Milpitas City Council
December 3, 2024

SOLID WASTE REDUCTION
Variance Variance Variance
Actual Amounts Positive Actual Amounts Positive Actual Amounts Positive Budget Budgetary Basis (Negative) Budget Budgetary Basis (Negative) Budget Budgetary Basis (Negative) $481,514 $476,728 ($4,786)
$889,916 $889,916
$21,027 $16,488 ($4,539) $26,517 57,150 $30,633 22,439 9,641 (12,798) 547,040 392,660 (154,380) 201,483 142,850 (58,633)
384 384
568,067 409,148 (158,919) 228,000 1,090,300 862,300 503,953 486,369 (17,584) 9,166 4,124 5,042
884,769 913,084 (28,315) 330,600 280,183 50,417
2,700 (2,700) 101,199 97,732 3,467
576,954 448,923 128,031
576,954 448,923 128,031 893,935 919,908 (25,973) 431,799 377,915 53,884 (8,887) (39,775) (30,888) (665,935) 170,392 836,327 72,154 108,454 36,300 43,817 43,817
(136,505) (136,505) (89,100) (89,100)
(136,505) (136,505) (45,283) (45,283)
($8,887) (39,775) ($30,888) ($802,440) 33,887 $836,327 $26,871 63,171 $36,300 (39,522)
46,306 123,672 4,320
116,879 2,287,191 343,641
$83,888 $2,444,750 $411,132
(Continued)

LAW ENFORCEMENT SERVICES MAINTENANCE DISTRICTAND SERVICES

LIGHTING AND LANDSCAPING
143

CITY OF MILPITAS

BUDGETED NON-MAJOR FUNDS

COMBINING SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL (NON-GAAP LEGAL BASIS)
FOR THE YEAR ENDED JUNE 30, 2024
Variance Variance
Actual Amounts Positive Actual Amounts Positive
Budget Budgetary Basis (Negative) Budget Budgetary Basis (Negative)

REVENUES
Other taxes $4,472,000 $5,512,571 $1,040,571
Franchise Fees
Use of money and property 44,670 85,150 40,480 $41,727 $66,188 $24,461 Intergovernmental
Charges for services
Developer contributions
Total Revenues 4,516,670 5,597,721 1,081,051 41,727 66,188 24,461

EXPENDITURES
Current:

General Government:

City Manager
City Attorney
Finance
Non-departmental 11,500 10,662 838 39,000 40,766 (1,766) Building, Safety and Housing
Recreation and Community Services
Public Works 1,823,904 1,686,358 137,546
Engineering
Planning
Police
Total Expenditures 1,835,404 1,697,020 138,384 39,000 40,766 (1,766)

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 2,681,266 3,900,701 1,219,435 2,727 25,422 22,695

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers (out) (3,172,000) (3,172,000)
Total Other Financing Sources (Uses) (3,172,000) (3,172,000) NET CHANGE IN FUND BALANCES ($490,734) 728,701 $1,219,435 $2,727 25,422 $22,695 ADJUSTMENT TO BUDGETARY BASIS:

Expenditures capitalized for GAAP purposes
Capital Outlay
Encumbrance adjustments 1,505
Fund balances at beginning of year 2,118,826 1,468,865
Fund balances at end of year $2,849,032 $1,494,287

HETCH-HETCHY GROUND LEASECOMMUNITY FACILITIES DISTRICT
144

Variance Variance Variance
Actual Amounts Positive Actual Amounts Positive Actual Amounts Positive Budget Budgetary Basis (Negative) Budget Budgetary Basis (Negative) Budget Budgetary Basis (Negative) $12,700 $6,110 ($6,590) $10,608 $8,188 ($2,420) $148,231 $144,506 ($3,725) 77,318 77,318
325,000 222,656 (102,344)
161,503 161,503
337,700 228,766 (108,934) 10,608 8,188 (2,420) 225,549 383,327 157,778 $144,200 42,090 102,110
21,000 21,000
100,964 59,866 41,098
1,083,843 596,684 487,159
265,175 237,382 27,793 96,012 140,357 (44,345)
265,175 237,382 27,793 1,446,019 838,997 607,022
72,525 (8,616) (81,141) 10,608 8,188 (2,420) (1,220,470) (455,670) 764,800 (74,073) (74,073)
(74,073) (74,073)
($1,548) (82,689) ($81,141) $10,608 8,188 ($2,420) ($1,220,470) (455,670) $764,800 320,623 422,822 5,092,594
$237,934 $431,010 $4,636,924
(Continued)

COMMUNITY BENEFITS AFFORDABLE HOUSINGCOMMUNITY PLANNING 145

AFFORDABLE
Variance Variance
Actual Amounts Positive Actual Amounts Positive
Budget Budgetary Basis (Negative) Budget Budgetary Basis (Negative)

REVENUES
Other taxes
Franchise Fees
Use of money and property $69,033 $69,509 $476 $31,027 $44,929 $13,902 Intergovernmental
Charges for services
Developer contributions 81,881 81,881
Total Revenues 69,033 69,509 476 31,027 126,810 95,783

EXPENDITURES
Current:

General Government:

City Manager
City Attorney
Finance
Non-departmental 16,842 (16,842)
Building, Safety and Housing
Recreation and Community Services 16,735 (16,735)
Public Works
Engineering
Planning
Police
Total Expenditures 16,842 (16,842) 16,735 (16,735)

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 69,033 52,667 (16,366) 31,027 110,075 79,048

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers (out) (140,000) (140,000)
Total Other Financing Sources (Uses) (140,000) (140,000) NET CHANGE IN FUND BALANCES $69,033 52,667 ($16,366) ($108,973) (29,925) $79,048 ADJUSTMENT TO BUDGETARY BASIS:

Expenditures capitalized for GAAP purposes
Capital Outlay
Encumbrance adjustments
Fund balances at beginning of year 3,170,042 1,017,675
Fund balances at end of year $3,222,709 $987,750
FOR THE YEAR ENDED JUNE 30, 2024

CITY OF MILPITAS

BUDGETED NON-MAJOR FUNDS

COMBINING SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL (NON-GAAP LEGAL BASIS)

PUBLIC ARTHOUSING UNRESTRICTED
146

TOTALS
Variance
Actual Amounts Positive
Budget Budgetary Basis (Negative)
$4,953,514 $5,989,299 $1,035,785
889,916 889,916
505,626 695,270 189,644
6,628,905 6,444,436 (184,469)
325,000 223,040 (101,960)
243,384 243,384
12,413,045 14,485,345 2,072,300
153,366 46,214 107,152
21,000 21,000
1,623,665 1,621,106 2,559
1,083,843 596,684 487,159
16,735 (16,735)
3,039,273 2,879,625 159,648
101,199 100,432 767
361,187 377,739 (16,552)
576,954 448,923 128,031
6,960,487 6,087,458 873,029
5,452,558 8,397,887 2,945,329
230,702 230,702
(8,516,804) (8,299,106) 217,698
(8,286,102) (8,068,404) 217,698
($2,833,544) 329,483 $3,163,027
(39,522)
175,803
28,598,643
$29,064,407
147

INTERNAL SERVICE FUNDS
Internal Service Funds report any activity that provides goods or services to other funds, departments, or agencies of the primary government and its components units, or to other governments, on a cost reimbursement basis. These funds include the following:

EQUIPMENT MANAGEMENT INTERNAL SERVICE FUND
The Equipment Management Internal Service Fund is used to finance and account for the replacement of equipment used by City departments and the maintenance of computer systems on a cost reimbursement basis.

PENSION SECTION 115 INTERNAL SERVICE FUND
The Pension Section 115 Internal Service Fund is used to accumulate funds which may be used to fund either the annual actuarially determined pension contribution amounts, pay down unfunded pension liabilities with CalPERS, or reduce the length of pension cost amortization schedules with CalPERS.

CITY OF MILPITAS

INTERNAL SERVICE FUNDS

COMBINING STATEMENTS OF NET POSITION
JUNE 30, 2024
Equipment Pension
Management Section 115 Totals
ASSETS
Current Assets
Cash and investments $14,999,151 $36,385,160 $51,384,311 Interest receivable 91,509 91,509
Materials, supplies and deposits 1,081,842 1,081,842
Total current assets 16,172,502 36,385,160 52,557,662
Noncurrent Assets
Capital assets (net of accumulated depreciation) 10,619,817 10,619,817 Total noncurrent assets 10,619,817 10,619,817
Total Assets 26,792,319 36,385,160 63,177,479

LIABILITIES
Current Liabilities
Accounts payable 108,956 15,986 124,942
Refundable deposit 12 12
Accrued payroll 25,663 25,663
Accrued vacation 49,472 49,472
Noncurrent Liabilities
Accrued vacation 15,047 15,047
Sick leave payable 7,497 7,497
Total Liabilities 206,647 15,986 222,633

NET POSITION
Invested in capital assets 10,619,817 10,619,817
Restricted for pension expenses 36,369,174 36,369,174
Unrestricted 15,965,855 15,965,855
Total Net Position $26,585,672 $36,369,174 $62,954,846
151

Equipment Pension
Management Section 115 Totals

OPERATING REVENUES
Charges for services $4,032,465 $4,032,465
Other 173,479 $2,737,594 2,911,073
Total Operating Revenues 4,205,944 2,737,594 6,943,538

OPERATING EXPENSES
Personal services 1,164,806 1,164,806
Services and supplies 634,492 104,147 738,639
Depreciation and amortization 1,289,220 1,289,220
Maintenance and repairs 157,489 157,489
Total Operating Expenses 3,246,007 104,147 3,350,154
Operating Income (Loss) 959,937 2,633,447 3,593,384

NONOPERATING REVENUES (EXPENSES)
Interest income(loss) 622,135 1,072,667 1,694,802
Subventions and grants 27,200 27,200
Total Nonoperating Revenues (Expenses) 649,335 1,072,667 1,722,002 Income (Loss) Before Contributions and Transfers 1,609,272 3,706,114 5,315,386 Contributions 1,619,581 1,619,581
Transfer in 300,000 300,000
Change in net position 3,528,853 3,706,114 7,234,967
Net position-beginning 23,056,819 32,663,060 55,719,879 Net position-ending $26,585,672 $36,369,174 $62,954,846

CITY OF MILPITAS

INTERNAL SERVICE FUNDS

COMBINING STATEMENTS OF REVENUES, EXPENSES AND

CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2024
152

Equipment Pension
Management Section 115 Totals

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $4,205,944 $2,737,594 $6,943,538 Payments to suppliers (1,285,769) (96,614) (1,382,383)
Payments to employees (1,297,733) (1,297,733)
Net cash provided by operating activities 1,622,442 2,640,980 4,263,422

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Transfers in 300,000 300,000
Cash Flows from Noncapital Financing Activities 300,000 300,000

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition of capital assets (1,808,869) (1,808,869)
Receipts from grants and subventions 27,200 27,200
Cash Flows from Capital and Related
Financing Activities (1,781,669) (1,781,669)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest and dividends 591,051 1,072,667 1,663,718
Cash Flows from Investing Activities 591,051 1,072,667 1,663,718 Net increase (decrease) in cash and cash equivalents 731,824 3,713,647 4,445,471 Cash and investments at beginning of period 14,267,327 32,671,513 46,938,840 Cash and investments at end of period $14,999,151 $36,385,160 $51,384,311 NONCASH TRANSACTIONS:

Contributions and transfers of capital assets, net $1,619,581 $1,619,581 Retirement of capital assets, net
Reconciliation of operating income (loss) to net cash provided by operating activities:

Operating income (loss) 959,937 $2,633,447 3,593,384
Adjustments to reconcile operating income to net cash provided by operating activities:

Depreciation 1,289,220 1,289,220
Change in assets and liabilities:

Receivables, net
Materials, supplies and deposits (490,725) (490,725)
Accounts and other payables (135,990) 7,533 (128,457)
Net cash provided by operating activities $1,622,442 $2,640,980 $4,263,422

CITY OF MILPITAS

INTERNAL SERVICE FUNDS

COMBINING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2024
153

STATISTICAL SECTION
This part of the City’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 says about the City’s overall financial health. In contrast to the financial section, the statistical section information is not subject to independent audit.

Financial Trends
These schedules contain trend information to help the reader understand how the City’s financial performance and wellbeing have changed over time:

Net Position – Schedule 1
Changes in Net Position – Schedule 2
Fund Balances, Governmental Funds – Schedule 3
Changes in Fu
nd Balance, Governmental Funds – Schedule 4
Revenue Capacity
These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax:

Assessed Value and Actual Value of Taxable Property – Schedule 5 Direct and Overlapping Property Taxes Rates – Schedule 6 Principal Property Taxpayers – Schedule 7
Property Tax Levies and Collections – Schedule 8
Taxable Sales by Category – Schedule 9
Direct and Overlapping Sales Tax Rates – Schedule 10
Principal Sales Tax Payers – Schedule 11
Debt Capacity
These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future:

Ratios of Outstanding Debt by Type – Schedule 12
Bonded Debt Pledged Revenue Coverage, Redevelopment Agency Tax Allocation Bonds – Schedule 13 Computation of Direct and Overlapping Debt – Schedule 14 Legal Debt Margin Information – Schedule 15
Installment Payment Coverage, Sewer Certificates of Participation and Waste Water Revenue Refunding Bonds – Schedule 16
Installment Payment Coverage, Water Revenue Bonds – Schedule 17 Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place:

Bimonthly Sewer Rates by Customer Class – Schedule 18
Bimonthly Water Rates by Customer Class – Schedule 19
Demographic and Economic Statistics – Schedule 20
Principal Employers – Schedule 21
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs:

Authorized Full-Time Equivalent Employees by Function/Program – Schedule 22 Operating Indicators by Function/Program – Schedule 23
Capital Asset Statistics by Function/Program – Schedule 24 Sources
Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant year.

Schedule 1

CITY OF MILPITAS

NET POSITION

LAST TEN FISCAL YEARS
(Accrual basis of accounting)
(Dollars in Thousands)
Fiscal Year Ended June 30,
2015 (b) 2016 2017 2018 (c) 2019
Governmental activities
Net investment in capital assets and capacity rights $291,500 $298,321 $312,138 $323,239 $326,564 Restricted 103,829 100,327 108,630 109,726 145,983
Unrestricted (84,598) (44,368) (30,091) (63,405) (65,799) Total governmental activities net position $310,731 $354,280 $390,677 $369,560 $406,748 Business-type activities
Net investment in capital assets and capacity rights $113,232 $118,588 $122,937 $130,736 $135,048 Restricted 40,867 35,130 40,311 43,834 59,191
Unrestricted 11,586 15,261 20,254 15,784 8,930
Total business-type activities net position $165,685 $168,979 $183,502 $190,354 $203,169 Primary government
Net investment in ca pital assets and capacity rights $404,732 $416,909 $435,075 $453,975 $461,612 Restricted 144,696 135,457 148,941 153,560 205,174
Unrestricted (73,012) (29,107) (9,837) (47,621) (56,869) Total primary government net position $476,416 $523,259 $574,179 $559,914 $609,917 Fiscal Year Ended June 30
2020 2021 2022 2023 2024
Governmental activities
Net investment in capital assets and capacity rights $344,471 $358,445 $365,009 $365,509 $366,987 Restricted 158,716 189,030 176,451 179,036 188,018
Unrestricted (93,911) (142,708) (118,570) (114,218) (116,040) Total governmental activities net position $409,276 $404,767 $422,890 $430,327 $438,965 Business-type activities
Net investment in capital assets and capacity rights $99,331 $125,206 $127,204 $130,978 $135,007 Restricted 63,084 72,629 75,083 89,091 83,642
Unrestricted 47,967 18,483 21,208 12,857 27,545
Total business-type activities net position $210,382 $216,318 $223,495 $232,926 $246,194 Primary government
Net investment in ca pital assets and capacity rights $443,802 $483,651 $492,213 $496,487 $501,994 Restricted 221,800 261,659 251,534 268,127 271,660
Unrestricted (45,944) (124,225) (97,362) (101,361) (88,495) Total primary government net position $619,658 $621,085 $646,385 $663,253 $685,159 (a) The City implemented the provisions of GASB Statement 63 in fiscal year 2013, which replaced the term “net assets” with the term “net position” (b) The City implemented the provisions of GASB Statement 68 in fiscal year 2015 that required the restatement of net position.

Amounts prior to 2015 have not been restated.
(c) The City implemented the provisions of GASB Statement 75 in fiscal year 2018 that required the restatement of net position. Amounts prior to 2018 have not been restated.
(200,000)
(100,000)
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2015
(b)
2016 2017 2018
(c)
2019 2020 2021 2022 2023 2024
($ 000)
Net investment in capital assets and capacity rights Restricted Unrestricted 157

Schedule 2
2015 2016 2017 2018
Expenses
Governmental activities
General Government $18,118 $18,614 $21,174 $19,111
Building and Safety 2,617 2,513 3,389 4,148
Building, Housing and Safety (e)
Recreation and Community Services 5,890
Public Works 17,509 12,761 16,266 15,903
Engineering 5,790 (d) 6,249 (d) 5,712 (d)
Planning and Neighborhood Services 2,372 2,649 (d) 3,103 (d) 3,586 (d) Planning
Parks and Recreation 3,098 4,090 4,949
Police 24,699 24,556 30,270 33,840
Fire 16,301 16,400 20,499 24,194
Interest on Long Term Debt 67 56 48
Total governmental activities expenses 84,781 87,429 105,947 112,384 Business-type activities
Water Utility 18,344 19,743 20,666 23,742
Recycled Water Utility (c) (c) (c) (c)
Sewer Utility 10,426 10,872 9,969 12,715
Total business-type activities expenses 28,770 30,615 30,635 36,457 Total primary government expenses $113,551 $118,044 $136,582 $148,841 Program Revenues
Governmental activities:

Charges for services:

General Government $1,063 $2,065 $1,970 $2,088
Building and Safety 5,128 5,963 7,814 10,093
Building, Housing and Safety
Recreation and Community Services 2,559
Public Works 2,644 (d) (d) (d)
Engineering 2,863 (d) 2,720 (d) 2,465 (d)
Planning and Neighborhood Services 700 747 292 418
Planning
Parks and Recreation 2,060 1,981 2,301
Police 1,151 1,138 1,184 1,089
Fire 1,885 2,440 3,224 3,326
Operating grants and contributions 6,201 7,320 7,880 6,521 Capital grants and contributions 14,711 35,195 32,256 34,003 Total government activities program revenues 35,543 59,712 59,641 62,562 Business-type activities
Charges for services:

Water Utility 21,136 18,709 26,318 29,667
Recycled Water Utility (c) (c) (c) (c)
Sewer Utility 14,453 15,964 16,803 17,139
Operating grants and contributions 127 63 89 124
Capital grants and contributions 710 1,103 4,937 2,507
Total business-type activities program revenue 36,426 35,839 48,147 49,437 Total primary government program revenues $71,969 $95,551 $107,788 $111,999 Net (Expense)/Revenue
Governmental activities ($49,238) ($27,717) ($46,306) ($49,822) Business-type activities 7,656 5,224 17,512 12,980
Total primary government net expense ($41,582) ($22,493) ($28,794) ($36,842) (a) The City implemented the provisions of GASB Statement 63 in fiscal year 2013, which replaced the term “net assets” with the term “net position.”
(b) The parks division is part of the Public Works department beginning in fiscal year 2013. (c) Beginning in fiscal year 2013, the Recycled Water Utility is part of the Water Utility. (d) Public Works and Engineering are separate departments beginning in fiscal year 2016. (e) Neighborhood Services is a component of Building, Housing and Safety, and Planning is a separate department beginning in fiscal year 2019. (f) Under the terms of a settlement agreement with the County Auditor - Controller, Successor Agency to the Milpitas Redevelopment Agency and other parties, the City and Economic Development Corporation transferred cash and certain capital assets to the Successor Agency and received certain capital assets from the Successor Agency.

CITY OF MILPITAS

CHANGES IN NET POSITION

LAST TEN FISCAL YEARS
(accrual basis of accounting)
(Dollars in Thousands)
Fiscal Year Ended June 30,
158

Schedule 2
2019 2020 2021 2022 2023 2024
$25,281 $24,050 $25,247 $25,213 $25,711 $28,302
(e) (e) (e) (e) (e) (e)
5,449 7,418 6,705 4,943 7,940 8,376
7,020 7,095 5,174 6,114 8,410 8,514
20,053 20,342 20,219 22,063 23,657 31,702
6,459 (d) 7,314 (d) 6,826 (d) 5,047 (d) 6,006 (d) (d) (e) (e) (e) (e) (e) (e)
1,851 2,741 2,489 1,851 2,638 2,545
35,868 43,505 38,919 29,468 39,545 46,096
26,535 31,472 31,859 29,040 31,799 31,777
17 37 785 838 565 676
128,533 143,974 138,223 124,577 146,271 157,988
25,232 28,750 28,959 26,898 28,070 30,029
(c) (c) (c) (c) (c) (c)
12,231 15,240 15,982 15,622 20,226 17,839
37,463 43,990 44,941 42,520 48,296 47,868
$165,996 $187,964 $183,164 $167,097 $194,567 $205,856
$2,347 $1,809 $1,710 $1,931 $1,400 $1,299
(e) (e) (e) (e) (e) (e)
9,718 6,621 8,629 8,815 7,815 5,358
2,655 1,145 762 2,360 3,328 2,910
(d) (d) (d) (d) 81 (d) 3,678 (d)
2,379 (d) 2,132 (d) 1,792 (d) 1,096 (d) 2,960 (d) (d) (e) (e) (e) (e) (e) (e)
226 452 408 474 505 566
1,130 1,087 1,055 1,421 1,565 1,513
2,172 2,402 2,553 2,582 2,498 2,396
8,277 10,643 14,986 15,335 16,230 21,580
47,194 33,423 18,997 19,924 7,901 12,270
76,098 59,714 50,892 53,938 44,283 51,570
29,355 32,792 34,658 34,374 34,242 36,065
(c) (c) (c) (c) (c) (c)
17,830 19,566 20,152 21,593 24,953 25,110
114 171 125 306 59 61
2,755 601 1,434 1,026 2,509 174
50,054 53,130 56,369 57,299 61,763 61,410
$126,152 $112,844 $107,261 $111,237 $106,046 $112,980
($52,435) ($84,260) ($87,331) ($70,639) ($101,988) ($106,418) 12,591 9,140 11,428 14,779 13,467 13,542
($39,844) ($75,120) ($75,903) ($55,860) ($88,521) ($92,876) (Continued)
159

Schedule 2
2015 2016 2017 2018

CITY OF MILPITAS

CHANGES IN NET POSITION

LAST TEN FISCAL YEARS
(accrual basis of accounting)
(Dollars in Thousands)
Fiscal Year Ended June 30,
General Revenues and Other Changes in Net Position
Governmental activities
Taxes:

Property taxes $24,927 $27,068 $30,262 $31,893
Sales and use taxes 18,779 23,924 25,392 26,991
Hotel/Motel taxes 10,917 11,757 11,858 12,122
Other taxes 664 822 803 814
Franchise fees 3,659 3,841 3,871 4,678
Motor vehicle in lieu 29 29 34 39
Investment earnings 379 913 118 301
Gain on sale of capital assets/property 7,324
Miscellaneous 333 287 118 186
Transfers 1,627 2,625 2,923 2,511
Extraordinary item
Special Item (12,432) (f)
Total government activities 61,314 71,266 82,703 67,103 Business-type activities
Investment earnings 383 695 (65) 171
Transfers (1,627) (2,625) (2,923) (2,511)
Total business-type activities (1,244) (1,930) (2,988) (2,340) Total primary government $60,070 $69,336 $79,715 $64,763 Change in net position
Governmental activities $12,076 $43,549 $36,397 $17,281 Business-type activities 6,412 3,294 14,524 10,640
Total primary government $18,488 $46,843 $50,921 $27,921 (a) The City implemented the provisions of GASB Statement 63 in fiscal year 2013, which replaced the term “net assets” with the term “net position.”
(b) The parks division is part of the Public Works department beginning in fiscal year 2013. (c) Beginning in fiscal year 2013, the Recycled Water Utility is part of the Water Utility. (d) Public Works and Engineering are separate departments beginning in fiscal year 2016. (e) Neighborhood Services is a component of Building, Housing and Safety, and Planning is a separate department beginning in fiscal year 2019. (f) Under the terms of a settlement agreement with the County Auditor - Controller, Successor Agency to the Milpitas Redevelopment Agency and other parties, the City and Economic Development Corporation transferred cash and certain capital assets to the Successor Agency and received certain capital assets from the Successor Agency. 160

Schedule 2
2019 2020 2021 2022 2023 2024
$33,811 $37,684 $40,979 $42,646 $47,100 $48,613
27,983 24,173 24,170 33,210 37,344 34,617
14,503 11,377 4,213 8,013 11,190 11,537
808 836 791 1,070 737 819
5,127 5,173 5,036 5,188 5,690 7,075
36 60 57 87 84 101
4,474 2,808 965 (7,560) 1,864 5,594
4 43 28 198 34
390 446 503 1,554 765 1,272
2,489 4,187 6,079 4,357 4,616 5,428
89,625 86,787 82,821 88,763 109,424 115,056
2,712 2,261 588 (3,246) 580 5,154
(2,489) (4,187) (6,079) (4,357) (4,616) (5,428)
223 (1,926) (5,491) (7,603) (4,036) (274)
$89,848 $84,861 $77,330 $81,160 $105,388 $114,782
$37,190 $2,527 ($4,510) $18,124 $7,436 $8,638
12,814 7,214 5,937 7,176 9,431 13,268
$50,004 $9,741 $1,427 $25,300 $16,867 $21,906
161

Schedule 3

CITY OF MILPITAS

FUND BALANCES, GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
(Dollars in Thousands)
Fiscal Year Ended June 30,
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
General Fund
Nonspendable $23,265 $23,387 $20,209 $10,043 $10,234 $10,189 $4,783 $4,866 $4,924 $4,970 R e s t r i c t e d 0 0 0 000000 0
Committed 5,433 8,440 19,026 33,643 43,852 44,082 13,266 15,766 16,972 16,495 Assigned 7,013 9,052 8,067 8,629 5,916 6,118 6,543 6,114 6,921 7,478 Unassigned 13,864 13,410 25,440 40,496 40,655 34,387 38,128 40,038 44,685 56,307 Total General Fund $49,575 $54,289 $72,742 $92,811 $100,657 $94,776 $62,720 $66,784 $73,502 $85,250 (a) All Other Governmental Funds
Nonspendable $11 $13 $15 $2,229 $85 $20 $28 $27 $150 $32 Restricted 92,347 99,701 109,416 110,418 143,232 155,359 150,544 147,231 145,894 150,629 Assigned 20,806 29,956 29,635 24,284 28,532 29,768 39,508 22,250 26,485 28,522 Unassigned (5,932) 0 0 000000 0
Total all other governmental funds $107,232 $129,670 $139,066 $136,931 $171,849 $185,147 $190,080 $169,508 $172,529 $179,183 (a) (a) The chan
ge in total fund balance for the General Fund and other governmental funds is explained in Management's Discussion and Analysis.
0 50,000
100,000
150,000
200,000
250,000
300,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
($ 000)
Nonspendable Restricted Committed Assigned Unassigned
163

Schedule 4
2015 2016 2017 2018 2019
Revenues
Property taxes $24,927 $27,068 $30,261 $31,893 $33,811
Sales taxes 19,572 24,719 26,214 27,854 28,890
Hotel/Motel taxes
Franchise fees
Other taxes 17,505 18,737 19,349 20,429 23,386
Licenses and fines 6,971 8,051 10,497 12,758 11,757
Use of money and property 2,032 3,037 2,180 2,719 8,452 Intergovernmental 5,482 6,104 4,696 6,228 6,019
Charges for services 6,449 7,196 7,238 6,981 6,969
Developer contributions 11,614 29,410 25,637 29,065 41,153 Other 205 113 310 568 926
Total Revenues 94,757 124,435 126,382 138,495 161,363
Ex
penditures
Current:

General Government 12,814 13,771 17,089 15,397 21,352
Building and Safety 2,706 2,885 3,148 3,633 (c)
Building, Housing and Safety 5,038
Recreation and Community Services 3,383 3,876 4,497 5,144 Human Resources and Recreation 3,329 (b) (b) (b) (b)
Parks and Recreation (a) (a) (a) (a) (a)
Public Works 9,199 6,020 6,839 6,983 8,151
Engineering 3,257 3,527 3,103 3,201
Planning and Neighborhood Services 2,570 2,805 2,978 3,153 (c) Planning 1,648
Police 24,193 26,124 27,247 27,880 30,389
Fire 15,605 17,470 18,456 21,034 23,225
Capital outlay 14,376 24,811 26,151 27,243 23,435
Debt service:

Principal 6,000 199
Interest and fees 61 54 48 69 104
Total Expenditures 90,853 100,580 109,359 112,992 121,886 Excess (deficiency) of revenues over
(under) expenditures 3,904 23,855 17,023 25,503 39,477
Other Financing Sources (Uses)
Proceeds from debt issuance 952
Payments to refunded debt escrow agent
Proceeds/gain from sale of properties 4 160 7,324 1
Loss from sale/conveyance of property (12,437) (152)
Transfers in 25,558 23,001 18,405 19,505 37,936
Transfers (out) (19,305) (19,864) (14,903) (14,637) (35,449) Total other financing sources (uses) 6,257 3,297 10,826 (7,569) 3,288 Extraordinary Items
Assets transferred to Housing Successor
Assets transferred to/liabilities assumed
by Successor Agency/Housing Successor
Special Item
Assets transferred to/from Successor Agency and County
Net Change in fund balances $10,161 $27,152 $27,849 $17,934 $42,765 Debt service as a percentage of
noncapital expenditures 7.4% 0.1% 0.1% 0.1% 0.3%
(a) Beginning in fiscal year 2013, parks maintenance division is part of the public works department and the recreation division is part of human resources department.

However starting in fiscal year 2016, the recreation was separated out from Human Resources as an individual department (b) Human Resources is a component of General Government and Recreation is a separate department beginning in fiscal year 2016. (c) Neighborhood Services is a component of Building, Housing and Safety, and Planning is a separate department beginning in fiscal year 2019. (d) Transient occupancy taxes and Franchise fees were reported separately from Other taxes beginning in fiscal year 2020.

CITY OF MILPITAS

CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
(Dollars in Thousands)
Fiscal Year Ended June 30,
164

Schedule 4
2020 2021 2022 2023 2024
$37,799 $41,093 $42,759 $47,210 $48,724
25,058 25,114 34,364 38,476 35,836
11,377 (d) 4,213 (d) 8,012 (d) 11,189 (d) 11,529 (d)
5,173 (d) 5,036 (d) 5,188 (d) 5,690 (d) 7,075 (d)
4,632 (d) 4,889 (d) 5,940 (d) 6,154 (d) 7,141 (d)
9,039 10,993 11,287 10,147 7,663
8,092 1,505 (5,980) 3,432 9,937
9,089 12,576 15,403 16,062 20,079
5,228 4,816 6,114 6,908 7,418
24,684 15,880 9,331 2,399 2,288
983 642 621 935 1,315
141,154 126,757 133,039 148,602 159,005
19,146 22,902 24,657 22,390 25,212
(c) (c)
5,784 6,088 5,853 7,635 7,601
5,227 3,662 5,041 6,640 6,967
(b) (b)
(a) (a)
9,588 10,671 10,850 12,053 16,977
3,559 3,846 3,474 3,539
(c) (c)
2,116 2,293 2,142 2,484 2,295
34,301 34,803 35,023 37,656 39,273
26,416 28,200 29,483 29,227 28,401
32,106 33,648 33,828 21,196 17,638
728 275 748 652
155 449 737 740 719
139,126 146,562 151,363 144,308 145,735
2,028 (19,805) (18,324) 4,294 13,270
21,919
3 118 65 5
27,164 21,486 16,902 23,531 24,441
(21,777) (50,724) (13,225) (20,131) (19,313)
5,387 (7,316) 3,795 3,465 5,133
$7,415 ($27,121) ($14,529) $7,759 $18,403

0.7% 0.3% 0.7% 1.16% 1.08%
Fiscal Year Ended June 30,
165

Schedule 5

CITY OF MILPITAS

ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY

LAST TEN FISCAL YEARS
(Dollars in Thousands)
Real Property Less: Total Taxable
Fiscal Residential Commercial Industrial Tax-Exempt Assessed Total Direct Year Property Property Property Other (c) Unsecured Property (c) Value (a) Tax Rate (b) 2013-14 6,793,845 1,388,236 2,622,328 540,230 1,764,760 (296,041) 12,813,358 1% 2014-15 7,728,283 1,427,474 2,628,858 654,879 1,887,428 (266,136) 14,060,786 1% 2015-16 8,629,667 1,445,665 2,788,984 649,712 1,844,591 (299,860) 15,058,759 1% 2016-17 9,386,926 1,493,922 3,248,012 675,017 1,529,223 (314,291) 16,018,809 1% 2017-18 10,143,815 1,581,140 3,563,327 782,718 1,710,357 (315,999) 17,465,358 1% 2018-19 10,997,080 1,619,668 3,504,633 790,143 1,761,094 (328,719) 18,343,899 1% 2019-20 12,311,913 1,684,889 3,752,681 665,325 1,917,745 (333,527) 19,999,026 1% 2020-21 13,398,580 1,792,792 4,048,447 534,924 1,890,212 (186,858) 21,478,097 1% 2021-22 14,045,849 1,861,634 4,231,585 463,153 1,922,357 (178,163) 22,346,415 1% 2022-23 15,166,680 1,890,500 4,568,761 496,705 2,196,227 (193,979) 24,124,894 1% 2023-24 15,901,041 1,986,166 5,068,816 548,661 2,072,285 (307,593) 25,269,376 1% Source: Hdl Coren & Cone, Santa Clara County Assessor Combined Tax Rolls Notes:
(a) The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over-rides. These values are considered to be full market values. (b) California cities do not set their own direct tax rate. The state constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. (c)
Corrections were made for Fiscal Years 2013-14 through 2018-19 to correct the amounts for Other and Tax-Exempt Property. Total assessed value was unchanged.
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
$22,000,000
$24,000,000
$26,000,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 166

Schedule 6

CITY OF MILPITAS

DIRECT AND OVERLAPPING PROPERTY TAX RATES

LAST TEN FISCAL YEARS
(Rate per $100 of assessed value)
City Direct Rates Overlapping Rates (a)
County of
Fiscal Basic Total Santa School Special
Year Rate (b) Direct Clara (c) Districts Districts
2013-14 1.00 1.00 0.0437 0.0961 0.0070
2014-15 1.00 1.00 0.0503 0.0750 0.0065
2015-16 1.00 1.00 0.0503 0.0817 0.0057
2016-17 1.00 1.00 0.0498 0.0734 0.0086
2017-18 1.00 1.00 0.0621 0.0880 0.0062
2018-19 1.00 1.00 0.0589 0.0850 0.0042
2019-20 1.00 1.00 0.0581 0.1245 0.0410
2020-21 1.00 1.00 0.0412 0.1255 0.0037
2021-22 1.00 1.00 0.0412 0.1210 0.0051
2022-23 1.00 1.00 0.0412 0.1172 0.0044
2023-24 1.00 1.00 0.0412 0.1017 0.0041
Source: County of Santa Clara, Tax Rates & Information Notes:
(a) Overlapping rates are those of local and county governments that apply to property owners within the City of Milpitas. Not all overlapping rates apply to all Milpitas property owners. These are voter approved levies in addition to the 1% State levy.
(b) The City's basic property tax rate can only be increased by a 2/3 vote of the City's residents. (c)
The overlapping rates for the County of Santa Clara were corrected in prior years to include amounts that were previously omitted by mistake.
167

Schedule 7

CITY OF MILPITAS

PRINCIPAL PROPERTY TAXPAYERS
FISCAL YEARS 2023-24 and 2014-15
2023-2024 2014-2015
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Cisco Systems Inc. 825,473,412.00 1 3.27% $985,547,362 1 7.01% Headway Technologies Inc 611,730,024 2 2.42% 111,314,729 7 0.79% KLA Tencor Corporation 565,688,668 3 2.24% 244,697,337 3 1.74% Milpitas-District 1 Owner LLC 461,776,784 4 1.83%
Milpitas Mills LP 360,394,095 5 1.43% 304,166,632 2 2.16% Anton Milpitas 241,001,399 6 0.95%
McCarthy Center Holding LLC 214,696,475 7 0.85%
MG Eleanor Apartments 192,150,000 8 0.76%
WH Silicon Valley VI LP 183,321,200 9 0.73%
Amalfi Milpitas LLC 179,562,301 10 0.71%
California Diversified LLC 160,198,610 4 1.14%
Essex Portfolio LP 131,424,789 5 0.93%
Hudson Campus Center LLC 121,691,718 6 0.87%
Linear Technology Corporation 107,602,501 8 0.77%
Fairfield Murphy RD LLC 105,345,742 9 0.75%
SPUS6 Murphy Crossing 95,431,300 10 0.68%
Subtotal $3,835,794,358 15.18% $2,367,420,720 16.84%
Fiscal Year 2023-2024 Total Net Assessed Valuation $25,269,376,274 Fiscal Year 2014-2015 Total Net Assessed Valuation $14,060,786,369 Source: Hdl, Coren & Cone, Santa Clara County Assessor 2022/23 Combined Tax Rolls 168

Schedule 8

CITY OF MILPITAS

PROPERTY TAX LEVIES AND COLLECTIONS

LAST TEN FISCAL YEARS
(Dollars in thousands)
Percent Delinquent Total
Fiscal Taxes Current of Levy Tax Taxes Percent
Year Levied (a) Collections (a) Collected Collections Collected (a) of Levy 2014-15 24,927 24,927 100.00% 0 24,927 100.00%
2015-16 27,068 27,068 100.00% 0 27,068 100.00%
2016-17 30,262 30,262 100.00% 0 30,262 100.00%
2017-18 31,893 31,893 100.00% 0 31,893 100.00%
2018-19 33,811 33,811 100.00% 0 33,811 100.00%
2019-20 37,684 37,684 100.00% 0 37,684 100.00%
2020-21 41,093 41,093 100.00% 0 41,093 100.00%
2021-22 42,759 42,759 100.00% 0 42,759 100.00%
2022-23 47,210 47,210 100.00% 0 47,210 100.00%
2023-24 48,578 48,578 100.00% 0 48,578 100.00%
(a) The City elected to participate in the "Teeter" plan offered by the County whereby cities receive 100% of the taxes levied in exchange for foregoing any interest and penalties collected on delinquent taxes.
(b) The Redevelopment Agency was dissolved effective January 31, 2012 and collections of property tax increment ceased as of that date. Subsequent to that date, a Successor Agency collects property taxes of the former Redevelopment Agency.

Source: City of Milpitas
169

Schedule 9

CITY OF MILPITAS

TAXABLE SALES BY CATEGORY

LAST TEN CALENDAR YEARS
(Dollars in Thousands)
Adjusted for Economic Data (a)

CALENDAR YEARS
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Apparel Stores 300,449 321,992 324,754 314,471 325,502 328,545 135,733 235,718 267,979 283,257 General Merchandise 85,048 86,475 92,857 90,725 86,646 83,356 63,773 70,904 73,663 77,461 Food Stores 30,876 32,076 32,093 32,541 31,105 31,622 33,133 35,305 37,683 36,134 Eating and Drinking Places 225,234 246,653 262,560 278,180 285,726 299,484 176,508 260,109 337,908 370,420 Building Materials 90,386 134,128 219,504 217,800 245,999 273,634 241,873 261,114 230,481 215,126 Auto Dealers and Supplies 177,278 186,944 195,626 218,899 208,229 201,342 176,691 204,344 249,917 245,884 Service Stations 115,955 98,981 93,188 97,579 107,423 110,121 72,722 108,410 148,616 131,711 Other Retail Stores 197,600 211,323 198,233 191,621 198,054 192,134 123,956 158,486 163,503 157,502 All Other Outlets 476,482 636,541 645,440 877,058 706,636 734,758 709,740 1,211,268 1,433,583 1,276,906 Total $1,699,308 $1,955,113 $2,064,255 $2,318,874 $2,195,320 $2,254,996 $1,734,129 $2,545,658 $2,943,333 $2,794,401 Source: State Board of Equalization, California Department of Taxes and Fees Administration, State Controller's Office, The HdL Companies Note: Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources ot the City's revenue. (a) Adjusted for Economic Data - reflects adjustments fo r prior periods taxable sales in the appropriate quarters. 0 500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
($ 000)
Apparel Stores General Merchandise Food Stores Eating and Drinking Places Building Materials Auto Dealers and Supplies Service Stations Other Retail Stores All Other Outlets 170

Schedule 10CITY OF MILPITAS

DIRECT AND OVERLAPPING SALES TAX RATES

LAST TEN FISCAL YEARS
City
Fiscal Direct Santa Clara State of
Year Rate County (e) California
2014-15 1.00 1.50 6.25
2015-16 1.00 1.50 6.25
2016-17 1.00 2.00 6.00
2017-18 1.00 2.00 6.00 (d)
2018-19 1.00 2.00 6.00
2019-20 1.00 2.00 6.00
2020-21 1.25 2.00 6.00
2021-22 1.25 2.13 6.00
2022-23 1.25 2.13 6.00
2023-24 1.25 2.13 6.00
Source: California State Board of Equalization
(a) July 1, 2011 the State decreased the State Rate 1%
(b) April 1, 2013 the County increased the rate 0.25%
(d) On April 1, 2017, the County increased the rate 0.50% and on January 1, 2017 the State decreased the rate 0.25%.
(e)
Corrections were made to the County and State rates in all years. 0.25% that is part of the County Transportation Fund was being counted as State rate in error.

Note: The City sales tax rate may be changed only with approval of the State Legislature. (c) On both July 1, 2012 and April 1, 2013 the State increased the State Rate 0.125% 171

Schedule 11

CITY OF MILPITAS

PRINCIPAL SALES TAXPAYERS
FISCAL YEARS 2023-24 and 2014-15

IN ALPHABETICAL ORDER
Fiscal Year 2023-2024 Fiscal Year 2014-2015
Arco Best Buy
Best Buy Burlington
Burlington Chevron
Cisco Systems Chevron
Coach Cisco Systems
Consolidated Electrical Distributors Coach
Envision Honda of Milpitas Consolidated Electrical Distributors Envision Toyota of Milpitas Dave & Busters
Eplus Technology Eplus Technology
Flextronics Flextronics
Floor & Decor Home Depot
Home Depot Jacklin Shell
Hoya Corporation Usa KLA Tencor
Inspur Systems Kohls
Jacklin Shell Linear Technology
KLA Tencor Marshalls
Kz Kitchen Cabinet & Stone Milpitas Fast Fill Market
Lennox Industries Milpitas Materials Company
Marshalls Nanometrics
Milpitas Materials Company Nike Factory Store
Teledyne Lecroy Piercey Toyota
Uniqlo Shell
United Rentals South Bay Honda
Veeco Process Equipment Inc Tommy Hilfiger
Walmart Supercenter Walmart Supercenter
Source: HDL Coren & Cone
172

Schedule 12
Business-type Activities
Lease Certificates Total Percentage
Fiscal Revenue Purchase Capital of Revenue Primary of Personal Per Year Bonds Agreement Lease Participation Bonds (d) Government Income (a) Capita (a) 2012-13 0 9,828 360 7,315 0 $17,503 0.82% 258
2013-14 0 6,000 274 6,910 0 13,184 0.59% 188
2014-15 0 0 186 6,490 0 6,676 0.29% 96
2015-16 0 0 94 6,055 0 6,149 0.26% 81
2016-17 0 0 0 5,605 0 5,605 0.22% 74
2017-18 0 0 0 0 5,363 5,363 0.20% 71
2018-19 0 0 728 0 4,812 5,540 0.19% (b) 73
2019-20 0 0 0 0 59,448 59,448 1.76% 763
2020-21 21,919 0 0 0 57,882 79,801 2.11% 1,116
2021-22 21,470 0 0 0 56,246 77,716 1.59% 950
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. (a) See Schedule 20 for personal income and population data. (b) The Redevelopment Agency was dissolved as of January 31, 2012 and its debt was assumed by a Successor Agency. (c) Data for fiscal year 2018-19 not available until May of 2020. (d) Balance of Revenue Bonds includes unamortized Bond Premium Governmental Activities
(Dollars in thousands, except per capita)

CITY OF MILPITAS

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
173

Schedule 13

CITY OF MILPITAS

BONDED DEBT PLEDGED REVENUE COVERAGE

REDEVELOPMENT AGENCY TAX ALLOCATION BONDS

LAST TEN FISCAL YEARS
Fiscal Net
Year Redevelopment Tax Debt Service Requirements
Ended Agency Property Less Housing Increment
June 30 Tax Increments (a) Reserve Fund Revenue Principal Interest Total Coverage 2015 44,843,881 (d) 0 (b) 44,843,881 6,120,000 (d) 7,414,608 (d) 13,534,608 3.31 2016 48,810,216 (d) 0 (b) 48,810,216 7,375,000 (d) 5,567,028 (d) 12,942,028 3.77 2017 51,563,292 (d) 0 (b) 51,563,292 6,045,000 (d) 5,682,175 (d) 11,727,175 4.40 2018 66,266,187 (d) 0 (b) 66,266,187 6,225,000 (d) 5,467,000 (d) 11,692,000 5.67 2019 71,988,412 (d) 0 (b) 71,988,412 6,475,000 (d) 5,213,000 (d) 11,688,000 6.16 2020 83,139,471 0 (b) 83,139,471 6,735,000 (d) 4,915,125 (d) 11,650,125 7.14 2021 84,805,793 0 (b) 84,805,793 7,070,000 (d) 4,570,000 (d) 11,640,000 7.29 2022 91,606,749 0 (b) 91,606,749 7,425,000 (d) 4,207,625 (d) 11,632,625 7.87 2023 99,657,121 0 (b) 99,657,121 7,800,000 (d) 3,827,000 (d) 11,627,000 8.57 2024 100,075,599 0 (b) 100,075,599 8,185,000 (d) 3,427,375 (d) 11,612,375 8.62 (a) Tax increments are net of pass-through payments and administ rative fees withheld by the County prior to distribution to the Agency. (b) The Redevelopment Agency was dissolved as of Janua ry 31, 2012 and its debt was assumed by a Successor Agency.

The Successor Agency collects Property Taxes, with no distinction between housing and non-housing revenues, which are used for the repayment of the former Redevelopment Agency's Bonds. (c) Includes debt service paid by the Redevelopment Agency prio r to the dissolution and by the Successor Agency after the dissolution. (d) Tax increment reported in this table after the dissolution date is the amount calculated by the County Auditor-Controller as available for payment of enforceable obligations. Under the provisions of the laws dissolving the Redevelopment Agency, the Successor Agency only receives the funds necessary to fulfill its approved obligations.

Debt service reported was paid by the Successor Agency. $0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
$75,000
$80,000
$85,000
$90,000
$95,000
$100,000
$105,000
$110,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
($000)
Series1 Series4
174

Schedule 14

CITY OF MILPITAS

COMPUTATION OF DIRECT AND OVERLAPPING DEBT

PERCENTAGE AMOUNT

APPLICABLE APPLICABLE

TO CITY OF TO CITY OF
JURISDICTION MILPITAS (1) MILPITAS
2023-24 Assessed Valuation, Direct and Overlapping Debt $25,269,350,900 OVERLAPPING TAX AND ASSESSMENT DEBT:

Santa Clara County $36,625,156
San Jose- Evergreen Community College District 121,057,911 Milpitas Unified School District 310,694,984
East Side Union High School District 10,257,109
Berryessa Union School District 10,530,885
Santa Clara Valley Water District Benefits Assessment District 1,119,116 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 490,285,161

DIRECT AND OVERLAPPING GENERAL FUND DEBT
Santa Clara County General Fund Obligations $40,489,117 Santa Clara County Pension Obligation Bonds 12,392,522
Santa Clara County Board of Education Certificates of Participation 462,158 San Jose-Evergreen Community College District OPEB Bonds 5,790,139 Milpitas Unified School District General Fund Obligations 8,171,793 East Side Union High School District OPEB Bonds 236,227 Berryessa Union School District General Fund Obligations 125,654 City of Milpitas General Fund Obligations 100% 17,180,000 Santa Clara County Vector District Certifications of Participations 36,175 TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT 84,883,785 Less: Santa Clara County supported obligations 101,825

TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEB
T $84,781,960
OVERLAPPING TAX INCREMENT DEBT (Successor Agency) 100% $64,455,000 TOTAL DIRECT DEBT $17,180,000
TOTAL GROSS OVERLAPPING DEBT $622,443,946
TOTAL NET OVERLAPPING DEBT $622,342,121
GROSS COMBINED TOTAL DEBT $639,623,946 (2)
NET COMBINED TOTAL DEBT $639,522,121
(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, revenue, mortgage revenue and tax allocation bonds and non-bonded lease obligations.

Ratios to 2023-24 Assessed Valuation:

Total Overlapping Tax and Assessment Debt 1.94%
Ratios to Assessed Valuation:

Direct Debt % 0.07%
Total Gross Debt % 2.53%
Source: Avenu Insights & Analytics, California Municipal Statistics, Inc.

JUNE 30, 2024
175

Schedule 15

CITY OF MILPITAS

LEGAL DEBT MARGIN INFORMATION

LAST TEN FISCAL YEARS
Legal Debt Margin Calculation for Fiscal Year 2023-24
Assessed value (net) - June 30, 2024 $25,269,350,900
Debt limit: 3.75% of assessed value (a) $947,600,659
Debt applicable to limit
Total Bonded Debt
Less: Tax Allocation Bonds
not subject to limit
Amount of Debt subject to limit 0
Legal debt margin $947,600,659
Total Net Debt
Applicable to the
Limit as a
Fiscal Debt Total Net Debt Legal percentage of
Year Limit Applicable to Limit Debt Margin Debt Limit
2014-15 527,280 0 $527,280 0.0%
2015-16 564,703 0 $564,703 0.0%
2016-17 600,705 0 $600,705 0.0%
2017-18 654,951 0 $654,951 0.0%
2018-19 687,896 0 $687,896 0.0%
2019-20 749,963 0 $749,963 0.0%
2020-21 805,429 0 $805,429 0.0%
2021-22 837,991 0 $837,991 0.0%
2022-23 904,669 0 $904,669 0.0%
2022-23 947,601 0 $947,601 0.0%
(a) California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the change in being assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one-fourth the limit to account for the adjustment of showing assessed valuation at full cash value.

Source: City of Milpitas Finance Department
Santa Clara County Tax Assessor's Office
176

Schedule 16

CITY OF MILPITAS

INSTALLMENT PAYMENT COVERAGE

SEWER CERTIFICATES OF PARTICIPATION AND

LAST TEN FISCAL YEARS
Less: Net Installment Payments
Fiscal Gross Operating Available
Year Revenues (1) Expenses (2) Revenue Principal Interest Total Coverage 2012-13 12,785,567 6,356,621 6,428,946 395,000 292,966 687,966 9.34 2013-14 13,235,908 7,834,220 5,401,688 405,000 278,965 683,965 7.90 2014-15 14,664,759 7,263,553 7,401,206 420,000 264,528 684,528 10.81 2015-16 16,408,718 7,687,848 8,720,870 435,000 249,348 684,348 12.74 2016-17 16,803,344 6,657,757 10,145,587 450,000 233,193 683,193 14.85 2017-18 17,245,001 9,031,729 8,213,272 470,000 216,055 686,055 11.97 2018-19 19,163,495 8,427,888 10,735,607 480,000 170,273 650,273 16.51 2019-20 20,664,951 10,235,463 10,429,488 460,000 808,477 1,268,477 8.22 2020-21 20,499,033 11,425,234 9,073,799 920,000 1,498,525 2,418,525 3.75 2021-22 21,592,843 9,373,484 12,219,359 980,000 1,455,875 2,435,875 5.02 NOTE: The Certificates of Participation were issued on November 28, 2006 and called on January 5, 2018.

The 2017 Wastewater Revenue Refunding Bonds were issued on December 4, 2017.

The 2019 Wastewater Revenue Bonds were issued on October 22, 2019. (1) Gross Revenues include sewer service charges, other operating revenues, and interest income.

Gross Revenues exclude connection fees and capital contributions. (2) Operating Expenses include sewer treatment services, personnel services, services and supplies, and repairs and maintenance expenses.

Operating Expenses exclude depreciation and amortization expenses.

WASTEWATER REVENUE REFUNDING BONDS
177

Schedule 17

CITY OF MILPITAS

INSTALLMENT PAYMENT COVERAGE

LAST TEN FISCAL YEARS
Less: Net Installment Payments
Fiscal Gross Operating Available
Year Revenues (1) Expenses (2) Revenue Principal Interest Total Coverage 2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20 $33,954,254 $26,919,455 $7,034,799 $155,000 $419,018 $574,018 12.26 2020-21 $35,023,092 $27,314,613 $7,708,479 $290,000 $755,650 1,045,650 7.37 2021-22 $32,732,692 $24,593,074 $8,139,618 $300,000 $744,050 1,044,050 7.80 NOTE: The Water Revenue Bonds were issued on October 24, 2019. (1) Gross Revenues include water service charges, other operating revenues, and interest income.

Gross Revenues exclude connection fees and capital contributions. (2) Operating Expenses include wholesale water pur chases, personnel services, services and supplies, and repairs and maintenance expenses.

Operating Expenses exclude depreciation and amortization expenses.

WATER REVENUE FUNDS
178

Schedule 18

CITY OF MILPITAS

BIMONTHLY SEWER RATES BY CUSTOMER CLASS

LAST TEN FISCAL YEARS
Single Family Multi-Family Mobile Home
Fiscal Per Dwelling Per Dwelling Parks Per Flat Quantity Year Unit Unit Dwelling Unit Rate Charges (a)
2014-15 86.93 52.22 38.20 14.68 2.73 - 8.00
2015-16 90.27 69.32 56.97 14.97 3.94 - 8.34
2016-17 90.27 69.32 56.97 14.97 3.94 - 8.34
2017-18 90.27 69.32 56.97 14.97 3.94 - 8.34
2018-19 102.52 78.73 64.70 24.30 4.21 - 9.63
2019-20 111.07 85.30 70.08 25.78 4.54 - 10.65
2020-21 118.34 90.88 74.66 26.55 4.91 - 11.48
2021-22 124.14 95.34 78.28 27.35 5.31-12.09
2022-23 128.44 97.96 84.42 29.25 4.95 - 11.58
2023-24 133.58 101.88 91.05 30.43 5.15 - 12.04
Source: City of Milpitas, Ordinance 208.53
(a) For each one hundred cubic feet of water used. Charge varies depending on the business or type of business.

Residential Commercial
179

Schedule 19

CITY OF MILPITAS

BIMONTHLY WATER RATES BY CUSTOMER CLASS

LAST TEN FISCAL YEARS
Potable
Commercial
Industrial
Fiscal Potable Capital 5/8 inch Institutional 5/8 to 10 inch Year Residential Surcharge Meter Charge Construction Meter Charge 2014-15 2.62 - 5.29* 27.36 5.29 27.36 - 667.31
2015-16 4.75 18.00 4.75 18.00 - 900.00
2016-17 5.13 1.30 19.44 5.13 19.44 - 972.00
2017-18 5.13 1.30 19.44 5.13 19.44 - 972.00
2018-19** 5.13 - 5.31 1.30 - 1.08 19.44 - 27.01 5.13 - 5.31 19.44 - 1,350.33 2019-20 5.63 1.08 28.63 5.63 26.83 - 1,431.35
2020-21 6.32 1.08 32.17 6.32 32.17-1608.26
2021-22 6.70 1.08 34.10 6.70 34.10-1704.76
2022-23 7.17 1.14 35.87 7.17 35.87-4700.56
2023-24 7.64 1.20 38.21 7.64 38.21-5006.10
Source: City of Milpitas, Ordinance 120.50
*Residential rates were a range based on consumption amounts for the period. There were 4 levels with the lowest rate being for use under 10 hc, and the highest rate for use over 30 hcf in the period.. **Rate effective Service Period April 1, 2019 to June 30, 2019 implemented on bill dated June 17, 2019. July 2018 rate listed first, and April rate listed second.
(a) For each one hundred cubic feet of water used. Charge varies depending on the business or type of business.

Single Family Residential Commercial
180

Schedule 20

CITY OF MILPITAS

DEMOGRAPHIC AND ECONOMIC STATISTICS

LAST TEN CALENDAR YEARS
(Personal Income in Thousands)
Population Per Capita
Calendar Density Total Personal Personal School Unemployment Land Area Year Population (Sq. Mile) Income Income Enrollment Rate (%) (Sq. Mile) 2014 69,903 5,117 2,287,366 32,722 10,281 4.90% 13.66
2015 75,521 5,529 2,374,221 31,437 10,291 3.90% 13.66
2016 75,410 5,520 2,528,663 33,532 10,260 3.50% 13.66
2017 75,410 5,520 2,721,275 36,086 10,318 3.60% 13.66
2018 76,231 5,581 2,966,362 38,912 10,172 2.80% 13.66
2019 77,961 5,707 3,373,340 43,269 10,308 2.70% 13.66
2020 75,663 5,539 3,787,034 50,051 10,413 7.50% 13.66
2021 80,839 5,918 3,744,971 46,326 10,072 5.30% 13.66
2022 81,067 5,935 4,289,458 52,912 9,967 2.70% 13.66
2023 81,773 5,986 4,889,914 59,798 10,199 3.90% 13.66
Sources: HdL, Coren & Cone
City of Milpitas Annual Budget
181

Schedule 21

CITY OF MILPITAS

PRINCIPAL EMPLOYERS
FISCAL YEARS 2023-24 and 2014-15
2023-24 2014-15
Percentage Percentage
Number of of Total City Number of of Total City
Employer Employees Rank Employment Employees Rank Employment Cisco Systems, Inc. 3,600 1 8.930% 3,816 10.15%
KLA-Tencor Corporation 2,760 2 6.850% 2,214 5.89%
Western Digital Tech (SanDisk Corporation) 1,700 3 4.220% 1,928 5.13% Flextronics International (aka Vista Point Technologies) 1,039 4 2.580% 1,275 3.39% Milpitas Unified School District 836 5 2.070% 840 2.23% Headway Technologies Inc. (2 Locations) 732 6 1.820% 638 1.70% City of Milpitas 416 7 1.030%
Amazon Delivery 404 8 1.000%
Walmart Supercenter 332 9 0.820% 530 1.14%
Kaiser Permanente Medical Offices 246 10 320 0.85%
Analog Devices (Linear Technology Corporation) 0.00% 1,230 3.27% FireEye, Inc 852 2.27%
Subtotal 12,065 29.3200% 13,643 36.2900%
Total Labor Force 40,300 37,600
Source: California Municipal Statistics, Inc.
182

Schedule 22

CITY OF MILPITAS

AUTHORIZED FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
Fiscal Year Ended June 30
2015 2016 2017 2018 2019 (d) 2020 2021 2022 2023 2024
Function
General Government 63.0 64.8 64.8 69.0 60.0 64.0 67.5 66.5 68.5 71.0 Building, Housing and Safety 23.0 24.0 24.0 25.0 33.0 (b) 33.0 33.0 33.0 31.0 30.0 Public Works 97.0 73.0 (a) 73.0 84.0 44.0 48.0 47.5 47.6 51.8 56.8 ( e) Engineering 26.0 (a) 26.0 17.0 22.0 25.0 24.0 24.0 25.0 26.0 ( e) Planning 18.5 17.0 17.0 17.0 9.0 (b) 10.0 10.0 9.0 9.0 9.0 Recreation 25.5 18.0 18.0 17.5 18.0 20.75 20.75 20.75 17.00 18.00 Parks and Recreation
Police:

Sworn Police 92.0 92.0 93.0 93.0 90.0 93.0 93.0 93.0 93.0 94.0 Civilians 30.0 30.0 29.0 29.0 29.0 33.0 33.0 33.0 34.0 34.0 Fire:

Firefighters and Safety
Officers 68.0 66.0 66.0 68.0 71.0 73.0 79.0 78.0 78.0 78.0 Civilians 12.0 11.0 11.0 12.0 3.0 4.0 4.0 4.0 4.0 4.0
Utilities (c) 27.5 29.5 29.5 34.5 27.5 27.5 27.5 28.4 29.2 31.2 Total 456.5 451.3 451.3 466.0 406.5 431.3 439.3 437.3 440.5 452.0 (a) Beginning in fiscal year 2016, Public Work s and Engineering are separate departments. (b) Neighborhood Services is a component of Building, Housing and Safety, and Planning is a separate department beginning in fiscal year 2019. (c) Utilities is comprised of employees from Public Works and Finance. (d) In Fiscal Year 2019, the City removed unfunded authorized positions. ( e) As of December 2023, the Engineering and Public Works Departme nts were realigned into one department named Public Works Department.

Source: City of Milpitas, final budget
0 100
200
300
400
500
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
FTE's
General Government Building Public Works Engineering and Planning Planning and Neighborhood Services Recreation Parks and Recreation Police Fire Utilities
183

Schedule 23
2015 2016 2017 2018 2019
Function/Program
Building Safety & Housing
Building permits issued 4,300 4,200 4,090 4,200 4,300
Plan review performed 1,400 1,500 1,610 1,700 1,600
Code Customer Service Requests /
Violations abated 755 755 800 714 784
Public Works
Street miles maintained 139 139 139 298 298
Customer Service Requests 2,800 2,794 2,800 3,000 2,384 Development projects reviewed 190 178 158 160 225
Planning
Applications to Planning Commission 236 92 92 100 419
Recreation
Sports Center members 1,504 1,600 1,325 1,450 1,575
Senior nutrition meals served 21,231 20,158 18,678 17,206 18,322 Police
Avg response time to emergency calls (minutes) 2:32 2:40 2:44 2:57 2:41 Number of anti-terrorist patrol checks 2,300 2,400 2,200 2,200 1,949 Crime prevention presentations 200 125 70 56 104
Number of vehicle citations issued 3,600 5,900 5,720 5,900 5,895 Fire
Emergency calls for service 4,950 5,000 5,000 5,200 5,640 Public education events 80 100 112 200 223
Permits Inspections 4,666 7,600 7,322 7,577 7,824
Plan Review 983 1,200 1,550 1,700 1,600
Utility
Clean sewer lines (feet) 500,000 500,000 500,000 491,244 528,051 Repair, replace or set water meters 279 189 152 115 147 Average daily consumption (thousands of gallons) 9,300 7,800 5,800 6,590 8,394 Source: City of Milpitas, final budget
Footnote: Statistic for DARE presentations: schools/students is removed from this schedule in 2022 due to no activity since 2013.

CITY OF MILPITAS

OPERATING INDICATORS BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
Fiscal Year Ended June 30
184

Schedule 23
2020 2021 2022 2023 2024
4,000 3,000 3,000 3,800 4,300
4,800 4,900 4,900 5,200 5,700
600 600 600 600 1,054
298 303 303 308 308
4,468 3,353 4,652 5,176 6,000
134 48 24 15 10
37 31 60 60 50
1,877 506 1,024 1,104 1,104
20,145 39,783 28,699 21,112 21,112
2:36 2:40 2:49 2:55 2:49
1,479 958 490 233 544
110 105 47 28 45
6,000 6,300 4,230 3,829 3,838
5,600 5,390 6,164 6,782 6,782
134 0 2,082 5,079 5,079
7,772 2,949 1,652 1,668 1,668
1,575 1,884 1,401 1,448 1,448
432,022 636,681 331,232 234,040 234,040
219 113 25 18 18
8,410 7,440 6,895 6,490 6,490
Fiscal Year Ended June 30
185

Schedule 24
2015 2016 2017 2018 2019
Function/Program
Public Works
Miles of streets 298 298 298 298 298
Street lights 4,577 4,577 4,581 5,119 5,141
Square feet of buildings
maintained (in thousands) 376 376 376 322 473
City vehicles 260 264 264 269 271
Signs 5,700 5,700 6,000 10,000 10,000
Signal lights 70 71 72 72 74
City Parks 34 33 32 32 32
Acres of Parkland 180 180 195 195 195
Playgrounds 34 34 33 30 33
Parks and recreation
Community centers 11111
Senior centers 11111
Sports centers 11111
Satellite centers 00221
Swimming pools 33333
Tennis courts 21 21 21 21 21
Football field 11111
Baseball/softball fields 99779
Soccer fields 12 13 13 13 8
Basketball courts 7 9 10 10 10
Volleyball courts / Horse Shoe Pits /
Bocce Ball / Cricket Field / Par Course 7 10 13 12 10
Handball courts 55666
Skate Park
Joint use:

Russell Bobbysocks Fields 00333
Soccer fields 00228
Open Space - Number of School Sites 00000
Police
Police stations 22222
Police patrol vehicles 28 34 29 29 29
Fire
Fire stations 44444
Fire Apparatus 19 13 11 11 12
Fire hydrants 2,033 2,033 2,039 2,039 2,039
Utility
Miles of water mains 213 203 203 206 206
Water Tank Storage
capacity (million of gallons) 16 16 16 16 16
Miles of sanitary sewers 179 173 173 175 173
Miles of storm drain 110 99 99 105 99
Miles of recycled water main 23 23 21 23 26
Source: City of Milpitas, final budget
Fiscal Year Ended June 30

CITY OF MILPITAS

CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
186

Schedule 24
2020 2021 2022 2023 2024
298 303 303 308 308
4,418 4,494 4,494 4,516 4,584
473 473 455 455 455
258 268 256 302 302
6,000 6,000 6,000 6,000 6,100
78 83 83 83 79
36 36 36 36 37
154 154 154 154 165
33 33 33 33 35
11111
11111
11111
21111
33333
21 21 21 21 25
11111
9 9 11 11 11
88888
10 10 10 10 18
10 10 10 10 21
66662
111
33000
22000
0 0 13 13 13
22222
29 30 30 30 30
44444
13 13 13 13 13
2,308 2,308 2,308 2,308 2,308
206 206 206 206 183
16 16 16 16 16
173 173 173 160 160
99 99 99 99 112
26 26 24 24 24
Fiscal Year Ended June 30
187

OTHER AUDIT REPORT

INDEPENDENT AUDITOR’S REPORT ON

INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN

AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Members of the City Council
City of Milpitas, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of the City of Milpitas, California, as of and for the year ended June 30, 2024, and have issued our report thereon dated September 30, 2024. Our report includes a reference to other auditors who audited the financ ial statements of Terrace Gardens, Inc. , as described in our report on the City’s financial statements. This report does not include the results of the other auditors’ testing of internal control over financial reporting or on compliance and other matters that are reported on separately by those auditors.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we consider ed the City’s internal control over financial reporting (internal control) as a basis for desi gning the audit procedures th at are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected an d corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is le ss severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficien cies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, du ring our audit we did not identify any de ficiencies in internal control that we consider to be material weaknesses. However, material weakness or significant deficiencies may exist that have not been identified.
191

Report on Compliance and Other Matters
As part of obtaining reasonable assu rance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statement amounts.

However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.

The resu lts of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

We have also issued a separate Memorandum on Internal Control dated September 30, 2024 which is an integrate part of our audit and should be read in conjunction with this report.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to pr ovide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s intern al control and compliance. Accord ingly, this communication is not suitable for any other purpose.

Pleasant Hill, California
September 30, 2024
192

CITY OF MILPITAS

MEMORANDUM ON INTERNAL CONTROL

FOR THE YEAR ENDED JUNE 30, 2024

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CITY OF MILPITAS

MEMORANDUM ON INTERNAL CONTROL
For the Year Ended June 30, 2024
Table of Contents
Page
Memorandum on Internal Control ................................................................................................................... 1 Schedule of Other Matters ....................................................................................................................... 3

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MEMORANDUM ON INTERNAL CONTROL
To the City Council of
the City of Milpitas, California
We have audited the basic financial statements of the
City of Milpitas for the year ended June 30, 2024,
and have issued our report thereon dated September 30, 2024. Our opinions on the basic financial statements and this report, insofar as they relate to Terrace Gardens, In c, are based solely on the report of other auditors. In planning and perf orming our audit of the basic fina ncial statements of the City of Milpitas as of and for the year ended June 30, 2024, in accordance with auditin g standards generally accepted in the United States of America, we considered the City’s internal control over financial reporting (internal control) as a basis for designi ng audit procedures that are appropriate in the circumstances for the purpose of expressing our op inions on the financial statements, but not for the purpose of expressing an opinion on th e effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable po ssibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis.

Our consideration of internal control was for the lim ited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses. In addition, because of inherent limitations in internal control, including the poss ibility of management override of controls, misstatements due to error or fraud may occur and not be detected by such controls. Given these limitations during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Included in the Schedule of Other Matters are recommendations not meeting the above definitions that we believe are opportunities for strengthening internal controls and operating efficiency.

Management’s written responses included in this repo rt have not been subjected to the audit procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.

Government Auditing Standards require the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying Schedule of Other Matters. The City’s response was not subjected to the other auditing procedures appl ied in the audit of the financial statements and, accordingly, we express no opinion on the response.

This communication is intended solely for the information and use of management , City Council, others within the organization, and agencies and pass-through entities requiring compliance with Government Auditing Standards, and is not intended to be and should not be used by anyone other than these specified parties.

Pleasant Hill, California
September 30, 2024
1

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MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS
2024-01 Timeliness of Journal Entries
Criteria:

In order, for the general ledger to be accurate and effective, journal entries should be prepared, reviewed, and posted timely, ideally within 30 days of the journal entries' transaction date.

Condition:
a. During our testing of journal en tries, we noted that one entry was prepared and reviewed more than one year after the date the activity occurred.
b. We also noted six journal entries were reviewed more than 30 days past the prepared date.

Cause:

According to the Finance Manager, the delays are due to the City ta king time to research and communicate with other departments and the customer.

Potential Effect: When journal entries are not posted time ly, there is an increased risk that transactions are not posted in the correct period and that accounting errors, misstatements, or unauthorized transactions may not be identified or corrected in a timely manner.

Recommendation: We recommend Finance prioritize j ournal entry processing and establish procedures to ensure monthly journal entries are prepared, reviewed, and posted timely.

Management Responses:

We acknowledge the findings and agree with the import ance of ensuring that journal entries are prepared, reviewed, and posted in a timely manner. The delays identified were primarily due to the time required for research and coordination with
other departments and external stak eholders. While we understand the necessity of gathering accurate information, we reco gnize the need to improve the timeliness of this process.

While we already have a tracking system via Smartsheet in place to monitor the st atus of journal entries, we believe that more emphasis is needed on prioritizing this task to ensure it remains on track. To address the delays, we will enhance our procedures by focusi ng on improving the efficiency of the coordination process. This includes setting clearer timelines an d communication expectatio ns with the departments involved and streamlining the exchange of information. We will also reinforce the importance of adhering to established timelines through staff training and management oversight.

In addition, we will continue to use our existing track ing system and starting on July 1, we will set up a workflow for the journal entry approval process in Tyler ERP. The approver will receive a reminder to review, approve, and post JEs. This will ensure time ly approval and streamline the JE approval process.

This will help ensure that all journal entries are prepared, reviewed, and posted within the required 30-day window. These actions will minimize the risk of misst atements, ensure more time ly financial reporting, and improve overall accuracy in the general ledger
3

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS

CURRENT AND UPCOMING GASB PRONOUNCEMENTS
The following comment represents new pronouncements ta king affect in the next few fiscal years. We cite them here to keep you informed of developments:

EFFECTIVE FISCAL YEAR 2024/25:

GASB 101 – Compensated Absences
The objective of this Statement is to better meet the information need s of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurem ent guidance under a unified model and by amending certain previously required disclosures.

Recognition And Measurement
This Statement requires that liabilities for compensate d absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for t ime
off or otherwise paid in cash or settled through noncas h means. Leave is attributable to services already rendered when an employee has performed the services required to earn the leave. Leave that accumulates is carried forward from the reporting period in which it is earned to a future reporting period during which it may be used for time off or otherwise paid or settled. In estimating the leave that is more likely than not to be used or otherwise paid or settled, a gove rnment should consider relevant factors such as employment policies related to compensated absenc es and historical information about the use or payment of compensated absences. However, leave that is more likely than not to be settled through conversion to defined benefit postemployment benefi ts should not be included in a liability for compensated absences.

This Statement requires that a li ability for certain types of compen sated absences—including parental leave, military leave, and jury duty leave—not be recognized until the leave commences. This Statement also requires that a liability for specific types of co mpensated absences not be recognized until the leave is used.

This Statement also establishes gu idance for measuring a liability fo r leave that has not been used, generally using an employee’s pay rate as of the date of the financial st atements. A liability for leave that has been used but not yet paid or settled should be measured at th e amount of the cash payment or noncash settlement to be made. Ce rtain salary-related payments that are directly and incrementally associated with payments for leave also should be included in the measurement of the liabilities.

With respect to financial statemen ts prepared using the current fina ncial resources measurement focus, this Statement requires that expenditures be recognize d for the amount that norm ally would be liquidated with expendable available financial resources.
4

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS

GASB 101 – Compensated Absences (Continued)

Notes To Financial Statements

This Statement amends the existing requirement to disclose the gross increases and decreases in a liability for compensated absences to allow governments to disclose only the net change in the liability (as long as they identify it as a net change). In addition, governments are no l onger required to disclose which governmental funds typically have been used to liquidate the liability for compensated absences.

How the Changes in this Statement Will Improve Financial Reporting

The unified recognition and measurement model in this Statement will result in a liability for compensated absences that more appropriately refl ects when a government incurs an obligation. In addition, the model can be applied consistently to any type of compensated absence and will eliminate potential comparability issues between governments that offer different types of leave.

The model also will result in a more robust estimat e of the amount of compen sated absences that a government will pay or settle, which will enhance the relevance and reliability of information about the liability for compensated absences.

GASB 102 – Certain Risk Disclosures

State and local governments face a va riety of risks that could negatively affect the level of service they provide or their ability to meet obligations as they come due. Although governments are required to disclose information about their expo sure to some of those risks, esse ntial information about other risks that are prevalent among state and local governments is not routinely disclosed because it is not explicitly required. The objective of this Statement is to pr ovide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints.

This Statement defines a concentration as a lack of dive rsity related to an aspect of a significant inflow of resources or outflow of resources. A constraint is a limitation imposed on a gov ernment by an external party or by formal action of the go vernment’s highest level of decision-making authority. Concentrations and constraints may limit a government’s ability to acquire resources or control spending.

This Statement requires a government to assess whet her 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 constr aint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur with in 12 months of the date the financial statements are issued.

If a government determines that those criteria for di sclosure have been met for a concentration or constraint, it should disclose information in notes to financial statements in sufficient detail to enable users of financial statements to understand the nature of the circumstances disclosed and the government’s vulnerability to the risk of a substantia l impact. The disclosure should include descriptions of the following:

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MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS

GASB 102 – Certain Risk Disclosures (Continued)

• The concentration or constraint.
• Each event associated with the concentration or constraint that could cause a substantial impact if the event had occurred or had begun to occur prior to the issuance of the financial statements. • Actions taken by the government prior to the issuance of the financial stat ements to mitigate the risk.

How the Changes in This Statement Will Improve Financial Reporting

The requirements of this Statement will improve fi nancial reporting by providing users of financial statements with essential information that currently is not often provided. The disclosures will provide users with timely information regard ing certain concentrations or constr aints and related events that have occurred or have begun to occur that make a governme nt vulnerable to a substantial impact. As a result, users will have better information with which to understand and anticipate certain risks to a government’s financial condition.

EFFECTIVE FISCAL YEAR 2025/26:

GASB 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. This Statement also addresses certain application issues.

Management’s Discussion and Analysis - This Statement continues th e requirement that the basic financial statements be preceded by management’s discussion and analysis (MD&A), which is presented as required supplementary information (RSI). MD&A pr ovides an objective and ea sily readable analysis of the government’s financial activities based on curr ently known facts, decisi ons, or conditions and presents comparisons between the current year and the prior year. This Stat ement requires that the information presented in MD&A be limited to the rela ted topics discussed in five sections: (1) Overview of the Financial Statements, (2) Financial Summary, (3) Detailed Analyses, (4) Significant Capital Asset and Long-Term Financing Activity, and (5) Curren tly Known Facts, Decisions, or Conditions.

Furthermore, this Statement stresses that the detailed analyses should explain why balances and results of operations changed rather than simply presenting th e amounts or percentages by which they changed.

This Statement emphasizes that the analysis provided in MD&A should avoid unnecessary duplication by not repeating explanations that may be relevant to multiple sections and that “boilerplate” discussions should be avoided by presenting only the most relevant information, focused on the primary government.

In addition, this Statement continues the requiremen t that information included in MD&A distinguish between that of the primary government and its discretely presented component units.

Unusual or Infrequent Items - This Statement describes unusual or infrequent items as transactions and other events that are either unusual in nature or in frequent in occurrence. Furthermore, governments are required to display the inflows and outflows related to each unusual or infrequent item separately as the last presented flow(s) of resources prior to the net change in reso urce flows in the government-wide, governmental fund, and proprietary fund statements of resource flows.

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MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS

GASB 103 – Financial Reporting Model Improvements (Continued)

Presentation of the Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position - This Statement requires that the proprietary fund statement of revenues, expenses, and changes in fund net position continue to distinguish between operating and nonoperating revenues and expenses.

Operating revenues and expenses are defined as revenues and expenses other th an nonoperating revenues and expenses. Nonoperating revenues and expenses are defined as (1 ) subsidies received and provided, (2) contributions to permanent and te rm endowments, (3) revenues and e xpenses related to financing, (4) resources from the disposal of capital assets and inventory, and (5) investment income and expenses.

In addition to the subtotals currently required in a proprietary fund statement of revenues, expenses, and changes in fund net position, this Statement requires that a subtotal for operating income (loss) and noncapital subsidies be presented before reporting other nonoperating revenues and expenses. Subsidies are defined as (1) resources received from another part y or fund (a) for which the proprietary fund does not provide goods and services to th e other party or fund and (b) that directly or indirectly keep the proprietary fund’s current or future fees and charges lower than they would be otherwise, (2) resources provided to another party or fund (a) for which th e other party or fund does not provide goods and services to the proprietary fund and (b) that are r ecoverable through the proprietary fund’s current or future pricing policies, and (3) all other transfers.

Major Component Unit Information - This Statement requires go vernments to present each major component unit separately in the reporting entity’s statement of net position and statement of activities if it does not reduce the readability of the statements. If the readabi lity of those statements would be reduced, combining statements of major component units should be presented after the fund financial statements.

Budgetary Comparison Information - This Statement requires go vernments to present budgetary comparison information using a single method of communication—RSI. Governments also are required to present (1) variances between original and final budget amounts and (2) variances between final budget and actual amounts. An explanation of significant variances is required to be presented in notes to RSI.

How the Changes in This Statement Will Improve Financial Reporting

The requirements for MD&A will improve the quality of the analysis of changes from the prior year, which will enhance the relevance of that informatio n. They also will provide clarity regarding what information should be presented in MD&A.

The requirements for the separate presentation of unusual or infrequent items will provide clarity regarding which items should be reported separately from other inflows and outflows of resources.

The definitions of operating revenues and expenses and of nonoperating revenues and expenses will replace accounting policies that vary from government to government, thereby improving comparability.

The addition of a subtotal for operating income (loss) and noncapital subsidies will improve the relevance of information provided in the proprietary fund statem ent of revenues, expenses, and changes in fund net position.

The requirement for presentation of major component unit information will improve comparability.

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CITY OF MILPITAS

REQUIRED COMMUNICATIONS

FOR THE YEAR ENDED
JUNE 30, 2024

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CITY OF MILPITAS

REQUIRED COMMUNICATIONS

For the Year Ended June 30, 2024

Table of Contents

Page

Required Communications ................................................................................................................................. 1

Significant Audit Matters .......................................................................................................................... 1

Qualitative Aspects of Accounting Practices ................................................................................... 1

Difficulties Encountered in Performing the Audit ........................................................................... 3

Corrected and Uncorrected Misstatements ....................................................................................... 3

Disagreements with Management ..................................................................................................... 3

Management Representations ............................................................................................................. 4

Management Consultations with Other Independent Accountants ................................................. 4

Other Audit Findings or Issues ........................................................................................................... 4

Other Matters ............................................................................................................................................. 4

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REQUIRED COMMUNICATIONS

To the City Council of
the City of Milpitas, California

We have audited the basic financial statements of the City of Milpitas (City) for the year ended June 30, 2024. We did not audit the fina ncial statements of Terrace Gardens, Inc. as of and for the year ended December 31, 202 3, which represent 1.0 0%, 1.47%, and 1. 08% of the assets, net position and revenues, respectively, of the primary government. These component unit financial statements were audited by other auditors, whose report there on has been furnished to us, and our opinion, insofar as it relates to the amounts included for this entity, is based solely on the report of the other auditors.

Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter dated April 15, 2024.

Significant Audit Matters

Qualitative Aspects of Accounting Practices

Accounting Policies - Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted, and the application of existing policies was not changed during the year, except as follows:

The following pronouncements became effective, but did not have a material effect on the financial statements:

GASB 99 – Omnibus 2022, paragraphs 4-10
GASB 100 – Accounting for Changes and Error Corrections

Unusual Transactions, Controversial or Emerging Areas - We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting Estimates - Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:

Estimated Fair Value of Investments: As of June 30, 2024, the City held approxim ately $416.4 million of cash and investments as measured by fair value as disclosed in Note 3 to the financial statements. Fair value is essentially market pricing in effect as of June 30, 2024. These fair values are not required to be adjusted for changes in general market conditions occurring subsequent to June 30, 2024.

Estimate of Depreciation: Management’s estimate of the depreciation is based on useful lives determined by management. These lives have been determined by management based on the

expected useful life of assets as disclosed in Note 8 to the financial statements. We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the basic financial statements taken as a whole.

Estimate of Compensated Absences: Accrued compensated absences which are comprised of accrued vacation and sick leave is estimated using accumulated unpaid leave hours and hourly pay rates in effect at the end of the fiscal year as disclosed in Note 14F to the financial statements.

We evaluated the key factors and assumptions used to develop the accrued compensated absences in determining that it is reasonable in relation to the basic financial statements taken as a whole.

Estimated Claims Liabilities: Management’s estimate of the claims liabilities payable is disclosed in Note 15 to the financial statements and is based on estimates determined by the City’s risk pool and third party claims administrator, which are based on the claims experience of the City. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the basic financial statements taken as a whole.

Estimated Net Pension Liabilities and Pension -Related Deferred Outflows and Inflows of Resources: Management’s estimate of the net pension liabilities and deferred outflows/inflows of resources are disclosed in Note 1 3 to the financial statements and are based on accounting valuations determined by the California Public Employees Retirement System, which are based on the experience of the City. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the basic financial statements taken as a whole.

Estimated Net OPEB Liability and Pension-Related Deferred Outflows and Inflows of Resources:

Management’s estimate of the net OPEB liability is disclosed in Note 14 to the financial statements and is based on actuarial study determined by a consultant, which is based on the experience of the City. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the basic financial statements taken as a whole.

Disclosures - The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit

We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements

Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.

Professional standards require us to accumulate all known and likely uncorrected misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. We have no such misstatements to report to the City Council.

Disagreements with Management

For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations

We have requested certain representations from management that are included in a management representation letter dated September 30, 2024.

Management Consultations with Other Independent Accountants

In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues

We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters

We applied certain limited procedures to the required supplementary information that accompanies and supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information.

We were engaged to report on the supplementary information that accompanies the financial statements, but is not required supplementary information. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

We were not engaged to report on the Introductory and Statistical Sections which accompany the financial statements, but are not required supplementary information. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

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This information is intended solely for the use of City Council and management and is not intended to be, and should not be, used by anyone other than these specified parties.

Pleasant Hill, California
September 30, 2024

INDEPENDENT ACCOUNTANT’S REPORT ON

APPLYING AGREED UPON PROCEDURES FOR
COMPLIANCE WITH THE PROPOSITION 111
2023-2024 APPROPRIATIONS LIMIT INCREMENT

Honorable Mayor and Members of the City Council
City of Milpitas, California

We have performed the procedures enumerated below on the Appropriations Limit Worksheet (Worksheet) of the City of Milpitas, California, for the year ended June 30, 2024. The City’s management is responsible for the Worksheet.

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of t hese procedures, which were suggested by the League of California Cities and presented in their Article XIIIB Appropriations Limitation Uniform Guidelines , were performed solely to assist you in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and associated findings are as follows:

A. We obtained the Worksh eet and determined that the 2023 -2024 Appropriations Limit of $135,124,537 and annual adjustment factors were adopted by Resolution of the City Council. We also determined that the population and inflation options were selected by a recorded vote of the City Council.

B. We recomputed the 2023- 2024 Appropriations Limit by multiplying the 2022 -2023 Prior Year Appropriations Limit by the Total Growth Factor. We recomputed the Total Growth Factor by multiplying the population option by the inflation option.

C. For the Worksheet, we agreed the Per Capita Income Factor, City Population Factor and County Population Factor to California State Department of Finance Worksheets.

We were engaged by the City to perform t his agreed -upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Worksheet.

Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of management and the City Council and is not intended to be and should not be used by anyone other than those specified parties ; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record.

Pleasant Hill, California
September 30, 2024