Agenda packet — City Council and Authorities Concurrent, December 6, 2022 (part 9 of 11)

In March 2020, the Governmental Accounting Standards Board (GASB) issued Statement No. 93, Replacement of Interbank Offered Rates. The objective of this statement is to address accounting and financial reporting implication that results from the replacement of an IBOR. The City is currently working

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 110
with JPMorgan to update the agreement to reflect the use of new interest rate, which is targeted to be completed by the end of first quarter of calendar year 2023.

Santa Clara Stadium Authority
Stadium Funding Trust Loan
The Restated Credit Agreement by and among FinanceCo, the Stadium Authority and Goldman Sachs Bank was entered into on June 19, 2013. FinanceCo agreed to loan the Stadium Authority up to $450 million.

Under the Restated Credit Agreement, the loan from FinanceCo consists of the Term A Loan and the Term B Loan. On March 31, 2016, the Stadium Authority paid the remaining amount due on the Term B Loan.

Term A Loan
The Term A Loan was made in the amount of $282.79 million. This loan bears interest at a fixed rate of

5.00%, payable semi-annually, with annual principal payments due beginning in April 2018. The Term A Loan has a maturity date of April 1, 2039 and is subject to certain prepayment premiums. The loan was fully drawn at closing. As of March 31, 2022, $230.1 million was outstanding.

In the event of default under the loan agreement, FinanceCo has the right, upon written notice to the Stadium Authority, to accelerate and declare the Stadium Authority’s obligation to repay the related loan to FinanceCo to be immediately due and payable.

StadCo CFD Advance
In May of 2010, the City of Santa Clara completed the proceedings to establish a Community Facilities District (CFD) for the purpose of financing certain publicly owned facilities and public services associated with Levi’s Stadium.

On June 11, 2013, the CFD, the Stadium Authority, and StadCo entered into a Reimbursement Agreement under which the CFD would agree to reimburse the Stadium Authority for costs of certain publicly owned facilities and public services constructed for Levi’s Stadium. The reimbursement can only be made from a special tax generated by the CFD, as and when received by the CFD.

StadCo has agreed to advance to the Stadium Authority funds to pay for the CFD Infrastructure (StadCo CFD Advance). To evidence the Stadium Authority’s obligation to repay the StadCo CFD Advance, the Stadium Authority and StadCo also executed a note on June 11, 2013. The StadCo CFD Advance has a maximum principal of $38 million and an interest rate of 5.73%.

During the year ended March 31, 2022, as the special CFD tax was submitted to the Stadium Authority, a number of payments were made on the StadCo CFD Advance. These payments were made mid-way through each quarter. The interest that accrued between the last StadCo CFD Advance payment and the end of the year is added to principal. These payments totaled $1.7 million, which included $1.7 million in interest and $0 in principal. The Stadium Authority made $819 thousand in payments and added the remaining unpaid balance to the principal during the year. As of March 31,2022, $30.4 million was outstanding, which includes $872 thousand of interest added to principal as of March 31, 2022.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 111
StadCo Subordinated Loan
The Restated StadCo Obligations Agreement dated as of June 19, 2013 was entered into by and between StadCo and the Stadium Authority as part of the take-out financing process. Under the Restated StadCo Obligations Agreement, StadCo will loan the Stadium Authority an amount not to exceed $500 million with a fixed 5.50% interest rate. Required principal repayments started in March 2016 and the Stadium Authority may prepay the loan at any time.

Payments totaling $4.6 million were made on the loan during the year. This included a $3.3 million in principal prepayment and $1.3 million in interest. As of March 31, 2022, $19.8 million was outstanding.

Debt service on this loan is secured by a pledge of available Stadium Authority revenues on a basis subordinate to outstanding senior loans, if any.

In the event of default under the loan agreement, StadCo has the right, upon written notice to the Stadium Authority, to accelerate and declare the Stadium Authority’s obligation to repay the related loan to StadCo to be immediately due and payable.

D. Derivative Instruments
Under hedge accounting, the increase (decrease) in the fair value of a hedge is reported as a deferred cash flow hedge on the statement of net position. For the reporting period, all of SVP’s derivatives meet the hedge effectiveness tests defined by GAAP.

Notional Amounts and Fair Values- SVP Future Derivative Instruments SVP maintains a Market Risk Management Policy, which among other things, sets forth the guidelines for the purchase and sale of certain financial instruments defined as hedge instruments in support of market power purchase and sales transactions. The primary goal of these guidelines is to provide a framework for the operation of an energy price hedging program to better manage SVP’s risk exposure in order to stabilize pricing and costs for the benefit of SVP and its customers.

Consistent with hedge accounting treatment meeting effectiveness tests, changes in fair value are reported as deferred flows of resources on the statement of net position until the contract expiration that occurs in conjunction with the hedged expected energy purchase/sales transaction. When hedging contracts expire, at the time the purchase/sales transactions occur, the deferred balance is recorded as a component of Purchased Power. For energy derivatives, fair values are estimated by comparing contract prices to forward market prices quoted by third party market participants.

SVP had the following future derivative instruments outstanding at June 30, 2022 with Archer Daniels Midland Company to hedge cash flows on sales of excess resources in CAISO market in the future months.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 112
Long Short
Effective
Date
Maturity
Date
Average
Price Classification Amount Classification Amount
20,800 6/1/2022 6/30/2022 $57.50 Derivative
Instrument $ 412,672 Deferred inflow $ 412,672
10,000 7/1/2022 7/31/2022 98.00
Derivative
Instrument (80,500) Deferred outflow (80,500)
10,800 8/1/2022 8/31/2022 98.00
Derivative
Instrument 247,860 Deferred inflow 247,860
10,000 9/1/2022 9/30/2022 98.00
Derivative
Instrument 66,500 Deferred inflow 66,500
15,200 6/1/2022 6/30/2022 62.75
Derivative
Instrument 89,832 Deferred inflow 89,832
8,600 7/1/2022 7/31/2022 73.00
Derivative
Instrument (78,604) Deferred outflow (78,604)
7,800 8/1/2022 8/31/2022 73.00
Derivative
Instrument (5,460) Deferred outflow (5,460)
8,000 9/1/2022 9/30/2022 73.00
Derivative
Instrument 52,400 Deferred inflow 52,400
$ 704,700 704,700 $
Long Short
Effective
Date
Maturity
Date
Average
Price Classification Amount Classification Amount
6,245,000 7/1/2020 12/31/2025 $2.42 Derivative
Instrument $ 13,536,965 Deferred inflow $ 13,536,965
6,400,000 1/1/2021 12/31/2025 0.56
Derivative
Instrument 3,135,450 Deferred inflow 3,135,450
12,490,000 1/1/2022 12/31/2025

2.64 Derivative
Instrument 24,326,130 Deferred inflow 24,326,130
12,800,000 1/1/2022 12/31/2025 1.03
Derivative
Instrument 318,900 Deferred inflow 318,900
$ 41,317,445 41,317,445 $
Grand Total 42,022,145 $ 42,022,145 $
Notional
Notional
Amount (MMBtu) Fair Value Change in Fair Value
Amount (MWh) Fair Value Change in Fair Value
Credit risk
Credit risk is the risk of loss due to a counterparty defaulting on its obligations. SVP is exposed to credit risk if hedging instruments are in asset positions. In order to eliminate counterparty credit risk, SVP has transacted both long term power and gas contracts on the Futures market on Intercontinental Exchange (ICE). As of June 30, 2022, $42.2 million of SVP’s open derivative power and gas contracts were in an asset position, and the fair values of those open contracts were positive. $0.2 million of SVP’s open derivative power contracts were in a liability position, and the fair values of those open contracts were negative. The

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 113
open contract was with ADM Investor Service, Inc., a clearing member of ICE and a company of Archer Daniels Midland Company who was rated A by Standard & Poor’s as of June 30, 2022.

SVP’s policy for requiring collateral on hedging instruments varies based on individual contracts and counterparty credit ratings. Under the brokerage agreements with Archer Daniels Midland Company, the accounts are prefunded by SVP. If the account value falls below zero, margin calls are invoked. At June 30, 2022, SVP had posted collateral of $19,518,954 deposited with CAISO and Archer Daniels Midland Company for resource energy trading.

It is also SVP's policy to negotiate netting arrangements whenever it has entered into more than one bilateral transactions with counterparty. Under the terms of these arrangements, should one party become insolvent or otherwise default on its obligations, the non-defaulting party may accelerate and terminate all outstanding transactions and net their fair values so that a single amount will be owed by (or to) the non-defaulting party.

Termination Risk
SVP’s futures contracts are traded over the counter and have no termination risk.

Price Risk
With respect to price risk under power Futures contracts, on purchase contracts (long positions), SVP receives the CAISO NP15 average daily rate at settlement and pays the fixed contracted rate entered into on the trade date; on sales contracts (short positions), SVP pays the CAISO NP15 average daily rate at settlement and receives the fixed contracted rate entered into on the trade date. With respect to price risk under gas Futures contracts, on purchase contracts (long positions), SVP receives PG&E Citygate average daily price at settlement and pays the fixed contracted rate entered into on the trade date; on sales contracts (short positions), SVP pays the PG&E Citygate average daily price at settlement and receives the fixed contracted rate entered into on the trade date. SVP is exposed to risk because the contract prices are different from the settlement prices.

E. Repayment Requirements
As of June 30, 2022, the debt service requirements to maturity for the City’s long-term obligations, with determinable payment dates and the funds from which payment will be made are as follows:

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 114
Government Activities
For the Year
Ending June 30 Principal Interest Principal Interest Principal Interest 2023 980,000 $ 420,275 $ 9,655,000 $ 1,752,125 $ 4,703,152 $ 1,362,384 $ 2024 1,030,000 371,275 5,440,000 1,374,750 30,494,893 1,218,281 2025 1,085,000 319,775 5,795,000 1,093,875 10,476,995 1,119,831 2026 1,120,000 285,869 6,005,000 798,875 6,739,465 1,031,663 2027 1,150,000 249,469 6,320,000 490,750 6,822,310 953,203 2028-2032 5,700,000 598,800 6,655,000 166,375 59,930,499 2,785,327 2033 - - - - 7,610,000 51,748
$ 2,245,463 11,065,000 $ 39,870,000 $ 5,676,750 $ 126,777,314 $ 8,522,437 $ Business-Type Activities (excluding Santa Clara Stadium Authority) Lease and COPs Bonds Debt from direct borrowing
Principal Outstanding as Reported in Government Activities 11,065,000 $ Principal Outstanding as Reported in Business Type Activities 166,647,314 Total Principal Outstanding as Reported 177,712,314
Principal Outstanding - Stadium Authority(1) 280,313,692 Unamortized Discount/Premium 4,295,559
Total Long-term Obligations $ 462,321,565
(1) The principal outstanding for Stadium Authority is as of March 31, 2022. Please refer to Santa Clara Stadium Authority's separately issued Financial Statements Note 5 for details.

Reconciliation of Long-term Obligations
F. Debt Limitations and Restrictions
The amounts of the City’s legal debt limit and debt margin (as defined by Section 1309 of the City Charter) as of June 30, 2022, is $7.8 billion. There are a number of limitations and restrictions contained in the various bond indentures. The City is in compliance with all significant limitations, covenants, and restrictions.

G. Arbitrage
According to the regulations set forth by the U. S. Treasury Department, for bond issues subject to arbitrage rebate, earnings in excess of the stated bond rate must be rebated to the federal government every five years.

As of June 30, 2022, the City has twelve outstanding bond issues that are subject to the arbitrage rebate regulations. The City monitors the earnings on each of these issues and records any accrued rebate liability at the end of each individual bond year.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
115
NOTE 11 - SOLID WASTE LANDFILL CLOSURE
The City of Santa Clara All Purpose Landfill (Landfill) was closed in September 1993. Federal and state laws and regulations require closure activities such as removal of landfill structures, decommissioning of environmental control systems, site security, and final cover construction and postclosure care such as ongoing monitoring of environmental impact. The City's postclosure plan (Plan) accepted by the California Integrated Waste Management Board, which is now the California Department of Resources Recycling and Recovery (CalRecycle), addresses all the attendant issues. Based on the Plan and pertaining laws and regulations, an estimated Landfill Postclosure Care Cost Obligation is recorded and updated annually. The postclosure care liability is accrued in the Solid Waste Enterprise Fund in accordance with GAAP. This obligation is payable from solid waste user fees.

The City also has a Pledge of Revenue Agreement establishing financial assurance for postclosure maintenance of the Landfill with CalRecycle, which was adopted on October 12, 1999. Financial assurance in the amount of $600,000 will be maintained in a separate account. In addition, the agreement requires funds to be pledged annually for post-closure maintenance and corrective action costs.

The City has pledged $245,000 for postclosure maintenance expenses and $209,000 for corrective action in 2022-23. These amounts are subject to annual inflation factors, as stipulated by CalRecycle.

At June 30, 2022, a liability in the amount of $6,205,986 was reported based on the estimated remaining postclosure care costs to meet the regulatory requirements. During fiscal year 2022, the City incurred postclosure expenses of $850,531 and increased the liability by $1,361,458 based on revised estimates of future costs. The estimated liability is based on the amount that would be paid if all equipment, facilities, and services required to monitor and maintain the landfill were acquired as of June 30, 2022. However, the actual cost of postclosure care and corrective action may be higher or lower due to inflation, changes in technology, or changes in landfill laws and regulations.

NOTE 12 – PARTICIPATION IN JOINT VENTURES
A. Investments in Joint Venture
The City participates in significant joint ventures: Northern California Power Agency (NCPA), the Transmission Agency of Northern California (TANC), San Jose-Santa Clara Water Pollution Control Plant and Clean Water Financing Authority (SJSC), M-S-R Energy Authority (MSR EA), M-S-R Public Power Agency (MSR PPA) and Silicon Valley Animal Control Authority (SVACA).

The separately issued financial statements of these joint ventures (as noted below) are available on request.

Date of latest audited
financial statement Joint Venture’s address
NCPA 6/30/2021 651 Commerce Dr. Roseville, CA 95678
TANC 6/30/2021 P.O. Box 15129 Sacramento, CA 95851
SJSC 6/30/2021 200 E. Santa Clara St. San Jose, CA 95113 MSR EA 12/31/2021 P.O. Box 4060 Modesto, CA 95352
MSR PPA 12/31/2021 P.O. Box 4060 Modesto, CA 95352
SVACA 6/30/2021 3370 Thomas Road Santa Clara, CA 95051

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
116
The City’s basic financial statements reflect the following investments in joint ventures as of June 30, 2021 (latest information available):

Participating
percentage Investment
Method of
accounting
NCPA
Geothermal 44.39%
Hydroelectric 37.02%
Combustion Turbine 41.67%
Lodi Energy Center 25.75%
TANC 9.64% 6,185,241 Equity
SJSC (1) 19.46% 280,257,540 Equity
MSR EA 33.40% - Suspended
MSR PPA 35.00% 7,904,404 Equity (2)
SVACA 56.50% 5,485,729 Equity
Total $343,055,511
(1) The investment in San Jose/Santa Clara Regional Wastewater Facility includes the current year capital contribution. (2)
$43,222,597 Equity
The equity method of accounting for investment in MSR PPA was suspended prior to fiscal year ended June 30, 2021.

Starting in fiscal year 2022, equity method was used for SVP's investment with MSR PPA.

B. Contingent Liability
Under the terms of the various joint venture agreements, the City is contingently liable for a portion of the long-term debt of the entities under take-or-pay agreements, letters of credit, guarantees or other similar agreements. Sewer revenue bonds issued by the San Jose-Santa Clara Clean Water Financing Authority were no longer outstanding as they were fully redeemed on November 15, 2020. Based on the most recent audited financial statements of the individual joint ventures as of June 30, 2021, the City was contingently liable for long-term debt as follows (in thousands):

Total Participating Contingent
Debt Share Liability
NCPA 597,178 $ 33.00% 197,084 $
TANC 169,945 9.65% 16,402
MSR PPA 26,425 35.00% 9,249
Total 793,548 $ $ 222,735
In addition, the City would, under certain conditions, be liable to pay a portion of the costs associated with the operations of the entities. Under certain circumstances, such as default or bankruptcy of the other participants, the City may also be liable to pay a portion of the debt of these joint ventures on behalf of those participants and seek reimbursement from those participants.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
117
Take-or-Pay commitments expire upon final maturity of outstanding debt for each project. Final fiscal year debt expirations as of June 30, 2021 are as follows:

Entitlement Debt Service
Project Debt Expiration Share % Share %
NCPA - Geothermal Project (NGP) July-2024 44.3905% 44.3905% NCPA - Hydroelectric Project (NHP) July-2032 37.0200% 37.0200% NCPA - Lodi Energy Center (NLEC) (1) June-2040 25.7500% 30.9657% TANC - CA-OR Transmission Project (COTP) May-2039 9.7386% 9.6512% MSR PPA - San Juan Plant July-2022 35.0000% 35.0000%
(1) The SVP's debt service share in NLEC on issue one is 46.1588%, on issue two is 0%.

A summary of the City’s “Take-or-Pay” contracts and related projects and its contingent liability for the debt service including principal and interest payments at June 30, 2021 is as follows (latest information available):

Fiscal Year NGP NHP NLEC COTP MSR PPA Total
2022 2,197,534 $ 12,858,730 $ 7,566,771 $ 1,003,698 $ 9,711,100 $ 33,337,833 $ 2023 2,198,863 12,870,163 7,567,678 1,008,307 23,645,011 2024 1,541,819 14,375,558 7,565,130 1,348,027 - 24,830,534 2025 1,545,765 14,399,154 7,565,513 1,465,120 - 24,975,552 2026 - 7,912,261 7,581,031 1,464,903 - 16,958,195
2027-2031 - 39,516,428 38,615,584 7,324,369 - 85,456,381 2032-2036 - 17,218,945 38,621,715 7,324,877 - 63,165,537 2037-2041 - - 37,973,144 4,394,758 - 42,367,902
Total 7,483,981 $ 119,151,239 $ 153,056,566 $ 25,334,059 $ 9,711,100 $ 314,736,945 $ C. Northern California Power Agency (NCPA)
NCPA was formed in 1968 as a joint powers agency in the State of California. Its membership consists of sixteen public agencies. NCPA is generally empowered to sell, purchase, generate, transmit, manage electrical energy and provide regulatory and legislative advocacy. Members participate in the projects of NCPA on an elective basis. Therefore, the participation percentage varies for each project in which it participates.

A Commission comprised of one representative for each member governs NCPA. The Commission is responsible for the general management of the affairs, property, and business of NCPA. Under the direction of the General Manager, the staff of NCPA is responsible for providing various administrative, operating and planning services for NCPA and its associated power corporations.

Project Financing and Construction
NCPA’s project construction and development programs have been individually financed by project revenue bonds collateralized by NCPA’s assignment of all payments, revenues and proceeds associated with its interest in each project. Each project participant has agreed to pay its proportionate share of debt service and

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
118
other costs of the related project, notwithstanding the suspension, interruption, interference, reduction or curtailment of output from the project for any reason. Certain of the revenue bonds are additionally supported by municipal bond insurance credit enhancements.

Hydroelectric Project
NCPA is contracted to finance, manage, construct, and operate Hydroelectric Project Number One for the licensed owner, Calaveras County Water District (CCWD). In exchange, NCPA has the right to the electric output of the project for 50 years from February 1982. NCPA also has an option to purchase power from the project in excess of the CCWD’s requirements for the subsequent 50 years, subject to regulatory approval.

The Agency has modified both steam turbine units and the associated steam collection system to enable generation with lower pressure steam at higher mass-flow rates to optimize the utilization of the available steam resource. In fiscal year 2019-20, NCPA began a well-workover program to restore underperforming wells.

Based upon current operation protocols and forecasted operations, NCPA expects average annual generation and peak capacity to decrease further, reaching approximately 68 MW by the year 2040.

Combustion Turbine Project No. 1
NCPA owns five dual (natural gas and fuel oil) combustion turbine units, each of which is nominally rated at 25 MW, which are collectively known as the Combustion Turbine Project No. 1. These units were completed in 1986 and are designed to provide peak power and reserve requirements and emergency support.

Each purchaser is responsible under its power sales contract for paying an entitlement share in Combustion Turbine Project No. 1 of all NCPA’s costs of such project.

Lodi Energy Center
On May 24, 2010, SVP entered into an agreement with NCPA for a 25.75% interest in the Lodi Energy Center, a 280 MW combined cycle natural gas fired power plant, located in Lodi, California. The project received approval from the California Energy Commission in April 2010 and was placed into operation in November 2012. In January 2020, the Lodi Energy Center suffered a catastrophic turbine failure. NCPA replaced the turbine with a newer state-of-the-art turbine which could use hydrogen as a cleaner fuel source.

The majority of the replacement cost was covered by NCPA’s insurance resulting in relatively minimal financial impact to project participants.

D. Transmission Agency of Northern California (TANC)
TANC was organized under the California Government Code pursuant to a joint powers agreement entered into by 15 Northern California utilities. The purpose of TANC is to provide electric transmission and other

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
119
facilities for the use of its members through its authority to plan, acquire, construct, finance, operate and maintain facilities for electric power transmission. The joint powers agreement provides that the costs of TANC’s activities can be financed or recovered through assessment of its members or from user charges through transmission contracts with its members. Each TANC member has agreed to pay a pro-rata share of the costs to operate TANC and for payment of debt service, and has the right to participate in future project agreements.

The joint powers agreement remains in effect until all debt obligations and interest thereon have been paid, unless otherwise extended by the members.

California-Oregon Transmission Project
TANC is a participant and also the Project Manager of the California-Oregon Transmission Project (Project), a 340-mile long, 500-kilovolt alternating current transmission project between Southern Oregon and Central California. As Project Manager, TANC is responsible for the overall direction and coordination of all Project operations and maintenance, additions and betterments, and for general and administrative support.

As of June 30, 2021, the most recent data available, TANC’s investment in the Project was $546.5 million, less accumulated depreciation and amortization of $290.3 million.

In connection with its participation in the Project, TANC has an entitlement balance of the Project’s transfer capability of approximately 1,362 megawatts and is obligated to pay an average of approximately 80% of the operating costs associated with the Project. TANC incurred and initially capitalized all costs for project construction since they were expected to be recovered through reimbursement from Project participants and from the successful operations of the Project’s transmission lines. The Project agreement among the participating members provides that each member agrees to make payments, from its revenues, to TANC for project costs incurred and for payment of debt service.

Santa Clara has historically been obligated to pay 20.47% of TANC’s COTP operating and maintenance expenses and 20.70% of TANC’s COTP debt service and 22.16% of the Vernon acquisition debt. Santa Clara has also been entitled to 20.4745% of TANC’s share of COTP transfer capability (approximately 278 MW net of third party layoffs of TANC) on an unconditional take-or-pay basis. Starting on July 1, 2014 Santa Clara laid-off 147 MWs of this entitlement to other TANC members under a 25 year agreement.

During the term of this agreement the parties taking on the entitlement will pay all associated debt service, operations and maintenance costs, and all administrative and general costs. Santa Clara’s portion of the operating and maintenance expenses and the COTP debt service is 10.004 %.

E. San Jose/Santa Clara Regional Wastewater Facility and Clean Water Financing Authority (SJSC)
The City and the City of San Jose jointly own the San Jose/Santa Clara Regional Wastewater Facility, (RWF). The RWF provides wastewater treatment services to Santa Clara, San Jose, and seven other tributary agencies. The City of San Jose is the administering agency for the RWF. The San Jose/Santa Clara Clean

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
120
Water Financing Authority (Authority) was created in 1981 to provide financing for capital improvements at the RWF.

In 1959, the City and the City of San Jose entered into an agreement to construct and operate the RWF, (formerly referred to as the San Jose/Santa Clara Water Pollution Control Plant). Under the terms of the agreement, the cities own an undivided interest in the RWF and share in the capital and operating costs on a pro rata basis, determined by the ratio of each city’s assessed valuation to the sum of both cities assessed valuations. Such percentages are determined annually and applied to the capital and operating costs of the RWF, determined on an accrual basis. For the fiscal year ended June 30, 2021, the City’s portion of the plant capacity was approximately 19.46%, which is also its interest in the net position of the RWF.

Zero Waste Energy Development Company Ground Lease
On June 21, 2011, the San Jose City Council approved a ground lease with Zero Waste Energy Development Company (ZWED) to lease a portion of the former Nine Par landfill, which is a part of the San Jose/Santa Clara Regional Wastewater Facility lands. ZWED would lease the property in three phases. Under the terms of the proposed lease, ZWED will lease 40.7 acres from the City of San Jose for an initial term of seven years from the date of execution for all three leaseholds. The base rent for the initial phase (Phase 1) of the property would be payable as a proportional credit against the expenditure of site development costs estimated at $11.8 million or as a payment of $850,000 per year. Rent for the subsequent phases will be based on the amount of organic waste processed at the facility. Over the 30-year life of the lease, the estimate payment is a minimum of $16.5 million. The incoming revenue will be distributed between the City of Santa Clara, City of San Jose, and the tributary agencies to the RWF based on the master agreements with each agency.

South Bay Water Recycling Program
The South Bay Water Recycling Program (SBWR), a regional water reclamation program, is part of an action plan adopted by the Regional Water Quality Control Board (RWQCB) which limits the RWF on the amount of effluent discharged into San Francisco Bay in order to prevent conversion of salt marsh and destruction of endangered species habitat. Flow limits are not included in the current five year permit from the RQWCB. SBWR has a master plan to guide the continued operation and potential expansion of the SBWR in the absence of the previous regulatory drivers. The master plan was completed in December of 2014 and accepted by the City of San Jose and the Santa Clara Valley Water District during fiscal year 2014-

15. Under the previously approved action plan, SBWR was required to reclaim 21.1 million gallons per day (MGD) of plant effluent for nonpotable use by November 1, 1997, (Phase 1) and an additional 24.30 MGD by December 31, 2000 (Phase 2). The action plan also requires assessment of alternatives for potable reuse, including a potable pilot plant to be coordinated with the Santa Clara Valley Water District. In addition to habitat preservation, the project reduces the mass trace contaminates discharged to the San Francisco Bay and provides a reliable source of water to offset potable water demands. The current master plan recognizes that primary drivers for the continued operation and expansion of the recycled water system are based in the need for water supply, rather than wastewater discharge reduction.

When first built, the SBWR distribution system included approximately 67 miles of pipe, a four million gallon reservoir, a transmission pump station, and two booster pump stations. These facilities were constructed between 1996 and 1998 at a capital cost of approximately $140 million funded by the tributary

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
121
agencies, grants and bond proceeds. Santa Clara’s share of Phase 1 costs was approximately $20.07 million.

Within Santa Clara, seven miles of distribution mains were added to the system in 2010 and 2011 and the entire SBWR distribution system now consists of over 140 miles of pipeline.

Proceeds from the City of San Jose 1995 Series A and B Bonds and other funds were used to pay for the City of San Jose’s share of Phase 1. The City contributed existing capital reserves, existing recycled water distribution system, and additional construction of system extensions. Other sources for funding of Phase 1 include U.S. Bureau of Reclamation grants, State of California Revolving Fund loans, $6.45 million transferred in fiscal year 1995 from the Clean Water Financing Authority to the City of San Jose Wastewater Treatment Plant Capital Fund, and cash contributions from other participating agencies. The 2010 and 2011 extensions of the distribution system were funded in part by a combination of grants from the American Recovery and Reinvestment Act of 2009 (ARRA) and the United State Bureau of Reclamation totaling $10.4 million.

In June 1997, the RWQCB approved the Proposed Revision to the South Bay Action Plan (the Plan), which describes the projects necessary to reduce average dry weather effluent flow from the RWF to below 120 MGD and protect salt marsh habitat for endangered species in the South Bay as required by RWQCB Order 94-117. These projects include expanding the Phase 1 nonpotable water distribution system by extending additional piping, placing greater emphasis on water conservation programs, reducing infiltration inflow, augmenting stream flow, and creating wetlands. The estimated costs of $127.5 million has been funded through a combination of State Revolving Fund loans, Equipment Replacement Reserves, Sewage Treatment Plant Connection Fees, federal grants, in-kind services and cash contributions.

F. M-S-R Public Power Agency (MSR PPA)
MSR PPA is a joint power agency formed in 1980 by the Modesto Irrigation District, the City and the City of Redding, California, to develop or acquire and manage electric power resources for the benefit of the members. The personnel of its members and contract professional staff perform the administrative and management functions of MSR PPA. The member’s income and expense sharing ratio is as follows:

Modesto Irrigation District – 50%; City of Santa Clara – 35%; and City of Redding – 15%.

Prior to fiscal year ended December 31, 2020, SVP’s equity in MSR PPA’s net losses exceeds its investments and, therefore, the equity method of accounting for the investment was suspended. As of December 31, 2021, the date of the latest available audited financial statements, SVP was in a positive equity position of $7.9 million. The equity method of accounting of SVP’s investment in MSR PPA was applied.

Under the joint exercise of power agreement, which formed MSR PPA, the City is responsible for funding up to 35 percent of MSR PPA’s operating cost, to the extent such funding is necessary. During the year ended June 30, 2022, the City made no contributions to fund its share of operating deficits. If there were such contributions, they would be included in the Electric Utility Enterprise Fund expenses.

MSR PPA’s principal activity is a 28.8% ownership interest in a 507-megawatt unit of a coal-fired electricity generating plant located in New Mexico (San Juan Plant). The San Juan plant was jointly owned by the Public Service Company of New Mexico (PNM) (38.5%), MSR PPA (28.8%) and other municipal power entities (32.7%). On December 31, 2017, MSR PPA divested its ownership interest in the San Juan plant and no longer receives electric energy or capacity from the San Juan Generating Station.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
122
In 2006, MSR PPA entered into a Wholesale Purchase and Sale Agreement and a Shaping and Firming Agreement with Avangrid Renewables, Inc. to provide renewable wind energy to the Members from the Big Horn I Wind Energy Project (Big Horn I Project) with a nominal installed capacity of approximately 199.5 MW. The City receives the power purchased by MSR PPA from the Big Horn I Project. The City’s share equates to approximately a 105 MW share of the output at a cost comparable to combined cycle gas-fuel generation. Power deliveries commenced on October 1, 2006 and will continue through September 30, 2026.

Through an amendment of the original agreements MSR PPA has an obligation to continue to take the same output through September 30, 2031, or if the Big Horn Project is repowered MSR PPA will have a right of first offer to negotiate a long-term power purchase for such repowered project. The participation in this project is as follows: Modesto Irrigation District – 12.5%; City of Santa Clara – 52.5%; and City of Redding – 35%.

In 2009, MSR PPA entered into a Power Purchase Agreement and Redelivery Agreement with Avangrid Renewables Inc. to purchase additional wind power energy from the same site, called Big Horn II, with a nominal installed capacity of 50 MW for a twenty-year period. Deliveries of energy under this project began on November 1, 2010. The participation in this project is as follows: Modesto Irrigation District – 65%; City of Santa Clara – 35%.

M-S-R PPA San Juan
In 2015, the MSR PPA Commission approved a number of agreements (the “San Juan Restructuring Agreements”) to provide for the interests of MSR PPA and certain other San Juan Participants (the “exiting participants”) in the San Juan Generation Station to be transferred to the remaining San Juan Participants effective December 31, 2017. In addition to the ownership divesture, the San Juan Restructuring Agreements provide for, among other things, the allocation of ongoing responsibility for decommissioning costs, mine reclamation costs and any environmental remediation obligations among the exiting participants and the remaining San Juan Participants, and the establishment and funding of mine reclamation and plant decommissioning trust funds. The San Juan Restructuring Agreements were subsequently executed by all nine San Juan Generation Station owners and PNM Resources Development Company (a non-utility affiliate of PNM) and, following receipt of regulatory approvals, became effective on January 31, 2016. Various other implementing agreements and amendments to existing San Juan project agreements to effect the restructuring have also been executed. Closing of the ownership restructuring of the San Juan Generation Station and the divestiture of MSR PPA’s interests in San Juan Unit No. 4 was completed on schedule on December 31, 2017.

G. M-S-R Energy Authority (MSR EA)
MSR EA is a joint power agency formed in 2008 by the Modesto Irrigation District, the City of Santa Clara, and the City of Redding, California, to develop or acquire and manage natural gas resources for the benefit of the members. The personnel of its members and contract professional staff perform the administrative and management functions of MSR EA. The member’s income and expense sharing ratio is as follows: Modesto Irrigation District – 33.3%; City of Santa Clara – 33.4%; and City of Redding – 33.3%.

The City’s equity in MSR EA’s net losses exceeds its investment and, therefore, the equity method of accounting for the investment has been suspended. As of December 31, 2021, the date of the latest available audited financial statements, the City’s unrecognized share of member’s deficit of MSR EA was $27.2 million. Under the joint exercise of power agreement, which formed MSR EA, the City is responsible for

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
123
funding up to 33.4% of MSR EA’s operating cost, to the extent such funding is necessary. During the year ended June 30, 2022, the City made no contributions to fund its share of operating deficits. If there were such contributions, they would be included in the Electric Utility Enterprise Fund expenses.

The agreement provides this supply at a discounted price below the spot market price (the Pacific Gas & Electric City gate index) over the next 30 years. As of December 31, 2021, bonds issued by MSR EA to finance the City’s share of the Gas Prepay Project were outstanding in the principal amount of $500,200,000.

These bonds were initially sold on August 27, 2009. Under the Gas Supply Agreement, MSR EA will bill the City for actual quantities of natural gas delivered each month on a “take-and-pay” basis. MSR EA has contracted with Citigroup Energy, Inc. (“CEI”) to use the proceeds of the Gas Prepay bond issue to prepay CEI for natural gas. CEI has guaranteed repayment of the bonds, and responsibility for bond repayment is non-recourse to the City of Santa Clara. Moreover, any default by the other Gas Prepay Project participants is also non-recourse to the City.

H. Silicon Valley Animal Control Authority
The City is a member of the Silicon Valley Animal Control Authority, (SVACA), established in 2000 to deliver animal control and sheltering services to three communities: the cities of Santa Clara, Campbell, and Monte Sereno. SVACA provides field and shelter services and staffing to support adoption and spay/neuter programs. SVACA purchased and retrofitted an existing cold-shell office building in Santa Clara that became a fully operating animal shelter. The shelter opened in the third quarter of 2006. SVACA is governed by a Board of Directors comprised of one appointed Councilmember from each of the four member cities.

During the fiscal year ended June 30, 20222, the City of Santa Clara contributed $1,062,366 to SVACA. The City’s equity interest in SVACA was $5,485,729 at June 30, 2021 (the most recent audited information available). Audited financial statements are available from SVACA, located at 3370 Thomas Road, Santa Clara, CA 95051.

NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN A. Plan Description
The City contributes to the California Public Employees Retirement System (CalPERS), an agent multipleemployer defined benefit plan, which is a public employee retirement system that acts as a common investment and administrative agent for participating public entities within the State of California. CalPERS offers a menu of benefit provisions and other requirements that are established by State statutes within the Public Employee Retirement law. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance. CalPERS issues a separate Annual Comprehensive Financial Report. Copies of the CalPERS’ annual financial report may be obtained from the CalPERS website at www.calpers.ca.gov.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 124
The City’s defined benefit pension plans for Miscellaneous and Safety employees with CalPERS provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. All permanent (full-time and part-time) and eligible “as-needed” hourly City employees are required to participate in CalPERS. Employees fall under two categories, Classic and PEPRA. Employees hired on or before December 31, 2012 are considered Classic PERS members. Employees hired on or after January 1, 2013 fall into the PEPRA PERS members.

B. Pension Plan Benefits
On September 12, 2012, the State of California passed Assembly Bill (AB) 340, which created the Public Employees’ Pension Reform Act (PEPRA). PEPRA implemented new benefit formulas and final compensation period, as well as new contribution requirements for new employees hired on or after January 1, 2013 who meet the definition of new member under PEPRA. Please refer to the Pension Reform section of the CalPERS website for more information regarding when an employee will be considered a new member under PEPRA.

Benefits for employees in the Miscellaneous Plan and Safety Plan vest after five years of CalPERS credited service. The retirement benefits are based on the retiree’s age, years of CalPERS credited service, and benefit factor of 2.7% at 55 for the Classic Miscellaneous Plan members and 3% at 50 for the Classic Safety Plan members. For members under PEPRA, the benefit factor is reduced to 2% at 62 for the Miscellaneous Plan and 2.7% at 57 for the Safety Plan.

Miscellaneous Plan
Participants in this plan are eligible for service retirement and receive graduated benefits upon attaining the age of 50 and with at least five years of credited service with a CalPERS employer. The service retirement benefit is a monthly allowance equal to the product of the benefit factor (2.7% at 55 for Classic members or 2% at 62 for PEPRA members), years of service, and final compensation (monthly average of member’s highest 12 or 36 (for new members) consecutive months full-time equivalent monthly pay). The service retirement benefit for this group is not capped. The compensation limit for Classic members for the 2022 calendar year is $305,000. Employees with membership dates prior to July 1, 1996 are not impacted by this limit. The compensation limit for PEPRA for calendar year 2022 is $134,974 for employees covered by Social Security and is adjusted annually with the CPI for all Urban Consumers.

Safety Plan
Participants in this plan are eligible for service retirement upon attaining the age of 50 and with at least five years of credited service with a CalPERS employer. The service retirement benefit is a monthly allowance equal to the product of the benefit factor (3% at 50 for Classic members or 2.7% at 57 for new members), years of service, and final compensation. For Classic Fire Safety employees, the final compensation is the monthly average of member’s highest 36 consecutive months full-time equivalent monthly pay for both Classic and new members, and for Classic Police Safety employees, it is the monthly average of the member’s highest 12 or 36 (for new members) consecutive months full-time equivalent monthly The service retirement benefit for the Safety Plan group is capped at 90% of final compensation for the Classic members. PEPRA members have an annual compensation limit on reportable earnings. The compensation limit for calendar year 2022 is $161,969 for employees not covered by Social Security and is adjusted annually with the CPI for all Urban Consumers.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 125
The Plans provisions and benefits in effect at June 30, 2022 are summarized as follows:

Hire date
Prior to
January 1,
2013
On or After
January 1,
2013
Prior to
January 1,
2013
On or After
January 1, 2013
Benefit formula 2.7% @ 55 2.0% @ 62 3.0% @ 50 2.7% @ 57 Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life monthly for life Retirement age 50 - 55 52 - 67 50 50 - 57
Monthly benefits, as a % of
eligible compensation 2.00% - 2.70% 1.00% - 2.50% 3.00% 2.00% - 2.70% Required employee contribution rates 8.00% 6.50%
Public Safety - Fire 9.00% 11.75%
Public Safety - Police 9.00% 11.75%
Required employer contribution rates 11.160% 11.160% 21.230% 21.230% Required unfunded liability contribution
Miscellaneous Safety
$24,570,525 $20,872,387
Beginning in fiscal year 2015-16, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability. The dollar amounts are billed on a monthly basis. The City’s required contribution for the miscellaneous plan’s unfunded liability was $24,570,525 in fiscal year 2021-22. The City’s required contribution for the safety plan’s unfunded liability was $20,872,387 in fiscal year 2021-22.

Employees Covered
At the valuation date, June 30, 2020 and measurement date June 30, 2021, the following employees were covered by the benefits terms for each Plan:

Miscellaneous Safety
1,026 497
539 78
Active employees 741 289
Total 2,306 864
Inactive employees or beneficiaries currently
receiving benefits
Inactive employees entitled to but not yet
receiving benefits

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 126
C. Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 20222, the City’s contributions to the miscellaneous and safety plans were $34,126,897 and $32,084,531, respectively.

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

Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Payroll Growth
Projected Salary Increase
Investment Rate of Return (1)
Post Retirement Benefit Increase
Mortality (2)
(1) Net of pension plan investment and administrative expenses; including inflation All Plans
June 30, 2020
June 30, 2021

7.15%

2.50%
Entry-Age Normal Cost Method
Derived using CalPERS' membership data for all funds
(2) The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS' December 2017 experience study report available on CalPERS' website.

The lesser of Contract COLA or 2.5% until Purchasing Power applies, 2.5% thereafter

2.75%
Varies by Entry-Age and Service

7.15%

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 127
The underlying mortality assumptions and all other actual assumption used in the June 30, 2020 valuation were based on the results of a December 2017 actuarial experience study for the period 1997 to 2015.

Further details of the Experience Study can be found on the CalPERS website.

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

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

In determining the long-term expected rate of return, CalPERS took into account both short-term and longterm market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ assets classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The table below reflects the long-term expected real rates of return by asset class.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 128
Asset Class (1)
Assumed Asset
Allocation
Real Return
Years 1 - 10 (2)
Real Return
Years 11+ (3)
Public Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Assets - 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Assets 13.00% 3.75% 4.93%
Liquidly 1.00% - -0.92%
100.00%
(2) An expected inflation of 2.00% used for this period. (3) An expected inflation of 2.92% used for this period. (1) In the CalPERS Annual Comprehensive Financial Report, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-Term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.

E. Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan follows:

Miscellaneous Plan:

Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability/(Asset)
Balance at June 30, 2020 measurement date $ 799,410,972 $ 494,872,454 $ 304,538,518 Changes in the year:

Service cost 15,428,984 - 15,428,984
Interest on the total pension liability 56,183,036 - 56,183,036 Differences between expected and actual
experience - 1,328,853 1,328,853
Contributions - employer - 31,272,528 (31,272,528)
Contributions - employees - 6,333,120 (6,333,120)
Net investment income - 112,780,714 (112,780,714)
Benefit payments, including refunds of
employee contributions (45,355,148) (45,355,148) -
Administrative expense - (494,347) 494,347
Net changes 27,585,725 104,536,867 (76,951,142)
Balance at June 30, 2021 measurement date $ 599,409,321 826,996,697 $ 227,587,376 $ Increase (Decrease)

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 129
Safety Plan:

Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability/(Asset)
Balance at June 30, 2020 measurement date $ 835,779,951 $ 541,301,220 $ 294,478,731 Changes in the year:

Service cost 15,750,690 - 15,750,690
Interest on the total pension liability 59,165,587 - 59,165,587 Differences between expected and actual
experience - 7,316,002 7,316,002
Contributions - employer - 29,084,516 (29,084,516)
Contributions - employees - 5,742,937 (5,742,937)
Net investment income - 122,207,114 (122,207,114)
Benefit payments, including refunds of
employee contributions (46,961,121) (46,961,121) -
Administrative expense - (540,727) 540,727
Net changes 35,271,158 109,532,719 (74,261,561)
Balance at June 30, 2021 measurement date $ 650,833,939 871,051,109 $ 220,217,170 $ Combined Total $ 1,250,243,260 1,698,047,806 $ 447,804,546 $ Increase (Decrease)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Miscellaneous Safety
1% Decrease 6.15% 6.15%
Net Pension Liability 329,339,664 $ 344,044,055 $
Current Discount Rate 7.15% 7.15%
Net Pension Liability 227,587,376 $ 220,217,170 $
1% Increase 8.15% 8.15%
Net Pension Liability 142,776,616 $ 126,402,796 $
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 130
F. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2022, the City recognized pension expense of $19,461,190 for the Miscellaneous Plan and $22,687,233 for the Safety Plan, for total pension expense of $42,148,423.

At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Plan:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to measurement date 34,126,897 $ - $ Changes of assumptions - -
Differences between expected and actual experience 6 - ,174,491 Net differences between projected and actual earnings
on pension plan investments (56,772,710) -
Total $ (56,772,710) 40,301,388 $
Safety Plan:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to measurement date 32,084,531 $ - $ Changes of assumptions (158,754) -
Differences between expected and actual experience 1 - 3,963,503 Net differences between projected and actual earnings
on pension plan investments (61,140,875) -
Total $ (61,299,629) 46,048,034 $
Combined Total $ (118,072,339) 86,349,422 $

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 131
The reported $34,126,897 for the Miscellaneous Plan and $32,084,531 for the Safety Plan deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized as pension expense as follows:

Measurement Period
Ended June 30
Miscellaneous Plan
Annual Amortization
Safety Plan
Annual Amortization
2022 (10,165,196) $ (9,414,056) $
2023 (11,466,512) (9,286,380)
2024 (13,417,009) (12,180,424)
2025 (15,549,502) (16,455,266)
G. Subsequent Events
On July 12,2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21.

Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of .20% from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.

On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction of administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from

2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.

NOTE 14 – RETIREMENT PLAN - DEFINED CONTRIBUTION PLAN
The City’s Public Agency Retirement System Plan (PARS Plan) is a compulsory retirement plan that qualifies under Section 401 of the Internal Revenue Code covering City employees who are not members of CalPERS. Under the provisions of the PARS Plan, the City makes no contributions; however, all administrative costs of the plan are funded by the City. The PARS Plan administrator is Phase II Systems.

The total assets of the PARS Plan are held in trust for the employees and are not included in the City’s assets or equity.

NOTE 15 – DEFERRED COMPENSATION PLAN
City employees may defer a portion of their compensation under a City sponsored deferred compensation plan created in accordance with Internal Revenue Code Section 457. Under this plan, participants are not

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 15 – DEFERRED COMPENSATION PLAN (continued)
132
taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, death or in an emergency as defined by the Internal Revenue Service.

The Plan is part of the public agency agent multiple-employer defined contribution plan that is administered by Nationwide. Benefit provisions under the Plan are established by City Resolution.

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

The City has no liability for any losses incurred by the Plan and does not participate in any gains, but does have the duty of due care that would be required of an ordinary prudent investor. The City has a contract with Nationwide to manage and invest the assets of the Plan. The administrator pools the assets of the Plan with those of other participants and does not make separate investments for the City. The assets in the Plan are the sole property of the participants or their beneficiaries. Since the assets held under the Plan are not the City’s property and are not subject to claims by general creditors of the City, they have been excluded from these financial statements. The Plan requires investments to be stated at fair market value and it requires all gains and losses on Plan investments to accrue directly to participant accounts.

Under the terms of the Memorandum of Understanding (MOU) with the Police Officers Association Unit 2, Police Officers Association Recruits Unit 2R, and the Unclassified Police Management Association, the City is required to make a monthly contribution of $150 to each employee and under the MOU with the Public Safety Non‐Sworn Employees Association Unit 10, the City is required to make a monthly contribution of $100 to each employee. The City’s required contributions for the year ended June 30, 2022 totaled $308,435.

NOTE 16 – OTHER POST EMPLOYMENT BENEFITS
A. Plan Description
The City’s agent multiple-employer defined benefit Other Post Employment Benefit (OPEB) Plan, which was established by City Council in fiscal year 2007-08 in accordance with GAAP, provides reimbursements to retirees for qualified expenses. Employees who have retired from the City with at least ten years of service and meet certain criterion based upon retirement date, household income in the most recent calendar year and age are entitled to reimbursements for qualified expenses. Annual maximum reimbursement amounts differ depending on when an employee retired from City service. The majority of retirees may be eligible for a maximum of $4,626 in annual reimbursements. Amendments to benefit provisions are negotiated by the various bargaining units at the City and must be approved by Council. In fiscal year 2007- 08, the City established an irrevocable exclusive agent multiple-employer defined benefit trust which is administered by Public Agency Retirement Services (PARS). The City is the Plan administrator, and PARS administers the investment trust for the City’s Plan. The trust is used to accumulate and invest assets necessary to reimburse retirees. Separate financial reports are issued by PARS for the OPEB Plan Trust. The report can be obtained by writing to PARS at 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660, or by calling 1-800-540-6369.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
133
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEB plan and additions to and deduction from the OPEB’s fiduciary net position have been determined on the same bases. For this purpose OPEB benefit payments are recognized when currently due and payable in accordance with the benefits terms. Investments are report at fair value.

Generally accepted accounting principles require that the reporting results must pertain to liability and asset information within certain defined timeframes. For the fiscal year 2021-22, the following time frames were used.

Measurement Date
Measurement Period
Actuarial valuation date (1)
June 30, 2022
June 30, 2020
July 1, 2021 to June 30, 2022
(1) Update procedures were used to roll forward the Total OPEB liability from the valuation date to the measurement date.

B. Plan Membership
As of June 30, 2022, membership in the plan consisted of the following:

Number of
Covered Employees
661
281
Active employees 973
Total 1,915
Inactive employees currently receiving benefits
Inactive employees entitled to but not yet receiving
benefit payments
C. Contributions
The OPEB Plan trust annual contributions are based upon actuarial determine contributions. The contribution requirements are established and may be amended by the City Council. Plan members do not make contributions to the plan; the plan is funded entirely by employer contributions. For the fiscal year ending June 30, 2022 the City’s cash contributions were $4,054,583 in payments to the trust, $14,747 in administrative expenses paid outside of the trust, and the estimated implied subsidy was $999,000, for total contributions of $5,068,330.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
134
D. Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2022 and the total OPEB liability used to calculate the Net OPEB liability was determined by an actuarial valuation dated June 30, 2020, rolled forward to June 30, 2022 using standard actuarial methods, based on the following actuarial methods and assumptions:

Actuarial Assumptions
Actuarial Assumption
Actuarial valuation date
Discount rate
Inflation
Salary increases
Investment rate of return
Funding policy
Mortality, Disability,
Termination, and Retirement
Mortality Improvement
Healthcare cost trend rates
Healthcare participation for future
retirees - Cash subsidy
PEMHCA minimum only: Currently covered: 80%, Waived: 25% Healthcare participation for future
retirees - PEMHCA implied subsidy Currently covered: 80% Waived: 25%

2.75%
Medicare (Non-Kaiser) - 6.1% for 2022 scaling down to 4.0% in year 2076
PARS portfolio: Moderately Conservative
Non-Medicare - 7% for 2022, scaling down to 4.0% in year 2076 Mortality projected fully generational with Scale MP-2020 Aggregate 3%
Other plans: : Currently covered: 80%, Waived: 40%
CalPERS 1997-2015 Experience Study
Full pre-funding to PARS trust

5.25% at June 30, 2020
Medicare (Kaiser) - 5% for 2022 scaling down to 4.0% in year 2076 Significant Actuarial Assumptions Used in Total OPEB Liability Crossover analysis showed benefit payments always fully funded by plan assets
June 30, 2022 Measurement Date
June 30, 2020

4.75% at June 30, 2022

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
135
E. Discount Rate
The discount rates used to measure the total OPEB liability was 4.75% as of June 30, 2022. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rate equal to the actuarially determined contributions rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members.

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

Asset Class
Target
Allocation
Long-Term Expected
Real Rate of Return
Mutual Funds - Equity 29% 4.82%
Mutual Funds - Fixed Income 65% 1.47%
REIT'S 1% 3.76%
Cash and equivalent 5% 0.06%
100%
Expected Inflation 2.75%
Discount Rate 4.75%
F. Changes in the OPEB Liability
The changes in the Net OPEB liability and Fiduciary Net Position are as follows:
2022 2021
Total OPEB Liability $ 67,638 $ 65,587
Fiduciary Net Position (27,223) (28,877)
Net OPEB Liability $ 36,710 40,415 $
Plan Fiduciary Net Position as a
percentage of the Total OPEB Liability 40.2% 44.0%
Net OPEB Liability
(In Thousands)

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
136
The changes in Net OPEB details as follow:

Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability/(Asset)
Balance at June 30, 2021 measurement date 65,586 $ 28,876 $ 36,710 $ Changes in the year:

Service cost - 2,344 2,344
Interest - 3,145 3,145
Differences between expected and actual
experience - - -
Change in Assumption - - -
Contributions - employer (1) 5,068 - (5,068)
Net investment income (3,222) - 3,222
Benefit payments (3,437) (3,437) -
Administrative expense (62) - 62
Net changes (1,653) 2,052 3,705
Balance at June 30, 2022 measurement date $ 27,223 67,638 $ 40,415 $ (1) Includes implied subsidy of $999 thousand
Increase (Decrease)
Changes in Net OPEB Liability
(In Thousands)
G. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following table presents the net OPEB liability of the Plan as of June 30, 2022, calculated using the discount rate of 4.75%, as well as what the plan’s net OPEB liability would be if it were calculated using a discount rate that is 1% point lower or 1% point higher than the current rate. 1% Decrease Current Rate 1% Increase
(3.75%) (4.75%) (5.75%)
Net OPEB Liability 49,339 $ 40,415 $ 33,078 $
Sensitivity of Net OPEB Liability to Changes in Discount Rate (In Thousands)

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
137
H. Sensitivity of the Net OPEB Liability to Healthcare Cost Trend Rates The following table presents the net OPEB liability of the City, as of June 30, 2022, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1% point lower or 1% point higher than the current rate.
1% Decrease Current Rate 1% Increase
(6% Non-Medicare
4% Medicare decreasing
to 3.0% )
(7% Non-Medicare
5% Medicare decreasing
to 4.0% )
(8% Non-Medicare
6% Medicare decreasing
to 5.0% )
Net OPEB Liability 31,091 $ 40,415 $ 52,060 $
Sensitivity of Net OPEB Liability to Changes in Healthcare Care Trend Rates (In Thousands)
I. OPEB Expense and Deferred Outflows and Inflows of Resources Related to OPEB For the year ended June 30, 2022, the City recognized OPEB expense as follows:
2022
Fund level expense $ 4,054
Actuarial Expense (343)
OPEB Expense $ 3,711
OPEB Expense
(In Thousands)
As of fiscal year ended June 30, 2022, the City reported deferred outflows as of resources related to OPEB from the following sources.

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Changes of assumptions $ 2,070 1,166 $
Differences between expected and actual experience - 806 Net differences between projected and actual earnings
on OPEB plan investments - 2,602
Total $ 2,876 3,768 $
Deferred Outflows and Inflows Balance
(In Thousands)

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
138
Amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:

For the Year ending June 30 Amount
2023 $ (489)
2024 (419)
2025 586
2026 1,148
2027 66
Recognition of Deferred Outflows and Inflows of Resources in Future OPEB Expense (In Thousands)
NOTE 17 – ELECTRIC UTILITY - SILICON VALLEY POWER (SVP) The City’s Electric Utility Department provides electricity to City residents and businesses under the name Silicon Valley Power (SVP).

A. Long-term Power Purchase Contracts
The City purchases wholesale electric power from various participants of the Western Systems Power Pool (WSPP), NCPA, MSR Public Power Agency (Note 12), Western Area Power Administration, and other sources to supply the power requirements of the City’s electric utility customers under long-term power purchase agreements (PPAs). The City actively manages the financial risks inherent in these PPAs, including the risks arising from the changing spot market prices that move above and below the contract prices and from contract disputes that may arise from time to time. The cost of power under PPAs is included in enterprise fund materials, services and supplies expense and excluded from wholesale resources purchase.

B. Restructuring of the California Electric Industry
Deregulation Legislation and Direct Access
The passage of AB1890 in 1998 triggered fundamental changes in the structure of the electric industry in California. Generally, AB1890 provided for creation of the California Power Exchange (Cal PX), which was to be a clearinghouse for energy transactions among investor-owned utilities, independent generators and power marketers, who in turn would serve so called direct-access customers. AB1890 also created the California Independent System Operator (CAISO), which was to manage the state’s bulk transmission grid.

However, in 2000 and 2001, the price of electricity at the Cal PX became extremely high, and investorowned utilities were unable to pay for the energy that they needed from the Cal PX. Eventually the Cal PX filed for bankruptcy and was dismantled. Investor-owned utility PG&E and several energy marketers would also file for bankruptcy and over a decade of litigation ensued.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 17 – ELECTRIC UTILITY – SILICON VALLEY POWER (SVP) (continued) 139
of 2000 and 2001. Along with balancing control area responsibility, the CAISO has also announced that it will take on the role of reliability coordinator for the region.

Energy Wholesale Trading and Risk Management
SVP participates in the wholesale gas and power market and the CAISO’s centralized market. Since CAISO’s Market Redesign and Technology Upgrade (MRTU), CAISO has become the ultimate buyer and seller in the California day ahead market. Therefore, SVP engages in the trading of commodity forward contracts (gas and electric energy contracts) to secure fuel supply and hedge daily power purchase/sales from/to CAISO. Activities during the fiscal year were substantially considered hedging transactions and, as such, have been accounted for using the settlement method of accounting. Accordingly, related gross sales and purchases totaling $36.0 million and $18.4 million, respectively, for fiscal year ended June 30, 2022, have been separately reported on the statement of revenues, expenses and changes in net position.

The restructured electric wholesale market exposes SVP to various risks including market, credit and operational risks. Active and effective management of these risks associated with the power trading activity is critical to its continued success and contribution to the entire utility. A Risk Management Committee, separate from the units that create the risk exposures, overseen by a Risk Oversight Committee that reports ultimately to the City Council, administers and monitors compliance with the risk policies and procedures on a regular basis. The City and SVP believe that it has the resource commitment, and effective policies and procedures, and is continuing to improve the control structure and oversight for evaluating and controlling the market and credit risks to which it is exposed.

Credit Arrangements
The City of Santa Clara electric utility maintains credit policies, procedures, and systems that help mitigate credit risk and minimize overall credit risk exposure. The policies include transacting only with investment grade counterparties, evaluating potential counterparties’ financial condition and assigning credit limits as applicable. These credit limits are established based on risk and return considerations under terms customarily available in the industry. Additionally, SVP is a signatory to the WSPP netting agreement supplement and otherwise, enters into master netting arrangements whenever possible and, where appropriate, obtains collateral prior to trade execution. Master netting agreements incorporate rights of setoff that provide for the net settlement of subject contracts with the same counterparty in the event of default.

NOTE 18 – NET POSITION/FUND EQUITY
Net Position is measured on the full accrual basis and presented in the Government-wide Financial Statements, while Fund Balance is measured on the modified accrual basis and presented in the Governmental Funds Financial Statements.

A. Government-wide Financial Statements - Net Position
Net Position is the excess of all the City’s assets and deferred outflow of resources over all its liabilities and deferred inflow of resources, regardless of fund. Net Position is divided into three captions. These captions apply only to Net Position, which is determined only at the government–wide level, and are described below:

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 18 – NET POSITION/FUND EQUITY (continued)
140
Net investment in capital assets describes the portion of Net Position which is represented by the current net book value of the City’s capital assets, less the outstanding balance of any debt issued to finance these assets.

Restricted describes the portion of Net Position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements, and redevelopment funds restricted to low and moderate-income purposes.

Unrestricted describes the portion of Net Position which is not restricted as to use.

B. Governmental Fund Financial Statements - Fund Balances The City categorizes fund balance in accordance with GAAP. The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:

Nonspendable Fund Balance
Amounts that cannot be spent either because they are in a nonspendable form or are required to be maintained intact.

Restricted Fund Balance
Amounts that are constrained to specific purposes by federal, state, county, local laws, or externally imposed conditions by grantors or creditors.

Committed Fund Balance
Amounts that can only be used for specific purposes pursuant to constraints imposed by the City Council, the City’s highest level of decision-making authority, through resolutions. These committed amounts cannot be used for any other purpose unless the Council removes or changes the specific uses through the same type of formal action taken to establish the commitment. These Council actions must occur prior to June 30th of the applicable fiscal year.

Assigned Fund Balance
Amounts that are constrained by the City’s intent are to be used for specific purposes, but are neither restricted nor committed. The City Council delegated the authority to assign amounts to be used for specific purposes to the City Manager per Ordinance 1784, September 16, 2003.

Unassigned Fund Balance
These are either residual positive net resources of the General Fund in excess of what can properly be classified in one of the other four categories in the General Fund, or negative balances in all other funds. The Unassigned Fund Balance includes the Budget Stabilization (Emergency) and Capital Projects Reserves, and other undesignated fund balances. The balances in these accounts are $52.9 million, $9.9 million, and $13.6 million, respectively. Additional information is described in the Stabilization Arrangement section of this note.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 18 – NET POSITION/FUND EQUITY (continued)
141
Under the City’s encumbrance system of accounting, a portion of fund balance that has been encumbered for a specific future use is classified in the appropriate fund balance component based on the nature of the encumbrance.

Fund Balance Classification
Non-Major Fund Balance
General Santa Clara Governmental June 30,
Fund Housing Successor Funds 2022
Nonspendable:

Receivables, inventory & prepaid $ 307,044 $ - $ - $ 307,044 Leases 1,397,235 - - 1,397,235
Advances to other Funds 5,539,540 - - 5,539,540
Total Nonspendable 7,243,819 - - 7,243,819
Restricted For:

Gas tax programs - - 2,118,981 2,118,981
Housing & Community Development - 15,322,517 17,250,750 32,573,267 Maintenance districts - - 1,635,977 1,635,977
Operating grants - - 1,952,011 1,952,011
Debt service - - 722,541 722,541
Environmental enforcements 528,409 - - 528,409
Parks & recreation - - 25,036,301 25,036,301
Streets and highway - - 43,014,307 43,014,307
Public safety 364,992 - - 364,992
Library 19,488 - - 19,488
Public facilities 220,181 - 2,501,248 2,721,429
Donations 790,667 - 470,088 1,260,755
Pension rate stabilization program 21,367,474 - - 21,367,474 Storm drain - - 423,110 423,110
Total Restricted 23,291,211 15,322,517 95,125,314 133,739,042 Committed to:

Housing programs - - 4,228,920 4,228,920
Parks & recreation - - 3,382,773 3,382,773
Streets and highway - - 15,803,604 15,803,604
Storm drain - - 6,129,737 6,129,737
Public safety - - 1,332,933 1,332,933
Library - - 160,526 160,526
Public facilities - - 13,991,632 13,991,632
Building inspection - - 28,791,322 28,791,322
Land investment 23,892,284 - - 23,892,284
Historical preservation 92,754 - - 92,754
Total Committed 23,985,038 - 73,821,447 97,806,485
Assigned to:

General Government 9,739,522 - - 9,739,522
Other purposes
104,273 29,261 - - 104,273
Total Assigned 9,843,795 - - 9,843,795
Unassigned: 76,750,858 - - 76,750,858
Total Fund Balances 141,114,721 $ 15,322,517 $ 168,946,761 $ 325,383,999 $ Major Funds

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 18 – NET POSITION/FUND EQUITY (continued)
142
C. Fund Balance Policy
When both restricted and unrestricted funds are available for expenditure, the City’s Fund Balance Policy reduces all Governmental Funds Balances in the following order: Restricted, Committed, Assigned, and Unassigned fund balances unless disallowed by City Council or legal requirements.

Stabilization Arrangement
Maintaining financial stabilization is a necessity for sound financial management and fiscal accountability.

Its purpose is to ensure funds are available to cover occasional budgetary shortfalls (i.e., when general unrestricted revenues decline) or other unexpected urgent events. The City’s Budget Stabilization Reserves (Emergency) and Capital Projects Reserves are maintained for these purposes. As of June 30, 2022, the Budget Stabilization and Capital Projects Reserves were $52.9 million and $9.9 million, respectively, and are a component of the General Fund’s Unassigned Fund Balance.

In 1985-86, the City Council established a policy regarding the City's General Contingency Reserve, under which two separate reserves were established.
 The Budget Stabilization Reserve is set aside primarily for weathering economic downturns, emergency financial crisis, or disaster situations. The reserve target is equal to the cost of the City’s General Fund operations for three months (90-days or 25% General Fund operating budget). Given the significant impacts of COVID-19 0n the City’s budget, the City Council Adopted the FY2021-22 budget principles that allow this reserve to drop to 15% of budgeted expenditures.  The Capital Projects Reserve, earmarks funds for a five-year capital improvement program. The minimum target for this reserve is $5 million.

One of the strategic objectives on the 2017-18 Council Goals and Strategic Objectives list is to continue to replenish City reserves and maintain strong, fiscally-sound management policies of City revenues with long term goals in mind.

Pension Rate Stabilization Program Trust
In fiscal year 2016-17, the City established an irrevocable trust account with PARS to pre-fund retirement plan obligations. The contributions placed in the trust will reduce the City’s net pension liability for financial purposes as required by GAAP. As of June 30, 2022, the balances in the pension rate stabilization program trust for the General Fund and Enterprise Funds are listed as follows:

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 18 – NET POSITION/FUND EQUITY (continued)
143
Pension Rate
Stabilization
Balances
General Fund: $ 21,367,474
Enterprise Funds:

Electric Utility 6,146,358
Water Utility 1,267,460
Sewer Utility 595,654
Water Recycling 108,715
Solid Waste 288,662
$ 29,774,323
Fund Name
D. Net Position/Fund Balance Deficits
The funds listed below had an accumulated deficit as of June 30, 2022:

Accumulated
Deficit
Enterprise Funds:

Solid Waste $ 773,159
Internal Service Funds:

Information Technology Services $ 645,102
Special Liability Insurance Claims $ 781,254
Workers’ Compensation Insurance Claims 11,555,432 $
Fund Name
The Solid Waste deficit is mainly due to liabilities incurred for landfill postclosure care and is expected to be funded by charges for services in future years. The Information Technology Service, Special Liability Insurance Claims and Workers Compensation Insurance Claims’ Internal Service Fund accumulated deficits are expected to be offset by future charges to the General Fund and the enterprise funds.

NOTE 19 – RISK MANAGEMENT
The City is exposed to various risks of losses related to torts, errors and omissions, general liability, injuries to employees and unemployment claims. The City currently reports all of its risk management activities in its Internal Service Funds. Claims, expenditures and liabilities are reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated using actuarial methods or other estimating techniques.

The City records a liability to reflect an actuarial estimate of ultimate uninsured losses for both general liability claims and workers’ compensation claims. The estimated liabilities for general liability and

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 19 – RISK MANAGEMENT (continued)
144
workers’ compensation claims are based on case reserves and include amounts for claims incurred but not reported (IBNR). At June 30, 2022, the estimated claims payable of $31,028,000, consisting of reserves for both reported and IBNR losses, as well as, allocated loss adjustment expenses, have been recorded in the Special Liability and Workers’ Compensation Internal Service Funds, respectively. The claims payable are reported at their present value using expected future investment yield assumptions of 2.5%, and the undiscounted claims at June 30, 2022, totaled $10,740,000 and $23,897,000 for general liability and workers’ compensation claims, respectively.

The estimate of claims due in one year is the City’s best estimate based upon available information which is included in accrued liabilities.

Changes in the reported liability since June 30, 2020 resulted from the following:

Special
Liability
Workers'
Compensation Total
Liability as of June 30, 2020 7,697,000 $ 21,603,000 $ 29,300,000 $ Claims and changes in estimates during fiscal 2020 1 4,529,703 1,449,175 15,978,878 Claim payments (4,329,703) (12,212,175) (16,541,878)
Liability as of June 30, 2021 6,934,000 $ 21,803,000 $ 28,737,000 $ Claims and changes in estimates during fiscal 2022 9 3,804,070 ,903,230 13,707,300 Claim payments (4,636,070) (6,780,230) (11,416,300)
Liability as of June 30, 2022 10,057,000 $ 20,971,000 $ 31,028,000 $ Current Claims Payable 3,172,000 $ 3,937,000 $ 7,109,000 $ Long Term Claims Payable 6,885,000 17,034,000 23,919,000 Liability as of June 30, 2022 10,057,000 $ 20,971,000 $ 31,028,000 $ With respect to the Special Liability accrual of $10 million, the City has numerous unsettled lawsuits filed or claims asserted against it as of June 30, 2022. The City has reviewed these claims and lawsuits in order to evaluate the likelihood of an unfavorable outcome to the City and to arrive at an estimate of the amount or ranges of potential loss to the City. As a result of such review, the City has categorized the various claims and lawsuits as “probable,” “reasonably possible,” and “remote” loss contingencies, as defined by current accounting standards.

The City has determined that the City’s probable loss contingencies, which are accrued for as the estimated liability for claims and lawsuits as of June 30, 2022, are approximately $10 million. The final outcome of claims and lawsuits, which have been categorized as reasonably possible loss contingencies, is not presently determinable and any associated potential loss cannot be estimated. Accordingly, no provision has been made in the accompanying basic financial statements relative to the potential outcome of such claims and lawsuits. However, the ultimate resolution of such claims and lawsuits is not expected to have a material effect on the accompanying basic financial statements.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
145
NOTE 20 – COMMITMENTS AND CONTINGENCIES
A. Electricity Purchase Contracts
The City has future commitments under electricity purchase contracts as discussed in Note 17A, and is contingently liable under joint venture agreements discussed in Note 12B.

B. Grant Programs
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.

C. Encumbrances
The City uses encumbrances to control expenditure commitments for the year and to enhance cash management. Encumbrances represent commitments related to contracts not yet performed and purchase orders not yet filled (executory contracts; and open purchase orders). Commitments for such expenditure of monies are encumbered to reserve a portion of applicable appropriations. Encumbrances still open at year end are not accounted for as expenditures and liabilities but, rather, as restricted or committed governmental fund balance. As of June 30, 2022, total governmental fund encumbrance balances for the City are as follows:

General Fund $ 4,471,304
Santa Clara Housing Successor 131,579
Nonmajor Governmental Funds 24,213,141
Total Governmental Funds 28,816,024 $
D. Bay Area Water Supply and Conservation Agency Revenue Bonds Surcharge The City contracts with the City and County of San Francisco for the purchase of water from the Hetch Hetchy System operated by the San Francisco Public Utilities Commission (SFPUC). The City is also a member of the Bay Area Water Supply and Conservation Agency (BAWSCA) which represents the interests of all the 24 cities and water districts, as well as two private utilities, that purchase wholesale water from the SFPUC.

In 2009 the City entered into a new 25 year agreement with the SFPUC. One of the ways that the new agreement differs from the old is in how facilities constructed by the SFPUC that benefit the regional customers are treated from a rate and financial perspective. Under the old agreement, facilities were built, capitalized, and added to the rate base with a rate of return (interest), and then paid for over their useful lives through wholesale rates. Under the new agreement, the SFPUC issues revenue bonds and the debt service (which also includes an interest component) is paid for through rates over the life of the bonds.

During the transition from the old to the new contracts, one of the issues addressed was how to deal with the $370 million in assets that were still being paid for by the wholesale customers under the old agreement. The assets were transferred to the new agreement, assigned a life with an agreed upon rate of return of 5.13%.

Also negotiated was a provision to allow the wholesale customers to prepay any remaining existing assets’

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 20 – COMMITMENTS AND CONTINGENCIES (continued)
146
unpaid principal balance without penalty or premium. This prepayment was executed through the issuance of bonds by BAWSCA which provide a better interest rate given the favorable rate environment.

BAWSCA issued Revenue Bonds in the principal amount of $335,780,000 in January 2013 to prepay the capital cost recovery payment obligation and fund a stabilization fund. The Bonds mature in October 2034 and are secured by surcharges to the monthly water purchase charges imposed upon the participating members. The Bonds are not a debt obligation of any member, and BAWSCA’s failure to pay its Bonds would not constitute a default by any participating member.

Should any participating member fail to pay its share, BAWSCA will rely on the stabilization fund and will pursue all legal remedies to collect the shortfall from the delinquent member. In the interim, other participating members may have their portion adjusted to insure the continued payment of the debt service surcharge.

The risk of bearing the debt service expense of a defaulting member is not significantly different than the risk each member assumes currently for fluctuations in water purchase charges. Under the Bond indenture, BAWSCA maintains a stabilization fund. If surcharge revenues collected are less than needed (due to a member’s failure to pay timely), BAWSCA uses the stabilization fund to fund the debt service deficiency, and increases the surcharge in the subsequent year to make up for the prior year shortfall and reimburse the stabilization fund account. Also, given that each participating agency’s governing body adopted a Resolution to participate in the Bond issue, Management believes that default is generally very unlikely.

The annual debt service surcharges are a fixed amount for each participant and are calculated by taking the subsequent fiscal year’s debt service, multiplied by each participant’s actual water purchase as a percent of total wholesale customer water purchases from the prior fiscal year. One-twelfth of the annual surcharge is included in the monthly bill from SFPUC. Because each participant’s share of the debt service surcharge is proportional to the amount of water purchased during the prior fiscal year, the City’s share of the debt service will fluctuate from year to year.

The City paid its surcharge of $814,769 during fiscal year 2021-22, which is included as a component of purchased water expenses in the Water Enterprise Fund. The surcharge for fiscal year 2022-23 is estimated to be $571,392.

E. Santa Clara Stadium Authority and Litigation
Asset Retirement Obligation
Pursuant to the Ground Lease, the Stadium Authority may be required to demolish the Stadium and other improvements at the end of the lease term, upon written notice from the City. Pursuant to the Stadium Lease, the Stadium Authority will establish reserves to fund the cost of demolishing the stadium at the end of the lease term. While such reserves are projected to cover the entire demolition cost, StadCo will be responsible for funding any shortfall.

Historical SBL Buffet Costs
On April 30, 2020, the Stadium Authority received an invoice in the amount of $4,388,709 for previously unbilled “complimentary” buffet costs associated with certain SBL holders for the NFL seasons from 2014 thru 2018. On May 13, 2020, the Stadium Authority issued a response letter disputing the newly-billed costs

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 20 – COMMITMENTS AND CONTINGENCIES (continued)
147
citing that the costs were not presented in a reasonable manner relative to the financial planning and reporting requirements of the Lease Agreement and Stadium Management Agreement and there is no justification for delaying presentment and demand for payment. The invoices presented also lack sufficient supporting documentations in order to confirm the validity of the costs and charges under the Lease Agreement terms. StadCo and ManagementCo have initiated arbitration proceedings to dispute the Stadium Authority’s position and dispute is still outstanding.

As of March 31, 2022, ManagementCo invoiced an additional $902,081 in new buffet costs to the Stadium Authority through the fiscal year 2021-22 Non-NFL events’ net loss. ManagementCo also issued a certificate of loan to the Stadium Authority under the Management Company Revolving Loan for the buffet amount and subsequently paid off the loan through the year-end excess cash distribution. Stadium Authority objected to and disputes ManagementCo's unauthorized payment of these buffet costs through the Revolving Loan, and also the payment of that loan through year-end excess cash. Pursuant to the parties' August 31, 2022 settlement agreement and stipulation, ManagementCo's draw under the Revolving Loan will be treated as a timely Stadium Authority payment, under protest, and with a full reservation of Stadium Authority's rights and claims. The Stadium Authority recorded a $902,081 receivable from ManagementCo for the loan draw on the buffet costs as of March 31, 2022.

NOTE 21 – REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY

ACTIVITIES
A. Defeased Bonds
Bayshore North Project 2011 Tax Allocation Bonds
On May 11, 2011, the former RDA issued $31.41 million of Bayshore North Project 2011 Tax Allocation Bonds (RDA 2011 Bonds) with an interest rate ranging from 2% to 7.86%, and a final maturity of 2026, to finance various redevelopment activities associated with the former RDA’s Bayshore North Project Area.

The 2011 Bonds were defeased on June 1, 2017.

The following schedule summarizes the defeased 2011 Tax Allocation Bonds:
2011 Series Ptincipal Issued Date Issued Principal Defeased Maturities Defeased Redemption
Date
Current Interest Bonds $ 11,440,000 May 18, 2011 $ 11,315,000 June 1, 2026 June 1, 2021 Capital Appreciation Bonds 19,971,295 May 18, 2011 10,643,264 From June 1, 2022 to
June 1, 2026 June 1, 2021
$ 21,958,264 31,411,295 $

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
148
NOTE 22 – SUCCESSOR AGENCY LEASE AGREEMENTS
On January 8, 2016 the City executed the Settlement Agreement for Sharma vs Successor Agency to Redevelopment Agency of the City of Santa Clara. This Settlement Agreement calls for the City to return to the Successor Agency certain properties that the former Redevelopment Agency transferred to the City prior to dissolution. The properties transferred are as follows: the Great America Theme Park Property (not including the parking lot, see Note 4B), the Hilton Hotel Property, the North/South Parking Lots, the Gateway Parcel 2 Property, the Hyatt Hotel Property (not including the ballroom, see Note 4B), the Techmart Property, and the Martinson Childcare Center Property. All the properties, other than the Martinson Childcare Center Property will be sold by the Successor Agency. Until the properties are sold the rent revenues will be used to pay the Successor Agency’s enforceable obligations. The Settlement Agreement requires the City to forego the long term lease revenues generated by the properties.

A. Techmart Office Building Ground Lease
In May 1998, the former RDA entered into a long-term ground lease of the Techmart parcel with CarrAmerica. The lease has a 55 year term with options for two additional ten-year terms. The former RDA received $1 million annual rent for each of the first ten years of the lease, which lease revenues were paid by the former RDA to the City pursuant to the First Amended Cooperation Agreement. Rent increases are scheduled as follows: 10% in the eleventh year and every five years thereafter during the initial term and 15% in the first and sixth year of each option term. Under the terms of the lease, CarrAmerica assumed responsibility for all taxes and assessments levied against the Techmart parcel and the Lessor’s interest in the ground lease is unsubordinated to any other financing. On July 13, 2006, CarrAmerica merged with Nantucket Acquisition, Inc., a wholly owned subsidiary of The Blackstone Group; the terms and conditions of the lease agreement remain in effect.

Lease revenues collected from July 1, 2012 to June 30, 2021 in the amount of $11,273,167 were passed on to the Successor Agency. For the fiscal year ended June 30, 2022, the Successor Agency recognized $1,268,278 in lease revenue and $913,640 in interest revenue. As of June 30, 2022, the Successor Agency’s receivable for lease payments was $39,989,418 and the balance of the deferred inflow of resources was $39,210,941.

B. Hyatt Regency Hotel Ground Lease and Ballroom Lease
In April 1985, the former RDA entered into a long-term ground lease with SCCC Associates (Lessee) for the development of a certain portion of that piece of land – the Bayshore North Redevelopment Project Area, and eventual operation of a high quality hotel and related facilities, amenities and improvements including one of the Ballrooms in the Convention Center. The lease is for an initial term of 50 years. The Lessee has options to renew the lease for four additional periods of ten years each and one additional period of nine years. In 2005, SHC New Santa Clara, LLC, the successor-in-interest to SCCC Associates at that time, sold the interest to Hyatt Equities, LLC. In 2013, Hyatt Equities, LLC. sold its interest to Inland American Lodging Acquisitions, Inc.; the terms and conditions of the lease agreements remain in effect. Under the terms of the lease, the former RDA is entitled to receive a specified amount of minimum rent subject to adjustment at times specified in the lease. Lessee may also have an obligation for additional rent calculated as a predetermined percentage of the hotel gross revenues which exceed the amount specified in the lease.

The Settlement Agreement states that a portion of the ground lease payments from the Hyatt Hotel are derived from the Convention Center Ballroom space rental and are not related to the Hyatt Hotel ground lease. The Settlement Agreement states the City shall retain all revenues generated from the Ballroom Agreement starting July 1, 2015. Lease revenues collected from July 1, 2012 to June 30, 2015 in the amount

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2022
NOTE 22 – SUCCESSOR AGENCY LEASE AGREEMENTS (continued) 149
of $921,270 were passed on to the Successor Agency. Additional information concerning the Ballroom Lease can be found in Note 4B.

Lease revenues collected from Hyatt from July 1, 2012 to June 30, 2021 in the amount of $14,326,501 were passed on to the Successor Agency. For the fiscal year ended June 30, 2022, the Successor Agency recognized $343,388 in lease revenue and $104,209 in interest revenue. As of June 30, 2022, the Successor Agency’s receivable for lease payments was $4,446,355 and the balance of the deferred inflow of resources was $4,406,812.

This page intentionally left blank
Required Supplementary Information
This page intentionally left blank
153

CITY OF SANTA CLARA

REQUIRED SUPPLEMENTARY INFORMATION
This part of the City of Santa Clara’s Annual Comprehensive Report provides detailed information to better understand the data presented within the financial statements and note disclosures.

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Discloses the changes and components of the net pension liability and related ratios, including the pension plan’s fiduciary net position as a percentage of the total pension liability, and the net pension liability as a percentage of covered payroll.

SCHEDULE OF PLAN CONTRIBUTIONS - PENSION PLAN
Contains information of the employer’s contractually required contribution rates, contributions to the pension plan and related ratios.

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS Discloses the changes and components of the net OPEB liability and related ratios, including OPEB’s Plan Trust Fund net position as a percentage of the total OPEB liability, and the net OPEB liability as a percentage of covered employee payroll.

SCHEDULE OF PLAN CONTRIBUTIONS - OPEB PLAN
Contains information of the employer’s contractually required contribution rates, contributions to the OPEB Plan and related ratios.

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET

AND ACTUAL
Presents the accompanying budget and actual comparison schedules in accordance with the budgetary process.
154
Miscellaneous Plan
2021 2020
Total Pension Liability
Service cost $ 15,079,332 15,428,984 $
Interest 54,277,035 56,183,036
Changes of assumptions - -
Differences between expected and actual experience 9,229,485 1,328,853 Benefit payments, including refunds of employee contributions (45,355,148) (43,050,194) Net change in total pension liability 35,535,658 27,585,725 Total pension liability - beginning 763,875,314 799,410,972 Total pension liability - ending $ 799,410,972 826,996,697 $ Plan Fiduciary Net Position
Contributions - employer $ 28,827,466 31,272,528 $
Contributions - employee 6,650,350 6,333,120
Net investment income 24,008,623 112,780,714
Benefit payments, including refunds of employee contributions (45,355,148) (43,050,194) Plan to plan resource movement - -
Administrative expense (675,430) (494,347)
Other Misc Income/(Expense) (2) - -
Net change in plan fiduciary net position 15,760,815 104,536,867 Plan fiduciary net position - beginning 479,111,639 494,872,454 Plan fiduciary net position - ending $ 494,872,454 599,409,321 $ Net Pension Liability - ending $ 304,538,518 227,587,376 $

72.48% 61.90%
Covered payroll $ 89,410,939 89,321,766 $
Net pension liability as percentage of covered payroll 254.79% 340.61% Notes to schedule:
(1) Fiscal year 2014-15 was the first year of implementation.

CITY OF SANTA CLARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

MISCELLANEOUS PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years for the Measurement Periods Ended June 30 (1) Plan fiduciary net position as a percentage of the total pension liability (2) During fiscal year 2017-18, as a result of GASB No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other Than Pensions, CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California's agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB No. 75.

Additionally, CalPERS employees participate in various State of California agent pension plans and during fiscal year 2017-18, CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pension.

Schedule of Changes in the Net Pension Liability and Related Ratios (Miscellaneous Plan) 155
2019 2018 2017 2016 2015 2014
$ 13,159,021 14,448,007 $ 11,975,850 $ 10,415,730 $ 9,909,421 $ 10,345,749 $ 49,394,806 51,858,572 47,384,580 46,283,869 44,755,550 42,969,016 (5,067,759) - 37,018,109 - (10,233,178) -
10,229,369 10,888,358 (2,176,270) (2,265,081) 108,957 - (38,252,869) (41,003,947) (35,744,281) (33,491,738) (31,858,297) (29,847,146) 29,462,568 36,190,990 58,457,988 20,942,780 12,682,453 23,467,619 698,221,756 727,684,324 639,763,768 618,820,988 606,138,535 582,670,916 $ 727,684,324 763,875,314 $ 698,221,756 $ 639,763,768 $ 618,820,988 $ 606,138,535 $ $ 22,508,822 25,715,248 $ 22,015,885 $ 18,464,042 $ 15,625,285 $ 14,887,751 $ 5,957,917 6,182,683 5,247,078 5,151,548 4,755,791 5,439,513 36,908,188 30,342,401 44,308,442 2,186,435 9,037,882 61,358,126 (38,252,869) (41,003,947) (35,744,281) (33,491,738) (31,858,297) (29,847,146) (1,065) - - (788) (368) -
(674,790) (326,982) (587,320) (247,274) (457,051) -
(1,281,438) 1,065 - - - -
25,164,765 20,910,468 35,239,804 (7,937,775) (2,896,758) 51,838,244 433,036,406 458,201,171 397,796,602 405,734,377 408,631,135 356,792,891 $ 458,201,171 479,111,639 $ 433,036,406 $ 397,796,602 $ 405,734,377 $ 408,631,135 $ $ 269,483,153 284,763,675 $ 265,185,350 $ 241,967,166 $ 213,086,611 $ 197,507,400 $

62.72% 62.97% 62.02% 62.18% 65.57% 67.42%
$ 75,515,390 81,872,333 $ 71,285,526 $ 61,942,363 $ 58,051,406 $ 58,020,890 $ 347.76% 356.81% 371.95% 390.63% 367.07% 340.41%

CITY OF SANTA CLARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

MISCELLANEOUS PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years for the Measurement Periods Ended June 30 (1) Changes in assumptions: None in 2016, 2019, 2020 and 2021. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of the Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the discount rate was reduced from 7.65% to 7.15%. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5% discount rate.
156
Miscellaneous Plan
2022 2021 2020
Actuarially determined contribution 34,126,897 $ 31,035,143 $ 28,987,800 $ Contributions in relation to the actuarially
determined contributions (31,035,143) (34,126,897) (28,987,800) Contribution deficiency (excess) $ - - $ - $
Covered payroll $ 89,321,766 92,642,754 $ 89,410,939 $
Contributions as a percentage of
covered payroll 36.84% 34.75% 32.42%
Notes to schedule
Valuation date 6/30/2019 6/30/2018 6/30/2017
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, closed Remaining amortization period 25 years as of valuation date Asset valuation method 5-year smoothed fair value
Inflation 2.75% for 2015 to 2019, 2.675% for 2020 and 2.50% for 2021 and 2022 Salary increases Varies by Entry Age and Service
Investment rate of return
Retirement age
Mortality
(1) Fiscal year 2014-15 was the first year of implementation.

7.50% for 2015 to 2018, 7.375%, for 2019, 7.25% for 2020, and 7% for 2021 and 2022, net of pension plan investment expense, including inflation The probabilities of Retirement are based on the CalPERS Experience Study The probabilities of mortality are based on CalPERS Experience Study. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale AA published by the Society of Actuaries for 2015 to 2018. For 2019, 2020, 2021, and 2022 pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.

CITY OF SANTA CLARA

SCHEDULE OF PLAN CONTRIBUTIONS

MISCELLANEOUS PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years Ended June 30 (1)
Schedule of Plan Contributions (Miscellaneous Plan)
157
2019 2018 2017 2016 2015
$ 25,256,224 23,615,964 $ 21,613,984 $ 18,543,534 $ 15,257,771 $ (25,256,224) (23,615,964) (21,613,984) (18,543,534) (15,257,771) $ - - $ - $ - $ - $
$ 75,515,390 81,872,333 $ 71,285,526 $ 61,942,363 $ 58,051,406 $

28.84% 33.45% 30.32% 29.94% 26.28%
6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012

CITY OF SANTA CLARA

SCHEDULE OF PLAN CONTRIBUTIONS

MISCELLANEOUS PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years Ended June 30 (1)
158
Safety Plan
2021 2020
Total Pension Liability
Service cost $ 15,518,467 15,750,690 $
Interest 56,740,930 59,165,587
Changes of assumptions - -
Differences between expected and actual experience 7 10,124,845 ,316,002 Benefit payments, including refunds of employee contributions (46,961,121) (44,599,326) Net change in total pension liability 37,784,916 35,271,158 Total pension liability - beginning 797,995,035 835,779,951 Total pension liability - ending $ 835,779,951 871,051,109 $ Plan Fiduciary Net Position
Contributions - employer $ 26,654,865 29,084,516 $
Contributions - employee 5,589,396 5,742,937
Net investment income 26,348,251 122,207,114
Benefit payments, including refunds of employee contributions (46,961,121) (44,599,326) Plan to plan resource movement - -
Administrative expense (744,424) (540,727)
Other Misc Income/(Expense) (2) - -
Net change in plan fiduciary net position 109,532,71 13,248,762 9 Plan fiduciary net position - beginning 528,052,458 541,301,220 Plan fiduciary net position - ending $ 541,301,220 650,833,939 $ Net Pension Liability - ending $ 294,478,731 220,217,170 $

74.72% 64.77%
Covered payroll $ 53,564,578 54,912,443 $
Net pension liability as percentage of covered payroll 401.03% 549.76% Notes to schedule:
(1) Fiscal year 2014-15 was the first year of implementation.

CITY OF SANTA CLARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

SAFETY PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years for the Measurement Periods Ended June 30 (1) Plan fiduciary net position as a percentage of the total pension liability (2) During fiscal year 2017-18, as a result of GASB No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other Than Pensions, CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California's agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB No. 75.

Schedule of Changes in the Net Pension Liability and Related Ratios (Safety Plan) 159
2019 2018 2017 2016 2015 2014
$ 13,999,625 14,861,460 $ 13,111,358 $ 10,985,005 $ 10,678,931 $ 10,748,085 $ 51,713,042 54,154,256 49,741,737 48,410,844 46,944,730 45,454,864 (3,333,870) - 40,842,398 - (11,249,844) -
5,782,119 8,480,853 (1,814,831) (3,491,487) (3,604,245) - (38,978,890) (41,984,265) (37,370,686) (35,868,203) (34,372,454) (33,072,631) 29,182,026 35,512,304 64,509,976 20,036,159 8,397,118 23,130,318 733,300,705 762,482,731 668,790,729 648,754,570 640,357,452 617,227,134 $ 762,482,731 797,995,035 $ 733,300,705 $ 668,790,729 $ 648,754,570 $ 640,357,452 $ $ 20,510,633 23,458,623 $ 19,580,881 $ 16,679,012 $ 14,692,277 $ 12,839,821 $ 5,395,755 5,781,715 4,913,868 4,376,079 4,079,023 4,866,079 40,902,179 33,408,137 49,621,113 2,362,110 10,236,992 70,347,760 (38,978,890) (41,984,265) (37,370,686) (35,868,203) (34,372,454) (33,072,631) (1,182) - - 788 - -
(751,243) (362,341) (658,507) (279,579) (516,273) -
(1,426,623) 1,182 - - - -
25,650,629 20,303,051 36,086,669 (12,729,793) (5,880,435) 54,981,029 482,098,778 507,749,407 446,012,109 458,741,902 464,622,337 409,641,308 $ 507,749,407 528,052,458 $ 482,098,778 $ 446,012,109 $ 458,741,902 $ 464,622,337 $ $ 254,733,324 269,942,577 $ 251,201,927 $ 222,778,620 $ 190,012,668 $ 175,735,115 $

66.17% 66.59% 65.74% 66.69% 70.71% 72.56%
$ 47,569,993 50,808,770 $ 47,064,869 $ 41,116,053 $ 38,909,866 $ 38,845,554 $ 531.29% 535.49% 533.74% 541.83% 488.34% 452.39%

CITY OF SANTA CLARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

SAFETY PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years for the Measurement Periods Ended June 30 (1) Changes in assumptions: None in 2016, 2019 and 2020. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of the Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the discount rate was reduced from 7.65% to 7.15%. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5% discount rate. 160
Safety Plan
2022 2021 2020
Actuarially determined contribution 32,084,531 $ 29,295,456 $ 27,099,469 $ Contributions in relation to the actuarially
determined contributions (29,295,456) (32,084,531) (27,099,469) Contribution deficiency (excess) $ - - $ - $
Covered payroll $ 54,912,443 57,190,646 $ 53,564,578 $
Contributions as a percentage of
covered payroll 56.10% 53.35% 50.59%
Notes to schedule
Valuation date 6/30/2019 6/30/2018 6/30/2017
Methods and assumptions used to determine contribution rates:

CITY OF SANTA CLARA

SCHEDULE OF PLAN CONTRIBUTIONS

SAFETY PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years Ended June 30 (1)

7.50% for 2015 to 2018, 7.375%, for 2019, 7.25% for 2020, and 7% for 2021, and 2022 net of pension plan investment expense, including inflation The probabilities of Retirement are based on the CalPERS Experience Study The probabilities of mortality are based on CalPERS Experience Study. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries for 2015 to 2018. For 2019, 2020,2021, and 2022, pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.

Schedule of Plan Contributions (Safety Plan)
161
2019 2018 2017 2016 2015
$ 22,002,506 23,484,760 $ 19,735,867 $ 17,365,058 $ 14,776,850 $ (22,002,506) (23,484,760) (19,735,867) (17,365,058) (14,776,850) $ - - $ - $ - $ - $
$ 47,569,993 50,808,770 $ 47,064,869 $ 41,116,053 $ 38,909,866 $

46.22% 46.25% 41.93% 42.23% 37.98%
6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012

CITY OF SANTA CLARA

SCHEDULE OF PLAN CONTRIBUTIONS

SAFETY PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years Ended June 30 (1)
162
2022 2021 2020 2019 2018 2017
Total OPEB Liability
Service cost $ 2,091 2,344 $ 2,030 $ 2,264 $ 2,198 $ 2,134 $ Interest 3,292 3,145 3,200 3,478 3,343 3,194
Differences between expected and actual
experience (326) - - (1,644) - -
Changes of assumptions - 1,709 - (5,838) - -
Benefit payments including refunds (3,437) (3,592) (3,498) (3,096) (3,036) (2,034) Net change in total OPEB liability 2,052 3,174 1,732 (4,836) 2,505 3,294 Total OPEB liability - beginning 65,586 62,412 60,680 65,516 63,011 59,717 Total OPEB liability - ending $ 65,586 67,638 $ 62,412 $ 60,680 $ 65,516 $ 63,011 $ Plan Fiduciary Net Position
Contributions - employer 5,068 $ 4,535 $ 4,696 $ 5,366 $ 6,300 $ 2,733 $ Net investment income (3,222) 2,957 1,403 1,410 524 738 Benefit payments including refunds (3,437) (3,592) (3,498) (3,096) (3,036) (2,034) Administrative expense (62) (59) (100) (91) (71) (73)
Net change in plan fiduciary net position (1,653) 3,841 2,501 3,589 3,717 1,364 Plan fiduciary net position - beginning 28,876 25,035 22,534 18,945 15,228 13,864 Plan fiduciary net position - ending $ 28,876 27,223 $ 25,035 $ 22,534 $ 18,945 $ 15,228 $ Net OPEB Liability - ending $ 36,710 40,415 $ 37,377 $ 38,146 $ 46,571 $ 47,783 $

40.2% 44.0% 40.1% 37.1% 28.9% 24.2%
Covered-employee payroll 169,613 $ 163,594 $ 164,431 $ 151,453 $ 135,297 $ 102,468 $

23.8% 22.4% 22.7% 25.2% 34.4% 46.6%
Notes to schedule:
(1) Fiscal year 2016-17 was the first year of implementation.

CITY OF SANTA CLARA

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS

OPEB PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PLAN Last Ten Fiscal Years for the Measurement Periods Ended June 30 (1) (In Thousands)
Plan fiduciary net position as a percentage of
the total OPEB liability
Net OPEB liability as percentage of covered payroll
Schedule of Changes in the Net OPEB Liability and Related Ratios (OPEB Plan) 163
2022 2021 2020 2019 2018 2017
Actuarially determined contribution $ 4,826 4,748 $ 4,681 $ 5,306 $ 5,466 $ 2,981 $ Contributions in relation to the actuarially determined contributions 4,535 5,068 4,696 5,366 6,300 2,981Contribution deficiency (excess) $ 291 (320) $ (15) $ (60) $ (834) $ - $ Covered-employee payroll 163,594 169,613 164,431 151,453 135,297 $ 102,468 $ Contributions as a percentage of covered payroll 2.99% 2.77% 2.86% 3.54% 4.66% 2.91% Notes to schedule:
(1) Fiscal year 2016-17 was the first year of implementation.

CITY OF SANTA CLARA

SCHEDULE OF PLAN CONTRIBUTIONS

OPEB PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PLAN Last Ten Fiscal Years Ended June 30(1)
(In Thousands)
Schedule of Plan Contributions (OPEB Plan)
164
Actuarial valuation date June 30, 2020
Actuarial cost method Entry Age Normal, Level Percentage of Payroll Amortization method Level percent of payroll
Unfunded liability amortization
Asset valuation method
Discount rate 5.25%
General inflation 2.75%
Healthcare trend
Mortality CalPERS 1997-2015 Experience Study
Mortality improvement

CITY OF SANTA CLARA
Notes to Schedule of Employer Contribution (OPEB Plan)
Post-retirement mortality projected fully generational with Scale MP-2020
Methods and Assumptions for 2021-22 Actuarially Determine Contributions 15 years (open period) for method, assumption, plan changes, and gains and losses
Maximum 30-year combined period
Investment gains and losses spread over a 5-year rolling period.

Not less that 80% nor greater than 120% of fair value
Non-Medicare - 7% for 2022, decreasing to an ultimate rate of 4% in 2076
Medicare (Non-Kaiser)- 6.1% for 2022 decreasing to an ultimate rate of 4% in 2076
30 years (closed period) for initial UAAL
(18 Years remaining on June 30, 2021)
20 years (closed period) for implied subsidy on 06/30/2019 (18 years remaining on June 30, 2021)
Medicare (Kaiser)- 5% for 2022 decreasing to an ultimate rate of 4% in 2076
Notes to Schedule of Employer Contributions (OPEB Plan) 165
Variance with
Budgeted Amounts Final Budget
Actual Amounts Positive
Original Final Budgetary Basis (Negative)

REVENUES
Taxes:

Sales $ 58,183,000 58,183,000 $ 56,901,656 $ (1,281,344) $ Ad valorem 71,559,000 71,559,000 74,630,557 3,071,557
Transient occupancy 9,000,000 9,000,000 10,812,400 1,812,400 Other 6,080,000 6,080,000 6,988,597 908,597
Licenses, permits, fines and penalties 5,181,135 5,181,135 5,169,954 (11,181) Intergovernmental 26,205,801 2,837,454 2,996,606 159,152 Charges for services 36,944,512 36,949,512 36,375,116 (574,396) Contributions in-lieu of taxes 24,700,000 24,700,000 27,259,168 2,559,168 Interest and rents 12,433,222 12,615,522 10,590,985 (2,024,537) Other 198,000 198,000 815,530 617,530
Total Revenues 250,484,670 227,303,623 232,540,569 5,236,946

EXPENDITURES
General Government:

General Administration 20,844,243 21,892,791 16,510,558 5,382,233 City Clerk 1,604,231 1,470,231 1,345,556 258,675
City Attorney 3,097,380 3,097,380 2,996,701 100,679
Human Resources 4,133,810 4,265,810 3,849,444 416,366
Finance 17,705,142 17,439,442 16,957,767 747,375
Total General Government 46,985,106 48,565,354 41,660,026 6,905,328 Public Works 23,201,356 23,430,108 23,011,339 418,769
Parks and Recreation 20,982,990 20,982,990 18,773,650 2,209,340 Public Safety:

Police 65,129,268 79,870,137 62,253,369 2,875,899
Fire 50,809,615 60,581,403 50,207,371 602,244
Total Public Safety 140,451,540 115,938,883 112,460,740 3,478,143 Planning and Inspection 4,493,357 4,513,357 3,037,304 1,476,053 Library 10,764,727 10,764,727 9,910,594 854,133
Total Expenditures 246,879,076 224,195,419 208,853,653 15,341,766 For the year ended June 30, 2022

CITY OF SANTA CLARA

GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL (NON-GAAP LEGAL BASIS)
General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis)
166
Variance with
Budgeted Amounts Final Budget
Actual Amounts Positive
Original Final Budgetary Basis (Negative)

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 3,605,594 3,108,204 23,686,916 20,578,712

OTHER FINANCING SOURCES (USES)
Transfers in 6,350,884 3,432,617 6,350,869 (15)
Transfers (out) (46,829,314) (38,296,855) (46,829,314) - Total Other Financing Sources (Uses) (34,864,238) (40,478,430) (40,478,445) (15)

EXCESS (DEFICIENCY) OF REVENUES AND

OTHER SOURCES OVER EXPENDITURES
AND OTHER USES - BUDGETARY BASIS (31,258,644) $ (37,370,226) $ (16,791,529) $ 20,578,697 $ ADJUSTMENTS TO BUDGETARY BASIS:

Prior year encumbrances recognized on the GAAP basis (4,817,658) Current year encumbrances recognized on the budgetary basis 4,445,951 Net change in receivables recognized on the GAAP basis (18,863,222) Net change in accrued liabilities recognized on the GAAP basis (622,753) Net change in funds for GAAP Basis not included in annual budget (38,249) Beginning Fund balance 177,802,181
Ending Fund balance $ 141,114,721
For the year ended June 30, 2022
(continued)

CITY OF SANTA CLARA

GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL (NON-GAAP LEGAL BASIS)
167
Variance
Actual Amount Positive
Original Final Budgetary Basis (Negative)

REVENUES
Charges for services - $ - $ 1,845 $ 1,845 $
Interest and rents 50,000 50,000 186,771 136,771
Other 5,500,000 300,000 6,334,282 834,282
Total Revenues 350,000 5,550,000 6,522,898 972,898

EXPENDITURES
Current:

General Administration
Salary & benefits 333,979 333,979 241,084 92,895
Material, service & supplies 559,000 559,000 483,974 75,026 Internal service fund charges 22,661 22,661 22,661 -
Capital outlay 16,700,000 - 11,700,000 5,000,000
Total General Administration 915,640 17,615,640 12,447,719 5,167,921 Total Expenditures 915,640 17,615,640 12,447,719 5,167,921

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (565,640) (12,065,640) (5,924,821) 6,140,819

EXCESS (DEFICIENCY) OF REVENUES AND

OTHER SOURCES OVER EXPENDITURES
AND OTHER USES (565,640) $ (12,065,640) $ (5,924,821) 6,140,819 $ ADJUSTMENTS TO BUDGETARY BASIS:

Expenditures of prior year encumbrances recognized on the GAAP basis (344,361) Current year encumbrances recognized on the budgetary basis 131,579 Net change in accrued liabilities recognized on the GAAP basis 348,378 Beginning Fund balance 21,111,742
Ending Fund balance $ 15,322,517

CITY OF SANTA CLARA

SANTA CLARA HOUSING SUCCESSOR

SCHEDULE OF REVENUES, EXPENDITURES

BUDGET AND ACTUAL (NON-GAAP LEGAL BASIS)
Budgeted Amounts
For the year ended June 30, 2022

AND CHANGES IN FUND BALANCES
Santa Clara Housing Successor Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis)

CITY OF SANTA CLARA

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
June 30, 2022
168
NOTE 1 – REQUIRED SUPPLEMENTARY INFORMATION
A. BUDGETS AND BUDGETARY ACCOUNTING
The results of operations are presented in the budget and actual comparison statement in accordance with the budgetary process (budgetary basis) to provide a meaningful comparison with the budget.

The major differences between the budgetary basis actual and GAAP basis actual are as follows:
 Year-end encumbrances are recognized as the equivalent of expenditures in the budgetary basis financial statements, while encumbered amounts are not recognized as expenditures on the GAAP basis until the liability is incurred.
 Expenditures of prior year encumbrances are recognized on the GAAP basis in the current year, while on the budgetary basis prior year encumbrances were recognized in the prior year.  Accrued liabilities and compensated absences are recognized on the GAAP basis, while the budgetary basis does not recognize accrued liabilities.  Revenues considered susceptible to accrual on the GAAP basis are not recognized on the budgetary basis until received.
 Special item resulted from dissolution of the Agency are included in the City’s GAAP basis financial statements. However, formal budgets are not prepared for non-cash transactions, and as such are excluded from the budgetary basis financial schedules.
 Increases to certain GAAP basis advances to other funds are treated as expenditures for budgetary basis financial statements.

Notes to Required Supplementary Information
Supplementary Information
This page intentionally left blank
171

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS

GAS TAX
The fund accounts for revenues and expenditures received from the State under Street and Highways Codes Sections 2105 (Gas Tax 2105), 2106 (Collier-Unruh) and 2107 (Special Gas Tax) and from the State under the Road Repair and Accountability Act of 2017 under the Streets and Highways Code Section 2030. The allocations must be spent for street maintenance or construction and a limited amount for engineering.

HUD PROGRAMS
This fund accounts for grant funds received from other governmental agencies for the purpose of developing viable urban communities.

CITY AFFORDABLE HOUSING
This fund accounts for the City’s Below Market Housing Program for low and moderate income residents.

SANTA CLARA HOUSING AUTHORITY FUND
On February 22, 2011, the Santa Clara Housing Authority (SCHA), a special revenue fund, was established to account for housing loans to assist in providing affordable housing. On March 8, 2011, the City, former RDA, and the SCHA executed an assignment and assumption agreement whereby the SCHA assumed responsibility for housing loans for qualifying individuals and groups. Loans assigned were made under various programs; substantially all are long-term in nature.

MAINTENANCE
This fund accounts for the maintenance of the Lawrence Station Community Facility District and two Parking Districts located near the City’s Convention Center and the downtown area. Funds are received by means of a Special Benefit Assessment levied against the property owners in the respective districts.

OPERATING GRANTS FUND
This fund accounts for grant funds received from other governmental agencies for various operating activities.

NEW DEVELOPMENT SERVICE FEE
This fund accounts for the revenues and expenditures from the new development-related fees that are imposed upon new development projects in the City.
172
This page intentionally left blank

CITY OF SANTA CLARA
NON-MAJOR GOVERNMENTAL FUNDS (continued)
173

DEBT SERVICE FUNDS

PUBLIC FACILITIES FINANCING CORPORATION (PFFC)
This fund accumulates monies for the repayment of Certificates of Participation, which are financed by lease payments made by the City’s General Fund to the PFFC for use of the Police Administration Building and Library sites.

CAPITAL PROJECTS FUNDS

PARKS AND RECREATION FACILITIES
This fund was established to account for revenues, contributions and reimbursements received and costs incurred in connection with the acquisition and construction of the City parks.

STREETS AND HIGHWAYS IMPROVEMENT
This fund is used to account for revenues and expenditures related to road construction and traffic improvements.

STORM DRAIN IMPROVEMENT
This fund is used to account for revenues and expenditures related to the construction or modification of the City’s storm drainage system.

FIRE DEPARTMENT IMPROVEMENT
This fund is used to account for revenues and expenditures related to the construction or modification of City fire stations.

LIBRARY DEPARTMENT IMPROVEMENT
This fund is used to account for revenues and expenditures related to the construction or modification of the City’s library facilities.

PUBLIC FACILITIES
This fund is used to account for revenues and expenditures related to the construction, acquisition or modification of public improvements not accounted for in another Capital Projects Fund. 174
HUD City Affordable
Gas Tax Programs Housing
ASSETS
Cash and investments:

Pooled cash and investments 1,646,020 $ 1,031,175 $ 16,185,598 $ Investments with fiscal agent - current - - -
Restricted cash - - -
Receivables (net of allowance for uncollectibles):

Accounts - - -
Loans 10,964,058 - 48,730,846
Intergovernmental 435,276 472,961 -
Investments with fiscal agent - noncurrent - - -
Total Assets $ 12,430,509 2,118,981 $ 64,916,444 $

LIABILITIES
Accrued liabilities $ 309,174 - $ 92,125 $
Advances from other funds - - -
Total Liabilities 309,174 - 92,125

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - Loans 10,964,058 - 48,730,846
Total Deferred Inflows of Resources - 10,964,058 48,730,846

FUND BALANCES
Restricted 1,157,277 2,118,981 16,093,473
Committed - - -
Total Fund Balances 1,157,277 2,118,981 16,093,473
Total Liabilities, Deferred Inflows of Resources
and Fund Balances $ 12,430,509 2,118,981 $ 64,916,444 $

NON-MAJOR GOVERNMENTAL FUNDS

CITY OF SANTA CLARA

COMBINING BALANCE SHEET
June 30, 2022

SPECIAL REVENUE FUNDS
Combining Balance Sheet
175
Santa Clara Operating New Development Public Facilities Housing Authority Maintenance Grants Fund Service Fee Financing Corp. $ 1,260,441 4,248,160 $ 1,607,896 $ 29,502,259 $ 18,287 $ - - - - 19
156,961 - - - -
284,355 - - - -
- 6,541,070 - - -
349 - 423,826 - -
- - - - 704,235
$ 1,702,106 10,789,230 $ 2,031,722 $ 29,502,259 $ 722,541 $ $ 66,129 19,240 $ 79,711 $ 240,849 $ $ -
- - - - -
66,129 19,240 79,711 240,849 -
- 6,541,070 - - -
- 6,541,070 - - -
1,635,977 - 1,952,011 470,088 722,541
- 4,228,920 - 28,791,322 -
1,635,977 4,228,920 1,952,011 29,261,410 722,541
$ 1,702,106 10,789,230 $ 2,031,722 $ 29,502,259 $ 722,541 $

SPECIAL REVENUE FUNDS DEBT SERVICE FUND

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
June 30, 2022
176
Parks Streets
and and Storm
Recreation Highways Drain
Facilities Improvement Improvement
ASSETS
Cash and investments:

Pooled cash and investments 34,063,399 $ 59,771,296 $ 7,120,207 $ Investments with fiscal agent - current - - -
Restricted cash 2,149,658 - -
Receivables (net of allowance for uncollectibles):

Accounts - - 133,399
Loans - - -
Intergovernmental - - -
Investments with fiscal agent - noncurrent - - -
Total Assets $ 61,920,954 34,063,399 $ 7,253,606 $

LIABILITIES
Accrued liabilities $ 3,103,043 104,785 $ 700,759 $
Advances from other funds 5,539,540 - -
Total Liabilities 3,103,043 5,644,325 700,759

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - Loans - - -
Total Deferred Inflows of Resources - - -

FUND BALANCES
Restricted 43,014,307 25,036,301 423,110
Committed 15,803,604 3,382,773 6,129,737
Total Fund Balances 28,419,074 58,817,911 6,552,847
Total Liabilities, Deferred Inflows of Resources
and Fund Balances 34,063,399 $ 61,920,954 $ 7,253,606 $

CAPITAL PROJECTS FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
June 30, 2022 (continued)
177
Total
Fire Library Non-Major
Department Department Public Governmental
Improvement Improvement Facilities Funds
$ 167,026 1,375,902 $ 16,859,423 $ 174,857,089 $
- - - 19
- - - 2,306,619
- - 793,223 1,210,977
- - - 66,235,974
- - - 1,332,412
- - - 704,235
$ 167,026 1,375,902 $ 17,652,646 $ 246,647,325 $
$ 42,969 $ 6,500 $ 5,925,050 1,159,766 $
- - - 5,539,540
6,500 42,969 1,159,766 11,464,590
- - - 66,235,974
- - - 66,235,974
- - 2,501,248 95,125,314
160,526 1,332,933 13,991,632 73,821,447
160,526 1,332,933 16,492,880 168,946,761
$ 167,026 1,375,902 $ 17,652,646 $ 246,647,325 $

CAPITAL PROJECTS FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
June 30, 2022 (continued)
178
HUD City Affordable
Gas Tax Programs Housing

REVENUES
Taxes:

Other $ - - $ - $
Intergovernmental 2,063,111 5,352,279 16,611
Charges for services - - 30,688
Interest and rents 437 253,506 191,544
Other 537,657 - 9,120,912
- - -
Total Revenues 2,601,205 5,605,785 9,359,755

EXPENDITURES
Current:

General Administration 2,690,143 - 5,039,720
Public Works - - -
Parks and Recreation - - -
Public Safety:

Police - - -
Fire - - -
Planning and Inspection - - -
Library - - -
Capital outlay - - -
Debt service:

Principal payments - - -
Interest and fiscal fees - - -
- - -
Total Expenditures 2,690,143 - 5,039,720

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (88,938) 5,605,785 4,320,035

OTHER FINANCING SOURCES (USES)
Transfers in - 382,163 -
Transfers (out) (24,000) (6,046,580) -
Total Other Financing Sources (Uses) (5,664,417) (24,000) - NET CHANGE IN FUND BALANCE (58,632) (112,938) 4,320,035 Fund balances - beginning 1,270,215 2,177,613 11,773,438 Fund balances - ending $ 1,157,277 2,118,981 $ 16,093,473 $

SPECIAL REVENUE FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
For the year ended June 30, 2022
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 179

DEBT SERVICE FUND
Santa Clara Operating New Development Public Facilities Housing Authority Maintenance Grants Fund Service Fee Financing Corp. $ 328,257 - $ - $ - $ - $
- - 27,327,765 - -
937,225 - 65,997 7,181,833 -
11,750 59,767 - - 623
- 470,505 - 335,491 -
- - - - -
1,277,232 530,272 27,393,762 18,336,208 623
- 166,829 201,753 - -
1,619,258 - 86 - -
13,924 - 210,437 - -
- - 15,441,680 - -
- - 11,718,958 - -
- - 107,919 11,768,951 -
- - 104,483 - -
- - - - -
- - - - 2,005,000
- - - - 497,604
- - - - -
1,633,182 166,829 27,785,316 11,768,951 2,502,604
(355,950) 363,443 (391,554) 6,567,257 (2,501,981)
771,349 - 826,293 22,347,656 2,501,439
(383,097) - (13,333) (185,200) -
388,252 - 812,960 22,162,456 2,501,439
32,302 363,443 421,406 28,729,713 (542)
1,603,675 3,865,477 1,530,605 531,697 723,083
$ 1,635,977 4,228,920 $ 1,952,011 $ 29,261,410 $ 722,541 $

SPECIAL REVENUE FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
For the year ended June 30, 2022
180
Parks Streets
and and Storm
Recreation Highways Drain
Facilities Improvement Improvement

REVENUES
Taxes:

Other $ - - $ - $
Intergovernmental 1,847,939 59,245 -
Charges for services - - 1,478,423
Interest and rents 217,546 276,420 6,794
Other 1,395,274 18,688,729 -
- - -
Total Revenues 3,460,759 19,024,394 1,485,217

EXPENDITURES
Current:

General Administration - - -
Public Works 3,266,768 - 400,705
Parks and Recreation 756,552 - -
Public Safety:

Police - - -
Fire - - -
Planning and Inspection - - -
Library - - -
Capital outlay 11,799,378 1,174,639 2,417,883
Debt service:

Principal payments - - -
Interest and fiscal fees - - -
- - -
Total Expenditures 1,931,191 15,066,146 2,818,588

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 17,093,203 (11,605,387) (1,333,371)

OTHER FINANCING SOURCES (USES)
Transfers in 19,321,679 200,000 600,411
Transfers (out) (426,889) (2,037,768) (2,115,134)
Total Other Financing Sources (Uses) (1,837,768) 18,894,790 (1,514,723) NET CHANGE IN FUND BALANCE 15,255,435 7,289,403 (2,848,094) Fund balances - beginning 13,163,639 51,528,508 9,400,941 Fund balances - ending 28,419,074 $ 58,817,911 $ 6,552,847 $

CAPITAL PROJECTS FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
For the year ended June 30, 2022 (continued)
181
Total
Fire Library Non-Major
Department Department Public Governmental
Improvement Improvement Facilities Funds
$ - - $ - $ 328,257 $
- - 204,401 36,871,351
- - 713,030 10,407,196
- - 2,871 1,021,258
- - 4,121,879 34,670,447
- - -
- - 5,042,181 94,117,393
- - 4,726,685 12,825,130
- - 40,425 5,327,242
- - - 980,913
- - - 15,441,680
- 374,140 - 12,093,098
- - - 11,876,870
10,000 - - 114,483
34,784 80,399 3,688,067 19,195,150
- - - 2,005,000
- - - 497,604
- - - -
44,784 454,539 8,455,177 80,357,170
(44,784) (454,539) (3,412,996) 13,760,223
7,872 837,110 1,952,953 49,748,925
- (236) (1,262,002) (12,494,239)
7,872 836,874 690,951 37,254,686
(36,912) 382,335 (2,722,045) 51,014,909
197,438 950,598 19,214,925 117,931,852
$ 160,526 1,332,933 $ 16,492,880 $ 168,946,761 $

CAPITAL PROJECTS FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
For the year ended June 30, 2022 (continued)
182
Maintenance
Variance
Actual Amount Positive
Budget Budgetary Basis (Negative)

REVENUES
Taxes-Other $ 328,257 331,481 $ (3,224) $
Charges for services 937,225 937,331 (106)
Interest and rents 11,750 3,639 8,111
Total Revenues 1,277,232 1,272,451 4,781

EXPENDITURES
Current:

Total Public Works 1,612,693 2,022,287 409,594
Total Parks and Recreation 286,798 136,863 149,935
-
Total Expenditures 1,749,556 2,309,085 559,529

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (1,036,634) (472,324) 564,310

OTHER FINANCING SOURCES (USES)
Transfers in 771,349 771,349 -
Transfers out (383,097) (383,097) -
Total Other Financing Sources (Uses) 388,252 388,252 -

EXCESS (DEFICIENCY) OF REVENUES AND

OTHER SOURCES OVER EXPENDITURES
AND OTHER USES $ (84,072) (648,382) 564,310 $
ADJUSTMENTS TO BUDGETARY BASIS:

Expenditures of prior year encumbrances recognized on the GAAP basis (65,791) Current year encumbrances recognized on the budgetary basis 180,782 Net change in accrued liabilities recognized on the GAAP basis 1,383 Beginning Fund balance 1,603,675
Ending Fund balance $ 1,635,977

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL (NON-GAAP LEGAL BASIS)
For the year ended June 30, 2022

CITY OF SANTA CLARA

SPECIAL REVENUE FUNDS
Special Revenue Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis)
183

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS
Non-Major Enterprise Funds are used to finance and account for operations and activities performed by designated departments in the City or through third party agreements.

SOLID WASTE FUND
This fund accounts for the administration of the City’s garbage and rubbish collection service.

CEMETERY FUND
This fund accounts for the activities of the Mission City Memorial Park.

SANTA CLARA CONVENTION CENTER FUND
The Santa Clara Convention Center Fund was established in 1984 to account for the operations of the City’s Convention Center or through third party agreements.

SPORTS AND OPEN SPACE AUTHORITY FUND (SOSA)
SOSA was created by the City Council in 1974 for the acquisition and development of open space within the City and the development of local sports activities.
184
Solid
Waste Cemetery
ASSETS
Current assets:

Cash and investments:

Pooled cash and investments 5,735,257 $ 2,881,742 $
Receivables (net of allowance for uncollectible):

Accounts 8 6,487,254
Due from other funds 280,954 -
Total current assets 12,222,511 3,162,704
Noncurrent assets:

Restricted cash - 1,098,006
Capital assets:

Land 1,096,874 -
Buildings, infrastructure and land improvements 127, 1,280,641 362 Equipment 17,705 37,170
Construction in progress - -
2,395,220 164,532
Less accumulated depreciation 81,545 1,142,149
Net capital assets 1,253,071 82,987
Total noncurrent assets 1,180,993 1,253,071
Total assets 4,415,775 13,403,504

DEFERRED OUTFLOWS OF RESOURCES
OPEB related items 22,609 56,899
Pension related items 241,808 608,550
Total deferred outflows of resources 665,449 264,417

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2022
Combining Statement of Net Position
185
Santa Clara Sports and TOTAL
Convention Open Space Non-Major
Center Authority Enterprise Funds
$ 4,662 9,870,764 $ 18,492,425 $
- 2,410,613 8,897,875
- - 280,954
4,662 12,281,377 27,671,254
- 134,862 1,232,868
1,995,998 - 3,092,872
- 78,803,728 80,211,731
- 2,957,268 3,012,143
- 585,129 585,129
1,995,998 82,346,125 86,901,875
- 60,274,140 61,497,834
1,995,998 22,071,985 25,404,041
1,995,998 22,206,847 26,636,909
2,000,660 34,488,224 54,308,163
- - 79,508
- - 850,358
- - 929,866
(continued)

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2022
186
Solid
Waste Cemetery

LIABILITIES
Current liabilities:

Accrued liabilities 17,324 3,634,303
Unearned revenue - -
Accrued compensated absences 6,213 20,380
Current portion of landfill closure liability 743,00 - 0 Total current liabilities 4,383,516 37,704
Noncurrent liabilities:

Long-term compensated absences 48,078 157,712
Landfill closure liability 5,462,986 -
Net OPEB liability 242,487 610,261
Net pension liability 1,365,525 3,436,571
Total noncurrent liabilities 9,557,896 1,765,724
Total liabilities 13,941,412 1,803,428

DEFERRED INFLOWS OF RESOURCES
OPEB related items 17,258 43,432
Pension related items 340,636 857,268
Total deferred inflows of resources 900,700 357,894

NET POSITION
Net investment in capital assets 82,987 1,253,071
Restricted for capital projects and other agreements 1,098,006 2,187,637 Unrestricted (921,838) (1,954,152)
Total net position (deficit) (773,159) $ 2,518,870 $

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2022
187
Santa Clara Sports and TOTAL
Convention Open Space Non-Major
Center Authority Enterprise Funds
- 2,142,456 5,794,083
- 6,978,949 6,978,949
- - 26,593
- - 743,000
- 9,121,405 13,542,625
- - 205,790
- - 5,462,986
- - 852,748
- - 4,802,096
- - 11,323,620
- 9,121,405 24,866,245
- - 60,690
- - 1,197,904
- - 1,258,594
1,995,998 22,071,985 25,404,041
- 134,862 3,420,505
4,662 3,159,972 288,644
$ 2,000,660 25,366,819 $ 29,113,190 $
June 30, 2022

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF NET POSITION
188
Solid
Waste Cemetery
Operating revenues:

Charges for services $ 1,015,820 33,973,882 $
Other 7,865 866,558
Total operating revenues 34,840,440 1,023,685
Operating expenses:

Salaries and benefits 770,122 1,007,939
Materials, services and supplies 32,236,654 602,864
Depreciation 8,104 6,079
Total operating expenses 33,250,672 1,381,090
Operating income (loss) 1,589,768 (357,405)
Nonoperating revenues (expenses):

Interest revenue 30,221 (32,225)
Rents and royalties - 10,464
Total nonoperating revenues (expenses) (21,761) 30,221
Income (loss) before
contributions and transfers 1,568,007 (327,184)
Transfers in 7,969,558 33,600
Transfers (out) (822) (26,621)
Change in net position 1,574,986 7,641,552
Total net position - beginning (2,348,145) (5,122,682)
Total net position - ending $ 2,518,870 (773,159) $

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
For the year ended June 30, 2022
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 189
Santa Clara Sports and TOTAL
Convention Open Space Non-Major
Center Authority Enterprise Funds
$ - 8,527,284 $ 43,516,986 $
- - 874,423
- 8,527,284 44,391,409
4,590 326,379 2,109,030
4,573 9,949,867 42,793,958
- 1,557,456 1,571,639
9,163 11,833,702 46,474,627
(9,163) (3,306,418) (2,083,218)
139 2,754 889
- - 10,464
139 2,754 11,353
(9,024) (3,303,664) (2,071,865)
- 83,112 8,086,270
- (40,000) (67,443)
(9,024) (3,260,552) 5,946,962
2,009,684 28,627,371 23,166,228
$ 2,000,660 25,366,819 $ 29,113,190 $
For the year ended June 30, 2022

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
190
Solid
Waste Cemetery

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 1,023,685 31,959,870 $
Payments to suppliers (607,432) (31,216,463)
Payments to employees for salaries and benefits (1,3 (838,401) 86,026) Rents and royalties received - 10,464
Other receipts - 866,558
Net cash provided (used) by operating activities 234 (422,148) ,403

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
(Increase) in due from other funds (25,010) -
Transfers in 858,409 33,600
Transfers (out) (822) (26,621)
Cash Flows from Noncapital Financing Activities 6,97 832,577 9

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition and construction of capital assets, net - - Cash Flows from Capital and Related
Financing Activities - -

CASH FLOWS FROM INVESTING ACTIVITIES
Interest and dividends 30,221 (32,225)
Cash Flows from Investing Activities (32,225) 30,221
Net increase (decrease) in cash and cash
equivalents 440,650 209,157
Cash and cash equivalents at beginning of period 6,6 2,441,092 24,106 Cash and cash equivalents at end of period 6,833,263 $ 2,881,742 $ Cash and cash equivalents:

Pooled cash and investments $ 2,881,742 5,735,257 $
Restricted cash - 1,098,006
Total cash and cash equivalents 6,833,263 $ 2,881,742 $

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
Combining Statement of Cash Flows
191
Santa Clara Sports and TOTAL
Convention Open Space Non-Major
Center Authority Enterprise Funds
$ - 6,871,656 $ 39,855,211 $
(4,573) (8,084,124) (39,912,592)
(4,590) (326,379) (2,555,396)
- - 10,464
- - 866,558
(9,163) (1,538,847) (1,735,755)
- - (25,010)
- 83,112 975,121
- (40,000) (67,443)
- 43,112 882,668
- (303,398) (303,398)
- (303,398) (303,398)
139 2,754 889
139 2,754 889
(9,024) (1,796,379) (1,155,596)
13,686 11,802,005 20,880,889
$ 4,662 10,005,626 $ 19,725,293 $
$ 4,662 9,870,764 $ 18,492,425 $
- 134,862 1,232,868
$ 4,662 10,005,626 $ 19,725,293 $
(continued)

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
192
Solid
Waste Cemetery
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:

Operating income (loss) $ (357,405) 1,589,768 $
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:
(Decrease) Increase in due to OPEB system (20,489) 22,737 (Decrease) Increase in due to retirement system (221 (118,873) ,452) Depreciation 8,104 6,079
Change in assets and liabilities:

Receivables, net - (2,014,012)
Accrued liabilities (4,568) 1,020,191
Long-term portion estimated claims (136,146) -
Compensated absences 27,857 -
Unearned revenue - -
Other receipts - 10,464
Net cash provided (used) by operating activities 234 $ (422,148) ,403 $ NONCASH TRANSACTIONS:

Forgiveness of advances $ 7,111,149 - $

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
193
Santa Clara Sports and TOTAL
Convention Open Space Non-Major
Center Authority Enterprise Funds
$ (9,163) (3,306,418) $ (2,083,218) $
- - 2,248
- - (340,325)
- 1,557,456 1,571,639
- (2,144,921) (4,158,933)
- 1,865,743 2,881,366
- - (136,146)
- - 27,857
- 489,293 489,293
- - 10,464
$ (9,163) (1,538,847) $ (1,735,755) $
$ - - $ 7,111,149 $
For the year ended June 30, 2022

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF CASH FLOWS
This page intentionally left blank
195

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS
Internal Service Funds are used to finance and account for special activities and services performed by a designated department for other departments in the City on a cost reimbursement basis.

The concept of major funds does not extend to internal service funds because they do not do business with outside parties. For the Statement of Activities, the net revenues or expenses of each internal service fund are eliminated by netting them against the operations of the other City departments which generated them.

The remaining balance sheet items are consolidated with these same funds in the Statement of Net Position.

However, internal service funds are still presented separately in the Fund financial statements, including the funds below.

AUTOMOTIVE SERVICES
This fund accounts for the maintenance and replacement of vehicles and equipment used by all City departments. The source of revenue for this fund is rental fees charged to the various departments.

TECHNICAL EQUIPMENT SERVICES
This fund accounts for the maintenance and replacement of communication and computer equipment used by City departments. The source of revenue for this fund is rental fees charged to the various departments.

PUBLIC WORKS CAPITAL PROJECTS MANAGEMENT
This fund accounts for the Public Works staff time and non-personnel costs utilized to manage and work on specific capital improvement programs of the City. The source of revenue for this fund is fees charged to the departments requiring Public Works capital project services.

INFORMATION TECHNOLOGY SERVICES
This fund accounts for citywide cost associated with computer and telephone equipment replacement as well as other services including new or upgraded software, additional licenses for new users, and general information technology services provided to all City departments. The source of revenue for this fund is fees charged to the departments that require information technology services.

SPECIAL LIABILITY INSURANCE CLAIMS
This fund was established to account for the cost of claims and administrative costs for the City’s selfinsured general liability program.

WORKERS’ COMPENSATION INSURANCE CLAIMS
This fund is used to account for the cost of claims for service connected with injuries and illnesses sustained by members of the City’s work force.
196
Technical PW Capital
Automotive Equipment Projects
Services Services Management
ASSETS
Current assets:

Cash and investments:

Pooled cash and investments 12,021,989 $ 1,778,773 $ 772,531 $ Receivables (net of allowance for
uncollectible):

Accounts - 7,134 -
Due from other funds - 34,980 -
Materials, supplies and prepaids 259,412 - -
Total current assets 12,323,515 1,778,773 772,531
Noncurrent assets:

Right-to-use leased assets, net of amortization - - -
Capital assets:

Equipment 3,379,177 39,219,442 -
Total capital assets 39,219,442 3,379,177 -
Less accumulated depreciation 27,324,747 3,216,798 -
Net capital assets 11,894,695 162,379 -
Total noncurrent assets 11,894,695 162,379 -
Total assets 1,941,152 24,218,210 772,531

DEFERRED OUTFLOWS OF RESOURCES
OPEB related items - 70,841 -
Pension related items 757,667 - -
Total deferred outflows of resources 828,508 - -

COMBINING STATEMENT OF NET POSITION

INTERNAL SERVICE FUNDS

CITY OF SANTA CLARA
June 30, 2022
Combining Statement of Net Position
197
Special Workers'
Information Liability Compensation
Technology Insurance Insurance
Services Claims Claims TOTAL
$ 9,566,355 3,903,464 $ 9,052,582 $ 37,095,694 $
4,688 10,744 421,019 443,585
- - - 34,980
- - 25,938 285,350
9,571,043 3,914,208 9,499,539 37,859,609
- 450,514 - 450,514
- 6,040 - 42,604,659
- 6,040 - 42,604,659
- 3,523 - 30,545,068
- 2,517 - 12,059,591
- 453,031 - 12,510,105
9,571,043 4,367,239 9,499,539 50,369,714
- 32,407 - 103,248
- 346,592 - 1,104,259
- 378,999 - 1,207,507
(continued)

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2022
198
Technical PW Capital
Automotive Equipment Projects
Services Services Management

LIABILITIES
Current liabilities:

Accrued liabilities - 349,619 62,038
Interest payable - - -
Due to other funds 3,317,877 904,117 -
Accrued compensated absences 29,425 - -
Current portion of lease obligation - - -
Total current liabilities 3,696,921 904,117 62,038
Noncurrent liabilities:

Long-term portion estimated claims - - -
Long-term compensated absences 227,708 - -
Long-term lease obligation - - -
OPEB pension liability 759,793 - -
Net pension liability 4,278,640 - -
Total noncurrent liabilities 5,266,141 - -
Total liabilities 904,117 8,963,062 62,038

DEFERRED INFLOWS OF RESOURCES
OPEB related items - 54,072 -
Pension related items 1,067,327 - -
Total deferred inflows of resources 1,121,399 - -

NET POSITION
Net investment in capital assets 11,894,695 162,379 -
Unrestricted 874,656 3,067,562 710,493
Total net position (deficit) 14,962,257 $ 1,037,035 $ 710,493 $

COMBINING STATEMENT OF NET POSITION
June 30, 2022

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS
199
Special Workers'
Information Liability Compensation
Technology Insurance Insurance
Services Claims Claims TOTAL
3,467,297 1,755,275 4,020,971 9,655,200
- 31 - 31
- - - 4,221,994
- 42,050 - 71,475
- 207,893 - 207,893
3,467,297 2,005,249 4,020,971 14,156,593
6,885,000 - 17,034,000 23,919,000
- 325,410 - 553,118
- 242,883 - 242,883
- 347,565 - 1,107,358
- 1,957,252 - 6,235,892
6,885,000 2,873,110 17,034,000 32,058,251
10,352,297 4,878,359 21,054,971 46,214,844
- 24,736 - 78,808
- 488,245 - 1,555,572
- 512,981 - 1,634,380
- 2,517 - 12,059,591
(781,254) (647,619) (11,555,432) (8,331,594)
$ (781,254) (645,102) $ (11,555,432) $ 3,727,997 $

COMBINING STATEMENT OF NET POSITION
June 30, 2022

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS
200
Technical PW Capital
Automotive Equipment Projects
Services Services Management
Operating revenues:

Charges for services $ 482,242 8,323,379 $ 3,962,714 $
Insurance refunds and other - - -
Total operating revenues 482,242 8,323,379 3,962,714
Operating expenses:

Salaries and benefits - 2,031,708 2,973,325
Materials, services and supplies 2,369,634 373,997 435,266 General and administrative - - -
Amortization - Right to use assets - - -
Depreciation 110,296 2,587,735 -
Total operating expenses 484,293 6,989,077 3,408,591
Operating income (loss) (2,051) 1,334,302 554,123
Nonoperating revenues (expenses):

Interest revenue - - -
Other revenue - 137,134 -
Interest expense - - -
Gain (loss) on retirement of assets (8,755) - -
Total nonoperating revenues (expenses) 128,379 - -
Income (loss) before
contributions and transfers 1,462,681 (2,051) 554,123
Transfers in - 933,161 -
Transfers (out) - (960,000) (408,247)
Change in net position (2,051) 1,435,842 145,876
Total net position - beginning 1,039,086 13,526,415 564,617 Total net position - ending $ 1,037,035 14,962,257 $ 710,493 $

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
For the year ended June 30, 2022
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 201
Special Workers'
Information Liability Compensation
Technology Insurance Insurance
Services Claims Claims TOTAL
$ 7,070,567 12,064,739 $ 5,998,858 $ 37,902,499 $
295,090 - 346,487 641,577 -
7,365,657 12,064,739 6,345,345 38,544,076
- 1,828,897 - 6,833,930
- 9,288,491 - 12,467,388
10,640,952 - 4,194,324 14,835,276
- 207,930 - 207,930
- 1,208 - 2,699,239 -
10,640,952 11,326,526 4,194,324 37,043,763
(3,275,295) 738,213 2,151,021 1,500,313
37 - - 37
24,425 - - 161,559
- (716) - (716)
- - - (8,755) -
24,462 (716) - 152,125
(3,250,833) 737,497 2,151,021 1,652,438
5,200,000 - - 6,133,161
- - - (1,368,247)
1,949,167 737,497 2,151,021 6,417,352
(2,730,421) (1,382,599) (13,706,453) (2,689,355)
$ (781,254) (645,102) $ (11,555,432) $ 3,727,997 $

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
For the year ended June 30, 2022
202
Technical PW Capital
Automotive Equipment Projects
Services Services Management

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 482,242 8,387,964 $ 3,962,714 $ Payments to suppliers (373,997) (2,238,084) (127,440)
Payments to employees for salaries and benefits (2,3 - 25,124) (2,973,325) Internal activity - payments to other funds (222,286 - ) (245,788) Claims paid - - -
Other receipts - 137,134 -
Net cash provided (used) by operating activities 3,7 108,245 39,604 616,161

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
(Increase) in due from other funds (2,105) - -
Increase in due to other funds 238,397 102,092 -
Transfers in - 933,161 -
Transfers (out) - (960,000) (408,247)
Cash Flows from Noncapital Financing Activities 209,4 102,092 53 (408,247)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition and construction of capital assets, net - (2,169,296) - Principal payment on capital debt - - -
Interest paid on capital debt - - -
Cash Flows from Capital and Related
Financing Activities - (2,169,296) -

CASH FLOWS FROM INVESTING ACTIVITIES
Interest and dividends - - -
Cash Flows from Investing Activities - - -
Net increase (decrease) in cash and cash
equivalents 210,337 1,779,761 207,914
Cash and investments at beginning of period 10,242,22 1,568,436 8 564,617 Cash and investments at end of period 12,021,989 $ 1,778,773 $ 772,531 $ Cash and cash equivalents:

Pooled cash and investments 12,021,989 $ 1,778,773 $ 772,531 $ Total cash and cash equivalents 12,021,989 $ 1,778,773 $ 772,531 $

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
Combining Statement of Cash Flows
203
Special Workers'
Information Liability Compensation
Technology Insurance Insurance
Services Claims Claims TOTAL
$ 7,070,567 12,058,335 $ 6,708,943 $ 38,670,765 $
- (8,154,412) - (10,893,933)
- (1,882,213) - (7,180,662)
- (57,199) - (525,273)
(6,780,230) - (4,636,070) (11,416,300)
25,348 - - 162,482
315,685 1,964,511 2,072,873 8,817,079
- - - (2,105)
- - - 340,489
5,200,000 - - 6,133,161
- - - (1,368,247)
5,200,000 - - 5,103,298
- - - (2,169,296)
- (207,639) - (207,639)
- (716) - (716)
- (208,355) - (2,377,651)
37 - - 37
37 - - 37
5,515,722 1,756,156 2,072,873 11,542,763
-
4,050,633 2,147,308 6,979,709 25,552,931
$ 9,566,355 3,903,464 $ 9,052,582 $ 37,095,694 $
$ 9,566,355 3,903,464 $ 9,052,582 $ 37,095,694 $
$ 9,566,355 3,903,464 $ 9,052,582 $ 37,095,694 $
(continued)

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
204
Technical PW Capital
Automotive Equipment Projects
Services Services Management
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:

Operating income (loss) $ (2,051) 1,334,302 $ 554,123 $ Adjustments to reconcile operating income (loss) to net cash provided by operating activities:
(Decrease) Increase in lease obligation - - -
(Decrease) Increase in due to OPEB system (25,513) - -
(Decrease) Increase in due to retirement system (275 - ,716) - Depreciation 110,296 2,587,735 -
Change in assets and liabilities:

Receivables, net - 64,585 -
Inventory - (58,494) -
Accrued liabilities - (32,242) 62,038
Long-term portion estimated claims - - -
Compensated absences - 7,813 -
Other receipts - 137,134 -
Net cash provided (used) by operating activities 3,7 $ 108,245 39,604 $ 616,161 $

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
205
Special Workers'
Information Liability Compensation
Technology Insurance Insurance
Services Claims Claims TOTAL
$ (3,275,295) 738,213 $ 2,151,021 $ 1,500,313
- 207,930 - 207,930
- (11,671) - (37,184)
- (126,125) - (401,841)
- 1,208 - 2,699,239
283,565 (6,404) 710,085 1,051,831
- - (25,938) (84,432)
1,180,067 1,076,880 402,705 2,689,448
2,102,000 - (1,165,000) 937,000
- 84,480 - 92,293
25,348 - - 162,482
$ 315,685 1,964,511 $ 2,072,873 $ 8,817,079 $

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2022
This page intentionally left blank
207

CITY OF SANTA CLARA

COMBINING FIDUCIARY FUNDS

PRIVATE PURPOSE TRUST FUNDS
Private Purpose Trust Funds are used to report trust arrangements, other than pension and investment trusts, under which principal and income benefit individuals, private organizations, or other governments. The Private Purpose Trust Funds are described below:

CHARITABLE TRUST
This fund accounts for the various gifts, donations and bequests received by the City for distribution to various nonprofit organizations as determined by the Mission City Community Fund.

SUCCESSOR AGENCY
California State laws ABx1 26 and AB 1484 provided for the dissolution of California Redevelopment Agencies effective January 31, 2012 and the transfer of all non-housing Agency assets to the Successor Agency Redevelopment Obligation Retirement Fund.

CUSTODIAL FUNDS
Custodial Funds are presented separately from the Government-wide and Fund financial statements.

Custodial Funds account for assets held by the City as an agent for individuals, governmental entities, and non-public organizations. These funds include the following:

EMPLOYEE CONTRIBUTED EMERGENCY PAID LEAVE POOL FUND
This fund is used to account for monies collected and disbursed for the employees paid leave program that is administered by respective bargaining units. The City does not make contribution to this fund.

SPECIAL ASSESSMENTS
This fund accounts for monies collected and disbursed from special assessment districts where the City is not obligated for the outstanding debt payments.

CUSTODIAL DEPOSITS
This fund accounts for various miscellaneous deposits for other entities. 208
Total
Charitable Successor Private Purpose
Trust Agency Trust
ASSETS
Current assets
Cash and investments:

Pooled cash and investments 634,618 $ 637,942 $ 1,272,560 $ Receivables (net of allowance for uncollectibles):

Interest and rent 215,408 13,956 229,364
Leases receivable 736,474 - 736,474
Total current assets 1,589,824 648,574 2,238,398
Noncurrent assets
Leases receivable- noncurrent 43,699,299 - 43,699,299
Investment with fiscal agent-noncurrent 2,859,692 - 2,859,692 Land held for resale 532,542 - 532,542
Total noncurrent assets 44,231,841 2,859,692 47,091,533 -
Total Assets 45,821,665 3,508,266 49,329,931

LIABILITIES
Unearned revenues 110,917 - 110,917
Due to other agencies 630,000 - 630,000
Total Liabilities 740,917 - 740,917

DEFERRED INFLOWS OF RESOURCES
Leases related 43,617,753 - 43,617,753
Total deferred inflows of resources - 43,617,753 43,617,753

NET POSITION
Held in trust for private purpose 3,508,266 - 3,508,266 1,462,995 - 1,462,995
-
Total Net Position $ 1,462,995 3,508,266 $ 4,971,261 $

CITY OF SANTA CLARA

PRIVATE PURPOSE TRUST FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2022
Restricted for individuals, organization
and other governments
Private Purpose Trust Funds
Combining Statement of Net Position
209
Total
Charitable Successor Private Purpose
Trust Agency Trust

ADDITIONS
Investment income:

Net change in fair value of investments (326,060) $ - $ (326,060) $ Interest and rents 2,952,451 150,060 3,102,511
Net investment income 2,952,451 (176,000) 2,776,451
Other - - -
Total additions 2,952,451 (176,000) 2,776,451

DEDUCTIONS
General and administrative 756 79,000 79,756
Pass through to the County of Santa Clara - 2,120,000 2,120,000 Total deductions 2,120,756 79,000 2,199,756
831,695 (255,000) 576,695
Net position - beginning 631,300 3,763,266 4,394,566
Net position - ending $ 1,462,995 3,508,266 $ 4,971,261 $

CITY OF SANTA CLARA

PRIVATE PURPOSE TRUST FUNDS

COMBINING STATEMENT OF CHANGES IN NET POSITION
For the Year Ended June 30, 2022
Net increase (decrease) in fiduciary net position
Combining Statement of Changes in Net Position
210
Employee Contributed Total
Emergency Paid Special Custodial Custodial
Leave Pool Assessments Deposits Funds
ASSETS
Cash and investments:

Pooled cash and investments 422,270 $ 347,377 $ 23,519 $ 793,166 $ Total cash 347,377 422,270 23,519 793,166
Total Assets 347,377 422,270 23,519 793,166

NET POSITION
347,377 422,270 23,519 793,166
-
Total Net Position $ 347,377 422,270 $ 23,519 $ 793,166 $

CITY OF SANTA CLARA

CUSTODIAL FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2022
Restricted for individuals, organization
and other governments
Custodial Funds
Combining Statement of Net Position
211
Employee Contributed Total
Emergency Paid Special Custodial Custodial
Leave Pool Assessments Deposits Funds

ADDITIONS
Contributions:

Employee contributions $ - 138,214 $ - $ 138,214 $
Other plans 1,340,818 - - 1,340,818
Gifts and bequest - - 675 675
Total contributions 1,340,818 138,214 675 1,479,707
Investment income:

Interest and rents - 6,139 - 6,139
Net investment income - 6,139 - 6,139
Total additions 1,340,818 144,353 675 1,485,846

DEDUCTIONS
General and administrative 80,000 - 2,401 82,401
Benefits paid - 107,543 - 107,543
Pass through to the Stadium Authority 1,085,575 - - 1,085,575 Total deductions 1,165,575 107,543 2,401 1,275,519
175,243 36,810 (1,726) 210,327
Net position - beginning 172,134 385,460 25,245 582,839 Net position - ending $ 347,377 422,270 $ 23,519 $ 793,166 $

CITY OF SANTA CLARA

CUSTODIAL FUNDS

COMBINING STATEMENT OF CHANGES IN NET POSITION
For the Year Ended June 30, 2022
Net increase (decrease) in fiduciary net position
Combining Statement of Changes in Net Position

This page intentionally left blank

Statistical Section (Unaudited)
This page intentionally left blank
215

CITY OF SANTA CLARA

STATISTICAL SECTION
This part of the City of Santa Clara’s Annual Comprehensive Report provides detailed information to better understand the data presented within the financial statements, note disclosures, and required supplementary information.

TABLES
FINANCIAL TRENDS 1 - 4
Contains trend information to help the reader understand how the City’s financial performance has changed over time.

REVENUE CAPACITY 5 - 10
Contains information to help the reader assess the City’s most significant local revenue source, the property tax.

DEBT CAPACITY 11 - 15
Presents information to assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

DEMOGRAPHIC AND ECONOMIC INFORMATION 16 - 17
Offers information to help the reader understand the environment within which the City’s financial activities take place.

OPERATING INFORMATION 18 - 21
Contains service and infrastructure data to help the reader understand how the City’s financial report relates to the services the City provides and the activities it performs.

City of Santa Clara
216

CITY OF SANTA CLARA

NET POSITION BY COMPONENT
Last Ten Fiscal Years
(Accrual Basis of Accounting)
(In Thousands)
Table 1
2022 2021 2020 2019 2018 2017 2016 2015 (2) 2014 2013 (1) Governmental Activities:

Net Investment in Capital Assets 625,872 $ 626,115 $ 613,187 $ 585,201 $ 553,135 $ 532,255 $ 507,390 $ 524,645 $ 528,043 $ 522,175 $ Restricted 317,290 275,653 260,872 244,775 246,048 242,393 207,996 198,316 189,618 230,545 Unrestricted (283,492) (289,637) (224,176) (169,513) (180,368) (135,818) (125,913) (186,423) 102,421 127,390 $ 612,131 659,670 $ 649,883 $ 660,463 $ 618,815 $ 638,830 $ 589,473 $ 536,538 $ 820,082 $ 880,110 $ Business - Type Activities:

Net Investment in Capital Assets 1,079,607 $ 1,042,058 $ 974,612 $ 953,098 $ 917,738 $ 882,187 $ 844,911 $ 760,150 $ 496,107 $ 406,972 $ Restricted 333,069 234,289 249,516 185,267 174,595 142,459 133,718 93,891 96,318 90,437 Unrestricted 112,922 100,116 80,997 31,258 (24,141) (13,132) (61,843) (1,573) 325,633 382,992 $ 1,376,463 1,525,598 $ 1,305,125 $ 1,169,623 $ 1,068,192 $ 1,011,514 $ 916,786 $ 852,468 $ 918,058 $ 880,401 $ Primary Government
Net Investment in Capital Assets 1,705,479 $ 1,668,173 $ 1,587,799 $ 1,538,299 $ 1,470,873 $ 1,414,442 $ 1,352,301 $ 1,284,795 $ 1,024,150 $ 929,147 $ Restricted 650,359 509,942 510,388 430,042 420,643 384,852 341,714 292,207 285,936 320,982 Unrestricted (170,570) (189,521) (143,179) (138,255) (204,509) (148,950) (187,756) (187,996) 428,054 510,382 $ 1,988,594 2,185,268 $ 1,955,008 $ 1,830,086 $ 1,687,007 $ 1,650,344 $ 1,506,259 $ 1,389,006 $ 1,738,140 $ 1,760,511 $ Note:
(1) Certain amounts in the prior year have been reclassified due to the implementation of GASB Statement No. 65. (2) Certain amounts cannot be compared to fiscal year 2015 due to the implementation of GASB Staetment No. 68.

Source: Finance Office, City of Santa Clara.

Total Governmental Activities Net Assets:Total Business - Type Activities Net PositionTotal Primary Government Net Position

1. Net Position by Component – Last Ten Fiscal Years
217

2. Changes in Net Position – Last Ten Fiscal Years
Table 2
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Expenses:Governmental Activities:

General Administration $ 33,671 37,676 $ 26,436 $ 30,328 $ 25,467 $ 20,636 $ 22,692 $ 18,310 $ 15,208 $ 15,799 $ City Clerk 1,414 1,171 1,292 1,263 864 1,020 309 389 263 388 City Attorney 1,890 2,079 1,945 1,700 1,000 860 270 194 102 100 Human Resources 1,616 2,136 2,751 2,011 1,886 1,675 748 654 502 367 Finance 10,188 10,325 10,497 7,111 6,253 5,323 1,633 1,357 844 1,270 Public Works 41,951 38,837 46,176 45,725 38,276 34,314 30,365 29,713 30,287 29,337 Parks and Recreation 20,266 20,520 27,491 23,285 21,369 18,616 17,106 16,135 15,913 15,858 Public Safety: Police 87,563 71,575 89,477 72,449 76,742 63,612 58,599 54,252 47,105 45,120 Fire 71,025 58,117 67,767 58,120 55,372 43,384 37,120 35,341 34,099 33,162 Planning and Inspection 15,537 15,487 16,281 12,879 10,614 9,162 7,855 7,593 6,848 6,383 Library 10,864 10,925 13,773 12,687 12,302 10,553 10,718 8,851 8,161 7,712 Interest on long term debt 487 408 560 630 695 749 803 853 1,125 2,107 Total Governmental Activities Expenses (Net) 296,472 269,256 304,446 268,188 250,840 209,904 188,218 173,642 160,457 157,603 Business-Type Activities:

Utilities: Electric 454,503 552,552 453,112 408,812 437,419 402,977 386,239 377,017 362,303 338,786 Water 45,353 45,578 43,196 46,067 41,777 35,649 32,254 29,482 28,181 26,683 Sewer 30,103 30,523 28,614 29,462 25,689 23,047 19,081 17,981 17,237 16,054 Water Recycling 5,844 5,700 6,344 5,909 4,972 4,858 2,672 2,902 2,030 1,979 Solid Waste 29,769 32,997 25,567 25,393 23,363 26,621 20,142 19,717 18,486 19,222 Cemetery 1,359 1,350 1,659 1,257 1,174 820 781 676 901 991 Sports and Open Space Authority 8 9 10 9 10 53 102 97 95 44 Santa Clara Golf and Tennis Club - - 1,675 2,837 2,951 2,772 2,777 2,754 2,827 2,662 Santa Clara Convention Center 4,667 11,829 16,738 12,967 8,423 8,478 9,075 9,006 8,926 8,553 Santa Clara Stadium Authority 41,181 65,308 79,539 103,899 111,210 105,593 147,435 98,363 21,913 27,442 Total Business-Type Activities Expenses 612,787 745,846 656,454 636,612 656,988 610,868 620,558 557,995 462,899 442,416 Total Primary Expenses $ 909,259 1,015,102 $ 960,900 $ 904,800 $ 907,828 $ 820,772 $ 808,776 $ 731,637 $ 623,356 $ 600,019 $ Source: Finance Office, City of Santa Clara

CITY OF SANTA CLARA

CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
(In Thousands)
218
Table 2
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Program Revenues:Governmental Activities:

Charges for Services: General Administration $ 3,475 9,592 $ 8,837 $ 7,904 $ 398 $ 1,651 $ 1,247 $ 416 $ 355 $ 562 $ Parks and Recreation 891 2,049 1,495 3,431 3,126 3,169 3,114 4,207 3,157 2,825 Planning and Inspection 16,470 21,274 15,564 19,048 12,837 13,658 15,065 13,944 9,299 6,872 Other Programs 12,604 15,282 15,057 17,476 21,303 19,658 23,022 16,281 12,296 9,352Operating Grants and Contributions 17,053 34,060 9,455 8,457 7,172 4,723 5,809 8,240 6,566 3,922Capital Gains and Contributions 11,598 6,072 29,619 23,634 20,273 14,280 12,100 5,848 10,347 4,490Total Governmental Activities Program Revenues 62,091 88,329 80,027 79,950 65,109 57,139 60,357 48,936 42,020 28,023 Business-Type Activities:

Utilities:Electric 526,710 611,549 507,494 460,263 475,434 459,849 412,441 381,858 364,280 345,045 Equity in income (losses) of joint ventures (1) - - - - - - - (4,719) 4,214 6,111Water 52,530 51,606 51,373 47,017 46,685 39,953 31,955 31,462 30,979 30,177Sewer 16,587 116,443 71,041 44,763 50,942 43,176 41,659 43,400 34,585 32,090 Equity in income (losses) of joint ventures (1) - - - - - - - (10,036) (3,383) (3,654)Water Recycling 6,182 6,072 6,304 6,299 5,479 4,834 3,841 3,381 3,136 2,774Solid Waste 26,603 34,851 26,645 25,983 23,544 22,585 21,854 20,404 20,154 19,575Cemetery 844 1,024 585 634 666 799 693 649 528 632Sports and Open Space Authority - - - - - 58 72 66 82 420Santa Clara Golf and Tennis Club - - 674 2,001 1,991 1,780 1,666 2,207 2,857 2,929Santa Clara Convention Center 1,221 8,527 14,252 12,734 9,061 9,581 7,399 7,112 7,240 6,933Santa Clara Stadium Authority 38,682 59,528 87,976 112,550 112,039 110,059 146,619 102,908 33,193 -Total Business-Type Activities Program Revenues 669,359 889,600 766,344 712,244 725,841 692,674 668,199 578,692 497,865 443,032Total Primary Government Program Revenues 731,450 977,929 846,371 792,194 790,950 749,813 728,556 627,628 539,885 471,055 Net (Expense) Revenue:

Governmental Activities (234,381) (180,927) (224,419) (188,238) (185,731) (152,765) (127,861) (124,706) (118,437) (129,580) Business-Type Activities 56,572 143,754 109,890 75,632 68,853 81,806 47,641 20,697 34,966 616Total Primary Government Net (Expense) Revenue $ (177,809) (37,173) $ (114,529) $ (112,606) $ (116,878) $ (70,959) $ (80,220) $ (104,009) $ (83,471) $ (128,964) $ Note:
(1) Equity in income (losses) of joint ventures were included in the Electric and Sewer Business-Type Activities beginning in fiscal year 2016 Source: Finance Office, City of Santa Clara
Last Ten Fiscal Years
(Accrual Basis of Accounting)
(In Thousands)
(continued)

CITY OF SANTA CLARA

CHANGES IN NET POSITION
219

CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Table 2
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
General Revenue and other changes in Net PositionGovernmental Activities:

Taxes: Sales $ 56,178 56,902 $ 55,270 $ 65,036 $ 56,320 $ 55,751 $ 57,797 $ 49,648 $ 46,736 $ 44,159 $ Ad Valorem Property 68,358 74,188 65,132 58,502 54,965 50,943 45,627 37,574 39,187 31,651 Transient occupancy 2,949 10,812 15,994 23,229 20,580 20,484 20,557 18,186 15,141 13,673 Other 6,019 7,317 5,967 5,955 6,392 5,671 5,510 5,173 5,191 4,333 Internal Governmental, unrestricted: Motor Vehicle in-lieu - - - - - 55 49 50 - 51 Contribution in-lieu of taxes 24,548 27,259 22,710 21,304 21,986 21,117 19,057 17,493 16,591 15,219 Investment earnings 6,451 5,709 8,700 6,990 4,600 3,466 2,178 1,702 3,380 6,058 Net increase (decrease) in the fair value of investments (13,688) (5,207) 6,531 8,082 (2,452) (3,217) 1,049 496 1,815 (3,567) Equity in income (losses) of joint ventures - - 95 28 25 49 44 (40) (106) (286) Rents and royalties 9,852 7,205 9,032 9,762 10,494 11,410 13,642 11,189 3,781 13,658 Other 24,590 58,511 22,513 30,257 16,243 39,956 8,551 12,154 4,317 4,434 Special item - - - - - - (24,451) (9,224) (80,152) (29,563) Total Government General Revenue and Special Item 193,738 234,215 211,944 229,145 189,153 205,685 149,610 144,401 55,881 99,820 Business-Type Activities: (2)
Investment earnings 13,569 11,587 16,709 16,618 15,755 13,031 16,894 15,602 2,863 3,403 Net increase (decrease) in the fair value of investments (26,594) (6,246) 10,798 9,921 (3,584) (3,672) 1,218 544 2,356 (4,695) Equity in gains of joint venture - 14,639 - - - - - - - - Gain (loss) on retirement of assets 1,678 - - - - - 29,751 64 - (2) Total Business-Type General Revenue (368) 9,001 27,507 26,539 12,171 9,359 47,863 16,210 5,219 (1,294) Total Primary Government General Revenue 202,739 233,847 239,451 255,684 201,324 215,044 197,473 160,611 61,100 98,526 Change in Net Position - Total Primary Government 24,930 196,674 124,922 143,078 84,446 144,085 117,253 56,602 (22,371) (30,438) Net Position - Beginning of Year (2015 Adjusted) 1,955,007 1,988,594 1,830,085 1,687,007 1,650,344 1,506,259 1,389,006 1,738,140 1,760,511 1,790,949 GASB68 Implementation - - - - - - - (405,736) - -
GASB75 Implementation - - - - (47,783) - - - - -
GASB84 Implementation 8,657 - - - - - - - - -
Net Position - End of Year - Total Primary Government $ 1,988,594 2,185,268 $ 1,955,007 $ 1,830,085 $ 1,687,007 $ 1,650,344 $ 1,506,259 $ 1,389,006 $ 1,738,140 $ 1,760,511 $

CITY OF SANTA CLARA
(continued)
(In Thousands)
220
Table 3
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
General Fund:

Nonspendable $ 13,767 7,244 $ 24,260 $ 24,421 $ 25,002 $ 13,837 $ 13,517 $ 13,247 $ 12,850 $ 12,785 $ Restricted 25,943 23,291 28,507 17,652 13,585 7,083 11,865 9,546 9,641 7,191 Committed 40,280 23,985 36,978 30,902 41,914 58,580 64,111 55,121 78,125 86,949 Assigned 7,131 9,844 5,861 7,879 7,473 4,639 4,875 6,761 4,752 4,927 Unassigned 90,681 76,751 122,969 147,739 107,801 107,404 103,430 58,946 23,910 38,522 Total General Fund 177,802 141,115 218,575 228,593 195,775 191,543 197,798 143,621 129,278 150,374 All other Governmental Funds:

Restricted 88,486 110,448 89,256 86,802 91,290 89,818 67,612 76,848 60,489 105,785 Committed 50,558 73,821 44,757 45,345 40,473 44,936 38,953 20,237 25,697 21,351 Total All Other Governmental Funds 139,044 184,269 134,013 132,147 131,763 134,754 106,565 97,085 86,186 127,136 Total Governmental Funds $ 316,846 325,384 $ 352,588 $ 360,740 $ 327,538 $ 326,297 $ 304,363 $ 240,706 $ 215,464 $ 277,510 $

CITY OF SANTA CLARA

FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
(In Thousands)

3. Fund Balances – Governmental Funds – Last Ten Fiscal Years 221
Table 4
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
REVENUES:

Taxes: Sales $ 56,178 56,902 $ 55,270 $ 65,036 $ 56,321 $ 55,750 $ 57,796 $ 49,649 $ 46,736 $ 44,160 $ Ad valorem property 68,773 74,630 65,498 58,502 54,965 50,943 45,627 37,574 39,187 31,651 Transient occupancy 2,949 10,812 15,994 23,229 20,580 20,484 20,557 18,186 15,141 13,673 Other 5,824 7,317 5,967 5,955 6,392 5,671 5,510 5,173 5,191 4,333 Licenses, permits, fees and penalties 12,568 16,182 11,476 16,478 8,665 10,536 11,530 9,508 6,860 6,523 Intergovernmental 22,589 39,929 19,905 29,685 13,920 15,269 8,570 13,766 10,611 6,838 Charges for services 38,171 47,194 44,029 49,067 45,237 42,941 46,938 39,012 32,749 26,621 Contribution in-lieu of taxes 24,548 27,259 22,710 21,304 21,986 21,117 19,057 17,493 16,591 15,219 Interest and rents 16,161 13,220 17,673 16,927 15,223 14,636 15,617 10,692 7,672 20,026 Net increase (decrease) in the fair value of investments (5,207) (13,688) 6,531 8,082 (2,452) (3,217) 1,049 496 1,815 (3,567) Other 17,161 42,033 17,955 15,021 11,957 32,209 9,578 13,792 6,740 4,627 TOTAL REVENUES $ 259,715 321,790 $ 283,008 $ 309,286 $ 252,794 $ 266,339 $ 241,829 $ 215,341 $ 189,293 $ 170,104 $ Source: Finance Office, City of Santa Clara.

CITY OF SANTA CLARA
(In Thousands)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS

4. Changes in Fund Balances – Governmental Funds – Last Ten Fiscal Years 222
Table 4
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
EXPENDITURESCurrent:

General Administration $ 37,273 42,252 $ 28,927 $ 36,093 $ 28,997 $ 24,265 $ 23,743 $ 18,684 $ 17,101 $ 17,615 $ City Clerk 1,697 1,618 1,429 1,440 1,361 1,594 1,007 1,060 863 970City Attorney 2,330 2,681 2,154 2,006 1,690 1,658 1,500 1,329 1,335 1,226Human Resources 3,201 3,837 3,876 3,151 3,175 2,993 2,616 2,322 2,279 2,055Finance 15,852 16,576 14,924 11,697 10,484 9,725 9,319 8,455 8,231 7,876 Public Works 28,443 28,158 28,186 31,595 25,595 24,018 20,088 18,424 17,562 16,765 Parks and Recreation 17,822 19,890 22,551 20,026 18,882 17,364 16,162 14,506 14,428 14,063 Public Safety: Police 74,918 77,590 74,168 62,799 67,841 62,290 61,015 54,344 45,584 42,991 Fire 59,799 62,203 56,421 50,975 49,043 42,550 39,129 35,144 33,267 32,370 Planning and Inspection 14,712 16,174 13,534 11,521 9,896 9,156 8,231 7,620 6,938 6,268 Library 8,879 10,011 10,392 10,234 10,426 9,113 9,479 7,611 7,206 6,564 Capital Outlay 30,514 19,261 24,021 30,382 19,933 29,329 13,434 10,730 8,736 15,060 Debt Service:

Principal payments 1,930 2,009 1,859 1,786 1,731 1,674 1,620 1,576 8,520 24,302Interest and fiscal fees 572 498 644 712 767 825 879 925 1,174 2,009 Bond issuance cost - - - - 7 2 1 2 5 411
TOTAL EXPENDITURES 297,942 302,758 283,086 274,417 249,828 236,556 208,223 182,732 173,229 190,545 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (38,227) 19,032 (78) 34,869 2,966 29,783 33,606 32,609 16,064 (20,441) OTHER FINANCING SOURCES (USES):

Lease liabilities issued - 18 - - - - - - - -
Proceeds from Bond Issuance - - - - - - - - - 19,572
Transfers in 49,402 56,105 29,003 43,334 21,381 44,983 58,473 14,152 27,961 17,525 Transfers out (55,575) (66,617) (37,076) (45,001) (23,106) (52,832) (27,581) (12,295) (25,918) (14,446) TOTAL OTHER FINANCING SOURCES (USES) (6,173) (10,494) (8,073) (1,667) (1,725) (7,849) 30,892 1,857 2,043 22,651

NET CHANGE IN FUND BALANCES
BEFORE SPECIAL ITEM $ (44,400) 8,538 $ (8,151) $ 33,202 $ 1,241 $ 21,934 $ 64,498 $ 34,466 $ 18,107 $ 2,210 $

SPECIAL ITEM-ASSET TRANSFERRED
TO LIABILITIES ASSUMED BY SUCCESSOR AGENCY - - - - - - (9,224) (842) (80,152) (29,563) NET CHANGE IN FUND BALANCES AFTER SPECIAL ITEM $ (44,400) 8,538 $ (8,151) $ 33,202 $ 1,241 $ 21,934 $ 63,656 $ 25,242 $ (62,045) $ (27,353) $ DEBT SERVICE AS A PERCENTAGE OF 2,502 2,507 2,503 2,498 2,505 2,501 2,500 2,503 9,699 26,722 NON-CAPITAL EXPENDITURES 1% 1% 1% 1% 1% 1% 1% 1% 6% 15% Source: Finance Office, City of Santa Clara.
(continued)

CITY OF SANTA CLARA
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
(In Thousands)

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
223
Table 5
Ratio of Net
Fiscal Year Net Local State Net Net Total Assessed Valuation % Growth Total Direct Ending Secured Assessed Unsecured Assessed Assessed To Total Assessed of Assessed Tax June 30 Roll (1) Valuation Roll Valuation Valuation Valuation Valuation Rate 2012 / 13 20,475,348 $ 4,641 $ 4,702,675 $ 25,182,664 $ 25,295,792 $ 99.55% 6.19% 1.16% 2013 / 14 22,216,962 4,641 4,680,536 26,902,139 27,012,697 99.59% 6.83% 1.14% 2014 / 15 24,294,056 4,183 4,352,204 28,650,443 28,758,679 99.62% 6.50% 1.13% 2015 / 16 27,659,960 4,183 5,157,346 32,821,489 32,927,777 99.68% 14.56% 1.16% 2016 / 17 30,672,596 4,183 5,856,885 36,533,664 36,638,297 99.71% 11.31% 1.15% 2017 / 18 33,449,607 3,896 6,553,560 40,007,063 40,109,539 99.74% 9.51% 1.16% 2018 / 19 36,596,483 354 7,266,592 43,863,429 43,964,914 99.77% 9.64% 1.13% 2019 / 20 38,502,828 870 7,629,244 46,132,942 46,232,453 99.78% 5.17% 1.20% 2020 / 21 42,047,766 870 7,972,493 50,021,129 50,118,954 99.80% 8.43% 1.18% 2021 / 22 44,162,052 870 8,007,077 52,170,000 52,264,729 99.82% 4.30% 1.19% Note:
(1) Net of Home Owner Property Tax Relief.Source: County of Santa Clara, Department of Finance

CITY OF SANTA CLARA

ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years
(In Thousands)

5. Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 224

CITY OF SANTA CLARA

PROPERTY TAX RATES
(Per $100 Assessed Valuation)
Direct and Overlapping Governments
Last Ten Fiscal Years
Table 6
Fiscal Santa
Year Ending Clara School Special
June 30 County Districts Districts Total
2012 / 13 1.0388% 0.1108% 0.0069% 1.1565%2013 / 14 1.0388% 0.0962% 0.0070% 1.1420%2014 / 15 1.0388% 0.0824% 0.0065% 1.1277%2015 / 16 1.0388% 0.1174% 0.0057% 1.1619%2016 / 17 1.0388% 0.1014% 0.0086% 1.1488%2017 / 18 1.0388% 0.1028% 0.0062% 1.1478%2018 / 19 1.0388% 0.0905% 0.0042% 1.1335%2019 / 20 1.0388% 0.1472% 0.0041% 1.1901%2020 / 21 1.0388% 0.1356% 0.0037% 1.1781%2021 / 22 1.0388% 0.1318% 0.0051% 1.1757% Tax rate limit: A state constitutional amendment (Proposition 13) commencing with fiscal 1979 provided that the tax rate was limited to 1% of full cash value, levied only by the Countyand shared with all other jurisdictions. All jurisdictions may levy a tax rate for voter approved debt.

Due date for current taxes: First installment - November 1; second installment - February 1.Penalties for delinquency: 10% and 1.5% of tax per month after date taxes become delinquent.Collected by government unit: County of Santa Clara.Basis upon which collections are distributed: Taxing jurisdictions assessed valuations and tax ratesfor voter approved debt to taxing jurisdictions, County rate (1% of full cash value) shared by all jurisdictions.

Compensation paid to collecting government unit for fiscal year 2021-22 is $442,717 Note: Tax rates stated are the rates applicable to the tax rate area 7-000 as typical tax rate area within the City. Rates are based on $100 assessed valuation. Source: County of Santa Clara, Department of Finance

6. Property Tax Rates Direct and Overlapping Governments – Last Ten Fiscal Years 225
Table 7
Percentage of Percentage of
Assessed Total Assessed Assessed Total Assessed
Taxpayers Valuation Valuation Valuation Valuation
Intel Corporation $ 3.47% 1,102,266 1,813,764 $ 4.36%
Nvidia Corporation (formerly Nvidia Land Development LLC) 1,142,361 2.19% 370,958 1.47% Microsoft Corporation 2.16% - 1,127,274 -
Santa Clara Square Office 2B LLC 2.12% - 1,105,692 0.00% Santa Clara Phase III EFH LLC 1.66% - 867,276 -
SI LLC 1.61% 704,703 839,601 2.79%
Vantage Data Centers LLC 1.59% - 830,420 -
Forty Niners SC Stadium Company LLC 785,232 1.50% - -
Apple Inc 1.31% - 686,798 -
Coresite Real Estate 1.05% - 549,108 -
Xeres Venture LLC - - 265,484 1.05%
Agilent Technologies - - 195,749 0.77%
Applied Materials, Inc. - - 186,975 0.74%
Oracle America Inc (formerly Sun Microsystems) - - 280,529 1.11% Marvell Technology Inc - - 215,311 0.85%
M West Propco XIII LLC - - 173,952 0.69%
Yahoo Inc. - - 219,104 0.87%
Top Ten Total 9,747,526 $ 18.66% 3,715,031 $ 14.70%
City Total 52,264,132 $ 25,295,792 $
Sources: Santa Clara County Assessor 2021-22 and 2012-13 Combined Tax Rolls through HdL Coren & Cone.

CITY OF SANTA CLARA

PRINCIPAL PROPERTY TAX PAYERS
2021-22 AND 2012-13 COMPARISON FOR GENERAL FUND
(In Thousands)
2021-22 2012-13

7. Principal Property Tax Payers 2017-18 and 2010-11 Comparison for General Fund 226

CITY OF SANTA CLARA

PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
(In Thousands)
Table 8
Fiscal Year Percentage of Delinquent Percentage of
Ending Gross Current Tax Current Levy Tax Total Total Levy June 30 Tax Levy Collections Collected Collected Collections Collected 2012 / 13 22,313 $ 22,313 $ 100.00% - 22,313 $ 100.00%
2013 / 14 24,027 24,027 100.00% - 24,027 100.00%
2014 / 15 25,550 25,550 100.00% - 25,550 100.00%2015 / 16 27,603 27,603 100.00% - 27,603 100.00%2016 / 17 30,605 30,605 100.00% - 30,605 100.00%2017 / 18 33,312 33,312 100.00% - 33,312 100.00%2018 / 19 37,374 37,374 100.00% - 37,374 100.00%2019 / 20 40,288 40,288 100.00% - 40,288 100.00%2020 / 21 43,680 43,680 100.00% - 43,680 100.00%2021 / 22 45,539 45,539 100.00% - 45,539 100.00% Sources: City of Santa Clara and County of Santa Clara, Department of Finance

8. Property Tax Levies and Collections – Last Ten Fiscal Years 227
Table 9
This list is in alphabetical order and represents sales from July 2021 to June 2022The Top 25 Sales / Use Tax contributors generate 44.7% of Santa Clara's total sales and use tax revenueAG Electronic Materials Lexus of Stevens CreekApplied Materials Norman S. Wright Mechanical Equipment CorpArista Networks NVIDIA CorporationBell Electrical Supply One WorkplaceCarl Zeiss Sports Optics Pace SupplyCostco Wholesale Pivot InteriorsFrontier Ford Porsche Stevens CreekHome Depot Stevens Creek Auto ImportsIngrasys Technology USA Stevens Creek BMWIntel Corporation Vantage Data Centers ProcurementKeysight Technologies Wiwynn InternationalLasertec ZT SystemsLenovo Global Technology Sources: From Muni Services Sales Tax Digest Summary.

CITY OF SANTA CLARA

PRINCIPAL SALE/USE TAX CONTRIBUTORS
June 30, 2022

9. Principal Sale/Use Tax Contributors
228
Table 10
Fiscal Year
Ending June
30 Residential Commercial Industrial Other Total
2012 / 13 23,474 $ 15,579 $ 257,118 $ 2,581 $ 298,751 $ 2013 / 14 25,653 13,770 267,169 2,578 309,169
2014 / 15 27,139 13,783 277,079 14,936 332,938
2015 / 16 27,789 15,409 321,491 7,112 371,801
2016 / 17 28,007 15,855 341,865 4,682 390,410
2017 / 18 29,082 15,774 355,279 3,562 403,698
2018 / 19 29,734 15,378 359,407 2,428 406,947
2019 / 20 31,867 15,472 383,704 2,815 433,858
2020 / 21 35,440 16,489 399,940 1,394 453,264
2021 / 22 33,275 16,395 448,257 4,447 502,373
Notes:

Sources: City of Santa Clara

CITY OF SANTA CLARA
Electric Utility Charge For Services by Source
Last Ten Fiscal Years
(In Thousands)

10. Electric Utility Charge for Services by Source
229
Table 11
Business
Activities
Santa Clara
Stadium
Authority
Total Primary
Government Population
Debt per
Capita
Total Personal
Income ($000)
Debt/ Income
Ratio
Fiscal Year
Ending June
30 Certificates of
Participation
Total Governmental
Activities Revenue Bonds
Revenue
Bonds
2012 / 13 34,784 $ 34,784 $ 199,676 $ 396,140 $ 630,600 $ 120,284 5,243 $ 4,530,093 $ 13.92% 2013 / 14 26,210 26,210 227,163 653,367 906,740 121,229 7,480 4,739,710 19.13% 2014 / 15 24,579 24,579 226,828 561,556 812,963 120,973 6,720 4,952,711 16.41% 2015 / 16 22,905 22,905 229,719 464,720 717,344 123,752 5,797 5,194,006 13.81% 2016 / 17 21,177 21,177 220,800 429,773 671,750 123,983 5,418 5,454,137 12.32% 2017 / 18 19,392 19,392 208,117 394,827 622,336 129,604 4,802 6,064,143 10.26% 2018 / 19 17,551 17,551 189,158 340,217 546,926 128,717 4,249 6,121,909 8.93% 2019 / 20 15,638 15,638 196,012 325,265 536,915 129,104 4,159 6,180,008 8.69% 2020 / 21 13,654 13,654 184,933 296,796 495,383 130,746 3,789 6,596,037 7.51% 2021 / 22 11,594 11,594 170,413 280,314 462,321 130,127 3,553 7,540,481 6.13% Notes:

Sources: Finance Office, City of Santa Clara and MuniServices LLC.

CITY OF SANTA CLARA

RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
(In Thousands)
Public Facilities Financing Corporation
Governmental Activities

11. Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 230
Fiscal Year
Ending June 30 Population
Total Assessed
Valuation
2012 / 13 120.3 25,295,792 $
2013 / 14 121.2 27,012,6972014 / 15 121.0 28,758,6792015 / 16 123.8 32,927,7772016 / 17 123.9 36,638,2972017 / 18 129.6 40,109,5392018 / 19 128.7 43,964,9142019 / 20 129.1 46,232,4532020 / 21 130.7 50,118,9542021 / 22 130.1 52,264,729 Sources: State of California, Department of Finance County of Santa Clara, Department of Finance

CITY OF SANTA CLARA

POPULATION AND ASSESSED VALUATION
Last Ten Fiscal Years
(In Thousands)
Table 12

12. Population and Assessed Valuation – Last Ten Fiscal Years 231
Table 13
% Applicable Debt
Direct Debt:
2010 Lease Financing 100% - $
2013 Refunding Certificates of Participation 100% 11,065,000 Total Gross Direct Debt 11,065,000
Unamortized Premium/Discount 100% 529,395
Total Net Direct Debt 11,594,395
Overlapping Debt:

Santa Clara County General Fund Obligations 109,797,872 Santa Clara County Pension Fund Obligations 30,439,053Santa Clara Valley Water District Benefit Assessment District 4,366,724 Santa Clara County Board of Education Certificates of Participation 165,056 San Jose-Evergreen Community College District OPEB Obligations 25,623 West Valley-Mission Community College District General Fund Obligations 3,619,320 Foothill-DeAnza Community College District 7,841,910
San Jose-Evergreen Community College District 450,392
West Valley Community College District 220,929,325
Fremont Union High School District 15,542,478Campbell Union High School District General Fund Obligations 317,750 Campbell Union School District 9,762,450
Campbell Union High School District 7,613,495
Campbell Union School District General Fund Obligations 82,555 El Camino Hospital District 1,760,929
San Jose Unified School District 756,351
Cupertino Union School District 13,226,963Santa Clara Unified School District 615,172,138 San Jose Unified School District General Fund Obligations 9,675 Santa Clara County 102,556,787
Foothill-DeAnza Community College District Certificates of Participation 254,850 Santa Clara Unified School District Certificates of Participation 8,571,306 Santa Clara County Vector Control District Certificates of Participation 136,488 Total Overlapping Debt 1,153,399,490
Total Gross Direct and Overlapping Bonded Debt (1) 1,164,464,490 Direct Unamortized Premium/Discount -TOTAL NET DIRECT AND OVERLAPPING BONDED DEBT $ 1,164,464,490 2021 / 22 Assessed Value $ 52,264,729,168
Ratios to Assessed Valuation:

Direct Debt $ 11,594,395 0.020%
Total Gross Debt 2.230%Total Net Debt 2.220%
Note: (1) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds.

Source: California Municipal Statistics, Inc.

CITY OF SANTA CLARA

COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT
June 30, 2022
Description

13. Computation of Direct and Overlapping Bonded Debt\
232
Table 14
Fiscal Year Net
Ending Assessed Debt Limit- 15% of Debt Applicable
June 30 Valuation Assessed Valuation (1) to Limit Legal Debt Margin 2012 / 13 25,182,664 $ 3,777,400 $ - 3,777,400 $
2013 / 14 26,902,139 4,035,321 - 4,035,3212014 / 15 28,650,443 4,297,566 - 4,297,5662015 / 16 32,821,489 4,923,223 - 4,923,2232016 / 17 36,533,664 5,480,050 - 5,480,0502017 / 18 40,007,063 6,001,059 - 6,001,0592018 / 19 43,863,429 6,579,514 - 6,579,5142019 / 20 46,132,942 6,919,941 - 6,919,9412020 / 21 50,021,129 7,503,169 - 7,503,1692021 / 22 52,170,000 7,825,500 - 7,825,500 Note:

Sources: County of Santa Clara, Department of Finance and City of Santa Clara

CITY OF SANTA CLARA

LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
(In Thousands)
(1) Section 1309 of the City Charter of the City states: "Bonded Debt Limit. The bonded indebtedness of the City may not in the aggregate exceed the sum of fifteen percent (15%) of the total assessed valuation of property within the City, exclusive of revenue bonds or any indebtedness that has been or may hereafter be incurred for the purposes of acquiring, constructing, extending, or maintaining municipally owned utilities for which purposes a further indebtedness may be incurred by the issuance of bonds, subject only to the provisions of the State Constitution and this Charter."

14. Legal Debt Margin Information – Last Ten Fiscal Years 233
Table 15
Fiscal Year
Ending June 30
Gross
Revenue
Less
Operating
Expense
Net Revenue
Available For
Debt Service Principal Interest
Letter Of
Credit
Fees Total Coverage (1)
2012 / 13 298,522 $ 266,246 $ 32,276 $ 6,560 $ 9,899 $ 813 $ 17,272 $ 1.87 2013 / 14 314,847 288,954 25,893 3,550 7,994 637 12,181 2.13 2014 / 15 332,178 297,846 34,332 6,485 7,990 459 14,934 2.30 2015 / 16 359,084 316,578 42,506 8,958 8,348 358 17,664 2.41 2016 / 17 352,828 317,237 35,591 7,640 8,434 335 16,409 2.17 2017 / 18 383,662 346,825 36,837 11,416 6,594 302 18,312 2.01 2018 / 19 414,975 331,141 83,834 11,897 11,565 607 24,069 3.48 2019 / 20 445,142 368,162 76,980 11,700 6,787 316 18,803 4.09 2020 / 21 467,625 407,627 59,998 9,580 3,862 349 13,791 4.35 2021 / 22 554,170 492,700 61,470 13,005 3,232 8 16,245 3.78 Notes:

Source: City of Santa Clara

CITY OF SANTA CLARA
Last Ten Fiscal Years
(In Thousands)
(1) The required coverage is 1.00.

PLEDGED REVENUE COVERAGE

ELECTRIC REVENUE BOND

15. Pledged Revenue Coverage Electric Revenue Bond – Last Ten Fiscal Years 234
Table 16
Per
Capita Public County City
Personal Buying Median School Unemployment Unemployment Year Population Income Income Age Enrollment Rate Rate
($000)
2012 / 13 120,284 4,530,093 $ 37,662 $ 34.1 14,705 6.8% 6.2% 2013 / 14 121,229 4,739,710 39,097 35.0 15,169 5.4% 4.9% 2014 / 15 120,973 4,952,711 40,941 34.4 15,169 3.9% 3.6% 2015 / 16 123,752 5,194,006 41,971 34.3 15,388 4.2% 3.7% 2016 / 17 123,983 5,454,137 43,991 34.3 15,409 3.8% 3.4% 2017 / 18 129,604 6,064,143 46,790 34.3 15,509 2.9% 2.7% 2018 / 19 128,717 6,121,909 47,561 33.9 15,387 2.1% 1.9% 2019 / 20 129,104 6,180,008 47,868 34.2 15,306 11.0% 9.0% 2020 / 21 130,746 6,596,037 50,449 33.9 14,808 7.0% 5.9% 2021 / 22 130,127 7,540,481 57,947 34.0 14,028 1.8% 1.6% Sources: MuniServices, LLC \ Avenu Insights & Analytics (1) Population data by the California Department of Finance Projections.(2) The California Department of Finance demographics estimates now incorporate 2010 Census counts as a benchmark. (3) Unemployment and Total Employment Data are provided by the EDD's Bureau of Labor Statistics Department. (4) Student Enrollment reflects the total number of students enrolled in the Santa Clara Unified School District.

Other school districts within the City are not accounted for in this report.

CITY OF SANTA CLARA

DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Calendar Years

16. Demographic and Economic Statistics – Last Ten Calendar Years 235
Table 17
Percentage of Percentage of
Number of Total City Number of Total City
Company Employees Employment Employees EmploymentApplied Materials, Inc. 8,500 20.7% 8,500 7.1%Intel Corporation 7,801 19.0% 7,001 5.9%Advanced Micro Devices Inc. 3,000 7.3%California's Great America 2,500 6.1% 2,500 4.4% Nvidia 6.1% 2,500
Dell 5.1% 2,088Santa Clara University 2,000 4.9% 1,200 1.0%City of Santa Clara 1,752 4.3% 1,412 1.2%SVB Financial Group 1,250 3.0%Macy's 2.9% 1,200 1,200 1.0%Catalyst Semiconductor Inc. - -EMC Corporation - - 1,338 1.1% AAA-Affordable Tutoring - - 4,324 3.6%Texas Instruments - -Kaiser Foundation Hospitals - -Total Top Ten 79.4% 30,575 32,591 25.3% All Others 20.6% 88,642 8,491 74.7%
Total Employment 100% 119,217 41,082 100%
Sources: Fiscal year 2021: Reference Solutions database, Infogroup, Inc., Papillion, NebraskaSources: Fiscal year 2012: www.ReferenceUSA.com

CITY OF SANTA CLARA

PRINCIPAL EMPLOYERS
Current Year and Ten Years Ago
2022 2013

17. Principal Employers – Current Year and Ten Years Ago 236
Table 18
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
City Council 9.00 9.00 10.00 10.00 11.00 10.00 9.00 8.50 8.50 8.50 City Clerk 6.00 7.00 5.00 6.00 7.00 7.00 5.00 5.00 5.00 4.00 City Attorney 8.00 8.00 7.00 7.00 6.00 6.00 6.00 6.00 6.00 6.00 City Auditor 3.00 3.00 3.00 - - - - - - -
City Manager 19.00 13.00 13.00 13.00 14.00 13.00 16.00 9.00 9.00 8.00 Information Technology 6.00 7.00 7.00 7.00 7.00 7.00 5.00 5.00 4.00 4.00 Human Resources 14.00 15.75 15.75 15.00 15.00 15.00 14.50 14.50 14.50 14.50 Finance 68.75 69.75 61.75 61.00 61.00 61.75 60.25 58.25 58.00 58.00 Parks & Recreation 77.75 82.75 82.75 80.75 80.75 79.00 82.75 82.75 82.00 82.00 Library 42.50 46.75 46.75 46.75 45.50 45.50 47.00 46.50 46.50 42.00 Community Development 72.00 68.75 66.00 65.00 64.00 56.00 42.00 44.00 40.00 40.00 Engineering 39.25 42.25 39.25 39.92 40.92 39.25 38.25 38.00 38.00 38.00 Building Maintenance 13.00 13.00 13.00 13.23 13.23 12.90 10.90 11.40 11.50 11.50 Street 55.50 60.60 60.60 58.60 58.60 59.60 65.35 63.10 62.00 63.00 Automotive Services 14.75 15.65 15.65 15.75 15.75 15.75 15.00 15.00 15.00 16.00 Police 221.00 239.00 239.00 239.00 239.00 231.00 222.00 219.00 222.00 222.00 Fire 154.50 168.25 167.25 167.25 167.50 166.50 179.50 179.50 179.50 179.50 Non-Departmental - 11.00 9.00 4.00 - - - - - -
Electric Utility 198.00 198.00 197.00 189.00 186.00 179.00 166.00 156.00 142.00 135.00 Water Utility 50.55 50.80 50.80 50.35 50.85 52.70 50.10 47.10 45.40 45.80 Sewer Utility 22.45 22.20 22.20 22.65 22.15 21.30 19.90 17.90 15.60 14.20 TOTAL 1,095.00 1,151.50 1,131.75 1,111.25 1,105.25 1,078.25 1,054.50 1,026.50 1,004.50 992.00 Source: City of Santa Clara Annual Budget

CITY OF SANTA CLARA

FULL-TIME EQUIVALENT BUDGETED CITY EMPLOYEES BY PROGRAM/FUNCTION Last Ten Fiscal Years
Fiscal Year Ending June 30

18. Full-Time Equivalent Budgeted City Employees by Program/Function – Last Ten Fiscal Years 237
Table 19
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Culture and Recreation:

Number of library items circulated 1,268,965 736,301 1,598,171 2,509,201 2,612,102 2,700,315 2,479,126 2,491,553 2,260,844 2,525,555 Fire Protection:

Number of calls answered 10,391 8,853 9,339 9,456 8,849 8,850 8,933 8,403 8,336 8,232Number of inspections conducted 10,143 4,004 4,303 6,404 8,470 9,696 8,260 8,067 8,784 9,097 Police Protection:

Number of calls for service (1) 61,421 67,211 63,860 58,912 53,865 50,429 51,853 60,208 59,474 59,158 Electric System:

Maximum annual demand (MW) 649.4 590.6 579.3 587.8 586.6 568.1 526.4 491.1 482.4 471.1Total annual energy (Mwh) 4,361,658 3,956,474 3,773,864 3,693,251 3,733,800 3,628,200 3,488,004 3,238,372 3,145,100 3,102,166 Sewer System:

Number of service connections 25,682 25,948 25,359 25,481 26,236 26,162 25,744 25,656 25,660 25,530 Peak flow (5-day average, WPCP) (MG) 110 110 110 110 110 110 110 121 121 121 Maximum daily capacity of
treatment plant (WPCP) (MGD) 167 167 167 167 167 167 167 167 167 167 Peak flow (5-day average, City)
(MGD) 16 16 16 16 16 16 16 16 16 16
Water System:

Number of service accounts 25,371 25,592 24,904 25,293 25,670 25,714 25,716 25,656 25,530 25,530 Daily Average consumption (MG) 13 16 16 16 15 15 15 16.8 18.8 19Maximum daily capacity of plant:Potable Water (MGD) 80 80 80 80 80 80 96 87 87 87Recycled Water (MGD) 15 15 15 15 15 30 14 15 15 15 Note: (1) Data Based on Calendar Year
Source: City of Santa Clara

CITY OF SANTA CLARA

OPERATING INDICATORS BY FUNCTION/ACTIVITY
Last Ten Fiscal Years
Fiscal Year Ending June 30

19. Operating Indicators by Function/Activity – Last Ten Fiscal Years 238

CITY OF SANTA CLARA
Table 20
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Culture and Recreation:

Number of community centers 4 4 4 4 4 4 4 4 4 4Number of parks 44 44 44 39 39 35 34 34 32 32 Park acreage 367 367 353 254 311 330 274 273 273 273
Number of golf courses - - - 1 1 1 1 1 1 1Number of swimming pools 11 11 11 11 11 11 5 5 5 5Number of tennis courts 27 27 27 28 28 28 28 28 28 28Number of lawn bowling greens 1 1 1 1 1 1 1 1 1 1Number of lighted soccer fields 7 7 7 3 3 3 3 3 3 3Number of lighted softball fields 4 4 4 7 7 7 7 7 7 7Number of neighborhood park buildings 10 10 10 8 8 8 8 8 8 8Number of gymnastic centers 1 1 1 1 1 1 1 1 1 1Number of skate parks 1 1 1 1 1 1 1 1 1 1Number of community theaters 1 1 1 1 1 1 1 1 1 1Number of libraries 3 3 3 3 3 3 3 2 2 2 Cemetery 2 2 2 2 2 2 2 2 2 2Fire Protection:

Number of stations 10 9 10 10 10 10 10 10 10 10
Police Protection:

Number of stations 1 1 2 2 2 2 2 2 2 2
Electric System:

Number of meters 59,227 58,230 57,066 55,971 55,139 54,942 53,824 53,360 52,775 52,957 Miles of high voltage lines 622 618 616 613 612 608 605 591 590 586 Number of substations 29 29 29 28 27 27 27 27 26 26
Sewerage and Storm Drain System:

Miles of sanitary sewers 288 288 288 288 288 288 288 288 288 288 Number of sanitary sewer pump stations 6 6 6 6 6 6 6 6 6 6 Miles of storm sewers 194 196 195 195 195 195 195 195 - 141 Number of treatment plants 1 1 1 Tertiary 1 Tertiary 1 Tertiary 1 Tertiary 1 Tertiary 1 Tertiary 1 Tertiary 1 TertiaryNumber of storm drain pump stations 22 22 22 22 22 22 22 22 22 21 Water System:

Miles of water mains 306 306 306 335 335 335 310 335 335 335 Number of fire hydrants 3,437 3,248 3,429 3,404 3,382 3,501 3,383 3,315 3,315 3,315 Miles of recycled watermains 34 34 34 33 33 33 33 33 33 33 Streets:

Miles of Streets 252 252 252 252 252 252 252 252 249 249 Number of Street Lights 8,429 8,404 8,235 8,187 8,118 8,112 8,103 8,097 8,054 8,077Number of Traffic Signals 186 183 182 207 207 207 206 200 196 191 Source: City of Santa Clara

CAPITAL ASSETS STATISTICS BY FUNCTION
Last Ten Fiscal Years
Fiscal Year Ending June 30

20. Capital Assets Statistics by Function – Last Ten Fiscal Years 239
Table 21

INSURANCE ANNUAL TERM EXPIRATION
TYPE OF POLICY COMPANY LIMITS (1) PREMIUM (3) YEARS DATE (2) LiabilityComprehensive General Self-insured (Since 1987) $3 million n/a - OngoingExcess Liability PRISM $50 million $1,240,130 1 7/1/2022 and various other carriers
Workers' Compensation Self-insured (since 1973) $750 thousand n/a - OngoingExcess Workers' PRISM $5 million $1,050,621 1 7/1/2022CompensationProperty CoverageAll Risks, including flood, Alliant Property Insuranceexcluding earthquake Program (APIP) $800 million $1,091,131 1 7/1/2022 Various excess carriers
Boiler and Machinery Alliant Property Insurance $100 million not available 1 7/1/2022 Program (APIP)Various excess carriers
Financial Loss BondsCrime Coverage Bond PRISM $10 million $12,391 1 6/30/2022 Notes:
(1) Limits are per occurrence (2) All policies have been renewed (3) Boiler and Machinery APIP premium is included in All Risks premium, $1,091,131. Breakdown is unavailable.

Source: City of Santa Clara

CITY OF SANTA CLARA

STATEMENT OF INSURANCE COVERAGE
June 30, 2022

21. Statement of Insurance Coverage
This page intentionally left blank
241

SUCCESSOR AGENCY CITY OF SANTA CLARA

TABLES
REVENUE CAPACITY 1 - 3
Contains information to help the reader assess the Successor Agency’s most significant local revenue source, the property tax.

DEBT CAPACITY 4
Presents information to assess the affordability of the Successor Agency’s current levels of outstanding debts.

Successor Agency
242
This page intentionally left blank
243
Table 1
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Real Property Value 5,790,301 $ 5,708,617 $ 5,372,322 $ 6,024,538 $ 6,136,642 $ 5,710,559 $ 4,474,495 $ 2,504,578 $ 2,428,787 $ 2,443,683 $ Other Property Value 33,102 28,733 25,324 22,913 25,857 27,877 796,082 551,425 450,943 468,788 Total Project Value 5,823,403 5,737,350 5,397,646 6,047,451 6,162,499 5,738,436 5,270,577 3,056,003 2,879,730 2,912,471 Less Base Value (8,838) (8,838) (8,838) (8,838) (8,838) 49,632 49,322 (8,829) (8,838) (8,838) Increment Over Base Value 5,814,565 5,728,512 5,388,808 6,038,613 6,153,661 5,788,068 5,319,899 3,047,174 2,870,892 2,903,633 Redevelopment Property Tax Trust Fund (RPTFF) (1) - - - - - - 5,697 9,365 26,759 13,366 Total Tax Revenue - - - - - - 5,697 9,365 26,759 13,366 Less:

AB 1484 True-Up Payment (2) - - - - - - - - (378)
Net Tax Revenue $ - - $ - $ - $ - $ - $ 5,697 $ 9,365 $ 26,759 $ 12,988 $ Notes:

Source: City of Santa Clara / Santa Clara County Auditor

SUCCESSOR AGENCY OF THE CITY OF SANTA CLARA

BAYSHORE NORTH PROJECT AREA

HISTORICAL TAX INCREMENT
Last Ten Fiscal Years
(In Thousands)
(1) With the State dissolving all RDAs on 02/01/2012, the structure of Tax Increment Revenue has changed. Starting in fiscal year 2012-13, the County's property tax distribution to the Successor Agency was changed to the Redevelopment Property Tax Trust Fund (RPTTF). The RPTTF reported in this table is the amount calculated by the County Auditor-Controller. Under the provisions of the laws dissolving the Redevelopment Agency, the Successor Agency only receives the funds necessary to fulfill its approved obligations.(2) On June 28, 2012, AB 1484 became law which made a number of significant changes to ABXI 26. In particular, the new Health and Safety Code Section 34183.5 required the Santa Clara County Auditor-Controller to conduct a "true-up" of the June 1, 2012 distribution from the RPTTF for each former RDA. In accordance with the new law, the Successor Agency was required to make a "true-up" payment of $378,540.37 by July 12, 2012.

1. Historical Tax Increment – Last Ten Fiscal Years
244
Table 2

ASSESSED ASSESSED

PROPERTY PROPERTY PERCENT

ASSESSEE USE VALUATION OF TOTAL
1 Forty Niners SC Stadium Company LLC Commercial Office Building 785,232,301 $ 13.48% 2 SI LLC Commercial Office Building 535,984,549 9.20%
3 Innovation Commons Owner LLC Commercial Office Building 278,772,528 4.79% 4 The Irvine Company Commercial Office Building 231,125 3.97% ,938 5 PC Santa Clara Gateway 2 LLC Commercial Office Building 212,537,185 3.65% 6 Apple Inc Commercial Office Building 180,907,491 3.11% 7 STC Ventures LLC Commercial Office Building 171,085,7 2.94% 59 8 PR II TWRS of GRT America Owner Commercial Office Building 168,790,353 2.90% 9 PR3976 Freedom Circle LLC Commercial Office Building 2.90% 168,645,693 10 RAR2 - Stadium Techcter 123 LLC Commercial Office Building 163,772,824 2.81% TOTAL $ 49.75% 2,896,854,621
TOTAL AGENCY ASSESSED VALUE $ 5,814,565,313
Source: HDL Coren & Cone

SUCCESSOR AGENCY OF THE CITY OF SANTA CLARA

BAYSHORE NORTH PROJECT AREA

TEN LARGEST ASSESSEES - TAXABLE VALUE
June 30, 2022

2. Ten Largest Assessees – Taxable Value
245
Table 3

HEARING APPLICANT'S

TAX ROLL ASSESSED APPEAL DATE OPINION
NUMBER ASSESSEE VALUATION/ORIGINAL S/U (1) NUMBER DEADLINE STATUS VALUATION LAND USE 984-92-103 FORTY NINERS 555,214,000 $ S 15.0278 88,000,000 $ Commerical984-92-104 FORTY NINERS 555,214,000 S 15.0279 88,000,000 Commerical984-92-103 FORTY NINERS 555,214,000 S 15.028 Commerical 88,000,000 984-92-104 FORTY NINERS 555,214,000 S 15.0281 88,000,000 Commerical984-92-103 FORTY NINERS 554,267,314 S 17.0232 140,000,000 Commerical984-92-104 FORTY NINERS 554,267,314 S 17.0233 140,000,000 Commerical984-92-104 FORTY NINERS 548,980,708 S 16.0256 100,000,000 Commerical984-92-103 FORTY NINERS 548,980,708 S 16.0257 100,000,000 Commerical984-92-103 FORTY NINERS 253,784,158 S 18.1918 250,500,000 Commerical21-081107 CEDAR FAIR S U 21.3482 46,577,214 93,154,425 N/A 21-081108 CEDAR FAIR S U 21.3483 42,989,135 86,769,758 N/A 21-081109 CEDAR FAIR S U 21.3484 35,620,612 62,482,975 N/A 21-081110 CEDAR FAIR S U 21.3485 29,888,601 59,777,200 N/A 17-018611 CEDAR FAIR S U 17.1041 58,852,511 59,280,246 N/A 18-018278 CEDAR FAIR S U 18.0594 50,547,232 58,493,748 N/A 104-50-025 COHERENT INC 46,023,273 U 15.0256 15,251,322 N/A10-037856 SAVVIS COMMU 45,935,890 U 10.5814 40,000,000 N/A14-032002 SAVVIS COMMU 44,195,581 U 14.171 N/A 22,000,000 20-012639 APPLE INC U 20.1073 41,718,286 N/A 3,100,001
15-032178 SAVVIS COMMU 41,532,802 U 15.1129 20,750,000 N/A $ 5,320,500,386 $ 1,448,076,628
Note:
(1) S=secured roll, U=unsecured roll
Source: Santa Clara County Assessor's Office

SUCCESSOR AGENCY OF THE CITY OF SANTA CLARA

BAYSHORE NORTH PROJECT AREA
ASSESSMENT APPEAL ACTIVITY OF TOP 20 ASSESSEES
2021-22 Impacts

3. Assessment Appeal Activity of Top 20 Assessees
246
Table 4
2021-22 Assessed Valuation: $ 5,823,403,269
Base Year Valuation: (8,837,956)Incremental Valuation: $ 5,814,565,313 Total Debt Project Area’s Share of
6/30/2022
%
Applicable(1) Debt 6/30/22
OVERLAPPING TAX AND ASSESSMENT DEBT: Santa Clara Unified School District $ 7.715% 73,782,403 956,350,000 $ West Valley-Mission Community College District 3.531% 25,864,575 732,500,000 Santa Clara County 1.010% 11,421,585 1,130,850,000Santa Clara Valley Water District Benefit Assessment District 1.010% 486,315 48,150,000 El Camino Hospital District 0.008% 8,899 111,240,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 111,563,777 OVERLAPPING GENERAL FUND DEBT:Santa Clara County General Fund Obligations $ 1.010% 12,228,013 1,210,694,365 $ Santa Clara County Pension Obligations 1.010% 3,389,949 335,638,470 Santa Clara County Board of Education Certificates of Participation 1.010% 18,382 1,820,000 West Valley-Mission Community College District General Fund Obligations 12,000,000 3.531% 423,720Santa Clara Unified School District Certificates of Participation 7.715% 1,028,024 13,325,000 City of Santa Clara General Fund Obligations 11.142% 1,232,862 11,065,000 Santa Clara County Vector Control District Certificates of Participation 1.010% 15,201 1,505,000 TOTAL OVERLAPPING GENERAL FUND DEBT $ 18,336,151
Less: Santa Clara County supported obligations (182,595) COMBINED TOTAL DIRECT AND OVERLAPPING DEBT $ 129,899,928 (2) TOTAL NET DIRECT AND OVERLAPPING BONDED DEBT $ 129,717,333(1) Percentage of overlapping agency's assessed valuation located within boundaries of the project area(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligationsRatios to 2021-22 Assessed Valuation: Combined Total Direct and Overlapping Debt 2.23% Net Combined Total Direct and Overlapping Debt 2.23%

SUCCESSOR AGENCY OF THE CITY OF SANTA CLARA

BAYSHORE NORTH PROJECT AREA

COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT
June 30, 2022

4. Computation of Direct and Overlapping Bonded Debt
FOR THE YEAR ENDED JUNE 30, 2022

WITH COMPARATIVE TOTALS
AS OF JUNE 30, 2021

CITY OF SANTA CLARA, CALIFORNIA
1500 WARBURTON AVENUE
SANTA CLARA, CA 95050-3796

CITY OF SANTA CLARA

ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

FINANCIAL STATEMENTS

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

TABLE OF CONTENTS

Page
INDEPENDENT AUDITOR'S REPORT ................................................................................... 1 Management’s Discussion and Analysis ..................................................................................... 5 Statements of Net Position .................................................................................................... 11 Statements of Revenue, Expenses and Changes in Net Position .......................................... 13 Statements of Cash Flows ..................................................................................................... 14 Notes to Financial Statements ............................................................................................... 16 Required Supplementary Information
Schedule of Proportionate Share of the Net Pension Liability .............................................. 70 Schedule of Contributions (Pension Plan) ............................................................................ 72 Schedule of Proportionate Share of the Net OPEB Liability and Related Ratios ................. 74 Schedule of Proportionate Share of the Contributions (OPEB Plan) .................................... 75 INDEPENDENT AUDITOR’S REPORT
To the Honorable Members of the City Council
City of Santa Clara, California
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the City of Santa Clara Electrical Utility Enterprise Fund (Silicon Valley Power) of the City of Santa Clara, California, as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise Silicon Valley Power’s basic financial statements as listed in the Table of Contents. We did not audit the financial statements of Northern California Power Agency (NCPA), Transmission Agency of Northern California (TANC) and M-S-R Public Power Agency (MSR PPA) as of and for the year ended June 30, 2021, related to the calculation of the Investments in Joint Ventures. At June 30, 2022, the Investment in these Joint Ventures collectively represents 4.4%, 5.9% and 2.4%, respectively, of total assets, net position and revenues of Silicon Valley Power. The financial statements of the NCPA, TANC and MSR PPA were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the calculation of the Investments in Joint Ventures, is based solely on the reports of the other auditors.

In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Silicon Valley Power as of June 30, 2022, and the changes in financial position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Silicon Valley Power, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirement relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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

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

Accountancy Corporation 1
3478 Buskirk Avenue, Suite 215
Pleasant Hil l, CA 94523
T 925.930.0902
F 925.930.0135
E [email protected]
w mazeassociates.com
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the judgment made by a reasonable user based on the financial statements.

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

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

Report on Summarized Comparative Information
We have previously audited Silicon Valley Power’s June 30, 2021 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated November 30, 2021. In our opinion the summarized comparative information presented herein as of and for the year ended June 30, 2021 is consistent, in all material respects, with the audited financial statements from which it has been derived.

Emphasis of Matter
As discussed in Note 1, the financial statements present only Silicon Valley Power and do not purport to, and do not present fairly the financial position of the City as of June 30, 2022, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. 2 Changes in Accounting Principles
Management adopted the provisions of Governmental Accounting Standards Board Statement No. 87, Leases, which became effective during the year ended June 30, 2022 and required the restatement of certain balances as discussed in Note 2B to the financial statements.

The emphasis of this matter does not constitute a modification to our opinions.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and other required supplementary information as listed in the Table of Contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 30, 2022, on our consideration of the City of Santa Clara’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.

The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Santa Clara’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Santa Clara’s internal control over financial reporting and compliance.

Pleasant Hill, California
November 30, 2022
3 This page intentionally left blank
5 Management’s Discussion and A nalysis
MANAGEMENT’S DISCUSSION AND ANALYSIS
The management’s discussion and analysis of the Silicon Valley Power (SVP) provides an overall review of the SVP’s financial activities for the fiscal years ended June 30, 2022 and 2021. The intent of this discussion and analysis is to look at SVP’s financial performance as a whole. Readers should review the discussion and analysis in conjunction with the Basic Financial Statements, including the notes to the basic financial statements to enhance their understanding of SVP’s financial performance.

SVP is a separate enterprise fund of the City of Santa Clara (City) and was established to account for the electric power transactions of the City. SVP owns power generation facilities, has investments in joint ventures that produce electric power, and trades power on the open market.

These efforts are directed toward ensuring its retail customers—the citizens, organizations and businesses of the City—have a reliable source of electric power at reasonable rates.

SVP has been affected by the deregulation of the electric power industry in California, as discussed in detail in Note 9 to the financial statements.

FINANCIAL HIGHLIGHTS
Key financial highlights for the fiscal year ended June 30, 2022 are as follows:
• The assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $970.8 million. This is an increase of $55.4 million, from $915.4 million to $970.8 million, in the net position. This is mainly due to increases in capital assets of $33.6 million and accounts receivable of $21.7 million. • Operating revenues increased by $57.3 million or 11.2%, from $509.7 million to $567.0 million. This is primarily due to increases in consumption and the implementation of a 3% rate increase in January 2022.
• Operating expenses increased by $100.0 million or 22.2%, from $450.4 million to $550.4 million. The increase is a result of higher costs for purchased resources. • SVP’s total outstanding long-term debt decreased by $13.7 million, from $156.5 million to $142.8 million, during the current fiscal year.

OVERVIEW OF SVP’S BASIC FINANCIAL STATEMENTS
This annual report consists of a series of financial statements and the notes to those statements.

These statements are organized so the reader can understand SVP as a financial whole. The Basic Financial Statements are in two parts:

1. Management’s Discussion and Analysis (this part),

2. The Basic Financial Statements, along with the Notes to these Basic Financial Statements.

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
6 The Basic Financial Statements provide both a short-term and a long-term view of SVP’s financial activities and financial position.

The Basic Financial Statements are comprised of the Statements of Net Position, the Statements of Revenues, Expenses, and Changes in Net Position, and the Statements of Cash Flows. The Statements of Net Position provide information about the financial position of SVP as a whole, including all its long-term liabilities on the full accrual basis. The Statements of Revenues, Expenses, and Changes in Net Position provide information about all SVP’s revenues and all its expenses, also on full accrual basis, with the emphasis on measuring net revenues and expenses of the program. The Statements of Cash Flows provide information about cash activities for the fiscal year.

FISCAL YEAR 2021-22 FINANCIAL HIGHLIGHTS
The following is summarized financial information from the Statements of Net Position (Table1) and the Statements of Revenues, Expenses, and Changes in Net Position (Table 2).

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
7 Description 2022 2021* Amount % 2020
Pooled cash and investments 417.6$ 434.9$ (17.3)$ -4.0% 382.8$ Other assets 263.4 179.5 83.9 46.7% 160.3
Capital assets 635.3 601.7 33.6 5.6% 587.0
Total Assets 1,316.3 1,216.1 100.2 8.2% 1,130.1
Deferred outflows on derivative instruments 0.2 - 0.2 NA 0.3 Deferred outflows on refunding 6.2 7.1 (0.9) -12.7% 7.9

14.2 15.4 (1.2) -7.8% 12.8
Total Deferred Outflows of Resources 20.6 22.5 (1.9) -8.4% 21.0 Long-term liabilities outstanding
(including current portion) 142.8 156.5 (13.7) -8.8% 171.7 Net OPEB liability 13.1 11.9 1.2 10.1% 12.1
Net pension liabilities 73.5 98.4 (24.9) -25.3% 92.0
Other liabilities 71.1 39.6 31.5 79.5% 28.2
Total Liabilities 300.5 306.4 (5.9) -1.9% 304.0
Deferred inflows on derivative instruments 42.2 13.0 29.2 224.6% 0.8 Deferred inflows on refunding 1.5 1.8 (0.3) -16.7% 2.0
Deferred inflows on lease revenue 2.6 - 2.6 NA -
Deferred inflows on pension related items 18.4 0.2 18.2 9100.0% 1.7 Deferred inflows on OPEB related items 0.9 1.8 (0.9) -50.0% 1.7 Total Deferred Inflows of Resources 65.6 16.8 48.8 290.5% 6.2 Net Position:

Net investment in capital assets 512.0 463.7 48.3 10.4% 435.1 Restricted for contractual obligation 6.2 6.8 (0.6) -8.8% 5.2 Unrestricted 452.6 444.9 7.7 1.7% 400.6
Total Net Position 970.8$ 915.4$ 55.4$ 6.1% 840.9$
*
Not restated for the implementation of GASB 87 (See Note 2R) Deferred outflows on pension and OPEB
related items
Table 1
Net Position
(in millions)
Increase (Decrease)
June 30, 2022, 2021, and 2020
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
8 Description 2022 2021 Amount % 2020
Revenues:

Retail 497.9$ 453.3$ 44.6$ 9.8% 433.9$
Wholesale 36.0 22.3 13.7 61.4% 24.8
Interest Revenue 6.1 6.8 (0.7) -10.3% 7.5
Net increase (decrease) in fair value of investments (21.0) (4.8) (16.2) -337.5% 8.4 Rents and royalties 3.9 3.8 0.1 2.6% 3.6
Renewable energy credits 2.0 1.9 0.1 5.3% 4.3
Mandated program receipts 14.2 13.0 1.2 9.2% 12.3
Other 72.0 32.2 39.8 123.6% 28.6
-
Total Revenues 611.1 528.5 82.6 15.6% 523.4
Expenses:

Retail 526.5 432.3 94.2 21.8% 408.8
Wholesale 18.3 12.3 6.0 48.8% 30.0
Interest on long term debt and swap termination
payment 3.1 3.8 (0.7) -18.4% 6.9
Mandated program disbursement 5.5 5.8 (0.3) -5.2% 6.9
Total Expenses 553.4 454.2 99.2 21.8% 452.6
Increase (decrease) in net position before transfers 57.7 74.3 (16.6) -22.3% 70.8 Contribution 1.9 (1.9) - -
Transfers in (out) (2.3) (1.7) (0.6) -35.3% (0.4)
Increase (decrease) in net position 55.4 74.5 (19.1) -25.6% 70.4 Net Position - July 1 915.4 840.9 74.5 8.9% 770.5
Net Position - June 30 970.8$ 915.4$ 55.4$ 6.1% 840.9$
Table 2
Revenues, Expenses, and Changes in Net Position
(in millions)
Increase (Decrease)
For the years ended June 30, 2022, 2021 and 2020
SVP retail operating revenues were $497.9 million in fiscal year 2021-22, $453.3 million in fiscal year 2020-21, and $433.9 million in fiscal year 2019-20, reflecting increases of approximately 9.8% and 4.5% from fiscal years 2020-21 and 2019-20, respectively. The main reason for the increase in fiscal year 2021-22 was a 3% rate increase effective January 1, 2022 and consumption increases.

Retail operating expenses were $526.5 million in fiscal year 2021-22, $432.3 million in fiscal year 2020-21, and $408.8 million in fiscal year 2019-20, reflecting an increase of $94.2 million and $23.5 million or 21.8% and 5.7% from fiscal years 2020-21 and 2019-20, respectively. The retail operating expenses for fiscal year 2021-22 were higher primarily due to additional market MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
9 purchases to supply the increasing load demand and 26.6% increases in transmission access charge.

Revenues of wholesale resources (include gas and power) sales were $36.0 million in fiscal year 2021-22, $22.3 million in fiscal year 2020-21, and $24.8 million in fiscal year 2019-20.

Concurrently, the cost of wholesale resources purchases was $18.3 million in fiscal year 2021- 22, $12.3 million in fiscal year 2020-21, and $30 million in fiscal year 2019-20. The increase in wholesale power purchases in fiscal year 2021-22 was due to the overall high-priced resource market.

Interest income was $6.1 million in fiscal year 2021-22, $6.8 million in fiscal year 2020-21, and $7.5 million in fiscal year 2019-20. The decrease in the current fiscal year was primarily the result of lower interest rate environment. Interest expense was $3.1 million in fiscal year 2021- 22, $3.8 million in fiscal year 2020-21, and $6.9 million in fiscal year 2019-20. The decrease of interest expenses in fiscal year 2021-22 was due to refunding of Electric Revenue Refunding Bonds, Series 2011A, the callable portion of Electric Revenue Refunding Bonds, Series 2013A, and the Bank of America Loan Agreement, Series 2014 in fiscal year 2019-20. Further detail may be found in Note 5 to the financial statements.

SVP had a net position of $970.8 million at June 30, 2022, an increase of $55.4 million from the prior fiscal year. Of this amount, $48.3 million was an increase in net investment in capital assets, $0.7 million was a decrease of restricted for contractual obligation, and $7.8 million was an increase of unrestricted net position.

CAPITAL ASSETS
At the end of fiscal year 2021-22 SVP had $635.3 million, net of depreciation, invested in capital assets, with a significant amount in power generation facilities and the remainder in transmission and distribution assets. At June 30, 2022, SVP had various projects completed or under construction. In fiscal year 2021-22, the Capital Improvement Projects Budget included appropriations for significant investments in substation improvements in future years.

Further detail may be found in Note 4 to the financial statements.

DEBT ADMINISTRATION
Each of SVP’s debt issues is discussed in detail in Note 5 to the financial statements. At June 30, 2022, SVP’s debt is comprised of two issues of Revenue Bonds and three issues of Subordinate Revenue Bonds totaling of $142.8 million. These bonds are secured by net electric revenues earned by SVP and mature in fiscal years 2023 through 2033.

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
10 ECONOMIC OUTLOOK AND MAJOR INITIATIVES
The economy of the City and its major initiatives for the coming year are discussed in detail in the Letter of Transmittal Section of the City’s Annual Comprehensive Financial Report for the fiscal year ended June 30, 2022.

CONTACTING SVP’S FINANCIAL MANAGEMENT
These Basic Financial Statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of SVP’s finances. Questions about these Basic Financial Statements should be directed to the City of Santa Clara Finance Department, 1500 Warburton Avenue, Santa Clara, CA 95050-3796.

See accompanying notes to financial statements
11 ASSETS 2022 2021
Current Assets:

Pooled cash and investments (Note 3) 417,583,298 $ 434,877,562 $ Investments with fiscal agent (Note 3) 15,196,469 14,774,682 Leases Receivable (Note 2R) - 239,156
Receivables (net of allowances)
Accounts 76,744,991 98,415,474
Interest 1,470,576 1,614,768
Derivative instrument (Note 5G) 15,462,094 1,604,352
Due from the City of Santa Clara (Note 2E) 2,686, 2,603,215 894 Inventory of materials and supplies (Note 2F) 13, 12,136,795 804,838 Total Current Assets 544,212,173 565,002,991
Noncurrent Assets:

Capital assets (Note 4)
Land 14,371,743 14,371,743
Construction in progress 99,971,096 63,161,131
Buildings, improvements and infrastructure 1,065,938 974,506,146 ,843 Equipment 9,698,465 9,941,798
Right-to-use leased assets - 2,916,623
Accumulated depreciation (496,816,889) (520,990,136)
Total Capital Assets (Net of Accumulated Depreciation) 635,340,002 601,730,561 Other Noncurrent Assets:

Restricted investments (Note 3) 6,808,996 6,146,358
Derivative instrument (Note 5G) 26,724,615 11,427,770
Investments in joint ventures (Note 6) 57,312,242 42,673,081 Investments with fiscal agent (Note 3) 3,906,331 3,721,334 Deposits (Note 3) 5,522,664 19,518,954
Leases receivable (Note 2R) - 2,365,415
Total Other Noncurrent Assets 115,973,915 70,153,845
Total Noncurrent Assets 671,884,406 751,313,917
Total Assets 1,216,096,579 1,316,316,908

DEFERRED OUTFLOWS OF RESOURCES
Accumulated decrease in fair value of hedging
instruments (Note 5G) - 164,564
Deferred outflow on refunding of debt 6,192,411 7,051,125 Deferred outflows on OPEB related items (Note 8) 1,2 464,425 17,486 Deferred outflows on pension related items (Note 7) 14,951,393 13,021,377 Total Deferred Outflows of Resources 20,595,838 22,466,943 June 30, 2022

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

STATEMENTS OF NET POSITION
with Comparative Totals as of June 30, 2021
Statements of Net Position

See accompanying notes to financial statements
12 LIABILITIES 2022 2021
Current Liabilities:

Accrued liabilities 31,729,971 60,306,912
Interest payable 1,672,931 1,618,146
Accrued compensated absences 705,530 774,797
Current portion of long-term debt (Note 5) 13,580,00 13,005,000 0 Current portion derivative financial instruments (Note 5G) 164,564 - Current portion of leases obligation (Note 5J) 654,0 - 44 Total Current Liabilities 47,113,432 77,098,463
Noncurrent Liabilities:

Long-term portion accrued compensated absences 5,995 5,462,387 ,836 Net pension liability (Note 7) 98,396,395 73,533,480
Net OPEB liability (Note 8) 11,860,957 13,057,945
Long-term leases obligation (Note 5J) 1,632,622 -
Long-term debt (Note 5) 143,529,398 129,196,165
Total Noncurrent Liabilities 223,416,048 259,249,137
Total Liabilities 306,362,569 300,514,511

DEFERRED INFLOWS OF RESOURCES
Accumulated increase in fair value of hedging instruments (Note 5G) 13,032,122 42,186,709
Deferred inflow on refunding of debt 1,537,064 1,793,331 Deferred inflow - leases related (Note 2R) 2,571,068 -
Deferred inflows pension related items (Note 7) 18,3 148,855 43,263 Deferred inflows OPEB related items (Note 8) 929,326 1,811,678 Total Deferred Inflows of Resources 65,567,430 16,785,986

NET POSITION
Net investment in capital assets 511,984,541 463,692,179 Restricted 6,808,996 6,146,358
Unrestricted 444,913,792 452,699,906
Total Net Position $ 915,414,967 970,830,805 $
with Comparative Totals as of June 30, 2021
(SILICON VALLEY POWER)

STATEMENTS OF NET POSITION
June 30, 2022

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND

See accompanying notes to financial statements
13 2022 2021
Operating Revenues:

Residential sales $ 35,440,461 33,275,452 $
Commercial sales 16,489,095 16,394,519
Industrial sales 399,940,409 448,256,676
Renewable energy credits 1,901,898 2,024,100
Wholesale resource sales (Note 9) 36,048,240 22,324,165 Mandated program receipts 12,952,572 14,223,250
Other operating revenues 16,802,355 20,614,578
Total Operating Revenues 567,024,592 509,663,178
Operating Expenses:

Operations 80,459,901 91,250,838
Maintenance 22,049,243 24,972,897
Purchased resource 308,443,776 386,053,317
Wholesale resource purchases (Note 9) 18,370,965 12,282,782 Mandated program disbursement 5,533,938 5,821,317
Amortization - 673,067
Depreciation 21,359,932 23,547,718
Total Operating Expenses 550,402,740 450,416,951
Operating Income 59,246,227 16,621,852
Nonoperating Revenues (Expenses):

Interest revenue 6,823,316 6,065,834
Net changes in the fair value of investments (21,01 (4,791,168) 0,694) Interest expense (3,744,098) (3,117,699)
Equity in income (losses) of joint ventures 14,639,1 1,678,371 61 Rents and royalties 3,767,123 3,898,215
Other revenues 11,379,050 40,626,292
Total Nonoperating Revenues, net 41,101,109 15,112,594
Income Before Transfers 57,722,961 74,358,821
Contributions 1,900,000 -
Transfers from the City of Santa Clara 330,000 166,540
Transfers to the City of Santa Clara (2,637,123) (1,902,975) Net Income 74,522,386 55,415,838
Net Position, Beginning of Year 915,414,967 840,892,581 Net Position, End of Year 970,830,805 $ 915,414,967 $

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION For the Year Ended June 30, 2022
with Comparative Totals for the Year Ended June 30, 2021 Statements of Revenue, Expen ses and Changes in Net Position See accompanying notes to financial statements
14 2022 2021

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 494,683,368 $ 476,627,250
Payments to suppliers (438,473,513) (353,242,680)
Payments to employees for salaries and benefits (45,739,420) (43,598,710) Rents and royalties received 3,823,785 2,972,934
Resource energy trading escrow (13,996,290) (2,296,122) Wholesale resource sales 36,048,240 22,324,165
Wholesale resource purchases (18,370,965) (12,282,782)
Renewable energy credits 2,024,100 1,901,898
Other receipts 48,415,239 17,536,223
Net Cash provided by Operating Activities 68,414,544 109,942,176

CASH FLOWS FROM NONCAPITAL FINANCING

ACTIVITIES
Increase (decrease) in due from other funds (83,679) (601,248) Changes in restricted investments (662,638) 1,643,104
Transfers in 330,000 166,540
Transfers out (2,637,123) (1,902,975)
Net Cash (used in) Noncapital Financing Activities (3,053,440) (694,579)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition and construction of capital assets, net (50,687,039) (40,389,333) Principal payments on debt (13,632,958) (9,580,000)
Interest paid on debt (3,325,270) (3,991,726)
Net Cash (used in) Capital and Related Financing Activities (67,645,267) (53,961,059)

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

STATEMENTS OF CASH FLOWS
with Comparative Totals for the Year Ended June 30, 2021 For the Year Ended June 30, 2022
Statements of Cash Flows
See accompanying notes to financial statements
15 2022 2021

CASH FLOWS FROM INVESTING ACTIVITIES
Interest and dividends 6,766,041 5,944,739
Net increase (decrease) in the fair value of investments (21,010,694) (4,791,168) Payments made by fiscal agent 13,538,574 16,294,079
Deposits made with fiscal agent (17,030,693) (16,900,863) Net Cash (used in) Investing Activities (15,672,739) (1,517,246) Net Increase (Decrease) in Cash and Cash Equivalents (17,956,902) 53,769,292 Cash and cash equivalent at Beginning of Period 441, 387,917,266 686,558 Cash and cash equivalent at End of Period 423,729,65 $ 441,686,558 6 $ Reconciliation of Operating Gain (Loss) to Net Cash
Provided (Used) by Operating activities:

Operating income $ 16,621,852 $ 59,246,227
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
(Decrease) Increase in due to OPEB system (438,425) (578,377) (Decrease) Increase in due to retirement system (4,7 2,739,064 38,491) (Decrease) Increase in due to lease obligation 616,4 - 66 Depreciation 21,359,932 23,547,718
Change in assets and liabilities:

Receivable, net 4,315,664 (21,670,483)
Inventory (1,431,601) (1,668,043)
Accrued liabilities 12,360,873 24,350,379
Restricted cash 662,638 (1,643,104)
Compensated absences 723,447 602,716
Other receipts 15,146,173 44,524,507
Resource trading escrow (2,296,122) (13,996,290)
Net Cash Provided by Operating Activities 68,414,544 $ 109,942,176 $ NONCASH TRANSACTIONS:

Joint Ventures
Nonoperating Income (Expense) $ 1,678,371 14,639,161 $
(SILICON VALLEY POWER)

STATEMENTS OF CASH FLOWS
with Comparative Totals for the Year Ended June 30, 2021

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
For the Year Ended June 30, 2022

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
16 NOTE 1 – DEFINITION OF THE REPORTING ENTITY
The City of Santa Clara (the City), California’s Electric Utility Enterprise Fund, which began operating as Silicon Valley Power (SVP) in 1997, commenced operations over 100 years ago in 1896. Originally, SVP constructed a lighting plant consisting of forty-six 2000 candlepower direct current lamps and a dynamo (a type of electric generator) which entered into service in October 1896. In late 1903, SVP invested $5,000 to convert the system to alternating current and abandoned the small generating plant. Wholesale power was purchased from United Gas and Electric Company of San Jose.

Between 1903 and 1965, SVP purchased all of its electric power requirements from investorowned utilities. In 1965, it received an allocation of power from the Federal Central Valley Project and began to diversify its resources. SVP became a charter member of the Northern California Power Agency (NCPA) in June 1968. Throughout the 1970’s, SVP and NCPA worked on behalf of all municipal electric utilities in Northern California to gain access to wholesale transmission markets and to jointly develop cost-effective electric generation resources.

In 1980, SVP became a generating utility for the first time in 73 years with the start of operations of the 6-Megawatt Cogen No. 1 power plant. In 1983, the 110 Megawatt NCPA Geothermal Project, the first municipally owned and operated geothermal power plant in the United States, entered service with SVP as lead partner holding a 55% participation share. Subsequently, SVP participated in further jointly owned power generation projects including hydroelectric, natural gas and coal fired generation. In 2005, SVP placed the 147 Megawatt Don Von Raesfeld Power Plant into service.

Today, SVP has grown to approximately 8,429 streetlights and serves approximately 58,118 electric customers. As SVP looks to the future, it continues to be responsive to the electric market development by increasing its renewable power resources, reducing its greenhouse gas (GHG) footprint, and working with its customers to enhance the value they receive from municipal ownership of their electric utility.

Notes to Financial Statemen ts
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Presentation
SVP’s Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to government units. The Government Accounting Standards Board (GASB) is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 2- SUMMARY OF SIGNIIFICANT ACCOUNTING POLICIES (continued) 17 in the United States of America. The electric enterprise fund is included in the City’s Annual Comprehensive Financial Report, and therefore, these financial statements do not purport to represent the financial position and changes in financial position of the City.

B. Basis of Accounting
SVP reports its activities as a proprietary fund type (Enterprise Fund) which is maintained on the accrual basis of accounting wherein revenues are recognized in the accounting period in which they are earned regardless of whether they are received, and expenses are recognized in the period in which the related liabilities are incurred. Certain indirect costs are included in program expenses reported for individual functions and activities.

During the year ended June 30, 2022, SVP implemented the following GASB Statement:

The GASB issued Statement No. 87 "Leases.” The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. To be consistent with the Citywide implementation, the provisions of this Statement were implemented during fiscal year 2022.

As a result, the beginning the balances of leases receivable and deferred inflows of resources related to leases were $2,832,684 as of July 1, 2021. The balances of the lease payable and intangible right-to-use asset were $2,916,623 as of July 1, 2021. SVP restated and increased the balances in that amount and the net effect on beginning net position was zero.

The GASB issued Statement No. 89 "Accounting for Interest Cost Incurred Before the End of a Construction Period.” The objectives of this Statement are to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and to simplify accounting for certain interest costs. This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in the financial statements. The

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 2- SUMMARY OF SIGNIIFICANT ACCOUNTING POLICIES (continued) 18 provisions of this Statement were implemented during fiscal year 2022. The implementation had no effect on the financial statements.

The GASB issued Statement No. 93, Replacement of Interbank Offered Rates. The primary objective of this Statement is to address accounting and financial reporting implications that result from the replacement of an interbank offered rate (IBOR). The provisions of this Statement were implemented during fiscal year 2022. The implementation had no effect on the financial statements.

The GASB issued Statement No. 97 “Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans-An Amendment of GASB Statements No.14 and No. 84, and a Supersession of GASB Statement No. 32.” The objectives of this statement are to (1) increase consistency and comparability related to reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. This statement becomes effective for periods beginning after June 15, 2021. The implementation had no effect on the financial statements.

The GASB issued Statement No. 99, Omnibus 2022. The primary objective of this Statement is to enhance comparability in reporting and improve the consistency of authoritative literature by addressing practice issues identified during implementation and application of certain GASB statements. The provisions of this Statement related to LIBOR, SNAP, and Leases, were implemented during fiscal year 2022.

SVP is analyzing the effects of the following pronouncements and plans to adopt them by the effective dates:

The GASB issued Statement No. 91 “Conduit Debt Obligation.” The objective of this statement is to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practices. This statement becomes effective for periods beginning after December 15, 2021. SVP is currently evaluating the impact on the financial statements.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 2- SUMMARY OF SIGNIIFICANT ACCOUNTING POLICIES (continued) 19 The GASB issued Statement No. 92 “Omnibus 2020.” The objective of this statement is to enhance comparability in reporting and improve the consistency of authoritative literature by addressing practice issues identified during implantation of certain GASB statements. This statement becomes effective upon issuance for requirements related to GASB 87. For GASB 73, GASB 74, and GASB 84 as well as measurement of liabilities associated with asset retirement obligations, the requirements become effective for reporting periods beginning after June 15, 2021. SVP is currently evaluating the impact on the financial statements.

The GASB issued Statement No. 94 “Public-Private and Public-Public Partnerships and Availability Payment Arrangements.” The objective of this statement is to address issues related to public-private and public-public partnership arrangements and to provide guidance for accounting and financial reporting for availability payment arrangements. This statement becomes effective for periods beginning after June 15, 2022. SVP is currently evaluating the impact on the financial statements.

The GASB issued Statement No. 96 “Subscription-Based Information Technology Arrangements.” The objective of this statement is to provide guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users. This statement becomes effective for periods beginning after June 15, 2022. SVP is currently evaluating the impact on the financial statements.

The GASB issued Statement No. 100 “Accounting Changes and Errors Corrections". The objective of this statement is to establish accounting and financial reporting requirements for (a) accounting changes and (b) the correction of an error in previously issued financial statements.

This statement becomes effective for periods beginning after June 15, 2023. SVP is currently evaluating the impact on the financial statements.

The GASB issued Statement No. 101 “Compensated Absences". The objective of this statement is to amend the existing requirements for the recognition of compensated absences liability. This statement becomes effective for periods beginning after December 15, 2023. SVP is currently evaluating the impact on the financial statements.

C. Measurement Focus
Enterprise funds are accounted for on a cost of services or economic resources measurement focus, which means that all liabilities associated with the activity are included on their Statement of Net Position. Enterprise fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Reported net position is segregated into three categories – net investment in capital assets, restricted, and unrestricted.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 2- SUMMARY OF SIGNIIFICANT ACCOUNTING POLICIES (continued) 20 D. Cash and Investments
SVP’s cash and investments pool is maintained by the City except for fiscal agent cash and investments.

While maintaining safety and liquidity, the City maximizes investment return by pooling its available cash for investment purposes. Unless there are specific legal or contractual requirements to do otherwise, interest earnings are apportioned among funds according to average monthly cash and investment balances. It is generally the City's intention to hold investments until maturity. City investments are stated at fair value (see Note 3).

Cash and cash equivalents for purposes of the statement of cash flows include pooled cash and investments and cash designated for construction. Transactions with City-wide cash management pools are similar to those with external investment pools; therefore, since pooled cash and investments have the same characteristics as demand deposits in that the City's individual funds and component units may withdraw additional monies at any time without prior notice or penalty, pooled cash and investments are considered essentially demand deposit accounts.

Cash and investments with fiscal agent, a bond reserve investment pool, and amounts classified as deposits are not considered cash and cash equivalents.

E. Due from City of Santa Clara
During the course of operations, transactions occur between SVP and the City for goods provided or services rendered. The related receivables, net, are classified as “Due from the City of Santa Clara” on the accompanying statement of net position.

F. Inventory of Materials and Supplies
Inventory of materials and supplies is accounted for using the consumption method and is stated at average cost. Inventory consists of expendable supplies held for consumption by the electric utility.

G. Capital Assets
All capital equipment and right-to-use equipment with a value of $5,000 and buildings, improvements and infrastructure, right-to-use building with costs exceeding $20,000 or more with useful lives exceeding two years are capitalized. These assets are valued at historical cost or estimated historical cost if actual historical cost is not available except for intangible right -touse lease assets, the measurement of which discussed in Note 2R below. Contributed capital

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 2- SUMMARY OF SIGNIIFICANT ACCOUNTING POLICIES (continued) 21 assets are valued at their estimated acquisition value on the date contributed. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets (buildings and improvements: 20 to 50 years; and equipment: 3 to 25 years) and is charged as an expense against operations. Accumulated depreciation is reported on the statement of net position.

The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related capital assets.

Capital assets and the related obligations under lease/purchase agreements are capitalized and accounted for in accordance with Accounting Standards Codification (ASC) Topic 840. Interest is capitalized on construction in progress in accordance with ASC Topic 835, Capitalization of Interest Cost in Situations Involving Certain Tax-Exempt Borrowings, and Certain Gifts and Grants. Accordingly, interest capitalized is the total interest cost for the date of the borrowings net of any interest earned on temporary investments of the borrowed proceeds until the specified asset is ready for its intended use. There was no interest capitalized for the fiscal years ended June 30, 2021 or 2022.

H. Joint Ventures
SVP participates in several joint ventures in accordance with GAAP. If SVP’s equity in net losses of a joint venture exceeds its investments, use of the equity method is suspended except to the extent that SVP is obligated to provide further support or has guaranteed obligations of the joint venture.

SVP advances funds to certain of its joint ventures in the form of refundable advances, project advances, and operating and maintenance advances. Refundable advances accrue interest at rates stated in the related agreements. Operating, maintenance, and project advances are charged to operations when incurred.

Capitalized project costs are charged to operations in the event that a project is determined to be not economically feasible.

I. Compensated Absences
Amounts of vested or accumulated vacation leave and certain benefits that are not expected to be liquidated with expendable available financial resources are reported in the SVP financial statements as an expense and liability.

In accordance with GAAP, Accounting for Compensated Absences, a liability for sick leave and benefits is accrued using the vesting method. The vesting method provides that a governmental

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 2- SUMMARY OF SIGNIIFICANT ACCOUNTING POLICIES (continued) 22 entity estimate its accrued sick leave liability based on the sick leave accumulated at the statement of net position date by those employees who currently are eligible to receive termination payments as well as other employees who are expected to become eligible in the future to receive such payments. Estimated sick leave payments are recorded as an expense and liability by SVP.

J. Risk Management
SVP is covered under the City’s self-insurance programs via Internal Service Funds. There were no significant reductions in insurance coverage from the prior year by major categories of risk and the amount of settlements did not exceed insurance coverage for the past four fiscal years.

Additional information with respect to the City’s self-insurance programs can be found in the City’s Annual Comprehensive Financial Report.

K. Electric Resource Purchased
SVP purchases power from various suppliers and agencies (including joint powers agencies) for resale to its customers (see Note 10). SVP also engages in numerous resource energy transactions with the objective of reducing its overall cost of resource energy. Gross resource energy sales and resource energy purchases are recorded as operating revenue and expense, respectively (see Note 9).

L. Bond Discounts/Issuance Costs
Bond discounts are presented as a reduction of the face amount of bonds payable, whereas issuance costs are recognized in the current period.

M. Revenue Recognition
Operating revenues are recognized based on cycle billings periodically rendered to customers.

Operating revenues for services provided, but not billed at the end of the fiscal year, are recognized and accrued based on estimated consumption. Operating revenues primarily include the sales of electric power to residential, commercial, industrial, and municipal customers.

Non-operating revenues primarily represent interest income, grants, rents, and other nonrecurring miscellaneous income.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 2- SUMMARY OF SIGNIIFICANT ACCOUNTING POLICIES (continued) 23 N. Taxes on Income
As an agency of the City, SVP falls under the review of the Internal Revenue Code Section 115 and corresponding California Revenue and Taxation Code provisions. As such, it is not subject to federal income or state franchise taxes.

O. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position includes a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. SVP has three items that qualify for reporting in this category:
deferred outflow related to the refunding, pension and OPEB.

In addition to liabilities, the statement of financial position includes a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. In the government‐wide financial statements SVP reports deferred amounts related to derivative instruments, refunding, leases and deferred amounts related to pension and OPEB.

P. Net Position and Fund Equity
SVP may fund certain programs with a combination of restricted and unrestricted net position.

The policy is to first apply restricted net position followed by unrestricted net position if necessary.

Q. Use of Estimates
The preparation of financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

R. Lease Agreements
A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 2- SUMMARY OF SIGNIIFICANT ACCOUNTING POLICIES (continued) 24 Lessee - SVP is a lessee for noncancellable lease of buildings. SVP recognizes a lease liability with an initial, and individual value of $100,000 and an intangible right‐to‐use lease asset (lease asset) in the statement of net position financial statements.

At the commencement of a lease, SVP initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight‐line basis over its useful life.

Key estimates and judgments related to leases include how SVP determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments as follows:
 SVP uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.  The lease term includes the noncancellable period of the lease.  Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that SVP is reasonably certain to exercise.

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

Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the statement of net position.

Lessor - SVP is a lessor for noncancellable leases of land and building. SVP recognizes a lease receivable and a deferred inflow of resources in the financial statements.

At the commencement of a lease, SVP initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 2- SUMMARY OF SIGNIIFICANT ACCOUNTING POLICIES (continued) 25 Key estimates and judgments include how SVP determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts as follows:
 SVP uses its estimated incremental borrowing rate as the discount rate for leases.  The lease term includes the noncancellable period of the lease.  Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

SVP monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable. SVP has leases related to fiber and land use and the balances related to the leases receivable and deferred inflow of resources as of June 30, 2022 were $2,604,571 and $2,571,068, respectively. The leases have remaining terms of one to 19 years as of July 1, 2021 and annual increases of 3%. SVP recognized $11,894 in lease revenue and $68,494 in interest revenue during the current fiscal year related to these leases.

S. Prior Year Summarized Comparative Information
The basic financial statements include certain prior year summarized comparative information in total but not at the level of detail required for a presentation in accordance with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the SVP’s financial statements for the year ended June 30, 2021, from which the summarized information was derived.

NOTE 3 – CASH AND INVESTMENTS
SVP’s cash and investments pool is maintained by the City except for fiscal agent cash and investments. A full description of the City’s cash and investment policy is in Note 7 of its Annual Financial Report.

A. Investments Authorized by the California Government Code and the City’s Investment Policy
The City’s Investment Policy and the California Government Code allow the City to invest in certain types of investments, provided the credit ratings of the issuers are acceptable to the City.

The table below also identifies certain provisions of the City’s Investment Policy and the

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 3 – CASH AND INVESTMENTS (continued)
26 California Government Code that address interest rate risk, credit risk, and concentration of credit risk.

Minimum Maximum Maximum
Maximum Credit Percentage Investment
Authorized Investment Type Maturity Quality or Portfolio In One Issuer U.S. Treasury Obligations 7 years N/A 100% 100%
U.S. Agency Securities (1) 7 years Top three ratings
categories
80%(2) 40%
Negotiable Certificates of Deposit 5 years A/A1 30% 5%
Bankers Acceptances 180 days N/A 25% 5%
Commercial Paper 270 days A1 / P1 25% 5%(3)
California Local Agency Investment
Fund
N/A N/A None $75M Per A/C
Repurchase Agreements 60 days N/A 50% 20%
Reverse Repurchase Agreements
(requires City Council approval)
92 days N/A 20% 10%
Municipal Obligations 7 years N/A 20% 5%
Medium Term Corporate Notes 5 years Top three ratings
categories
20% 5%
Mutual Funds / Money Market Funds N/A Top rating category 20% 10% Joint Power Authority Investment Pools N/A Top rating category 100% 100% Supranational Obligations 5 years AA 20% 10%
Asset-Backed Securities 5 years AA 10% 5%
Non-Negotiable Certificates of Deposit 5 years N/A 10% 5% Mortgage-Backed Securities 12 years (4) AA 15% 5%
(2) Callable securities are limited to 30% of the portfolio. (3) No more than 10% of the outstanding commercial paper of any single issuer. time of purchase for Mortgage-Backed Securities (MBS). Maximum Final Maturity for MBS's = 30 years with balloon payments.
(1) Securities issued by the Federal Farm Credit Bank (FFCB), the Federal Home Loan Bank (FHLB), the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC), local agencies and other U.S. government sponsored enterprises. (4) Maximum Weighted Average Life with Current Public Securities Association Assumptions =12 years at

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 3 – CASH AND INVESTMENTS (continued)
27 B. Investments Authorized by Debt Agreements
The City invests bond proceeds restricted for construction in instruments that are stated in the Investment Policy and in various return-guaranteed investment agreements. These investments are invested in accordance with bond indentures and the maturities of each investment should not exceed the final maturity of each bond. Bond proceed investments are reported monthly to the City Council.

SVP also maintains required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if SVP fails to meet its obligations under these debt issues. The California Government Code 53601 (L) allows these funds to be invested in accordance with the statutory provisions governing the issuance of those bonds, indebtedness, other agreements, or certificates of participation in accordance with the ordinance, resolution, indenture, or agreement of the local agency providing for the issuance.

C. Pension Rate Stabilization Program
In February 2017, the City Council approved a Pension Rate Stabilization Program, (PRSP) Trust administered by Public Agency Retirement Services (PARS). The PRSP is an irrevocable trust and qualifies as an Internal Revenue Section 115 trust. This trust will assist the City in mitigating the CalPERS contribution rate volatility. Investments of funds held in Pension Rate Stabilization Program (PRSP) are governed by the Investment Guideline Document for the investment account and by the agreement for administrative services with the Public Agency Retirement Services (PARS), rather than the general provisions of the California Government code or the City’s investment policy. The City elected a discretionary investment approach which allows the City to maintain oversight of the investment management, control on target yield and the portfolio’ risk tolerance. The assets in this program will eventually be used to fund Pension Plan obligations.

As part of the year-end process for fiscal year 2016-17, the City Council approved SVP to designate and make an initial deposit of $3.5 million in fiscal year 2018 towards pre-funding the City’s pension obligations. As of June 30, 2022, the balance in the pension rate stabilization program trust was $6.1 million.

D. Credit and Interest Rate Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligations to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 3 – CASH AND INVESTMENTS (continued)
28 Interest rate risk is the risk that changes in market interest rate will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment is the greater the sensitivity of its fair value to changes in market interest rates to be.

Information about the sensitivity of the fair values of SVP’s investments to market interest rate fluctuations is provided by the following table that shows the distribution to SVP’s investment by maturity.
2022 2021
Credit Under 180 181 - 365 1 - 3 3 - 5 Fair Fair
Type of Investment Rating Days Days Years Years Value Value Cash and Investments
- City Treasury:

Cash N/A 75,462,582 $ - $ - $ - $ 75,462,582 $ 68,251,715 $ U.S. Treasury notes Aaa 2,685,313 33,518,682 74,690,438 41,574,840 152,469,273 171,790,670 Federal Farm Credit Bank Aaa 2,908,873 2,134,688 25,989,982 3,958,083 34,991,626 45,478,812 Federal Home Loan Bank Aaa - - 10,624,125 - 10,624,125 31,764,216 Federal National Mortgage
Association Aaa 2,133,770 - 17,529,986 729,096 20,392,852 29,136,334 Federal Home Loan Mortgage
Corporation Aaa - 2,089,366 5,854,073 3,677,511 11,620,950 16,126,375 Corporate notes Aaa - - 4,249,522 1,968,901 6,218,423 4,586,331 Corporate notes Aa - - 10,681,116 6,254,944 16,936,060 6,640,391 Corporate notes A - - 26,903,494 17,414,716 44,318,210 14,943,037 Supranational Aaa - 3,064,725 4,464,513 - 7,529,238 3,255,588 Asset-Backed Securities Aaa - - - 4,707,312 4,707,312 1,758,039 California Municipal Bonds Aaa - - - 1,068,661 1,068,661 1,199,332 California Municipal Bonds Not Rated - 599,091 - - 599,091 648,456 Certificates of Deposit A-1 - 4,637,466 - - 4,637,466 8,171,859 Wells Fargo Money Market Fund Not Rated 420,314 - - - 420,314 90,363 State Investment Pool (LAIF) Not Rated 25,587,115 - - - 25,587,115 31,036,044 Cash and Investments
- City Treasury 46,044,018 109,197,967 180,987,249 81,354,064 417,583,298 434,877,562 Cash and Investments
- Other:

Cash (Debt Fund) N/A 6,085,210 - - - 6,085,210 91,549
Mutual Fund - Goldman FS
- Money Market Funds
(Debt Funds) Aaam 8,473,195 - - - 8,473,195 14,055,910
Mutual Fund - JP Morgan
- Money Market Funds
(Debt Funds) Aaam 4,544,395 - - - 4,544,395 4,348,557
Pension Rate Stabilization
Investment
(Cash and Equivalents) Not Rated 62,426 - - - 62,426 69,156 Pension Rate Stabilization
Investment
(Mutual Fund - Equity) Not Rated 1,927,138 - - - 1,927,138 2,134,902 Pension Rate Stabilization
Investment
(Mutual Fund - Fixed Income) Not Rated 4,156,794 - - - 4,156,794 4,604,938 Collateral Obligations
(Archer Daniels Midland and
CAISO) Not Rated 19,518,954 - - - 19,518,954 5,522,664
Investments - Other - 44,768,112 - - 44,768,112 30,827,676 Total Cash and Investments $ 46,044,018 153,966,079 $ 180,987,249 $ 81,354,064 $ 462,351,410 $ 465,705,238 $ Maturity

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 3 – CASH AND INVESTMENTS (continued)
29 The City is a voluntary participant in the Local Agency Investment Fund (LAIF). LAIF is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. LAIF’s investment portfolio mainly consists of Treasuries, loans, Federal Agency securities, and collateralized mortgage obligations. Each regular LAIF account is permitted to have up to 15 transactions per month, with a minimum transaction amount of $5,000, a maximum transaction amount of $75 million and at least 24 hours advance notice for withdrawals of $10 million or more. Bond proceeds accounts are subject to one time deposit with no cap and are set up with a monthly draw down schedule. The carrying value of LAIF approximates fair value.

Mutual funds are available for withdrawal on demand. See City’s Annual Financial Report Note 7 to the financial statements for additional detail on the fiscal year 2021-22 investment portfolio.

E. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. Under California Government Code Section 53651, depending on specific types of eligible securities, a bank must deposit eligible securities posted as collateral with its Agent having a fair value of 105% to 150% of the City’s cash on deposit. All of the City’s deposits are either insured by the Federal Depository Insurance Corporation (FDIC) or collateralized with pledged securities held in the trust department of the financial institutions.

The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, the City will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The City’s Investment Policy limits its exposure to custodial credit risk by requiring that all security transactions entered into by the City, including collateral for repurchase agreements, be conducted on a delivery-versus-payment basis. Securities are to be held by a third party custodian.

F. Fair Value Hierarchy
SVP categorizes its fair value measurements within the fair value hierarchy established by GAAP. The hierarchy is based on the valuation input used to measure the fair value of asset.

Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. See City’s Annual Financial Report Note 7 to the financial statements for more detailed information.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 3 – CASH AND INVESTMENTS (continued)
30 Fair Value Measurements Using
Investments and
Derivative Instruments
Measured at Fair Value
Quoted Prices in
Active Markets for
Identical Assets
Significant
Other
Observable
Inputs
6/30/2022 Level 1 Level 2 Exempt (1)
Investments by Fair Value Level
Short Term Investments
US Treasury Notes $ 152,469,273 152,469,273 $ - $ $ -
Federal Farm Credit Banks 34,991,626 - 34,991,626 -
Federal Home Loan Banks 10,624,125 - 10,624,125 -
Federal National Mortgage Association 20,392,852 - 20,392,852 - Federal Home Loan Mortgage Corp 11,620,950 - 11,620,950 - Corporate notes - 67,472,693 67,472,693 -
Supranational - 7,529,238 7,529,238 -
Asset-Backed Securities 4,707,312 - 4,707,312 -
California Municipal Bonds 1,667,752 - 1,667,752 -
Certificates of Deposit 4,637,466 - 4,637,466 -
Wells Fargo Money Market Fund 420,314 - - 420,314
Total Short Term Investments 152,469,273 316,533,601 163,644,014 420,314 Debt Securities and Other
Mutual Fund - Goldman FS
- Money Market Funds (Debt Funds) - 8,473,195 - 8,473,195 Mutual Fund - JP Morgan
- Money Market Funds (Debt Funds) - 4,544,395 - 4,544,395 Pension Rate Stabilization Investment (Cash
and Equivalents) 62,426 62,426 - -
Pension Rate Stabilization Investment
(Mutual Fund - Equity) 1,927,138 1,927,138 - -
(Mutual Fund - Fixed Income) 3,245,091 4,156,794 911,703 - Collateral Obligations
(Archer Daniels Midland and CAISO) - 19,518,954 - 19,518,954 Total Debt Securities and Other 5,234,655 38,682,902 911,703 32,536,544 Total Investment by Fair Value Level $ 157,703,928 355,216,503 $ 164,555,717 32,956,858 Investments Measured at the Amortized Cost
State Investment Pool (LAIF) - 25,587,115 - 25,587,115
Total Investments $ 157,703,928 380,803,618 $ 164,555,717 $ 58,543,973 Cash in Banks 81,547,792
Total Cash and Investment $ 462,351,410
Investments Derivative Instruments
Open contract power trading - current assets 15,462, $ 094 $ 15,462,094 Open contract gas trading - non-current assets 26,72 4,615 26,724,615 Total Investment Derivative Instruments $ 42,186,709 $ 42,186,709 (1) Accounts in exempt column are Mutual Fund-Money Market, Collateral Obligation and LAIF investments which are exempt from fair value hierarchy, or reported at amortized cost.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 3 – CASH AND INVESTMENTS (continued)
31 The City utilizes a third party pricing service to determine fair market prices for its individually held investments. Evaluations are based on market information available at the time and generated using proprietary evaluated pricing models and methodologies.

Level 1 investments are valued using a marketable actively traded assets closing price for identical assets. Level 2 investments are determined by using quoted prices for similar assets.

NOTE 4 – CAPITAL ASSETS
A. Capital Assets Summary
Capital asset activity for the years ended June 30, 2022 and 2021 is as follows:

Balance Balance
6/30/2021
(as restated) Additions Retirements Transfers June 30, 2022 Non Depreciable Assets:

Land 14,371,743 $ - $ - $ - $ 14,371,743 $
Construction In Progress 99,971,096 54,622,732 - (91,432,697) 63,161,131 Total Non Depreciable Assets 114,342,839 54,622,732 - (91,432,697) 77,532,874 Capital assets being depreciated:

Buildings and Improvements 974,506,146 - - 91,432,697 1,065,938,843 Right-to-use leased building 2,916,623 - - - 2,916,623
Machinery & Equipment 9,698,465 290,871 (47,538) - 9,941,798 Total capital assets being
depreciated 290,871 987,121,234 (47,538) 91,432,697 1,078,797,264 Less accumulated depreciation for:

Buildings and Improvements (488,361,127) (23,235,288) - - (511,596,415) Right-to-use leased building - (673,067) - - (673,067)
Machinery & Equipment (8,455,762) (312,430) 47,538 - (8,720,654) Total accumulated depreciation (496,816,889) (24,220,785) 47,538 - (520,990,136) Net Depreciable Assets 490,304,345 (23,929,914) - 91,432,697 557,807,128 Enterprise Activity Capital Assets,
Net $ 30,692,818 604,647,184 $ - $ - $ 635,340,002 $

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 4 – CAPITAL ASSETS (continued)
32 Balance Balance
June 30, 2020 Additions Retirements Transfers June 30, 2021 Non Depreciable Assets:

Land 14,371,743 $ - $ - $ - $ 14,371,743 $
Construction In Progress 93,557,073 34,169,303 - (27,755,280) 99,971,096 Total Non Depreciable Assets 107,928,816 34,169,303 - (27,755,280) 114,342,839 Capital assets being depreciated:

Buildings and Improvements 944,850,866 1,900,000 - 27,755,280 974,506,146 Machinery & Equipment 9,852,172 67,107 (220,814) - 9,698,465 Total capital assets being
depreciated 1,967,107 954,703,038 (220,814) 27,755,280 984,204,611 Less accumulated depreciation for:

Buildings and Improvements (467,321,569) (21,039,558) - - (488,361,127) Machinery & Equipment (8,356,202) (320,374) 220,814 - (8,455,762) Total accumulated depreciation (475,677,771) (21,359,932) 220,814 - (496,816,889) Net Depreciable Assets 479,025,267 (19,392,825) - 27,755,280 487,387,722 Enterprise Activity Capital Assets,
Net $ 14,776,478 586,954,083 $ - $ - $ 601,730,561 $
B. Construction in Progress
Construction in progress as of June 30, 2022 and 2021 consisted of the following in SVP Projects.

Projects as of June 30 , 2022 Authorized Expended Commitments Replace NRS 115/60KV Transformers 9,166,995 $ 1,641,462 $ 7,525,533 $ Sierra Substation 14,618,579 15,969,974 1,351,395
Implementation Advanced Meter Infrastructure 31,502, 27,641,081 512 3,861,431 Bucks Creek Relicensing 6,318,577 6,450,261 131,684
Electric Vehicle Charging 2,492,992 1,168,048 1,324,944 San Tomas Junction 931,796 5,180,038 4,248,242
Other Projects 10,841,588 102,044,261 91,202,673
Total $ 63,161,131 172,807,033 $ 109,645,902 $

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 4 – CAPITAL ASSETS (continued)
33 Projects as of June 30, 2021 Authorized Expended Commitments Replace NRS 115/60KV Transformers 18,673,045 $ 1,279,952 $ 17,393,093 $ SVP Utility Center 188,173 17,413,108 17,224,935
Serra Substation 7,887,229 18,887,411 11,000,182
Fairview Substation 23,349,610 28,502,108 5,152,498
San Tomas Junction 233,933 5,041,285 4,807,352
Great America Tasman Street Lighting Improvements 4, 767,162 830,772 4,063,610 Other Projects 66,265,037 85,261,120 18,996,083
Total $ 99,971,096 178,608,849 $ 78,637,753 $
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS
Changes in long-term debt for the year ended June 30, 2022, consisted of the following:

Outstanding Debt Additions and Outstanding
Type of Indebtedness as of June 30, Retired / Amortization as of June 30, Current Rate, Issue Date and Maturity 2021 Defeased of Discounts 2022 Portion Obligation Bonds:
2013 Series A Refunding Revenue Bonds
3%-5%, 04/24/13-07/01/22 $ 4,320,000 8,865,000 $ - $ 4,545,000 $ 4,545,000 $ 2018 Series A Refunding Revenue Bonds,
5%, 12/18/18 - 07/01/27 40,110,000 4,785,000 - 35,325,000 5,110,000 Unamortized Discount/Premium - 4,519,398 (753,233) 3,766,165 - Subtotal Electric Utility Revenue Bonds 53,494,398 9,105,000 (753,233) 43,636,165 9,655,000 Direct Placement:

Series 2020-1 Revenue Refunding Bonds,

1.74%, 04/10/2020 - 07/01/2032 52,985,000 - - 52,985,000 - Series 2020-2 Revenue Refunding Bonds,

1.31%, 04/10/2020 - 07/01/2028 34,315,000 - - 34,315,000 - Series 2020-3 Revenue Refunding Bonds,

0.58% 04/10/2020 - 07/01/2024 3,900,000 15,740,000 - 11,840,000 3,925,000 Subtotal Electric Utility Revenue Bonds 103,040,000 3,900,000 - 99,140,000 3,925,000 Total Electric Utility Activities - Bonds
and Notes from Direct Borrowing $ 13,005,000 156,534,398 $ (753,233) $ 142,776,165 $ 13,580,000 $

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 34 A. Electric Revenue Refunding Bonds, Series 2013A
On April 24, 2013, the City issued $64.380 million of Electric Revenue Refunding Bonds, Series 2013A (Electric 2013A Bonds), to provide funds, together with other available moneys, to refinance outstanding Electric 2003A Bonds. The Electric 2013A Bonds mature annually beginning on July 1, 2014 through July 1, 2028 and bear coupon rates ranging from 3.00% to

5.00%. Debt service on the Electric 2013A Bonds is secured by a pledge of net revenues of SVP.

As of April 1, 2020, $43.705 million of the Electric 2013A Bonds were outstanding and $30.725 million would be callable at par beginning January 1, 2023. With the passage of the Tax Cuts and Jobs Act on December 22, 2017 eliminated tax-exempt advance refunding of tax-exempt bonds beginning January 1, 2018, and therefore tax-exempt advance refunding is no longer a refinancing option.

On April 10, 2020, SVP refinanced $30.725 million callable portion of the outstanding principal amount of Electric 2013 A Bonds through a direct placement with Bank of America, N.A. under a Taxable to Tax-Exempt Conversion structure. The refunding resulted in overall debt service savings of $1,706,384. The net present value of the debt service savings is called an economic gain and after an addition for prior funds on hand of $203, amounted to $1,703,470. See Notes below for Subordinated Electric Revenue Refunding Bonds, Series 2020-2.

As of June 30, 2022, $4.545 million non-callable principal of Electric 2013A Bonds were outstanding. In the event of default, SVP will transfer to the trustee all adjusted net revenues held by it and received thereafter and the trustee will disburse all adjusted net revenues and any other funds then held or thereafter received by the trustee under the provisions of indenture. In the case of default, the trustee will be entitled to declare the bond obligation of all bonds then outstanding to be due and payable immediately.

B. Electric Revenue Refunding Bonds, Series 2018A
On December 18, 2018, SVP issued $48.8 million of Electric Revenue Refunding Bonds, Series 2018A (Electric 2018A Bonds) to refinance $54.58 million outstanding principal amount of Variable Rate Demand Electric Revenue Refunding Bonds, Series 2008B and terminate a related swap agreement. The Electric 2018A Bonds bear a 5% coupon rate, mature annually beginning on July 1, 2019 through July 1, 2027, and were sold at an All-In True Interest Cost of 2.32%.

Debt service on the Electric 2018A Bonds is secured by a pledge of net revenues of SVP.

In the event of default, SVP will transfer to the trustee all adjusted net revenues held by it and received thereafter and the trustee will disburse all adjusted net revenues and any other funds

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 35 then held or thereafter received by the trustee under the provisions of indenture. In the case of default, the trustee will be entitled to declare the bond obligation of all bonds then outstanding to be due and payable immediately.

C. Subordinate Electric Revenue Refunding Bonds, Series 2020-1 As of April 1, 2020, all $54.830 million of the Electric 2011 A Bonds were outstanding and callable at par beginning July 1, 2021. The passage of the Tax Cuts and Jobs Act on December 22, 2017 eliminated tax-exempt advance refunding of tax-exempt bonds beginning January 1, 2018, and therefore tax-exempt advance refunding is no longer a refinancing option.

The City Council determined that it was in the best interests of the City to enter into a credit facility with a bank for the purpose of refunding all outstanding Electric 2011A Bonds; and for the indebtedness created under such credit facility to be evidenced by a subordinate electric revenue bond to be issued by the City and delivered to the bank as authorized by Resolution No. 20-8834 adopted by the City Council on April 7, 2020.

On April 10, 2020, the City entered into a loan agreement with Bank of America, N.A. (the “Bank”) and issued $52.985 million of Subordinate Electric Revenue Refunding Bonds, Series 2020-1 (Electric 2020-1 Bonds) to refinance $54.830 million outstanding principal amount of Electric Series 2011A Bonds under a Taxable to Tax-Exempt Conversion structure. The Electric 2020-1 Bonds bear 1.74% coupon rates, mature annually beginning on July 1, 2028 through July 1, 2032 and were sold at a true interest cost of 1.43% with an average coupon rate of 1.40%.

Electric 2020-1 Bonds were priced at taxable rates and was converted to tax-exempt on April 2, 2021. Both the taxable rate and tax-exempt rate after conversion were fixed at time of issuance.

Starting April 2, 2021, the Bonds will bear interest at the tax exempt rate of 1.360% per annum.

Debt service on the Electric 2020-1 Bonds is secured by a pledge of Available Electric Revenues of SVP on a basis subordinate to outstanding Electric Revenue Bonds, if any.

In the event of default under the loan agreement for the 2020-1 bonds (including a failure by the City to pay principal or interest on the related bonds, a failure by the City to perform or observe its covenants, a default in other specified indebtedness or obligations of the City, certain acts of bankruptcy or insolvency, or other specified events of default), the Bank has the right, upon written notice to the City, to accelerate and declare the City’s obligation to repay the related bonds and all other obligations of the City to the Bank under such loan agreement to be immediately due and payable.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 36 D. Subordinate Electric Revenue Refunding Bonds, Series 2020-2 The City Council determined that it was in the best interests of the City to enter into a credit facility with a bank for the purpose of refunding a portion of the outstanding Electric 2013A Bonds; and for the indebtedness created under such credit facility to be evidenced by a subordinate electric revenue bond to be issued by the City and delivered to the Bank as authorized by Resolution No. 20-8834 adopted by the City Council on April 7, 2020.

On April 10, 2020, the City entered into a loan agreement with Bank of America, N.A. (the “Bank”) and issued $34.315 million of Subordinate Electric Revenue Refunding Bonds, Series 2020-2 (Electric 2020-2 Bonds) to refinance $30.725 million of the callable portion of the outstanding Electric Revenue Refunding Bonds, Series 2013 A under a Taxable to Tax-Exempt Conversion structure. The Electric 2020-2 Bonds bear 1.31% coupon rates, mature annually beginning on July 1, 2023 through July 1, 2028 and were sold at a true interest cost of 1.21% with an average coupon rate of 1.15%. Electric 2020-2 Bonds were priced at taxable rates and will convert to a tax-exempt rate at the earlier of (i) the call date (1/1/2023) or (ii) the reversal of the advance refunding prohibition. Both the taxable rate and tax-exempt rate at conversion were fixed at the time of issuance, and once converted, the Bonds will bear interest at the tax-exempt rate of 1.02% per annum. Debt service on the Electric 2020-2 Bonds is secured by a pledge of Available Electric Revenues of SVP on a basis subordinate to outstanding Electric Revenue Bonds, if any.

In the event of default under the loan agreement for the 2020-2 Bonds (including a failure by the City to pay principal or interest on the related bonds, a failure by the City to perform or observe its covenants, a default in other specified indebtedness or obligations of the City, certain acts of bankruptcy or insolvency, or other specified events of default), the Bank has the right, upon written notice to the City, to accelerate and declare the City’s obligation to repay the related bonds and all other obligations of the City to the Bank under such loan agreement to be immediately due and payable.

E. Subordinate Electric Revenue Refunding Bonds, Series 2020-3 On June 16, 2014, the City entered into a Tax-Exempt Multiple Draw Term Loan with the Bank of America Preferred Funding Corporation (the “Electric 2014 Loan Agreement”) to fund the phase-shifting transformer project and the acquisition of property for future utility use. The indebtedness created under such credit facility was evidenced by a subordinate electric revenue bond issued by the City - Subordinated Electric Revenue Bond, Series 2014. As of April 1, 2020, $19.413 million principal amount was outstanding and unpaid.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 37 The City Council determined that it was in the best interests of the City to continue the credit facility with the bank for the purpose of refunding of the outstanding Electric 2014 Loan Agreement at lower interest rate; and for the indebtedness created under such credit facility to be evidenced by a subordinate electric revenue bond to be issued by the City and delivered to the Bank as authorized by Resolution No. 20-8834 adopted by the City Council on April 7, 2020.

On April 10, 2020, the City entered into a loan agreement with Bank of America, N.A. (the “Bank” and issued $16.720 million of Subordinate Electric Revenue Refunding Bonds, Series 2020-3 (Electric 2020-3 Bonds) to refinance $19.413 million outstanding principal amount of Subordinated Electric Revenue Bonds, Series 2014. The Electric 2020-3 Bonds bear 0.58% coupon rates mature annually beginning on July 1, 2020 through July 1, 2024 and were sold at a true interest cost of 0.70%. Debt service on the Electric 2020-3 Bonds is secured by a pledge of Available Electric Revenues of SVP on a basis subordinate to outstanding Electric Revenue Bonds, if any.

In the event of default under the loan agreement for the 2020-3 bonds (including a failure by the City to pay principal or interest on the related bonds, a failure by the City to perform or observe its covenants, a default in other specified indebtedness or obligations of the City, certain acts of bankruptcy or insolvency, or other specified events of default), the Bank has the right, upon written notice to the City, to accelerate and declare the City’s obligation to repay the related bonds and all other obligations of the City to the Bank under such loan agreement to be immediately due and payable.

F. Pledge of Future Electric Revenues
The pledge of future Electric Fund revenues ends upon repayment of the $139 million in outstanding principal on the bonds which is scheduled to occur in fiscal year 2032-33. For fiscal year 2021-22, Electric Fund revenues including operating revenues and non-operating interest earnings amounted to $554.2 million and operating costs including operating expenses, but not interest, depreciation or amortization amounted to $492.7 million. Net revenues available for debt service amounted to $61.5 million which represented a coverage ratio of 3.79 on the $16.2 million of debt service.

G. Derivative Instruments
In fiscal year 2009-10, SVP implemented GAAP, which addresses recognition, measurement and disclosures related to derivative instruments to determine whether they meet the definition of derivative instruments, and if so, whether they effectively hedge the expected cash flows associated with the interest rate and energy exposures. Under hedge accounting, the increase

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 38 (decrease) in the fair value of a hedge is reported as a deferred cash flow hedge on the statement of net position.

Notional Amounts and Fair Values – Future Derivative Instruments SVP maintains a Market Risk Management Policy, which among other things, sets forth the guidelines for the purchase and sale of certain financial instruments defined as hedge instruments in support of market power purchase and sales transactions. The primary goal of these guidelines is to provide a framework for the operation of an energy price hedging program to better manage SVP’s risk exposure in order to utilize resources, stabilize pricing and costs for the benefit of SVP and its customers.

When hedging contracts expire, at the time the purchase/sales transactions occur, the deferred balance is recorded as a component of Purchased Power. For energy derivatives, fair values are estimated by comparing contract prices to forward market prices quoted by third party market participants.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 39 Notional Amount (MWh)
Long Short
Effective
Date
Maturity
Date
Average
Price Classification Amount Classification Amount
6/1/2022 6/30/2022 $57.50 20,800 Derivative
Instrument $ Deferred inflow 412,672 412,672 $
7/1/2022 7/31/2022 98.00 10,000
Derivative
Instrument (80,500) Deferred outflow (80,500)
8/1/2022 8/31/2022 98.00 10,800
Derivative
Instrument Deferred inflow 247,860 247,860
9/1/2022 9/30/2022 98.00 10,000
Derivative
Instrument Deferred inflow 66,500 66,500
6/1/2022 6/30/2022 62.75 15,200
Derivative
Instrument Deferred inflow 89,832 89,832
7/1/2022 7/31/2022 73.00 8,600
Derivative
Instrument (78,604) Deferred outflow (78,604)
8/1/2022 8/31/2022 73.00 7,800
Derivative
Instrument (5,460) Deferred outflow (5,460)
9/1/2022 9/30/2022 73.00 8,000
Derivative
Instrument Deferred inflow 52,400 52,400
$ 704,700 $ 704,700
Notional Amount (MMBtu)
Long Short
Effective
Date
Maturity
Date
Average
Price Classification Amount Classification Amount
7/1/2020 12/31/2025 $2.42 6,245,000 Derivative
Instrument $ Deferred inflow 13,536,965 13,536,965 $
1/1/2021 12/31/2025 0.56 6,400,000
Derivative
Instrument Deferred inflow 3,135,450 3,135,450
1/1/2022 12/31/2025 2.64 12,490,000
Derivative
Instrument Deferred inflow 24,326,130 24,326,130
1/1/2022 12/31/2025 1.03 12,800,000
Derivative
Instrument Deferred inflow 318,900 318,900
$ 41,317,445 41,317,445 $
Grand Total $ 42,022,145 $ 42,022,145
Fair Value Change in Fair Value
Fair Value Change in Fair Value

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 40 Credit Risk
Credit risk is the risk of loss due to a counterparty defaulting on its obligations. SVP is exposed to credit risk if hedging instruments are in asset positions. In order to eliminate counterparty credit risk, SVP has transacted both long term power and gas contracts on the Futures market on Intercontinental Exchange (ICE). As of June 30, 2022, SVP’s open derivative power and gas contracts were in an asset position with positive $42.02 million of Mark-to-Market. The open contract was with ADM Investor Service, Inc., a clearing member of ICE and a subsidiary of Archer Daniels Midland Company who was rated A by Standard & Poor’s as of June 30, 2022.

SVP's policy for requiring collateral on hedging instruments varies based on individual contracts and counterparty credit ratings. Under the brokerage agreements with Archer Daniels Midland Company, the accounts are prefunded by SVP. If the account value falls below zero, margin calls are invoked.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 41 Termination Risk
SVP’s futures contracts are traded over the counter and have no termination risk.

H. Other
Various debt agreements governing SVP’s revenue bonds contain a number of covenants including those that require SVP to maintain and preserve the enterprise in good repair and working order, to maintain certain levels of insurance, and to fix and collect rates, fees, and charges so as to maintain certain debt coverage ratios. SVP is in compliance with these specific covenants and all other material covenants governing the particular revenue bond issues. No event of default as defined in the bond indentures has occurred or was occurring as of the date of this report.

I. Repayment Requirements
As of June 30, 2022, the debt service requirements to maturity for SVP’s long-term debt are as follows:

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 42 Year Ending
June 30 Principal Interest Total Principal Interest Total 2023 9,655,000 $ 1,752,125 $ 11,407,125 $ 3,925,000 $ 1,203,086 $ 5,128,086 $ 2024 5,440,000 1,374,750 6,814,750 9,700,000 1,075,725 10,775,725 2025 5,795,000 1,093,875 6,888,875 9,665,000 994,377 10,659,377 2026 6,005,000 798,875 6,803,875 5,910,000 923,678 6,833,678 2027 6,320,000 490,750 6,810,750 5,975,000 863,064 6,838,064 2028-2032 6,655,000 166,375 6,821,375 56,355,000 2,611,030 58,966,030 2033 - - - 7,610,000 51,748 7,661,748
$ 5,676,750 39,870,000 $ 45,546,750 $ 99,140,000 $ 7,722,708 $ $106,862,708 Senior Revenue Bonds
Future Debt Service Requirements
Subordinate Revenue Bonds from
Direct Placement
Long-term Debt

Reconciliation of Long-term Debt:

Principal Outstanding as of June 30, 2022 $ 139,010,000 Unamortized Discount/Premium - Electric Revenue Bonds 3,766,165 Total Long-term Debt 142,776,165 $
J. Lease Liabilities
SVP entered into a five‐year lease agreement as lessee for the use of office space in November 2015 and the lease was extended to October 2026. SVP is required to make monthly principal and interest payments and common area operating expenses with 3% annual escalation. The lease agreement qualifies as other than short-term leases under GASB87 and therefore, has been recorded at the present value of the future minimum lease payment as of the date of June 30, 2021. The lease liability is measured at a discount rate of 1.10% based on Applicable Federal Rates for real estate as of July 2021.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 5 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 43 A summary of the SVP’s lease transactions for the fiscal year ended June 30, 2022 are as follows:

Balance
June 30, 2021
(As restated) Retirment
Balance
June 30, 2022 Current portion
Lease liabilities 2,916,623 $ (629,957) $ 2,286,666 $ 654,044 $ Total Lease liabilities 2,916,623 $ (629,957) $ 2,286,666 $ 654,044 $ The future principal and interest lease payments as of June 30, 2022, are as follows:

For the Year Ending
June 30 Principal Interest Total
2023 654,044 $ 21,893 $ 675,937 $
2024 681,619 14,596 696,215
2025 710,181 6,920 717,101
2026 240,822 553 241,375
Total 2,286,666 $ 43,962 $ 2,330,628 $
NOTE 6 – PARTICIPATION IN JOINT VENTURES
A. Investment in Joint Ventures
SVP (through the City) participates in significant joint ventures: Northern California Power Agency (NCPA), Transmission Agency of Northern California (TANC), M-S-R Public Power Agency (MSR PPA), M-S-R Energy Authority (MSR EA).

The separately issued financial statements of these joint ventures (as noted below) are available on request.

Date of latest audited
financial statement Joint venture’s address
NCPA 6/30/2021 651 Commerce Dr. Roseville, CA 95678
TANC 6/30/2021 P.O. Box 15129 Sacramento, CA 95851
MSR EA 12/31/2021 P.O. Box 4060 Modesto, CA 95352
MSR PPA 12/31/2021 P.O. Box 4060 Modesto, CA 95352

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 6 – PARTICIPATION IN JOINT VENTURES (continued)
44 As described in paragraph (E) below, the carrying value of SVP’s investment in MSR EA is $0.

SVP’s financial statements as of June 30, 2022 and 2021 reflect the following investments in joint ventures:

Participating
percentage Investment
Participating
percentage Investment
Method of
accounting
NCPA
Geothermal 44.39% $43,222,597 44.39% $37,566,136 Equity Hydroelectric 37.02% 37.02%
Combustion Turbine 41.67% 41.67%
Lodi Energy Center 25.75% 25.75%
TANC 9.64% 6,185,241 9.74% 5,106,945 Equity
MSR EA 33.40% - 33.40% - Suspended
MSR PPA 35.00% 7,904,404 35.00% - Equity*
Total $57,312,242 $42,673,081
*
June 30, 2022 June 30, 2021
The equity method of accounting for investment in MSR PPA was suspended prior to fiscal year ended June 30, 2021.

Starting in fiscal year 2022, equity method was used for SVP's investment with MSR PPA.

B. Northern California Power Agency (NCPA)
NCPA was formed in 1968 as a joint powers agency in the State of California. Its membership consists of sixteen public agencies. NCPA is generally empowered to sell, purchase, generate, transmit, manage electrical energy and provide regulatory and legislative advocacy. Members participate in the projects of NCPA on an elective basis. Therefore, the participation percentage varies for each project in which it participates.

A Commission comprised of one representative from each joint venture member governs NCPA.

The Commission is responsible for the general management of the affairs, property, and business of NCPA. Under the direction of the General Manager, the staff of NCPA is responsible for providing various administrative, operating and planning services for NCPA and its associated power corporations.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 6 – PARTICIPATION IN JOINT VENTURES (continued)
45 proceeds associated with its interest in each project. Each project participant has agreed to pay its proportionate share of debt service and other costs of the related project, notwithstanding the suspension, interruption, interference, reduction or curtailment of output from the project for any reason. Certain of the revenue bonds are additionally supported by municipal bond insurance credit enhancements.

Hydroelectric Project
NCPA contracted to finance, manage, construct, and operate Hydroelectric Project Number One for the licensed owner, Calaveras County Water District (CCWD). In exchange, NCPA has the right to the electric output of the project for 50 years from February 1982. NCPA also has an option to purchase power from the project in excess of the CCWD’s requirements for the subsequent 50 years, subject to regulatory approval.

Geothermal Project
The NCPA Geothermal Plants have historically experienced greater than anticipated declines in steam production from the existing geothermal wells. Although initially operated as baseload generation projects at full capability (238MW), NCPA changed its steam field production from baseload to load-following and reduced average annual steam production. Along with other steam field operators in the area, the Agency began implementing various operating strategies to further reduce the rate of decline in steam production. The Agency has modified both steam turbine units and the associated steam collection system to enable generation with lower pressure steam at higher mass-flow rates to optimize the utilization of the available steam resource. In FY 19-20, NCPA began a well-workover program to restore underperforming wells.

Based upon current operation protocols and forecasted operations, NCPA expects average annual generation and peak capacity to decrease further, reaching approximately 68 MW by the year 2040.

1. These units were completed in 1986 and are designed to provide peak power and reserve requirements and emergency support. Each purchaser is responsible under its power sales contract for paying entitlement share in Combustion Turbine Project No. 1 of all NCPA’s costs of such project.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 6 – PARTICIPATION IN JOINT VENTURES (continued)
46 Lodi Energy Center
On May 24, 2010, SVP entered into an agreement with NCPA for a 25.75% interest in the Lodi Energy Center, a 280 MW combined cycle natural gas fired power plant, located in Lodi, California. The project received approval from the California Energy Commission in April 2010 and was placed into operation in November 2012. In January 2020, the Lodi Energy Center suffered a catastrophic turbine failure. NCPA replaced the turbine with a newer state-of-the-art turbine which could use hydrogen as a cleaner fuel source. The majority of the replacement cost was covered by NCPA’s insurance resulting in relatively minimal financial impact to project participants.

C. Transmission Agency of Northern California (TANC)
TANC was organized under the California Government Code pursuant to a joint powers agreement entered into by 15 Northern California utilities. The purpose of TANC is to provide electric transmission and other facilities for the use of its members through its authority to plan, acquire, construct, finance, operate and maintain facilities for electric power transmission. The joint powers agreement provides that the costs of TANC’s activities can be financed or recovered through assessment of its members or from user charges through transmission contracts with its members. Each TANC member has agreed to pay a pro-rata share of the costs to operate TANC and for payment of debt service, and has the right to participate in future project agreements.

The joint powers agreement remains in effect until all debt obligations and interest thereon have been paid, unless otherwise extended by the members.

California-Oregon Transmission Project
TANC is a participant and also the Project Manager of the California-Oregon Transmission Project (Project), a 340 mile long, 500 kilovolt alternating current transmission project between Southern Oregon and Central California. As Project Manager, TANC is responsible for the overall direction and coordination of all Project operations and maintenance, additions and betterments, and for general and administrative support.

The Project was declared commercially operable on March 24, 1993, with a rated transfer capability of 1,600 megawatts and provides a third transmission path between the electric systems of the Pacific Northwest and those in California. The Project has successfully met and completed all major environmental requirements. As of June 30, 2021, the most recent data available, TANC’s investment in the Project was $546.5 million, less accumulated depreciation and amortization of $290.3 million.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 6 – PARTICIPATION IN JOINT VENTURES (continued)
47 In connection with its participation in the Project, TANC has an entitlement balance of the Project’s transfer capability of approximately 1,362 megawatts and is obligated to pay an average of approximately 80 percent of the operating costs associated with the Project. TANC incurred and initially capitalized all costs for project construction since they were expected to be recovered through reimbursement from Project participants and from the successful operations of the Project transmission lines. The Project agreement among the participating members provides that each member agrees to make payments, from its revenues, to TANC for project costs incurred and for payment of debt service.

SVP has historically been obligated to pay 20.47% of TANC’s COTP operating and maintenance expenses and 20.70% of TANC’s COTP debt service and 22.16% of the Vernon acquisition debt.

SVP has also been entitled to 20.4745% of TANC’s share of COTP transfer capability (approximately 278 MW net of third party layoffs of TANC) on an unconditional take-or-pay basis. Starting on July 1, 2014, SVP laid-off 147 MWs of this entitlement to other TANC members under a 25 year agreement. During the term of this agreement the parties taking on the entitlement will pay all associated debt service, operations and maintenance costs, and all administrative and general costs. SVP’s portion of the operating and maintenance expenses and the COTP debt service is 10.004 %.

D. M-S-R Public Power Agency (MSR PPA)
MSR PPA is a joint power agency formed in 1980 by the Modesto Irrigation District, the City of Santa Clara, and the City of Redding, California, to develop or acquire and manage electric power resources for the benefit of the members. The personnel of its members and contract professional staff perform the administrative and management functions of MSR PPA. The member’s income and expenses sharing ratio is as follows: Modesto Irrigation District – 50 percent, City of Santa Clara – 35 percent, and City of Redding – 15 percent.

Prior to fiscal year ended December 31, 2020, SVP’s equity in MSR PPA’s net losses exceeds its investments and, therefore, the equity method of accounting for the investment was suspended.

As of December 31, 2021, the date of the latest available audited financial statements, SVP was in a positive equity position of $7.9 million. The equity method of accounting of SVP’s investment in MSR PPA was applied. Under the joint exercise of power agreement, which formed MSR PPA, SVP is responsible for funding up to 35 percent of MSR PPA’s operating cost, to the extent such funding is necessary. During the years ended June 30, 2022 and 2021, SVP made no contributions to fund its share of operating costs. If there were such contributions, they would be included in SVP’s expenses.

MSR PPA’s principal activity is a 28.8% ownership interest in a 507-megawatt unit of a coalfired electricity generating plant located in New Mexico (San Juan Plant). The San Juan plant

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 6 – PARTICIPATION IN JOINT VENTURES (continued)
48 was jointly owned by the Public Service Company of New Mexico (PNM) (38.5%), MSR PPA (28.8%) and other municipal power entities (32.7%). On December 31, 2017, MSR PPA divested its ownership interest in the San Juan plant and no longer receives electric energy or capacity from the San Juan Generating Station.

In 2006, MSR PPA entered into a Wholesale Purchase and Sale Agreement and a Shaping and Firming Agreement with Avangrid Renewables, Inc. to provide renewable wind energy to the Members from the Big Horn I Wind Energy Project (Big Horn I Project) with a nominal installed capacity of approximately 199.5 MW. SVP receives the power purchased by MSR PPA from the Big Horn I Project. SVP’s share equates to approximately a 105 MW share of the output at a cost comparable to combined cycle gas-fuel generation. Power deliveries commenced on October 1, 2006 and will continue through September 30, 2026. Through an amendment of the original agreements MSR PPA has an obligation to continue to take the same output through September 30, 2031, or if the Big Horn Project is repowered MSR PPA will have a right of first offer to negotiate a long-term power purchase for such repowered project. The participation in this project is as follows:

Modesto Irrigation District 12.5%
City of Santa Clara 52.5%
City of Redding 35.0%
In 2009, MSR PPA entered into a Power Purchase Agreement and Redelivery Agreement with Avangrid Renewables Inc. to purchase additional wind power energy from the same site, called Big Horn II, with a nominal installed capacity of 50 MW for a twenty-year period. Deliveries of energy under this project began on November 1, 2010. The participation in this project is as follows: Modesto Irrigation District – 65%; City of Santa Clara – 35%.

MSR PPA San Juan
In 2015, the MSR PPA Commission approved a number of agreements (the “San Juan Restructuring Agreements”) to provide for the interests of MSR PPA and certain other San Juan Participants (the “exiting participants”) in the San Juan Generation Station to be transferred to the remaining San Juan Participants effective December 31, 2017. In addition to the ownership divesture, the San Juan Restructuring Agreements provide for, among other things, the allocation of ongoing responsibility for decommissioning costs, mine reclamation costs and any environmental remediation obligations among the exiting participants and the remaining San Juan Participants, and the establishment and funding of mine reclamation and plant decommissioning trust funds. The San Juan Restructuring Agreements were subsequently executed by all nine San Juan Generation Station owners and PNM Resources Development

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 6 – PARTICIPATION IN JOINT VENTURES (continued)
49 Company (a non-utility affiliate of PNM) and, following receipt of regulatory approvals, became effective on January 31, 2016. Various other implementing agreements and amendments to existing San Juan project agreements to effect the restructuring have also been executed. Closing of the ownership restructuring of the San Juan Generation Station and the divestiture of M-S-R PPA’s interests in San Juan Unit No. 4 was completed on schedule on December 31, 2017.

E. M-S-R Energy Authority (MSR EA)
MSR EA is a joint power agency formed in 2008 by the Modesto Irrigation District, the City of Santa Clara, and the City of Redding, California, to develop or acquire and manage natural gas resources for the benefit of the members. The personnel of its members and contract professional staff perform the administrative and management functions of MSR EA. Each member’s income and expense sharing ratio is as follows: Modesto Irrigation District – 33.3%; City of Santa Clara – 33.4%; and City of Redding – 33.3%.

SVP’s equity in MSR EA’s net losses exceeds its investment and, therefore, the equity method of accounting for the investment has been suspended. As of December 31, 2021, the date of the latest available audited financial statements, SVP’s unrecognized share of member’s deficit of MSR EA was $27.2 million. Under the joint exercise of power agreement, which formed MSR EA, SVP is responsible for funding up to 33.4% of MSR EA’s operating cost, to the extent such funding is necessary. During the years ended June 30, 2022 and 2021, SVP made no contributions to fund its share of operating costs. If there were such contributions, they would be included in SVP’s expenses.

In 2009, the City of Santa Clara, along with the Cities of Modesto and Redding participated in the M-S-R Energy Authority Gas Prepay Project. The Gas Prepay Project provides the City, through a Gas Supply Agreement with MSR EA dated September 10, 2009, a secure and longterm supply of natural gas of 7,500 MM Btu (Million British thermal unit) daily or 2,730,500 MM Btu annually through December 31, 2012, and 12,500 MM Btu daily, or 4,562,500 MM Btu annually thereafter until September 30, 2039. The agreement provides this supply at a discounted price below the spot market price (the Pacific Gas & Electric City gate index) over the next 30 years. As of December 31, 2021, bonds issued by MSR EA to finance the City’s share of the Gas Prepay Project were outstanding in the principal amount of $500,200,000. These bonds were initially sold on August 27, 2009. Under the Gas Supply Agreement, MSR EA will bill the City for actual quantities of natural gas delivered each month on a “take-and-pay” basis.

MSR EA has contracted with Citigroup Energy, Inc. (“CEI”) to use the proceeds of the Gas Prepay bond issue to prepay CEI for natural gas. CEI has guaranteed repayment of the bonds, and responsibility for bond repayment is non-recourse to the City. Moreover, any default by the other Gas Prepay Project participants is also non-recourse to the City.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 6 – PARTICIPATION IN JOINT VENTURES (continued)
50 F. Contingent Liability
Under the terms of the various joint venture agreements, SVP is contingently liable for a portion of the long-term debt of the entities under take-or-pay agreements, letters of credit, guarantees or other similar agreements.

Based on the most recent audited financial statements of the individual joint ventures, SVP was contingently liable for long-term debt as of June 30, 2021 as follows:

Total Debt Silicon Valley Power's Silicon Valley Power's Agreements (Principal) Debt Share Contingent Liability
NCPA 06/30/21 597,178,000 $ 33.00% 197,083,912 $
TANC 06/30/21 169,945,000 9.65% 16,401,681
MSR PPA 12/31/21 26,425,000 35.00% 9,248,750
TOTAL 793,548,000 $ $ 222,734,343
In addition, SVP would be, under certain conditions, liable to pay a portion of costs associated with the operations of the entities. Under certain circumstances, such as default or bankruptcy of the other participants, SVP may also be liable to pay a portion of the debt of these joint ventures on behalf of those participants and seek reimbursement from those participants.

Take-or-Pay commitments expire upon final maturity of outstanding debt for each project. Final fiscal year debt expirations as of June 30, 2021 are as follows:

Entitlement Debt Service
Project Debt Expiration Share % Share %
NCPA - Geothermal Project (NGP) July-2024 44.3905% 44.3905% NCPA - Hydroelectric Project (NHP) July-2032 37.0200% 37.0200% NCPA - Lodi Energy Center (NLEC)** June-2040 25.7500% 30.9657% TANC - CA-OR Transmission Project (COTP) May-2039 9.7386% 9.6512% MSR PPA -San Juan Plant July-2022 35.0000% 35.0000%
** The SVP's debt service share in NLEC on issue one is 46.1588%, on issue two is 0%.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 6 – PARTICIPATION IN JOINT VENTURES (continued)
51 A summary of SVP’s “Take-or-Pay” contracts and related projects and its contingent liability for the debt service including principal and interest payments at June 30, 2021 is as follows:

Fiscal Year NGP NHP NLEC COTP MSR PPA Total
2022 2,197,534 $ 12,858,730 $ 7,566,771 $ 1,003,698 $ 9,711,100 $ 33,337,833 $ 2023 2,198,863 12,870,163 7,567,678 1,008,307 23,645,011 2024 1,541,819 14,375,558 7,565,130 1,348,027 - 24,830,534 2025 1,545,765 14,399,154 7,565,513 1,465,120 - 24,975,552 2026 - 7,912,261 7,581,031 1,464,903 - 16,958,195
2027-2031 - 39,516,428 38,615,584 7,324,369 - 85,456,381 2032-2036 - 17,218,945 38,621,715 7,324,877 - 63,165,537 2037-2041 - - 37,973,144 4,394,758 - 42,367,902
Total 7,483,981 $ 119,151,239 $ 153,056,566 $ 25,334,059 $ 9,711,100 $ 314,736,945 $ NOTE 7 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

A. General Information about the Pension Plan
Plan Descriptions
All qualified regular and probationary employees are required to participate in the City’s Miscellaneous Agent Multiple-Employer defined benefit plan administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues a publicly available report that include a full description of the pension plan regarding benefit provisions, assumptions and membership information and can be found on the CalPERS website.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 7 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 52 Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments, and death benefits to plan members, who must be public employees or beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The pre-retirement death benefit is the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plan’s provisions and benefits in effect at June 30, 2022, are summarized as follows:

Miscellaneous
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2.7% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 55 52 - 67
Monthly benefits, as a % of eligible compensation 2.00 - 2.70% 1.00 - 2.50% Required employee contribution rates 8.00% 6.50%
Required employer contribution rates 11.160% 11.160%
Required unfunded liability contribution $7,938,737
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.

SVP is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 7 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 53 The contributions to the Plan were as follows:

June 30, 2022 June 30, 2021
Contributions - employer $11,026,399 $10,027,454
Miscellaneous
B. Net Pension Liability, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
SVP reported a net pension liability for its proportionate share of the net pension liability of the Plan as follows:

June 30, 2022 June 30, 2021
Miscellaneous 73,533,480 $ 98,396,395 $
Proportionate Share of Net Pension Liability
SVP’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2021, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. SVP’s proportion of the net pension liability was based on a projection of SVP’s long-term share of contributions to the pension plan relative to the projected contributions of all funds of the City. SVP’s proportionate share of the net pension liability for the Plan as of June 30, 2020 and 2021 was 32.31%.

For the years ended June 30, 2022 and 2021, SVP recognized pension expense of $6,364,608 and $13,041,275 respectively. At June 30, 2022 and 2021, SVP reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Plan:

Deferred Outflows Deferred Inflows
June 30, 2022 of Resources of Resources
Pension contributions subsequent to measurement date 11,026,399 $ - $ Differences between expected and actual experience 1 - ,994,978 Net differences between projected and actual earnings
on plan investments (18,343,263) -
Total $ (18,343,263) 13,021,377 $

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 7 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 54 Deferred Outflows Deferred Inflows
June 30, 2021 of Resources of Resources
Pension contributions subsequent to measurement date 10,027,454 $ - $ Differences between expected and actual experience - (148,855) Changes in assumptions - 3,879,098
Net differences between projected and actual earnings
on plan investments - 1,044,841
Total $ (148,855) 14,951,393 $
$11,026,399 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2022 measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Measurement Period Annual Measurement Period Annual
Ended June 30 Amortization Ended June 30 Amortization
2023 (3,284,375) $ 2022 1,330,268 $
2024 (3,704,830) 2023 1,613,389
2025 (4,335,036) 2024 1,192,933
2026 (5,024,044) 2025 638,496
2022 2021
C. Actuarial Assumptions
For the measurement period ended June 30, 2021, the total pension liability was determined by rolling forward the June 30, 2020 total pension liability. The June 30, 2020 total pension liability was based on the following actuarial methods and assumptions:

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 7 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 55 Miscellaneous
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 7.15%
Inflation 2.50%
Payroll Growth 2.75%
Projected Salary Increase Varies by Entry-Age and Service Investment Rate of Return 7.15% (1)
Post Retirement Benefit Increase The lesser of Contract COLA or 2.5% until Purchasing Power Protection applies, 2.5%
thereafter
Mortality (2) Derived using CalPERS' Membership Data for all Funds
(1) Net of pension plan investment and administrative expenses; including inflation. (2) The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS' December 2017 experience study report available on CalPERS' website.

The underlying mortality assumptions and all other actual assumptions used in the June 30, 2020 valuation were based on the results of a December 2017 actuarial experience study for the period 1997 to 2015. Further details of the Experience Study can be found on the CalPERS website.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 7 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 56 return on plan investments was applied to all period of projected benefit payments to determine the total pension liability for the Plan.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows.

Using historical returns of all the funds’ assets classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The table below reflects the long-term expected real rate of return by asset class.

Asset Class(a)
Assumed Asset
Allocation
Real Return
Years 1 - 10(b)
Real Return
Years 11+(c)
Public Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets - 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0% - -0.92%
Total 100%
(b) An expected inflation of 2.0% used for this period. (c) An expected inflation of 2.92% used for this period. (a) In the CalPERS Annual Comprehensive Financial Report, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 7 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 57 Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents SVP’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what SVP’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

June 30, 2022 June 30, 2021
1% Decrease 6.15% 6.15%
Net Pension Liability $ 130,318,500 106,409,645 $
Current Discount Rate 7.15% 7.15%
Net Pension Liability $ 98,396,395 73,533,480 $
1% Increase 8.15% 8.15%
Net Pension Liability $ 71,794,130 46,131,125 $
Miscellaneous
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial report.

D. Subsequent Events
On July 12,2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of .20% from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 7 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 58 the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.

NOTE 8 – OTHER POST EMPLOYMENT BENEFITS
A. Plan Description
The City’s agent multiple-employer defined benefit Other Post Employment Benefit (OPEB) Plan, which was established by City Council in fiscal year 2007-08 in accordance with GAAP, provides reimbursements to retirees for qualified expenses. Employees who have retired from the City with at least ten years of service and meet certain criterion based upon retirement date, household income in the most recent calendar year and age are entitled to reimbursements for qualified expenses. Annual maximum reimbursement amounts differ depending on when an employee retired from City service. The majority of retirees may be eligible for a maximum of $4,626 in annual reimbursements. Amendments to benefit provisions are negotiated by the various bargaining units at the City and must be approved by Council. In fiscal year 2007-08, the City established an irrevocable exclusive agent multiple-employer defined benefit trust which is administered by Public Agency Retirement Services (PARS). The City is the Plan administrator, and PARS administers the investment trust for the City’s Plan. The trust is used to accumulate and invest assets necessary to reimburse retirees. Separate financial reports are issued by PARS for the OPEB Plan Trust. The report can be obtained by writing to PARS at 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660, or by calling 1-800-540- 6369.

For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEB plan and additions to and deduction from the OPEB’s fiduciary net position have been determined on the same bases. For this purpose OPEB benefit payments are recognized when currently due and payable in accordance with the benefits terms. Investments are report at fair value.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 8 – OTHER POST EMPLOYMENT BENEFITS (continued)
59 Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
Actuarial valuation date (1) June 30, 2020
(1) Update procedures were used to roll forward the Total OPEB Liability from the valuation date to the measurement date.

B. Contributions
The OPEB Plan trust annual contributions are based upon actuarial determine contributions. The contribution requirements are established and may be amended by the City Council. Plan members do not make contributions to the plan; the plan is funded entirely by employer contributions. For the fiscal year ending June 30, 2022, SVP contributed $635 thousand.

C. Actuarial Assumptions
The June 30, 2022 total OPEB liability was based on the following actuarial methods and assumptions:

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 8 – OTHER POST EMPLOYMENT BENEFITS (continued)
60 Significant Actuarial Assumptions Used in Total OPEB Liability Actuarial Assumption June 30, 2022 Measurement Date
Actuarial valuation date June 30, 2020
Discount rate 4.75% at June 30, 2022
Crossover analysis showed benefit payments always fully funded by plan assets
Inflation 2.75%
Salary increases Aggregate 3%
Investment rate of return 5.25% at June 30, 2020
Funding policy Full pre-funding to PARS trust
PARS portfolio: Moderately Conservative
Mortality, Disability,
Termination, and Retirement
CalPERS 1997-2015 Experience Study
Mortality Improvement Mortality projected fully generational with Scale MP-2020 Healthcare cost trend rates Non-Medicare - 7% for 2022 scaling down to 4.0% for year 2076 Medicare(Non-Kaiser)- 6.1% for 2022 scaling down to 4.0% for year 2076 Medicare(Kaiser)- 5% for 2022 scaling down to 4.0% for year 2076 Healthcare participation for future
retirees - Cash subsidy Currently covered: 80%
Waived: 40%
Healthcare participation for future
retirees - PEMHCA implied subsidy Currently covered: 80% Waived: 25%
D. Net OPEB Liability, OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB
SVP’s net OPEB liability for the Plan is measured as the proportionate share of the City’s net OPEB liability as of June 30, 2022, and the total OPEB liability for the Plan used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2020, rolled forward to June 30, 2022 using standard actuarial methods, based on actuarial methods and assumptions.

SVP’s proportion of the net OPEB liability was based on a projection of SVP’s long-term share of contributions to the OPEB plan relative to the projected contributions of all funds of the City.

SVP’s proportionate share of the net OPEB liability for the Plan as of June 30, 2021 and 2022 was 32.31%.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 8 – OTHER POST EMPLOYMENT BENEFITS (continued)
61 For the year ended June 30, 2022, SVP reported a net OPEB liability of $13.058 thousand and recognized OPEB expense of $753 thousand. At June 30, 2022, SVP reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources (in thousands):

June 30, 2022
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Changes of assumptions $ 669 377 $
Differences between expected and actual experience - 260 Net differences between projected and actual earnings
on OPEB plan investments - 840
Total $ 929 1,217 $
June 30, 2021
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Changes of assumptions $ 973 464 $
Differences between expected and actual experience - 363 Net differences between projected and actual earnings
on OPEB plan investments 476 -
Total $ 1,812 464 $
Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:

Annual Annual
Measurement Period Amortization Measurement Period Amortization Ended June 30 (in thousands) Ended June 30 (in thousands) 2023 (157) $ 2022 (436) $
2024 (135) 2023 (458)
2025 189 2024 (435)
2026 371 2025 (111)
2027 21 2026 71
Thereafter - Thereafter 21
2022 2021

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 8 – OTHER POST EMPLOYMENT BENEFITS (continued)
62 E. Discount Rate
The discount rate used to measure the total OPEB liability was 4.75% as of June 30, 2022. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rate equal to the actuarially determined contributions rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Asset Class Target Allocation
Long-Term Expected
Real Rate of Return
Mutual Funds - Equity 29% 4.82%
Mutual Funds - Fixed Income 65% 1.47%
REITS 1% 3.76%
Cash and equivalent 5% 0.06%
100%
Expected Inflation 2.75%
Discount Rate 4.75%
2022
Asset Class Target Allocation
Long-Term Expected
Real Rate of Return
Mutual Funds - Equity 29% 4.57%
Mutual Funds - Fixed Income 65% 0.72%
REITS 1% 3.96%
Cash and equivalent 5% 0.06%
100%
Expected Inflation 2.75%
Discount Rate 4.75%
2021

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 8 – OTHER POST EMPLOYMENT BENEFITS (continued)
63 F. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following table presents the net OPEB liability of the Plan as of June 30 calculated using the discount rate of 4.75%, as well as what the plan’s net OPEB liability would be if it were calculated using a discount rate that is 1% point lower or 1% point higher than the current rate.

June 30, 2022
(In Thousands)
June 30, 2021
(In Thousands)
1% Decrease 3.75% 3.75%
Net OPEB Liability $ 14,655 15,941 $
Current Discount Rate 4.75% 4.75%
Net OPEB Liability $ 11,861 13,058 $
1% Increase 5.75% 5.75%
Net OPEB Liability $ 9,564 10,688 $
G. Sensitivity of the Net OPEB Liability to Healthcare Cost Trend Rates The following table presents the net OPEB liability of the City, as of June 30, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1% point lower or 1% point higher than the current rate.

June 30, 2022
(In Thousands)
June 30, 2021
(In Thousands)
1% Decrease 6% Non-Medicare
4% Medicare decreasing to 3.0%
6% Non-Medicare
4% Medicare decreasing to 3.0%
Net OPEB Liability $10,046 $9,133
Current Rate
7% Non-Medicare
5% Medicare decreasing to 4.0%
7% Non-Medicare
5% Medicare decreasing to 4.0%
Net OPEB Liability $13,058 $11,861
1% Increase
8% Non-Medicare
6% Medicare decreasing to 5.0%
8% Non-Medicare
6% Medicare decreasing to 5.0%
Net OPEB Liability $16,821 $15,255

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
64 NOTE 9 – WHOLESALE ACTIVITIES
A. Long-term Power Purchase Contracts
SVP purchases wholesale electric power from various participants of the Western Systems Power Pool (WSPP), NCPA, MSR Public Power Agency (Note 6), Western Area Power Administration, and other sources to supply the power requirements of Silicon Valley Power’s electric utility customers under long-term power purchase agreements (PPAs). SVP actively manages the financial risks inherent in these PPAs, including the risks arising from the changing spot market prices that move above and below the contract prices and from contract disputes that may arise from time to time. The cost of power under PPAs is included in materials, services and supplies expense and excluded from wholesale resources purchases.

B. Restructuring of the California Electric Industry
Deregulation Legislation and Direct Access
The passage of AB1890 in 1998 triggered fundamental changes in the structure of the electric industry in California. Generally, AB1890 provided for creation of the California Power Exchange (Cal PX), which was to be a clearinghouse for energy transactions among investorowned utilities, independent generators and power marketers, who in turn would serve so called direct-access customers. AB1890 also created the California Independent System Operator (CAISO), which was to manage the state’s bulk transmission grid.

However, in 2000 and 2001, the price of electricity at the Cal PX became extremely high, and investor-owned utilities were unable to pay for the energy that they needed from the Cal PX.

Eventually the Cal PX filed for bankruptcy and was dismantled. Investor-owned utility PG&E and several energy marketers would also file for bankruptcy and over a decade of litigation ensued.

The CAISO, however, continues to manage the state’s bulk electric system and the day-ahead and day-of markets, and it has implemented various price controls and tariffs in an effort to avoid repeating the mistakes of 2000 and 2001. Along with balancing control area responsibility, the CAISO has also announced that it will take on the role of reliability coordinator for the region.

Energy Wholesale Trading and Risk Management
SVP participates in the wholesale gas and power market and the CAISO’s centralized market.

Since CAISO’s Market Redesign and Technology Upgrade (MRTU), CAISO has become the ultimate buyer and seller in the California day ahead market. Therefore, SVP engages in the trading of commodity forward contracts (gas and electric energy contracts) to secure fuel supply and hedge daily power purchase/sales from/to CAISO. Activities during the fiscal year were

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 9 – WHOLESALE ACTIVITIES (continued)
65 substantially considered hedging transactions and, as such, have been accounted for using the settlement method of accounting. Accordingly, related gross sales and purchases totaling $36.0 million and $18.4 million, respectively, for fiscal year ended June 30, 2022, have been separately reported on the statement of revenues, expenses and changes in net position.

The restructured electric wholesale market exposes SVP to various risks including market, credit and operational risks. Active and effective management of these risks associated with the power trading activity is critical to its continued success and contribution to the entire utility. A Risk Management Committee administers and monitors compliance with the Council approved risk policies and the related procedures on a regular basis. The City and SVP believe that it has the resource commitment, effective policies and procedures, and is continuing to improve the control structure and oversight for evaluating and managing the market and credit risks to which it is exposed.

Credit Arrangements
SVP has risk policies, regulations, and procedures that help mitigate credit risk and minimize overall credit risk exposure. The policies include transacting only with investment grade counterparties, evaluating of potential counterparties’ financial condition and assigning credit limits as applicable. These credit limits are established based on risk and return considerations under terms customarily available in the industry. For counterparties below investment grade or lack of solid financial records, SVP requires collateral in the form of parental guarantee, surety bonds, letter of credit, or cash prepayment. Additionally, The City is a signatory to the WSPP netting agreement supplement and otherwise, enters into master netting arrangements whenever possible and, where appropriate, obtains collateral prior to trade execution. Master netting agreements incorporate rights of setoff that provide for the net settlement of subject contracts with the same counterparty in the event of default.

NOTE 10 – MAJOR SUPPLIERS
SVP purchases electric energy through its participation in the NCPA and M-S-R Public Power Agency joint powers agencies, from the Western Area Power Administration, from the market via the California Independent System Operator (CAISO), and from other sources to supply its retail electric utility customers. Additionally, SVP purchases transmission services through its participation in the TANC and from the CAISO.

The purchases of energy and transmission services that represent 5% or more of the total purchased power costs are shown in the table below:

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 10 – MAJOR SUPPLIERS (continued)
66 Supplier Power Purchased
% of the Total
Purchased Power
NCPA $ 50.81% 205,500,630
M-S-R Public Power Agency 37,406,667 9.25%
M-S-R Energy Authority 28,856,522 7.14%
Tri-Dam Project 28,602,808 7.07%
NOTE 11 – COMMITMENTS AND CONTINGENCIES
Commitments and contingencies, undeterminable in amount, include normal recurring pending claims and litigation. In the opinion of management, based upon discussion with legal counsel, there is no pending litigation, which is likely to have a material adverse effect on the financial position of the fund.

SVP has future commitments under construction projects as stated in Construction in Progress in Notes to Financial Statements 4B.

NOTE 12 – NET POSITION AND STABILIZATION AGREEMENTS
A. Net Position
Net Position is the excess of all SVP’s assets and deferred outflow of resources over all its liabilities and deferred inflow of resources. Net Position is divided into three categories that are described below:

Net investment in capital assets describes the portion of Net Position which is represented by the current net book value of SVP’s capital assets, less the outstanding balance of any debt issued to finance these assets.

Restricted for other agreements describes the portion of Net Position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which SVP cannot unilaterally alter.

Unrestricted describes the portion of Net Position which is not restricted as to use.

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

NOTES TO FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
NOTE 12 – NET POSITION AND STABILIZATION AGREEMENTS (continued) 67 SVP reported net position at June 30 as follows:
2022 2021
Net investment in capital assets: 511,984,541 $ 463,692,179 $ Restricted:

Pension benefits 6,146,358 6,808,996
Unrestricted:

Capital projects 126,114,987 125,362,902
Rate stabilization 167,542,169 157,736,368
Operations 159,042,750 161,814,522
Total Unrestricted 452,699,906 444,913,792
Total Net Position $ 970,830,805 $ 915,414,967
B. Stabilization Agreements
Rate Stabilization Fund
In 1996, SVP established the Rate Stabilization Fund and Cost Reduction Fund to assure that the rates were set properly with sufficient operating cash as well as cost reduction and financial stability of the Electric Utility. In December 2010, Council approved to transfer the Cost Reduction Fund as a subaccount to the Rate Stabilization Fund and continued to be used to offset Electric Utility costs in essentially the same manner. As of June 30, 2022, the balance of the Rate Stabilization Fund was $167,542,169.

Pension Stabilization Fund
In fiscal year 2016-17, the City established an irrevocable pension trust as a way to address unfunded pension liabilities. As part of the year-end process for 2016-17, City Council approved SVP to designate and make an initial deposit of $3.5 million in fiscal year 2018 toward prefunding pension obligations. As of June 30, 2022, the balance of the Pension Stabilization Fund was $6,146,358.

This page intentionally left blank

CITY OF SANTA CLARA ELECTRIC UTILITY ENTERPRISE FUND
(SILICON VALLEY POWER)

REQUIRED SUPPLEMENTARY INFORMATION
69 This part of the City of Santa Clara Electric Utility Enterprise Fund Financial Statements provides detailed information to better understand the data presented within the financial statements and note disclosures.

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AND

RELATED RATIOS
Discloses the proportionate share of the net pension liability and related ratios, including the proportionate share of fiduciary net position as a percentage of the total pension liability, and proportionate share of the net pension liability as a percentage of covered payroll.

SCHEDULE OF CONTRIBUTIONS – PENSION PLAN
Contains information of the employer’s contractually required contribution rates, contributions to the pension plan and related ratios.

SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY AND

RELATED RATIOS
Discloses the proportionate share of the net OPEB liability and related ratios, including proportionate share of fiduciary net position as a percentage of the total OPEB liability, and the proportionate share of the net OPEB liability as a percentage of covered employee payroll.

SCHEDULE OF PLAN CONTRIBUTIONS - OPEB PLAN
Contains information of the employer’s contractually required contribution rates, contributions to the OPEB Plan and related ratios.

Required Supplementary Information
70 Measurement Date June 30, 2021 June 30, 2020 June 30, 2019 Plan's Proportion of the Net Position
Liability/(Asset) 32.31% 32.31% 32.31%
Plan's Proportionate Share of the Net Pension
Liability/(Asset) $ 98,396,395 73,533,480 $ 92,007,139 $ Plan's Covered Payroll $ 28,859,863 $ 28,818,319 $ 28,630,755 Plan's Proportionate Share of the Net Pension
Liability/(Asset) as a Percentage of it's Covered
Payroll 254.79% 341.44% 321.36%
Plan's Proportionate Share of the Fiduciary Net
Position as a Percentage of the Plan's Total
Pension Liability 72.48% 61.90% 62.72%
Notes to Schedule:

Schedule of Proportionate Share of the Net Pension Liability City of Santa Clara Electric Utility Enterprise Fund Miscellaneous Plan, a Cost-Sharing Defined Benefit Pension Plan
Last Ten Fiscal Years for the Measurement Periods Ended June 30(1) (1) Fiscal year 2014-15 was the first year of implementation.

Schedule of Changes in the Net Pension Liability and Related Ratios Schedule of Prop ortionate Share of the Net Pension Liab ility 71 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014

34.97% 34.97% 34.97% 34.97% 34.97%
$ 92,735,319 94,238,259 $ 84,615,916 $ 74,516,387 $ 69,068,338 $ $ 24,928,548 26,407,732 $ 21,661,244 $ 20,300,577 $ 20,289,905 $ 356.86% 372.00% 390.63% 367.07% 340.41%

62.97% 62.02% 62.18% 65.57% 67.42%
Last Ten Fiscal Years for the Measurement Periods Ended June 30 Schedule of Proportionate Share of the Net Pension Liability City of Santa Clara Electric Utility Enterprise Fund Miscellaneous Plan, a Cost-Sharing Defined Benefit Pension Plan
72 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 Actuarially determined contribution 11,026,399 Contributions in relation to the $ 10,027,454 $ 9,365,958 $ 8,258,503 $ actuarially
determined contributions (10,027,454) (11,026,399) (9,365,958) (8,258,503) Contribution deficiency (excess) $ - - $ - $ - $
Covered payroll $ 29,932,874 $ 28,859,863 $ 28,818,319 $ 28,630,755 Contributions as a percentage of
covered payroll 36.84% 34.75% 32.50% 28.84%
Notes to Schedule
Valuation date 6/30/2019 6/30/2018 6/30/2017 6/30/2016
Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Inflation
Salary increases
Investment rate of return
Retirement age
Mortality
(1) Fiscal year 2014-15 was the 1st year of implementation.

The probabilities of mortality are based on CalPERS Experience Study. Preretirement and post-retirement mortality rates include 20 years of projected mortality improvement using Scale AA published by the Society of Actuaries for 2015 to 2018. For 2019,2020, 2021 and 2022, pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.

Level percentage of payroll, closed
25 years as of valuation date
5-year smoothed market

2.75% for 2015 to 2019, and 2.625% for 2020 and 2.50% for 2021 and 2022 Varies by Entry Age and Service

7.5% for 2015 to 2018, 7.375% for 2019, 7.25% for 2020, and 7% for 2021 and 2022, net of pension plan investment expense, including inflation The probabilities of Retirement are based on the CalPERS Experience Study Entry age normal
Schedule of Contributions
City of Santa Clara Electric Utility Enterprise Fund Miscellaneous Plan, a Cost-Sharing Defined Benefit Pension Plan
Last Ten Fiscal Years(1)
Schedule of Co ntribu tions (Pension Plan)
73 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 $ 7,558,410 8,832,105 $ 6,484,674 $ 5,335,643 $
(7,558,410) (8,832,105) (6,484,674) (5,335,643)
$ - - $ - $ - $
$ 24,928,548 26,407,732 $ 21,661,244 $ 20,300,577 $

33.45% 30.32% 29.94% 26.28%
6/30/2015 6/30/2014 6/30/2013 6/30/2012
Schedule of Contributions
City of Santa Clara Electric Utility Enterprise Fund Miscellaneous Plan, a Cost-Sharing Defined Benefit Pension Plan
Last Ten Fiscal Years
74 Measurement Date June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Plan's Proportion of the Net Posistion
Liability/(Asset) 32.31% 32.31% 32.31% 34.97% 34.97%
Plan's Proportionate Share of the Net OPEB
Liability/(Asset) $ 11,860,957 13,057,945 $ 12,076,500 $ 13,339,656 $ 16,285,879 $ Plan's Covered-employee Payroll $ 54,801,960 $ 52,857,221 $ 53,127,656 $ 52,963,135 $ 47,313,294 Plan's Proportionate Share of the Net OPEB
Liability/(Asset) as a Percentage of it's Coveredemployee Payroll 23.83% 22.44% 22.73% 25.19% 34.42% Plan's Proportionate Share of the Fiduciary Net
Position as a Percentage of the Plan's Total OPEB
Liability 40.25% 44.03% 40.11% 37.14% 28.90%
Notes to Schedule:

Schedule of Proportionate Share of the Net OPEB Liability and Related Ratios City of Santa Clara Electric Utility Enterprise Fund
OPEB Plan, A Cost-Sharing Defined Benefit Plan
Last Ten Fiscal Years Ended June 30(1)
(1) Fiscal year 2017-18 was the first year of implementation.

Schedule of Prop ortionate Share of the Net OPE B Liab ility and Related Ratio s 75 June 30,
2022
June 30,
2021
June 30,
2020
June 30,
2019
June 30,
2018
Actuarially determined contribution $ 1,534 $ 1,559 $ 1,512 $ 1,856 $ 1,911 Contributions in relation to the actuarially
determined contributions (635) (570) (638) (748) (886)
Contribution deficiency (excess) $ 989 899 $ 874 $ 1,108 $ 1,025 $ Covered-emplyee payroll 54,802 $ 52,857 $ 53,128 $ 52,963 $ 47,313 $ Contributions as a percentage of
covered-employee payroll 1.16% 1.08% 1.20% 1.41% 1.87%
Notes to Schedule:
(1) Fiscal year 2017-18 was the first year of implementation. (In Thousands)
Schedule of Proportionate Share of Contributions
City of Santa Clara Electric Utility Enterprise Fund
OPEB Plan, A Cost-Sharing Defined Benefit Plan
Last Ten Fiscal Years Ended June 30(1)
Schedule of Prop ortionate Share of the Con tributions (O PEB Plan) Actuarial valuation date June 30, 2020
Actuarial cost method Entry Age Normal, Level Percentage of Payroll Amortization method Level percent of payroll
Unfunded liability amortization
Asset valuation method
Discount rate 5.25%
General inflation 2.75%
Healthcare trend
Mortality CalPERS 1997-2015 Experience Study
Mortality improvement
Notes to Schedule of Employer Contribution (OPEB Plan)
Post-retirement mortality projected fully generational with Scale MP-2020
Methods and Assumptions for 2021-22 Actuarially Determine Contributions 15 years (open period) for method, assumption, plan changes, and gains and losses
Maximum 30-year combined period
Investment gains and losses spread over a 5-year rolling period.

Not less that 80% nor greater than 120% of fair value
Non-Medicare - 7% for 2022, decreasing to an ultimated
rate of 4% in 2076
Medicare (non-Kaiser)- 6.1% for 2022, decreasing to an ultimated rate of 4% in 2076
30 years (closed period) for initial UAAL
(18 Years remaining on June 30, 2021)
20 years (closed period) for implied subsidy on 06/30/2019 (18 years remaining on June 30, 2021)
Medicare (Kaiser)- 5% for 2022, decreasing to an ultimated rate of 4% in 2076
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
22-1397 Agenda Date: 12/6/2022

REPORT TO STADIUM AUTHORITY BOARD

SUBJECT
Request from the Stadium Manager to Execute Agreement with LCPtracker, Inc. for Labor Compliance Software Subscription Service

BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium

DISCUSSION
On November 7, 2022, the Stadium Manager submitted a Recommendation for Award memo to request approval to execute an agreement with LCPtracker, Inc. (LCPtracker) for a cloud based labor compliance software subscription, for a one year period beginning December 15, 2022 through December 14, 2023, in the amount of $13,090 and delegated authority to annually renew subscription services for an additional two years from December 15, 2023 through December 14, 2025. Since the renewal term extends beyond a single fiscal year, the term for subsequent fiscal years shall be conditioned upon approval of the Stadium Authority budget for the applicable fiscal year that includes the amounts due under the agreement as required under Santa Clara City Code Chapter 17.30.100.

These costs are classified in the Stadium Authority Fiscal Year 2022/23 Shared Stadium Manager Expenses as Non-Compensation Expenses for the Stadium Operations Department. Shared Expenses are split between the Stadium Authority and Forty Niners SC Stadium Company LLC per the Management Agreement.

ATTACHMENTS

1. Stadium Manager’s Recommendation for Award Memo

2. Draft Agreement with LCPtracker
City of Santa Clara Page 1 of 1 Printed on 12/2/2022
powered by Legistar™
1 Date: November 7, 2022
To: Rajeev Batra
Executive Director
Santa Clara Stadium Authority

From: Jenti Vandertuig
Procurement Director
Forty Niners Stadium Management Company LLC
Subject: Recommendation for Award for Labor Compliance Software Subscription Services with LCPtracker, Inc. for Levi’s Stadium
Recommendation

1. Recommend approval and award of an agreement with LCPtracker, Inc., (LCPtracker) for a cloud based labor compliance software subscription service, for a one year period beginning December 15, 2022 through December 14, 2023, in the amount of $13,090.

2. Authorize annual renewal of subscription services for an additional two-years from December 15, 2023 through December 14, 2025. Since the renewal term extends beyond a single fiscal year, the term for subsequent fiscal years shall be conditioned upon approval of the Santa Clara Stadium Authority (SCSA) budget for the applicable fiscal year that includes the amounts due under the agreement.

Reasons for Recommendation
In support of the Forty Niners Stadium Management Company (Stadium Manager) and SCSA’s shared objective of ensuring payment of prevailing wage rates and compliance with all applicable state prevailing wage requirements for Levi’s Stadium public works projects, the Stadium Manager seeks SCSA Board approval of the LCPtracker software-as-a-service (SAAS) solution. LCPtracker is an advanced labor compliance software solution providing an automated means for collecting and checking certified payroll reports including fringe benefit statements and associated statements of compliance and statements of non-performance, apprenticeship records, and implementing other public works compliance management obligations. Employing this solution provides both the owner (Stadium Manager and SCSA) and contractors a streamlined process for ensuring prevailing wage compliance through the easy-to-use LCPtracker platform, which can be customized to provide instantaneous automated notifications to the contractor when there are any inconsistencies in the uploaded certified payroll reports and other prevailing wage compliance records. These automated notifications allow for contractors to efficiently address any prevailing wage compliance issues in real time, avoids the delay and administrative burden of iterative manual review, and most importantly,

2 results in workers being paid the appropriate prevailing wage rates required under state prevailing wage law in a timelier manner.

LCPtracker itself is a proven dynamic labor compliance SAAS solution utilized throughout the construction industry by both public owners and contractors alike to ensure labor compliance on public works projects. Many of the contractors working on Levi’s Stadium public works projects have experience with LCPtracker thus reducing onboarding time that might pose an issue with alternative platforms. It is also our understanding the City of Santa Clara employs LCPtracker on its own public works projects. City staff’s familiarity with the platform will facilitate providing direct access to prevailing wage compliance documentation submitted by contractors on Levi’s Stadium public works projects and further the objective of ensuring contractors, subcontractors and workers are appropriately and timely paid.

Proposed Agreement
LCPtracker is extensively used in the public sector both at the federal, state, and local levels.

LCPtracker offers public entities the opportunity to utilize the federal General Services Administration (GSA) schedule cooperative agreement without an option to negotiate nor include any additional terms or enter into a commercial master subscription software as a service agreement with mutually agreed upon terms. Stadium Manager selected the latter by negotiating provisions to ensure additional protections under the risk allocation terms of the agreement (i.e., limitation of liability and indemnity) and a 15% discount off the list price.

Stadium Manager recommends approval of a one year agreement with LCPtracker. Based on the anticipated spend, Stadium Manager has opted for Bulk Project Pricing annual fees for construction capacity of up to $10 million in the first year. At each annual renewal period, Stadium Manager’s usage will be assessed and trued up to the actual spend. The master subscription service also includes one-time standard web based start-up fees and travel expenses for onsite training. Stadium Manager will continue to receive the 15% discount off the list price for years two and three.

Stadium Manager recommends approval to renew the software subscription service on an annual basis for two additional years. The annual Bulk Project Pricing fee will vary based on the new subscription rates and the construction capacity needed by Stadium Manager. Since the renewal term extends beyond a single fiscal year, the term for subsequent fiscal years shall be conditioned upon approval of the SCSA budget for the applicable fiscal year that includes the amounts due under the agreement.

Therefore, approval is sought to enter into an agreement with LCPtracker for a one year period beginning December 15, 2022 in the amount of $13,090, with an option to extend for two additional one year periods.

The cost for this purchase is covered in the FY22/23 SCSA Budget, Stadium Operations, as a shared expense.

3 Next Steps
Once Stadium Manager receives approval from the SCSA Board, the agreement will be executed and an executed copy forwarded to the Board. Supporting documentation is provided for review and approval.

Submitted By: __________________________________ Date: ___________________ Jenti Vandertuig, Procurement Director

LCPtracker, Inc.

Master Subscription Software as a Service Agreement
THIS MASTER SUBSCRIPTION SOFTWARE AS A SERVICE AGREEMENT ("Agreement") is entered into as of December 15th 2022 (the “Effective Date”) between LCPtracker, Inc., with a place of business located at 117 East Chapman, Orange, California 92866 (“LCPtracker”) and Forty Niners Stadium Management Company LLC with a place of business located at 4949 Marie P. DeBartolo Way, Santa Clara, CA 95054 (“Client”, together with LCPtracker the “Parties”, and each a “Party”). The Parties agree as follows:

1. DEFINITIONS.
a. "Affiliate" means any entity which directly or indirectly controls, is controlled by, or is under common control with the subject entity. Control, for purposes of this definition, means direct or indirect ownership or control of more than fifty percent (50%) of the voting interests of the subject entity. b. "Aggregated Statistics" means data and information related to Client's and Users’ use of the Services that is used by LCPtracker in an aggregate and anonymized manner, including to compile statistical and performance information related to the provision and operation of the Services. c. “Applicable Law” means all federal, state, local and other laws, rules and regulations, ordinances, interpretive letters and other official releases of or by any governmental authority, decrees, orders and codes as the same are amended from time to time and as are applicable to a Party’s performance of its obligations under the Agreement, including any applicable law relating to the privacy or processing, protection, collection, use, or disclosure of personally identifiable information as more particularly described in any such applicable law. d. "Client Data" means all Client and User electronic information entered into the Services or otherwise provided from Client to LCPtracker pursuant to this Agreement.
e. "Documentation" means this Agreement, the applicable Product Schedule, and (i) for LCPtracker Professional, the online user guide (Administrator Manual or Contractor Manual as appropriate) for the Services, accessible via login at LCPtracker online, and updated from time to time, or (ii) for Workforce Manager, the LCPtracker guides entitled “How to Access Workforce Manager”, “Creating a New Administrator Profile” and “WFM How to reset your password”, that are supplied to Client on request, are accessible via login at LCPtracker online, and that may be updated from time to time.

Updates of the Documentation in Section 1(e)(i) and (ii) are in LCPtracker’s sole discretion. f. "LCPtracker IP" means the Services, the Documentation, and any intellectual property provided to Client or any User in connection with the foregoing. For the avoidance of doubt, LCPtracker IP includes Feedback and Aggregated Statistics, as provided herein. Herein, "intellectual property rights" means any registered and unregistered rights granted, applied for, or otherwise now or hereafter in existence under or related to any patent, copyright, trademark, or trade secret or intellectual property rights laws in any part of the world.
g. "Malicious Code" means viruses, worms, time bombs, Trojan horses and other harmful or malicious code, files, scripts, agents or programs.
h. "Product Schedule" means the document(s) for placing orders hereunder signed by both Parties and made a part hereof. By entering into a Product Schedule hereunder, a Client Affiliate agrees to be bound by the terms of this Agreement as if it were an original party hereto. To be effective a Product Schedule must be signed by both parties to the Product Schedule.
i. “PII” means (i) information about an identified or identifiable individual or household as more particularly described in any Applicable Law in any way relating to privacy and the protection, collection, use, disclosure or distribution of personally identifiable information, including without limitation to the generality of the foregoing, personally identifiable healthcare information or personally identifiable financial information, or (ii) where no Applicable Law applies, means any information that by itself or when combined with other information (such as, but not limited to, names, addresses, telephone numbers, e-mail addresses, credit card number, demographic information, static IP address and government issued identification number) can be used to identify a specific living natural person or household. j. “Services” means any LCPtracker software as a service products and related services that are ordered by Client under a Product Schedule and made available by LCPtracker online via the Client login or otherwise. "Services" excludes non-LCPtracker applications or software of any kind. k. “Service Fees” means the fees payable for the Services that are chosen in the applicable Product Schedule. l. “Subscription Term” means the applicable term as set forth on the applicable Product Schedule for the Services. m. "Third-Party Products" means any third-party products that Client or a User uses to connect with the Services. n. “User” or "Users" means persons who are authorized by Client to use the Services, for whom subscriptions to a Service have been ordered, and who have been supplied user identifications and passwords by Client or by Users.

Client must ensure that Users not share their user identification or passwords and further protect them. Users may include but are not limited to Client and its Affiliates’ employees, consultants, contractors and agents and use is solely

Page 2 of 11 ends

City Council and Authorities ConcurrentDecember 6, 2022

City Council and Authorities Concurrent
December 6, 2022