976 0.06 187
' In 1978, Califo rnia voters passed Proposition 13 wh ich set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In add ition to the 1.00% fixed amo unt, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds . 20verlapping rates are those of local and county governments that apply to proper ty owne rs wit hin the City . Not all overlapp ing rates apply to all city property owners.
'City's Share of I% Levy is based on the City's share of the genera l fund tax rate area with the largest net taxable value within the city. ERAF general fund tax s~ifts may not be included in tax ratio figues. •Redevelopmen t Rate is based on the largest RDA tax rate area and only incl udes rate(s) from indebtedne ss adopted prior to I 989 per Cal iforn ia State statute. RDA direct and ove rlappin g rates are applied only to the incre mental property value s. T he approval of ABX I 26 eliminated Redevelopment from the State o f Californ ia for the fiscal year 2012/13 and years thereafter. 'To tal Direct Rate is the weighted average of all individual direct rates app lied to by the government preparing the statistical section information and exclude s revenues deriv ed from aircraft. Beginning in 20 I 3/14 the Total Direct Rate no longer includes revenue generated from the fonn er redeve lopment tax rate areas. Challenges to recogni zed enforceable obl igations are assumed to have been resol ved during 20 I 2/ 13. For the purposes of this report , residua l revenue is assumed to be distributed to the City in the same proportions as general fund revenue.

Data Source: Santa Clara County Assessor 2013114 - 2022123 Tax Rate Table 160
City of Cupertino
Direct and Overlapping Property Tax Rates (Continued)
(Rate per $100 of taxable value)
Last 10 Fiscal Years
A enc 2018-19 2019-20 2020-21 2021-22 2022-23
Basic Levy' 1.00000 1.00000 1.00000 1.00000 1.00000
Co. Housing Bond 20 16 0.0 I 050 0.01000 0.00000 0.01266 0.01080 County Bond 2008 Hospital Facili ty 0.00720 0.00690 0.00690 0.006 10 0.00630 County Libra1y Retirement Levy 0.00240 0.00240 0.00240 0.00240 0.00240 County Retirement Levy 0.03880 0.03880 0.03880 0.03880 0.03880 Cupertino Elementary 0.03970 0.04 150 0.04030 0.03800 0.03680 El Camino Hospita l 2003 0.0 I 000 0.0 1000 0.0 I 000 0.0 I 000 0.00900 Foothill De Anza College 0.02170 0.02080 0.03640 0.03310 0.02910 Fremont High 0.04300 0.04790 0.04780 0.04 I 60 0.03710
Los Gatos -Saratoga High 1998 0.03040 0.01770 0.01930 0.0 1850 0.01790 MidPenin sula Open Space 2014 0.00 I 80 0.00 I 60 0.00150 0.00150 0.00130 Santa Clara Unified 0.07070 0.11760 0. 10450 0. 10140 0.08670 Santa Clara Valley Water Distric t 0.00420 0.004 I 0 0.00370 0.00510 0.00440 Saratoga Elementary 0.04580 0.04640 0.04850 0.04830 0.04850 West Valley Coll ege 0.0 1980 0.01860 0.031 10 0.03040 0.02830 Total Direct & Overlapping' Tax Rates 1.34600 1.39530 1.39120 1.38786 1.357~0 City's Share of I% Levy Per Prop 13' 0.06320 0.0653 1 0.06515 0.06528 0.06504 Genera l Obiligation Debt Rate
Redevelopment Rate'
Total Direct Rate' 0.06381 0.06499 0.06463 0.06477 0 .06482 Notes:
' In 1978, California voters passed Proposit ion 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all tax ing agencies for which the subject property resides within. In addition to the 1.00% fi xed amount, property owners are char ged laxes as a percen tage of assessed property values for the paymen t of any vote r approved bonds . 'Ove rlapping rates are those of local and county governments that apply to property owne rs within the City. Not all overlapping rates apply to all city prope rty owner s.
'City's Share of I% Levy is based on the City's share of the general fund tax rate area with the largest net taxable va lue within the city. ERAF general fund tax shifts may not be included in tax ratio figues. ' Redeve lopment Rate is based on the largest RDA tax rate area and only includes rate(s) from indebtedness adopted prior to 1989 per California State statute. RDA direct and ove rlapping rates are applied only to the incrementa l property values. The approval of ABX I 26 e liminat ed Redevelopment from the State of California for the fiscal year 20 12/ 13 and years thereafter. ' Total Direct Rate is the weighted average of all indi vidual direc t rates applied to by the government preparing the statist ical sect ion informat ion and excludes reven ues deri ved from aircraft. Beginn ing in 20 13/14 the Total Direct Rate no longer includes revenue generated from the former rede velopment tax rate areas. Challenges to recognized enforceable obligat ion s are assumed to have been resolved during 2012/ 13. For the purposes of this report , residual revenue is assumed to be distributed to the City in the sa me proportions as genera l fund revenue.

Dala Source: San/a Clara Counly Assessor 201311-1 - 2022/23 Tax Rafe Table 16 1
Taxpayer
Apple Inc.

Main Street Cupe rtino
Vallco Property Owner LLC
Cupertino City Center
Cupertino Property Deve lopment
PR Cupe rtino Gateway LLC
Avery Glenbrook LP
Markham Apartments LP
Preg Emerson LLC
Cupertino Village
Tota l
Source: HdL, Core n & Cone
City of Cupertino
Principal Property Taxpayers
Current Year and Ten Years Ago
(Unaudited)
2023 Percen tage of
Assessed Tota l Assessed
Valuation Valuation
$ 8,080.536 ,959 26.16%
379. 188,743 1.23%
357. 133.944 1.1 6%
253.985.462 0.82%
216.93 5.305 0.70%
137,402 ,151 0.44%
11 3.723 ,103 0.37%
I 09,473.477 0.35%
I 07,770. 538 0.35%
91,7 I 0,720 0.30%
$ 9,847,860.402 3 1.88%
162
-
$
-
$
20 14
Assessed
Valuation
1,324. 522.880
89,929.542
139, I 50,359
1,553,602,78 1
Percentage of
Total Assesse d
Valuation

6.38%

0.00%

0.50%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

6.88%
Fiscal Tota l
Year Tax Levy
2014 $ 9. 169,183
20 15 I 0, 178.734
20 16 11,864,026
20 17 13,308,884
20 18 13, 172,425
20 19 16,049, 112
2020 18, 11 7,304
202 1 19, 197,994
2022 20,322,779
2023 2 1,807,628
City of Cupertino
Property Tax Levies and Collections
Last Ten Fiscal Years
(Unaudited)
Percent Delinquent
Current Tax of Levy Tax
Collect ions Collected ( I) Collect ions ( I)
$ 9, 169.183 100.00%
10, 178,734 100.00%
11 ,864,026 100.00%
13,308,884 100.00%
13, 172.425 100.00%
16,049. 112 100.00%
18, 11 7,304 100.00%
19, 197,994 100.00%
20,322.779 100.00%

21.807.628 100.00%
Total
Tax
Collectio ns
$ 9, 169, 183
I 0.178.734
11 ,864,026
13,308,884
13, 172,425
16,049, 11 2
I 8, 117,304
19, 197,994

20.322 ,779
2 1,807,628
(I) Per the Teeter Plan, the City receives I 00% of the tax levy, while the County receives delinqu encies and pena lties.

Source: City of Cupertino NWS
163
Percent or
Tota l Tax
Collections
to Tax Levy
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Fiscal
Year
20 14
20 15
20 16
201 7
20 18
20 19
2020
202 1
2022
2023
City of Cupertino
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Unaudited)
Percentage
of Estimated
Certi ricates Actual Market Value
of Participation of Taxable Property Per Capita

39.980,000 0.23%
37,925,000 0.20%
35,835,000 0.18%
33,700,000 0. 15%

31.520,000 0. 12%

29.300.000 0.11%

27.0 10.000 0.10%
19,900.000 0.07%

18.020,000 0.06%
16,065.000 0.06%
Source: City of Cupertino Budget Book
164
%of
Persona l
Income
67 1 1.38%
633 1.28%
598 1.21%
579 1.02%
525 0.87%
488 0.8 1%
451 0.7 1%
334 0.48%
297 0.40%
269 0.36%
City of Cupertino
Direc t and Overlapping Bonded Debt
June 30, 2023
2022 -23 Assesse d Valuatio n
Overlapping Tax and Ass essment Debt:

Santa Clara County
Santa Clara County Genera l Fund Obl igat ions
Santa Clara County Pension Obligat ions
(Unaudited)
Santa Clara Cou nty Board of Education Certificates of Part icipation Foothill-DeAnza Com munity College District
Foothill-DeAnza Com mun ity College District Certificates of Partic ipation West Valley Commu nity College Dish·ict
West Valley-Missio n Com munity College District Genera l Fund Obligations Santa Clara Uni fied Schoo l District & Genera l Fund Obl igations Santa Clara County Vecto r Contro l District Ce rtificates of Partic ipation Fremo nt Union High School District
Cupe rtino Union Schoo l Distr ict
El Cam ino Hosp ital District
Midpen insula Regional O pen Space Distric t and Genera l Fund Obligations Santa Clara Valley Water District Benefit Assessment
Tota l Overlapping Tax and Assessme nt Debt
Direct Debt: City of Cupertino Certificates of Participation Total Direct and Overlapp ing General Fund Debt
Totals bv Catego rv:

Total Direct Debt
To tal Overla pping Debt
Combined Total Debt
Ratios to 2022 -23 Assessed Valuatio n:

Tota l Ove rlappi ng Tax and Assessme nt Debt
Combine d Tota l Debt
$
Total Debt
6/30/2023
$ 1,041 , 125,000
I, 120,404 ,570
329,7 41.844
935 ,000
603,653,754
20,645,000
694,320 ,000
8,160 ,000
1,088,0 48,000
1,230,000
77 1.685 ,088
258 .383.303
I 05,480.00 0
82,680,000
38,900,000
6, 165,39 1,559
16,065,000
16,065 ,000
16,065,000
6, 165,39 1,559
$ 6, I 8 I ,456,559

2.0 1%

0.05%

2.07%
$
%
Aeei icab le ( I)

4.998% $

4.998%

4.998%

4.998%

12.559%

12.559%

1.977%

1.977%

4.380%

4.998%

28.026%

51. I 38%

0.89 1%

7.600%

4.998%
$
100.000 %
$

30.892.027. 763
City's Share of
Debt 6/30/23
52,035 ,428
55,997 ,820
16,480,497
46,73 1
75,8 12.875
2,592,806

13.726.706
161.323
47,656,502
6 1,475
21 6,272,463
132,132,0 53
939,827
6,283,680
1,944,222
622, 144,410
16,065,000
16,065,000
16,065,000
622, 144,4 I 0
638,209,4 10
The perce ntage of ove rlapp ing deb t appl icable to the city is estima ted using taxa ble assessed pro perty value. Applicable percentages were est imated by determining the portio n of the ove rlapping distric t's assessed value that is with in the bounda ries of the city divided by the district's total taxab le assessed value.
'.) Principal amount as o f 6/30322.
165
Debt Lim it:

Fiscal
Year
20 14
20 15
20 16
20 17
2018
2019
2020
2021
2022
2023
$
-City of Cupertino
Legal Debt Margin Information
Last Ten Fiscal Years
{Unaudited)
Tota l Net
Debt Debt App licable
Limit to Limit
577, 187, 126 $ $
605,0 11.397
686,577.008
757,359,69 1
825.933.99 1
877,579,62 1
913,901,945
I, 118,339,92 8
1,015,630,083
I, 118,339 ,928
Sec ured property assessed value. net of exempt real property Adjus ted valuation - 25% of assessed valuation
Debt limit - 15% of adjusted valuati on
Amount of Debt Subject to Limit:

Total Bonded Debt
Less: Ce1iificates of Participation not subject to deb t limit Amount of debt subject to limit
Legal Debt Margin
Legal
Debl
Marg in
-
577,187, 126 $
605.0 11 ,397
686 ,577.008
757 ,359,69 I
825 ,933 ,99 I
877.579 ,62 1
9 13,90 1,945
I, 118,339,928

1.015.630 ,083
I, 11 8,339,928
$
$
Tota l net debt
applicable to the
limit as a% of
debt limit

29.822.398 ,085
7,455 ,599,52 1
I, 118.339,928
16,06 5,000
( 16,065,000)
1, 11 8,339,928
Note: The Government Code of the State of. California provides for a legal debt limit of 15% of gross assessed valuation. However, this provis ion was enacted when assessed valuation was based upo n 25% of market value. Effecti ve with the 198 1-82 fiscal year , each parcel is now assessed at I 00% of market value (as of the most recent change in ownership for that parcel). The computations show n above reflect a conversio n of assessed va.luation data for each fiscal year from the current full valualio n perspect ive to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governmen ts located within the state.

Source: City of Cupert ino Budget Book
166
Fiscal
Year
20 14
20 15
20 16
20 17
2018
2019
2020
202 1
2022
2023
Population

59.946 $
59,777
58,185

58.917
60,09 1
59,879
59,549
60,656

66.274

59.656
City of Cupertino
Ratio of General Bonded Debt
Last Ten Fiscal Years
(Unaudited)
Assessed General
Value Bonded Debt
17,098,778,392 $

19.395,507 , 127

19.395,507, 127
21 ,346,570 ,360

23.139,029 ,846
25, 182,059,606
27,82 1,316,543
27,821,316.543
28,807 ,715,978
30,892 ,027,763
Sources: HdL, Coren & Cone/Cupertino Budget Book
167
$
Bonded Debt
Per Capita
$
Ratio of General
Bonded Debt to
Assessed Value
City of Cupertino
Demographic and Economk Statistics
Last Ten Fiscal Years
% of % of
City City County Population Population
City County Population Per Capita **Public Unemploy Unemploym Over 25 with Over 25 with Fiscal Population Population % of City Personal Personal School ment Rate ent Rate Median High School Bllchelor's Year (1) (1) Conntv Income (2) Income (2) Enrollment (%)(3) (%) (3) Age (4) Degree Degree 20 13-14 59,946 1,868,558 3.21% 3,090,636,000 51 ,557 29,904 3.4% 6.8% 40.0 96.2% 74.2% 20 14-15 59,777 1,889,638 3. 16% 3, I 86,772,000 53,3 11 29,871 4.2% 3.8% 40.0 96.5% 74.6% 20 15-16 58, 185 1,927,888 3.02% 3,340, 132,000 57,405 29,684 3.4% 4.2% 40.2 96.5% 75.6% 2016-1 7 58,917 1,938,180 3.04% 3,486,805,000 59, 181 29,467 3.0% 3.8% 40.6 96.7% 760% 2017- 18 60,09 1 1,938,153 3.10% 3,620,255,000 60,246 29,255 3.3% 3.8% 40.7 97.1% 76.6% 2018-19 59,879 1,937,570 3.09% 3,821,320,000 63,817 29,240 2.6% 2.3% 41.1 97.1% 77.2% 2019-20 59,549 1,927,852 3.09% 4,114,967,000 69,102 29,550 2.4% 10.7% 41.1 97.2% 78.1% 2020-21 60,656 1,936,259 3. 13% 4,378,045,000 74,485 30,900 4.9% 5.2% 4 1.6 97.2% 78.8% 202 1-22 66,274 1,934,171 3.43% 4,571 ,170,000 76,684 24,380 3.7% 2.2% 4 1.2 97.3% 79.6% 2022-23 59,656 1,902,799 3.14% 5,214,787,000 88, 156 23,486 2.3% 3.7% 4 1.0 970% 80.9% Notes and Data Sources:

Population: California State Department of Finance. Unemployment Data: California Employment Development Department Income, Age, and Education Data: ESRI - Demographic Estimates are based on the last availab le Census. Projections are deve loped by incorporating all of the prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's boundaries 20 I- and later - Income, Age and education Data - US Census Bureau, most recent American Community Survey **Reported Public School Enrollment rellects the total number of students in the Fremont Union High School District and Cupertino Union School District Previously published reports included Fremont Union High School District only. https ://dq . cde. ca. qov/dataq uest/dq census/En r AqeG rd .aspx?cd s=436946 8&agg level =district& ye a r= 2021-2 2 https :/ id g. cde. ca. g ov/d a tag u es t/dq census/En r Age G rd. as px? cd s=4369419& aggleve l=d is trict& year= 2 021-22 https://labormarketinfo.edd.ca.gov/data/industry-employment-and-unemployment-rates-for-counties.html chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://labormarketinfo.edd.ca.gov/file/lfmonth/2306rcou.pdf 168
Emp loyer
Apple
De Anza College
Force 5 Software Inc
Whole Foods Market
Claris International, Inc
Hea lth Care Center at the Forum
Target
Cupertino Union School District
City of Cupertino
Mist Systems. Inc.

Source: Data-Ax le
City of Cupertino
2023 Employer Ranking
(Unaudited)
Ranking Employer
I lntero Real Estate Services. Inc
2 Keller Williams Realty
3 Cupertino Healthcare & Wellness Center
4 Exilant
5 BJ's Resturant & Brewhouse
6 Sunny View Retirement Community
7 Insight Solutions Inc
8 Cupertino High School
9 Monta Vista High School
10 Nexsales Corp
169
Ranking
11 12
13 14
15 16
17 18
19 20
Ol l
JfllV/q ljil/ ~i/Vl/Of/lli!/ll! a:Jvd Sfl/.L
City of Cupertino
Full-Time Equivalent City Employees by Function/Program Last Ten Fiscal Years
(Unaudited)
Funct_ion/Program 201~ 201 5 2016 2017 2018 2019 2020 2021 2022 2023 Council and Commissions
Administrat ion
Innovation & Technology
Adm inistrative Services
Parks & Recreation
Community Development
Public Works
Law Enforcement
Total

1.57 1.55 1.60 1.55 2.35 2.35

10.75 10.75 10.85 10.57 14. 12 15.47
I 1.00 10.25 11 .40 13.95 14.55 15.05
I 1.00 12.00 12.30 12.30 12.00 14.00

29.48 31.28 32.1 8 33.08 35.13 34.80

24.83 24.80 27.30 28. 18 28.08 28. 13

74.1 2 77. 12 82. 12 84.12 84.52 84.95

2.00 2.00 2.00 2.00 2.00 2.00
164.75 169.75 179.75 185.75 192.75 196.75

2.5 1

15.1 5

14.95 16.00

32.1 0

28.29 88.75

0.00 197.75

2.53 17.85

11.93 15.90
3 1.90

28.49 90.1 5

0.00 198.75
250 ~- -----------------------------
150
100
50 20 I 4 20 I 5 20 I 6 20 I 7 2018 20 I 9 2020 202 1
Source: City of Cupertino Budget
171
2022 2023
■ Public Works
■ Co mmun ity
Development
Recreation
Administrative
Services
■ Innovation &
Technology
Administration
■ Council and
Commissions

7.30 7.2

24.30 21.8

13.40 14.9

18.90 17.9

29.50 27.6

37.50 34.4

94. 10 88.1

0.00 0.00
225.00 2 11.90
City of Cuperti no
Operati ng Indicators by Funct ion/Program
Last Ten Fisca l Years
(Unaudited)
Function/Program 201~
Law Enforcement Sheriff Response
Priority One-Respond within 5 minutes 4.30 Min.

Priority Two-Respond within 9 minutes 6.39 Min.

Priority Three-Respond within 20 minute! 10.76 Min.

Public Works
Street Sweeping 575 Curb Miles
Street Maintenance 24 Hrs of Call
Number of development permit applications received
Number of encroachment pen,1 its received
Stonn Drain Inlets Inspected/Cleaned
Roadway Signs Repaired/Replaced
Number of trees planted vs. removed
Parks & Recreation
Number of reservations at Quinlan Center
Number of rounds of golf at BBF Golf Course
Sports Center Memberships
Number of Senior Center classes offered
Senior Center Memberships
Quinlan Community Center Rental Reven
Community Development
1,950
2,623
$109 ,342
2015

4.90 Min.

6.56 Min.

10.52 Min.
575 Curb Miles
24 Hrs of Call
2,000
2,549
$1 10,033
20 16

4.90 Min.

6.56 Min.

10.52 Min.
575 Curb Miles
24 Hrs of Call

1.989
2,493
$104, 150
20 17

5.07 Min

8.00 Min.

15.79 Min
534 Curb Miles
24 Hrs of Call
2,0 15
2,094
$128,778
2018

4.23 Min.

7.49 Min.

14.79 Min.
534 Curb M ilcs
24 Hrs of Call
428
121
815
404
53/67
560
28, 193
1,850
246
2,260
$72 ,948
Approved Building Plan Sets
Discretionary Land Use Applications
Public Notice of Upcoming Projects
Number of preliminary reviews
95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days 99% Within 21 Work Days 99% Within 2 1 Work Days 99% Within 21 Work Days 99% Within 21 Work Days 99% Within 21 Work Days Number of planning applications received
Number of perm its received
Number of inspections requested
Administrative Sen•ices
Accounts Payable Processing
Business License Renewal Certificates
Number of regular recruitments
Number of new hires
Number of temporary new hires
Number of vendor checks processes
Number of payroll checks process
Number of business license applications
Number of journal entries posted
Number of receipts processed
Library
Volumes in Collection
Annual Gale Count
Annual Circulation Children's Items
Annual Circulation Adult and Teen Items
Adult Classes and Events
Adult Classes and Events Attendence
Teen Classes and Events
Teen Classes and Events Attendenee
Children's Classes and Events
Children's Classes and Events Allcndence
Volunteer Hours
100% Within 10 Days
7 Days
3 Days
IOO% Within 10 Days
7 Days
3 Days
36 18 17
869762
1474996
999766
209
11860
52 3393
458
25529
11786
Sources: City o f Cupertino PM & Wis and Santa Clara Cou nty Library District 172
IOO% Within 10 Days
7 Days
J Days
364,557
880,894
1,544,095
1,032,326
2 15
8,855
78 3,135
493
28,532
10,000
I 00% Within IO Days
7 Days
3 Days
369,924
835,073
1,448,265
950.453
242
9,242
66 2,571
440
25,857
9,645
100% Within 10 Days
82 169
2322
16026
7 Days
3 Days
21 26
101
6793
10387
1294
2830
9766
367,979
873,862
1,453 , 173
980,609
206
7,622
79 2,495
426
24,675
10,302
City of Cupertino
Operating Indicators by Function/Program (Continu ed)
Last Ten Fiscal Years
(Unaudited)
Function/Program 2019 2020 2021 2022 2023
Law Enforcement Sheriff Response
Priority One-Respond within 5 minutes 4.39 Min. 3.5 1 Min. 3.40 Min. 5.33 Min 6.57 Min Priority Two-Respond within 9 minutes 6.23 Min. 6.37 Min. 607 Min. 6.94 Min. 7.46 Min.

Priority Three-Respond within 20 minutes 12. 11 Min. 11.96 Min. 11 .80 Min. 11.73 Min 12.72 Min Public Works
Street Sweeping 534 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles Street Maintenance 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call Number of development permit application, 434 428 127 128 127 Number of encroachment permits received 136 134 577 426 449 Stonn Drain Inlets Inspected/Cleaned 1063 1638 1802 80% 53% Roadway Signs Repaired/Replaced 721 346 1151 3.5% 2.0%
Number of trees planted vs. removed 155/192 164/190 187/202 211/ 187 153/ 105 Parks & Recreation
Number of reservations at Quinlan Center 402 526 8 260 405 Number of rounds of gol rat BBF Golf Corn 27,205 28,952 43,650 45367 37961 Sports Center Memberships 1,952 1,802 1,655 1186 1394
Number of Senior Center classes offered 320 258 100 183 235 Senior Center Memberships 2, 171 2,17 1 1,470 210 1087
Quinlan Community Center Rental Revenu, $139,590 $139,590 $5,507 $1 15,093 $126,670 Community Development
Approved Building Plan Sets 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days Discretionary Land Use Applications 99% Within 21 Work Days 99% Within 21 Work Day, 99% Within 21 Work Day: 99% Within 21 Work Day, 99% Within 21 Work Days Public Notice of Upcoming Projects 100% Within 10 Days 100% Within JO Days 100% Wit hin JO Days 100% Within JO Days 100% Within JO Days Number of preliminary reviews 90 110 163 142 127
Number of planning applications received 138 194 237 30 1 232 Number of pennits received 2,32 1 2,534 2,364 2380 2618 Number of inspections requested 13,625 14,596 13,374 11906 15181 Administn1tive Services
Accounts Payable Processing 7 Days 7 Days 7 Days 7 Days 7 Days Business License Renewal Certificates 3 Days 3 Days 3 Days 3 Days 3 Days Number or regular recruitments 21 28 24 33 29
Number of new hires 16 14 2 1 38 3 1
Number of temporary new hires 105 38 17 77 70
Number of vendor checks processes 6,536 5,906 4,457 4993 5130 Number of payroll checks process 10,30 1 10,802 7,8 16 8119 9176 Number of business license applications 1, 154 1,032 1,06 1 884 969 Number of journal entries posted 4,521 4,558 3,915 3635 3695 Number of receipts processed 13,9 13 18,992 10,367 9353 11275 I
Library
Volumes in Collection 367,10 1 368,46 1 350,088 367,745 367,745 Annual Gate Count 904,349 620,007 128,9 12 387,285 387,285 Annual Circulation Children's Items 1,535,842 1, 192,880 1,207,878 1,771,986 1,771,986 Annual Circulation Adult and Teen Items 1,049, 166 83 1, 114 750,602 1,056,4 5 1 1,056,451 Adult Classes and Events 207 396 459 62 62
Adult Classes and Events Attendencc 8,304 9,986 19,223 86 1 861 Teen Classes and Events 52 57 31 2 1 2 1
Teen Classes and Events Attendence 1,283 8,495 7, 151 916 916 Children's Classes and Events 424 477 464 105 105
Children's Classes and Events Attendence 22,851 26,032 52,634 7,7 11 7,711 Volunteer Hours 10, 191 6,592 465 4305.8 4305 .8
173
Function/Pro~ram
Public Works
Centerlane Miles of Street s
Streetl ights
Traffic Signals
Culture & Recreation
Parks and Open Spaces
Park and Landscape Acreage
City Trail s
Golf Courses
Community Center
Community Hall
Senior Center
Sports Cente r
Swimming Pools
Tennis Courts
Sports Fields
City Library
City of Cupertino
Capital Assets Statistics by Function/Program
Last Ten Fiscal Years
(Unaud ited)
2014
142
2,950
48 21
169
3 17
41 2015
142
2,950
48 21
169
3 28
41 2016
142

2.950
48 21
169
3 I
28 41
Sou rce: City of Cupertino Budget Book/GIS Team
174
2017
142

2.950
48 21
169
3 28
41 I
2018
142

2.950
52 21
169
3 28
41 Function/Program
Public Works
Centerlane Miles of Streets
Streetlights
Traflic Signals
(::ulture & Recreation
Parks and Opep Spaces
Park and Landscape Acreage
City Trails ·
Go! f Courses
Community Center
Community Hall
Senior Center
Sports Center
Swimming Pools
Tennis Courts
Sports Fields
City Library
City of Cupertino
Capita l Assets Statistics by Function/Program (Continued) Last Ten Fiscal Years
(Unaudited)
2019
142
2,950
52 21
169
3 28
41 175
2020
142
2,950
52 21
169
3 I
28 41
2021
142

2.950
52 21
169
3 I
28 41
2022
142
2,950
52 21
169
3 I
28 41
2023
142
2,870
61 21
169
5 I
28 41
9LI
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Community Economic Profile
Cupertino, with a population of 66,274'and City limits stretching across 13 square miles, is considered one of the most prestigious cities to live and work in the Bay Area.

Economic health is an essen tial component to maintaining a balanced city, which provides high-level opportunities and services that create and help sustain a sense of commwuty and quality of life. Public and private interests must be muh1al so that success as a partnership is a direct reflection of success as a communi ty. The cornersto ne of tlus partnershi p is a cooperative and respo nsive governmen t that fosters residential and business prosperity and strength ens working relations hips among all sectors of the community.

Because Cupertino is a mahire , 93% bu ilt-out city, the City of Cupertino focuses on business retention and revitalization. Cupertino is world-re nowned as the home to high-tech giant Apple, Inc., and as a communit y with stellar public schools. De Anza College, one of the larges t single-campus communi ty colleges in the country, is another major employer and a magnet for attrac ting local and international students. The City's proactive economic development efforts have resulted in an innovative env ironment for start-ups and growing compani es to thrive, including Bromium, DURECT, Suga rCRM, Pana sonic Venture Group, Altia Systems, Mirapath, Aemetis Inc, Mist Systems, and Plus . The City strives to retain and attract local companies through active outreach and a respo nsive and customer- oriented entitlement process.

Cuper tino is excited to have a number of new mixed-use development projects offering more retail and d ining options, as well as providi ng addi tional housing opporhuut ies to meet the need s of the growing commun ity.

The Main Street and Nineteen800 mixed-use developme nts have created a vibran t downtown are a for Cupertino , offering a large selection of restaurant s and retailers, includin g Alexander 's Steak.house, Eureka !, Oren' s Hummu s, Lazy Dog, Ipp udo, Pasta Armellino, HaiDiLao Hot Pot Restaurant , Pineapple Thai, Pressed Juicery, Orangeth eory, 85 Degree Bakery, SomiSomi, Sul & Beans, Kura Sushi, Vitality Bowls, La Pizzeria, Tan­ cha, Koja Kitchen, Bishops Cuts & Colors, Capez io, Howa rd's Shoes, and Meet Fresh. Housing, office, and the Residence Im, by Marriott are available to support tl,e thriving area.

Serving as a long-time retail anchor for the comm unit y, The Marke tplace has a variet y of stores and restaurant s popular with sh1dents, families, and working professionals. They include Galpao Gaucho, Dai.so, Marukai Groceri es, Harunu Su shi, La Patisserie Bakery, Beard Papa's , Legend's Pizza, Icicles, Kong's Tofu & BBQ Rori Rice, One Pot Shabu Shabu, Olarn Thai, and Erik's DeliCafe to name a few .

Cupertino Village is undergoing renova tions to upgrade existing building s, construct new buildings, parking, and open-cour tyard space. The shoppin g center is home to 99 Ranch Mark et, Duke of Edinburgh Pub & Restaura11t, JSJ Street Kitchen, Kira Kira Beauty, MOD Pizza, Ten Ren Tea, Fantasia Coffee & Tea, Kee Wah Bakery, Happy Lemon, and many other Asian restaura nts, bakeries , and shops. The prope rty owners have received approval to cons tru ct a new full-service boutiqu e hotel with 185 rooms to accommodate business and leisure travelers.

Cupertin o feah 1res many other retail oppo rtuniti es, includin g TJ Maxx and Home Goods, Whole Foods, Target, Party City, and over 180 restaurants to serve residents and the local workforce. There are now seven hotels providing over 1,000 rooms, to serve the area: The Alo Cupertino , Cupertin o Hotel, Hilton Garden Inn, Hya House, Junip er Hotel operated by Curio, Marriott Courtyard, and Residence Inn by Marriott.

Another longtime retail anchor in north Cupertino is Homestead Square Shopping Cente r, located at Home stead Road and De Anza Boulevard. This shopping center includes a 24-hour Safeway, U1ta Beauty, Ross Stores, Pet Club, Michael's, Rite Aid, FedEx, and numerous restaurant s, such as Fish's Wild, Pho Hoa Noodle Soup, Yayoi Teishoku Japanese Restauran t, Starb ucks, Clupotle, and financial instih1tions. 177
Recently approved is the redevelopment of The Oaks Shopping Center site, located off of State Route 85 freeway and across from De Anza College. The Westport Cupertino project will be a mixed-used development consisting of 259 housing units (Rowho use{fow nhomes, senior apa rtments) 35 memory care rooms, -and 20,000 square feet of commercial space.

Apple Park, Apple's newest corporate campus, features approximately 2.8 million squa re feet of office and R&D space north of Highway 280 between Wolfe Road and Tantau Avenue. A state -of-the-art Visitors Center, Observation Deck, flagship retail store, and cafe are open to the public. 178