Cupertino City Council
December 3, 2024

CITY OF FISCAL YEAR 2023-2024
Annual Comprehensive
CUPERTINO Financial Report
City of Cupertino • 10300 Torre Avenue • Cupertino, CA 95014 cupertino.gov

CITY OF CUPERTINO, CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

WITH REPORTS ON AUDIT

BY INDEPENDENT

CERTIFIED PUBLIC ACCOUNTANTS

FOR THE YEAR ENDED
JUNE 30, 2024
Prepared by:

The City of Cupertino Administrative Services Department Finance Division

City of Cupertino
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents
Page
INTRODUCTORY SECTION (Unaudited)
Letter of Transmittal ..

City Council and Directory of City Officials... .. Vil
Organizational Chart. viii
Commissions and Committees.. . iX
GOA Certificate of Achievement for Excellence in Financial Reporting ..

FINANCIAL SECTION
Independent Auditors' Report on Financial Statements.. 1 Management's Discussion and Analysis (Required Supplementary Information) (Unaudited) 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position .. 22
Statement of Activities. .. 24
Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet ... ...28
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position. ...31 Statement of Revenues, Expenditures, and
Changes in Fund Balances... ..32
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities. ..34
Proprietary Fund Financial Statements:

Statement of Net Position. .. 36
Statement of Revenues, Expenses, and Changes in Net Position ...40 Statement of Cash Flows ..42
Notes to the Basic Financial Statements ..51
City of Cupertino
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule:

General Fund. .. 97
Transportation Special Revenue Fund ...98
Housing Development Special Revenue Fund .. 99
Notes to the Budgetary Comparison Schedules.... ......... 101 Schedule of Changes in the Net Pension Liability and Related Ratios Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan. 102 Schedule of Contributions - Pensions
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan. 104 Schedule of Changes in the Net OPEB Liability and Related Ratios. 106 Schedule of Contributions - Other postemployment Benefits 108 Supplementary Information:

Other than the General Fund and Special Revenue Funds 113 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual:

Public Facilities Corporation Debt Service Fund 115
Capital Improvement Projects Capital Projects Fund 116
Nonmajor Governmental Funds:

Description of Nonmajor Governmental Funds 117
Combining Balance Sheet... 118
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances... 120 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual:

Storm Drain Improvement Special Revenue Fund... 122
Park Dedication Special Revenue Fund 123
Environmental Management/Clean Creeks Special Revenue Fund 124 Traffic Impact Special Revenue Fund.. 125
Stevens Creek Corridor Park Capital Projects Fund. 126
Nonmajor Enterprise Funds:

Combining Statement of Net Position... 129
Combining Statement of Revenues, Expenses and Changes in Net Position 130 Combining Statement of Cash Flows... 131
Internal Service Funds:

Combining Statement of Net Position 134
Combining Statement of Revenues, Expenses, and Changes in Net Position.. 136 Combining Statement of Cash Flows.. 138
City of Cupertino
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents (Continued)
Page
STATISTICAL SECTION (Unaudited)
Description of Statistical Section Contents... . 145
Financial Trends:

Net Position By Component - Last Ten Fiscal Years... .. 146 Changes in Net Position - Expenses and Program Revenues - Last Ten Fiscal Years 148 Fund Balances of Governmental Funds - Last Ten Fiscal Years. 152 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years. ... 154 Revenue Capacity:

Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years. ... 157 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years. 158 Principal Property Taxpayers - Current Year and Nine Years Ago.. ... 160 Property Tax Levies and Collections - Last Ten Fiscal Years.. ... 161 Debt Capacity:

Ratios of Outstanding Debt by Type - Last Ten Fiscal Years ... 162 Direct and Overlapping Bonded Debt. .. 163
Legal Debt Margin Information - Last Ten Fiscal Years.. 164 Ratio of General Bonded Debt - Last Ten Fiscal Years 165 Demographic and Economic Information:

Demographic and Economic Statistics - Last Ten Fiscal Years ... 166 Top 25 Sales Tax Producers ... 167
Operating Information:

Full-Time Equivalent City Employees By Function/Program - Last Ten Fiscal Years. ... 169 Operating Indicators by Function/Program - Last Ten Fiscal Years.. .. 170 Capital Assets By Function/Program - Last Ten Fiscal Years. 172 Community Economic Profile. .. 175
This page intentionally left blank.

CITY OF CUPERTINO

CITY HALL
ST-19SA 10300 TORRE AVENUE • CUPERTINO, CA 95014-3202
(408) 777-CITY • WWWW.CUPERTINO.ORG

CUPERTINO
November 25, 2024
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, 2024. The report is prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) set by the Governmental Accounting Standards Board (GASB). The report presents City information on an entity-wide basis and a more detailed fund-level basis. The fund-level reports emphasize the City's major funds. A Management Discussion and Analysis (MD&A) presents a comparative analysis of current and prior year results, changes in financial position, a comparison of actual versus budget, financial highlights, trends, and disclosure of any known significant events or decisions that affect the financial condition of the City. This transmittal letter is designed to complement the MD&A and should, therefore, be read in conjunction with it. The MD&A is required supplementary information and is found in the Financial Section of the ACFR.

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

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

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

ECONOMIC CONDITIONS
The City of Cupertino is located in Santa Clara County at the southern end of the San Francisco Bay Peninsula. The City is comprised of 13-square miles and is bordered by the cities of San Jose, Saratoga, Sunnyvale, Santa Clara, and Los Altos. It has a residential population of 59,471 (California Department of Finance, January 2024).

Situated at the west end of Silicon Valley, Cupertino has earned the reputation of a balanced community with a healthy climate for business and well-maintained residential neighborhoods, community parks and public facilities. The excellent reputation of Cupertino's schools is a major attraction for families wishing to settle in close proximity to high-wage jobs in Silicon Valley. The City recognizes the importance of quality school facilities and programs to all Cupertino residents and works in partnership with the schools in many programs affecting education and youth. National surveys rank the city high in education levels, average household incomes, and registered patent numbers, as well as one of the best cities in which to live and raise a family.

Because Cupertino is a mostly built-out city, the City of Cupertino focuses on business retention and revitalization. Cupertino is world renowned as the home of high-tech giants, such as Apple, Inc., and Amazon, and as a community with stellar public schools. De Anza College, one of the largest single-campus community colleges in the country, is another major employer and a magnet for attracting local and international students. The City's proactive economic development efforts have resulted in an innovative environment for start-ups and growing companies to thrive. The City strives to retain and attract local companies through active outreach and a responsive and customer-oriented entitlement process.

The City is excited to have a number of new mixed-use development projects offering more retail and dining options, as well as providing additional housing opportunities to meet the needs of the growing community.

The Main Street and Nineteen800 mixed-use developments continue to offer a vibrant downtown area for Cupertino, with a large selection of restaurants and retailers, including Alexander's Steakhouse, Eureka!, Oren's Hummus, Lazy Dog, Ippudo, HaiDiLao Hotpot Restaurant, Pressed Juicery, Orangetheory Fitness, 85 Degree Bakery, Somi Somi, Sul & Beans, Kura Sushi, Vitality Bowls, Holder's Country Inn, Koja Kitchen, Bishops Cuts/Color, Capezio, Howard's Shoes, Tan Cha, Meet Fresh, Pineapple Thai, Koi Palace Contempo, Myungrang Hotdog, Pacific Catch, Philz Coffee, Pelicana Chicken, Golden Vision Optical, Meri West Bank, AT&T Store, The Original Facial Bar, Pizza My Heart, Charles Schwab (formerly TD Ameritrade), and Bon Mot Restaurant. Housing, office, and a Residence Inn by Marriott and Main Street Cupertino Lofts are available to support the thriving area. Benihana, Bowlmor, and Cupertino Ice Center also serve as long-time anchors.

The limited construction of new retail and commercial development results in strengthening existing popular venues in Cupertino, including The Marketplace. The Marketplace has a variety of stores and restaurants popular with students, families, and working professionals. They include Sanrio (Hello Kitty), Kiddleton, Galpao Gaucho (Brazilian Steakhouse), Daiso, Marukai Groceries, Harumi Sushi, La Patisserie Bakery, Beard Papa's, Legend's Pizza, Icicles, Kong's Tofu & BBQ, and One Pot Shabu Shabu.

Shopping center improvements to Cupertino Village reflect building upgrades and renovations, newly constructed buildings, parking, and open space. The shopping center is home to 99 Ranch Market, Duke of Edinburgh Pub & Restaurant, Ume Tea, Tofu Plus, Kira Kira Beauty, Ten Ren Tea, Fantasia Coffee & Tea, Happy Lemon, Shanghai Family Restaurant, and many other Asian restaurants, bakeries, and shops.

Cupertino features many other retail opportunities, including TJ Maxx and Home Goods, Whole Foods, Target, Party City, and over 180 restaurants to serve residents and the local workforce. There are seven hotels providing over 1,000 rooms, to serve the area: The Aloft Cupertino, Cupertino Hotel, Hilton Garden Inn, Juniper Hotel operated by Curio, Marriott Courtyard, the Residence Inn by Marriott, and Hyatt House.

The Homestead Square Shopping Center, located at Homestead Road and De Anza Boulevard, includes a Safeway, PGA Tour Superstore, Starbucks, Ulta Beauty, Ross, Pet Club, Michaels, FedEx, and numerous restaurants, such as Fish's Wild, Pho Hoa Noodle Soup, Yayoi Teishoku Japanese Restaurant, and Chipotle.

Apple completed construction of its new corporate campus, Apple Park, which includes approximately 2.8 million square feet of office and R&D space north of Highway 280 between Wolfe Road and Tantau Avenue. A state-of-the-art Visitors Center, Observation Deck, flagship retail store and café offer the public a place to learn, explore, and shop.

Property Tax
According to the 2023-2024 Assessor's Annual Report for Santa Clara County, Cupertino's net assessment roll growth increased by nearly $1,411 million, or 4.6%, from the prior year. Residential use values increased 6.8% a total of $1,281 million and represented 90.8% of net positive growth experienced in the City. Commercial properties posted a decrease of $91.5 million, or -1%, due to the movement of assets from the secured to the unsecured roll. The industrial properties reported growth of $99.1 million, or 7.0%, on the strength of parcels adding improvement values between tax years or tenants at these sites adding fixtures and business assets. Unsecured assets in Cupertino increased by $75.7 million, or 7.1% due to the movement of assets from the secured to the unsecured roll, which contributed to the large growth in unsecured seen in the commercial use category.

Sales Tax
The City has experienced significant fluctuations in sales tax revenues over the past several fiscal years.

Sales tax revenue peaked at $42.6 million in FY 2020-21, driven by pandemic-related growth in two major industry groups: Business and Industry, and State & County Pools. These sectors saw substantial gains due to increased demand for technology and online purchases. However, as in-person purchases resumed, revenues decreased to $34.8 million in FY 2022-23, and further declined to $31.0 million in FY 2023-24, returning to pre-pandemic levels.

The increase in sales tax revenue during FY 2020-21 and FY 2021-22 can be attributed to strong growth in two major industry groups: Business and Industry, and State & County Pools. These groups experienced the greatest growth during the pandemic. However, during FY 2022-23, these groups have returned to FY 2019-20 levels, with other industry groups have shown modest but constant growth over the years, contributing to the City's diversified economic base. In FY 2023-24, the Business and Industry group experienced the largest decrease, which in turn negatively affected the State and County Pools.

Sales taxes are comprised of eight major industry groups: Business and Industry and State & County Pools (86.1%), Restaurants and Hotels (6.8%), General Consumer Goods (3.3%), Fuel and Service Stations (1.8%), Food and Drugs (1.1%), Building and Construction (0.7%), and Autos and Transportation (0.2%) in FY 2023-24. Due to confidentiality requirements, the percentage for State & County Pools has been included within the Business and Industry category. These figures underscore the City's reliance on technology-driven sectors while highlighting emerging contributions from hospitality and retail industries.

Pension and Other Post-Employment Benefits (OPEB)
The City remains committed to responsibly managing its long-term pension and retiree medical obligations.

As of June 30, 2024, Cupertino's CaPERS actuarial valuation (measured as of June 30, 2023) reported an unfunded accrued liability of approximately $58.0 million, with a funded status of 68.2%. Adjustments to ili
the CaPERS discount rate from 7.0% to 6.9% in FY 2022-23 increased liabilities for all agencies, including Cupertino. Despite these challenges, the City continues to address its obligations proactively through long- term planning and prudent fiscal management.

To mitigate rising costs, the City implemented measures such as reducing pension benefits for new hires under state law and increasing employee contributions. Additionally, the City continues to leverage its Section 115 Pension Trust, established as part of a pension rate stabilization program. Since its inception in 2017-18, the City has contributed $16 million, and the trust remains a critical tool for managing pension. cost volatility.

As of June 30, 2024, the City's Net OPEB Liability stands at approximately $2.4 million. While the City has traditionally contributed annually to its retiree health plan trust, the City paused its contributions in FY 2022-23 and FY 2023-24 to help balance potential General Fund deficits resulting from the CDTFA audit.

This decision underscores Cupertino's flexibility in addressing short-term fiscal challenges while remaining committed to the long-term sustainability of its OPEB obligations.

The City benefits from its contracted approach to public safety services, outsourcing police operations to he County Sheriff and fire protection to a special district. This structure avoids the significant pension anc apital costs associated with operating its own public safety departments. Additionally, prudent financia practices, including maintaining robust reserves and implementing cost-saving measures, position Cupertino to navigate economic uncertainties effectively.

California Department of Tax and Fee Administration (CDTFA) The City of Cupertino continues to navigate a dynamic economic environment shaped by its strong property tax base, diversified sales tax revenue sources, and ongoing fiscal challenges. Recently, the City achieved a favorable resolution to a California Department of Tax and Fee Administration (CDTFA) audit involving a major sales taxpayer.

To prepare for a potential adverse outcome, the City established a Sales Tax Repayment Reserve totaling $74.5 million to cover disputed revenues. However, following the settlement reached in October 2024, the reserve was deemed unnecessary, and the funds were transferred back to the General Fund's unassigned balance. This resolution underscores the City's proactive financial management and strengthens its ability to address future economic uncertainties.

ECONOMIC INITIATIVES
The City of Cupertino remains committed to fostering economic diversity and maintaining long-term fiscal sustainability. While Cupertino benefits from a thriving high-tech economy, led by major employers like Apple Inc., the City is focused on broadening its revenue base to enhance stability and growth.

This includes supporting the development of emerging industries, promoting local entrepreneurship, and investing in innovative infrastructure that attracts diverse businesses. By fostering a vibrant mix of industry sectors, from technology to retail and services, the City aims to create a resilient economy that can adapt to changing market conditions, ensuring sustained prosperity for the community and future generations.

ACCOUNTING AND BUDGETARY CONTROL
In developing and evaluating the City's accounting system, consideration is given to the adequacy of internal accounting controls. The City's controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against losses from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability of assets. iv
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 UPDATE
The City of Cupertino remains committed to financial integrity and accountability. Following the 2018 discovery of embezzlement by a former employee, Jennifer "Yuen-Cheng" Chang, the City has pursued both criminal and civil remedies to recover the stolen funds. In December 2021, Ms. Chang pleaded no contest to three felony charges and paid the City $612,000 in restitution as a condition of her criminal judgment. The City also pursued a civil case, which concluded on May 5, 2024, when the court found Ms.

Chang liable for conversion and awarded the City over $800,000 in damages, including the remaining principal and accrued interest. Through a subsequent settlement agreement, Ms. Chang agreed to pay the full damages awarded by the court. Between the criminal judgment and the civil settlement, the City has successfully recovered the entire loss resulting from the embezzlement.

To safeguard against future incidents, the City has strengthened internal controls, hired additional accounting staff to enhance segregation of duties, and established an internal audit function in FY 2019-

20. The City also engaged Moss Adams, LLP as its internal auditor, reinforcing the City's commitment to robust financial oversight and operational transparency.

CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Cupertino for its AFR 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 AFR. This report must satisfy both GAAP and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. Due to the timing of the completion of last year's AFR and the earlier completion date of this report, the City has not yet received notification regarding the award for the fiscal year ended June 30, 2023. However, 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, department 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 Beth Viajar, Richard Wong, Giang Dinh, and Janet Liang for their efforts in the preparation and production of this report.

Reviewed by,
Kust Alao
Kristina Alfaro
Director of Administrative Services
vi
Directory of City Officials
City Council
Sheila Mohan J.R. Fruen
Mayor Vice Mayor
Liang Chao Kitty Moore Hung Wei
Council Member Council Member Council Member
Directory of City Officials
Pamela Wu - City Manager
Matt Morley - Assistant City Manager
Christopher Jensen - City Attorney
Tina Kapoor - Deputy City Manager
Kristina Alfaro - Director of Administrative Services
Ben Fu - Director of Community Development
Chad Mosley - Director of Public Works
Rachelle Sander - Director of Parks and Recreation
Teri Gerhardt - Chief Technology Officer
vii
City Organizational Chart
Citizens of
Cupertino
City Council
Committees and
City Attorney City Manager
Economic Office of Sustainability Community Outreach Office of Development Emergency Services Programs and Neighborhood City Clerk Watch Communications
Law Enforcement Administrative
Santa Clara County Community Parks and Innovation and
Services* Development Recreation Public Works
Sheriffs- Contract) Technology
Finance Capital
(Accounting, Building Recreation and Development
Education Improvement Infrastructure GIS
Purchasing, Budget) Services Program
Human Resources Planning Sports, Safety, and Environmental Transportation Multimedia Jutdoor Recreation Programs Applications
Business and
Code Enforcement Community Service Center
Services
Housing Facilities and Fleet Trees and ROW Streets Grounds *The City Treasurer is the Director of Administrative Services Commissions and Committees

ARTS AND CULTURE LIBRARY COMMISSION SUSTAINABILITY
COMMISSION Archana Panda COMMISSION
Carol Maa Janki Chokshi Alexander Fung
Dana Ford Liyan Zhao Conny Yang
David Wang Sheela Sreekanth Steve Poon
Kiran Varsshneya Rohra Qin Pan Susan Hansen
Rani Agrawal Sonali Padgaonkar

PARKS AND RECREATION

AUDIT COMMITTEE COMMISSION TEEN COMMISSION
Angela Chen Carol Stanek Anika Mukherjee
Eno Schmidt Claudio Bono Joyce Cheung
Hanyan Wu Hemant Buch Peter Chen
Hung Wei Jennifer Shearin Pranav Gupta
Sheila Mohan Seema Swamy Rayna Shah

BICYCLE PEDESTRIAN PLANNING COMMISSION
COMMISSION David Fung Shivika Biswari
Herve Marcy Muni Madhdhipatla Sudisha Kumar
Grace John Seema Lindskog
Toel Wolf Steven Scharf TECHNOLOGY, INFORMATION
John Zhao Teiesh Mistry & COMMUNICATIONS
Ilango Ganga COMMISSION
PUBLIC SAFETY COMMISSION Balaram Donthi
HOUSING COMMISSION Emma Shearir
Neat vada Mukesh Garg
Angan Das
Connie Cunningham Nirmalendu Da Prabir Mohanty
Govind Tatachari Rohan Pandit Sudeep Kumar
{yan Golze Sidarth Rajaram
(uyi He
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
Chustophe P. Morill
Executive Director/CEO
THE

PUN GROUP

ACCOUNTANTS & ADVISORS
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
www.pungroup.cpa

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
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, 2024, 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, 2024, 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 report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

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

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

Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 omissións, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management's Discussion and Analysis, the Budgetary Comparison Schedules - General Fund and Major Special Revenue Funds, the Schedule of Changes in Net Pension Liability and Related Ratios, the Schedule of Contributions - Pensions, the Schedules of Changes in Net Other Postemployment Benefits Liability and Related Ratios, and the Schedule of Contributions - Other Postemployment Benefits as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2 To the Honorable Mayor and the Members of the City Council of the City of Cupertino
Cupertino, California

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

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

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 25, 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.

The few Group, Up
Santa Ana, California
November 25, 2024
This page intentionally left blank.

CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
As management of the City of Cupertino, California (City), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities for the fiscal year ended June 30, 2024 (FY 2023-24).

Readers are encouraged to consider the following information in conjunction with the accompanying Transmittal Letter and Basic Financial Statements.

FINANCIAL HIGHLIGHTS
The comparisons provided in this discussion and analysis are between FY 2022-23 and FY 2023-24. All increases and decreases are expressed relative to FY 2022-2023 amounts. Financial highlights for FY 2023-24 are summarized below. Details related to these highlights are found in the remaining sections of this analysis:

Citywide
• The City's total net position, the amount by which total assets and deferred outflows of resources exceed total liabilities and deferred inflows of resources, equaled $398.5 million in FY 2022-23 and equals $424.4 million in FY 2023-24.
• Of this amount, $145.9 million is unrestricted and may be used to meet the City's ongoing obligations to residents and creditors. The remaining net position is classified as net investment in capital assets of $205.0 million and restricted of $73.5 million.
• The City's total net position increased by $25.8 million over FY 2022-23, and is largely attributed to revenues exceeding expenditures as reported in the statement of activities. The remainder of this report will provide a more detailed analysis of the City's net position and operating activities that contributed to this increase. • In December 2021, the California Department of Tax and Fee Administration (CDTFA) initiated an audit of one of the City's major sales taxpayers, creating uncertainty about the potential fiscal impact. In March 2023, the CDTFA preliminarily determined that sales tax revenues had been misallocated to Cupertino, and the City received the formal audit results in October 2023 and subsequently appealed the results. This prompted the City to take proactive steps to mitigate potential impacts, including adjustments in its FY 2023-24 and FY 2024-25 Adopted Budgets.
• During the fiscal year, the Federal Reserve continued its efforts to combat inflation by implementing further interest rate increases. The City's investment portfolio reached 98.1% of its book value as of June 30, 2024, an increase to last year's 95%, resulting in a positive $4.4 million adjustment compared to the prior fiscal year.

Fund Level
• As of June 30, 2024, governmental funds report a combined fund balance of $246.1 million, an increase of $25.7 million from the prior year. Of this amount, $26.0 million is available for spending at the City's discretion (unassigned fund balance).
• As of June 30, 2024, the General Fund reports an ending fund balance of $166.1 million. Of this amount, $26.0 million is available for spending at the City's discretion (unassigned fund balance). Cash and investments of the General Fund total $149.0 million, which represents 89.7% of the General Fund's total $166.1 million fund balance.

To address the anticipated CDTFA audit outcome, City Council established a committed Sales Tax Repayment Reserve in October 2023, initially funded at $56.5 million and later increased to $74.5 million to account for disputed revenues and accrued interest. As of June 30, 2024, this $74.5 million is reflected as committed fund balance in the financial statements:
5 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024

OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis are intended to serve as an introduction to the City's Basic Financial Statements. The Basic Financial Statements are comprised of the 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.

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 an accrual basis, which means they measure the flow of all economic resources of the City as a whole. The accrual basis of accounting is similar to the accounting used by most private sector companies. The Statement of Net Position provides information about the financial position of the City as a whole, including all its capital assets and long- term liabilities. The Statement of Activities provides information about all the City's revenues and expenses, with the emphasis on measuring net revenues and expenses for each of the City's programs. The Statement of Activities explains in detail the change in net position for the year. Over time, increases or decreases in net position can be indicators of whether the financial condition of the City is improving or deteriorating.

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

The City's governmental activities include the activities of a separate legal entity, the Cupertino Public Facilities Corporation (the "Corporation"), because the City is considered to be financially accountable for the Corporation. The City leases its major facilities from the Corporation, which then uses the lease payments • Business-type activities—All of the City's enterprises are reported here, including solid waste management and most of the City's recreational operations. Unlike governmental services, these services are supported by charges paid by users based on the amount of services used.

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

The Fund Financial Statements provide detailed information about each of the City's most significant funds, called major funds. Cupertino's Fund Financial Statements include governmental, enterprise and internal service funds as discussed below. Each major fund is presented individually, with all non-major funds summarized and presented only in a single column. Subordinate schedules, which follow the Notes to Basic Financial Statements, present the 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.
6 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
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.

Comparisons of budget and actual financial information are included in the Basic Financial Statements for the General Fund and other major Special Revenue Funds. For other nonmajor funds, budgetary comparison schedules for these funds are included in this document as supplemental information only.

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

Since the City's Internal Service funds provide goods and services only to the City's governmental and business- type activities, their activities are reported only in total at the fund level. Internal Service funds may not be major funds because their revenues are derived from other City funds. These revenues are eliminated in the City-wide financial statements and any related profits or losses are returned to the activities which created them, along with any residual net position of the Internal Service funds. For this City, internal service activities predominantly benefit governmental rather than business-type functions, and are therefore included within governmental The Notes to Basic Financial Statements provide important additional detail that is essential to a full understanding of the data reported 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.
7 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued for the Year Ended June 30, 202.

Table 1
Condensed Statement of Net Position at June 30
(in thousands)
Governmental Activities
2024 2023
Assets:

Cash and investments $ 241,393 $ 205,572
Restricted cash and investments 21,664 19,089
Other assets 25,113 25,222
Capital assets 220,484 219,168
Total assets 508,654 469,051
Deferred Outflows of Resources:

Loss on refunding 120 159
Related to Pension 16,410 17,294
Related to OPEB 5,693 5,859
Total deferred outflows of resources 22,223 23,312
Liabilities:

Long term debt 16,417 18,850
Other liabilities 95,682 80,725
Total liabilities 112,099 99,575
Deferred Inflows of Resources:

Leases Receivable 2,321 2,379
Related to Pension 82 131
Related to OPEB 1,857 2,169
Total deferred inflows of resources 4,260 4,679
Net Position:

Net Investment in capital assets 202.961 198,451
Restricted 73,407 69,129
Unrestricted 138,150 120,529
Total net position 414,518 388,109
8 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
Governmental Activities
The City's change in net position from governmental activities was $26.4 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 to its Section 115 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 115 Trust qualifies as a "trust," the assets in the Section 115 Trust are not used to directly pay benefits to beneficiaries; rather, they are used to pay CaPERS via the CERBT Trust, and as a result, the activities are not required to be reported in a fiduciary fund.

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. Additionallý, the change in demographic assumptions and investment performance, the Net OPEB Liability grew to $2.4 million, an increase of $1.8 million from the previous year's Net OPEB Liability of $.6 million.
• Capital assets increased approximately $1.3 million. This consisted of continued significant capital investment into capital projects dedicated 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 12.9% over the previous year and resulted from the regular debt service payments made and the annual amortization on the issuance premium during the year. • Other liabilities increased by approximately $15.0 million or 18.5%, primarily due to an increase in the City's Net Pension and OPEB Liabilities.
• Deferred Outflows Related to Pension and OPEB decreased $1.1 million, while Deferred Inflows of Resources Related to Pension and OPEB increased approximately $.4 million primarily due to actuarial changes of assumptions.

CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
The Statement of Activities presents program revenues, expenses, general revenues, and the resulting change in net position as summarized in the next table.

Table 2
Condensed Statement of Activities for the Year Ended June 30 (in thousands)
Governmental Activities
Expenses
Administration 8,830
Law enforcement 15,716
Innovation and technology 1,951
Administrative services 6,363
Parks and recreation 6,021
Community development 13,696 12,463
Public works 36,547 38,696
Interest on long-term debt 305 370
Total expenses 94,787 90,410
Revenues
Program revenues:

Charges for services 18,622 18,405
Operating grants and contributions 4,685 10,881
Capital grants and contributions 3,666 1,594
Total program revenues 26,973 30,881
General revenues:

Taxes:

Property tax 22,494 21,808
Property tax in-lieu of motor vehicle fee 10,543 10,082 Sales tax 30,961 34,819
Transient occupancy tax 6,907 7,062
Utility user tax 3,936 4,104
Franchise tax 4,314 3,995
Other taxes 1,971 2,873
Intergovernmental, unrestricted:

Motor vehicle license fee 75 62
Investment earnings 11,563 2,802
Gain on sale of capital assets
Miscellaneous 1,442 444
Total general revenues 94,204 88,051
Total revenues 121,177 118,932
Excess of revenues over expenses,
before transfers 26,390 28,52l
Transfers 20 (296)
Change in net position 26,410 28,225
Beginning net position 388,109 359,884
Ending net position 414,518 388,109
10 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
City-wide Governmental Activities Revenues
Table 2 shows that revenues from governmental activities increased $2.2 million or 1.9% from last year, finishing at $121.2 million. The modest increase is largely due to increases in the temporary market adjustment to investment earnings and settlement agreement (included in Miscellaneous Revenue) offset by decreases in Operating Grants and sales taxes.

Property taxes increased general revenues by $.7 million over the prior year. According to the 2023/24 City of Cupertino Property Tax Review from HDL (Assessor's Annual Report for Santa Clara County) the net assessment roll growth increased $1.4 billion, or 4.6%, from the prior year.

The City experienced a sales tax decrease of $3.9million in the fiscal year, decreasing by 11.1% over the previous fiscal year. As consumers continue to transition back to in store shopping from online, sales tax revenue continue to decrease with the business and industry and the City's county pool allocation experienced the greatest decline.

Transient occupancy tax revenue decreased by $0.2 million, or 2.2%, compared to the prior year. While the City continues to see gradual recovery in this revenue source, the pace is slower than other areas due to the lasting impact of employers' long-term and permanent telework policies, which significantly affect travel and lodging demand.

Investment earnings increased by $8.7 million over the prior year. This is primarily due to an unrealized investment gain of $4.4 million compared to the previous year. Albeit, the City's investment portfolio continues to have a market value below cost.

Program revenues experienced a decrease of $3.9 million or 13%, and is primarily attributable to the revenue recognition of the remaining SLFRF funds in the previous year.

City-wide Governmental Activities Expenses
City-wide governmental activities expenses increased by $4.4 million, or 4.8%. This was primarily driven by increases across all programs with the exception of Public Works.

Change in Net Position
The City-wide governmental activities net position increased by $26.4 million, closely aligning with the prior year's $28.2 million increase. This growth is attributed to budget reduction strategies, including decreased utility expenses, reduced capital outlay, renegotiated contract services, and savings from staff vacancies. 11 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
• REVENUES BY SOURCE - GOVERNMENTAL ACTIVITIES
FISCAL YEAR 2023-24
Property Tax 27.3% Sales Tax 25.5%
Capital Grants &
Contributions 3.0% Transient Occupancy Tax

5.7%
Operating Grants &
Contributions 3.9% Utility User Tax 3.2%
Franchise Tax 3.6%
Charges for Services Other Taxes 1.6%

15.4% Intergovernmental 0.1%
Miscellaneous 1.2% Investment Earnings

9.5%
Transfers 0.0%

EXPENSES - GOVERNMENTAL ACTIVITIES
Community 7 FISCAL YEAR 2023-24
Development Administration 9.6%

14.5%
Parks and Law Enforcement
Recreations 7.6% 17.7%
Administrative
Services 8.6%
Innovation and
Technology 3.3%
Public Works 38.7%
Business Type Activities
Business-type activities in the City-wide Financial Statements include the City's four enterprise funds. Enterprise funds are used to account for recreational and solid waste management operations that are financed and operated in a manner similar to private business enterprises where the intent is that costs of providing services and facilities to the general public on a continuing basis be financed or recovered primarily through user fees. The major proprietary funds section of this report provides more information on business-type results. 12 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
As provided in Table 3 and Table 4, the business-type net position totaled $9.9 million at June 30, 2024, decreasing by $.6 million or 5.4%, largely due to operating costs exceeding revenues. Business-type activities revenues increased by $.5 million, or 6.2%, to $7.9 million, investment earnings increased by $.4 million and operating expenses increased by $.5 million to $8.4 million. The operating losses were attributed to Cupertino Sports Center, Recreation Programs, and Blackberry Farm.

Table 3
Condensed Statement of Net Position at June 30
(in thousands)
Business Type Activities
2024 2023
Assets:

Cash and investments $ 10,410 $ 11,373
Other assets 956 307
Capital assets 2,009 2,109
Total assets 13,375 13,789
Deferred Outflows of Resources:

Related to pension 872 832
Related to OPEB 378 311
Total deferred outflows of resources 1,250 1,143
Other Liabilities: 4,639 4,386
Total liabilities 4,639 4,386
Deferred Inflows of Resources:

Related to pension 4 6
Related to OPEB 123 115
Total deferred inflows of resources 127 121
Net Position:

Net Investment in capital assets 2,010 2,110
Restricted 107 167
Unrestricted 7,742 8,148
Total net position 2,859 10,425
13 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
Table 4
Condensed Statement of Activities for the Year Ended June 30 (in thousands)
Business Type Activities
Expenses 2024 2023
Resource recovery 2,228 $ 2,038
Cupertino sports center 3,113 3,457
Recreation programs 2,394 1,662
Blackberry Farm 674 799
Total expenses 8,409 7,956
Revenues
Program revenues:

Charges for services 7,429 7,249
General revenues:

Investment earnings 434 156
-
Total revenues 7,863 7,405
Excess of revenues over expenses,
before transfers (546) (551)
Transfers (20) 296
Change in net position (566) (255)
Beginning net position 10,425 10,679
Ending net position 9,859 10,425

MAJOR GOVERNMENTAL FUNDS
General Fund
General Fund Revenues
The General Fund's fund balance increased by $27.5 million in FY 2023-24. This increase resulted from revenues and transfers-in totaling $110.2 and $.1 million, respectively, exceeding expenditures totaling $76.2 million and transfers out totaling $6.6 million.
• General Fund revenue decreased by $.8 million compared to FY 2022-23. This net decrease is mainly explained by an increase of $1.1 million in property taxes and $6.1 million use of money and property, which includes realized and unrealized investment income, offset by a decrease of $3.9 million in sales tax and $6.4 million in intergovernmental revenue, which included ARPA revenue recognition in the previous year. '14

CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
Fiscal 2023-24 overall expenditures, at $76.2 million, were $3.6 million, or 5.0%, higher than last year. This result came in $10 million, or 11.6%, under the final budget. Year-over-year and budget-versus-actual results for General Fund programs are described below
Transportation
The Transportation Special Revenue Fund carried a June 30, 2024, ending fund balance of $13.6 million, increasing by 28.8%, or $3.0 million from the beginning of the fiscal year. In recent years this fund has accumulated fund balance year over year. The current year's increase is primarily attributed to additional transfers in to support scheduled projects that remain in progress.

Housing Development
The Housing Development Special Revenue Fund carried a June 30, 2024, ending fund balance of $11.1 million, down 3.4%, or $0.4 million, from the beginning of the fiscal year.

Public Facilities Corporation
On September 29", 2020, the City of Cupertino 2020A Certificates of Participation (2020 COPs) were successfully sold at very attractive interest rates in order to refund the City's 2012 Certificates 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 short maturity, and favorable supply and demand dynamics in the California municipal market.

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 11.61% of refunded par (compared to $2.26 million, or

8.36% of refunded par, when presented to Council on September 1st) and a True Interest Cost of 0.72%. 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. Fund balance as of June 30, 2024, was $250 which was $1,500 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 had an ending fund balance of $32.0 million as of June 30, 2024, reflecting a decrease of $2.8 million from the prior fiscal year. This decrease is primarily attributed to an increase in expenditures for ongoing capital projects.

MAJOR PROPRIETARY FUNDS
Resource Recovery
The City has a solid waste franchise agreement with Recology that shares collection, landfill disposal, and recycling revenues and costs. This fund receives revenues from Recology with the funds going toward landfill costs, regulatory fees, and staffing costs that the City incurs to manage its solid waste, recycling, and household hazardous waste programs. Total operating revenue and expenses is at $2.4 million and $2.2 million, respectively.

Considering net non-operating revenues of $0.2 million, net position increased by $0.3 to an ending fund balance of $5.1 million.
15 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
Recreation Programs
This enterprise operates the Quinlan Community Center, Monta Vista Recreation Center, McClellan Ranch, Creekside Park building, eight school sites, and various parks. These programs generated approximately $2 million in revenues and program expenses of approximately $2.4 million. Considering net non-operating revenues of $0.1 million, the program experienced a net operating loss of $0.2 million. The fund ended the year with a net position of $2.8 million.

Cupertino Sports Center
The Sport Center generated operating revenue decreased by $0.4 million or 15.4%, while the expenses also decreased by $0.3 million, resulting in a net operating loss of $0.8 million. Considering net non-operating revenues of $0.1 million, this fund's net position was $1.2 million as of June 30, 2024.

NONMAJOR PROPRIETARY FUNDS
Blackberry Farm
City employees, with a teaching professional contractor, staff the City-owned Blackberry Farm golf course and pro shop. This fund generated a positive net position increase of $22.8 thousand to $757.2 thousand as a result of $663.3 thousand in operating revenues, $673.4 thousand in operation expenses, and a positive nonoperating revenue of $32.9 thousand.

GENERAL FUND BUDGETARY HIGHLIGHTS
For the fiscal year ended June 30, 2024, the General Fund's original expenditure budget of $79.6 million increased by $6.5 million, resulting in a final amended budget of $86.1 million. Actual expenditures for the fiscal year totaled $76.2 million, coming in $10.0 million under budget. The majority of the budget increase occurred in Public Works, driven by an additional $2.9 million for contract services, primarily for a community shuttle program, and $1.5 million for special projects carried over from the prior fiscal year.

CAPITAL ASSETS
At June 30, 2024, the City had $222.5 million, net of depreciation and amortization, invested in a broad range of capital assets used in governmental and business-type activities, as shown 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 $1.2 million, after depreciation and amortization. 16 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
Table 5
Capital Assets, Net of Depreciation and Amortization, at June 30 (in thousands)
2024 2023
Governmental Activities:

Land $ 64,787 $ 64,787
Easements 19,615 19,615
Construction in progress 27,161 28,594
Buildings 11,967 12,504
Improvements other than buildings 15,431 13,373
Machinery and equipment 3,567- 3,640
Roads, curbs, gutters, sidewalks, medians and bridges 69,403 69,369 Streetlights 1,361 1,241
Storm drain structures and mains 5,551 3,541
Traffic signals 355 420
Right-to-use assets 1,287 2,083
Total Governmental Activities 220,484 219,167
Business-Type Activities
Construction in progress 3 358
Buildings 1,540 1,419
Improvements other than buildings 419 262
Machinery and equipment 47 70
Total Business-Type Activities 2,009 2,109
Total City $ 222,494 $ 221,276

DEBT ADMINISTRATION
On September 29, 2020, the City of Cupertino's 2020A Certificates of Participation (2020 COPs) were successfully sold in order to refund the City's 2012 Certificates 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 short maturity, and favorable supply and demand dynamics in the California municipal market. The refunding generated net present value savings of approximately $3.14 million, 11.61% of refunded par and a True Interest Cost of 0.72%. 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.

The June 30, 2024, outstanding principal of $14,030,000 is due to be paid off by June 1, 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.
17 CITY OF CUPERTINO
Management's Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024

CURRENTLY KNOWN FACTS AND CONDITIONS
The City of Cupertino is in a strong financial position, supported by a solid property tax base and diversified sales tax revenues. Following the resolution of a significant California Department of Tax and Fee Administration (CDTFA) audit, previously committed funds were transferred back to the General Fund's unassigned balance.

The City is now focusing on strategies to allocate these uncommitted funds toward community priorities, infrastructure investments, and long-term fiscal sustainability. At this time, the City is not aware of any other facts, conditions, or decisions expected to significantly affect its 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.

Further information can be provided by the City of Cupertino Finance Department, 10300 Torre Avenue, Cupertino CA 95014, phone (408) 777-3280, or by the City website at www.cupertino.gov. 18 BASIC FINANCIAL STATEMENTS
19 This page intentionally left blank.
20 GOVERNMENT-WIDE

FINANCIAL STATEMENTS
21 City of Cupertino
Statement of Net Position
June 30, 2024
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments (Note 2) $ 241,393,169 10,409,609 $ 251,802,778 Receivables:
14,414,306 891,221 15,305,527
Accounts
Interest 3,565,996 64,656 3,630,652
245,873 245,873
Leases, due within one year (Note 4)
21,383 : 21,383
Inventories
Prepaid items 4,680 4,680
Other assets 3,884 3,884
Total current assets 259,649,291 11,365,486 271,014,777 Noncurrent assets:

Restricted cash and investments (Note 2) 21,663,664 21,663,664 Lease receivable, due in more than one year (Note 4) 2,239,890 : 2,239,890 4,617,269 4,617,269
Loans receivable, net (Note 3)
Capital assets: (Note 6)
Capital assets, not being depreciated 111,562,428 3,337 111,565,765 Capital assets, being depreciated and amortized 108.921,607 2,006,083 110.927.690 Total noncurrent assets 249,004,858 2,009,420 251,014,278 508,654,149 13,374,906 522,029,055
Total assets

DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding 119,609 119,609
16,409,725 872,310 17,282,035
Related to pensions (Note 8)
Related to other postemployment benefit (Note 9) 5,693,398 377,739 6.071,137 Total deferred outflows of resources 22,222,732 1,250,049 23,472,781 See accompanying Notes to the Basic Financial Statements. 22 City of Cupertino
Statement of Net Position (Continued)
June 30, 2024
Governmental Business-Type
Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable and accruals 16,864,439 430,327 17,294,766 Accrued payroll and benefits 627,895 289 628,184
Deposits payable 7,623,932 7,623,932
46,767 : 46,767
Interest payable
5,224,783 896,268 6,121,051
Compensated absences, due within one year (Note 7) 453,951 19,979 473,930 Claims payable, due within one year (Note 10) 322,000 322,000 Lease liabilities, due within one year (Note 7) 6,808 6,808 Subscription liabilities, due within one year (Note 7) 597,895 597,895 Long-term debt, due within one year (Note 7) 2,115,000 2,115,000 Total current liabilities 33,883,470 1,346,863 35,230,333 Noncurrent liabilities:

Compensated absences, due in more than one year (Note 7) 4,606,986 214,720 4,821,706 Claims payable, due in more than one year (Note 10) 1,349,587 1,349,587 Lease liabilities, due in more than one year (Note 7) 8,561 : 8,561 Subscription liabilities, due more than one year (Note 7) 612,379 612,379 Long-term debt, due in more than one year (Note 7) 14,301,895 14,301,895

2.29.405
Aggregate net pension liabilities (Note 8) 55,107,440 58,036,845 Net other postemployment benefit liabilities (Note 9) 2,228,086 147,825 2,375,911 Total noncurrent liabilities 78,214,934 3,291,950 81,506,884 Total liabilities 112,098,404 4,638,813 116,737,217

DEFERRED INFLOWS OF RESOURCES
Leases (Note 4) 2,321,090 2,321,090
Related to pensions (Note 8) 82,126 4,367 86,493
Related to other postemployment benefit (Note 9) 1.856,867 123,196 1,980,063 Total deferred inflows of resources 4,260,083 127,563 4,387,646

NET POSITION
Net investment in capital assets (Note 11) 202,961,106 2,009,420 204.970,526 Restricted for:

Public works 37,384,845 37,384,845
:

Affordable housing 11,103,256 11,103,256
Pension trust 21,663,664 21,663,664
Other postemployment benefit 1,608,445 106.718 1,715,163 Other purposes 1,647,071 1,647,071
Debt service 250 250
Total restricted 73.407,531 106,718 73,514,249
Unrestricted 138,149,757 7,742,441 145,892,198
Total net position $ 414.518.394 $ 2.858.579 $ 424.376.973 See accompanying Notes to the Basic Financial Statements. 23 City of Cupertino
Statement of Activities
For the Year Ended June 30, 2024
Program Revenues
Capital Grants
Charges for Operating Grants and
Expenses Services and Contributions Contributions
Functions/Programs
Governmental Activities:

Administration $ 9,069,311 $ 1,370,548 $
16,682,075 739,408 567,591
Law enforcement
Innovation and technology 3,127,436
Administrative services 8,165,843 6,642,671
Recreation services 7,194,533 811,979
Community development 13,696,180 5,549,943
Public works 36,547,118 3,507,250 3,867,433 3,665,581
Interest and fiscal charges 304,972
Total Governmental Activities 94,787,468 18,621,799 4,685,153 3,665,581 Business-Type Activities:

Resource recovery 2,227,782 2,363,496
3,113,577 :

Cupertino sports center 2,362,677 :

Recreation programs 2,393,886 2,039,338 -
Blackberry farm 673,788 663,274
Total Business-Type Activities 8,409,033 7,428,785
Total Primary Government 103,196,501 26,050,584 $ 4,685,153 $ 3.665.581 See accompanying Notes to the Basic Financial Statements. 24 City of Cupertino
Statement of Activities (Continued)
For the Year Ended June 30, 2024
Net (Expense) Revenue and Changes in Net Position
Governmental Business-Type
Activities Activities Total
Functions/Programs
Governmental Activities:

Administration $ (7,698,763) (7,698,763)
Law enforcement (15,375,076) (15,375,076)
Innovation and technology (3,127,436) (3,127,436)
Administrative services (1,523,172) (1,523,172)
Recreation services (6,382,554) (6,382,554)
Community development (7,896,108) ... (7,896,108)
Public works (25,506,854) (25,506,854)
Interest and fiscal charges (304,972) (304,972)
Total Governmental Activities (67,814,935) (67,814,935) Business-Type Activities:

Resource recovery 135,714 135,714
Cupertino sports center (750,900) (750,900)
Recreation programs (354,548) (354,548)
Blackberry farm (10,514) (10,514)
Total Business-Type Activities (980,248) (980,248)
Total Primary Government (67,814,935) (980,248) (68,795,183) General Revenues:

Taxes:

Property taxes 22,494,293 22,494,293
Property tax in lieu of motor vehicle fee 10,542,559 10,542,559 Sales taxes 30,961,166 30,961,166
Transient occupancy tax (TOT) 6,906,722 6,906,722
Utility user tax (UUT) 3,935,917 3,935,917
Franchise tax 4,313,669 4,313,669
Other taxes 1,970,611 1,970,611
Motor vehicle license fee 74,801 74,801
11,562,914 434,290
Investment earnings 11,997,204
Miscellaneous 1,441,717 1,441,717
Total General Revenues 94,204,369 434,290 94,638,659
Transfers 20,000 (20,000)
Changes in Net Position 26,409,434 (565,958) 25,843,476 Net Position - Beginning 388,108,960 10,424,537 398,533,497 Net Position - Ending $ 414.518,394 9,858,579 424.376.973 See accompanying Notes to the Basic Financial Statements. 25 This page intentionally left blank.

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 determined to be Major Funds by the City. 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 fund.

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

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

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

Capital Improvement Projects Capital Projects Fund - This fund accounts for activities related to the acquisition or construction of major capital facilities.
27 City of Cupertino
Balance Sheet
Governmental Funds
June 30, 2024
Special Revenue Funds
Housing
General Transportation Development
ASSETS
Cash and investments (Note 2) $ 148,965,885 $ 14,239,100 $ 5,390,909 Restricted cash and investments (Note 2) 21,663,664
Receivables:

Accounts 11,816,460 1,067,114 124,524
Interest 1,749,186 88,918 1,528,490
Loans, net (Note 3) 428,431 4,188,838
Leases (Note 4) 2,485,763
Due from other funds (Note 5) 1,401,947 :

Advances to other funds (Note 5) 3,000,000
Inventories 21,383
3,884 :

Other assets
Total assets 191,536,603 15.395,132 11.232.761

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accruals 14,048,092 1,107,833 129,505 Accrued payroll and benefits 627,823
Advances from other funds (Note 5) :

1.623,932
Deposits
Unearned revenue 224,783
Total liabilities 22,524,630 1,107,833 129,505
Deferred inflows of resources:

Lease related (Note 4) 2,321,090
Unavailable revenue 595,564 651.941
Total deferred inflows of resources 2.916,654 651,941
Fund balances: (Note 11)
Nonspendable 3,449,814
23,310,735 13,635,358 11,103,256
Restricted
Committed 108,627,891
4,741,474 :

Assigned
Unassigned 25,965,405
Total fund balances 166,095,319 13,635,358 11,103,256
Total liabilities, deferred inflows
of resources, and fund balances $ 191,536,603 $ 15,395,132. $ 11,232,761 (Continued)
See accompanying Notes to the Basic Financial Statements City of Cupertino
Balance Sheet (Continued)
Governmental Funds
June 30, 2024
Public Capital
Facilities Improvement
Corporation Projects Nonmajor Total
Debt Capital Governmental Governmental
Service Fund Projects Fund Funds Funds
ASSETS
Cash and investments (Note 2) $ 250 $ 41,255,897 $ 23,211,490 $ 233,063,531 Restricted cash and investments (Note 2) 21,663,664
Receivables:

Accounts 18,249 13,026,347
Interest 143,492 3,510,086
Loans, net (Note 3) 4,617,269
Leases (Note 4) 2,485,763
Due from other funds (Note 5) 1,401,947
Advances to other funds (Note 5) : 3,000,000
Inventories 21,383
Other assets 3,884
Total assets 250 41,255,897 23.373,231 282,793.874

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accruals 1,284,794 121,137 16,691,361 Accrued payroll and benefits 627,823
Advances from other funds (Note 5) 3,000,000 3,000,000
Deposits 7,623,932
Unearned revenue 5,000,000 5,224,783
Total liabilities 9,284,794 121,137 33,167,899
Deferred inflows of resources:

Lease related (Note 4) - 2,321,090
Unavailable revenue 1,247,505
Total deferred inflows of resources 3,568,595
Fund balances: (Note 11)
Nonspendable 3,449,814
: 23,097,546
Restricted 71,147,145
Committed 108,627,891
Assigned 31,971,103 154,548 36,867,125
Unassigned 25,965,405
Total fund balances 250 31,971,103 23,252,094 246,057,380 Total liabilities, deferred inflows
of resources, and fund balances $ 250 $ 41.255.897 $ 23,373,231 $ 282,793,874 (Concluded)
See accompanying Notes to the Basic Financial Statements. 29 This page intentionally left blank.
30 City of Cupertino
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position
June 30, 2024
Total Fund Balances - Total Governmental Funds $ 246,057,380 Amounts reported for governmental activities in the Statement of Net Position were reported differently because:

Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet.

Nondepreciable, net of $192,925 reported in the Internal Service Fund 111,369,503 Depreciable and amortizable,
net of $2,567,288 reported in the Internal Service Fund 106.354,319 211,723,822 Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities, both current and long-term, are reported in the Statement of Net Position:

Bonds payable (14,030,000)
Premium on bonds payable (2,386,895)
Deferred charges on refunding 119,609
Subscription liabilities, net of $97,221 reported in the Internal Service Funds (1,113,053) Interest payable (46,767)
Compensated absences, net of $424,990 reported in the Internal Service Funds (4,635,947) Claims liability, net of $1,273,000 reported in the Internal Service Funds (398,587) (22,491,640) Net pension liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

Pension related deferred outflows of resources, net of $1,155,833 reported in the Internal Service Funds $ 15,253,892
Aggregate net pension liability, net of $3,881,541 reported in the Internal Service Funds (51,225,899) Pension related deferred inflows of resources, net of $5,785 reported in the Internal Service Funds (76,341) (36,048,348)
Net other postemployment benefit liability and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

Other postemployment benefits related deferred outflows of resources, net of $381,051 reported in the Internal Service Funds $ 5,312,347
Net Other postemployment benefits liability,, net of $149,122 reported in the Internal Service Funds (2,078,964)
Other postemployment benefits related deferred inflows of resources, net of $124,277 reported in the Internal Service Funds (1,732,590) 1,500,793
Revenue reported as unavailable revenue in the governmental funds when it is not received soon enough after year-end to be considered available. The availability criteria does not apply to the Government-Wide Financial Statements and therefore, the revenue is recognized when eligibility requirements are met and earned 1,247,505 Internal Service Funds were used by management to charge the costs of certain activities, such as insurance and equipment replacement to individual funds. The assets and liabilities of the Internal Service Funds were included in the governmental activities in the Government-Wide Statement of Net Position. 6,528,882 Net Position of Governmental Activities 414,518,394
See accompanying Notes to the Basic Financial Statements. 31 City of Cupertino
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2024
Special Revenue Funds
Housing
General Transportation Development
Revenues:

Taxes $ 80,355,732 $ $
9,098,441 438,177 524,394
Use of money and property
Intergovernmental 1,404,322 4,840,805 243,777
Licenses and permits 4,412,057
12,308,496 2,223
Charges for services
Fines and forfeitures - 416,402 4.798
2,199.861 50,000
Other revenue
Total revenues 110,195,311 5,286,003 818,171
Expenditures:

Current:

Administration 7,381,733
Law enforcement 16,204,350
Innovation and technology 2,284,198
Administrative services 6,716,341 :

Recreation services 5,517,003
Community development 10,659,154
Public works 25,060,745 3,250,708
1,773,434 :

Capital outlay 2,435,630
Debt service:

Principal 552,091 : :

Interest and fiscal charges 22,997
Total expenditures 76,172,046 5,686,338 839,57L
Excess (deficiency) of revenues over
expenditures 34,023,265 (400,335) (21,400)
Other financing sources (uses):

Transfers in (Note 5) 111,000 3,449,019
Transfers out (Note 5) (6.595,284) (367.951)
Total other financing sources (uses) (6,484,284) 3,449,019 (367,951) Net Change in Fund Balances 27,538,981 3,048,684 (389,351) Fund balances:

Beginning of year 138,556,338 10,586,674 11,492,607
End of year $ 166.095,319 $ 13.635.358 $ 11.103.256
(Continued)
See accompanying Notes to the Basic Financial Statements.

City of Cupertino
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Governmental Funds
For the Year Ended June 30, 2024
Public Capital
Facilities Improvement
Corporation Projects Nonmajor Total
Debt Capital Governmental Governmental
Service Fund Projects Fund Funds Funds
Revenues:

Taxes $ $ $ 349,283 $ 80,705,015
: 790,983
Use of money and property 950,318 11,802,313
Intergovernmental : 352,570 6,841,474
Licenses and permits 1532315 4,412,057
Charges for services 13,833,034
Fines and forfeitures 2,746 419,148
161,337 2,784
Other revenue 2,418,780
Total revenues 1,304,890 2,827,446 120,431,821
Expenditures:

Current:

Administration 1,500 7,383,233
Law enforcement 16,204,350
: ...

Innovation and technology 2,284,198
Administrative services : 6,716,341
Recreation services 5,517,003
Community development 11,498,725
49,7855
Public works 1,670,649 30,031,887
Capital outlay 4,270,128 1,994,691 10,473,883
Debt service:

Principal 2,035,000 - 2,587,091
Interest and fiscal charges 642,600 : 665,597
Total expenditures 2,679,100 4,319,913 3,665,340 93.362,308 Excess (deficiency) of revenues over
expenditures (2,679,100) (3,015,023) (837,894) 27,069,513 Other financing sources (uses):

Transfers in (Note 5) 2,677,600 4,552,250 10,789,869
Transfers out (Note 5) (4,333,318) (815,000) (12,111,553) Total other financing sources (uses) 2,677,600 218,932 (815,000) (1,321,684) Net Change in Fund Balances (1,500) (2,796,091) (1,652,894) 25,747,829 Fund balances:

Beginning of year 1,750 34,767,194 24,904,988 220.309.551 End of year 31.971.103 23,252,094 246.057,380
(Concluded)
See accompanying Notes to the Basic Financial Statements. 33 • City of Cupertino
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the Year Ended June 30, 2024
Net Change in Fund Balances - Total Governmental Funds $ 25,747,829 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 $432,767 reported in Internal Service Fund $ 10,357,167 Depreciation and amortization, net of $650,668 reported in Internal Service Funds (8,726,719) Net effect on disposal of capital assets (165,206) 1,465,242 Net change in revenues that was considered unavailable in the governmental funds. These items have been reported as revenue in the Statement of Activities. 374,513
Principal repayment on long-term debt is not an expense in the Statement of Activities, but is considered an expenditure in governmental funds.

Bonds payable $ 2,035,000
Subscription liabilities, net of $135,606 reported in the Internal Service Funds 552,091 2,587,091 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. 6,783
Amortization of bond premium and deferred charges were recognized in interest expense on the Government-Wide Statement of Activities, but did not require the use of current financial resources. Therefore amortization of bond discount was not reported as an expenditure in the governmental funds. 357,947 Inception of subscription liability, net of $51,199 reported in the Internal Service Funds. - Termination of subscription liability, net of $16,866 reported in the Internal Service Funds. 163,652 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 $36,100 reported in the Internal Service Funds. 56,723 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 $381,000 reported in Internal Service Funds. 170,199 Certain pension expenses reported in the Statement of Activities do not require the use of current financial resources and herefore, are not reported as expenditures in governmental funds, net of $199,180 reported in Internal Service Funds (2,465,861) Certain OPE 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 $112,245 reported in Internal Service Funds. (1,416,621) 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. (638,063) Change in Net Position of Governmental Activities $ 26,409,434 See accompanying Notes to the Basic Financial Statements. 34 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 financed primarily through user charges.

The City has identified the funds below as major proprietary funds for fiscal year 2023-2024 Resources Recovery Fund - This fund accounts for activity related to the collection, disposal, and recycling of solid waste. A private company has been issued an exclusive franchise to perform these services.

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

Cupertino Sports Center Fund - This fund accounts for the operation and maintenance of the Cupertino Sports Center. 35 City of Cupertino
Statement of Net Position
Proprietary Funds
June 30, 2024
Business-Type Activities - Enterprise Funds
Cupertino
Resources Recreation Sports
Recovery Programs Center
ASSETS
Current assets:

Cash and investments (Note 2) 5,210,390 $ 3,417,275 $ 847,694 Accounts receivable 783,446 63,941 41,300
Interest receivable 32,331 21,516 4,999
Prepaid expense
Total current assets 6,026,167 3.502,732 893,993
Noncurrent assets:

Capital assets: (Note 6)
Nondepreciable 3,337
: 649,276 1,217,153
Depreciable and amortizable, net
Total noncurrent assets 652,613 1,217,153
Total assets 6,026,167 4,155,345 2,111,146

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions (Note 8) 311,740 272,823 215,079
Related to other postemployment benefit (Note 9) 105.874 139,198 106,490 Total deferred outflows of resources 417,614 412,021 321,569 See accompanying Notes to the Basic Financial Statements. 36 City of Cupertino
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
Business-Type Activities Governmental
Enterprise Funds Activities
Nonmajor Internal
Enterprise Service
Fund Total Funds
ASSETS
Current assets:

Cash and investments (Note 2) 934,250 $ 10,409,609 8,329,638 Accounts receivable 2,534 891,221 1,387,959
Interest receivable 5,810 64,656 55,910
Prepaid expense 4,680
Total current assets 942,594 11,365,486 9,778,187
Noncurrent assets:

Capital assets: (Note 6)
Nondepreciable 3,337 192,925
139,654 2,006,083 2,567,288
Depreciable and amortizable, net
Total noncurrent assets 139,654 2,009,420 2,760,213
Total assets 1,082,248 13,374,906 12,538,400

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions (Note 8) 72,668 872,310 1,155,833
Related to other postemployment benefit (Note 9) 26,177 377,739 381.051 Total deferred outflows of resources 98,845 1,250,049 1,536,884 See accompanying Notes to the Basic Financial Statements. 37 City of Cupertino
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
Business-Type Activities - Enterprise Funds
Cupertino
Resources Recreation Sports
Recovery Programs Center

LIABILITIES
Current liabilities:

Accounts payable and accruals 80,585 277,919 32,501
Accrued payroll and benefits 289
Due to other funds
9,865 4,554 4,760
Compensated absences, due within one year (Note 7)
Claims payable, due within one year (Note 10)
465.161 319,070
Unearned revenue
Lease liabilities, due within one year (Note 7)
:

Subscription liabilities, due within one year (Note 7)
Total current liabilities 90,739 747,634 356,331
Noncurrent liabilities:

Compensated absences, due more than one year (Note 7) 106,022 48,942 51,156 Claims payable, due more than one year (Note 10) : .

Lease liabilities, due more than one year (Note 7)
Subscription liabilities, due more than one year (Note 7) 722.282 Net pension liabilities (Note 8) 916,197
Net other postemployment benefit liabilities (Note 7) 41,433 54,474 41,674 Total noncurrent liabilities 1,194,347 1,019,613 815,112 Total liabilities 1,285,086 1,767,247 1,171,443

DEFERRED INFLOWS OF RESOURCES
Related to pensions (Note 8) 1,560 1,366 1,077
Related to other postemployment benefit (Note 9) 34,530 45,398 34,731 Total deferred inflows of resources 36,090 46,764 35,808

NET POSITION
Net investment in capital assets (Note 11) 652,613 1,217,153 29911 39,326 30,085
Restricted
Unrestricted (deficit) 5.092,694 2.061,416 (21,774)
Total net position $ 5.122.605 2.753.355 $ 1.225.464
(Continued)
See accompanying Notes to the Basic Financial Statements.

City of Cupertino
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
Business-Type Activities Governmental
Enterprise Funds Activities
Nonmajor Internal
Enterprise Service
Fund Total Funds

LIABILITIES
Current liabilities:

Accounts payable and accruals 39,322 430,327 173,078
Accrued payroll and benefits 289 72
1,401,947
19,979 38,121
Compensated absences, due within one year (Note 7)
Claims payable, due within one year (Note 10) 896,268 232,000 112,037
Unearned revenue
6,808
Lease liabilities, due within one year (Note 7) :

Subscription liabilities, due within one year (Note 7) 68.110 Total current liabilities 152,159 1,346,863 1,920,136
Noncurrent liabilities:

Compensated absences, due more than one year (Note 7) 8,600 214,720 386,869 Claims payable, due more than one year (Note 10) 1,041,000 Lease liabilities, due more than one year (Note 7) 8,561 Subscription liabilities, due more than one year (Note 7) 29,111 244,034 2.929.405 3,881,541
Net pension liabilities (Note 8)
Net other postemployment benefit liabilities (Note 7) 10,244 147,825 149,122 Total noncurrent liabilities 262,878 3,291,950 5,496,204 Total liabilities 415,037 4,638,813 7,416,340

DEFERRED INFLOWS OF RESOURCES
Related to pensions (Note 8) 364 4,367 5,785
Related to other postemployment benefit (Note 9) 8,537 123,196 124.277 Total deferred inflows of resources 8,901 127,563 130,062

NET POSITION
Net investment in capital assets (Note 11) 139,654 2,009,420 2,647,623 Restricted 7,396 106,718 381,051
Unrestricted (deficit) 610,105 7,742,441 3.500,208
Total net position 757,155 $ 9.858.579 6.528,882
(Concluded)
See accompanying Notes to the Basic Financial Statements. 39 City of Cupertino
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2024
Business-Type Activities - Enterprise Funds
Cupertino
Resources Recreation Sports
Recovery Programs Center
OPERATING REVENUES:

Charges for services $ 1,563,696 $ 1,907,013 $ 1,998,806 Other 799,800 132,325 363,871
TOTAL OPERATING REVENUES 2,363,496 2,039,338 2,362,677
OPERATING EXPENSES:

Salaries and benefits 826,953 928,461 847,882
Materials and supplies 273.638 338,361 465,848
Contractual services 1,127,191 1,066,640 1,689,674
Insurance and claims and premium -

60.124 110173
Depreciation
TOTAL OPERATING EXPENSES 2,227,782 2,393,886 3,113,577
OPERATING INCOME (LOSS) 135,714 (354,548) (750,900)
NONOPERATING REVENUES (EXPENSES):

Investment income 203,021 132,200 65,800
Gain (loss) on sale of capital assets -
Interest expense
132,200 65.800
Total Nonoperating Income (Expenses) 203,021
NET INCOME (LOSS) BEFORE TRANSFERS 338,735 (222,348) (685,100) TRANSFERS:

Transfers in (Note 5)
Transfers out (Note 5) (20,000)
TOTAL TRANSFERS (20,000)
CHANGES IN NET POSITION 318,735 (222,348) (685,100)
NET POSITION:

Beginning of year 4,803,870 2,975,703 1,910,564
End of year $ 5.122.605 2.753.355 $ 1.225.464
(Continued)
See accompanying Notes to the Basic Financial Statements. 40 City of Cupertino
Statement of Revenues, Expenses, and Changes in Net Position (Continued) Proprietary Funds
For the Year Ended June 30, 2024
Enterprise Funds Activities
Nonmajor Internal
Enterprise Service
Fund Total Funds
OPERATING REVENUES:
$ 611,331 6,080,846 $ 4,171,856
Charges for services
51,943 1.347,939 1,431,954
Other
TOTAL OPERATING REVENUES 663,274 7,428,785 5,603,810
OPERATING EXPENSES:

Salaries and benefits 159,565 2,762,861 4,399,972
225,497 1,303,344 1,631,687
Materials and supplies
Contractual services 272,995 4,156,500 504,673
764,574
Insurance and claims and premium
15,390 185,987 650,668
Depreciation
TOTAL OPERATING EXPENSES 673,447 8,408,692 7,951,574
OPERATING INCOME (LOSS) (10,173) (979.907) (2,347,764)
NONOPERATING REVENUES (EXPENSES):
33,269 434,290 341,083
Investment income
Gain on sale of capital assets (341) (341) 31,039
(4,105)
Interest expense 133919)
32,928 368,017
Total Nonoperating Income (Expenses)
NET INCOME (LOSS) BEFORE TRANSFERS 22,755 (545,958) (1,979,747) TRANSFERS:
1,417,684
Transfers in (Note 5)
120000) (76,000)
Transfers out (Note 5)
TOTAL TRANSFERS (20,000) 1,341,684
CHANGES IN NET POSITION 22,755 (565,958) (638,063)
NET POSITION:
734,400 10.424,537 7,166,945
Beginning of year
End of year $ 757,155 $ 9.858.579 $ 6.528.882
(Concluded)
See accompanying Notes to the Basic Financial Statements 41 City of Cupertino
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
Business-Type Activities - Enterprise Funds
Cupertino
Resources Recreation Sports
Recovery Programs Center

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $ 1,802,376 $ 1,994,364 $ 2,123,966 Cash paid to suppliers for goods and services (1,419,006) (1,371,793) (2,236,005) Cash paid to employees for services (693,741) (812,792) (660,331) Cash paid to insurance claims
Net Cash Provided by (Used in) Operating
Activities (310,371) (190,221) (772,370)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash received from (paid to) other funds (20,000)
Net Cash Provided by (Used in)
Noncapital Financing Activities (20,000)

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (86,156)
Principal paid
:

Interest paid
:

Proceed from sale of capital assets
Net Cash Provided by (Used in) Capital and
Related Financing Activities (86,156)

CASH FLOWS FROM INVESTING
ACTIVITIES:

Investment income 189,445 122,894 66,533
Net Cash Provided by Investing Activities 189,445 122,894 66,533 Net Change In Cash and Cash
Equivalents (140,926) (67,327) (791,993)
CASH AND CASH EQUIVALENTS:

Beginning of year 5,351.316 3,484,602 1,639,687
End of year 5,210,390 $ 3,417,275 847.694
CASH AND CASH EQUIVALENTS:

Cash and investments 5,210,390 $ 3.417,275 847,694
Total cash and cash equivalents $ 5,210,390 $ 3.417,275 847.694 (Continued)
See accompanying Notes to the Basic Financial Statements.

City of Cupertino
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2024
Business-Type Activities Governmental
Enterprise Funds Activities
Nonmajor Internal
Enterprise Service
Fund Total Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $ 682,383 6,603,089 $ 5,601,610 Cash paid to suppliers for goods and services (478,146) (5,504,950) (2,883,013) Cash paid to employees for services (197,523) (2,364,387) (4,052,447) Cash paid to insurance claims (381,000)
Net Cash Provided by (Used in) Operating
Activities 6,714 (1,266,248) (1,714,850)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash received from (paid to) other funds (20,000) 1,347,974 Net Cash Provided by (Used in)
Noncapital Financing Activities (20,000) 1,347,974

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (86,156) (432,767)
Principal paid : (154,345)
Interest paid : (4,105)
: 30,750
Proceed from sale of capital assets
Net Cash Provided by (Used in) Capital and
Related Financing Activities (86,156) (560,467)

CASH FLOWS FROM INVESTING
ACTIVITIES:

Investment income 30,595 409,467 317,967
Net Cash Provided by Investing Activities 30,595 409,467 317,967 Net Change In Cash and Cash
Equivalents 37,309 (962,937) (609,376)
CASH AND CASH EQUIVALENTS:

Beginning of year 896,941 11.372.546 8,939,014
End of year $ 934.250 $ 10.409,609 $ 8.329.638
CASH AND CASH EQUIVALENTS:

Cash and investments $ 934,250 $ 10,409,609 $ 8,329,638 Total cash and cash equivalents 934,250 10.409.609 $ 8.329.638 (Concluded)
See accompanying Notes to the Basic Financial Statements. 43 City of Cupertino
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2024
Business-Type Activities - Enterprise Funds
Cupertino
Resources Recreation Sports
Recovery Programs Center
Reconciliation of Operating Income (Loss) to
Net Cash Provided by (Used in) Operating Activities:

Operating income (loss) $ 135,714 $ (354,548) (750,900) Adjustments to reconcile to net cash provided by
Operating activities:

Depreciation and amortization - 60,424 110,173
Changes in assets and liabilities:
(Increase)/decrease in accounts receivables (561,120) (21,960) (40,300) (Increase)/decrease in prepaid expense
(Increase)/decrease in deferred outflows of resources
related to pensions 14,529 (31,746) (51,945)
(Increase)/decrease in deferred outflows of resources
related to other postemployment benefit (1,035) (32,32l) (25,403) Increase/(decrease) in accounts payable (18,177) 33,208 (80,483) Increase/(decrease) in unearned revenue (23,014) (198,411) 51,610 (43,543) 6,605
Increase/(decrease) in compensated absences
Increase/(decrease) in claims payable

41.756 173,513 2119,714
Increase/(decrease) in net pension liabilities
Increase/(decrease) in other postemployment benefit liabilities 31,544 44,393 34,025 Increase/(decrease) in deferred inflows of resources
related to pensions (913) (461) (159)
Increase/(decrease) in deferred inflows of resources
related to other postemployment benefit (4,279) 5,834 4,714 Net Cash Provided by (Used in) Operating Activities $ (310.371) (190,221) (772,370) NONCASH ITEMS:

Acquisition of right to use intangible assets $ $
Issuance of lease and subscription liabilities $
Termination of subscription liabilities $
Gain (loss) of sale of capital assets
(Continued)
See accompanying Notes to the Basic Financial Statements. 44 City of Cupertino
Statement roprietary Fis (Continued)
For the Year Ended June 30, 2024
Business-Type Activities Governmental
Enterprise Funds Activities
Nonmajor Internal
Enterprise Service
Fund Total Funds
Reconciliation of Operating Income (Loss) to
Net Cash Provided by (Used in) Operating Activities:

Operating income (loss) (10,173) $ (979,907) $ (2,347,764) Adjustments to reconcile to net cash provided by
Operating activities:

Depreciation and amortization 15,390 185,987 650,668
Changes in assets and liabilities:
(Increase)/decrease in accounts receivables (705) (624,085) (2,200) (Increase)/decrease in prepaid expense (4,680)
(Increase)/decrease in deferred outflows of resources
related to pensions 28,838 (40,324) 56,800
(Increase)/decrease in deferred outflows of resources
related to other postemployment benefit (7,698) (66,457) 29,593 Increase/(decrease) in accounts payable 20,346 (45,106) 22,601 Increase/(decrease) in unearned revenue 19,814 (201,611) Increase/(decrease) in compensated absences (215) 14,457 36,100 Increase/(decrease) in claims payable (381,000)
Increase/(decrease) in net pension liabilities (68,675) 366,308 145,785 Increase/(decrease) in other postemployment benefit liabilities 8,501 118,463 110,387 Increase/(decrease) in deferred inflows of resources
related to pensions (405) (1,938) (3,405)
Increase/(decrease) in deferred inflows of resources
related to other postemployment benefit 1,696 7,965 (27,735) Net Cash Provided by (Used in) Operating Activities 6.714 (1.266.248) GA (1.714,850) NONCASH ITEMS:

Acquisition of right to use intangible assets $ 85,307
Issuance of lease and subscription liabilities 85,307
Termination of subscription liabilities $ $ 16.866
Gain (loss) of sale of capital assets (341) $ (341) $
(Concluded)
See accompanying Notes to the Basic Financial Statements. 45 This page intentionally left blank.
46 NOTES TO THE BASIC FINANCIAL STATEMENTS
47 This page intentionally left blank.

City of Cupertino
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
Page
Note 1 - Summary of Significant Accounting Policies • •• 51 A. Financial Reporting Entity 51
B. Basis of Presentation 52
C. Measurement Focus, Basis of Accounting and Financial Statements Presentation 52 D. Cash, Cash Equivalents, and Investments • 55
E. Fair Value Measurements 56
F. Receivables •• 56
G. Lease Receivable 57
H. Inventories

1. Prepaid Items
J. Interfund Transactions • 57
K. Capital Assets 58
L. Deferred Outflows of Resources and Deferred Inflows of Resources M. Interest Payable•• 59
N. Unearned Revenue 59
O. Compensated Absences 59
P. Claims and Judgement Payable 59
Q. Lease Liabilities 59
R. Subscription Liabilities • 60
S. Long-Term Debt-
T. Pensions
U. Other Postemployment Benefits ("OPEB") Plan
V. Net Position • • 62
W. Fund Balances 62
X. Property Taxes 63
Y. Use of Estimates •• 63
Z. Implementation of New GASB Pronouncements
AA. Upcoming New GANB Pronouncements • 64
Note 2 - Cash and Investments 04
A. Deposits •• 65
B. Investments Authorized by the California Government Code and the City's Investment Policy • 66 C. Investments Authorized by Debt Agreements .. 67
D. Risk Disclosures •..• ...• 67
E. Fair Value Measurement Disclosure ••........ .. 70
F. Investment in Local Agency Investment Fund (LAIF) •• 70 Note 3 - Loans Receivable • 71
Note 4 - Leases Receivable and Lease-Related Deferred Inflows of Resources .. 71 Note 5 - Interfund Transactions .. 72
A. Advances • .. 72
B. Due from and To other Funds .. 73
C. Transfers In and Out •• • 73
49 City of Cupertino
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024
Page
Note 6 - Capital Assets • 74
A. Governmental Activities 74
B. Business-Type Activities 75
Note 7 - Long-Term Liabilities 76
A. Governmental Activities 76
B. Business-Type Activities • 78
Note 8 - Defined Benefit Pension Plan•• .. 78
A. General Information about the Pension Plan 78
B. Net Pension Liability 80
C. Changes in the Net Pension Liability 82
Note 9 - Other Post Employment Benefits (OPEB) 84
A. General Information about the OPEB Plan 84
8 B. Net OPEB Liability
C. Change in Net OPEB Liability 88
D. OPEB Expense and Deferred Inflows of Resources Related to OPEB 89 Note 10 - Liabilities Under Self-Insurance and Risk Management • 89 Note 11 - Net Position and Fund Balances• 90
A. Net Investment in Capital Assets 90
B. Fund Balance Classifications 91
Note 12 - Commitments and Contingencies 91
A. Federal and State Grant 91
B. Encumbrances • 92
C. Consulting Agreement for Sales Taxes.•. .92
D. Santa Clara County Vehicle Registration Fee (VRF) 92 Note 13 - Concentration Risk 93
Note 14 - Stewardship, Compliance and Accountability 93 A. Deficit Fund Balance/Net Position • 93
B. Excess of Expenditures over Appropriations • 93
Note 15 - Subsequent Event 93
50 City of Cupertino
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies
A. Financial Reporting Entity
The City of Cupertino, California (the "City") was incorporated on October 3, 1955, under the laws of the State of California. The City operates under a Council - City Manager form of government and provides services through the following departments: Administrative Services, Community Development, City Manager, Parks and Recreation, Public and Environmental Affairs, and Public Works. Fire services are provided by the Santa Clara County Fire District, and the City contracts with the Santa Clara County Sheriff's Department for police services, and with Recology for garbage and recycling services.

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

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

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 Certificates of Participation issued by the Corporation to acquire the properties. The Corporation does not issue separate financial statements, since it is reported separately in the City's basic financial statements.

The City had no discretely presented component units.
51 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) B. Basis of Presentation
Financial statement presentation follows the recommendations promulgated by the Governmental Accounting Standards Board (GASB") commonly referred to as accounting principles generally accepted in the United States of America ("U.S. GAAP"). GASB is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.

C. Measurement Focus, Basis of Accounting and Financial Statements Presentation The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements.

Government-Wide Statements
The City's Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements.

These financial statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Certain types of transactions are reported as program revenues for the City in three categories:
• Charges for services
» Operating grants and contributions
• Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities and Changes in Net Position, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
• Due to/from other funds
• Transfers in/out
52 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting and Financial Statements Presentation (Continued) Governmental Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Schails in prese Bad ones for l ma explainethe enter ends and nortion upe enged gates staces tying net position presented in the Government-Wide Financial Statements. The City has presented all major funds that met the applicable criteria.

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

Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both "measurable" and "available" to finance expenditures of the current period.

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

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

The City reports the following major Governmental Funds:
• General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those that are required to be accounted for in another fund. • Transportation Special Revenue Fund - The Transportation Special Revenue Fund accounts for the City's gas tax, vehicle registration fees and grant revenues and expenditures related to the maintenance and construction of City streets. All revenue in this fund is restricted exclusively for street and road purposes including related engineering and administrative expenses. Management considers this fund qualitatively major and has elected to present this fund as such, even if mathematically it does not qualify per applicable GASB requirements. > Housing Development Special Revenue Fund - The Housing Development Special Revenue Fund accounts for the Federal Housing and Community Development Grant Program activities administered through the County.

Monies collected from developers that mitigate the impact of housing needs are also included. Monies in this fund are governed by the program's rules. Management considers this fund qualitatively major and has elected to present this fund as such, even if mathematically it does not qualify per applicable GASB requirements. • Public Facilities Corporation Debt Service Fund - The Public Facilities Corporation Debt Service Fund accounts for the payments of principal and interest on certificates of participation issued to provide for the financing of City Hall, Library, Wilson Park, Memorial Park, and other City facilities. Management considers this fund qualitatively major and has elected to present this fund as such, even if mathematically it does not qualify per applicable GASB requirements.
53 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting and Financial Statements Presentation (Continued) Governmental Fund Financial Statements (Continued)
• Capital Improvement Projects Capital Projects Fund - The Capital Improvement Projects Capital Projects Fund Accounts for activities related to the acquisition or construction of major capital facilities.

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

A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements. The City's internal service funds include two individual funds which provide services directly to other City funds. These areas of service include Central Garage and Print Shop.

Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts.

Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as nonoperating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.

The City reports the following major proprietary funds:
> Resources Recovery Enterprise Fund - The Resources Recovery Enterprise Fund accounts for activity related to the collection, disposal, and recycling of solid waste. A private company has been issued an exclusive franchise to perform these services.
> Recreation Programs Enterprise Fund - The Recreation Programs Enterprise Fund accounts for activities of the City's community centers and park facilities.
› Cupertino Sports Center Enterprise Fund - The Cupertino Sports Center Enterprise Fund accounts for activities of the City's sports center facility.

The City also reports the following fund as proprietary fund type:
• Internal Service Funds - These funds account for management information systems maintenance and • replacement, workers' compensation, equipment maintenance and replacement, accrued leave payouts, and long-term disability, retiree health costs, coverage which are provided to other departments on a cost- reimbursement basis.
54 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting and Financial Statements Presentation (Continued) Basis of Accounting
The government-wide and proprietary financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

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

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

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

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

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

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

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

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

The statement of cash flows requires presentation of "cash and cash equivalents". For the purposes of the statement of cash flows, the City considers all proprietary fund pooled cash and investments as "cash and cash equivalents", as such funds are available to the various funds as needed. 55 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) D. Cash, Cash Equivalents, and Investments (Continued)
Certain disclosure requirements, if applicable, for Deposits and Investment Risks in the following areas:

Interest Rate Risk
• Credit Risk
Overall
Custodial Credit Risk
Concentration of Credit Risk
• Foreign Currency Risk
In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end and other disclosures.

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

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

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

F. Receivables
Receivables include such items as taxes, intergovernmental revenues, charges for services, miscellaneous accounts receivable, and interest receivable. No allowance for doubtful accounts has been established, as the City believes all amounts are considered to be collectible in the normal course of business. 56 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) G. Lease Receivable
The City is a lessor for leases of buildings and land and recognizes leases receivable and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying asset are not included in the measurement of the lease receivable.

At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts. • The City uses the incremental borrowing rate (IBR) provided by the City's financial institution for existing leases or the current rate at the time a new lease is executed. • The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.
• Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

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

H. Inventories
Inventories consist of fuel.

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". 57 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) K. Capital Assets
Capital assets are recorded at cost or estimated historical cost if purchased, or constructed. Donated capital assets are recorded at their estimated acquisition value on the date donated. Public domain (infrastructure) capital assets consisting of roads, bridges, curbs, gutters, medians, sidewalks, drainage and lighting systems have been capitalized and depreciated. Capital assets are defined as assets with an initial individual cost of more than $5,000 for general capital assets and $100,000 for intangible assets.

Depreciation is recorded using the straight-line method over the following useful lives:

Buildings 15 - 25 years
Improvements 10 - 15 years
Vehicles 4 - 10 years
Street equipment 3-20 years
Water equipment 3 - 50 years
Office equipment 3 - 5 years
Road, curbs, gutters, sidewalks, medians and bridges 30 - 40 years Streetlights 20 years
Storm drain structure and mains 40 years
Traffic signals 20 years
Major outlays for capital assets and improvements are capitalized as projects are constructed. For enterprise funds, interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Some capital assets may be acquired using federal and state grant funds, or they may be contributed by developers or other governments. These contributions are accounted for as revenues at the time the capital assets are contributed.

Right-of-Use Lease Assets
Lease assets are recorded at the amount of the initial measurement of the lease liabilities and adjusted by any lease aments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillar charges necessary to place the lease assets into service. Lease assets are amortized using the straight-line method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.

Right-of-Use Subscription Assets
Subscription assets are recorded at the amount of the initial measurement of the SBITA liabilities ("subscription liabilities") and adjusted by any subscription payments to the SBITA vendor at or before the commencement of the subscription term, less any incentives received from the SBITA vendor at or before the commencement of the subscription term along with subscription implementation costs. Subscription assets are amortized over the shorter of the subscription term or the useful life of the underlying information technology assets. 58 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) L. Deferred Outflows of Resources and Deferred Inflows of Resources The Statement and Net Position and the Balance Sheet report separate sections for deferred outflows of resources, and deferred inflows of resources, when applicable.

Deferred Outflows of Resources represent a consumption of net assets that applies to future periods.

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

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

N. Unearned Revenue
Unearned revenue is reported for transactions for which revenue has not yet been earned. Typical transactions recorded as unearned revenues are prepaid charges for services.

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

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. Lease Liabilities
The City has a policy to recognize a lease liability and a right-to-use asset (lease asset) in the financial statements with an initial, individual value of $5,000 or more with a lease term greater than one year. Variable payments based on future performance or usage of the underlying assets are not included in the measurement of the lease liability.

At the commencement of a lease, the lease liability is measured at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments 59 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) Q. Lease Liabilities (Continued)
Lease assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service. Lease assets are amortized using the straight-line method over the shorter of the lease term or the useful life of the underlying asset, unless the lease e State has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments. • The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
• The lease term includes the noncancelable period of the lease, plus any option periods that are reasonably certain to be exercised.
• Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise. The City monitors changes in circumstances that would require a remeasurement of a lease and will remeasure any lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported as right-to-use along with other capital assets and lease liabilities are reported as long term liabilities on the statement of net position.

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

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

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

Key estimates and judgments related to subscription liabilities include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.
• The City uses incremental borrowing rate provided by the financial institution at July 1, 2022 for existing subscription or the current rate at the time a new subscription is executed. • The subscription term includes the noncancellable period of the SBITA. Subscription payments included in the measurement of the subscription liability are composed of fixed payments. 60 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) R. Subscription Liabilities (Continued)
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.

S. Long-Term Debt
Government-Wide Financial Statements
Long-term debt and other financial obligations are reported as liabilities in the statement of net position.

Bond premiums and discounts, as well as gains and losses on refunding, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable premium or discount.

Issuance costs are expensed in the year of issuance.

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

T. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans' fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

The following timeframes are used for pension reporting:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023
Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

General Fund is typically used to liquidate pension liabilities to governmental funds. 61 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) U. Other Postemployment Benefits ("OPEB") Plan
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's OPEB Plan and additions to/deductions from the OPEB Plans' fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

The following timeframes are used for OPEB reporting:

Valuation Date July 1, 2023
Measurement Date June 30. 2024
Measurement Period July 1, 2023 to June 30, 2024
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

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

V. Net Position
In governmental-wide and proprietary fund financial statements, net positions are categorized as follows:

Net Investment in Capital Assets - This category consists of capital assets, net of accumulated depreciation/amortization, reduced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those assets and retention payable.

Restricted - This category represents net position that has external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.

Unrestricted - This category represents net position of the City that do not meet the definition of "net investment in capital assets" or "restricted "'
When expenses are incurred for purposes for which both restricted and unrestricted net position are available, the City's policy is to apply restricted net position first, then unrestricted net position as they are needed.

W. Fund Balances
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. Fund balances for governmental funds are made up of the followings:
62 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) W. Fund Balances (Continued)
Nonspendable Fund Balance - includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The "not in spendable form" criterion includes items that are not expected to be converted to cash, for example: prepaid items, property held for resale and long term notes receivable.

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

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

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

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

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

X. Property Taxes
Property Tax Calendar - All property taxes are levied and collected by the County of Santa Clara. Secured taxes are levied on July 1, are due in two installments on November 1 and February 1 and become delinquent after December 10 and April 10. Unsecured taxes are levied on July 1 and become delinquent on August 31. The lien date for secured and unsecured property taxes is January 1.

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

Under this method, the City receives 100 percent of its secured property tax levied in exchange for foregoing any interest and penalties collected on delinquent taxes. The City receives remittances as a series of advances made by the County during the year.

Y. Use of Estimates
•The preparation of the basic financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
63 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) Z. Implementation of New GASB Pronouncements
GASB Statement No. 100 - In June 2022, GASB issued Statement No. 100, 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. Implementation of this Statement did not have a significant effect on the City's financial statements for the fiscal year ended June 30, 2024.

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

GASB Statement No. 101 - In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Application of this statement is effective for the City's fiscal year ending June 30, 2025.

GASB Statement No. 102 - In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. This Statement requires a government 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. Additionally, this Statement 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.

GASB Statement No. 103 - In April 2024, GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government's accountability. Application of this statement is effective for the City's fiscal year ending June 30, 2026.

Note 2 - Cash and Investments
The City had the following cash and investments at June 30, 2024:

Government-Wide
Statement of Net Position
Governmental Business-Type
Activities Activities Total
Cash and investments $ 241,393,169 $ 10,409,609 $ 251,802,778 Restricted cash and investments:

Held by fiscal agent for pension 21,663,664 21,663,664
Total cash and investments $ 263,056,833 $ 10,409,609 $ 273,466,442 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 2 - Cash and Investments (Continued)
The City's cash and investments at June 30, 2024, in more detail:

Cash on hand $ 1,850
Deposits with financial institutions 22,862,770
Total cash 22,864.620
Investments 228,938,158
Investments with PARS 21,663,664
Total investments 250,601,822
Total cash and investments $ 273,466,442
A. Deposits
The carrying amounts of the City's demand deposits were $22,862,770 at June 30, 2024. Bank balances at that date were $23,586,439 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. 65 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 2 - Cash and Investments (Continued)
B. Investments Authorized by the California Government Code and the City's Investment Policy The following table identifies the investment types that are authorized for the City by the California Government Code (or the City's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy: This does not include the City's investments of debt proceeds held by fiscal agents that are governed by the provisions of debt agreements of the City.

Maximum
Maximum Minimum Credit Percentage of Maximum Investment in Authorized Investment Type Maturity Quality Portfolio One Issuer U.S. Treasury Obligations 5 years N/A None None
U.S. Agency Securities* 5 years N/A None None
California Local Agency Investment Fund (LAIF) N/A N/A Up to S65 million None 10% of portfolio;
Non-negotiable Certificates of Deposits (time deposits) 5 years N/A 30%*** 5% of issuer's net worth ** State of California registered state
warrants, treasury notes, or bonds 5 years N/A None None California local agency bonds, notes,
warrants, or other obligations 5 years N/A None None
Bond issued by the local agency 5 years N/A None None
Bankers' Acceptances 180 days N/A 40% None
270 days A-I+P-1 25% 10% of portfolio; 5% of issuer's
net worth; 10% of outstanding
paper of Issuer. **
Commercial Paper
10% of portfolio; 5% of issuer's
Negotiable Certificates of Deposit 5 years N/A 30% net worth. ** 0% of portfolio; 5% of issuer
Repurchase Agreements 1 year N/A None let worth.
10% of portfolio; 5% of issuer'
Medium Term Corporate Notes 5 years A or better 25% let worth. * Money market mutual funds investing
in U.S. Treasury, Government Agency
securities or repurchase agreements
collateralized by U.S. Treasury or
Government Agency securities 5 years Aaa/AAA 20% None
Supernationals 5 years AA or better 30% 10% of portfolio *Securities issued by agencies of the federal government such as the Government National Mortgage Association (GNMA), ** Represents restriction in which the City's investment policy is more restrictive than the California Government Code. *** 30% maximum percent of portfolio if using a private sector entity to assist in the placement of the time deposits. No maximum 66 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 2 - Cash and Investments (Continued)
C. Investments Authorized by Debt Agreements
The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City ordinances, bond indentures or State statutes. The City's Investment Policy allows investments of bond proceeds to be governed by provisions of the related bond indentures. The following identifies the investment types that are authorized for investments held by fiscal agents under the terms of the bond indentures of the related debt issue:

Maximum
Maximum Minimum Credit Percentage of
Authorized Investment Type Maturity Quality Portfolio
Cash or obligations of the U.S. including U.S. Treasury obligations N/A N/A None Federal agencies obligations which represent
full faith and credit of the U.S. N/A N/A None
Direct federal agencies obligations which are not
fully guaranteed by the full faith and credit of the U.S. N/A N/A None U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks 360 days P-1, A-1+, A-1 None Commercial Paper 270 days P-1, A-1 None
Money market funds N/A Aaam or AAAm-G None
Pre-refunded municipal obligations that are not callable prior to maturity or as to which irrevocable instructions have been Highest given to call on the date specified in the notice N/A Rating Category None Municipal obligations or General obligations of states N/A Aaa, AAA, A2, A None California Local Agency Investment Fund (LAIF) N/A N/A Up to $65 million Shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the California Government Code which invests exclusively in investments permitted by Section 53635 of Title 5, Division 2, Chapter of the California Government Code, as it may be amended. N/A N/A None
D. Risk Disclosures
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.

Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the liquidity needed for operations.
67 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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 to 24 Months Months Total
U.S. Treasury Securities $ 8,951,031 $ 12,755,976 $ 34,158,951 $ 55,865,958 Corporate Notes 9,920,496 11,372,012 21,688,001 42,980,509 U.S. Agency Notes:

Federal Home Loan Mortgage Corporation 2,310,585 3,553,731 - 5,864,316 Federal National Mortgage Association 7,410,588 4,725,871 12,136,459 Federal Home loan Banks 1,880,320 1,880,320
FarmCredit System 5,209,380 5,209,380
Municipal Bonds 748,923 748,923
Asset-Backed Securities 2,859,880 1,483,330 13,578,990 17,922,200 Supranationals 6,933,063 6,933,063
Collateralized Mortgage Obligations 1.220.868 2,884,099 1,571,735 5,676,702 Local Agency Investment Fund 64,760,594 64,760,594
Money Market Mutual Funds 8,959,734 - 8,959,734
Restricted investment with PARS 21,663,664 21,663,664
Total investments $ 128,806,363 $ 43,708,082 78,087,377 250,601,822 Cash in banks and on hand 22,864,620
Total Cash and Investments $ 273,466,442
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Presented below is the minimum rating required by (where applicable) the California Government Code, the City's investment policy, or debt agreements, and the actual rating, by Standard and Poor's or Moody's', as of June 30, 2024 for each investment type:
68 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 2 - Cash and Investments (Continued)
D. Risk Disclosures (Continued)
Disclosures Relating to Credit Risk (Continued)
Investment Type Total AAA AA Not Required
U.S. Treasury Securities 55,865,958 $ 55,865,958 $ $
Corporate Notes 42,980,509 15,864,172 27,116,337
U.S. Agency Notes
Federal Home Loan Mortgage Corporation 5,864,316 5,864,316 Federal National Mortgage Association 12,136,459 12,136,459 : :

Federal Home Loan Banks 1,880,320 1,880,320
FarmCredit System 5,209,380 5,209,380
Municipal Bonds 748,923 748,923
Asset-Backed Securities 17,922,200 117,922,200
Supranationals 6,933,063 6,933,063
Collateralized Mortgage Obligations 5,676,702 5,676,702 Local Agency Investment Fund 64,760,594 64,760,594
8,959,734 8,0959,734
Money Market Mutual Funds
Restricted investment with PARS 21,663,664 21,663,664
$ 250,601,822 $ 120,448,132 $ 16,613,095 $ 27,116,337 S 86,424,258 Total Investments
Disclosures Relating to Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. At June 30, 2024, the following investment represent 5% or more of total City investments:

Issuer Investment Type Amount Percentage
Federal National Mortgage Association (FNMA) U.S. Agency Notes $ 12,136,459 5% Disclosures Relating to Custodial Credit Risk
Custodial credit risk is the risk that, in the event of the failure of the counter party, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. All securities, with the exception of LAIF and other pooled investments, are held by a third-party custodian. 69 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30; 2024
Note 2 - Cash and Investments (Continued)
E. Fair Value Measurement Disclosure
The investments are reported at fair value. The following table presents the fair value measurement of investments on a recurring basis and the levels within GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2024:

Quoted Prices in
Active Markets Significant Other
for Identical Observable
Assets Inputs
Investments by Fair Value Level (Level 1) (Level 2) Total U.S. Treasury Securities 55,865,958 $ $ 55,865,958
Corporate Notes 42,980,509 42,980,509
U.S. Agency Notes
Federal Home Loan Mortgage Corporation 5,864,316 5,864,316 Federal National Mortgage Association 12,136,459 12,136,459 Federal Home Loan Banks 1,880,320 1,880,320
FarmCredit System :...... 5,209,380 5,209,380
Asset-Backed Securities 17,922,200 17,922,200
Collateralized Mortgage Obligations 5,676,702 5,676,702 Supranationals 6,933,063 6,933,063
Municipal Bonds 748,923 748,923
Total Investments $ 55,865,958 $ 99,351,872 155,217,830 Investments Measured at Amortized Cost:

Money Markel Mutual Funds - Restricted for Pension (PARS) 21,663,664 Money Markel Mutual Funds 8,959,734
Investments Exempt from Fair Value Hierarchy:

Local Agency Investment Fund 64,760,594
Cash in banks and on hand 22,864,620
Total Cash and Investments $ 273,466,442
F. Investment in Local Agency Investment Fund (LAIF)
The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City's investments in LAIF at June 30, 2024 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. 70 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 2 - Cash and Investments (Continued)
F. Investment in Local Agency Investment Fund (LAIF) (Continued) As of June 30, 2024, the City had $64,760,594 invested in LAIF, which had invested 3.0.0% of the pool investment funds in Structured Notes and Asset-Back Securities. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. LAIF is reported at amortized cost, which approximates fair value.

Note 3 - Loans Receivable
Housing Program Loans
On June 30, 1995, the City loaned $821,000 to Community Housing Developers, a California nonprofit public benefit corporation. The note bears interest at three percent per annum, compounded annually, payable to the extent of surplus cash, and all unpaid principal and interest due June 30, 2035. As of June 30, 2024, the balance remaining on the loan was $1,934,740 including principal and interest in the amounts of $821,000 and $1,113,740, respectively. The loan was issued using resources in the amount of $417,000 and $404,000 in the General Fund and the Housing Development Special Revenue Fund, respectively and is considered governmental activities.

On June 6, 1996, the City loaned $320,000 to Cupertino Community Services, a California nonprofit public benefit corporation. The note bears interest at three percent per annum and due on July 14, 2026. As of June 30, 2024, the balance on the loan was $124,269. The loan was issued using resources in the Housing Development Special Revenue Fund and is considered governmental activities.

On September 11, 2017 the City loaned $3,672,000 to Stevens Creek, L.P., a California limited partnership. The note bears interest at three percent per annum for 55 years. After the completion of construction of the development, no later than April 30th of each calendar year, the Developer shall make repayments of the loan in an amount equal to the City loan percentage of the lenders' share of residual receipts. The payments shall be credited first against accrued interest and then against outstanding principal of the loan, and shall be accompanied by the developer's report of residual receipts. As of June 30, 2024, the balance remaining on the loan was $4,489,789 including principal and interest in the amounts of $3,672,000 and $817,789, 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 total of $263,427 recognized as rental revenue and $29,203 recognized as interest revenue on the lease for the year ended June 30, 2024 and a receivable for the remaining payments under the leases of $2,485,763.

A summary of changes in lease receivable for the year ended June 30, 2024 is as follows:

Balance Balance Long-term
July 1, 2023 Additions Retirements" June 30, 2024 Current Portion Portion 2,493,039 $ 221.447 $ (228,723) $ 2,485,763 $ 245,873 $ 2,239,890 71 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 4 - Leases Receivable and Lease-Related Deferred Inflows of Resources (Continued) At June 30, 2024, the required payments for these leases, including interest, are:

Year Ending NPV Leases Total Lease
June 30, Receivable Interest Pay ment
2025 $ 245,873 $ 31,656 $ 277,529
2026 265,353 28,432 293,785
2027 277,565 24,914 302,479
2028 289,843 21,252 311,095
2029 240,456 17,489 257,945
2030 - 2034 856,588 48,459 905,047
2035 - 2039 254,353 13,496 267,849
2040 - 2041 55,732 484 56,216
Total $ 2,485,763 $ 186,182 $ 2,671,945
At June 30, 2024, the amounts reported as deferred inflows of resources related to leases will be recognized as lease revenue as follows:

Year Ending
June 30, Amount
2025 $ 292,705
2026 280,343
2027 280,343
2028 280,343
2029 227,941
2030 - 2034 722,216
2035 - 2039 195,140
2040 - 2041 42,059
Total $ 2,321,090
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, 2024, the General Fund advanced $3,000,000 to the Capital Improvement Projects Capital Projects Fund for advance funding of planned projects that will be repaid in subsequent years. 72 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 5 - Interfund Transactions (Continued)
B. Due from and to other Funds
At June 30, 2024, the City has the following due from and to other funds:

Due to Other Funds
Internal Service
Funds Total
Due From Other Funds
Governmental Funds:

General Fund $ 1,401,947 $ 1,401,947
$ 1,401,947 $ 1,401,947
These interfund balances represent routine short-term cash flow assistance.

C. Transfers In and Out
Transfers between funds during the fiscal year ended June 30, 2024 were as follows:

Transfers In
Governmental Funds Proprietary Funds
Capital
Public Facilities Improvement
Transportation Corporation Projects Internal
Special Revenue Debt Capital Project Service
Transfers Out General Fund Fund Service Fund Fund Funds Total Governmental Funds:

General Fund $ $ 2,500,000 $ 2,677,600 $ $ 1,417,684 $ 6,595,284 Housing Development
Special Revenue Fund - 367,95l 367,951
Capital Improvement Projects
Capital Projects Fund 949,019 : 3,384,299 : 4,333,318
Nonmajor Governmental Funds 15.000 800,000 815,000
Proprietary Funds:

Resource Recovery Enterprise Fund 20,000 20.000
Internal Service Funds 76.000 76,000
111,000 $ 3,449,019 $ 2,677,600 $ 4,552,250 $ 1,417,684 $ 12,207,553 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. 73 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 6 - Capital Assets
A. Governmental Activities
A summary of changes in capital assets of the governmental activities for the year ended June 30, 2024 is as follows:

Balance Balance
Governmental Activities: July 1, 2023 Additions Deletions Transfers June 30, 2024 General Government Capital Asset:

Capital assets not being depreciated:

Land $ 64,786,669 $ $ $ 64,786,669
Easements 19,615,039 19,615,039
Construction in progress 28,475,393 10,357,167 (2,136) (11,862,629) 26.967,795 Total general government capital assets not being depreciated 112,877,101 10,357,167 (2,136) (11,862,629) 111,369,503 Capital assets being depreciated:

Buildings 47.763.913 1,122,392 48,886,305
Improvements other than buildings 61.623.361 4,545,738 66,169,099 Machinery and equipment 4,575.626 311918 4,887,544
Roads, curbs, gutters, sidewalks, medians and bridges 187.809.815 3.009.061 190,818,876 Streetlights 9.704.680 282.038 9,986,718
Storm drain structure and mains 37,373,158 2,546,177 39,919,335 Traffic signals 6.440.061 45.305 6,485,366
Total capital assets being depreciated 355.290.614 11.862.629 367,153,243 Less accumulated depreciation for:

Buildings (35,258,927) (1,660,807) (36,919,734)
Improvements other than buildings (48,249,869) (2.488,375) (50,738,244) Machinery and equipment (3,524,357) (196,590) (3.720.947) Roads, curbs, gutters, sidewalks, medians and bridges (118,441,355) (2.974,308) (121,415,663) Streetlights (8.463.672) (162.016) (8.625,688)
Storm drain structure and mains (33.832,000) (536,305) (34,368,305) Traffic signals (6.019.643) (111.072) (6,130,715)
Total accumulated depreciation (253,789,823) (8,129,473) (261,919,296) Total capital assets being depreciated, net 101,500,791 (8.129.473) 11.862.629 105,233,947 Intangible assets, being amortized
2,454,977 (219 832) 2235,145
Right-to-use subscription assets
Total intangible assets, being amortized 2454.977 (219.832) 2,235,145 Less accumulated amortization for:

Right-to-use subscription assets (574,289) (597,246) 56,762 (1,114,773) Total accumulated amortization (574,289) (597,246) 56.762 (1,114,773) Total intangible assets, being amortized, net 1.880,688 (597,246) (163,070) 1,120,372 Total general government capital asset, net 216,258,580 1,630,448 (165,206) 217,723,822 Internal Service Fund Capital Assets:

Capital assets not being depreciated:

Construction in progress 119.408 432,767 (359,250) 192,925 Total internal fund capital
assets not being depreciated 119,408 432,767 (359,250) 192,925 Capital assets being depreciated:

Machinery and equipment 13,067,171 (126,904) 359,250 13,299,517 Less accumulated depreciation (10,479,018) (546,697) 126,904 (10,898,811) Total internal fund capital assets being depreciated, net 2,588.153 (546.697) 359,250 2,400,706 Intangible assets, being amortized
Right-to-use lease assets 34,108 34,108
Right-to-use subscription assets 307.834 51,199 (24,866) 334,167 _ Total intangible assets, being amortized 307.834 85,307 (24,866) 368,275 Less accumulated amortization for:
• Right-to-use lease assets (18,844) (18,844)
Right-to-use subscription assets (106,011) (85,127) 8,289 (182,849) Total accumulated amortization (106.011) (103,971) 8,289 (201,693) Total intangible assets, being amortized, net 201.823 (18,664) (16,577) 166,582 Total internal service fund capital assets, net 2,909.384 (132,594) (16,577) 2,760,213 • Governmental activities capital assets, net $ 219.167.964 1.497.854 $ (181,783) $ 220,484,035 74 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 6 - Capital Assets (Continued)
A. Governmental Activities (Continued)
Depreciation and amortization expenses were charged to functions and programs based on their usage of the related assets. Depreciation and amortization expenses were charged to governmental activities as follows:

Governmental Activities Depreciation Amortization
Administration $ 1,016,184 46,585
Innovation and technology 618,653
Administrative Services 795,062 37,626
Parks and Recreation 1,148,695 27,533
Community development 1,016,184 160,540
Public Works 3,534,695 324,962
Subtotal 8,129,473 597,246
Internal Service Allocation
Administration 1,235 8,110
Innovation and technology 101,415
Administrative Services 967 6,550
Parks and Recreation 4,726 4,793
Community development 1,235 27,947
Public Works 437,119 56,571
Subtotal 546,697 103,971
Total - Governmental Activities $ 8,676,170 701.217
B. Business-Type Activities
A summary of changes in capital assets of the business-type activities for the year ended June 30, 2024 is as follows:

Balance Balance
July 1, 2023 Additions Deletions Transfers June 30, 2024 Business-type activities:

Capital assets not being depreciated:

Construction in progress 358,231 $ (341) $ (440,709) S 3.337 Total capital assets not being depreciated 358,231 86,156 (341) (440,709) 3,337 Capital assets being depreciated:

Buildings 2,073,689 217,551 2,291,240
Improvements other than buildings 2,175,914 • .. 223,158 2,399,072 Machinery and equipment 751,752 751,752
Total capital assets being depreciated 5,001,355 440,709 5,442,064 Less accumulated depreciation for:

Buildings (655,019) (95,786) (750,805)
Improvements other than buildings (1,912,652) (67,240) (1,979,892) Machinery and equipment (682,323) (22,961) (705,284)
Total accumulated depreciation (3,249,994) (185,987) : (3,435,981) Total capital assets being depreciated, net 1,751,361 (185,987) • 440,709 2.006.083 Business-type activity capital assets, net $ 2,109,592 $ (99,831) $ (341) $ $ 2,009,420 75 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 6 - Capital Assets (Continued)
B. Business-Type Activities (Continued)
Depreciation expense was charged to the business-type activities as follows:

Business-Type Activities Depreciation
Cupertino Sports Center 110,173
Recreation Program 60,424
Blackberry Farm 15,390
Total $ 185,987
Note 7 - Long-Term Liabilities
A. Governmental Activities
A summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2024 is as follows:

Balance Additions/ Balance Long-term
July 1, 2023 Adjustment Retirements June 30, 2024 Current Portion Portion 2020A Certificates of Participation $ 16,065,000 $ (2,035,000) $ 14,030,000 $ 2,115,000 $ 11,915,000 Issuance Premium 2,784,711 (397,816) 2,386,895 2,386,895 Lease liabilities - 34,108 (18,739) 15,369 6,808 8,561
Subscription liabilities 2,027,290 51,199 (868,215) 1,210,274 597,895 612,379 Claims payable 2,222,786 (268,925) (282,274) 1,671,587 322,000 1,349,587 Compensated absences 5,081.560 376,814 (397,437) 5,060,937 453,951 4,606,986 Total long-term liabilities S 28,181,347 193,196 (3,999,481) $ 24,375,062 3,495,654 $ 20,879,408 2020 A Certificates of Participation
The Cupertino Public Facilities Corporation issued Certificates of Participation to provide financing for the construction of the Community Center, improvements of the City Hall and the Library in July 1986; purchase of Wilson Park in 1989; finance the Memorial Park Expansion in 1990; and purchase the Blackberry Farm and Fremont Older site in 1991. The Cupertino Public Facilities Corporation, as lessor, leased real property to the City (under the Lease Agreement with the lessee) and assigned the base rental payments to the trustee for the benefit of the owners of the certificates of participation. The rental payments which represent the pledged revenues are scheduled to be sufficient in both time and amount, when the principal and interest of the certificates are due, which was the case for the year ended June 30, 2024.

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

On September 29, 2020, $22,040,000 principal amount of 2020A Certificates of Participation (2020 COPs) were issued to refund the 2012 COPs and pay costs incurred in connection with issuance. The proceeds were placed into an escrow account, along with funds from the City's 2012 COPs Reserve and on October 30, 2020, the 2012 COPS were prepaid, resulting no amounts outstanding as of June 30, 2024 for the 2012 COPs. The result of the transaction was an economic gain of $3,133,819.
76 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 7 - Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
2020 A Certificates of Participation (Continued)
The 2020A COPs are payable by a pledge of revenues from the lease payments payable by the City pursuant to the Lease Agreement between the Cupertino Public Facilities Corporation and the City for the use and possession of the Site and Facility as described in the Lease Agreement. The City also covenanted in the Lease Agreement to include all lease payments in its annual budget. Total debt service payments remaining on the 2020 COPs is $16,058,600 payable through June 1, 2030. During the year ended June 30, 2024, the bonds had $2,035,000 of principal and $642,600 interest due and paid. The annual debt service requirements on these certificates are as follows:

Year Ending
June 30, Principal Interest Total
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 2,475,000 202,000 2,677,000
2030 2,575,000 103,000 2.678,000
Total $ 14,030,000 $ 2,028,600 $ 16,058,600
Lease Liabilities
The City has entered into a lease for vehicle uses. The terms of the agreements are 36 months with an implicit rate

0.5273%. Principal and interest to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2025 6,808 65 $ 6,873
2026 6,844 29 6,873
2027 1,717 2 1,719
Total $ 15,369 $ 96 $ 15,465
Subscription Liabilities
The City has entered into subscriptions for information technology arrangements. The terms of the arrangements range from 12 to 48 months with implicit rates used between 1.710% to of 3.331%. Principal and interest to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2025 $ 597,895 $ 24,988 622,883
2026 382,583 12,130 394,713
2027 224,956 4,342 229,298
2028 4,840 160 5,000
Total $ 1,210,274 $ 41,620 $ 1,251,894
Claims Payable
Refer to Note 10 for more details.
77 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 7 - Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
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, 2024 was $5,060,937.

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, 2024:

Balance Balance Long-term
July 1, 2023 Additions Retirements June 30, 2024 Current Portion Portion Compensated absences $ 220,241 23,731 (9,273) 234,699 $ 19,979 $ 214,720 Total long-term liabilities $ 220,241 23,731 $ (9,273) $ 234,699 $ 19,979 $ 214,720 Compensated Absences
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, 2024 was $234,699.

Note 8 - Defined Benefit Pension Plan
A. General Information about the Pension Plan
Plan Description
The City contributes to the California Public Employees' Retirement System ("CalPERS"), an agent multiple- employer public employee defined benefit pension plan. CaPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and City ordinance. A full description of the pension plan regarding number of employees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership information are listed in the Annual Actuarial Valuation Report. This report and CalPERS' audited financial statements are publicly available reports that can be obtained at CalPERS' website at www.calpers.ca.gov under Forms and Publications.

Benefit Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service.

The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law. 78 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 8 - Defined Benefit Pension Plan (Continued)
A. General Information about the Pension Plan (Continued) Benefit Provided (Continued)
The Pension Reform Act of 2013 (PEPRA), Assembly Bill 340, is applicable to employees new to CalPERS and hired after December 31, 2012. The Plans' provisions and benefits in effect at June 30, 2024, are summarized as follows:.

Hire date
Prior to January 1, On or after January 1,
2013 2013

2.7%@55 2.0%@62
Benefit formula
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Minimum retirement age 50 52
Monthly benefits, as a% of eligible compensation 2% to 2.7% 1% to 2% Required employee contribution rates 8.00% 7.00%
Required employer contribution rates 10.71% 10.71%
Participant is eligible for non-industrial disability retirement if becomes disabled and has at least 5 years of credited service. There is no special age requirement. The standard non-industrial disability retirement benefit is a monthly allowance equal to 1.8 percent of final compensation, multiplied by service. Industrial disability benefits are not offered.

An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, where interest is currently credited at 6 percent per year, plus a lump sum in the amount of one-month salary for each completed year of current service, up to a maximum of six-months salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months preceding death.

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

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

Employees Covered by Benefit Terms
As of the June 30, 2022, the valuation date, the following employees were covered by the benefit terms of the Plan:

Active employees 205-
Transferred and terminated employees 169
Retired Employees and Beneficiaries 273
Total 647
79 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 8 - Defined Benefit Pension 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 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CaPERS. 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
Actuarial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2022 valuation was rolled forward to determine the June 30, 2023 total pension liability, based on the following actuarial methods and assumptions:

Entry Age Normal in accordance with the requirement of GASB Statement Actuarial Cost Method No. 68
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table' Derived using CalPERS' Membership Data for all Funds.

The lesser of contract COLA or 2.30% until Purchasing Power Protection Post Retirement Benefit Increase Allowance floor on purchasing power applies, 2.30% thereafter 'The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CaPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CaPERS website.

Change of Assumptions
There were no changes of assumptions in 2023.

Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
80 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 8 - Defined Benefit Pension Plan (Continued)
B. Net Pension Liability (Continued)
Long-term Expected Rate of Return (Continued)
In determining the long-term expected rate of return, CaPERS 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:

Assumed
Asset
Asset Class' Allocation Real Return 1,2
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5000% 3.57%
Real Assets 15.00% 3.21%
Leverage - 5.00% -0.59%
100.00%
'An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.

Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 81 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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 Pension Plan Fiduciary Net Net Pension Liability
Liability (a) Position (b) (c) = (a) - (b)
Balance at June 30, 2022 (Valuation Date) $ 172,848,302 $ 117,007,404 $ 55,840,898 Changes in the year:

Service cost 4,097,215 4,097,215
Interest on the total pension liability 11,919,333 11,919,333 Change of Benefit Terms 201,460 : 201,460
Change of Assumptions
Differences between actual and expected experience 2,085.468 7.183364 2,085,468 Contribution - employer (7,183,364)
Contribution - employee 1,825,602 (1,825,602)
Net investment income 7,184,605 (7,184,605)
Administrative expenses (86,042) 86,042
Other miscellaneous income/(expenses)
Benefit payments, including refunds of employee
contributions (8,879,755) (8,879,755)
Net Changes during July 1, 2022 to June 30, 2023 9,423,721 7,227,774 2,195,947 Balance at June 30, 2023 (Measurement Date) $ 182,272,023 $ 124,235,178 $ 58,036,845 Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the plans as of the measurement date, calculated using the discount rate of 6.90%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90%) or 1 percentage-point higher (7.90%) than the current rate:

Plan's Net Pension Liability/(Asset)
Discount Rate Current Discount Discount Rate
- 1% (5.90%) Rate (6.90%) + 1% (7.90%)
Miscellaneous Plan 82.467.218 $ 58,036,845 37,947,324
Pension Plan Fiduciary Net Position
Detailed information about the plan's fiduciary net position is available in the separately issued CaPERS financial report.
82 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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, 2024, the City recognized pension expense of $10,219,721. As of June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Plan
Deferred outflows Deferred inflows
of Resources of Resources
Pension contribution made after measurement date 7,230,634 $ Changes of assumptions 2,472,297
Difference between expected and actual experience 1,890,633 (86,493) Net difference between projected and actual earning on
pension plan investments 5,688,471
Total 17,282,035 (86,493)
The amounts above are net of outflows and inflows recognized in the 2022-23 measurement period expense.

The expected average remaining service lifetime ("EARSL") is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired). The EARSL for the Plan for the measurement period ending June 30, 2023 is 3.7 years, which was obtained by dividing the total service years of 2,413 (the sum of remaining service lifetimes of the active employees) by 647 (the total number of participants: active, inactive. and retired). Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members' probability of decrementing due to an event other than receiving a cash refund.

The $7,230,634 of contributions for the fiscal year ended June 30, 2024 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2025.

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

Measurement
Period Deferred
Ending June 30 Outflows/(Inflows)
2024 $ 3,377,930
2025 2,166,910
2026 4,243,185
2027 176,883
2028
Thereafter :

Total $ 9,964,908
83 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 9 - Other Post Employment Benefits (OPEB)
A. General Information about the OPEB Plan
Plan Description
Permanent employees who retire under the City's CaPERS 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 CaPERS 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 CaPERS' 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 CaPERS 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 CaPERS, inclusive of their benefit plans, is available at www.calpers.ca.gov.

The City participates in the Public Agency Retirement System (PARS) Public Agencies Post Retirement Health Care Plan Trust Program (PARS Trust), an agent-multiple employer irrevocable trust established to fund other postemployment benefits. The City Council adopted the PARS Public Agencies Post-Retirement Health Care Plan Trust, including the PARS Public Agencies Post-Retirement Health Care Plan, to fund medical insurance costs for its retired employees, effective February 17, 2010. The City Council appointed the City Treasurer, or his/her successor or his/her designee as the City's plan administrator. The plan administrator is authorized to execute the PARS legal documents on behalf of the City and to take whatever additional actions necessary to maintain the City's participation in the Program and to maintain compliance of any relevant regulation issued or as may be issued; therefore, authorizing him/her to take whatever additional actions are required to administer the City's PARS Plan. The PARS Trust is approved by the Internal Revenue Code Section 115 and invests funds in equity, bond, and money market mutual funds. Copies of PARS Trust annual financial report is available at the City's Finance Department.

An employee is eligible for lifetime medical benefits under the OPEB Plan, along with his/her spouse or declared domestic partner at the time of retirement, if all criteria listed below are met:
• The employee was hired or the City Council member was elected prior to August 1, 2004, and the employee has five or more full-time years of service and the City Council member has five or more years of elected service with the City of Cupertino; or
• The employee was hired or the City Council member was elected on or after August 1, 2004, and the employee has ten or more full-time and/or elected years of CaPERS service, five years of which must be from the City of Cupertino; and
• The employee is eligible for retirement as defined under the CaPERS retirement system; and the employee retires from the City of. Cupertino.

City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 9 - Other Post Employment Benefits (OPEB) (Continued) A. General Information about the OPEB Plan (Continued)
Plan Description (Continued)
In addition, the eligible employee's dependent children at the time of retirement who are under 23 years old are eligible for medical benefits. In addition to extending the eligibility of dependents from age 23 to age 26 in accordance with the recent healthcare reform act, effective July 1, 2010, employees that retire or resign from service with the City of Cupertino and who are not eligible for retiree medical benefits can continue on the City's medical and dental plans provided that they pay the premiums in full.

Plan Members Covered by Benefit Terms
At July 1, 2023, the valuation date, the Plan membership consisted of the following:

Inactive plan members or beneficiaries currently receiving benefit payments 156 Inactive plan members entitled to but not yet receiving benefit payments Active plan members 171
327
Contributions
OPEB Plan contributions are set by the adopted budget. The cost of the benefits provided by the OPEB Plan is currently being paid by the City on a fully pre-funded basis. Based on the actuarial valuation date of July 1, 2023, the annual required contribution rate is 7.3 percent of annual covered payroll. For the year ended June 30, 2024, the City paid $722,863 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, 2024 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of July 1, 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 determined 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, 2024 (see the discussion of the Plan's investment policy) are summarized in the following table:
85 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 9 - Other Post Employment Benefits (OPEB) (Continued) B. Net OPEB Liability (Continued)
Investment Rate of Return (Continued)
Long-Term Expected
Asset Class Real Rate of Return
Fixed income - core 6.20%
Fixed income - high yield 6.80%
Equities - domestic 7.50%
Equities - developed foreign 7.10%
Equities - emerging foreign 7.40%
Real estate 7.00%
Cash 2.70%
Investment Policy
The Plan's policy in regard to the allocation of invested assets is established and may be amended by the Plan's Board by a majority vote of its members. It is the policy of the Plan Board 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 Board's adopted asset allocation policy as of June 30, 2024:

Asset Class Target Allocation
Fixed income 29.00%
Equities 62.00%
Real estate 6.00%
Commodities 2.00%
Cash 1.00%
Total 100.00%
Concentrations
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 of Return
For the year ended June 30, 2024, the annual money-weighted rate of return on investments, net of investment expense, was 13.65 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 86 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 9 - Other Post Employment Benefits (OPEB) (Continued) B. Net OPEB Liability (Continued)
Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of July 1, 2023, using the previously listed actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified. Mortality rates were based on the CaPERS 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 July 1, 2023 actuarial valuation include the following:

Valuation date: July 1, 2023
Measurement date: June 30, 2024
Actuarial Cost Method: Entry Age Normal
Amortization Method: Level percent of pay closed, 7.5 years as of July 1, 2023 Amortization Period: 10 year
Asset Valuation Method: Market value of Assets
Actuarial Assumptions:

Discount Rate 6.50%
A mortization growth rate 2.75%
Ultimate Rate of Medical Inflation 4.25%
Salary increases 2.75% plus merit component based on years of service Mortality CaPERS mortality assumptions
Discount Rate
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.

Change of Assumptions
Demographic changes refer to the changes in status, as well as changes in member and beneficiary data and coverage elections from January 1, 2021 to July 1, 2023. In aggregate, the changes in demographics over the two- and-a-half-year period were close to those expected, though there were some gains. Health cost gain/loss refers to the changes in healthcare claims, trends, and expense costs. Overall health care claims were higher than expected since the prior valuation. Other assumptions include updating the following actuarial assumptions to reflect those adopted by the CaPERS Board in November 2021 including rates of mortality, rates of retirement, rates of termination, rates of disability, and salary increases. 87 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 9 - Other Post Employment Benefits (OPEB) (Continued) C. Change in Net OPEB Liability
Changes in the Net OPEB Liability: The changes in the City's net OPEB liability are:

Net Increase (Decrease)
Total OPEB Plan Fiduciary Net Net OPEB Liability
Liability (a) Position (b) (c) = (a) - (b)
Balance at June 30, 2023 $ 35,290,000 $ 34,708,000 $ 582,000 Changes in the year
Service cost 1,312,300 1,312,300
2,311,698 : 2,311,698
Interest on the total OPEB liability
Change of assumptions 3,583,364 3,583,364
Contribution - employer 722,863 (722,863)
Contribution - employee
4,814,071 (4,814,071)
Net investment income
Administrative expenses (123,483) 123,483
Benefit payments, including refunds of
Employee contributions (2,108,622) (2,108,622)
Net Changes during July 1, 2023 to June 30, 2024 5,098,740 3,304,829 1.793.011 Balance at June 30, 2024 (Measurement Date) $ 40,388,740 $ 38,012,829 $ 2,375,911 Sensitivity of the net OPEB Liability (Asset) to Changes in the Discount Rate The following presents the net OPEB asset of the City, as well as what the City's net OPE liability would be if it were calculated using a discount rate that is one-percentage-point lower (5.5 percent) or one-percentage-point higher (7.5 percent) than the current discount rate:

Plan's Net OPEB Liability/(Asset)
Current Discount
1% Decrease 5.50% Rate 6.50% 1% Increase 7.50%
7,303,748 2,375,911 $ (1,728,579)
Sensitivity of the Net OPEB Liability (Asset) to Changes in the Health Care Cost Trend Rates The following presents 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-percentage-point lower (decreasing to 3.5 percent) or one-percentage-point higher (increasing to 5.5 percent) than the current healthcare cost trend rates:

Plan's Net OPEB Liability/(Asset)
Current Healtheare
1% Decrease Cost Trend Rate 1% Increase
$ (1,648,459) $ 2,375,911 $ 7,559,037
88 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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, 2024, the City recognized OPEB expense of $2,311,700. As of June 30, 2024, the City reported deferred inflows of resources related to OPEB from the following sources:

OPEB Plan
Deferred Outflows Deferred Inflows of
of Resources Resources
Net difference between projected and actual
earnings on investments $ - $ (716,063)
Differences between expected and actual experience 2,957,000 (936,000) Changes in assumption 3,114,137 (328,000)
$ 6,071,137 (1,980,063)
The difference between projected OPEB plan investment earnings and actual earnings is amortized over a five-year period. The remaining gains and losses are amortized over the expected average remaining service life. The expected average remaining service life is 5 years, which was determined as of June 30, 2023, the beginning of the measurement period, for employees covered by the OPEB plan benefit terms.

Amounts reported as deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows Measurement
Period Deferred
Ending June 30 Outflows/(Inflows)
2025 67,961
2026 2,251,961
2027 442,961
2028 730,962
2029 597,229
Thereafter
Total $ • 4,091,074
Note 10 - Liabilities Under Self-Insurance and Risk Management General and Property Liability: The City is self-insured for the first $250,000 of general and property liability for each occurrence, and the excess (up to $10,000,000 for each occurrence and annual aggregate) is covered through the City's participation in the Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA - formerly the Association of Bay Area Governments Pooled Liability Assurance Network or ABAG PLAN). The risk pool consists of 28 agencies within the San Francisco Bay Area. The stated purpose of the PLAN JPA is to provide certain levels of liability insurance coverage, claims management, risk management services, and legal defense to its participating members.

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

Premiums paid to PLAN JPA are subject to possible refund based on the results of actuarial studies and approval by the Board of Directors. Complete financial statements for PLAN JPA may be obtained from their offices at the following address: PLAN JPA, c/o Sedgwick, 1750 Creekside Oaks Drive Suite 200, Sacramento, CA, 95833. Premiums are revised each year based on the City's claims experience and risk exposure. For the year ended June 30, 2024, the City paid the PLAN JPA premiums of $1,626,671.
89 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 10 - Liabilities Under Self-Insurance and Risk Management (Continued) 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. ElA 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, 2024, the City paid premiums of $151,564.

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:
2024 2023
Claims liability, beginning of year 2,222,786 $ 1,569,000 Incurred claims and changes in estimate (268,925) 1,122,626 Claim payments and credits (282,274) (468,840)
Total claims liability, end of year 1,671,587 2,222,786 Less current portion (322,000) (382,000)
Non-current portion $ 1,349,587 $ 1,840,786
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, 2024:

Governmental Business-Type
Activities Activities
Capital assets, net of accumulated depreciation and amortization $ 220,484,035 2,009,420 Add: deferred charges on refunding 119,609
Less: outstanding principal on capital related debts (14,030,000) Less: bond premium (2,386,895)
Less: lease liabilities (15,369)
Less: subscription liabilities (1,210,274)
Net investment in capital assets 202,961,106 $ 2,009,420 90 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 11 - Net Position and Fund Balances (Continued)
B. Fund Balance Classifications
At June 30, 2024, fund balances are classified in the governmental funds as follows:

Capital
Public Facilities Investments
Corporation Projects Nonmajor
Housing Debt Service Capital Projects Governmental
General Transportation Development Fund Fund Funds Total Nonspendable:

Loans receivable 428,431 : $ :s 428,431
Advances to other funds 3,000,000 : : 3,000,00
Inventories 21,383 21,383
Subtotal 3,449,814 3.449.814
Restricted for:

Public access television 1.639.443 1,639,443
CASP Certificate & Training 7,628 7,628
PARS Section 115 Trust 21,663,664 21.663,664
Debt services 250 250
Storm drain systen 2,193,180 2,193,180
Parks and open spac 19,122,923 19.122.923
Environmental management 968,556 968,556
Streets and road projects 13,635,358 812,887 14.448.245 Housing programs 11.103.256 11,103,256
Subtotal 23,310,735 13.635.358 11.103.256 250 23.097.546 71,147,145 Committed for:

Economic uncertainty 24,000,000 24,000,000
Sustainability reserve 127,891 127.891
Sales tax repayment reserve* 74,500,000 74,500,000
Capital project reserve 10,000,000 10,000,000
Subtotal 108,627,891 108.627.891
Assigned to:

Encumbrances 4,741,474 4,741,474
Capital projects 31,971,103 154,548 32.125.651
Subtotal 4,741,474 31.971.103 154,548 36,867,125
Unassigned 25,965,405 25.965.405
Total 3 166,095,319 S 13,635,358 $ 11.103.256 250 S 31971,103 23,252,094 S 246.057380 * Uncommitted on October 15, 2024. See Note 15 - Subsequent Event for more details.

Note 12 - Commitments and Contingencies
A. Federal and State Grants
The City participates in a number of federal and state grant programs subject to financial and compliance audits by the grantors or their representatives. Audits of certain grant programs, including those for the year ended June 30, 2024, have yet to be conducted. The amount, if any, of expenditures that may be disallowed by the granting agencies cannot be determined at this time. Management believes that such disallowances, if any, would not have a material effect on the financial statements.
91 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 12 - Commitments and Contingencies (Continued)
B. Encumbrances
The City uses encumbrances to control expenditure commitments for the year. Encumbrances represent commitments related to executor contracts not yet performed and purchase orders not yet filled. Commitments for such expenditure of monies are encumbered to reserve a portion of applicable appropriations. Encumbrances still open at year end are not accounted for as expenditures and liabilities, but as restricted, or assigned fund balance.

As of June 30, 2024, the City had the following encumbrances outstanding:

Governmental Funds:

General Fund $ 4,741,474
Transportation Special Revenue Fund 778,864
Housing Development Special Revenue Fund 3,005
Capital Improvements Projects Capital Projects Fund 2,447,952 Nonmajor Governmental Funds 105,085
Proprietary Funds:

Resource Recovery Enterprise Fund 44,640
Cupertino Sports Center Enterprise Fund 10,756
Internal Service Funds 837,022
Total Encumbrances $ 8,968,798
C. Consulting Agreement for Sales Taxes
The City entered into agreements (commitments) with two companies to provide services consisting of the assessment and creation of new sales and use tax revenue sources for the City. The City agreed to pay the companie based on a sliding scale payment schedule dependent on the level of new sales tax revenue realized by the City a defined in the consulting agreements. These agreements qualify as tax abatements under the provisions of GASB Statement 77. For the year ended June 30, 2024, the City abated taxes totaling $9,193,716.

D. Santa Clara County Vehicle Registration Fee (VRF)
The City is required to report VRE revenues, expenditures and fund balances for the year ended June 30, 2024:

VRF Balance as of July 1, 2023 $
VRF Revenue 438,330
VRF Interest 7,446
VRF Expended (445,776)
VRF Balance as of June 30, 2024
92 City of Cupertino
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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, 2024, more than 10 percent of the City General Fund's total revenues are derived from the company.

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

Note 14 - Stewardship, Compliance and Accountability
A. Deficit Fund Balance/Net Position
At June 30, 2024, the following fund had a unrestricted net position (deficit):

Fund Fund Type Deficit
Retiree Medical Internal Service Fund (13,988)
City management believes the present cash position of the Internal Service Funds are adequate to meet current needs.

B. Excess of Expenditures over Appropriations
Total expenditures exceeded budgeted appropriations in the following funds:

Funds Appropriations Expenditures Excess
General Fund:

Debt service:

Principal $ 552,091 $ (552,091)
Interest and fiscal charges 22,997 (22,997)
Public Facilities Corporation Debt Service Fund 2,679,100 (1,500) Nonmajor Governmental Funds
Storm Drain Improvement Special Revenue Fund 1,761,800 1,765,950 (4,150) Note 15 - Subsequent Event
California Department of Tax and Fee Administration ("CDTFA") Local Tax Reallocation On October 2, 2024, CDTFA and the City entered into a settlement agreement that allowed the City to retain the full amount of the $74.5 million held in reserve. Subsequently, the City unassigned funds from the committed sales tax repayment reserve through the Council approval on October 15, 2024. 93 This page intentionally left blank.
94 REQUIRED SUPPLEMENTARY

INFORMATION (UNAUDITED)
This page intentionally left blank.
96 City of Cupertino
Required Supplementary Information
Budgetary Comparison Schedule - General Fund
For the Year Ended June 30, 2024
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 59,055,566 $ 79,233,156 $ 80,355,732 $ 1,122,576 Use of money and property 2,328,336 2,328,336 9,098,441 6,770,105 Intergovernmental 807,624 1,571,820 1,404,322 (167,498) Licenses and permits 4,265,081 34,012,361 4,412,057 (29,600,304) Charges for services 12,261,786 14,978,786 12,308,496 (2,670,290) Fines and forfeitures 405,000 405,000 416,402 11,402
Other revenue 1,142,836 1.200,904 2,199,861 998,957
Total revenues 80,266,229 133,730,363 110,195,311 (23,535,052) EXPENDITURES:

Current:

Administration 9,030,461 8,505,119 7,381,733 1,123,386
Law enforcement 17,812,608 18,062,608 16,204,350 1,858,258 Innovation and Technology 3,632,785 3,161,298 2,284,198 877,100 Administrative services 7,083,011 7,255,528 6,716,341 539,187 Recreation services 6,082,736 6,132,685 5,517,003 615,682 Community development 11,647,125 13,111,301 10,659,154 2,452,147 Public works 24,071,672 28,118,930 25,060,745 3,058,185 Capital outlay 245,000 1,774,415 1,773,434 981
Debt service:

Principal 552,091 (552,091)
Interest and fiscal charges : : 22,997 (22,997)
Total expenditures 79,605,398 86,121,884 76,172,046 9,949,838 Excess (deficiency) of revenues over
expenditures 660,831 47.608,479 34,023,265 (13,585,214) OTHER FINANCING SOURCES (USES):

Transfers in 15,000 111,000 111,000
Transfers out (6,457,600) (6,595,284) (6.595,284)
Total other financing sources (uses) (6,442,600) (6,484,284) (6,484,284) NET CHANGE IN FUND BALANCE (5.781,769) 41.124,195 27,538,981 (13,585.214) FUND BALANCE:

Beginning of year 138,556,338
End of year 166.095.319
97 City of Cupertino
Required Supplementary Information
Budgetary Comparison Schedule - Transportation Special Revenue Fund For the Year Ended June 30, 2024
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property 159,000 159,000 $ 438,177 $ 279,177 Intergovernmental 3,164,952 4,164,952 4,840,805 675,853 Charges for services 2,223 2,223
: : 4,798 4,798
Other revenue
Total revenues 3,323,952 4,323,952 5,286,003 962,051
EXPENDITURES:

Current:

Public works 3,695,902 3,297,821 3,250,708 47,113
Capital outlay 2,823,892 3,093,464 2,435,630 657,834
Total expenditures 6,519,794 6,391,285 5,686,338 704,947 Excess (deficiency) of revenues over
expenditures (3,195,842) (2.067,333) (400,335) 1.666.998 OTHER FINANCING SOURCES (USES):

Transfers in 2,500,000 3,449,019 3.449.019
Total other financing sources (uses) 2,500,000 3,449,019 3,449.019 NET CHANGE IN FUND BALANCE $ (695.842) $ 1.381,686 3,048,684 1.666.998 FUND BALANCE:

Beginning of year 10.586.674
End of year $ 13,635,358
98 City of Cupertino
Required Supplementary Information
Budgetary Comparison Schedule - Housing Development Special Revenue Fund For the Year Ended June 30, 2024
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes 4,532,926 $ 4,532,926 $ (4,532,926)
86,300 86,300 524304 438,094
Use of money and property
Intergovernmental 588,886 588,886 243,777 (345,109)
Other revenue 50.000 50,000
Total revenues 5,208,112 5,208,112 818,171 (4,389.941)
EXPENDITURES:

Current:

Community development 1,632,788 1.639,512 839,57L 799,941 Total expenditures 1,632,788 1.639,512 839,571 799,941
Excess (deficiency) of revenues over
expenditures 3.575,324 3,568,600 (21,400) (3,590,000)
OTHER FINANCING SOURCES (USES):

Transfers out (367,951) (367,951)
Total other financing sources (uses) (367,951) (367,951) NET CHANGE IN FUND BALANCE $ 3.575.324 $ 3.200.649 (389,351) $ (3.590.000) FUND BALANCE:

Beginning of year 11,492,607
End of year $ 11,103,256
99 This page intentionally left blank.
100
City of Cupertino
Required Supplementary Information
Notes to the Budgetary Comparison Schedules
For the Year Ended June 30, 2024
Budget and Budgetary Accounting
The budget of the City is a detailed operating plan which identifies estimated costs and results in relation to estimated revenues.

The budget includes (1) the programs, projects, services and activities to be provided during the fiscal year; (2) estimated revenue available to finance the operating plan; and (3). the estimated spending requirements of the operating plan. The budget represents a process through which policy decisions are made, implemented and controlled. The City prohibits expending funds for which there is no legal appropriation. Operating appropriations lapse at fiscal year end.

In May of each year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning July 1. Public hearings on the proposed budget are held during the month of June and the budgets for all fund types are legally adopted by Resolution prior to June 30. Original budget amounts are presented on the accompanying budgetary statements include these legally adopted amounts.

Budgets for governmental funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. The City's legal level of budgetary control is at the 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.
101
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Pension Liability and Related Ratios For the Year Ended June 30, 2024
Last Ten Fiscal Years
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan Measurement period 2022-23 2021-22 2020-21 2019-20 2018-19 Total pension liability
Service cost 4,097,215 3,614,486 3,392,942 $ 3,241,719 3,324,361 Interest 11,919,333 11,312,835 10,907,002 10,302,395 9,800,245 Changes of benefit terms 201,460
Changes of assumptions 5,380,881
Differences between expected and actual experience 2,085,468 (188,249) 2,212,836 444,188 4,144,384 Benefit payments, including refunds of employee contributions (8,879,755) (8,451,800) (7,937,592) (6,815,494) (6,193,271) Net change in total pension liability 9,423,721 11,668,153 8,575,188 7,172,808 11,075,719 Total pension liability - beginning 172,848,302 161,180,149 152,604,961 145,432,153 134,356,434 Total pension liability - ending (a) 182,272,023 172,848,302 $ 161,180,149 152,604,961 145,432,153 Pension fiduciary net position
Contributions - employer $ 7,183,364 6,396,030 $ 5,957,595 $ 5,308,579 $ 4,654,841 Contributions - employee 1,825,602 1,632,861 1,560,532 1,429.446 1,364,731 Net investment income 7,184,605 (9,612,070) 23,553.078 4,975,822 6,096,968 Benefit payments, including refunds of employee contributions (8,879,755) (8,451,800) (7,937,592) (6,815,494) (6,193,271) Net Plan to Plan Resource Movement
Administrative expense (86,042) (79,189) (103,981) (140,036) (66,707) Other Miscellaneous Income/(Expense)' 216
Net change in plan fiduciary net position 7,227,774 (10,114,168) 23,029,632 4,758,317 5,856,778 Plan fiduciary net position - beginning 117.007.404 127,121,572 104.091.940 99.333.623 93,476,845 Plan fiduciary net position - ending (b) $ 124.235.178 117,007,404 $ 127,121,572 $ 104.091.940 99,333,623 Plan net pension liability - ending (a) - (b) 58,036.845 55,840,898 34,058,577 48,513.021 46,098,530 Plan fiduciary net position as a percentage 68.16% 67.69% 78.87% 68.21% 68.30% of the total pension liability
Covered payroll 23,043,952 $ 20,455,494 $ 20,427,103 $ 18.662.748 18,461,490 Plan net pension liability as a percentage of covered
payroll 251.85% 272.99% 166.73% 259.95% 249.70%
During Fiscal Year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions (GASB 75), CaPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California's agent OPEB plan. Accordingly, CaPERS recorded a one-time expense as a result of the adoption of GASB 75. Additionally, CaPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017 - 18, CaPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68).
" Includes any beginning of vear adjustment.
" Includes one year's payroll growth using 2.80% payroll growth assumption for fiscal years ended in 2022 and 2023; 2.75% payroll growth assumption for fiscal years ended in 2018 through 2021; 3.00% payroll growth assumption for fiscal years ended in 2014 through 2017.

Notes to Schedule:

Changes of Benefit Terms: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary. In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.

Changes of Assumptions: There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CaPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CaPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014. 102
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2024
Last Ten Fiscal Years
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan Measurement period 2017-18 2016-17 2015-16 2014-15 2013-14 Total pension liability $ 2,444,939
Service cost 3,058,629 $ 2,895,549 2,525,314 2,504,228
Interest 9,065,322 8,619,588 8,253,983 7,789,134 7,349,943 Changes of benefit terms
Changes of assumptions (847,606) 7,125,558 (1,883,633)
Differences between expected and actual experience 1,184,340 (182,397) 696,347 372,917 Benefit payments, including refunds of employee contributions (6,051,845) (5,346,890) (5,151,298) (4,637,005) (4,351,614) Net change in total pension liability 6,408,840 13,111,408 6,324,346 4,086,352 5,502,557 Total pension liability - beginning 127,947,594 114,836,186 108,511,840 104,425,488 98,922,931 $ 134,356,434 127,947,594 $ 114.836,186 108,511,840 $ 104.425,488 Total pension liability - ending (a)
Pension fiduciary net position
$ 4,263,020 $ 4,183,822 $ 3,659,170 3,301,642 2,891.986 Contributions - employer
Contributions - employee 1,506,888 1,236,052 1,169,921 1,149,894 1,061,884 Net investment income 7,347,936 8,749,288 466,704 1,724,204 11,379,985 Benefit payments, including refunds of employee contributions (6,051,845) (5,346,890). (5,151,298) (4,637,005) (4,351,614) Net Plan to Plan Resource Movement (216)
Administrative expense (135,263) (115,304) (47,536) (87,780) Other Miscellaneous Income/(Expense) (256,867)
6,673,653 8.706.968 96,961 1,450,955 10,982,241
Net change in plan fiduciary net position
Plan fiduciary net position - beginning' 86,803,192 78,096,224 77,999,263 76,548,308 65,566,067 Plan fiduciary net position - ending (b) GA 93,476,845 $ 78.096.224 77,999,263 76,548,308 86,803,192
Plan net pension liability - ending (a) - (b) 40,879,589 41,144,402 36.739.962 30,512,577 27,877,180

69.57% 67.84% 68.01% 71.88% 73.30%
Plan fiduciary net position as a percentage
of the total pension liability
$ 16,809,349 $ 14,336,969 13.504.966 $ 13.080.327
Covered payroll' 15,595,136
Plan net pension liability as a percentage of covered
243.20% 263.83% 256.26% 225.94% 213.12%
payroll
103
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pension
For the Year Ended June 30, 2024
Last Ten Fiscal Years
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan Fiscal Year End' 2023-24 2022-23 2021-22 2020-21 2019-20 Actuarially determined contribution? 7,230,634 7,183,364 6,396,030 5,957,595 5,308,579 Contributions in relation to the actuarially
determined contribution? (7,230,634) (7,183,364) (6,396,030) (5.957,595) (5,308.579) Contribution deficiency (excess) $ $ $ $ $
Covered payroll $ 23,689,183 23,043,952 : 20,455,494 $ 20,427,103 $ 18,662,748 Contributions as a percentage of covered
payroll 30.52% 31.17% 31.27% 29.17% 28.44%
'As prescribed in GASB 68, paragraph 46, the information presented in the Schedule of Plan Contributions should also be presented as of the employer's most recent fiscal year-end.
^ Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions. " Includes one year's payroll growth using 2.80% payroll growth assumption for fiscal years ended June 30, 2022 and 2023; 2.75% payroll growth assumption for fiscal years ended June 30, 2018- 21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17.

Notes to Schedule:

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were derived from the June 30. 2020 funding valuation report.

Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Actuarial Cost Method
Amortization method Level percentage of payroll, closed Asset valuation method Fair Value of Assets
Inflation 2.50%
Salary increases Varies by entry age and service
Payroll Growth 2.75%
Investment rate of return 7.00% net of pension plan investment and administrative expenses; includes inflation.

Retirement age The probabilities of retirement are based on the 2017 CaPERS Experience study for the period from 1997 to 2015.

Mortality The probabilities of mortality are based on the 2017 CaPERS Experience Study for the period from 1997 to 2015. Pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.
104
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pension (Continued)
For the Year Ended June 30, 2024
Last Ten Fiscal Years
Agent Multiple Employer Defined Benefit Retirement Plan - Miscellaneous Plan Fiscal Year End 2018-19 2017-18 2016-17 2015-16 2014-15 Actuarially determined contribution $ 4,654,841 4,263,020 4,183,822 3,659,170 3,301,642 Contributions in relation to the actuarially
determined contribution (4,654,841) (4.263,020) (4,183,822) (3,659,170) (3,301,642) Contribution deficiency (excess)
Covered payroll $ 18,461,490 $ 15,595,136 14,336,969 13,504,966 Contributions as a percentage of covered payroll 25.21% 25.36% 26.83% 25.52% 24.45% 105
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Other postemployment Benefits Liability and Related Ratios For the Year Ended June 30, 2024
Last Ten Fiscal Years*
Single Employer Defined Benefit Other Post Employment Benefit Plan 2023-24 2022-23 2021-22 2020-21
Measurement period
Total OPEB liability
Service cost $ 1,312,300 1,260,000 $ 1,015,000 844,000
Interest 2,311,698 1,967,000 1,921,000 2,042,000
Changes of benefit terms
Difference between expected vs actual experience 4,437,000 (4,688,000) Changes of assumptions 3,583,364 (492,000) 640,000
Benefit payments, including refunds of employee contributions (2,108,622) (1,753,000) (1,691,000) (1.550,068) Net change in total OPEB liability 5,098,740 5,419,000 1,245,000 (2,712,068) Total OPEB liability - beginning 35,290,000 29,871,586 28,626,586 31,338,654 $ 40,388,740 $ 35,290,586 29,871,586 $ 28,626,586
Total OPEB liability - ending (a)
Contributions - employer 722,863 1,753,000 1,691,000 1,550,068 Net investment income 4,814,071 3,484,000 (6,568,000) 8,775,796 Benefit payments (2,108,622) (1,753,000) (1,691,000) (1,550,068) Administrative expense (123,483) (116,000) (117,000) (121,000) Net change in fiduciary net position 3,304,829 3,368,000 (6,685,000) 8,654,796 Plan fiduciary net position - beginning 34,708,000 31,340,044 38,025,044 29,370,248 Plan fiduciary net position - ending (b) $ 34,708,044 $ 31,340,044 38,025,044

38.012,829
2,375,911 582,542 (1,468,458) $ (9,398,458)
Net OPEB liability (asset) - ending (a-b)

94.12% 98.35% 104.92% 132.83%
Plan fiduciary net position as a percentage
of the total OPEB liability
Covered-employee payroll $ 26,587,600 27,343,833 $ 24,015,350 23,081,960 Plan OPEB liability as a percentage of covered payroll 8.94% 2.13% -6.11% -40.72% Notes to Schedule:
* Fiscal year 2017 was the Ist year of implementation, therefore only eight (8) years are shown. 106
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Other postemployment Benefits Liability and Related Ratios (Continued) For the Year Ended June 30, 2024
Last Ten Fiscal Years*
Single Employer Defined Benefit Other Post Employment Benefit Plan Measurement period 2019-20 2018-19 2017-18 2016-17
Total OPEB liability
Service cost 1,009,000 $ 865,260 1,007,863 907,986
Interest 1,985,000 2,004,581 1,876,280 1,780,898
Changes of benefit terms :

Difference between expected vs actual experience 17000 (1,808,295) :

Changes of assumptions (36,407)
(1,489,506) (1,423,109) (1.19.221) (1.32.975)
Benefit payments, including refunds of employee contributions Net change in total OPEB liability 3,265,494 (397,970) 1,464,922 1,355,909 Total OPEB liability - beginning 28,073,160 28,471,130 27,006,208 25,650,299 Total OPEB liability - ending (a) $ 31,338,654 $ 28,073,160 28.471.130 $ 27,006,208 Contributions - employer 1,489,506 1,423,109 1,419,221 1,332,975 Net investment income 272,722 1,259,390 2,364,652 2,959,614 Benefit payments (1,489,506) (1,423,109) (1,419,221) (1,332,975) Administrative expense (120,708) (97,301) (53,582) (48,629) Net change in fiduciary net position 152.014 1,162,089 2,311,070 2,910,985 Plan fiduciary net position - beginning 29.218.234 28.056.145 25,745,075 22,834,090 Plan fiduciary net position - ending (b) 29,370,248 $ 29.218.234 28.056.145 25,745,075 Net OPEB liability (asset) - ending (a-b) $ 1,968,406 $ (1,145,074) $ 414,985 $ 1,261,133 Plan fiduciary net position as a percentage 93.72% 104.08% 98.54% 95.33% of the total OPEB liability
Covered-employee payroll $ 21,643,061 20,085,777 19,153,396 17,255,340 Plan OPEB liability as a percentage of covered payroll -5.70% 2.17% 7.31%

9.09%
Notes to Schedule:
* Fiscal year 2017 was the Ist year of implementation, therefore only eight (8) years are shown. 107
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other postemployment Benefits For the Year Ended June 30, 2024
Last Ten Fiscal Years*
Single Employer Defined Benefit OPEB Plan
2023-24 2022-23 2021-22 2020-21.

Actuarially determined contribution $ 1,675,019 $ 1,592,398 128,715 $ 123,712 Contributions in relation to the actuarially determined contribution 722,863 1,753,000 1,691,000 1,550,068 Contribution deficiency (excess) 952,156 $ (160,602) $ (1.562,285) $ (1,426,356) Covered-employee payroll $ 26,587,600 $ 27,343,833 $ 24,015,350 $ 23,081,960 Contributions as a percentage of covered-
employee payroll -2.72% -6.41% -7.04% -6.72%
* Fiscal year 2017 was the 1st year of implementation, therefore only eight (8) years are shown.

Notes to Schedule:

Valuation Date July 1, 2023
Actuarially determined contributions are calculated based on the most recently performed Timing actuarial valuation
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age
Amortization method Level Percent of Pay, Closed, 7.5 years as of 7/1/2023 Asset valuation method Market value of assets
Discount rate 6.50%
Amortization growth rate 2.75%
Ultimate rate of medical inflation 4.250%
Salary increases 2.75% plus merit component based on years of service Mortality CaPERS mortality assumptions
108
City of Cupertino
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other postemployment Benefits (Continued) For the Year Ended June 30, 2024
Last Ten Fiscal Years*
Single Employer Defined Benefit OPEB Plan
2019-20 2018-19 2017-18 2016-17
Actuarially determined contribution $ 1,401,176 1,300,357 1,361,806 $ 1,116,764 Contributions in relation to the actuarially determined contribution 1.489,506 1.423,109 1,419,221 1,332,975 Contribution deficiency (excess) $ (88,330) (122,752) (57,415) $ (216,211) Covered-employee payroll $ 21,643,061 $ 20,085,777 $ 19,153,396 $ 17,255,340 Contributions as a percentage of covered-
employee payroll -6.88% -7.09% -7.41% -7.72%
* Fiscal year 2017 was the Ist year of implementation, therefore only eight (8) years are shown.

Notes to Schedule:

Valuation Date July 1, 2023
Actuarially determined contributions are calculated based on the most recently performed Timing actuarial valuation
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age
Amortization method Level Percent of Pay, Closed, 7.5 years as of 7/1/2023 Asset valuation method Market value of assets
Discount rate 6.50%
Amortization growth rate 2.75%
Ultimate rate of medical inflation 4.250%
Salary increases 2.75% plus merit component based on years of service Mortality CaPERS mortality assumptions
109
This page intentionally left blank.
110

SUPPLEMENTARY

INFORMATION
111
This page intentionally left blank.
112
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 Improvement Projects Capital Projects Fund - This fund accounts for activities related to the acquisition or construction of major capital facilities.
113
This page intentionally left blank.
114
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Public Facilities Corporation Debt Service Fund
For the Year Ended June 30, 2024
Original Final Variance with
Budget Budget Actual Final Budget
EXPENDITURES:

Current:

Administration $ - $ - $ 1,500 $ (1,500)
Debt service:

Principal 2,035,000 2,035,000 2,035,000
Interest and fiscal charges 642,600 642,600 642,600 :

Total expenditures 2,677,600 2,677,600 2,679,100 (1,500)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (2,677,600) (2,677,600) (2,679,100) (1,500) OTHER FINANCIN SOURCES:

Transfers in 2,677,600 2,677,600 2.677,600
Total other financing sources 2,677,600 2.677,600 2,677,600 NET CHANGE IN FUND BALANCE $ (1,500) $ (1,500)
FUND BALANCE:

Beginning of Year 1,750
End of Year 250
115
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Capital Improvement Projects Capital Projects Fund
For the Year Ended June 30, 2024
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property $ $ $ 790,983 $ 790,983
Intergovernmental 2,359,235 352,570 (2,006,663)
Charges for services : 15,000 (15,000)
Other revenue 161,337 161,337
Total revenues 2,374,233 1,304,890 (1,069,343)
EXPENDITURES:

Public works 49,785 (49,785)
Capital outlay 2202,000 4.902,061 4,270,128 631,933
Total expenditures 2,202,000 4,902,061 4.319.913 582,148

EXCESS OF REVENUES OVER
EXPENDITURES (2,202,000) (2,527,828) (3,015,023) (487,195) OTHER FINANCING SOURCES (USES):

Transfers in 2,027,000 4,552,250 4,552,250
Transfers out (2,027,000) (4,333,318) (4.333,318)
Total other financing sources (uses) 218.932 218,932
NET CHANGE IN FUND BALANCE (2.202.000) (2,308.896) (2,796,091) (487.195) FUND BALANCE:

Beginning of Year 34,767,194
End of Year $ 31,971,103
116

NONMAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS
All funds not considered as major funds on the Fund Financial Statements are consolidated in one column entitled "Other 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 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 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.
117
City of Cupertino
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
- Special Revenue Funds
Storm Environmental
Drain Park Management/ Traffic
Improvement Dedication Clean Creeks Impact
-
ASSETS
Cash and investments $ 2,179,709 19,004,522 $ 1,064,837 $ 807,874 Accounts receivable 18,249 5,013
Interest receivable 13,471 118,401 6,607
Total assets 2.193,180 19.122.923 1,089.693 812,887

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accruals 121,137
Total liabilities 121,137
Fund balances:

Restricted 2,193,180 19,122,923 968,556 812,887
Assigned
Total fund balances 2,193,180 19,122,923 968,556 812,887 Total liabilities and fund balances 2,193,180 $ 19.122.923 $ 1,089.693 $ 812.887 118
City of Cupertino
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
Capital Projects
Fund
Total Nonmajor
Stevens Creek Governmental
Corridor Park Funds
ASSETS
Cash and investments $ 154,548 $ 23,211,490
Accounts receivable 18,249
Interest receivable 143,492
Total assets 154,548 23.373,231

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accruals 121,137
Total liabilities 121,137
Fund balances:

Restricted 23,097,546
154,548 154,548
Assigned
154,548 23.252,094
Total fund balances
Total liabilities and fund balances 154,548 23.373.231
119
City of Cupertino
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2024
Special Revenue Funds
-
Storm Environmental
Drain Park Management/ Traffic
Improvement Dedication Clean Creeks Impact
-
Revenues:

Taxes $ 109,283 $ 240,000 $
Use of money and property 156,175 717,404 44,463 29,122 Charges for services 7,900 1,500,757 13,658
Fines and forfeitures : 2,746
Other revenue 2,784
Total revenues 265,458 968,088 1,547,966 42,780
Expenditures:

Current:

Public works 1,670,649
Capital outlay 1.765,950 93,897 128,895
Total expenditures 1,765,950 93,897 1,799,544
Excess (deficiency) of revenues over
expenditures (1,500,492) 874,191 (251,578) 42,780
Other financing sources (uses):

Transfers out (300,000) (515,000)
Total other financing sources (uses) (300,000) (515,000) Net Change in Fund Balance (1,800,492) 359,191 (251,578) 42,780 Fund balances:

Beginning of year 3,993,672 18,763,732 1,220,134 770,107 End of year 2,193.180 $ 19.122.923 $ 968.556 812,887
120
City of Cupertino
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2024
Capital Projects
Fund
Total Nonmajor
Stevens Creek Governmental
Corridor Park Funds
Revenues:

Taxes $ $ 349,283
3,154 950,318
Use of money and property
Charges for services 1,522,315
Fines and forfeitures 2,746
Other revenue 2,784
Total revenues 3,154 2,827,446
Expenditures:

Current:

Public works 1,670,649
Capital outlay 5,949 1,994,691
Total expenditures 5,949 3,665,340
Excess (deficiency) of revenues over
expenditures (2,795) (837,894)
Other financing sources (uses):

Transfers out (815,000)
Total other financing sources (uses) (815,000)
Net Change in Fund Balance (2,795) (1,652,894)
Fund balances:

Beginning of year 157,343 24.904,988
End of year $ 154.548 $ 23.252,094
121
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, 2024
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes $ 131,135 $ 131,135 109,283 $ (21,852)
Use of money and property 51,000 51,000 156,175 105,175 Total revenues 182,135 182,135 265,458 83,323
Expenditures:

Capital outlay 1,761,800 1.765,950 (4,150)
Total expenditures 1,761,800 1,765,950 (4,150)
Excess (deficiency) of revenues over
expenditures 182,135 (1,579,665) (1,500,492) 79,173
OTHER FINANCING SOURCES (USES):

Transfers out (300,000) (300,000)
Total other financing sources (uses) (300,000) (300,000) NET CHANGE IN FUND BALANCE $ 182,135 $ (1.879.665) (1,800,492) 79,173 Fund balance:

Beginning of year 3.993.672.

End of year $ 2,193,180
122
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Park Dedication Special Revenue Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:
$ $ 240,000 $ 240,000
Taxes
2570000 25,000 717,404 460,404
Use of money and property
Charges for services 7,900 7,900
: : 2,784 2,784
Other revenue
257,000 257,000 968,088 708,304
Total Revenues
Expenditures:

Capital outlay 1,329,727 93,897 1,235,830
Total Expenditures 1,329,727 93,897 1,235,830
Excess (deficiency) of revenues over
257,000 (1.072.727) 874,191 1,944,134
expenditures
Other Financing Sources (Uses):

Transfers out (15,000) (515,000) (515,000)
Total Other Financing Sources (Uses) (15,000) (515,000) (515,000) NET CHANGE IN FUND BALANCE $ 242,000 $ (1,587,727) 359,191 $ 1,946,918 FUND BALANCE:

Beginning of year 18.763,732
End of year $ 19.122.923
123
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Environmental Management/Clean Creeks Special Revenue Fund For the Year Ended June 30, 2024
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:

Use of money and property 9,000 9,000 $ 44,463 $ 35,463 Charges for services 1,498,201 1,498,201 1,500,757 2,556 Fines and forfeitures 3,563 3,563 2,746 (817)
Total Revenues 1,510,764 1,510,764 1,547,966 37,202
Expenditures:

Current:

Public works 2,102,590 1,872,969 1,670,649 202,320
Capital outlay 131,000 131,000 128,895 2,105
Total Expenditures 2,233,590 2.003.969 1,799,544 204,425 NET CHANGE IN FUND BALANCE $ (722,826) $ (493,205) (251,578) $ 241,627 FUND BALANCE:

Beginning of year 1,220,134
End of year 968.556
124
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Traffic Impact Special Revenue Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:
$ 10,000 $ 10,000 $ 29,122 19,122
Use of money and property
13,658 13,658
Charges for services
10,000 10,000 42,780 32,780
Total Revenues
NET CHANGE IN FUND BALANCE 10,000 $ 10,000 42,780 $ 32,780 FUND BALANCE:

Beginning of year 770,107
End of year 812,887
City of Cupertino
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Stevens Creek Corridor Park Capital Projects Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Bindected Amountal Actual Positive
Original Amounts (Negative)
Revenues:

Use of money and property $ 3,154 3,154
Total Revenues 3,154 3,154
Expenditures:

Capital outlay 5.949 5.949
Total Expenditures 5,949 5.949
NET CHANGE IN FUND BALANCE $ (5,949) (2,795) $ 3,154
FUND BALANCE:

Beginning of year 157,343
End of year 154,548
126

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

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

The City has identified the fund below as a nonmajor proprietary fund Blackberry Farm Fund - This fund accounts for activities related to operating the City-owned golf course. 127
This page intentionally left blank.
128
City of Cupertino
Combining Statement of Net Position
•Nonmajor Enterprise Fund
June 30, 2024
Blackberry
Farm
ASSETS
Current assets:

Cash and investments $ 934,250
Accounts receivable 2,534
Interest receivable 5,810
Total current assets 942,594
Noncurrent assets:

Capital assets:

Depreciable, net 139.654
Total capital assets 139,654
Total noncurrent assets 139,654
Total assets 1,082,248

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 72,668
Related to other postemployment benefit 26,177
Total deferred outflows of resources 98,845

LIABILITIES
Current Liabilities:

Accounts payable and accruals 39,322
Compensated absences, current portion 800
Unearned revenue 112,037
Total current liabilities 152,159
Noncurrent liabilities:

Compensated absences 8,600
Net pension liability 244,034
Net other postemployment benefit liability 10,244
Total noncurrent liabilities 262,878
Total liabilities 415,037

DEFERRED INFLOW OF RESOURCES
Related to pensions 364
Related to other postemployment benefit 8 537
Total deferred inflows of resources 8.901
NET POSITION:

Net investment in capital assets 139,654
Unrestricted 617,501
Total net position 757,155
129
City of Cupertino
Combining Statement of Revenues, Expenses, and Changes in Net Position Nonmajor Enterprise Fund
For the Year Ended June 30, 2024
Blackberry
Farm
OPERATING REVENUES:

Charges for services 611,331
Others 51,943
Total operating revenues 663,274
OPERATING EXPENSES:

Salaries and benefits 159,565
Materials and supplies 225,497
Contractual services 272,995
Depreciation 15,390
Total operating expenses
OPERATING INCOME (LOSS) (10,173)
NONOPERATING REVENUES:

Investment income 33,269
Loss on sale of capital asset (341)
Total nonoperating revenues 32,928
CHANGES IN NET POSITION 22,755
NET POSITION:

Beginning of year 734,400
End of year 133.00
130
City of Cupertino
Combining Statement of Cash Flows
Nonmajor Enterprise Fund
For the Year Ended June 30, 2024
Blackberry
Farm

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 682,383
Cash paid to suppliers for goods and services (478,146) Cash paid to employees for services (197,523)
Net cash provided by operating activities 6,714

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets
Net cash provided capital and related
financing activities
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 30,595
Net cash provided by investing activities 30,595
Net change in cash and cash equivalents 37,309

RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO STATEMENTOF NET POSITION:

Beginning of year 896.941
End of year 934,250
CASH AND CASH EQUIVALENTS:

Cash and investments 934,250
Total cash and cash equivalents 934.250
Reconciliation of Operating Income (Loss) to
to Net Cash Provided by Operating Activities:
$ (10,173)
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:

Depreciation 15,390
Changes in assets and liabilities:
(Increase)/decrease in accounts receivables (705)
(Increase)/decrease in deferred outflows of resources pension related 28,838 (7,698)
Increase/(decrease) in accounts payable 20,346
Increase/(decrease) in unearned revenue 19,814
Increase/(decrease) in compensated absences (215)
Increase/(decrease) in net pension liability (68,675)
Increase/(decrease) in net other postemployment benefit liabilities 8,501 Increase/(decrease) in deferred inflows of resources pension related (405) Increase/(decrease) in deferred inflows of resources other postemployment benefit liabilities related 1,696 Net cash provided by operating activities 6.714
NONCASH ITEMS:

Loss on sale of capital assets (341)
131
This page intentionally left blank.
132

INTERNAL SERVICE FUNDS
These funds account for goods or services provided to other departments of the City where the intent of the City is that the costs of these goods or services are to be recovered through interdepartmental charges at the time that the goods are delivered or the services rendered to those departments.

The concept of major funds does not extend to internal service funds because they do not do business with outside parties. For the Statement of Activities, the net revenues or expenses of each internal service fund are eliminated by netting them against the operations of the City departments that generated them. The remaining balance sheet items are consolidated with these same funds in the Statement of Net Position. However, internal service funds are still 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.
'orkers' Compensation - This fund is used to account for all expenses relating to workers' compensation (i.e., injury claim surance premiums, etc.). The costs are recovered through an annual "user fee" which is charged to all departments/funds that hav employees.

Eument ending - Acous for the activis riled to the minance and replacement of the citys vehicle let and other 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. 133
City of Cupertino
Combining Statement of Net Position
Internal Service Funds
June 30, 2024
Information Workers' Equipment
Technology Compensation Revolving
ASSETS
Current assets:

Cash and investments 3,168,807 $ 3,564,772 $ 1,144,531
Account receivable
Interest receivable 19,663 22,082 10,265
Prepaid expense 4,680
Total current assets 3,193,150 3,586,854 1,154,796
Noncurrent assets:

Nondepreciable 5,031 187,894
598.925 : 1,968,363
Depreciable and amortizable, net
Total capital assets 603,956 2,156,257
Total noncurrent assets 603,956 2.156,257
Total assets 3,797,106 3,586,854 3,311,053

DEFERRED INFLOW OF RESOURCES
Related to pensions 919,238 20,665 215,930
Related to other postemployment benefit liability 282,941 3,209 24.901 Total deferred outflows of resources 1,202,179 23,874 310,831

LIABILITIES
Current Liabilities:

Accounts payable and accruals 153,652 19,426
Accrued payroll and benefits 72
Due to other funds
1,353 4,5485
Compensated absences, due within one year
Claims payable, due within one year 68.110 232,000 :

Subscription liabilities, due within one year -
Lease liabilities, due within one year 6,803
Total current liabilities 253,982 233,353 30,854
Noncurrent liabilities:

Compensated absences, due more than one year 326,987 13,728 46,154 Claims payable, due more than one year 1,041,000
Subscription liabilities, due more than one year 29,111 Lease liabilities, due more than one year :

3.087,04 69,396 725,141
Net pension liability
Net other postemployment benefit liability 110,727 1,256 37,139 Total noncurrent liabilities 3,553,829 1,125,380 816.995 Total liabilities 3,807,811 1,358,733 847,849

DEFERRED INFLOW OF RESOURCES
Related to pensions 4,601 103 1,081
. Related to other postemployment benefit liability 92,279 1,047 30.95L Total deferred inflows of resources 96,880 1,150 32,032 NET POSITION:

Net investment in capital assets 506,735 2,140,888
Restricted for other postemployment benefit 79,935 26,811 Unrestricted (deficit) 507.924 2,249,039 574.304
Total net position $ 1,094,594 2,250,845 2,742,003
134
City of Cupertino
Combining Statement of Net Position (Continued)
Internal Service Funds
June 30, 2024
Absences and
Long-Term Retiree
Disability Medical Total
ASSETS
Current assets:

Cash and investments $ 451,528 $ 8,329,638
1,387,959 1,387,959
Account receivable
Interest receivable 3,900 55,910
Prepaid expense 4,680
Total current assets 455,428 1,387,959 2,778,187
Noncurrent assets:

Capital assets:

Nondepreciable 192,925
:

Depreciable and amortizable, net 2,567,288
Total capital assets 2,760,213
Total noncurrent assets 2,760,213
Total assets 455,428 1,387,959 12,538,400

DEFERRED INFLOW OF RESOURCES
Related to pensions 1,155,833
Related to other postemployment benefit liability 381,051 Total deferred outflows of resources 1,536,884

LIABILITIES
Current Liabilities:

Accounts payable and accruals - 173,078
Accrued payroll and benefits : 72
Due to other funds 1,401,947 1,401,947
Compensated absences, due within one year 38,121
Claims payable, due within one year 232,000
Subscription liabilities, due within one year 68,110
Lease liabilities, due within one year 6,808
Total current liabilities 1,401,947 1,920,136
Noncurrent liabilities:

Compensated absences, due more than one year 386,869
Claims payable, due more than one year 1,041,000
Subscription liabilities, due more than one year 29,111 Lease liabilities, due more than one year 8,561
Net pension liability 3,881,541
Net other postemployment benefit liability 149,122
Total noncurrent liabilities 5,496,204
Total liabilities 1,401,947 7,416,340

DEFERRED INFLOW OF RESOURCES
Related to pensions : 5,785
Related to other postemployment benefit liability 124,277 Total deferred inflows of resources 130,062
NET POSITION:

Net investment in capital assets : : 2,647,623
Restricted for other postemployment benefit 107,652
Unrestricted (deficit) 455,428 (13,988) 3,773,607
Total net position $ 455,428 (13.988) $ 6,528,882
135
City of Cupertino
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2024
Information Workers' Equipment
Technology Compensation Revolving
OPERATING REVENUES:

Charges for services $ 2,546,858 $ - $ 1,523,066
Other 5,377 38356 262
Total operating revenues 2,552,235 38,356 1,523,328
OPERATING EXPENSES:

Salaries and benefits 2,477,519 45,676 488,818
Materials and supplies 1,303,771 29,295 278,162
Contractual services 400,552 104,121
Insurance and claims and premium : 450,115
Depreciation and amortization 200,553
Total operating expenses 4,382,395 74,971 1,321;216
OPERATING INCOME (LOSS) (1,830,160) (36,615) 202,112
NONOPERATING REVENUES (EXPENSES):

Investment income 134,857 147,234 26,776
Gain on sale of capital assets 289 30,750
Interest expense (4,105)
Total nonoperating revenues 131,041 147,234 57,526
INCOME (LOSS) BEFORE TRANSFERS (1,699,119) 110,619 259,638 TRANSFERS:

Transfers in 1,037,684
Transfers out (76,000)
Total transfers 961,684
CHANGES IN NET POSITION (737,435) 110,619 259,638
NET POSITION (DEFICIT):

Beginning of year 1,832,029 2,140,226 2,482,365
End of year $ 1,094,594 2,250,845 2,742,003
136
City of Cupertino
Combining Statement of Revenues, Expenses, and Changes in Net Position (Continued) Internal Service Funds
For the Year Ended June 30, 2024
Compensated
Absences and
Long-Term Retiree
Disability Medical Total
OPERATING REVENUES:

Charges for services $ 101,932 $ 4,171,856

1.387,959
Other 1.431,954
Total operating revenues 101,932 1,387,959 5,603,810
OPERATING EXPENSES:

Salaries and benefits 1,387,959 4,399,972
Materials and supplies 6,47i 13,988 1,631,687
Contractual services 504,673
Insurance and claims and premium 764,574 •.. 764,574
Depreciation and amortization 650,668
Total operating expenses 771,045 1,401,947 7,951,574
OPERATING INCOME (LOSS) (669,113) (13,988) (2347,764)
NONOPERATING REVENUES (EXPENSES):

Investment income 32,216 341,083
Gain on sale of capital assets 31,039
•... (4,105)
Interest expense
Total nonoperating revenues : 32,216 368,017
INCOME (LOSS) BEFORE TRANSFERS (636,897) (13,988) (1,979,747) TRANSFERS:

Transfers in 380,000 1,417,684
Transfers out (76.000)
Total transfers 380,000 1,341,684
CHANGES IN NET POSITION (256,897) (13,988) (638,063)
NET POSITION:

Beginning of year 712,325 7,166,945
End of year $ 455,428 (13,988) $ 6,528,882
137
City of Cupertino
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2024
Information Workers' Equipment
Technology Compensation Revolving

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users 2,552,235 38,356 $. 1,523,328 Cash paid to suppliers for goods and services (1,627,301) (29,295) (441,384) Cash paid to employees for services (2,137,110) (43,120) (484,258) Cash paid for insurance claims (381,000)
Net cash provided by (used in) operating activities (1.212.176) (415.059) 597.686

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash received (paid from other funds 961.684
Net cash provided by (used in) noncapital financing activities 961.684

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (5,031) (427,736)
Principal paid (135,606) ... (18,739)
Interest paid (4,105)
Proceeds from sale of capital assets 30.750
Net cash (used in) capital and related
financing activities (144.742) (415.725)
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest earnings 126.928 138.581 21,381
Net cash provided by (used in) investing activities 126.928 138,581 21,381 Net change in cash and cash equivalents (268,306) (276,478) 203,342 CASH AND CASH EQUIVALENTS:

Beginning of year 3.437.113 3,841,250 941,189
End of year 3.168.807 3.564.772 $ 1.144.53L
(Continued)
138
City of Cupertino
Combining Statement of Cash Flows (Continued)
Internal Service Funds
For the Year Ended June 30, 2024
Compensated
Absences and
Distery Retiree
Medical Total

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $ 101,932 $ 1,385,759 5,601,610 Cash paid to suppliers for goods and services (771,045) (13,988) (2,883,013) Cash paid to employees for services (1,387,959) (4,052,447) Cash paid for insurance claims (381.000)
Net cash provided by (used in) operating activities (669.113) (16.188) (1.714,850)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash received (paid from other funds 380.000 6,290 1,347.974 Net cash provided by (used in) noncapital financing activities 380.000 6,290 1.347.974

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (432,767)
Principal paid (154,345)
Interest paid ...• (4,105)
Proceeds from sale of capital assets 30.750
Net cash (used in) capital and related
financing activities - (560.467)
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest earnings 31.077 317,967
Net cash provided by (used in) investing activities 31,077 317,967 Net change in cash and cash equivalents (258,036) (9,898) (609,376) CASH AND CASH EQUIVALENTS:

Beginning of year 709.564 9.898 8.939.014
End of year 451.528 8.329.638
(Continued)
139
City of Cupertino
Combining Statement of Cash Flows (Continued)
Internal Service Funds
For the Year Ended June 30, 2024
Information Workers' Equipment
Technology Compensation Revolving
Reconciliation of Operating Income (Loss) to
to Net Cash Provided by (used in) Operating Activities:

Operating income (loss) $ (1,830,160) $ (36,615) $ 202,112 Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:

Depreciation and amortization 200,553 450,115
Changes in assets and liabilities:
(Increase)/decrease in account receivable
(Increase)/decrease in prepaid expense (4,680) 37835
(Increase)/decrease in deferred outflows of resources related to pensions 16,066 (Increase/decrease in deferred outflows of resources related to other postemployment benefit 28,805 119 669
Increase/(decrease) in accounts payable 81,702 - (59,101) Increase/(decrease) in compensated absences 34,213 2,054 (167) Increase/(decrease) in claims payable (381,000)
Increase/(decrease) in net pension liabilities 205,614 (3,197) (56,632) Increase/(decrease) in other postemployment benefit liabilities 81,321 942 28,124 Increase/(decrease) in deferred inflows of resources related to pensions (2,487) (76) (842) Increase/(decrease) in deferred inflows of resources related to other postemployment benefit (23.123) (185) (4.427)
Net cash provided by (used in) operating activities (1.212.176) (415.059) 597.686 NONCASH ITEMS:

Acquisition of right to use intangible assets 51,199 $ 34,108 Issuance of lease and subscription liabilities 51,199 34,108 Termination of subscription liabilities GA 16.866
140
City of Cupertino
Combining Statement of Cash Flows (Continued)
Internal Service Funds
For the Year Ended June 30, 2024
Compensated
Absences and
Long-Term Retiree
Disability Medical Total
PoNe Cast PrOd ray compersing Activities:

Operating income (loss) (669,113) (13,988) $ (2,347,764) Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:

Depreciation and amortization - 650,668
Changes in assets and liabilities:
(Increase)/decrease in account receivable ... (2,200) (2,200) (Increase)/decrease in prepaid expense (4,680)
(Increase)/decrease in deferred outflows of resources related to pensions 56,800 (Increase)/decrease in deferred outflows of resources related to other postemployment benefit 29,593
Increase/(decrease) in accounts payable 22,601
Increase/(decrease) in compensated absences 36,100
Increase/(decrease) in claims payable (381,000)
Increase/(decrease) in net pension liabilities 145,785
Increase/(decrease) in other postemployment benefit liabilities 110,387 (Increase)/decrease in deferred inflows of resources related to pensions (3,405) Increase/(decrease) in deferred inflows of resources related to other postemployment benefit (27.735)
Net cash provided by (used in) operating activities (669.113) (16.188) (1.714.850) NONCASH ITEMS:

Acquisition of right to use intangible assets $ $ 85,307 Issuance of lease and subscription liabilities $ $ 85.307 Termination of subscription liabilities 16,866
141
This page intentionally left blank.
142

STATISTICAL SECTION
143
This page intentionally left blank.
144
City of Cupertino
Description of Statistical Section Contents
June 30, 2024
This part of the City of Cupertino's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the government's overall financial health.

Contents: Pages
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. 146-155 Revenue Capacity - These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. 157-161 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. 162-165
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. 166-167
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. 169-173
145
City of Cupertino
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2015 2016 2017 2018 2019
Government activities:

Net investment in capital assets $ 131,425,677 $ 148,168,074 $ 153,239,534 $ 167,606,366 $ 170,973,897 Restricted 38,327,705 34,861,807 34,991,692 32,073,195 45,405,508 Unrestricted 51,003,950 51,164,063 59,385,309 50,457,871 51,190,017 Total governmental activities net position $ 220,757,332 $ 234,193,944 $ 247.616.535 $ 250.137.432 $ 267,569,422 Business-type activities:

Net investment in capital assets $ 2,079,561 $ 1,708,183 $ 1,972,169 1.597.700 $ 1,318,744 Restricted
Unrestricted 6.604,578 7,375,444 9,092,584 8,051,015 6,737,758 Total business-type activities net position $ 8,684,139 $ 9,083,627 $ 11,064,753 9,648,715 $ 8,056,502 Primary government:

Net investment in capital assets $ 133,505,238 $ 149,876,257 $ 155,211,703 $ 169,204,066 $ 172,292,641 Restricted 38,327,705 34,861,807 34,991,692 32,073,195 45,405,508 Unrestricted 57,608,528 58,539,507 68,477,893 58,508,886 57.927,775 Total primary government net position $ 229,441,47 $ 243,277,571 $ 259,786,147 $ 275,625,924 Source: Department of Administrative Services, City of Cupertino. 146
City of Cupertino
Net Position by Component (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2020 2021 2022* 2023 2024
Government activities:

Net investment in capital assets $ 177,128,134 $ 186,503,116 $ 196,915,823 $ 198,450,441 $ 202,961,106 Restricted 48,005,800 53,711,040 69,354,217 69,129,277 73,407,531 Unrestricted 66,493,336 83,458,299 93,613,909 120,529.242 138,149,757 Total governmental activities net position $ 291,627,270 $ 323,672,455 $ 359,883,949 $ 388.108.960 $ 414,518,394 Business-type activities:

Net investment in capital assets 1,118,882 2,090,530 $ 2,089,569 $ 2,109,592 2,009,420 Restricted 166.607 166.689 106,718
Unrestricted 8,134,944 9,374,129 8,422,930 8,148,256 7,742,441 Total business-type activities net position $ 9,253,826 $ 11,464,659 $ 10,679,106 $ 10,424,537 $ 9,858,579 Primary government:

Net investment in capital assets $ 178,247,016 $ 188,593,646 $ 199,005,392 $ 200,560,033 $ 204,970,526 Restricted 48,005,800 53,711,040 69,520,824 69,295,966 73,514,249 Unrestricted 74,628,280 92,832,428 102,036,839 128,677,498 145,892,198 Total primary government net position $ 300,881,096
* 2022 restricted and unrestricted net positions are restated as result of a prior period adjustment Source: Department of Administrative Services, City of Cupertino. 147
City of Cupertino
Changes in Net Position - Expenses and Program Revenues Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2015 2016 2017 2018 2019
Expenses:

Governmental Activities:

Administration $ 3,286,919 $ 3,710,388 $ 2,873,744 $ 5,612,733 $ 6,849,046 Law enforcement 10,705,328 11,316,271 12,528,328 12,674,042 13,381,113 Innovation and technology 649,442 575,260 1,884,165 3,244,846 3,210,343 Administrative services 4,300,336 2,994,611 5,898,479 4,415,647 4,290,818 Recreation services 5,365,282 5,758,194 10,651,557 9,352,551 7,389,915 Community development 5,976,797 6,259,734 13,775,591 16,789,351 10,470,973 Public works 27,893,361 31,313,396 32,491,244 28,995,382 31,870,165 Interest on long-term debt 1,120,138 1,077,538 1,035,738 993,038 949,438 Total governmental activities expenses 59,297,603 63,005,392 81,138,846 82,077,590 78,411,811 . Business-type activities:

Resources recovery $ 2,548,461 $ 2,997,200 $ 2,991,177 $ 2,594,511 $ 1,735,885 Blackberry farm 547,185 576,177 597,406 656,112 645,469 Cupertino sports center 2,269,420 2,299,210 2,159,243 2,633,748 3,036,037 Recreation programs 2,342,457 3,136,011 2,351,501 3,232,593 2,923,336 Total business-type activities expenses 7,707,523 9,008,598 8.099.327 9,116,964 8,340,727 Total primary government expenses $ 67.005,126 72,013,990 $ 89,238,173 $ 91,194,554 $ 86,752,538 Program revenues:

Governmental activities:

Charges for services:

Administration $ 322,534 $ 369,069 $ 3,992,716 $ 5,062,988 $ 1,319,395 Law enforcement 590,378 664,483 603,194 732,544 889,923 Innovation and technology 41,352 41,352
Administrative services 481,616 359,148 3,565,627 2,635,885 3,113,731 Recreation services 1,798,134 1,421,185 2.016.159 1,589.134 1,563,262 Community development 8,511,745 10,534,457 10,902,822 8,598,935 7,470,690 Public works 2,869,357 6,358,870 6,873,487 4,720,646 4,504,104 Operating grants and contributions 6,002,617 1,851,282 2,313,632 4,819,696 2,557,470 Capital grants and contributions 4,022,190 362,491 245,288 271,587 1.082,243 Total governmental activities program revenues 24,639,923 21,962,337 30,512,925 28,431,415 22,500,818 Business-type activities:

Charges for services:

Resources recovery $ 2,591,276 $ 2,664,888 $ 2,792,190 $ 2,559,862 $ 1,750,279 Blackberry farm 388,091 334,529 325,224 345,667 316,615 Cupertino sports center 2,152,498 2,224,146 2,238,023 2,403,665 2,349,468 Recreation programs 2,532,800 2,466,336 2,778,588 2,516,678 1,986,781 Total business-type activities program revenues 7,664,665 7,689,899 8,134,025 7,825,872 6.403,143 Total primary government program revenues $ 32,304,588 $ 29,652,236 $ 38,646,950 $ 36,257,287 $ 28,903,961 Source: Department of Administrative Services, City of Cupertino. 148
City of Cupertino
Changes in Net Position - Expenses and Program Revenues (Continued) Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2020 2021 2022 2023 2024
Expenses:

Governmental Activities:

Administration $ 7,974,520 $ 3,637,467 7,293,244 8,830,127 $ 9,069,311 Law enforcement 14,698,130 15,211,646 16,100,903 15,716,301 16,682,075 Innovation and technology 3,637,354 1,721,729 2,004,515 1,950,718 3,127,436 Administrative services 5,175,596 5,358,183 5,363,745 6,363,343 8,165,843 Recreation services 8,763,194 1,182,662 3,976,793 6,020,526 7,194,533 Community development 10,286,317 11,495,788 12,209,547 12,463,257 13,696,180 Public works 33,339,191 41,870,240 35,653,588 38,696,234 36,547,118 Interest on long-term debt 882,837 397,682 636,960 369,502 304,972 Total governmental activities expenses 84,757,139 80,875,397 83,239,295 90,410,008 94,787,468 Business-type activities:

Resources recovery $ 2,213,404 1.670.261 $ 1.837.781 2,038,313 2,227,782 Blackberry farm 663,663 535,274 655,184 799,168 3,113,577 Cupertino sports center 2,883,903 2,182,900 3,396,146 3,456,539 2,393,886 Recreation programs 3,141,225 1,117,244 1,617,717 1,661,686 673,788 Total business-type activities expenses 8,902,195 5,505,679 7,506,828 7.955.706 8,409,033 Total primary government expenses $ 93.659,334 86,381,076 $ 90.746.123 $ 98,365,714 $ 103,196,501 Program revenues:

Governmental activities:

Charges for services:

Administration $ 2,091,811 $ 2,387,412 $ 2,551,205 $ 3,098,916 1,370,548 Law enforcement 1,102,888 550,051 940,797 612,993 739,408 Innovation and technology
Administrative services 3,889,180 5,232,679 7,457,032 5,419,347 6,642,671 Recreation services 1,309,906 264,426 653,994 621,587 811.979 Community development 5,859,847 5,736,587 5.768.850 5.361.837 5,549,943 Public works 5,657,315 3.966.206 4.015.183 3,290,506 3,507,250 Operating grants and contributions 5,794,443 5,998,209 7,601,210 10,881,438 4,685,153 Capital grants and contributions 1,046,756 1,792,376 1,282,617 1,593,910 3,665,581 Total governmental activities program revenues 26,752,146 25,927,946 30,270,888 30,880,534 26,972,533 Business-type activities:

Charges for services:

Resources recovery $ 1,821,677 $ 1,819,861 $ 1,545,683 $ 1,772,252 2,363,496 Blackberry farm 338,212 610,603 602,778 616,461 2,362,677 Cupertino sports center 2,365,667 1,810,194 2,796,329 3,117,580 2.039.338 Recreation programs 1,588,576 590,871 1,294,128 1.742.442 663,274 Total business-type activities program revenues 6,114,132 4,831,529 6,238,918 7,248,735 7,428,785 Total primary government program revenues $ 32,866,278 $ 30,759,475 $ 36,509,806 38,129,269 34.401.318 Source: Department of Administrative Services, City of Cupertino. 149
City of Cupertino
Changes in Net Position - Expenses and Program Revenues (Continued) Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2015 2016 2017 2018 2019
Net revenues (expenses):

Governmental activities $ (34,657,680) $ (41,043,055) $ (50,625,921) (53,646,175) $ (55,910,993) Business-type activities (42,858) (1,318,699) 34.698 (1,291,092) (1,937,584) Total net revenues (expenses) $ (34,700,538) $ (42,361,754) $ (50,591,223) $ (54,937,267) $ (57,848,577) General revenues and Transfers
Governmental activities:

Taxes:

Property taxes 11,864,027 $ 13,251,840 14,881,533 $ 17,082,005 Property taxes in lieu of motor vehicle fee 6,330,436 6,967,237 7,552,272 8,219,090 Sales taxes 21,350,056 26,932,012 26,164,531 24,901,779 Transient occupancy tax 5,852,244 6,023,681 6,810,718 8,901,337 Utility user taxes 3,370,830 3,082,407 3,146,398 3,089,922 Franchise taxes 3,478,024 3,409,572 3,563,820 3,445,253 Other taxes 2,818,019 3,258,118 1,943,652 3,299,587
Intergovernmental 24,111 26,118 31,013 28,844
Investment earnings (loss) 40,751 807,287 694,730 916,638 3,258,550 Miscellaneous (2) 219,053 2,004,906 1,834,492 1,187,741 Gain on sale of capital assets 23,715,897 580 740,570 3,875 Transfers - fund closing' 272,011
Transfers 872,340 (1,635,000) (1,874,120) 107,030 (75,000) Total governmental activities 24,628,986 54,479,667 64,048,512 67,692,667 73,342,983 Business-type activities:

Investment earnings 42,561 82,187 59,012 75,663 270,371 Transfers (872,340) 1,635,000 1,874,120 (107,030) 75.000 Total business-type activities (829,779) 1,717,187 1,933,132 (31,367) 345.371 Total primary government 23,799,207 $ 56,196,854 65,981,644 67,661,300 $ 73,688,354 Changes in net position
Governmental activities $ (10,028,694) 13,436,612 13,422,591 14,046,492 17,431,990 Business-type activities (872,637) 398,488 1,967,830 (1,322,459) (1,592,213) Total primary government $ (10,901,331) $ 13,835,100 $ 15,390,421 $ 12,724,033 $ 15,839,777 'Asset and liability transfer from the closed City Channel/Web Internal Service Fund in 2017.

Source: Department of Administrative Services, City of Cupertino. 150
City of Cupertino
Changes in Net Position - Expenses and Program Revenues (Continued) Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2020 2021 2022 2023 2024
Net revenues (expenses):

Governmental activities $ (58,004,993) $ (54,947,451) $ (52,968,407) $ (59,529,474) S (67,814,935) Business-type activities (2,788,063) (674,150) (1,267,910) (706,971) (980,248) Total net revenues (expenses) $ (60,793,056) $ (55.621,601) $ (54,236,317) $ (60,236,445) $ (68,795,183) General revenues and Transfers
Governmental activities:

Taxes:

Property taxes $ 18,117,304 $ 19,197,994 $ 20,322,779 $ 21,807,628 22,494,293 Property taxes in lieu of motor vehicle fee 8,489,541 9,079,845 9,401,632 10,082,011 10,542,559 Sales taxes 35,657,214 42,581,070 43,646,813 34,819,341 30,961,166 Transient occupancy tax 7,286,083 2,141,058 4.404.958 7,062,150 6,906,722 Utility user taxes 3,182,086 3,074,358 3,356,389 4,103,906 3,935,917 Franchise taxes 3,418,908 3,368,286 3,479,554 3,995,018 4,313,669 Other taxes 1,774,235 3,022,333 11,117,528 2,872,571 1,970,611 Intergovernmental 47,391 43,675 67,762 62,072 74,801
Investment earnings (loss) 5,690,723 4,147,907 (9,241,781) 2,801,930 11,562,914 Miscellaneous 1,922,356 3,185,110 1,948,332 444,339 1.441.717 Gain on sale of capital assets
Transfers - fund closing'
Transfers (3,523,000) (2,849,000) (886,801) (296,481) 20,000 Total governmental activities 82,062,841 86,992,636 87.617,165 87,754,485 94,224,369 Business-type activities:

Investment earnings 462,387 35,983 (404,444) 155,921 434,290 Transfers 3,523,000 2.849.000 886.801 296.481 (20,000)
Total business-type activities 3,985,387 2,884,983 482,357 452,402 414,290 Total primary government $ 86,048,228 89.877,619 88.099.522 88,206,887 94,638,659 Changes in net position
Governmental activities $ 24,057,848 32.045.185 $ 34,648,758 28,225,011 $ 26,409,434 Business-type activities 1.197.324 2,210,833 (785,553) (254,569) (565,958) Total primary government $ 25.255,172 $ 34,256,018 $ 33,863,205 $ 27,970,442 $ 25,843,476 Source: Department of Administrative Services, City of Cupertino. 151
City of Cupertino
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2015 2016 2017 2018 2019)
General fund:

Nonspendable 938,245 $ 937,381 $ 876,939 $ 464,893 $ 454,188 Restricted 761,653 888,374 1,016,771 1,254,578 9,469,670 Committed 19,000,000 19,122,754 19,123,397
Assigned 28,849,679 20,500,000 4,638,181 9,963,310 1,979,202 Unassigned 8,774,966 29,869,085 28,057,799 21,704,922 27,896,128 Total general fund 39,324,543 $ 52,194,840 $ 53,589,690 $ 52,510,457 $ 58,922,585 All other governmental funds:

Nonspendable
Restricted 37,566,052 33,973,433 33,974,921 30,818,617 35,935,838 Committed 1,398,665 1,398,665 1,398,665
Assigned 20,671,116 15,344,191 25,305,974 29,129,616 33,211,946 Unassigned
Total all other governmental funds $ 59,635,833 $ 50,716,289 $ 60,679,560 $ 59.948,233 $ 69,147,784 Total Governmental Funds $ 98,960,376 $ 102,911,129 $ 114,269,250 $ 112,458,690 $ 128,070,369 'The City established a trust to fund Other Post-Employment Benefit contributions, which is classified as a restriction in fund balance.

Source: Department of Administrative Services, City of Cupertino. 152
City of Cupertino
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2020 2021 2022'"' 2023 2024
General fund:

Nonspendable 3,449,341 3,444,346 $ 4,055,956 4,000,588 3,449,814 Restricted 14,324,757 20,140,419 18,756,482 19,088,859 23,310,735 Committed 19,127,891 19,127,891 34,127,891 34,127,891 108,627,891 Assigned 3,176,882 4,906,139 5,041,682 9,735,187 4,741,474 Unassigned 34,426,942 49,231,996 48,696,821 71,603,813 25,965,405 Total general fund $ 74,505,813 $ 96,850,791 $ 110,678,832 $ 138,556,338 $ 166.095.319 All other governmental funds:

Nonspendable $
Restricted 33,681,043 33,570,621 51,106,343 46,828,676 47,836,410 Committed
Assigned 40,551,131 37,038,174 35,088,889 34,924,537 32,125,651 Unassigned
Total all other governmental funds $ 74,232,174 $ 70,608.795 $ 86,195,232 $ 81,753,213 $ 79.962,061 Total Governmental Funds S 148,737,987 $ 167,459,586 $ 196,874.064 $ 220,309,551 $ 246,057,380 '2022 balances were restated due to prior period adiustments.

Source: Department of Administrative Services, City of Cupertino. 153
City of Cupertino
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2015 2016 2017 2018 2019
Revenues:
$ 55,134,238 $ 55,462,956 $ 62,924,867 $ 64,062,924 $ 68,938,973 Taxes
Use of money and property 915,933 1,654,702 1,425,629 1,543,818 3,896,813 Intergovernmental 7,210,562 2,532,025 2,585,038 5,122,296 3,668,557 Licenses and permits 3,170,445 3,073,110. 2,536,925 2,757,928 4,102,665 Charges for services 5,203,371 17,249,123 24,103,167 15,638,247 13,385,698 Fines and forfeitures 554,002 564,903 603,194 602,934 534,012 Other 542,429 1,289,013 2,004,904 1,834,492 1,187,741
Total revenues 72,730,980 81,825,832 96,183,724 91,562,639 95,714,459 Expenditures:

Current:

Administration 3,897,701 4,053,741 5,942,633 4,943,052 6,294,111 Law enforcement 10,283,772 10,988,735 11,939,095 12,362,621 13,108,732 Innovation and technology 624,295 544,718 1,864,746 2,835,768 2,843,540 Administrative services 3,226,164 2,811,117 5,054,539 4,430,300 4,197,582 Recreation services 5,047,548 5,441,200 9,361,934 8,686,076 8,996,118 Community development 5,180,659 6,102,820 7,431,292 12,907,086 9,359,835 14,625,038 15,078,174 18,623,585 18,191,714 19,955,579
Capital outlay: 21,760,899 26,171,127 18,731,165 23,395,112 10,528,246 Principal repayment 2,055,000 2,090,000 2,135,000 2,180,000 2,220,000 Interest and fiscal charges 1,120,138 1,077,538 1,035,738 993,038 949,438 Total expenditures 67,821,214 74,359,170 82,119,727 90,924,767 78,453,181 Excess of revenues over (under) expenditures 4,909,766 7,466,662 14,063,997 637,872 17,261,278 Other financing sources (uses):

Proceeds from debt issuance : : :

Proceeds from debt issuance premium.

Payments to refunding agent
Proceeds from sale of capital assets 23,814,257 580 872,250 3,875 Inception of subscription liability 26.146,090 31.028.218 Transfers in 39,408,990 11,905,724 19,407,613
Transfers in - fund closing 260,374
Transfers out (39,177,284) (15.422,213) _ (29,412,340) (34.348.900) (21.061.087) Total other financing sources (uses) 24.045,963 (3,515,909) (2,705,876) (2,448,432) (1,649,599) Net change in fund balances $ 28,955,729 $ 3,950,753 $ 11,358,121 $ (1,810,560) $ 15,611,679 Debt service as a percentage of
noncapital expenditures 0.00% 6.57% 5.00% 4.70% 4.67%
Source: Department of Administrative Services, City of Cupertino. 154
City of Cupertino
Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2020 2021 2022 2023 2024
Revenues:

Taxes $ 77,925,371 $ 82,464,944 $ 95,729,653 $ 84,233,345 $ 80,705,015 Use of money and property 6,259,342 4,447,970 (8,501,439) 3,422,106 11,802,313 Intergovernmental 6,888,590 7,834,260 8,951,589 11,869,664 6,841,474 Licenses and permit: 4,692,847 4,068,238 4,141,902 4,093,631 4,412,057 Charges for services 13,937,950 13,601,302 16,373,903 12,741,952 13,833,034 Fines and forfeitures 344,008 134,459 373,722 326,944 419,148 Other 1,922,356 3,185,110 1,948,332 1,393,059 2,418,780 Total revenues 111,970,464 115,736,283 119,017,662 118,080,701 120,431,821 Expenditures:

Current:

Administration 6,951,541 7,549,386 7,492,277 7,603,732 7,383,233 Law enforcement 14,151,413 14,776,409 15,715,815 15,276,950 16,204,350 Innovation and technology 3,223,185 1,836,725 2,063,176 1,825,667 2,284,198 Administrative services 4,617,787 5,196,299 5,525,888 5,976,301 6,716,341 Recreation services 7,688,935 4,787,914 4,729,438 5,432, 183 5,517,003 Community development 9,310,827 11,177,690 12,627,702 11,693,554 11,498,725 Public works 22,445,948 24,568,155 28,542,850 28,221,856 30,031,887 Capital outlay: 12,644,373 19,483,945 12,777,121 12,533,316 10,473,883 Debt service:

Principal repayment 2,290,000 2,140,000 1,880,000 2,581,181 2,587,091 Interest and fiscal charges 882,837 798,747 796,000 739.340 665,597 Total expenditures 84,206,846 92,315,270 92,150,267 91,884,080 93,362,308 Excess of revenues over (under) expenditures 27,763,618 23,421,013 26,867,395 26,196,621 27.069.513 Other financing sources (uses):

Proceeds from debt issuance 22,040,000
Proceeds from debt issuance premium 3,878,704
Payments to refunding agent (27,279,118) :

Proceeds from sale of capital assets
Inception of subscription liability 964,745 10,789,869
35,208,276 12,876,969 23.089,059 11,350,697
Transfers in
Transfers in - fund closing
Transfers out (42,304,276) (16,215,969) (25,776,712) (15,076,576) (12.111,553) Total other financing sources (uses) (7,096,000) (4.699,414) (2.687,653) (2,761,134) (1,321,684) Net change in fund balances $ 20,667,618 $ 18.721,599 S 24,179,742 $ 23,435,487 $ 25,747,829 Debt service as a percentage of
noncapital expenditures 4.43% 4.04% 3.37% 4.18% 3.92%
Source: Department of Administrative Services, City of Cupertino. 155
This page intentionally left blank.
156
City of Cupertino
Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
(Unaudited)
State Board of Total Assessed & Direct
Total Equalization Secured Est. Full Market Tax
Fiscal Year Secured (a) Unsecured (a) Non-Unitary Exemptions Valuation (a) Rate 2015 $ 16,133,637,244 $ 965,141,148 - $ 119,476,276 17,098,778,392 5.61% 2016 18,308,720,226 1,086,786,901 114,223,063 19;395,507,127 5.59% 2017 20,196,258,418 1,150,311,942 118,257,368 21,346,570,360 5.98% 2018 22,024,906,420 1,114,123,426 - 122,805,695 23,139,029,846 6.19% 2019 23,402,123,229 1,779,936,377 125,245,819 25,182,059,606 6.38% 2020 24,370,718,536 1,641,863,322 138,025,761 26,012,581,858 6.50% 2021 25,397,331,860 2,423,984,683 145,644,653 27,821,316,543 6.48% 2022 27,083,468,890 1,724,247,088 149,658,614 28,807,715,978 3.55% 2023 29,822,398,085 1,069,629,678 154,098,046 30,892,027,763 7.24% 2024 31,157,956,858 1,145,368,676 146,726,345 32,303,325,534 4.57% $35
$30
$25
$20
$15
$10
$0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
•il Secured Property M Unsecured Property
(a) Net of exemptions
Source: HdL, Coren & Cone
Data Source: Santa Clara County Assessor 2023-24 Combined Tax Rolls This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone 157
City of Cupertino
Direct and Overlapping Property Tax Rates
(Rate per $100 of taxable value)
Last Ten Fiscal Years
Agency 2014-15 2015-16 2016-17 2017-18 2018-19
Basic Levy' 1.00000 1.00000 1.00000 1.00000 1.00000
Co. Housing Bond 2016 0.00000 0.00000 0.00000 0.01266 0.01050 County Bond 2008 Hospital Facility 0.00910 0.00880 0.00860 0.00820 0.00720 County Library 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 0,05400 0.05190 0.05090 0.04960 0.03970 El Camino Hospital 2003 0.01290 0.01290 0.01290 0.01000 0.01000 Foothill De Anza College 0.02760 0.02400 0.02340 0.02200 0.02170 Fremont High 0.03960 0.05250 0.04030 0.04640 0.04300
Los Gatos-Saratoga High 1998 0.05160 0.04230 0.04690 0.04570 0.03040 MidPeninsula Open Space 2014 0.00000 0.00080 0.00060 0.00090 0.00180 Santa Clara Unified 0.07040 0.09420 0.08180 0.08280 0.07070 Santa Clara Valley Water District 0.00650 0.00570 0.00860 0.00620 0.00420 Saratoga Elementary 0.04580 0.04490 0.04560 0.04580 0.04580 West Valley College 0.01200 0.02320 0.01960 0.02000 0.01980 Total Direct & Overlapping Tax Rates 1.37070 1.40240 1.38040 1.39146 1.34600 City's Share of 1% Levy Per Prop 13ª 0.05617 0.05571 0.05962 0.06148 0.06320 General Obiligation Debt Rate
Redevelopment Rate
Total Direct Rates 0.05610 0.05588 0.05976 0.06187 0.06381 'In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.

Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.
"City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in tax ratio figues. *Redevelopment Rate is based on the largest RDA tax rate area and only includes rates) from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping rates are applied only to the incremental property values. The approval of ABXI 26 eliminated Redevelopment from the State of California for the fiscal year 2012/13 and years thereafter. "Total Direct Rate is the weighted average of all individual direct rates applied to by the government preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforceable obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City in the same proportions as general fund revenue.

Data Source: Santa Clara County Assessor 2014/15 - 2023/24 Tax Rate Table This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone 158
City of Cupertino
Direct and Overlapping Property Tax Rates (Continued)
(Rate per $100 of taxable value)
Last Ten Fiscal Years
Agency 2019-20 2020-21 2021-22 2022-23 2023-24
Basic Levy' 1.00000 1.00000 1.00000 1.00000 1.00000
Co. Housing Bond 2016 0.01000 0.00000 0.01266 0.01080 0.00950 County Bond 2008 Hospital Facility 0.00690 0.00690 0.00610 0.00630 0.00550 County Library 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 0.04150 0.04030 0.03800 0.03680 0.03570 El Camino Hospital 2003 0.01000 0.01000 0.01000 0.00900 0.00500 Foothill De Anza College 0.02080 0.03640 0.03310 0.02910 0.02780 Fremont High 0.04790 0.04780 0.04160 0.03710 0.04410
Los Gatos-Saratoga High 1998 0.01770 0.01930 0.01850 0.01790 0.01370 MidPeninsula Open Space 2014 0.00160 0.00150 0.00150 0.00130 0.00120 Santa Clara Unified 0.11760 0.10450 0.10140 0.08670 0.08890 Santa Clara Valley Water District 0.00410 0.00370 0.00510 0.00440 0.00410 Saratoga Elementary 0.04640 0.04850 0.04830 0.04850 0.05960 West Valley College 0.01860 0.03110 0.03040 0.02830 0.02580 Total Direct & Overlapping Tax Rates 1.39530 1.39120 1.38786 1.35740 1.36210 City's Share of 1% Levy Per Prop 133 0.06531 0.06515 0.06528 0.06504 0.06513 General Obiligation Debt Rate
Redevelopment Rate
Total Direct Rates 0.06499 0.06463 0.06477 0.06482 0.06515 'In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.

Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.
'City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in tax ratio figues. state elue. A dir based on the pins Ries are plate and only i chuten eat ropery dies s aped at of 1989 26 Chinted Redevelopment from the State of California for the fiscal year 2012/13 and years thereafter. "Total Direct Rate is the weighted average of all individual direct rates applied to by the government preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforceable obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City in the same proportions as general fund revenue.

Data Source: Santa Clara County Assessor 2014/15 - 2023/24 Tax Rate Table This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone 159
City of Cupertino
Principal Property Taxpayers
Current Year and Nine Years Ago
(Unaudited)
2024 Percentage of 2015 Percentage of
Assessed Total Assessed Assessed Total Assessed
Taxpayer Valuation Valuation Valuation Valuation
7,802,605,907 24.15% $ 1,596,975,041 9.34%
Apple Inc.

Main Street Cupertino 390,150,977 1.21% 0.00%
Cupertino City Center 378,541,764 1.17% 139,849,982 0.82% Vallco Property Owner LLC 364,276,620 1.13% 157,741,957 0.92% Markham Apartments LP 256,729,104 0.79% 0.00%
215,132,010 0.67% 100,941,770 0.59%
Cupertino Property Development
PR Cupertino Gateway LLC 140,150,193 0.43% 0.00%
Preg Emerson LLC 130,697,590 0.40% : 0.00%
Avery Glenbrook LP 116,016,640 0.36% 0.00%
APPLE ENTERPRISES INC 112,000,000 0.35% 0.00%
Total $ 9,906,300,805 30.67% $ 1,995,508,750 11.67%
Source: Hd, Coren & Cone
160
City of Cupertino
Property Tax Levies and Collections
Last Ten Fiscal Years
(Unaudited)
Percent of
Percent Delinquent Total Total Tax
Fiscal Total Current Tax of Levy Tax Tax Collections
Year Tax Levy Collections Collected (1) Collections (1) Collections to Tax Levy 2015 $ 10,178,734 $ 10,178,734 100.00% $ 10,178,734 100.00% 2016 11,864,026 11,864,026 100.00% 11,864,026 100.00%
2017 13,308,884 13,308,884 100.00% 13,308,884 100.00%
2018 13,172,425 13,172,425 100.00% ' ' 13,172,425 100.00% 2019 16,049,112 16,049,112 100.00% 16,049,112 100.00%
2020 18,117,304 18,117,304 100.00% - 18,117,304 100.00% 2021 19,197,994 19,197,994 100.00% 19,197,994 100.00%
2022 20,322,779 20,322,779 100.00% 20,322,779 100.00%
2023 21,807,628 21,807,628 100.00% : 21,807,628 100.00% 2024 22,494,293 22,494,293 100.00% 22,494,293 100.00%
(1) Per the Teeter Plan, the City receives 100% of the tax levy, while the County receives delinquencies and penalties.

Source: City of Cupertino NWS
161
City of Cupertino
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Unaudited)
% of
Fiscal Certificates Lease SBITA Total Pirmary Total Debt Personal Year of Participation Payable Agreement Payable Government Per Capita Income 2015 37,925,000 $ - $ 37,925,000 $ 634.44 0.14%
2016 35,835,000 35,835,000 615.88 0.16%
2017 33,700,000 33,700,000 571.99 0.18%
2018 31,520,000 31,520,000 524.54 0.19%
2019 29,300,000 29,300,000 489.32 0.22%
2020 22,040,000 22,040,000 370.12 0.31%
2021 19,900,000 - 19,900,000 328.08 0.37%
2022 18,020,000 18,020,000 271.90 0.43%
2023 16,065,000 2,027,290 18,092,290 303.28 0.49%
15,369 1,210,274 15,255,643 256.52 0.26%
2024 14,030,000
* Bond was refinanced in 2020
Source: City of Cupertino Budget Book
162
City of Cupertino
Direct and Overlapping Bonded Debt
June 30, 2024
(Unaudited)
2023-24 Assessed Valuation $ 32,303,182,933
Total Debt % City's Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2024 Applicable (1) Debt 6/30/24 Santa Clara County 956,770,000 4.894% $ 46,824,324
Foothill-DeAnza Community College District 640,179,446 12.279% 78,607,634 West Valley Community College District 663,040,000 1.871% 12,405,478 Santa Clara Unified School District 1,003,615,000 4.145% 41,599,842 Fremont Union High School District 737,130,088 27.348% 201,590,336 Cupertino Union School District 235,883,303 50.573% 119,293,263 El Camino Hospital District 102,186,937 0.861% 879,830
Midpeninsula Regional Open Space District 80,700,000 7.403% 5,974,221 Santa Clara Valley Water District Benefit Assessment District 29,235,000 4.894% 1,430,761 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 508.605.689
DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Santa Clara County General Fund Obligations $ 1,057,709,440 4.894% $ 51,764,300 Santa Clara County Pension Obligation Bonds 323,733,582 4.894% 15,843,522 Santa Clara County Board of Education Certificates of Participation 12,073,098 4.894% 590,857 West Valley-Mission Community College District General Fund Obligations 2,520,000 1.871% 47,149 Santa Clara Unified School District General Fund Obligations 11,202,000 4.145% 464,323 Cupertino Union School District General Fund Obligations 40,233,350 50.573% 20,347,212 City of Cupertino Certificates of Participation 14,030,000 100.000% 14,030,000 Santa Clara County Central Fire Protection District General Fund Obligations 27,130,000 46.763% 12,686,802 Midpeninsula Regional Open Space Park District General Fund Obligations 79,795,600 7.403% 5,907,268 TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT 121,681,433 Less: Santa Clara County Supported Obligations 130,180
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT 121,551,253 TOTAL DIRECT DEBT 14,030,000
TOTAL GROSS OVERLAPPING DEBT $ 616,257,122
TOTAL NET OVERLAPPING DEBT $ 616,126,942
GROSS COMBINED TOTAL DEBT $ 630,287,122 (2)
NET COMBINED TOTAL DEBT $ 630,156,942
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Ratios to 2023-24 Assessed Valuation:

Total Overlapping Tax and Assessment Debt 1.57%
Total Direct Debt (S14,030,000) 0.04%
Gross Combined Total Debt 1.95%
Net Combined Total Debt 1.95%
Sources: California Municipal Statistics, Inc.
163
City of Cupertino
Legal Debt Margin Information
Last Ten Fiscal Years
(Unaudited)
Total net debt
Total Net Legal imitaba tr
Fiscal Debt Debt Applicable Debt
Year Limit to Limit Margin debt limit
2015 $ 605,011,397 $ 605,011,397 $
2016 686,577,008 686,577,008
2017 757,359,691 757,359,691 -
2018 825,933,991 825,933,991
2019 877,579,621 877,579,621
2020 913,901,945 913,901,945 -
2021 952,399,944 952,399,944 -
2022 1,015,630,083 1,015,630,083
2023 1,118,339,928 1,118,339,928 :
2024 1,168,423,382 1,168,423,382
Debt Limit:

Secured property assessed value, net of exempt real property 31,157,956,858 Adjusted valuation - 25% of assessed valuation 7,789,489,215 Debt limit - 15% of adjusted valuation 1,168,423,382
Amount of Debt Subject to Limit:

Total Bonded Debt 18,020,000
Less: Certificates of Participation not subject to debt limit (18,020,000) Amount of debt subject to limit
Legal Debt Margin $ 1,168,423,382
Note: The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessec valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margi was enacted by the State of California for local governments located within the state.

Source: City of Cupertino Budget Book
164
City of Cupertino
Ratio of General Bonded Debt
Last Ten Fiscal Years
(Unaudited)
Ratio of General
Fiscal Assessed General Bonded Debt Bonded Debt to
Year Population Value Bonded Debt Per Capita Assessed Value 2015 59,777 $ 19,395,507,127 $ $
2016 58,185 19,395,507,127
2017 58,917 21,346,570,360
2018 60,091 23,139,029,846
2019 59,879 25,182,059,606
2020 59,549 27,821,316,543
2021 60,656 27,821,316,543
2022 66,274 28,807,715,978
2023 59,656 30,892,027,763
2024 59,471 32,303,325,534
Sources: HdL, Coren & Cone/Cupertino Budget Book
165
City of Cupertino
Demographic and Economic Statistics
Last Ten Fiscal Years
% of % of
City City County Population Population
City County Population City Per Capita **Public Unemployment Unemployment Median Over 25 with Over 25 with Fiscal Population Population % of Personal Personal School Age High School Bachelor's Year (1) (1) County Income (2) Income (2) Enrollment (4) Degree Degree 2014-15 59,777 1.889,638 3.16% 3,186,772,000 53,311 29,871 40.0 96.5% 74.6% 2015-16 58,185 1,927,888 3.02% 3,340,132,000 57,405 29,684 40.2 96.5% 75.6% 2016-17| 58,917 1,938,180 3.04% 3,486,805,000 59,181 29,467 40.6 96.7% 76.0% 2017-18 60.091 1,938,153 3.10% 3.620,255,000 60,246 29,255 40.7 97.1% 76.6% 2018-19 59.879 1,937,570 3.09% 3,821,320,000 63,817 29,240 41.1 97.1% 77.2% 2019-20 59,549 1,927,852 3.09% 4,114,967,000 69,102 29,550 41.1 97.2% 78.1% 2020-21 60.656 1,936,259 3.13% 4,378,045,000 74,485 30,900 41.6 97.2% 78.8% 2021-22 66,274 1,934,171 3.43% 4,571,170,000 76,684 24,380 41.2 97.3% 79.6% 2022-23 59.656 1,902,799 3.14% 5,214,787,000 88,156 23,486 41.0 97.0% 80.9% 2023-24 59,471 1,903,198 3.12% 5.924,781,000 99,624 23,233 40.4 97.2% 82.8% Notes and Data Sources:

Population: California State Department of Finance. Unemployment Data: California Employment Development Department Income, Age, and Education Data: ESRI - Demographic Estimates are based on the last available Census. Projections are developed by incorporating all of the prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's boundaries 201- and later - Income, Age and education Data - US Census Bureau, most recent American Community Survey **Reported Public School Enrollment reflects the total number of students in the Fremont Union High School District and Cupertino Union School District.

Previously published reports included Fremont Union High School District only. 166
City of Cupertino
Top 25 Sales Tax Producers
For Calendar Year 2023
(Unaudited)
Business Name Business Category
99 Ranch Market Grocery Stores
Alexander's Steak House Fine Dining
Apple Fulfillment Centers
Argonaut Window & Door Contractors
Benihana Fine Dining
BJ's Restaurant & Brewhouse Casual Dining
California Dental Arts Medical/Biotech
Chevron Service Stations
Cupertino Car Wash Service Stations
Galpao Gaucho Fine Dining
Great Gas Cupertino Service Stations
Haidilao Hot Pot Casual Dining
Insight Direct Office Equipment
Insight Public Sector Office Equipment
Kura Revolving Sushi Bar Casual Dining
Lazy Dog Cafe Casual Dining
Mirapath Electrical Equipment
Ross Family Apparel
Rotten Robbie Service Stations
Safeway Grocery Stores
Shane Company Jewelry Stores
Target Discount Dept Stores
TJ Maxx Family Apparel
Valero Service Stations
Whole Foods Market Grocery Stores
Source: HdL, Coren & Cone
167
This page intentionally left blank.
168
City of Cupertino
Full-Time Equivalent City Employees by Function/Program Last Ten Fiscal Years
(Unaudited)
Function/Program 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Council and Commissions 1.55 1.60 1.55 2.35 2.35 2.51 2.53 7.58 7.28 7.23 Administration 10.75 10.85 10.57 14.12 15.47 15.15 17.85 19.85 24.30 21.80 Innovation & Technology 10.25 11.40 13.95 14.55 15.05 14.95 11.93 11.93 13.43 14.93 Administrative Services 12.00 12.30 12.30 12.00 14.00 16.00 15.90 16.90 18.90 17.90 Parks & Recreation 31.28 32.18 33.08 35.13 34.80 32.10 31.90 27.88 29.48 27.63 Community Development 24.80 27.30 28.18 28.08 28.13 28.29 28.49 32.49 37.49 34.39 Public Works 77.12 82.12 84.12 84.52 84.95 88.75 90.15 92.12 94.12 88.12 Law Enforcement 2.00 2.00 2.00 2.00 2.00 0.00 0.00 0.00 0.00 0.00 Total 169.75 179.75 185.75 192.75 196.75 197.75 198.75 208.75 225.00 212.00 250
• Public Works
200
• Community
Development
• Parks &
150 Recreation
# Administrative
Services
100
• Innovation &
Technology
• Administration
50 • Council and
Commissions
0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Source: City of Cupertino Budget
169
City of Cupertino
Operating Indicators by Function/Program
Last Ten Fiscal Years
(Unaudited)
Function/Program 2015 2016 2017 2018 2019
Law Enforcement Sheriff Response
Priority One-Respond within 5 minutes 4.90 Min. 4.90 Min. 5.07 Min 4.23 Min. 4.39 Min.

Priority Two-Respond within 9 minutes 6.56 Min. 6.56 Min. 8.00 Min: 7.49 Min. 6.23 Min.

Priority Three-Respond within 20 minutes 10.52 Min. 10.52 Min. 15.79 Min 14.79 Min. 12.11 Min.

Public Works
575 Curb Miles 575 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles Street Sweeping
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
applications received 428 434
Number of encroachment permits received 121 136
Storm Drain Inlets Inspected/Cleaned 815 1063
Roadway Signs Repaired/Replaced 404 721
Number of trees planted vs. removed 53/67 155/192
Parks & Recreation
Number of reservations at Quinlan Center 560 402
Number of rounds of golf at BBF Golf Course 28,193 27,205 Sports Center Memberships 2,000 1,989 2,015 1,850 1,952 Number of Senior Center classes offered 246 320
Senior Center Memberships 2,549 2,493 2,094 2,260 2,171 Quinlan Community Center Rental Revenue $110,033 $104,150 $128,778 $72,948 $139,590 Community Development
Approved Building Plan Sets 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days Discretionary Land Use Applications 99% Within 21 Work Days 99% Within 21 Work Days 99% Within 21 Work Days 99% Within 21 Work Days 99% Within 21 Work Days Public Notice of Upcoming Projects 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within lo Days Number of preliminary reviews 82 90
Number of planning applications received 169 138
Number of permits received 2322 2,321
Number of inspections requested 16026 13,625
Administrative Services
Accounts Payable Processing 7 Days 7 Days 7 Days 7 Days 7 Days Business License Renewal Certificates 3 Days 3 Days 3 Days 3 Days 3 Days Number of regular recruitments 21 21
26 16
Number of temporary new hires 101 105
Number of vendor checks processes 6793 6,536
Number of payroll checks process 10387 10,301
Number of business license applications 1294 1,154
Number of journal entries posted 2830 4,52l
Vumber of receipts processed 9766 13,913
Library
Volumes in Collection 361817 364,557 369,924 367,979 367,101 Annual Gate Count 869762 880,894 835,073 873,862 904,349 Annual Circulation Children's Items 1474996 1,544,095 1,448,265 1,453,173 1,535,842 Annual Circulation Adult and Teen Items 999766 1,032,326 950,453 980,609 1,049,166 Adult Classes and Events 209 215 242 206 207
Adult Classes and Events Attendence 11860 8,855 9,242 7,622 8,304 Teen Classes and Events 52 78 66 79 52
Teen Classes and Events Attendence 3393 3,135 2,571 2,495 1,283 458 493 440 426 424
Children's Classes and Events
Children's Classes and Events Attendence 25529 28,532 25,857 24,675 22,851 Volunteer Hours 11786 10,000 9,645 10,302 10,191
Sources: City of Cupertino PM & WIs and Santa Clara County Library District 170
City of Cupertino
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
(Unaudited)
Function/Program 2020 2021 2022 2023 2024
Law Enforcement Sheriff Response
Priority One-Respond within 5 minutes 3.51 Min. 3.40 Min. 5.33 Min 6.57 Min 5.81 Min Priority Two-Respond within 9 minutes 6.37 Min. 6.07 Min. 6.94 Min. 7.46 Min 6.32 Min Priority Three-Respond within 20 minutes 11.96 Min. 11.80 Min. 11.73 Min 12.72 Min 7.86 Min Public Works
Street Sweeping 534 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles 534 Curb Miles 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call 24 Hrs of Call Street Maintenance
Number of development permit
applications received 428 127 128 127 111
Number of encroachment permits received 134 577 426 449 478 Storm Drain Inlets Inspected/Cleaned 1638 1802 80% 53% 4% Roadway Signs Repaired/Replaced 346 1151 3.5% 2.0% 2.0% Number of trees planted vs. removed 164/190 187/202 211/187 153/105 42/41 Parks & Recreation
Number of reservations at Quinlan Center 526 8 260 405 450 Number of rounds of golf at BBF Golf Course 28,952 43,650 45367 37961 38984 Sports Center Memberships 1,802 1,655 1186 1394 1565
Number of Senior Center classes offered 258 100 183 235 373 Senior Center Memberships 2,171 1,470 210 1087 1493
Quinlan Community Center Rental Revenue $139,590 $5,507 $115,093 $126,670 $146,087 Community Development
Approved Building Plan Sets 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days 95% Within 7 Work Days Discretionary Land Use Applications 99% Within 21 Work Days 99% Within 21 Work Days 99% Within 21 Work Days 99% Within 21 Work Days 99% Within 21 Work Days Public Notice of Upcoming Projects 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within 10 Days 100% Within IO Days Number of preliminary reviews 110 163 142 127 66
Number of planning applications received 194 237 301 232 262 Number of permits received 2,534 2,364 2380 2618 2665
Number of inspections requested 14,596 13,374 11906 15181 15485 Administrative Services
Accounts Payable Processing 7 Days 7 Days 7 Days 7 Days Business License Renewal Certificates 3 Days 3 Days 3 Days Number of regular recruitments 28 24 33 29 21
Number of new hires 14 21 38 31 23
Number of temporary new hires 38 17 77 70 71
Number of vendor checks processes 5,906 4,457 5130
Number of payroll checks process 10,802 7,816 9176
Number of business license applications 1,032 1,061 969 Number of journal entries posted 4,558 3,915 3695
Number of receipts processed 18,992 10,367 11275
Library
Volumes in Collection 368,461 350,088 367,745 380,365 375,019 Annual Gate Count 620,007 128,912 387,285 683,303 743,644 Annual Circulation Children's Items 1,192,880 1,207,878 1,771,986 1,844,305 1,847,352 Annual Circulation Adult and Teen Items 831,114 750,602 1,056,451 1,190,995 1,250,904 Adult Classes and Events 396 459 62 181 221
Adult Classes and Events Attendence 9,986 19,223 861 5,140 6,318 Teen Classes and Events 57 31 21 51 50
Teen Classes and Events Attendence 8,495 7,151 916 2,002 1,337 Children's Classes and Events 477 464 105 491 524
Children's Classes and Events Attendence 26,032 52,634 7,711 30,386 35,305 Volunteer Hours 6,592 465 4305.8 4228 4,207
Sources: City of Cupertino PM & WIs and Santa Clara County Library District 171
City of Cupertino
Capital Assets Statistics by Function/Program
Last Ten Fiscal Years
(Unaudited)
Function/Program 2015 2016 2017 2018 2019
Public Works
Centerlane Miles of Streets 142 142 142 142 142
Streetlights 2,950 2,950 2,950 2,950 2,950
Traffic Signals 48 48 48 52 52
Culture & Recreation
arks and Open Space: 21 21 21 21
ark and Landscape Acreage 169 169 169 169 169
City Trails 3 3 3 3
Golf Courses 1
Community Center 1 1
Community Hall
Senior Center
Sports Center -=0-..- ----
Swimming Pools
Tennis Courts
= N
Sports Fields
City Library
Source: City of Cupertino Budget Book/GIS Team
172
City of Cupertino
Capital Assets Statistics by Function/Program (Continued) Last Ten Fiscal Years
(Unaudited)
Function/Program 2020 2021 2022 2023 2024
Public Works
Centerlane Miles of Streets 142 142 142 142 142
Streetlights 2,950 2,950 2950 2870 2870
Traffic Signals 52 52 61 61
Culture & Recreation
Parks and Open Spaces 21 21 21 • 21 21
Park and Landscape Acreage 169 169 169 169 169
City Trails 3 5
Golf Courses 1 1
-- 1
Community Center 1
Community Hall
Senior Center
Sports Center
Swimming Pools -=.....

Tennis Courts
Sports Fields - $0
City Library
Source: City of Cupertino Budget Book/GIS Team
173
This page intentionally left blank.
174
Community Economic Profile
Cupertino, with a population of 60,869 and City limits stretching across 13 square miles, is considered one of the most prestigious cities to live and work in the Bay Area.

Economic health is an essential component to maintaining a balanced city, which provides high-level opportunities and services that create and help sustain a sense of community and quality of life. Public and private interests must be mutual so that success as a partnership is a direct reflection of success as a community. The cornerstone of this partnership is a cooperative and responsive government that fosters residential and business prosperity and strengthens working relationships among all sectors of the community.

Because Cupertino is a mature, 93% built-out city, the City of Cupertino focuses on business retention and revitalization, while at the same time, being supportive of redevelopment projects to bring in new investment. Cupertino is world-renowned as the home to high-tech giant Apple, Inc., and as a community with stellar public schools. De Anza College, one of the largest single-campus community colleges in the country, is another major employer and a magnet for attracting local and international students. The City's proactive economic development efforts and a high-touch approach has resulted in an innovative environment for start-ups and growing companies to thrive, including Bromium, Moxo Cupertino, DURECT, Xisilicon Semiconductor Inc, Claspp, Panasonic Venture Group, Altia Systems, Mirapath, Aemetis Inc, Mist Systems, and many more. The City strives to retain our companies and aøract new ones through active outreach and a responsive, streamlined, and customer-oriented entitlement process.

Cupertino has a number of mixed-use development projects offering diverse retail and dining options, as well as providing additional housing opportunities to meet the needs of the growing community. There are also quite a few development projects underway including: Westport Cupertino, Marina Plaza, Alan Row, and Canyon Crossing. Further, City Council recently approved the 283,000 square foot mixed Office/Commercial Apple development at 19191 Vallco Parkway.

The Main Street and Nineteen800 mixed-use developments have created a vibrant downtown area for Cupertino, offering a large selection of restaurants and retailers, including Alexander's Steakhouse, Eureka!, Oren's Hummus, Lazy Dog, Ippudo, Pasta Armellino, HaiDiLao Hot Pot Restaurant, Pineapple Thai, Pressed Juicery, Orangetheory, 85 Degree Bakery, SomiSomi, Sul & Beans, Kura Sushi, Vitality Bowls, La Pizzeria, Tan-cha, Koja Kitchen, Bishops Cuts & Colors, Capezio, Howard's Shoes, and Meet Fresh.

Housing, office, and the Residence Inn by Marriott are available to support the thriving area.

Serving as a long-time retail anchor for the community, The Marketplace has a variety of stores and restaurants popular with students, families, and working professionals. They include Galpao Gaucho, Daiso, Marukai Groceries, Harumi Sushi, 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 DeliCafé to name a few.

Cupertino Village, a shopping center located in the northeast portion of the City, is home to 99 Ranch Market, Duke of Edinburgh Pub & Restaurant, MOD Pizza, Ten Ren Tea, Fantasia Coffee & Tea, Kee Wah ' Bakery, Happy Lemon, and many other Asian restaurants, bakeries, and shops. The property owners have received approval to construct a new full-service boutique hotel with 185 rooms to accommodate business and leisure travelers.
175
Cupertino features many other retail opportunities, including 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 Aloe Cupertino, Cupertino Hotel, Hilton Garden Inn, Hyatt House, Juniper Hotel operated by Curio, Marriott Courtyard, and Residence Inn by Marriott.

Another longtime retail anchor in north Cupertino is Homestead Square Shopping Center, located at Homestead Road and De Anza Boulevard. This shopping center includes a 24-hour Safeway, Ulta Beauty, Ross Stores, Pet Club, Michael's, Rite Aid, FedEx, and numerous restaurants, such as Fish's Wild, Pho Hoa Noodle Soup, Yayoi Teishoku Japanese Restaurant, Starbucks, Chipotle, and financial institutions.

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 (Rowhouse/Townhomes, senior apartments), 35 memory care rooms, and 20,000 square feet of commercial space.

Apple Park, Apple's newest corporate campus, features approximately 2.8 million square feet of office and R&D space north of Highway 280 between Wolfe Road and Tantau Avenue. A state-of-the-art Visitors Center, Observation Deck, flagship retail store, and café are open to the public. 176