City Council and Authorities Concurrent
December 12, 2023

City of Santa Clara
Joint Meeting Agenda of the
Council and Authorities Concurrent &
Santa Clara Stadium Authority Board
Hybrid Meeting
City Hall Council Chambers/Virtual
1500 Warburton Avenue
Santa Clara, CA 95050
4:00 PMTuesday, December 12, 2023
The City of Santa Clara is conducting City Council meetings in a hybrid manner (in-person and continues to have methods for the public to participate remotely). • Via Zoom:
o https://santaclaraca.zoom.us/j/99706759306
Meeting ID: 997-0675-9306
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Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023
Closed Session - 4:00 PM | Regular Meeting - 7:00 PM
4:00 PM CLOSED SESSION
Call to Order in the Council Chambers
Roll Call

1.A Conference with Legal Counsel-Existing Litigation (CC) Pursuant to Gov. Code § 54956.9(d)(1)
Marcus Dean
Diaz v. City of Santa Clara, et al., United States
District Court, Northern District of California, Case No. 5:20-cv-03506
23-1399

1.B Conference with Legal Counsel-Anticipated Litigation (CC) Pursuant to Gov. Code § 54956.9(e)(3) - Exposure to litigation Number of potential cases: 1
Facts and
Circumstances: Claim of Deanna J. Santana
(attached)
23-1372

1.C Conference with Labor Negotiators (CC)
Pursuant to Gov. Code § 54957.6
City representatives:

Jovan D. Grogan, Nadine Nader, Aracely
Azevedo, Marco Mercado, Charles Sakai, Glen R. Googins
Employee Organization(s):

Units #5, 7 & 8-City of Santa Clara Employees Association 23-1409

1.D Public Employee Performance Evaluation pursuant to
Government Code Section 54957(b)(1)
Title: City Manager
23-1516
Public Comment
The public may provide comments regarding the Closed Session item(s) just prior to the Council beginning the Closed Session. Closed Sessions are not open to the public.

Convene to Closed Session (Council Conference Room)

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023
7:00 PM JOINT CITY COUNCIL/STADIUM AUTHORITY BOARD MEETING Call to Order in the Council Chambers
Pledge of Allegiance and Statement of Values

REPORTS OF ACTION TAKEN IN CLOSED SESSION MATTERS

CONTINUANCES/EXCEPTIONS/RECONSIDERATIONS

SPECIAL ORDER OF BUSINESS

2. Present a Commendation for the 70th Anniversary of Nossa Senhora de Fatima, Nonprofit Organization in Santa Clara 23-1359

CONSENT CALENDAR
[Items listed on the CONSENT CALENDAR are considered routine and will be adopted by one motion. There will be no separate
discussion of the items on the CONSENT CALENDAR unless discussion is requested by a member of the Council, staff, or public. If so requested, that item will be removed from the CONSENT CALENDAR and considered under CONSENT ITEMS PULLED FOR DISCUSSION.]

3.A Board, Commissions and Committee Minutes23-27
Note and file the Minutes of:

Audit Committee - August 30, 2023
Governance and Ethics Committee - September 11,
2023
Cultural Commission - November 6, 2023
Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

3.B Action on Monthly Financial Status and Investment Reports for September 2023 and
to Approve the Related Budget
Amendments
23-1280

1. Note and file the Monthly Financial Status Reports
and Monthly Investment Reports for September
2023 as presented; and

2. Approve the following FY 2023/24 Budget
Amendments:
a. In the General Fund, recognize other fees for
services revenue of $150,000 and
appropriate the funding to the Fire
Department to support ambulance transport
services (five affirmative Council votes
required to appropriate additional
revenue);
b. In the Convention Center Enterprise Fund,
transfer $90,000 to the Convention Center
Capital Fund, offset by a reduction to the
ending fund balance (five affirmative
Council votes required for the use of
unused balances);
c. In the Convention Center Capital Fund,
recognize a transfer of $90,000 from the
Convention Center Enterprise Fund and
appropriate the funding to the Santa Clara
Convention Center Condition Assessment
Repair project (five affirmative Council
votes required to appropriate additional
revenue);
d. In Electric Utility Capital Fund, increase the
Major Engine Overhaul and Repair project in
the amount of $3,500,000, offset by a
reduction to the ending fund balance (five
affirmative Council votes required for the
use of unused balances);
e. In the Fire Development Services Fund,
recognize other fees for services revenue of
$2,887 and appropriate the funding to the
Fire Department (five affirmative Council
votes required to appropriate additional
revenue); and
f. In the Fire Operating Grant Trust Fund,
recognize other agencies revenue of $2,832
Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023
and appropriate the funding to the 2023
International Association of Fire Chiefs Grant
Program (five affirmative Council votes
required to appropriate additional
revenue).

3.C
Action on the City of Santa Clara Audited Annual
Comprehensive Financial
Report and Audited Silicon Valley
Power Financial Statements for Fiscal Year Ended June 30, 2023, as Recommended by the Audit Committee
23-1096
Note and file, as recommended by the Audit
Committee:

1. The audited City of Santa Clara Annual
Comprehensive Financial Report (ACFR) for fiscal
year ended June 30, 2023; and

2. The audited City of Santa Clara Electric Utility
Enterprise Fund (Silicon Valley Power) Financial
Statements for fiscal year ended June 30, 2023.

Recommendation:

3.D Action on Approval of the Spending Plan for Supplemental Law Enforcement Services
Fund and the Related Budget
Amendment
23-915

1. Approve the spending plan for funds received from
the Citizen’s Option for Public Safety Programs
Supplemental Law Enforcement Services Fund;

2. Approve the following FY 2023/2024 budget
amendments in the Police Operating Grant Trust
Fund:
a) Recognize grant revenue in the amount of
$205,975 and establish a COP24 grant
appropriation in the amount of $205,975
(five affirmative Council votes required
to appropriate additional revenue).; and
b) Recognize grant revenue in the amount of
$173,161 and increase the COP23 grant
appropriation in the amount of $173,161
(five affirmative Council votes required
to appropriate additional revenue).

Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

3.E Action on an Agreement with BKF Engineers for Design Professional Services
for the Lafayette Street Class IV Bikeway
and Pavement Rehabilitation Project and Related Budget
Amendment
23-1216

1. Approve and authorize the City Manager to execute
an agreement with BKF Engineers for the Lafayette
Street Class IV Bikeway and Pavement
Rehabilitation Project in the amount not-to-exceed
$588,385 for design professional services required
for the Project, in a final form approved by the City
Attorney; and

2. Authorize the City Manager to make minor
modifications, including time extensions, to the
agreement, if needed; and

3. Approve the FY 2023/24 budget amendments in the
Streets and Highways Capital Fund to increase the
Other Agencies Revenue estimate by $20,000 to
recognize grant funding for the VTA Measure B
Bicycle/Pedestrian Capital Project Competitive
Grant Program, decrease the Annual Street
Maintenance and Rehabilitation Program project by
$380,000, and increase the Lafayette Class IV
Bike Lanes project by $400,000 (five affirmative
Council votes required to appropriate
additional revenue).

Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

3.F Action on Agreements with Telstar Instruments and Rosemount Inc. Doing
Business as Measurement Solutions Systems &
Services for Calibration, Maintenance and Repair Services for Various Instruments and Devices for Silicon Valley Power with Five Year Terms and a Maximum Compensation of $1,000,000 for Each Agreement to be Funded by Silicon Valley Power 23-1258

1. Determine that the proposed actions are exempt
from CEQA pursuant to Section 15301 (Existing
Facilities) of Title 14 of the California Code of
Regulations;

2. Authorize the City Manager to execute an
agreement with Telstar Instruments to provide
calibration, maintenance and repair services for
various instruments and devices for the period of
October 1, 2023, through September 30, 2028, with
a maximum compensation not to exceed
$1,000,000, on substantially the terms and in the
form presented, funded by the SVP Operating or
Capital Fund as applicable, subject to the
appropriation of funds and the review and approval
as to form by the City Attorney;

3. Authorize the City Manager to execute an
agreement with Rosemount Inc. doing business as
Measurement Solutions Systems & Services to
provide calibration, maintenance and repair
services for various instruments and devices for the
period of October 1, 2023, through September 30,
2028, with a maximum compensation not to exceed
$1,000,000 on substantially the terms and in the
form presented, funded by the SVP Operating or
Capital Fund as applicable, subject to the
appropriation of funds and the review and approval
as to form by the City Attorney; and

4. Authorize the City Manager to take any actions as
necessary to implement and administer the above
agreements, including the secondary bid process
outlined in the Report, and negotiate and execute
amendments to such agreements to: (a) add or
delete services consistent with the scope of
services; (b) adjust future rates to account for
changes in labor rates; (c) exercise one one-year
option to extend the term of the agreements through
September 30, 2029; and (d) increase the
maximum compensation of each agreement by
Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023
$750,000 to address future needs and
requirements for a total maximum compensation of
$1,750,000 for each agreement, subject to the
appropriation of funds and the review and approval
as to form by the City Attorney.

3.G
Action to Authorize the City Manager to Execute Agreements with RCR
Tasman I, LLC for the Construction of Park
Improvements and the Maintenance of the Park within the Tasman East Specific Plan Area at Developer’s Sole Cost 23-1396
Authorize the City Manager to execute the Parkland
Agreement and the Park Maintenance Agreement
with RCR Tasman I, LLC on substantially the terms
and in the forms presented, with such minor,
non-substantive changes and amendments that may
be necessary to implement the project, in final forms
approved by the City Attorney.

Recommendation:

3.H Action on Amendment No. 1 to the J. Powers Recruiting Inc.

Agreement For Citywide Recruiting Services
23-1425

1. Action to Authorize the City Manager to execute
Amendment No. 1 to the J. Powers Recruitment,
Inc. services agreement to increase the maximum
compensation from $250,000 to $500,000.

Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

3.I Action on Amendment No. 1 to the Agreement for Services with The Power System People, Inc. DBA Power System Operations for Software License Update and Maintenance of the Validate, Estimate, Reconcile, Allocate (VERA) Settlement Suite Software funded by the Electric Utility Fund
23-1382

1. Authorize the City Manager to execute Amendment
No. 1 to the Agreement for Services (Agreement)
with The Power System People DBA Power
System Operations for Software License Update
and Maintenance of the Validate, Estimate,
Reconcile, Allocate (VERA) Settlement Suite
Software and Provision of Cloud Hosting to
retroactively reinstate the Agreement from May 20,
2023 and extend it through May 19, 2026, and
increase compensation by $905,700 for a revised
maximum compensation of $1,354,000, subject to
the appropriation of funds and review and approval
as to form by the City Attorney; and

2. Authorize the City Manager to take any actions as
necessary to implement and administer the
Agreement and to negotiate and execute future
amendment(s) to the Agreement to (a) extend the
term for up to three additional years through May
23, 2029; (b) adjust rates to reasonable market
rates; and (c) add or delete services or software
functionalities to support future system
requirements or regulatory needs, for a total
maximum compensation amount not-to-exceed
$2,000,000, subject to the appropriation of funds
and review and approval as to form by the City
Attorney.

Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

3.J Action on Amendment No. 2 to Agreement for the Performance of Services With Grid Subject Matter Experts, LLC, Extending the Term to December 31, 2024, and Increasing the Maximum Compensation from $300,000 to $500,000, Funded by the
Electric Utility Fund
23-1383

1. Authorize the City Manager to execute Amendment
No. 2 to the Agreement for the Performance of
Services Between the City of Santa Clara,
California, and Grid Subject Matter Experts, LLC.
(Agreement), to extend the term of the Agreement
through December 31, 2024, and increase the
maximum compensation from $300,000 to
$500,000 for the period of July 26, 2018, through
December 31, 2024, subject to the review and
approval as to form by the City Attorney; and

2. Authorize the City Manager to execute any related
documents and take any actions as are necessary
or advisable to implement and administer the
Agreement.

Recommendation:

3.K Action on Amendment No. 3 to the Agreement with Townsend Public Affairs, Inc. for Legislative Advocacy Services
23-1061
Authorize the City Manager to execute Amendment
No. 3 to the Agreement with Townsend Public Affairs,
Inc. to extend the term of the agreement through
January 29, 2025 and increase the total not to exceed
amount from $342,000 to $434,700 in a final form
approved by the City Attorney.

Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

3.L Action on Amendment No. 7 to the Exclusive Negotiation Agreement and Amendment No. 5 for the Amended and
Restated License Agreement with Habitat for Humanity East Bay / Silicon Valley for 3575 De La Cruz Boulevard with an Option to Extend the Agreements for an Additional Year
23-1335

1. Approve and authorize the City Manager to
execute Amendment No. 7 to the Exclusive
Negotiation Agreement (ENA), Amendment
No. 5 to the Amended and Restated License
Agreement with Habitat for Humanity East Bay
/ Silicon Valley for the Development of 3575
De La Cruz Boulevard, and any options to
extend the agreements not to exceed one
additional year, in final forms approved by the
City Attorney.

Recommendation:

3.M Action to Authorize the Use of City Electric Forces for New Dark Fiber Installations at Various Locations
23-1453

1. Determine the proposed action is exempt from
CEQA pursuant to Section 15303 (Class 3 - New
Construction or Conversion of Small Structures) of
Title 14 of the California Code of Regulations; and

2. Declare and determine in accordance with Section
1310 of the City Charter that the public works
located at 2201 Laurelwood Road are better
performed by the City with its own employees
based on the information set forth in this Report to
Council and authorize the performance of this
public work consistent with this authorization.

Recommendation:

3.N Action on 2024 Legislative Advocacy Positions23-1062 Adopt the amended 2024 Legislative Advocacy
Positions on Broadband, Cable Services, and
Wireless Telecommunications Facilities; Community
Services; Emergency Management; Energy
Legislation, Regulations and Issues; Housing; Human
Resources and Public Sector Employment; Public
Safety; Regional Issues and Collaboration;
Sustainability and Environmental Protection;
Transportation Issues; and Water Supply and
Conservation in the form presented.

Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

3.O Action on the Santa Clara Police Department’s
Recommendation to
Name the Police Building’s Motorcycle
Garage the “Pete Malae Traffic Unit Motorcycle Garage”
23-1291
Approve the naming of the Santa Clara Police
Department’s Motorcycle Garage the “Pete Malae
Traffic Unit Motorcycle Garage”
Recommendation:

3.P Action to Accept an Award of Funding from the State of California in
Support of the Regional Public Safety Interoperable
Radio Communications Project ($1,750,000) and the Santa Clara Overnight Care Locations Project ($1,800,000) and to Approve the Related Budget Amendments
23-916

1. Accept and approve Assembly Bill 102 funding
to support the Regional Public Safety
Interoperable Radio Communications
($1,750,000) and Santa Clara Overnight Care
Locations ($1,800,000) projects;

2. Approve the following FY 2023/24 budget
amendments:
a. In the Communication Acquisitions
Fund, recognize Revenue from Other
Agencies in the amount of $1,750,000
and increase the Capital Outlay budget
in the amount of $1,750,000 (five
affirmative Council votes required to
appropriate additional revenue); and
b. In the Other City Departments Operating
Grant Trust Fund, recognize Revenue
from Other Agencies in the amount of
$1,800,000 and establish a Santa Clara
Overnight Care Locations Program in
the amount of $1,800,000 (five
affirmative Council votes required to
appropriate additional revenue).

3. Authorize the City Manager and Finance
Director to sign any and all documents required
to accept the described funding in final forms
approved by the City Attorney
Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

3.Q Note and File the List of Designated City Employees who are Subject to
Post-Employment Restrictions Pursuant to City Code
Chapter 2.145
23-1461
Note and File the List of Designated City Employees who shall be subject to post-employment restrictions pursuant to Santa Clara City Code, Chapter 2.145 for the period of January 1, 2024 - December 31, 2024.

Recommendation:

SANTA CLARA STADIUM AUTHORITY CONSENT CALENDAR

4.A Action on Stadium Authority Bills and Claims for the Month of September 2023
23-1341
Approve the list of Stadium Authority Bills and Claims
for September 2023.

Recommendation:

4.B Informational Report on Stadium Authority and Stadium Manager Meetings
for the Period of July 1 to September 30,
2023
23-1227
Note and file the quarterly report on Stadium Authority and Stadium Manager staff meetings and
corresponding summaries for the period of July 1 to
September 30, 2023.

Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

4.C Action on Stadium Manager’s Request to Approve an
Agreement with Devcon Construction, Inc. for the Aesthetic Improvements - Premium Areas/Special Event Spaces CapEx Project within Stadium Shared Space and Related Budget
Amendment
23-1423

1. Approve a budget amendment for the
Aesthetic Improvements - Premium
Areas/Special Event Spaces line item in the
Stadium Authority FY 2023/24 CapEx Budget
to increase the budget by $242,855 from the
Capital Budget Ending Fund Balance, for a
total budget amount of $1,242,103;

2. Approve the Stadium Manager’s request to
award an agreement to Devcon Construction,
Inc. in the amount of $1,119,629 for aesthetic
improvements (replacing carpet and paint) at
Levi’s Stadium for the Aesthetic Improvements
- Premium Areas/Special Event Spaces
CapEx Project;

3. Authorize the Stadium Manager to execute any
and all documents associated with, and
necessary for the award, completion, and
acceptance of the project; and

4. Authorize the Stadium Manager to execute
change orders for the agreement up to
$111,963, for a total not to exceed amount of
$1,231,592.

Recommendation:

PUBLIC PRESENTATIONS
[This item is reserved for persons to address the Council or authorities on any matter not on the agenda that is within the
subject matter jurisdiction of the City or Authorities. The law does not permit action on, or extended discussion of, any item not on the agenda except under special circumstances. The governing body, or staff, may briefly respond to statements made or questions posed, and appropriate body may request staff to report back at a subsequent meeting. Although not required, please submit to the City Clerk your name and subject matter on the speaker card available in the Council Chambers.]

CONSENT ITEMS PULLED FOR DISCUSSION

PUBLIC HEARING/GENERAL BUSINESS

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

5. Action on FY 2022/23 Budget Year-End Report and Approve the Related Budget Amendments
23-1097

1. Note and file the FY 2022/23 Budget Year-End
Report.

2. Approve the FY 2022/23 Budget Amendments to
address necessary budget ratifications totaling
$4,416,920 in 13 funds, as set forth in Attachment 1
of this report (five affirmative Council votes
required for revenue actions and the use of
unused balances as noted for each item in
Attachment 1).

3. Approve the FY 2023/24 Budget Amendments in
the General Fund to distribute excess funding from
the close-out of FY 2022/23 as set forth in
Attachment 2 of this report:
a. Increase the Capital Projects Reserve in the
amount of $20,000,000, offset by an
increase to the Beginning Fund Balance (five
affirmative Council votes required for the
use of unused balances);
b. Increase the Budget Stabilization Reserve in
the amount of $6,276,323, offset by an
increase to the Beginning Fund Balance (five
affirmative Council votes required for the
use of unused balances);
c. Increase the Pension Stabilization Reserve
in the amount of $5,168,000, offset by an
increase to the Beginning Fund Balance (five
affirmative Council votes required for the
use of unused balances);
d. Increase the Transfer to the Communications
Acquisitions Fund for public safety radios in
the amount of $3,500,000, offset by an
increase in Beginning Fund Balance (five
affirmative Council votes required for the
use of unused balances);
e. Increase the Transfer to the Public Buildings
Capital Fund for the Public and Workspace
Improvement Project in the amount of
$750,000, offset by an increase to the
Beginning Fund Balance (five affirmative
Council votes required for the use of
unused balances); and
Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023
f. Increase the City Manager’s Office budget for
maintenance and necessary HVAC repairs
and replacement at 900 Lafayette Street,
known as Commerce Plaza, and 1000
Lafayette Street, known as Peddler’s Plaza
properties in the amount of $1,770,760,
offset by an increase in rent revenue in the
amount of $1,034,300 and an increase to the
Beginning Fund Balance in the amount of
$736,460 (five affirmative Council votes
required for revenue actions and the use
of unused balances).

4. Approve the FY 2023/24 Budget Amendments
totaling $99,765,963 in 65 funds as set forth in
Attachment 2 of this report (five affirmative
Council votes required for revenue actions
and the use of unused balances as noted for
each item in Attachment 2).

6. Action to Adopt a Resolution Approving and Adopting Updated Salary P
lans for Various As-Needed, Classified, and
Unclassified Positions, Including City Manager, and Approve Various Modifications to Existing Class Specifications
23-1408

1. Adopt a Resolution to approve the revised
salary plans for various as-needed, classified,
and unclassified positions, including the
position of City Manager (reflecting a 2%
increase with a new annual rate of
$413,157.48), to satisfy the requirements of
California Code of Regulations Section 570.5,
effective December 24, 2023; and

2. Approve revisions to the Electric Utility
Electrician, Staff Analyst I and II, Management
Analyst, and Executive Assistant class
specifications.

Recommendation:

Joint Council and Authorities Concurrent
& Stadium Authority Meeting
Meeting Agenda December 12, 2023

7. Action on Written Petition (Council Policy 030 ) for Council Consideration on a Policy to Normalize and Make Consistent Speaking at Public Events and Consider a Policy to Include Powers for Councilmembers to Declare Proclamations in their Respective Districts
23-635
Provide direction to staff on any recommendations
and refer to Governance and Ethics Committee for
further review.

Recommendation:

8. Action to Consider Releasing to the Public the Investigative Findings Prepared by
the Van Dermyden Makus Law Firm
Regarding a Complaint of Alleged Misconduct at the August 30, 2022 Closed Session Meeting
23-1444
Staff recommends that the City Council consider all
factors presented in this report and take such action
as it deems appropriate.

Recommendation:

REPORTS OF MEMBERS, SPECIAL COMMITTEES AND COUNCILMEMBER 030 REQUESTS (This section is reserved for Councilmembers to provide reports, and /or Submit Written 030 requests for Council consideration)

CITY MANAGER/EXECUTIVE DIRECTOR REPORT

ADJOURNMENT
The next regular scheduled meeting is on Tuesday, January 9, 2024 in the City Hall Council Chambers.

Joint Council and Authorities Concurrent
& Stadium Authority Board
Meeting Agenda December 12, 2023
The time limit within which to commence any lawsuit or legal challenge to any quasi-adjudicative decision made by the City is governed by Section 1094.6 of the Code of Civil Procedure, unless a shorter limitation period is specified by any other provision. Under Section 1094.6, any lawsuit or legal challenge to any quasi-adjudicative decision made by the City must be filed no later than the 90th day following the date on which such decision becomes final. Any lawsuit or legal challenge, which is not filed within that 90-day period, will be barred. If a person wishes to challenge the nature of the above section in court, they may be limited to raising only those issues they or someone else raised at the meeting described in this notice, or in written correspondence delivered to the City of Santa Clara, at or prior to the meeting. In addition, judicial challenge may be limited or barred where the interested party has not sought and exhausted all available administrative remedies.

STREAMING SERVICES: As always, the public may view the meetings on SantaClaraCA.gov, Santa Clara City Television (Comcast cable channel 15 or AT&T U-verse channel 99), or the livestream on the City’s YouTube channel or Facebook page.

Note: The public cannot participate in the meeting through these livestreaming methods; livestreaming capabilities may be disrupted at times, viewers may always view and participate in meetings in-person and via Zoom as noted on the agenda.

AB23 ANNOUNCEMENT: Members of the Santa Clara Stadium Authority, Sports and Open Space Authority and Housing Authority are entitled to receive $30 for each attended meeting.

Note: The City Council and its associated Authorities meet as separate agencies but in a concurrent manner. Actions taken should be considered actions of only the identified policy body.

LEGEND: City Council (CC); Stadium Authority (SA); Sports and Open Space Authority (SOSA); Housing Authority (HA); Successor Agency to the City of Santa Clara Redevelopment Agency (SARDA); Bayshore North Project Enhancement Authority (BNPEA); Public Facilities Financing Corporation (PFFC) Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the public information desk at any City of Santa Clara public library.

If a member of the public submits a speaker card for any agenda items, their name will appear in the Minutes. If no speaker card is submitted, the Minutes will reflect "Public Speaker." In accordance with the requirements of Title II of the Americans with Disabilities Act of 1990 ("ADA"), the City of Santa Clara will not discriminate against qualified individuals with disabilities on the basis of disability in its services, programs, or activities, and will ensure that all existing facilities will be made accessible to the maximum extent feasible. The City of Santa Clara will generally, upon request, provide appropriate aids and services leading to effective communication for qualified persons with disabilities including those with speech, hearing, or vision impairments so they can participate equally in the City’s programs, services, and activities. The City of Santa Clara will make all reasonable modifications to policies and programs to ensure that people with disabilities have an equal opportunity to enjoy all of its programs, services, and activities.

Agendas and other written materials distributed during a public meeting that are public record will be made available by the City in an appropriate alternative format. Contact the City Clerk’s Office at 1 408-615-2220 with your request for an alternative format copy of the agenda or other written materials.

Individuals who require an auxiliary aid or service for effective communication, or any other disability-related modification of policies or procedures, or other accommodation, in order to participate in a program, service, or activity of the City of Santa Clara, should contact the City’s ADA Coordinator at 408-615-3000 as soon as possible but no later than 48 hours before the scheduled event.

MEETING DISCLOSURES
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1399 Agenda Date: 12/12/2023

SUBJECT
Conference with Legal Counsel-Existing Litigation (CC)
Pursuant to Gov. Code § 54956.9(d)(1)
Marcus Dean Diaz v. City of Santa Clara, et al., United States District Court, Northern District of California, Case No. 5:20-cv-03506
City of Santa Clara Printed on 12/8/2023Page 1 of 1
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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1372 Agenda Date: 12/12/2023

SUBJECT
Conference with Legal Counsel-Anticipated Litigation (CC) Pursuant to Gov. Code § 54956.9(e)(3) - Exposure to litigation Number of potential cases: 1
Facts and Circumstances: Claim of Deanna J. Santana (attached) City of Santa Clara Printed on 12/8/2023Page 1 of 1
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Cityof
Santa Clara
. T l I
Tho Conlerol Wh1t't Postlble
207.3 S'"" I 5 Pf 1 I: 5 I

CLAIM AGAINST THE CITY OF SANTA CLARA
(For Damages to Persons or Personal Property)
City Clerk's Office Date Stamp
Received By: /Jt ~4
Via: U.S. Mail ~
Interoff ice Mall
Over the Counter ---Other
(Please do not write above this line - for City use only) A claim must be filed with the City Clerk of the City of Santa Clara within six months* after which the incident or event occurred . Be sure your claim is against the City of Santa Clara not some other public entity . Where space Is Insufficient, please use additional paper and Identify the information by paragraph number. Your completed claim (original) must be mailed or delivered to: City Clerk, City of Santa Clara, 1500 Warburton Avenue, Santa Clara, California 96050.

TO THE HONORABLE MAYOR AND CITY COUNCIL OF THE CITY OF SANTA CLARA:

The undersigned respectfull y submits the following claim and information relative to damage to persons and/or ersonal ro ert :

NAMEOF '1'
CLAIMANT LJe£;{V\Vl(/\
1 ADDRESSOF

CLAIMANT
3 4
6 DATE AND TIME

OF INCIDENT

SPECIFIC ADDRESS
OF INCIDENT (Address)
BASIS OF CLAIM (Specify the occurrence, event, act, or omission which you claim caused the Injury or damage for which you are submitting this clalm.)
CITY'S ACTION (Specify action by City or Its employees which caused alleged damage or Injury.) ""One year for a claim relating to any cause of action for other than death, Injury to person or to personal property, or growing crops." Government Code §91 1.2
NAME OF CITY EMPLOYEE WHO n rL A I'_,., . l J/U.J-.1 .,J,,. evrf- 6 ALLEGEDLY CAUSED INJURY OR LOSS lA"TV/ u:,111,V'\Ul / s-e-e rl\vv-'Y ,VV' 7 8
DESCRIPTION OF CLAIMANT'S INJURY, PROPERTY DAMAGE, OR LOSS (If there were no injuries. state
11 NO INJURIES".)
OTHER INJURED PERSONS (List names and addresses.)
DAMAGES CLAIMED: Amount of Claimant's damage or loss and method of computation. Include copies of bills, invoices, estimates, etc. Note: If your claim is for more than $10 10001 you need not fill in an amount but you must state whether jurisdiction for the claim would be in the Limited jurisdiction (up to $25,000) or Unlimited jurisdiction of the Superior Court.

ITEMS
°'-~uJ'l ~Z"510oo $ __ _
9 $. ____ _
$ ____ _
TOTAL AMOUNT: $ ___ _
Court Jurisdiction: (Check one)
Limited Civil: D Unlimited Civil: Ii]
WITNESSES, HOSPITALS, DOCTORS, ETC. (List names and addresses.) 10 See ;\~mevJ A
WARNING! IT IS A CRIMINAL OFFENSE TO FILE A FALSE CLAIM (Penal Code §72).

I have read the matters and statements made in the above claim and I know the same to be true of my own knowledge, except as to those matters stated upon information or belief and as to such matters I believe the same to be true. I certify under penalty of perjury that the foregoing is TRUE and CORRECT.

Signed this __ I;....:\ _____ day of __ 'Se_p~· ~ __ /o&r--_____ -=--========' 20 2-.2 at l:\CLAIMS\Claim Form March 2022 EDITS WITH CAO, CW, BYCH APPROVAL.doc I. The Dispute
Deanna Santana adv. City of Santa Clara
Tort Claim
Attachment A
A. Breach of Contract:

Deanna J. Santana ("Ms. Santana") is the former City Manager for the City of Santa Clara (City). The dispute involves implementation of an employment agreement ("Agreement") between Ms. Santana and the City. The Agreement for the Santa Clara City Manager position, dated October 2, 2017, included the terms of separation which became operative on March 8, 2022. The Agreement was unanimously approved by the City Council, available to the public for review since August 2017, and City's actions and intentions to implement the terms of the Agreement are reflecting in the City's public records.

The employment agreement permitted, and Ms. Santana did, elect the severance package under option "(b)", which provides in part:

6. Termination. Resignation. and Severance Pay .... In the event the City Council terminates Employee's employment as City Manager for no reason or for any reason other than as set forth in Subsection 6.3 below and Employee agrees to sign and deliver to the City Council a general and full release of all claims with the provisions contained in Exhibit C (Severance and Release Agreement) attached hereto ... Employee shall receive severance pay in accordance with Sec.

6.2 below.
* * *

6.2 If the City Council terminates Employee while employee is still willing and able to perform the duties of City Manager, the City Council agrees to pay Employee by either (a) a single lump sum payment ... ; or (b) allow her to continue to receive her usual compensation and benefits specified in Sec. 3, supra, through payroll for twelve {12) months, whichever is preferable to the Employee The City breached the Agreement by not completing its contractual obligations to pay for Ms. Santana's "usual compensation and benefits" benefits through March 31, 2023, as required under the Agreement. The term "Benefits" under section 6.2(b) means the aggregate of total compensation provision including all insurances (e.g., medical, vision, dentist, etc.), housing stipend wage (salary and deferred compensation), pension contributions, and the value of all oth;r benefits). The following are specific Instances of the breach of the Agreement:
1) Ms. Santana remained on City paid administrative leave and payroll until March 31, 2023. While on paid administrative leave and payroll, Ms. Santana was entitled to, and did, accrue leaves (e.g., vacation, sick, and management leaves), holidays (including floating holidays), deferred compensation, Cal PERS service credit, among other benefits from April 1, 2022 through March 18, 2023. The City breached the Agreement when it did not provide the contractually required accruals and benefits through March 31, 2023 and, in addition, clawed back all of the accrued leaves during that term on the pay period beginning of March 19, 2023.
2) Having elected the option under 6.2(b), the City publicly reported its approval in Closed Session and, as such, Ms. Santana was to be afforded all benefits provided to Unit 9 management employees, including COLAs and other provisions. While on paid administrative leave and payroll, Ms. Santana appropriately received COLAs. The Council's approval of a COLA was unanimously approved on a publicly noticed and available City Council agenda and recorded appropriately in the City's legal records. Additionally, in December 2022, the required annual approval of the City's Salary Schedule to submit to CalPERS, included reference to Ms. Santana's COLA approval and, again, was unanimously approved by the City Council on a Council agenda and recorded appropriately in the City's legal records. The City breached the Agreement by clawing back COLA on or about March 19, 2023, despite the Council's unanimous approval and acknowledgment of this contractual obligation in December 2022.
3) Ms. Santana has accrued sizable leave balances (e.g., vacation, management leave, etc.) while an employee from October 2017 through March 31, 2023.

The City breached the Agreement, and violated employment and labor laws, when it refused to pay Ms. Santana the sum of all of those accrued balances, including the accrued leaves as noted above.
4) Ms. Santana was placed on paid administrative leave by the City and appropriately accrued Cal PERS credit, as required while an employee is on City approved paid administrative leave. During the paid administrative leave term, the City continued the practice of processing Ms. Santana's payment of 8% of her salary for CalPERS service credit. The City breached the Agreement when it clawed back the accrued service credit. Additionally, the City has withheld the 8% annual CalPERS contribution that it processed on behalf of Ms. Santana while on paid administrative leave, which amounts to payment for a benefit that the City clawed back in violation of the Council approved Agreement.
-
B. Violations of Labor Laws, Discrimination and Whi~tleblower Retaliation:

On or about February 22 and 23, 2022, Ms. Santana disclosed information to the City Council and others concerning violations of law and local ordinances (both at a public session and in a formal personnel complaint). Ms. Santana was also subjected to racial slurs by at least one City Council member. Ms. Santana was thereafter placed on paid administrative leave from her duties as City Manager, and all terms of the severance agreement were unanimously approved by the City Council.

Over the course of the next year, certain city councilmembers have been the subject of investigations for public corruption on matters raised by Ms. Santana (e.g., City's lack of ability to obtain certain FIFA documents, for which over a year later, the City still does not fully possess). As of today, one councilmember has been criminally indicted.

Ms. Santana is aware that certain members of the City Council continue to press for retaliatory action against Ms. Santana, including but not limited to directing City employees and/or agents of the City to delay and ultimately fail to perform the City's lawful obligations to perform its contractual obligations owed to Ms. Santana and to unlawfully withhold earned wages and benefits.

This matter was the subject of review by the Civil Grand Jury in its report titled "Unsportmanlike Conduct: Santa Clara City Council," which made the following findings in its publicly issued report that the City was hostile toward Ms. Santana, her termination was linked to the February 22 public disclosure of FIFA details, and, in particular, opined that the City did indeed approve a "contractually obligated severance package" and the report stated as follows:
(1) Another behavioral standard the City Council has adopted is "[t]reating the public and City Staff, at all times, the way I treat highly regarded colleagues in businesses or professions." And a behavior to be avoided is "criticizing or embarrassing the City Manager or City Staff in public." Throughout its investigation the Civil Grand Jury uncovered evidence of disrespect toward staff by members of the City Council Voting Bloc.

Members of the City Council Voting Bloc doubted the accuracy of City staffs work and favored the 49ers' interpretation on a variety of subjects. The Civil Grand Jury saw no evidence that this doubt was warranted. As mentioned previously, the Civil Grand Jury viewed documents showing members of the City Council Voting Bio~ advocating on behalf of the 49ers and arguing with staff about state safety codes and established norms.
(2) Overall, the Civil Grand Jury saw a hostile environment for City staff, Illustrated by a text conversation between two members of the City Council Voting Bloc remarking that a member of the City staff was not afraid of them.
(3) A violation is a misdemeanor. Under the City Code, the City Manager is tasked as the chief administrative officer with responsibility for the administration of all affairs of the City. (Santa Clara City Code§§ 2.15.020(a) & (c).) The Civil Grand Jury learned that the then-City Manager made a complaint that, among other things, a councilmember was directing City staff. An outside investigator was hired to investigate the complaint. If true, the allegations in that complaint may have violated the Charter. On August 23, 2022, the City noticed a closed session meeting under the exception for "public employment appointment" for the City Manager. At that meeting, the City Council Voting Bloc voted to stop the investigation made from that complaint.
(4) As ~etailed above, the former City Manager defended her staff against inappropriate behavior from the City Council Voting Bloc. She opened investigations. She raised concerns about ManCo's compliance with contractual agreements. She has had to defend herself from personal attacks by 49ers lobbyists, who told the City Council Voting Bloc that they wanted the City Manager/Stadium Authority Executive Director gone. On February 22, 2022, she spoke out about concerns related to the FIFA event, urging caution and the need for more information. She also raised the issue of potential conflicts of interest related to the 49ers. Two days later, the City Council fired the City Manager with a contractually obligated severance package ...

Lastly, in its most recent act of retaliation, the City has now interposed an after-the-fact, pretextual claim that it had no obligation to pay such earned wages and benefits, required in the agreement and that the Council unanimously approved and implemented, from March 31, 2022 through pay period ending in March 18, 2023. Ultimately, on April 4, 2023, the City, through its outside counsel, informed Ms. Santana that the earned wages and benefits, including accrued leaves, would not be paid and that, further, the City unilaterally -- without the required notice and consent by Ms. Santana- had unlawfully clawed back accrued leave accruals and Cal PERS payments made by the City for service credit while Ms. Santana was on paid administrative leave.

Based on the foregoing, the City has violated the following California laws, including, inter alia, Government Code section 12940(a), Labor Code section 1102.5, 201, and 227.3 Ms. Santana has suffered monetary damages and emotional distress as a result of the foregoing wrongful conduct by the City.

II. Witnesses
Lisa M. Gillmor - Mayor
Suds Jain - Vice Mayor
Kathy Watanabe - Councilmember
Raj Chahal - Councilmember
Karen Hardy- Council member
Kevin Park-Councilmember
Anthony Becker - Council member
Brian Doyle - City Attorney
Steven Ngo - Interim City Attorney
Gary Baum - Outside City Attorney
Rod Diridon, Jr. City Clerk
Sujata Reuter, Assistant City Attorney
Nadine Nader, Assistant City Manager
Aracely Azevedo, Director of Human Resources
Teri Black- Brann, Executive Recruiter/City Liaison for Employment Agreement negotiations Charles Sakai, Esq.
100 Pine Street, Suite 350
San Francisco, California 94111
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Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1409 Agenda Date: 12/12/2023

SUBJECT
Conference with Labor Negotiators (CC)
Pursuant to Gov. Code § 54957.6
City representatives: Jovan D. Grogan, Nadine Nader, Aracely Azevedo, Marco Mercado, Charles Sakai, Glen R. Googins
Employee Organization(s):

Units #5, 7 & 8-City of Santa Clara Employees Association City of Santa Clara Printed on 12/8/2023Page 1 of 1
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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1516 Agenda Date: 12/12/2023

SUBJECT
Public Employee Performance Evaluation pursuant to Government Code Section 54957(b)(1) Title: City Manager
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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1359 Agenda Date: 12/12/2023

REPORT TO COUNCIL

SUBJECT
Present a Commendation for the 70th Anniversary of Nossa Senhora de Fatima, Nonprofit Organization in Santa Clara

BACKGROUND
The S.E.S. Portuguese Hall of Santa Clara is a volunteer-run Portuguese heritage and culture organization. Founded in 1896, Portuguese people created the S.E.S. Hall to provide the community a gathering place to meet, to discuss current issues, celebrate Portuguese events, and to share news from Portugal. Since then, S.E.S. Hall continues to build community for Santa Clarans and celebrate ties with Portugal.

Founded in 1953, Nossa Senhora de Fatima is a nonprofit organization which celebrates its annual anniversary at S.E.S. Portuguese Hall in Santa Clara. At each anniversary of Nossa Senhora de Fatima, the organization brings the community together to celebrate Portuguese heritage and culture.

Nossa Senhora de Fatima regularly participates in local community events, supports and donates to local Santa Clara businesses, and gives back to local organizations through volunteer work, donations, and serving meals.

DISCUSSION
This year, the nonprofit organization Nossa Senhora de Fatima is commemorating its 70th anniversary in Santa Clara. On December 12, 2023, the City Council will present a commendation to representatives of the organization to celebrate its 70th anniversary.

ENVIRONMENTAL REVIEW
This is an informative report only and no action is being taken by the City Council and no environmental review under the California Environmental Quality Act (“CEQA”) is required.

FISCAL IMPACT
There is no fiscal impact to the City other than staff time.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] or at the public information desk at any City of Santa Clara public library.

Reviewed by: Fiona Kirby, Management Analyst, Mayor and Council Office City of Santa Clara Printed on 12/6/2023Page 1 of 2
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23-1359 Agenda Date: 12/12/2023
Approved by: Jovan D. Grogan, City Manager

ATTACHMENTS

1. Draft - Commendation Commemorating the 70th Anniversary of Nossa Senhora de Fatima, Nonprofit Organization in Santa Clara
City of Santa Clara Printed on 12/6/2023Page 2 of 2
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Draft Commendation
City of SantaClara

WHEREAS, the Portuguese community has deep roots in Santa Clara, with many people immigrating from Portugal to the area beginning in the 1880s and again in the 1950s and 1960s; and

WHEREAS, the City of Santa Clara is fortunate to have many residents of Portuguese descent who continue to celebrate their heritage and give back to the community; and

WHEREAS, having formed the S.E.S. Portuguese Hall in 1896, immigrants from Portugal created a place to build community and foster good works; and

WHEREAS, Nossa Senhora de Fatima is a 501(c)(3) nonprofit organization related to S.E.S.

Portuguese Hall, which conducts annual community service activities in the City of Santa Clara; its community service activities include programs aimed at aiding the less fortunate; and

WHEREAS, founded in 1953, 2023 marks the 70
th anniversary of the Nossa Senhora de Fatima
organization.

NOW, THEREFORE, I, LISA M. GILLMOR, by virtue of the authority vested in me as Mayor, and on behalf of the entire City Council, do hereby recognize and congratulate

Nossa Senhora de Fatima in Santa Clara

On its 70th anniversary and commend the organization for its service to the City of Santa Clara.

Given under my hand and the Seal of the City of Santa Clara, California, this 12th day of December 2023.

LISA M. GILLMOR
MAYOR
City of Santa Clara

Commendation
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-27 Agenda Date: 12/12/2023

REPORT TO COUNCIL

SUBJECT
Board, Commissions and Committee Minutes

COUNCIL PILLAR
Enhance Community Engagement and Transparency

RECOMMENDATION
Note and file the Minutes of:

Audit Committee - August 30, 2023
Governance and Ethics Committee - September 11, 2023
Cultural Commission - November 6, 2023
City of Santa Clara Printed on 12/8/2023Page 1 of 1
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City of Santa Clara
Meeting Minutes
Audit Committee
Draft
11:00 AM Hybrid Meeting
CMO Staff Conference Room/Virtual
City Hall - East Wing
1500 Warburton Avenue
Santa Clara, CA 95050
08/30/2023
The City of Santa Clara is conducting the Audit Committee meetings in a hybrid manner (in-person and continues to have methods for the public to participate remotely).

Join from a PC, Mac, iPad, iPhone or Android device:

Please click this URL to join: https://santaclaraca.zoom.us/j/99199624617 Webinar ID: 991 9962 4617
Or join by phone:

US: +1 669 900 6833

CALL TO ORDER AND ROLL CALL
Chair Park called the meeting to order at 11:06 AM.

Member Kathy Watanabe, Member Suds Jain, and Chair Kevin ParkPresent 3 -

CONSENT CALENDAR

1. 23-939 Audit Committee Minutes
Recommendation: Approve the Audit Committee minutes of March 30, 2023.

A motion was made by Member Jain, seconded by Member
Watanabe to approve the Audit Committee Minutes of March 30, 2023.

Aye: Member Watanabe, Member Jain, and Chair Park3 -
GENERAL BUSINESS Page 1City of Santa Clara Printed on 10/02/2023 08/30/2023Audit Committee Meeting Minutes

2. 23-938 Overview of Santa Clara Stadium Authority Fiscal Year 2022/23 Annual Financial Statements and Audit Results Presentation by KPMG, LLP Recommendation: Accept the Santa Clara Stadium Authority FY 2022/23 Annual Financial Statements and recommend that the Stadium Authority note and file the report at the September 19, 2023 Joint Council and Authorities Concurrent and Stadium Authority meeting.

Treasurer, Kenn Lee, gave a PowerPoint presentation.

Committee Member Jain asked questions and had comments throughout the presentation.

Treasurer Lee, Executive Director, Jō
van Grogan, Managing
Director, Lisa Avis, KPMG, LLP addressed Committee Member Jain's questions and comments.

Managing Director Avis, gave a PowerPoint presentation.

Committee Members asked questions and had comments throughout the presentation.

Treasurer Lee, Executive Director Grogan, Managing Director Avis, and Chief Assistant City Attorney, Sujata Rueter, addressed the Committee Members' questions and comments.

A motion was made by Member Jain, seconded by Member
Watanabe, to accept the draft Santa Clara Stadium Authority FY 2022/23 Annual Financial Statements and recommend that the Stadium Authority note and file the final report at the September 19, 2023 Joint Council and Authorities Concurrent and Stadium Authority meeting.

Aye: Member Watanabe, Member Jain, and Chair Park3 -

ADJOURNMENT
Chair Park adjourned the meeting at 11:48 A.M.

A motion was made by Member Jain, seconded by Member
Watanabe, to adjourn the meeting.

Aye: Member Watanabe, Member Jain, and Chair Park3 -
Future Audit Committee Meetings will be scheduled at a later date.

MEETING DISCLOSURES

08/30/2023Audit Committee Meeting Minutes
The time limit within which to commence any lawsuit or legal challenge to any quasi-adjudicative decision made by the City is governed by Section 1094.6 of the Code of Civil Procedure, unless a shorter limitation period is specified by any other provision. Under Section 1094.6, any lawsuit or legal challenge to any quasi-adjudicative decision made by the City must be filed no later than the 90th day following the date on which such decision becomes final. Any lawsuit or legal challenge, which is not filed within that 90-day period, will be barred. If a person wishes to challenge the nature of the above section in court, they may be limited to raising only those issues they or someone else raised at the meeting described in this notice, or in written correspondence delivered to the City of Santa Clara, at or prior to the meeting. In addition, judicial challenge may be limited or barred where the interested party has not sought and exhausted all available administrative remedies.

If a member of the public submits a speaker card for any agenda items, their name will appear in the Minutes. If no speaker card is submitted, the Minutes will reflect "Public Speaker."
In accordance with the requirements of Title II of the Americans with Disabilities Act of 1990 ("ADA"), the City of Santa Clara will not discriminate against qualified individuals with disabilities on the basis of disability in its services, programs, or activities, and will ensure that all existing facilities will be made accessible to the maximum extent feasible. The City of Santa Clara will generally, upon request, provide appropriate aids and services leading to effective communication for qualified persons with disabilities including those with speech, hearing, or vision impairments so they can participate equally in the City’s programs, services, and activities. The City of Santa Clara will make all reasonable modifications to policies and programs to ensure that people with disabilities have an equal opportunity to enjoy all of its programs, services, and activities.

Agendas and other written materials distributed during a public meeting that are public record will be made available by the City in an appropriate alternative format.

Contact the City Clerk’s Office at 1 408-615-2220 with your request for an alternative format copy of the agenda or other written materials.

Individuals who require an auxiliary aid or service for effective communication, or any other disability-related modification of policies or procedures, or other accommodation, in order to participate in a program, service, or activity of the City of Santa Clara, should contact the City’s ADA Coordinator at 408-615-3000 as soon as possible but no later than 48 hours before the scheduled event.

City of Santa Clara
Meeting Minutes
Governance and Ethics Committee
3:00 PM Hybrid Meeting
City Hall
1500 Warburton Avenue
Santa Clara, CA 95050
09/11/2023

CALL TO ORDER AND ROLL CALL
Chair Jain called the meeting to order at 3:07 p.m.

Present 3 - Member Lisa M. Gillmor, Member Raj Chahal, and Chair Sudhanshu Jain

CONSENT CALENDAR

1. 23-997 Approval of the June 5, 2023 Governance and Ethics Committee Meeting Minutes
Recommendation:

Approve the minutes of the June 5, 2023 Governance and Ethics Committee Meeting.

Member Chahal made a comment the Council Policy 020 was included in the minutes to return to this September 11, 2023 meeting, however, he understood the staff report indicates it will be deferred to the December 4, 2023 Governance and Ethics Committee meeting.

A motion was made by Member Chahal, seconded by Member
Gillmor to approve June 5, 2023 minutes.

Aye: Member Gillmor, Member Chahal, and Chair Jain3 -

09/11/2023Governance and Ethics Committee Meeting Minutes

PUBLIC PRESENTATIONS
Member of the public Kirk Vartan stated he sent an email to Governance and Ethics Committee, City Manager and City Attorney as to why the Grand Jury Report is not on the agenda and not been discussed at the Governance and Ethics Committee and provided comments on ethics.

Member of the public Tom Shanks provided comments about the July 11, 2023 City Council meeting and the discussion on the Independent Ethics Commission.

Member of the public Wanda Buck provided comments on ethics.

GENERAL BUSINESS

2. 23-984 Approve Proposed Amendment to Council Policy 035 (Naming of Facilities)
Recommendation: Approve amendment to Council Policy 035 (“Naming of Facilities”) and bring forth to City Council for Adoption
City Manager Grogan presented an update on Council Policy 035 Policy for Naming of Facilities and a proposed addition to the policy to include Naming Rights Agreements which may provide a financial benefit to the City. Members asked questions about naming rights and time limits for naming, if facilities include street names, and renaming existing facilities .

Staff responded proper processes would be implemented to award naming rights agreements and would need to research further on changing existing facilities.

Member Gillmor motioned and was seconded by Member Chahal to approve amendment to Council Policy 035 and bring forth to Council for adoption. Motion was approved.

Aye: Member Gillmor, Member Chahal, and Chair Jain3 -

09/11/2023Governance and Ethics Committee Meeting Minutes

3. 23-989
Recommendation:
2024 Council Priority Session Framework
Review and provide input on the 2024 Council Priority Setting Session Framework and forward to the full Council for consideration City Manager Grogan updated the Committee on the 2024 Council Priority session framework and an update on the Boards, Commissions and Committees Workplan development.

Committee members had a discussion to include opportunities for public comment, the timeline for identifying priorities near the annual budget process, and Boards, Commissions, and Committees work plans should allow additional feedback from members.

Staff responded the goal of the Council Priority session is to determine the overall high level priorities Council goals and not focused on budgetary allocations. Member of the public Kirk Vartan stated we should ensure ethics is topic at the Council Priority sessions.

A motion was made by Member Chahal and seconded by Member Gillmor to approve the staff recommendation and ensure
opportunities for public participation during the sessions and forward to full Council for consideration. The motion was approved.

Aye: Member Gillmor, Member Chahal, and Chair Jain3 -

09/11/2023Governance and Ethics Committee Meeting Minutes

4. 23-994 Action on Recommendation to the Governance and Ethics Committee to Amend Council Policy 030, entitled Adding an Item on the Agenda and forward to the City Council for Consideration
Recommendation:

In order to enhance and streamline the processing of both City Council and public petitions for Council action, staff recommends that the Governance and Ethics Committee approve the revised 030 Policy, subject to any further amendments it may agree to, and recommend to the full Council its consideration and approval of the amended policy.

City Manager Grogan presented on proposed changes to Council Policy 030. Member of the public Kirk Vartan stated whether the policy would remove written petitions. Staff responded members of the public may still submit written petitions during Public Presentations of the agenda.

A motion was made by Member Gillmor and seconded by Member Chahal to approve the staff recommendation to bring forth Council Policy 030 to the full Council for consideration and approval of the amended policy.

Aye: Member Gillmor, Member Chahal, and Chair Jain3 -

5. 23-992
Informational Report on Transcription Services for Meeting Recordings (Referred from December 5, 2022 meeting)
Recommendation: Staff makes no recommendation as this is an informational report only.

City Manager Grogan presented an informational report on transcription services for meeting recordings. Committee members had comments on archiving audio and discussions time periods, the use of action minutes and ability to search for transcripts. Assistant City Clerk Nora Pimentel stated the current retention policy includes videos as permanent records and not transcripts, she added action minutes does include the motion and recommendation.

Member Gillmor motioned, seconded by Member Chahal to note and file the report and to include user friendly search for transcripts.

Aye: Member Gillmor, Member Chahal, and Chair Jain3 -

09/11/2023Governance and Ethics Committee Meeting Minutes

6. 23-993 Action to Defer Workplan Items to December 2023 Governance and Ethics Committee Meeting
Recommendation: Action to Defer Workplan Items to the December 4, 2023 Governance and Ethics Committee meeting.

Chair Jain requested a possible special meeting for Governance and Ethics Committee to address items. City Manager Grogan stated we would have to review staff scheduling and current work load.

Member of the public Kirk Vartan added if Committee would consider additional ethics and public issues, in addition to AB1234 training, for a future item. Member of the public Wanda Buck suggested we have an Ethics Committee.

A motion was made by Member Chahal and seconded by Chair Jain to approve staff recommendation to defer items to December 2023 meeting.

Aye: 2 - Member Chahal, and Chair Jain

Absent: 1 - Member Gillmor

STAFF REPORT
AB1234 Open Government and Ethics Update
City Attorney Glen Googins provided an update on the upcoming AB1234 training for the City Council, Boards and Commissions and City employees on October 26, 2023. The upcoming training includes an opportunity for the public to also observe or potentially participate in the training.

Update on Email Retention Policy
City Attorney Glen Googins provided an update on the Email Retention Policy and stated staff will review and bring forth any recommendations to a future Committee meeting.

09/11/2023Governance and Ethics Committee Meeting Minutes

COMMITTEE MEMBER REPORTS / FUTURE REFERRALS FOR CONSIDERATION Chair Jain stated during Council meetings Public Presentations are heard after the Consent Calendar. He requested staff consider Public Presentations at the beginning of the meeting for 30 minutes and the remainder of Public Presentations at the end of the agenda. Staff said they would review the request for consideration for the 2024 Governance and Ethics work plan.

ADJOURNMENT
Chair Jain adjourned the meeting at 5:35 p.m.

City of Santa Clara
Meeting Minutes
Cultural Commission
Draft
7:00 PM Hybrid Meeting
City Manager's Conf. Room
City Hall - East Wing
1500 Warburton Avenue
Santa Clara, CA 95050
11/06/2023
The City of Santa Clara is conducting the Cultural Commission meeting in a hybrid manner (in-person and a method for the public to participate remotely).

Via Zoom:
https://santaclaraca.zoom.us/j/98272283531
Meeting ID: 982 7228 3531
Or join by phone: 669-900-6833

CALL TO ORDER AND ROLL CALL
Vice Chair von Huene called the meeting to order at 7:03 p.m.

Commissioner Siddarth Sundaram, Vice Chair Debra von Huene, Commissioner Jonathan Marinaro, and Commissioner Neetu Garg Present 4 -
Commissioner Louis Samara, Chair Candida Diaz, and
Commissioner Paul McNamara
Absent 3 -
A motion was made by Commissioner Marinaro, seconded by Commissioner Sundaram, to excuse Chair Diaz and Commissioner Samara from the meeting.

Aye: Commissioner Sundaram, Vice Chair von Huene, Commissioner Marinaro, and Commissioner Garg
4 -
Excused: Commissioner Samara, and Chair Diaz2 -

Absent: Commissioner McNamara1 -

CONSENT CALENDAR

11/06/2023Cultural Commission Meeting Minutes
1 A. 23-1298 Action on Cultural Commission Regular Meeting Minutes of October 2, 2023
Recommendation: Approve the Cultural Commission Regular Meeting Minutes of October 2, 2023
A motion was made by Commissioner Marinaro, seconded by Commissioner Garg, that the consent calendar be approved. The motion passed with the following vote:

Aye: Commissioner Sundaram, Vice Chair von Huene, Commissioner Marinaro, and Commissioner Garg
4 -
Excused: Commissioner Samara, and Chair Diaz2 -

Absent: Commissioner McNamara1 -
Commissioner McNamara joined the meeting at 7:08 p.m.

Commissioner Siddarth Sundaram, Vice Chair Debra von Huene, Commissioner Jonathan Marinaro, Commissioner Paul McNamara, and Commissioner Neetu Garg
Present 5 -
Commissioner Louis Samara, and Chair Candida DiazExcused 2 -

PUBLIC PRESENTATIONS
None.

GENERAL BUSINESS

11/06/2023Cultural Commission Meeting Minutes

2. 23-1299 Action on Cultural Commission Work Plan Goals and Activities for FY 2023/24
Recommendation: Discuss the Cultural Commission Work Plan Goals and Activities for FY 2023/24.

The Commissioners discussed the Work Plan FY 2023/24. Work Plan has been updated based on the discussion.

GOAL #1: Host and enhance multicultural events to encourage and acquaint Santa Clara residents with cultural diversity
Concerts- Concert dates were chosen for 2024. Genres to be discussed by the committee and provided to staff. Commission was pleased with the bands chosen for 2023 and the concerts were well attended.

Street Dance- no updates provided.

Friday Night Live- Working with the Triton on securing the venue.

Sponsors-Commissioner Marinaro will follow up with sponsors. Trying to acquire additional sponsors for the events.

GOAL #2: Develop and encourage interactive, art opportunities to provide temporary, performing, cultural, and public art in the City.

Advise and recommend public art to City Council-The Mechanical Horse was installed on Sept. 25. Vice Chair von Huene will attend the upcoming City Council meeting to provide information on the exhibit during public presentations.

Identify available Utility Boxes in the City for Artist Utility Box Program (alternate years with Sculpture Exhibition)-Project is on hold. No updates.

Host Sculpture Exhibition-Theme will be "One World, One Hope". Call for Artists is scheduled for Dec. 15. Submissions close on Feb. 29, 2024.

Exhibition will open to the public on April 29, 2024. Additional dates outlined in the Post Meeting Material. Assistance is needed for installation by Building Maintenance.

Host Halloween Home & Holiday Home Decorating Contest and Recognition-11 entries were received for the Halloween Home Decorating Contest. District 5 had no submissions. Same judging criteria will be used for the Holiday Home Decorating which will be launched late November. The addition of the question of what the decorations meant to the applicant, was well received. The Contest will close on Dec.18, judging will occur on Dec. 19 and Commissioners will deliver the signs to the winners on Dec. 20.

Update and maintain City interactive web-based public art map-The map

11/06/2023Cultural Commission Meeting Minutes
is updated.

GOAL #3: Raise the visibility of commemorative months.

Update Coloring Book to honor Commemorative Months according to Federal Calendar-Coloring Book is updated through December 2023. January page will be completed next.

Promote monthly commemorative months through Social Media and Special Events to raise awareness and cultural competency-November page was posted on Social Media. December page will be posted in December.

GOAL #4: Enhance communication and media strategy to increase community awareness of the Cultural Commission.

Commissioners to attend the Americans for the Arts Conference-Item is currently on hold.

Present regularly to City Council-March 5, 2024 is the Joint Council/Commission Dinner. Commission will present to Council.

Develop, maintain, and grow partnerships and collaborate with external organizations-Commissioner Marinaro met with Mission College. They are interested in partnering/sponsoring events with the Commission. One idea was to possibly host a concert in their quad area, complete with restrooms and lighting. A new Center of Performing Arts will begin construction in early 2024.

GOAL #5: Prepare for Citywide Arts Master Plan Process
Participate in the Community Outreach process for the development of the Community Art Center in Patrick Henry Drive Development-The developer is no longer coordinating the project. This objective has been removed from the Work Plan.

Develop private/public partnerships to invest and promote the Arts in Santa Clara-Commissioners Marinaro and McNamara attended a luncheon with SV Creates. Nine (9) municipalities were represented. Grant money is available and the Commission is interested in a possible partnership with SV Creates.

Develop, promote, and implement Citywide Arts Master Plan alongside the City Council- Assistant City Manager Cynthia Bojorquez will attend the December Cultural Commission Meeting to discuss the Citywide Arts Master Plan with the Commission.

GOAL #6: Identify and expand on Arts Education in the City of Santa Clara

11/06/2023Cultural Commission Meeting Minutes
Identify potential partnerships with schools/local organizations to expand arts and art education-Commissioner McNamara will meet with the Assistant Superintendent of the Santa Clara School District and report back to the Commission.

A motion was made by Commissioner Samara, seconded by
Commissioner McNamara to rename Goal 4, Objective #3 to read:

Develop, maintain and grow partnerships and collaborate with external organizations.

Aye: Commissioner Sundaram, Vice Chair von Huene, Commissioner Marinaro, Commissioner McNamara, and Commissioner Garg
5 -
Excused: Commissioner Samara, and Chair Diaz2 -

STAFF REPORT
There was no staff report for this meeting.

COMMISSIONERS REPORT
Commissioner Marinaro attended a music festival in Las Vegas, "When we were young". He enjoyed it very much. He also attended Opera San Jose, The Barber of Seville at the California Theatre.

Commissioner Sundaram attended a community band in Milpitas, "Nature". It was very well executed and he enjoyed it.

Commissioner Garg is enjoying celebrating Diwali, feasting and fasting.

Vice Chair von Huene began rehearsals with the Santa Clara Chorale.

Britten Ceremony of Carols will take place on Dec 8 and 10 at Mission Santa Clara. The concert will feature 16 favorite carols from around the world, including Spanish and Old English carols.

Commissioner Mc Namara took a trip to San Diego, Balboa Park and enjoyed live music,including Phantom of the Opera and Thriller. He also attended a Renaissance Fair and plays.

ADJOURNMENT
A motion was made by Commissioner Marinaro, seconded by Commissioner Sundaram, that the meeting be adjourned at 8:07 p.m.

11/06/2023Cultural Commission Meeting Minutes

Aye: Commissioner Sundaram, Vice Chair von Huene, Commissioner Marinaro, Commissioner McNamara, and Commissioner Garg
5 -
Excused: Commissioner Samara, and Chair Diaz2 -

MEETING DISCLOSURES

11/06/2023Cultural Commission Meeting Minutes
The time limit within which to commence any lawsuit or legal challenge to any quasi-adjudicative decision made by the City is governed by Section 1094.6 of the Code of Civil Procedure, unless a shorter limitation period is specified by any other provision. Under Section 1094.6, any lawsuit or legal challenge to any quasi-adjudicative decision made by the City must be filed no later than the 90th day following the date on which such decision becomes final. Any lawsuit or legal challenge, which is not filed within that 90-day period, will be barred. If a person wishes to challenge the nature of the above section in court, they may be limited to raising only those issues they or someone else raised at the meeting described in this notice, or in written correspondence delivered to the City of Santa Clara, at or prior to the meeting. In addition, judicial challenge may be limited or barred where the interested party has not sought and exhausted all available administrative remedies.

If a member of the public submits a speaker card for any agenda items, their name will appear in the Minutes. If no speaker card is submitted, the Minutes will reflect "Public Speaker."
In accordance with the requirements of Title II of the Americans with Disabilities Act of 1990 ("ADA"), the City of Santa Clara will not discriminate against qualified individuals with disabilities on the basis of disability in its services, programs, or activities, and will ensure that all existing facilities will be made accessible to the maximum extent feasible. The City of Santa Clara will generally, upon request, provide appropriate aids and services leading to effective communication for qualified persons with disabilities including those with speech, hearing, or vision impairments so they can participate equally in the City’s programs, services, and activities. The City of Santa Clara will make all reasonable modifications to policies and programs to ensure that people with disabilities have an equal opportunity to enjoy all of its programs, services, and activities.

Agendas and other written materials distributed during a public meeting that are public record will be made available by the City in an appropriate alternative format.

Contact the City Clerk’s Office at 1 408-615-2220 with your request for an alternative format copy of the agenda or other written materials.

Individuals who require an auxiliary aid or service for effective communication, or any other disability-related modification of policies or procedures, or other accommodation, in order to participate in a program, service, or activity of the City of Santa Clara, should contact the City’s ADA Coordinator at 408-615-3000 as soon as possible but no later than 48 hours before the scheduled event.

2024 Sculpture Exhibition Theme: “One World, One Hope”
The exhibition’s theme is “One World, One Hope”. The theme can be interpreted to represent, among other things, a commonality of human yearnings such as peace, nurturing our children and our planet, unity, and regeneration as we all reflect on the state of the world today.

The artist can explore a range of artistic expression, from low-tech installations to contemporary uses of technology, including LED lighting. Incorporation of kinetic or mechanical/interactive elements are encouraged but not required. The artwork is not limited to any specific material or medium and is open to a wide range of artistic styles. The art installation should be a 3-dimensional sculpture no taller than 5 feet, and be able to be mounted on a pedestal that is approximately 3 feet wide by 3 feet deep. − December 15, 2023: Call for Artists / submissions open − February 29, 2024: Submissions close
− March 31, 2024: Semifinalists selected and Artists notified. − April 22-26, 2024: Semifinalist artwork installed at selected locations − April 29, 2024: Exhibition opens to public / Facebook voting opens − May 17, 2024: Finalists notified
− June 2024: Special Order of Business at City Council Meeting with winners − Sept 13, 2024: Exhibition closes
− Sept 16-20, 2024: All artwork uninstalled

ARTIST CALL DETAIL
City of Santa Clara Indoor Sculpture Exhibition
For SF Bay Area artists
WHO: City of Santa Clara
WEBSITE: tbd
APPLICATION OPENING: Monday, January 13, 2020
DEADLINE: Friday, February 28, 2020

INTRODUCTION
The City of Santa Clara and its Cultural Commission are pleased to announce an opportunity for artists to create a 3-dimensional artwork for its biennial Indoor Sculpture Exhibition.

THE PROMPT
The exhibition’s theme is “Breaking Free”. Incorporation of kinetic or mechanical/interactive elements are encouraged but not required. The theme can also be interpreted to represent a pilgrimage, epiphany, metamorphosis, liberation, or other passage/journey.

November 6, 2023 #23-1299

POST MEETING MATERIAL

THE ARTWORK
The artist can explore a range of artistic expression, from low-tech installations to contemporary uses of technology, including interactivity. The artwork is not limited to any specific material or medium and is open to a wide range of artistic styles. The art installation should be a 3-dimensional sculpture no taller than 5 feet, and able to be mounted on a pedestal that is approximately 3 feet wide by 3 feet deep.

ENTRY REQUIREMENTS
a. High res photograph or sketch at time of entry (minimum of 1 image uploaded at time of entry) b. Dimensions that will fit on a 36” x 36” pedestal, and no taller than 60” tall c. Limited number of entries per person (three per artist) d. Entrants must have their own insurance policy
e. Artist has the option to privately arrange sale of displayed artwork following the exhibition f. Entry submitted via Google Form at http://bit.ly/35xkbv9 g. Artist must be 18 years of age or older and live in one of the designated Northern California counties: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, or Sonoma
h. Employees or volunteers for the City of Santa Clara may enter, but are not eligible for monetary awards.

LOCA TION
The artwork should be designed for installation on a pedestal approximately 3’ x 3’ (no wall hangings).

Selected finalists will be on public display at Santa Clara City Hall or one of its three libraries (Central Park Library, Mission Library, and Northside Branch Library) and other public facilities. Placement will be determined by the judging panel.

PROJECT TIMELINE
● January 13, 2020: SUBMISSIONS OPEN. 12:00pm PST
● February 28, 2020: SUBMISSIONS CLOSE. 11:59pm PST
● March 31, 2020: Semifinalists selected. Artists notified. ● April 20-24, 2020: Semifinalist artwork installed at selected locations ● April 27, 2020: Exhibition opens to public
● May 15, 2020: Finalists notified
● Sept 14, 2020: Exhibition closes
● Sept 17-21, 2020: All artwork uninstalled

SELECTION PROCESS AND PROJECT ELEMENTS OVERVIEW
The Santa Clara Cultural Commission will review submitted proposals to identify projects that fulfill the theme and entry requirements. The proposals that fit the project intent and stated criteria will be shared with a judging panel consisting of a small group of Cultural Commissioners, Triton Museum staff, and may include a - ---
City Councilmember and City Staff. No more than 30 entries will be selected as Semifinalists and invited to participate in the city-wide display.

Once selected as a Semifinalist, the artist will be required to complete an Art Loan and Exhibition Agreement with the City of Santa Clara prior to final acceptance and installation of the artwork. The artist, at his or her own expense, will be responsible for the transportation and delivery of the artwork to and from the installation site and also will undertake the installation and subsequent removal of the artwork. Submitted high-res images of the Semifinalist artwork will also be featured on http://facebook.com/culturalcommission where the public will be invited to cast virtual “votes”. This social network score will count as 10% of the judging criteria.

On or before May 15, 2020 the judging panel will inform three (3) Finalists of their selection as First Place, Second Place, and Honorable Mention. The Finalists will be invited to an awards ceremony and recognition event at the next scheduled City Council meeting.

Finalists will be awarded monetary prizes: $1,000 for first place, $750 for second place, and $250 for Honorable Mention. The First Place winner may be featured in future City of Santa Clara Activities Guides, and the image of the artwork may also be featured on the City’s web page, local Channel 15 slide show rotation, future Sculpture Exhibition brochures, and other City branding.

SELECTION CRITERIA
Applicants will be selected based upon the following criteria:
● Appropriateness of content (should be appropriate for all audiences) ● Creativity
● Relevance to the theme
● Social network score

SUBMISSION PROCESS AND REQUIREMENTS
All artists are to submit proposals and attachments through a digital submission application here (http://bit.ly/35xkbv9).

All submissions must be logged by 11:59pm (PST) on February 28,2020.

APPLICA TIONS
● Artwork Title: Describe the name of the artwork to be submitted. Maximum 75 characters.
● Artwork Concept: What are you hoping to express with the manifestation of your artwork? What does the art mean to you and what do you hope to communicate to viewers? Make certain to address how you have incorporated the theme. Maximum 750 characters.
● Artwork Dimensions: Please represent in inches: height x width x depth ● Power (electrical) Requirements, if any: Please indicate if the art requires placement near an electrical outlet, if applicable, and the length of the power cord needed.
● Media: Describe the fabrication of the artwork, its physical elements, and techniques used to produce it.
● Upload – Image #1: At least one high-res photograph or sketch is required.

CONTACT INFORMATION
Any inquiries and questions can be submitted to the Santa Clara Cultural Commission at [email protected]
Deadline: 02/28/2020
Contact: Debra von Huene
email: [email protected]
Website: tbd
PPM
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1280 Agenda Date: 12/12/2023

REPORT TO COUNCIL

SUBJECT
Action on Monthly Financial Status and Investment Reports for September 2023 and to Approve the Related Budget Amendments

COUNCIL PILLAR
Enhance Community Engagement and Transparency

BACKGROUND
In compliance with the Charter of the City of Santa Clara and the adopted Investment Policy, the monthly financial report and monthly investment report for September 2023 are submitted for your information. The financial reviews as of September 30, 2023 provide a year-to-date financial update to the City Council for fiscal year 2023/24. The analysis of the revenues collected and all expenditures measures the level of adherence to the established resource allocation plan and allows the City to monitor and project revenues and expenditures throughout the year.

The Adopted Budget incorporates the estimated revenues and planned expenditures for all funds.

The attached Financial Status Report provides the budget to actual revenue and expenditure summaries for the General Fund, Special Revenue Funds and Enterprise Operating Funds, as well as expenditure summary for Capital Improvement Funds and Fund Reserve Balances. Any significant variances are explained in the report.

In accordance with City Council Policy 051 - Donations to the City, included in these reports are monthly activity and annual summary of donations received by department. Although the requirement of the policy is to report quarterly, the City will include this information monthly in the financial status report.

DISCUSSION
Monthly Financial Status Report (Attachment 1)
The attached reports summarize the City’s financial performance as of September 30, 2023 (Attachment 1). Financial analysis for these reports is provided for the General Fund, select Special Revenue Funds, Enterprise Operating Funds, and Capital Improvement Funds.

Attachment 1 shows that General Fund revenues (excluding transfers) at 10.2% of the budget through September 2023. In some categories, a portion of the revenues received through September account for activity that occurred in FY 2022/23 and those revenues are accrued back to that year. In other cases, such as property tax, most payments are scheduled to occur later in the fiscal year.

While it is very early in the fiscal year and limited data is available, General Fund revenues are currently tracking within estimated levels. General Fund departmental expenditures were at 23.1% of City of Santa Clara Printed on 12/8/2023Page 1 of 4
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23-1280 Agenda Date: 12/12/2023
budget through September 2023, which are within budgeted levels.

As shown in Attachment 1, total revenues for Enterprise Funds (Electric, Water, Sewer, Cemetery, Solid Waste, and Water Recycling) were at 14.8% of the budget through September 30, 2023, while total expenses were at 19.4%.

In the month of September, donations of $7,725 were received, bringing total donations to $103,484.

Some U.S. economic forecasts are predicting weaker growth in 2024. After three quarters of presenting both recession and no recession scenarios in its Forecasts, the October 2023 UCLA Anderson Forecast presents a single no-recession scenario “with a weak economy in 2024 followed by a return to trend growth rates, albeit below trend GDP levels, in 2025”. In its October 2023 forecast, The Conference Board predicts a very short and shallow recession early next year.

On a national level, the unemployment rate increased from 3.8% in September 2023 to 3.9% in October 2023. In October, the number of unemployed persons increased slightly from 6.4 million to

6.5 million. In the advance estimate for the third quarter 2023, the Gross Domestic Product (GDP) increased at an annual rate of 4.9%, compared with an increase of 2.1% in the second quarter 2023.

The California unemployment rate increased slightly from 4.6% in August 2023 to 4.7% in September 2023 and was up from 4.0% in September 2022. The unadjusted unemployment rate in the San José -Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) was 3.3% in September 2023, down from a revised 3.9% in August 2023, but above the September 2022 level of 2.4%.

Staff will continue to closely monitor the General Fund revenues and the City’s overall financial performance as the fiscal year progresses.

Monthly Investment Report (Attachment 2)
All securities held by the City of Santa Clara as of September 30, 2023 were in compliance with the City’s Investment Policy Statement regarding current market strategy and long-term goals and objectives. All securities held are rated “A” or higher by two nationally recognized rating agencies.

There is adequate cash flow and maturity of investments to meet the City’s needs for the next six months.

The City’s investment strategy for September 2023 was to invest funds not required to meet current obligations in securities listed in the prevailing Investment Policy Statement, with maturities not to exceed five years form the date of purchase. This strategy ensures safety of the City’s funds, provides liquidity to meet the City’s cash needs, and with a reasonable portfolio return of 2.77% in September.

ENVIRONMENTAL REVIEW
The actions being considered do not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(4) of Title 14 of the California Code of Regulations in that they are fiscal activities that do not involve any commitment to any specific project which may result in a potential significant physical impact on the environment.

FISCAL IMPACT
From time to time, budget adjustments are necessary to reflect new information, align budgets with City of Santa Clara Printed on 12/8/2023Page 2 of 4
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23-1280 Agenda Date: 12/12/2023
actual revenues and expenses, and correct errors. The recommended budget adjustments are described in Attachment 3 and summarized below:
· General Fund - recognize ambulance transport services revenue in the amount of $150,000 and appropriate the funding to the Fire Department to support those services (additional defibrillator, power gurneys in the ambulances, ambulance repairs/maintenance). · Convention Center Capital Fund
- recognize a transfer of $90,000 from the Convention Center Enterprise Fund and allocate the funding to the Condition Assessment Repairs project for a comprehensive roof assessment of the facility.
· Convention Center Enterprise Fund
- transfer $90,000 to the Convention Center Capital Fund for the Convention Center Condition Assessment Repairs project, offset by ending fund balance.
· Electric Utility Capital Fund
- increase the Major Engine Overhaul and Repair project by $3.5 million, offset by ending fund balance, to overhaul an engine at the power plant that was deemed unserviceable due to deterioration of turbine blades. · Fire Development Services Fund
- recognize and appropriate revenue from Intel Corp. in the amount of $2,887 for plan review and fire permit inspection services. · Fire Operating Grant Trust Fund - recognize grant funding in the amount of $2,832 and appropriate it to the 2023 International Association of Fire Chiefs (IAFC) Grant Program to support staff attendance at the IAFC’s Developing Inclusive Teams Workshop in Spanaway, WA.

The table below summarizes the net budget change in revenue and expenditure for each fund impacted by the recommended budget amendments.

Fund Name Revenue Expenditure
General Fund $150,000 $150,000
Convention Center Capital Fund $90,000 $90,000
Convention Center Enterprise Fund (net-zero
use of $90K from fund balance)
$0 $0
Electric Utility Capital Fund (net-zero use of
$3.5 M from fund balance)
$0 $0
Fire Development Services Fund $2,887 $2,887
Fire Operating Grant Trust Fund $2,832 $2,832

COORDINATION
This report has been coordinated with the City Attorney’s Office.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] mailto:[email protected] or at the public
information desk at any City of Santa Clara public library.

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23-1280 Agenda Date: 12/12/2023

RECOMMENDATION

1. Note and file the Monthly Financial Status Reports and Monthly Investment Reports for September 2023 as presented; and

2. Approve the following FY 2023/24 Budget Amendments:
a. In the General Fund, recognize other fees for services revenue of $150,000 and appropriate the funding to the Fire Department to support ambulance transport services (five affirmative Council votes required to appropriate additional revenue); b. In the Convention Center Enterprise Fund, transfer $90,000 to the Convention Center Capital Fund, offset by a reduction to the ending fund balance (five affirmative Council votes required for the use of unused balances);
c. In the Convention Center Capital Fund, recognize a transfer of $90,000 from the Convention Center Enterprise Fund and appropriate the funding to the Santa Clara Convention Center Condition Assessment Repair project (five affirmative Council votes required to appropriate additional revenue);
d. In Electric Utility Capital Fund, increase the Major Engine Overhaul and Repair project in the amount of $3,500,000, offset by a reduction to the ending fund balance (five affirmative Council votes required for the use of unused balances); e. In the Fire Development Services Fund, recognize other fees for services revenue of $2,887 and appropriate the funding to the Fire Department (five affirmative Council votes required to appropriate additional revenue); and
f. In the Fire Operating Grant Trust Fund, recognize other agencies revenue of $2,832 and appropriate the funding to the 2023 International Association of Fire Chiefs Grant Program (five affirmative Council votes required to appropriate additional revenue).

Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager

ATTACHMENTS

1. Monthly Financial Status Report - September 2023

2. Monthly Investment Report - September 2023

3. FY 2023/24 Budget Amendments
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_____________________________________________________________________

MONTHLY FINANCIAL STATUS REPORT

September 2023

City of
Santa Clara
The Center of What 's Possible

1 City of Santa Clara
Financial Status Report as of September 30, 2023

This report summarizes the City’s financial performance for the month ended September 30, 2023.

Financial analysis for the report is provided for the General Fund, select Special Revenue Funds, Enterprise Operating Funds, and Capital Improvement Funds. Financial information included in this report is unaudited.

Economic Outlook
After three quarters of presenting both recession and no recession scenarios in its Forecasts, the October 2023 UCLA Anderson Forecast presents a single forecast scenario “with a weak economy in 2024 followed by a return to trend growth rates, albeit below trend GDP levels, in 2025”. While a recession is no longer predicted, the higher interest rates are expected to restrain growth in 2024.

Substantial risks to the forecast are also identified, including a potential shutdown of the government, the impact of geopolitical events, and the impact of the election on economic policies in 2025.1 Quarterly Real GDP Growth, Seasonally Adjusted Annual Rates

In its latest Forecast, The Conference Board predicts a very short and shallow recession early next year. “This outlook is associated with numerous factors, including, elevated inflation, high interest rates, dissipating pandemic savings, rising consumer debt, lower government spending, and the resumption of mandatory student loan repayments. We forecast that real GDP will grow by 2.2 percent in 2023, and then fall to 0.8 percent in 2024.”2

1 UCLA Anderson Forecast, October 2023, As Recession Fades Into the Future: The U.S. Economic Outlook 2 https:///www.conference-board.org/research/us-forecast, The Conference Board Economic Forecast for the US Economy, Updated October 12, 2023

3/o

7.5 5

2.5 0
·2.5
2021 2022
Sow-ce: UCLA Ander.rem Forecast, U..S. Bureau of Economic Analysis 2023 2024 2025

2 City of Santa Clara
Financial Status Report as of September 30, 2023

On a national level, the unemployment rate increased from 3.8% in September 2023 to 3.9% in October 2023. This rate was well below the record setting high of 14.7% in April 2020, but above the pre- pandemic unemployment rate of 3.5%. In October, the number of unemployed persons slightly increased from 6.4 million to 6.5 million.3

In the third quarter 2023, the Gross Domestic Product (GDP) increased at an annual rate of 4.9% according to the “advance” estimate released by the Bureau of Economic Analysis. This follows a GDP increase of 2.1% in the second quarter 2023. The estimated increase in the third quarter reflects increases in consumer spending, exports, state and local government spending, federal government spending, private inventory investment, and residential fixed investment that were partially offset by a decrease in nonresidential fixed investment.4

3 https://www.bls.gov/news.release/pdf/empsit.pdf
4 https://www.bea.gov/sites/default/files/2023-10/tech3q23_adv.pdf Chart 1. Unemploymen t rate, s.easonally adjusted ,
Octobe r 2021 - Octobe r 2021
Percent

5.5 5.0

4.0 3.5

3.0 Chait 2. Nonfarm payroll emplloyment over-the-mon~li'I change , seaso nally adj usted , Octobe r 2-021 - October 2021
Thousan ds
1,000
900
800
700
600
500
400
300
200
100
0 I
I
I
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-I Ill I I
I Ill Ill
2 .5 ~~~~~~~~~~~~~~~~~~ -WO
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I
Ocl-21 Jen-22 Apr-22 Jul-22 Ocl-22 Jen-23 Apr-23 Jul-23 Ocl-23 Oct-2 1 Jan- 22 Apr-22 Jul-22 Oct-22 Jan-23 .Apr-23 Ju!-23 Oct-23 R.eall GO:P: P•er-c,ent change from preceding quarter
40 30
20 10
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-20
-30
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20 9
Ql
2020
U.S. Bur,eau of Economic Analyi.i-5,
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Ql Ol
2022
Q4 Ql '12 '13
2023
S .ii;onally adju5 ed a,nnu ,a'I ra e5

3 City of Santa Clara
Financial Status Report as of September 30, 2023

At the state level, the California unemployment rate increased slightly from 4.6% in August 2023 to

4.7% in September 2023. This rate is higher compared to the 4.0% rate in September 2022. Since the current economic expansion began in April 2020, California has added 3.2 million jobs, regaining the

2.7 million jobs lost as a result of the pandemic.5
The unadjusted unemployment rate in the San José-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) was 3.3% in September 2023, down from a revised 3.9% in August 2023, but above the September 2022 estimate of 2.4%. Between September 2022 and September 2023, employment in this region increase by 18,400 jobs, or 1.6% The largest increases were in private education and health services (up 10,300 jobs), leisure and hospitality (up 9,000 jobs), and government (up 2,400 jobs).

Notable employment reductions were in professional and business services (down 4,000 jobs) and manufacturing (down 2,800 jobs).6
General Fund
The General Fund is the major operating fund for the City and includes multiple programs, services, and activities for the residents and businesses of the City. The adopted budget for operating revenues and expenditures for fiscal year 2023/24 was $281.8 million. The amended budget for revenues and expenditures was adjusted to $287.4 million to reflect carryover encumbrances from fiscal year 2022/23 and various budget amendments approved by the City Council through September 2023.

While it is very early in the f iscal year and limited data is available, General Fund revenues and expenditures are currently tracking with estimated levels.

5 https://edd.ca.gov/en/about_edd/news_releases_and_announcements/unemployment-september-2023/ 6 https://labormarketinfo.edd.ca.gov/file/lfmonth/sjos$pds.pdf

4 City of Santa Clara
Financial Status Report as of September 30, 2023

General Fund Revenues
As of September 30, 2023, $27.9 million or 10.2% of the General Fund estimated revenue (excluding transfers) was received. Transfers and use of reserves of $15.0 million have occurred as budgeted.

This very low collection level through September is largely due to the timing of payments. In some categories, a portion of the revenues received through September account for activity that occurred in FY 2022/23 and those revenues are accrued back to that year. In other cases, such as property tax, most payments are scheduled to occur later in the fiscal year.

Adopted Budget
Amended
Budget
Actual Through
9/30/2023
Percentage
Received
Actual Through
9/30/2022
$
Change From
Prior Year
Percentage
Change
TAXES
Sales Tax 60,524,000$ 60,524,000$ 5,013,575$ 8.28% 4,966,516$ 47,059$ 0.95% Property Tax 85,800,000 85,800,000 184,513 0.22% 219,652 (35,139) -16.00% Transient Occupancy Tax 21,275,000 21,275,000 1,319,673 6.20% 1,756,416 (436,743) -24.87% Other Taxes 6,750,000 6,750,000 667,689 9.89% 426,167 241,522 56.67% Total Taxes 174,349,000 174,349,000 7,185,450 4.12% 7,368,751 (183,301) -2.49%

LICENSES & PERMITS
Business Licenses 6,000,000 6,000,000 1,029,725 17.16% 215,614 814,111 377.58% Fire Operation Permits 2,000,000 2,000,000 340,223 17.01% 480,700 (140,477) -29.22% Miscellaneous Permits 69,000 69,000 98,442 142.67% 30,867 67,575 218.92% Total Licenses & Permits 8,069,000 8,069,000 1,468,390 18.20% 727,181 741,209 101.93% FINES & PENALTIES 1,225,000 1,225,000 604,657 49.36% 61,307 543,350 886.28% INTERGOVERNMENTAL 520,000 520,000 9,654 1.86% 80,566 (70,912) -88.02% CHARGES FOR SERVICES 29,314,768 29,662,668 7,270,797 24.51% 8,173,296 (902,499) -11.04% SILICON VALLEY POWER TRANSFER 32,000,000 32,000,000 8,227,562 25.71% 7,160,972 1,066,590 14.89%

USE OF MONEY & PROPERTY
Interest 3,500,000 3,500,000 (677,143) -19.35% 126,324 (803,467) -636.04% Rent 12,397,660 12,397,660 3,157,866 25.47% 2,718,503 439,363 16.16% Total Use of Money & Property 15,897,660 15,897,660 2,480,723 15.60% 2,844,827 (364,104) -12.80% MISCELLANEOUS REVENUES 180,000 180,000 79,362 44.09% 1,824,889 (1,745,527) -95.65%

LAND PROCEED - - - N/A - - N/A

OTHER FINANCING SOURCES
Operating Transfer In - Storm Drain 1,454,000 1,454,000 1,454,000 100.00% 1,454,000 - 0.00% Operating Transfer In - Reserves 2,772,275 8,012,113 8,012,113 100.00% 33,702,079 (25,689,966) -76.23% Operating Transfer In - Fund Balances(1) 4,759,683 4,759,683 4,759,683 100.00% 4,484,726 274,957 6.13% Operating Transfer In - Miscellaneous 746,044 746,044 746,044 100.00% 2,370,374 (1,624,330) -68.53% Total Other Financing Sources 9,732,002 14,971,840 14,971,840 100.00% 42,011,179 (27,039,339) -64.36%

STADIUM OPERATION
Charges for Services 9,278,128 9,278,128 561,121 6.05% 2,172,678 (1,611,557) -74.17% Rent and Licensing 1,230,000 1,230,000 - 0.00% 507,777 (507,777) -100.00% Total Stadium Operation 10,508,128 10,508,128 561,121 5.34% 2,680,455 (2,119,334) -79.07% TOTAL GENERAL FUND 281,795,558$ 287,383,296$ 42,859,556$ 14.91% 72,933,423$ (30,073,867)$ -41.23% (1) The Operating Transfer In - Fund Balances includes the carryover encumbrances of open purchase orders as of June 30, 2023 and mid year budget amendment from reserves.

Function

CITY OF SANTA CLARA

GENERAL FUND

REVENUES OVERVIEW AND COMPARISON BY TYPE
FISCAL YEAR 2023/24 PY REVENUE COMPARISON

5 City of Santa Clara
Financial Status Report as of September 30, 2023

General Fund Revenues
Sales Tax: The City of Santa Clara sales tax rate is 9.125%, of which the City receives 1.0%. As of September 30, 2023, approximately $5.0 million has been collected, which is consistent with prior year collection levels. Given the timing of payments, the sales tax payments reflected are for the month of July 2023.

Property Tax: Property tax receipts totaling $0.1 million were received through September 2023. The majority of property tax revenue is collected in February and April each year. Based on initial information from the County of Santa Clara, property tax receipts are projected to end the year above the Adopted Budget estimate of $85.8 million.

Transient Occupancy Tax (TOT): TOT is calculated as a percentage of City hotel/motel room charges. The City’s TOT rate is currently 11.5% and will increase to 12.5% effective January 1, 2024.

This rate increase was factored into the development of the FY 2023/24 Adopted Budget. Through September 30, 2023, approximately $1.3 million was received, which is 24.9% lower than prior year receipts. This lower collection level primarily reflects differences in the timing of payments.

Other Taxes: Includes franchise tax and documentary transfer tax. The City has collected $0.7 million through September, which is 56.7% higher than last fiscal year’s collection levels. Receipts through September reflect franchise tax collections of $0.6 million and approximately $0.1 million in documentary transfer tax revenue.

Licenses & Permits: Includes business licenses, fire operation permits, and miscellaneous permits and fees. Licenses and permits revenue collections are tracking below par with receipts totaling $1.5 million, or 18.2% of the $8.1 million budget. However, this represents a nearly 102% increase compared to prior year collection levels, primarily in the business license category. The updated Business License Tax is being implemented this fiscal year with the new methodology. With this transition and the need to re-register every business, the timeline to submit payments has been extended which has impacted actual receipts in the first few months. Staff will closely monitor results from the implementation to determine if any budget adjustments are necessary based on the actual collections.

Fines & Penalties: Includes vehicle, parking, court fines, and miscellaneous penalty fines. The revenue collected in this category through September was $0.6 million, or 49.4% of the budgeted estimate. Collections in this category are tracking well above the budget and the prior year due to the resumption of the assessment of late fees that had previously been waived due to COVID-19.

Intergovernmental: Includes motor vehicle fees, state homeowner tax relief, state mandated reimbursement and redistribution of land sale proceeds and ground leases from the Successor Agency.

Through September 30, 2023, $9,654 was collected in this category.

Charges for Ser vices: Includes various plan check and zoning-related fees, engineering fees, administrative fees, and community service revenue from various recreational activities. Through

6 City of Santa Clara
Financial Status Report as of September 30, 2023

September, collections of approximately $7.3 million are tracking at par at 24.5% of the budget. This reflects an 11% decrease compared to last year’s collections through the same period of $8.2 million.

This large decrease is a result of lower collections for engineering fees, planning and zoning fees, as well as fire construction permitting fees.

Silicon Valley Power Transfer: In accordance with the City’s charter, Silicon Valley Power pays 5.0% of gross revenues to the General Fund. Through September, $8.2 million has been transferred.

Transfers throughout the year are based on the budgeted estimate and will be trued up at the end of the fiscal year based on actual performance.

Use of Money & Property: Includes realized investment income and rental income. Through September, $2.5 million has been collected, compared to $2.8 million last fiscal year. This decrease is primarily due to higher prior year accruals in the interest category, which results in the negative amount under the interest category in the current year.

Miscellaneous Revenues: Includes developer fees, donations, damage recovery, sale of surplus, and one-time miscellaneous revenues. Through September 30, 2023, collections of $79,000 are significantly lower than prior year levels. This is attributable to the one-time settlement between the City, the Santa Clara Stadium Authority, and the Forty-Niners SC Stadium Company LLC and Forty Niners Stadium Management Company LLC (collectively, the Forty-Niners) recorded last fiscal year.

Stadium Op eration: Through September 2023, revenues of $0.6 million are tracking well below par at

5.3% of the budget due to the timing of reimbursements for the costs incurred by the City. Revenues are also significantly below prior year collection levels. Last year, the payment of older public safety invoices was submitted as part of the August 2022 legal settlement. Outstanding public safety invoices from 2020 and 2021 were paid in September 2022 as a result of the settlement.

7 City of Santa Clara
Financial Status Report as of September 30, 2023

General Fund Expenditures
As of September 30, 2023, $76.6 million o r 26.7% of the General Fund operating budget had be en expended. Overall, expenditures in the General Fund are within budgeted levels through September.

Departmental expenditures totaled $61.7 million, or 23.1% of the budget, which is below the par level of 25% of the budget. Transfers of $11.6 million have occurred as budgeted.

Adopted Budget
Amended
Budget
Actual Through
9/30/2023
Percentage
Use d
Actual Through
9/30/2022
$
Change From
Prior Year
Percentage
Change

GENERAL GOVERNMENT
Non-Departmental 15,123,531$ 15,640,480$ 2,499,761$ 15.98% 1,164,971$ 1,334,790$ 114.58% City Council 1,124,281 1,131,037 282,965 25.02% 150,004 132,961 88.64% City Clerk 1,947,261 2,121,865 344,072 16.22% 554,046 (209,974) -37.90% City Manager 5,410,204 5,938,327 852,846 14.36% 1,162,661 (309,815) -26.65% City Attorney 3,076,516 3,196,951 630,789 19.73% 790,741 (159,952) -20.23% Human Resources 4,300,090 4,464,113 785,034 17.59% 881,394 (96,360) -10.93% Finance 19,140,702 19,939,776 4,176,852 20.95% 4,142,280 34,572 0.83% Total General Government 50,122,585 52,432,549 9,572,319 18.26% 8,846,097 726,222 8.21% PUBLIC WORKS 24,857,521 26,175,381 5,702,914 21.79% 5,532,057 170,857 3.09% COMMUNITY DEVELOPMENT 5,121,256 5,227,061 1,277,915 24.45% 1,084,002 193,913 17.89% PARKS AND RECREATION 21,933,152 22,711,221 5,306,810 23.37% 5,051,867 254,943 5.05%

PUBLIC SAFETY
Fire 62,616,032 63,222,036 16,697,448 26.41% 17,232,293 (534,845) -3.10% Police 85,598,562 85,946,468 20,669,417 24.05% 20,162,027 507,390 2.52% Total Public Safety 148,214,594 149,168,504 37,366,865 25.05% 37,394,320 (27,455) -0.07% LIBRARY 11,135,937 11,229,696 2,498,581 22.25% 2,530,015 (31,434) -1.24% DEPARTMENTAL TOTAL 261,385,045 266,944,412 61,725,404 23.12% 60,438,358 1,287,046 2.13%

OTHER FINANCING USES
Operating Transfer Out - Miscellaneous 1,198,809 1,198,809 1,198,809 100.00% 38,809 1,160,000 2989.00% Operating Transfer Out - Debt Services 1,402,440 1,402,440 1,402,440 100.00% 1,402,275 165 0.01% Operating Transfer Out - Maintenance Dtrct 942,413 942,413 942,413 100.00% 842,700 99,713 11.83% Operating Transfer Out - Cemetery 796,000 796,000 796,000 100.00% 870,000 (74,000) -8.51% Operating Transfer Out - CIP 7,305,499 7,305,499 7,305,499 100.00% 8,641,613 (1,336,114) -15.46% Total Other Financing Uses 11,645,161 11,645,161 11,645,161 100.00% 11,795,397 (150,236) -1.27% STADIUM OPERATION 8,765,352 8, 793,722 3,239,740 36.84% 2,035,243 1,204,497 59.18% TOTAL GENERAL FUND 281,795,558$ 287,383,295$ 76,610,304$ 26.66% 74,268,998$ 2,341,307$ 3.15% Function

CITY OF SANTA CLARA

GENERAL FUND

EXPENDITURES OVERVIEW AND COMPARISON BY FUNCTION
FISCAL YEAR 2023/24 PY EXPENDITURES COMPARISON

8 City of Santa Clara
Financial Status Report as of September 30, 2023

General Fund Expenditures
Below is an explanation of certain budget to actual expenditure variances by program.

Non-Departmental: Includes expenditures that are not attributable to a single department, but a function of the City in general. Through September 30, 2023, expenditures totaled $2.5 million, or 16% of the budget. These expenditures are below the par level of 25%, but above prior year levels. This is a result of higher property insurance costs that have been directly budgeted under Non-Departmental, as opposed to allocated out amongst the departments citywide.

City Attorney: Actual expenditures through September totaled approximately $0.6 million, which is

19.7% of the budget, which is below par. Spending is significantly below the total expenditures through the same time last fiscal year by 20.2%. This decrease is due to lower expenditures in the outside legal counsel services.

City Clerk: Through September, actual expenditures were tracking below budget at $0.3 million or approximately 16.2% of the budget. This expenditure level reflects a 38% decrease in spending compared to last fiscal year due to one-time Granicus costs that are paid every other year.

City Coun cil: Through September, expenditures were at 25% of budget, which is at par. Compared to the same period through last fiscal year, this reflects a significant increase in expenditures. This is a result of the reallocation of 1.0 Assistant to the City Manager position from the City Manager’s Office as approved as part of the FY 2023/24 and FY 2024/25 Adopted Operating Budget.

City Manager: The actual expenditures through September 30, 2023 totaled $0.9 million, or 14.4% of the budget, which is below par for this time of the year. Expenditures are approximately 26.7% lower compared with the spending level through the same period last fiscal year. This is a result of vacancy savings within the department and the reallocation of 1.0 Assistant to the City Manager position to the City Council as mentioned above.

Community Development Department: This department consists of three divisions: Planning, Building, and Housing and Community Services. The Building Division of this department is reflected in the Building Development Services Fund, which falls under the special revenue section of this report.

Through September, departmental expenditures for the Planning and Housing and Community Services divisions totaled $1.3 million, or 24.5% of the budget, which is at par. This expenditure level is 18% above the prior year is a result of higher salaries and benefits costs and higher contractual services spending in the current year.

Finance Department: Thr ough September, the Department’s expenditures totaled $4.2 million, or 21% of the budget, which is below par. This expenditure level is consistent with prior year levels.

Fire Department: Through September, actual expenditures totaled $16.7 million, or 26.4% of the budget, which is slightly above par. These expenditures reflect a 3.1% decrease from expenditures through the same period last fiscal year. This is primarily because, as approved as part of the FY 2023/24 and FY 2024/25 Adopted Operating Budget, approximately 9.0 FTE were reallocated to the

9 City of Santa Clara
Financial Status Report as of September 30, 2023

newly established Fire Development Services Fee Fund. These charges are reflected under the special revenue section of this report. Overtime expenditures are tracking at 44.3% of the budget, which is above par for this time of year. While this overtime figure is high, it is important to note that overtime is used to backfill for vacant positions and the vacancy savings offset a portion of the overtime costs.

Library Department: Through September, actual expenditures totaled $2.5 million, or 22.3% of the budget, which is slightly below par, but slightly higher than expenditure levels last fiscal year. The Library continues to hire staff and fill vacancies to restore library hours.

Parks and Recreation Department: Through September, actual expenditures totaled $5.3 million, or

23.4% of the budget, which is slightly below par, but slightly higher than prior year actuals of $5.1 million. This is primarily due to higher spend in the salaries and benefits and utilities categories.

Police Department: Expenditures through September are tracking slightly below par at $20.7 million, or 24% of the budget. This expenditure level is 2.5% above the prior year.

Stadium Operation: Stadium operating expenditures are incurred first and billed on a reimbursement basis creating a timing difference in revenue recognition. Stadium expenditures totaled $3.2 million through September, which is significantly higher than prior year levels. This is primarily due to higher personnel spend, particularly in overtime. Events at the Stadium during September included one NFL game as well as the Ed Sheeran concert.

10 City of Santa Clara
Financial Status Report as of September 30, 2023

Special Revenue Funds
The table below is a summary of revenues and expenditures of select Special Revenue Funds as of September 30, 2023. The amended budget reflects carryover encumbrances from fiscal year 2022/23 and budget amendments approved by the City Council through September 2023. Effective July 1, 2023, development related services in the Fire Department have been reallocated from the General Fund to the newly established Fire Development Services Fund, reflected below.

Revenues totaled approximately $5.6 million, while expenditures totaled $5.4 million through the end of September. Overall, revenues and expenditures are tracking below par of 25%. In the Housing Successor Fund, the expenditures are significantly lower compared to last fiscal year due to a one-time special disbursement for a housing loan that occurred in July 2022.

Actual Actual $
Fund Adopted Amended Through Percentage Through Change From Percent Description Budget Budget 9/30/2023 received 9/30/2022 Prior Year Change Housing Authority Fund 252,495$ 252,495$ 63,247$ 25.05% 25,167$ 38,080$ 151.31% City Affordable Housing Fund 1,166,720 1,166,720 50,231 4.31% 100,884 (50,653) -50.21% Housing Successor Fund 1,306,326 1,306,326 170,252 13.03% 398,917 (228,665) -57.32% Housing and Urban Development 3,106,041 3,106,041 382,263 12.31% 398,960 (16,697) -4.19% Building Development Services Fee
Fund
15,611,000 15,611,000 4,024,759 25.78% 4,919,941 (895,182) -18.19% Fire Development Services Fee
Fund
2,935,000 2,935,000 877,639 29.90% 0 877,639 N/A
TOTAL 24,377,582$ 24,377,582$ 5,568,391$ 22.84% 5,843,869$ (275,478)$ -4.71% Actual Actual $
Fund Adopted Amended through Percentage through Change From Percent Description Budget Budget 9/30/2023 use d 9/30/2022 Prior Year Change Housing Authority Fund 457,193$ 518,659$ 42,189$ 8.13% 57,597$ (15,408)$ -26.75% City Affordable Housing Fund 6,683,926 7,435,503 277,139 3.73% (1,290,070) 1,567,209 -121.48% Housing Successor Fund 873,227 1,216,887 257,090 21.13% 1,773,105 (1,516,015) -85.50% Housing and Urban Development 3,993,723 4,753,782 399,273 8.40% 568,143 (168,870) -29.72% Building Development Services Fee
Fund
13,689,592 17,218,230 3,632,981 21.10% 3,140,147 492,834 15.69% Fire Development Services Fee
Fund
3,109,073 3,109,073 767,376 24.68% 0 767,376 N/A
TOTAL 28,806,734$ 34,252,134$ 5,376,048$ 15.70% 4,248,922$ 1,127,126$ 26.53%

PRIOR YEAR EXPENDITURE COMPARISON

CITY OF SANTA CLARA

SPECIAL REVENUE FUNDS

REVENUE AND EXPENDITURE - OVERVIEW AND COMPARISON BY FUND REVENUES - FISCAL YEAR 2023/24 PRIOR YEAR REVENUE COMPARISON EXPENDITURES - FISCAL YEAR 2023/24

11 City of Santa Clara
Financial Status Report as of September 30, 2023

Governmental Capital Improvement Funds
The table below lists the revenue for selected capital improvement funds. The amended budget reflects current year appropriations, prior year carryover, and budget amendments approved through September 2023. As of September 30, 2023, the capital fund revenue totaled $0.8 million.

REVENUES - FISCAL YEAR 2023/24
Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 9/30/2023 Use d Parks & Recreation -$ 4,280,995$ 4,280,995$ 132,063$ 3.08% Streets & Highways 5,495,232 15,988,284 21,483,516 102,859 0.48% Storm Drain 1,454,000 - 1,454,000 362,995 24.97% Related Santa Clara Developer 977,582 - 977,582 140,313 14.35% Patrick Henry Drive Infrastructure
Improvement Fund
140,486 - 140,486 - 0.00% Tasman East Specific Infrastructure
Improvement Fund
- - - 14,616 N/A TOTAL 8,067,300$ 20,269,279$ 28,336,579$ 752,846$ 2.66%

CITY OF SANTA CLARA

GOVERNMENTAL CAPITAL IMPROVEMENT FUNDS

REVENUE - OVERVIEW AND COMPARISON BY SELECTED FUND

The table below lists the total amended budgeted amounts for expenditures in the Capital Improvement Funds. Similar to the revenue table, the amended expenditure budgets consist of current year appropriations, prior year carryover encumbrance balances in Governmental Capital Improvement Funds, and budget amendments approved through September 2023. As of September 30, 2023, capital fund expenditures totaled $9.9 million, or 6.5% of the amended budget, well below par of 25%.

As part of the adoption of the FY 2023/24 and FY 2024/25 biennial operating budget, some capital funds were carried over for projects that were not anticipated to be completed by June 30, 2023.

Necessary additional adjustments to the capital carryover amounts will be included as part of the Budgetary Year-End Report for FY 2022/23, anticipated to be brought forward for City Council approval in December 2023.

12 City of Santa Clara
Financial Status Report as of September 30, 2023

EXPENDITURES - FISCAL YEAR 2023/24
Actual
Fund Current Year Pri or Year Total Amended Through Percentage Description Appropriation Carryforward Budget 9/30/2023 Used Parks & Recreation 2,719,457$ 38,184,533$ 40,903,990$ 3,237,443$ 7.91% Streets & Highways 17,776,700 62,604,298 80,380,998 5,424,671 6.75% Storm Drain 807,414 4,002,049 4,809,463 67,942 1.41% Fire 427,374 1,303,898 1,731,272 72,665 4.20% Library - 301,105 301,105 406 0.13% Public Buildings 1,590,019 9,319,499 10,909,518 567,705 5.20% General Gov't - Other 941,000 8,688,990 9,629,990 373,611 3.88% City Affordable Housing Capital Fund - 1,600,000 1,600,000 - 0.00% Related Santa Clara Developer 977,582 523,109 1,500,691 161,064 10.73% Patrick Henry Drive Infrastructure
Improvement Fund
71,281 - 71, 281 4,029 5.65% Tasman East Specific Infrastructure
Improvement Fund
27,330 1,423,145 1, 450,475 4,029 0.28% TOTAL 25,338,157$ 127,950,626$ 153,288,783$ 9,913,565$ 6.47%

CITY OF SANTA CLARA

SUMMARY OF EXPENDITURES

GOVERNMENTAL CAPITAL IMPROVEMENT FUNDS

13 City of Santa Clara
Financial Status Report as of September 30, 2023

Enterprise Funds
The table below is a summary of revenues and expenses for the Enterprise Operating Funds as of September 30, 2023. Overall, revenues and expenditures are tracking below budgeted levels.

Actual Actual $
Fund Adopted Amended Through Percentage Through Change From Percent Description Budget Budget 9/30/2023 received 9/30/2022 Prior Year Change Electric Utility Fund 1,008,222,211$ 1,008,222,211$ 144,823,775$ 14.36% 124,963,195$ 19,860,580$ 15.89% Water Utility Fund 60,726,490 60,726,490 13,272,180 21.86% 12,097,373 1,174,807 9.71% Sewer Utility Fund 73,500,825 78,500,825 8,947,880 11.40% 8,583,181 364,699 4.25% Cemetery Fund 750,000 750,000 112,497 15.00% 194,821 (82,324) -42.26% Solid Waste Utility Fund 39,577,957 39,577,957 7,740,949 19.56% 7,056,681 684,268 9.70% Water Recycling Fund 7,668,868 7,668,868 2,038,776 26.59% 1,458,174 580,602 39.82% TOTAL REVENUE 1,190,446,351$ 1,195,446,351$ 176,936,057$ 14.80% 154,353,425$ 22,582,632$ 14.63% Actual Actual $
Fund Adopted Amended through Percentage through Change From Percent Description Budget Budget 9/30/2023 Use d 9/30/2022 Prior Year Change Electric Utility Fund 681,590,706$ 687,147,483$ 138,554,412$ 20.16% 123,309,086$ 15,245,326$ 12.36% Water Utility Fund 54,015,131 56,158,029 8,756,636 15.59% 10,029,986 (1,273,350) -12.70% Sewer Utility Fund 53,980,961 54,497,527 9,342,530 17.14% 7,570,761 1,771,769 23.40% Cemetery Fund 1,534,349 1,534,349 294,071 19.17% 352,678 (58,607) -16.62% Solid Waste Utility Fund 38,782,622 42,314,984 7,603,240 17.97% 7,142,932 460,308 6.44% Water Recycling Fund 8,234,584 8,234,584 343,078 4.17% 1,532,646 (1,189,568) -77.62% TOTAL - Operating
Appropriations
838,138,353$ 849,886,956$ 164,893,967$ 19.40% 149,938,089$ 14,955,878$ 9.97%

CITY OF SANTA CLARA

ENTERPRISE OPERATING FUNDS

REVENUES AND EXPENSES - OVERVIEW AND COMPARISON BY FUND REVENUES - FISCAL YEAR 2023/24 PRIOR YEAR REVENUE COMPARISON PRIOR YEAR EXPENSE COMPARISONEXPENSES - FISCAL YEAR 2023/24

Both revenues and expenditures are tracking higher than the prior year levels. In the Electric Utility Fund, higher debt retirement and resource costs were incurred this fiscal year. In the Solid Waste Utility Fund, there were higher refuse collection charges, alongside higher garbage collection expenses. The significant drop in expenditure levels in the Water Recycling Fund is due to the timing of resource/production invoice payments.

Revenues in the electric (which also includes the Electric Debt Service Fund), water, and sewer utility (which also includes the Sewer Debt Service Fund) and water recycling funds are primarily from customer service charges. The activity levels for these customer service charges also impact the resource and production costs on the expenditure side for these funds. The lower the revenue from customer service charges, the lower the expenditures in the resource and production category.

14 City of Santa Clara
Financial Status Report as of September 30, 2023

A summary of revenue and expenses in the Enterprise Capital Improvement Funds is detailed in the table below. Actual revenue through September 30, 2023 totaled $1.9 million, consisting primarily of developer contributions in the Electric Utility Fund and sewer fees in the Sewer Utility Fund. Enterprise capital fund expenses totaled $23 million, or 4% of the amended budget. Similar to the general government capital funds, capital funds were carried over from FY 2022/23 as part of the FY 2023/24 and FY 2024/25 budget adoption process for those projects that were not expected to be completed by June 30, 2023. Additional necessary adjustments to the capital carryover amounts based on actual year-end expenditures will be brought forward for City Council approval in December 2023, as part of the budgetary year-end report for FY 2022/23.

Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 9/30/2023 Use d Electric Utility Fund 37,980,480$ 40,599,727$ 78,580,207$ 1,819,942$ 2.32% Sewer Utility Fund - - - 115,266 N/A Solid Waste Utility Fund 258,000 - 258,000 3,813 1.48% Convention Center Capital
Fund
- - - 6,032 N/A TOTAL - Revenue 38,238,480$ 40,599,727$ 78,838,207$ 1,945,053$ 2.47% Actual
Fund Current Year Prior Year Total Amended Through Percentage Description Appropriation Carryforward Budget 9/30/2023 Use d Electric Utility Fund 355,072,203$ 161,038,869$ 516,111,072$ 18,452,387$ 3.58% Street Lighting (1) 125,000 3,452,509 3,577,509 21,075 0.59% Water Utility Fund 6,114,502 5,316,334 11,430,836 638,843 5.59% Sewer Utility Fund 13,721,802 28,349,075 42,070,876 3,329,769 7.91% Cemetery Fund - 245,335 245,335 - 0.00% Solid Waste Utility Fund 765,000 271,756 1,036,756 249,198 24.04% Water Recycling Fund 50,000 - 50,000 4,033 8.07% Convention Center Capital
Fund
- 2,146,482 2,146,482 332,992 15.51%

TOTAL - CIP
Appropriations
375,848,506$ 200,820,360$ 576,668,866$ 23,028,297$ 3.99%

CITY OF SANTA CLARA

ENTERPRISE CAPITAL IMPROVEMENT FUNDS

SUMMARY OF EXPENSES
EXPENSES - FISCAL YEAR 2023/24

CITY OF SANTA CLARA

ENTERPRISE CAPITAL IMPROVEMENT FUNDS

REVENUE - OVERVIEW AND COMPARISON BY SELECTED FUND
REVENUES - FISCAL YEAR 2023/24

(1) Street Lighting fund is part of Electric Capital Improvement Funds

15 City of Santa Clara
Financial Status Report as of September 30, 2023

Fund Reserves
By policy, City Council established the City’s General Contingency Reserve, under which reserves for Budget Stabilization and Capital Projects were established. • Bud get Stabilization Reserve is set aside for weathering economic downturns, emergency financial crisis, or disaster situations. The reserve target is equal to the expenditures of the City’s General Fund operations for three months (90-day or 25% General Fund Adopted Operating Budget). In FY 2023/24, the City Council approved an exception to the policy to allow the Reserve to a minimum of 15% of expenditures.
• Capital Projects Reserve earmarks funds for the Capital Improvement Program.

Other General Reserves and Enterprise Fund Reserves included in this report are highlighted as follows:
• Technology Fee Reserve is set aside to update and/or replace the City’s aging technology and to ensure internal controls are in compliance with current business standard and legal requirements.
• L and Sale Reserve is net proceeds from the sale of City-owned land, with interest earned on these funds available to be appropriated for General Fund operating expenditures. This reserve is available for appropriation by City Council action.
• The Electric Utility Rate Stabilization Reserve and Operations and Maintenance Reserve assures sufficient operating cash is available to cover day-to-day expenses, address unforeseen cost increases or revenue shortfalls, and ensure debt service coverage. • The Replacement and Improvement Reserve in the Water and Sewer Utility Funds is for future capital improvement.

The table below summari zes select reserve balances.

16 City of Santa Clara
Financial Status Report as of September 30, 2023

DETAIL OF SELECTED FUND RESERVE BALANCES:

GENERAL

FUND ELECTRIC WATER
Budget Stabilization Reserve 47,592,520$
Capital Projects Reserve 6,132,290
Reserve for Programmed Capital Projects 986,657
Land Sale Reserve 18,481,037
Technology Fee Reserve 2,581,146
Electric Rate Stabilization Fund Reserve 56,776,613$
Electric Operations and Maintenance Reserve 150,765,556 Replacement & Improvement 303,090$
TOTALS 75,773,650$ 207,542,169$ 303,090$

CITY OF SANTA CLARA

RESERVE BALANCES
September 30, 2023

Donations to the City of Santa Clara
Donations received by department during the month of September 2023 and for fiscal year 2023/24 are shown in the table below.

Department Sep-23
Fis cal Year
2023/24
Year To Date Designated Use
City Manager's Office - 201 Help Your Neighbor Parks & Recreation - 8,000 Case Management Parks & Recreation 0 133 Roberta Jones Jr. Theatre
Parks & Recreation 7,725 20,150 Wade Brummal
Police 0 75,000 TEAM 200
TOTALS 7,725$ 103,484$

_____________________________________________________________________

MONTHLY INVESTMENT REPORT

September 2023

City of
Santa Clara
The Center of What 's Possible
City of Santa Clara
Monthly Investment Report

TABLE OF CONTENTS
Page #
1 Summary of Investment Portfolio 1
2 Summary of Investments 5
3 Investment Maturity Distribution Schedule 6
4 Attachment A: Investment Inventory With Market Value 7 1 CITY OF SANTA CLARA

SUMMARY OF INVESTMENT PORTFOLIO

All securities held by the City of Santa Clara as of September 30, 2023 were in compliance with the City's Investment Policy Statement regarding current market strategy and long-term goals and objectives. All securities held are rated A or higher by two nationally recognized rating agencies. There is adequate cash flow and maturity of investments to meet the City’s needs for the next six months.

The following table provides the breakdown of the total portfolio among the City, the Sports and Open Space Authority (SOSA), and the Housing Authority (HA) as of September 30, 2023.

On September 30, 2023 the cost value and market value of the City's unrestricted pooled investment portfolio were $963,868,568 and $928,737,697 respectively.

Investment Strategy and Market Update
At its September meeting, the Federal Reserve (Fed) kept the overnight target rate unchanged in its current range of 5.25% to

5.50%. They did, however, signal that interest rates may still need to be a bit higher to counteract inflationary pressures, as reflected by the half-percent increase in the year-end 2024 and 2025 median projections for overnight rates compared to June estimates. Fed Chair Jerome Powell noted that the Fed can now “proceed carefully” thanks to its aggressive tightening early in this cycle.

Inflation, as measured by CPI, posted a second straight significant monthly increase in September (+0.4%). This was in large part due to an increase in both shelter costs and gasoline prices. Overall, the CPI increased 3.7% from a year ago, holding at higher levels than June and July. However, core inflation, excluding food and energy prices, continue to moderate, rising 4.1% year-over- year (YoY), down from 4.3% in August and 4.7% in July. The most recent core inflation reading was the weakest since September 2021.

Inflation, as measured by CPI, posted a second straight significant monthly increase in September (+0.4%). This was in large part due to an increase in both shelter costs and gasoline prices. Overall, the CPI increased 3.7% from a year ago, holding at higher levels than June and July. However, core inflation, excluding food and energy prices, continue to moderate, rising 4.1% year-over- year (YoY), down from 4.3% in August and 4.7% in July. The most recent core inflation reading was the weakest since September 2021.

COST VALUE PERCENTAGE
City $962,915,055 99.90%
SOSA 8,839

0.00%
HA 944,674 0.10% Unrestricted $963,868,568 100.00%
Restricted Bond Proceeds 2,259,419

Total Investments $966,127,987
2 The 10-year U.S. Treasury yield closed September above 4.5% for the first time since October 2007. Sticky inflation, a “higher-for- longer” market consensus, increased Treasury borrowing, and reduced holdings by China and Japan weighed on the long end of the curve. The benchmark 3-month, 2- and 10-year U.S. Treasuries finished the month at 5.45%, 5.05% and 4.57%, moving up 0, 18 and 46 bps, respectively, during September.

The City's investment strategy for September 2023 was to invest funds not required to meet current obligations, in securities listed in the prevailing Investment Policy Statement, with maturities not to exceed five years from date of purchase. This strategy ensures safety of the City’s funds, provides liquidity to meet the City’s cash needs , and earns a reasonable portfolio return. PFM Asset Management LLC began actively managing the City’s securities portfolio on September 1, 2020.

As of September 30, 2023, 37.50% of the City’s portfolio consists of U.S. Treasury Notes, 19.44% consists of investment grade Corporate Notes, 18.48% consists of California Asset Management Program (CAMP), 11.72% consists of Federal Agencies, 4.58% consists of investment grade Mortgage -Backed Securities, 4.48% consists of investment grade Asset -Back Securities, 1.53% consists of Negotiable Certificates of Deposit, 1.14% consists of investment grade Supranational Obligations, 0.60% consists of Local Agency Investment Fund (LAIF), and 0.28% consists of investment grade Municipal Bonds. In addition, City bond proceeds are invested in separate funds and are not included in the calculation of the City’s portfolio yield.

U.S. Treasury Notes

37.50%
Federal Agency Notes

11.72%
Corporate Notes

19.44%
Municipal Bonds

0.28%
Supranational Obligations

1.14%
Asset-Backed Securities

4.48%
Negotiable Certificates of
Deposit

1.53%
Mortgage-Backed Securities

4.58%
Money Market Fund

0.01%
Local Agency Investment Fund (LAIF)

0.60%
California Asset Management
Program (CAMP)

18.48%
Mutual Fund - Traffic Mitigation
Bond Proceeds

0.24%
3 The City’s securities portfolio is benchmarked against the ICE BAML 1-5 US Treasury Index.

2.77%

3.31%

3.45%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%
Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Securities Portfolio Yield at Cost vs Index 24-Month Average of Yield at Market Securities Portfolio (yield at cost)
City's Benchmark Index (24-month rolling average market yield) BofA 1-5 AAA-A Corp & Gov't Index (24-month rolling average market yield) T T T r T T T
4 The following table summarizes the investment yields other information of the City’s investment portfolio components, along with comparable-maturity market indices. Also shown are the monthly interest income and aggregate year-to-date income.

Current Month
9/30/2023
Investment Yield
Liquidity Portfolio1 5.48%
LAIF average monthly yield 3.53%

Securities Portfolio2 2.77%
ICE BAML 1-5 US Treasury Index (24-month rolling average market yield) 3.31% ICE BAML 1-5 AAA-A US Corporate & Government Index (24-month rolling average market yield) 3.45%

City Portfolio (Liquidity + Securities) 3.31%

Investment Total Return*
Securities Portfolio -0.32%
ICE BAML 1-5 US Treasury Index -0.34%
ICE BAML 1-5 AAA-A US Corporate & Government Index -0.36%

Average Maturity of Investments (in years)
Liquidity Portfolio1 0.08
Securities Portfolio2 2.85
City Portfolio (Liquidity + Securities) 2.28
ICE BAML 1-5 US Treasury Index 2.74
ICE BAML 1-5 AAA-A US Corporate & Government Index 2.75

Interest Income Current Month3 $ 2,322,293
Interest Income Fiscal Year-To-Date3 $ 6,279,095

1. Consists of CAMP Pool, LAIF, Dreyfus Traffic Mitigation Fund, & Principal Sweep Account

2. Core long term portfolio managed by PFM Asset Management

3. Cash basis
* Total rate of return including earnings, distributions, and capital appreciation/depreciation of all portfolio assets

5 CITY OF SANTA CLARA
SUMMARY OF INVESTMENTS SEPTEMBER 30, 2023

PER
COST % OF INVESTMENT

INVESTMENT TYPE VALUE PORTFOLIO POLICY

U.S. Treasury Notes 362,334,012 37.50% No Limit Federal Agency Notes 113,199,692 11.72% 80% Corporate Notes 187,836,386 19.44% 25%
Municipal Bonds 2,715,000 0.28% 20%
Supranational Obligations 11,056,812 1.14% 20% Asset-Backed Securities 43,328,476 4.48% 10% Negotiable Certificates of Deposit 14,770,000 1.53% 30% Mortgage-Backed Securities 44,272,608 4.58% 15% Money Market Fund 117,864 0.01% 10% Per Fund Local Agency Investment Fund (LAIF) 5,761,429 0.60% $75 M California Asset Management Program (CAMP) 178,476,289 18.48% No Limit Mutual Fund - Traffic Mitigation Bond Proceeds 2,259,419 0.24% 10% Per Fund TOTAL INVESTMENTS $ 966,127,987 100.00%

6 MATURITY

INVESTMENT MATURITY DISTRIBUTION
AS OF SEPTEMBER 30, 2023

UNRESTRICTED POOLED PORTFOLIO

NUMBER OF

IIN MONTHS) COST VALUE INVESTMENTS DISTRIBUTION
DEMAND $ 184,355,582 (a) 3 19.13%
0 TO 6 5,623,916 1 0.58%
7 TO 12 57,440,843 10 5.96%
13 TO 18 110,354,386 19 11.45%
19 TO 24 99,483,835 18 10.32%
25 TO 30 97,774,334 21 10.14%
31 TO 36 56,843,187 11 5.90%
37 TO 42 60,991,936 13 6.33%
43 TO 48 70,653,316 12 7.33%
49 TO 54 120,042,885 19 12.45%
55 TO 60 100,304,348 18 10.41%
60+ 0.00%
TOTAL $ 963,868,568 145 100.00%
l\verage Matu1itJ1 of Unrestricted Pool: 2.28 Years
(a) $20 million is earmarked for the City's Electric Utility power-trading. 24%
22%
20%
18%
16%
Q)
"' ~
Q) 14%
~
Q)
Cl.

C: 0
~
12%
.0
E .!<?
0 10%
8%
6%
...

INVESTMENT MATURITY DISTRIBUTION

UNRESTRICTED POOLED PORTFOLIO
AS OF SEPTEMBER 3-0, 2023
Maturity (Months)
City of Santa Clara Monthly Report
9/30/2023
Description Issue Date Coupon  Rate Maturity  Date CUSIP Par Value S&P  Rating Settle  Date Cost  Value YTM  at Cost Market  Value Unrealized  G/L UNITED STATES TREASURY 7/15/2021 0.375% 7/15/2024 91282CCL3 2, 910,000.00 AA+ 9/10/2021 2,908,181.25 0.40% 2,796,568.20 -111,613.05 UNITED STATES TREASURY 7/31/2017 2.125% 7/31/2024 9128282N9 5,000, 000.00 AA+ 9/10/2019 5,133,315.75 1.56% 4,863,650.00 -269,665.75 UNITED STATES TREASURY 8/31/2017 1.875% 8/31/2024 9128282U3 2,985, 000.00 AA+ 3/10/2020 3,149,640.66 0.62% 2,889,509.85 -260,130.81 UNITED STATES TREASURY 8/31/2019 1.250% 8/31/2024 912828YE4 4,750, 000.00 AA+ 1/5/2021 4,928,867.19 0.21% 4,571,495.00 -357,372.19 UNITED STATES TREASURY 10/31/2017 2.250% 10/31/2024 9128283D0 10,000, 000.00 AA+ 11/18/2019 10,290,625.00 1.64% 9,667,600.00 -623,025.00 UNITED STATES TREASURY 11/30/2017 2.125% 11/30/2024 9128283J7 5,000, 000.00 AA+ 1/6/2020 5,118,945.31 1.62% 4,817,200.00 -301,745.31 UNITED STATES TREASURY 1/2/2018 2.250% 12/31/2024 9128283P3 10,000, 000.00 AA+ 1/7/2020 10,300,781.25 1.62% 9,629,700.00 -671,081.25 UNITED STATES TREASURY 1/15/2022 1.125% 1/15/2025 91282CDS7 2, 095,000.00 AA+ 4/12/2022 2,007,026.37 2.71% 1,986,164.75 -20,861.62 UNITED STATES TREASURY 1/31/2020 1.375% 1/31/2025 912828Z52 5,000, 000.00 AA+ 4/22/2020 5,238,671.88 0.37% 4,747,650.00 -491,021.88 UNITED STATES TREASURY 1/31/2020 1.375% 1/31/2025 912828Z52 1,950, 000.00 AA+ 5/7/2021 2,013,146.48 0.50% 1,851,583.50 -161,562.98 UNITED STATES TREASURY 2/28/2018 2.750% 2/28/2025 9128283Z1 6,200, 000.00 AA+ 3/6/2020 6,850,757.82 0.61% 5,986,658.00 -864,099.82 UNITED STATES TREASURY 8/31/2020 0.250% 8/31/2025 91282CAJ0 4, 120,000.00 AA+ 8/2/2021 4,075,581.25 0.52% 3,759,335.20 -316,246.05 UNITED STATES TREASURY 10/31/2020 0.250% 10/31/2025 91282CAT8 5, 510,000.00 AA+ 6/7/2022 5,024,216.04 3.00% 4,996,247.60 -27,968.44 UNITED STATES TREASURY 10/31/2020 0.250% 10/31/2025 91282CAT8 5, 400,000.00 AA+ 10/7/2021 5,285,882.81 0.78% 4,896,504.00 -389,378.81 UNITED STATES TREASURY 11/30/2020 0.375% 11/30/2025 91282CAZ4 4, 450,000.00 AA+ 11/4/2021 4,327,625.00 1.07% 4,031,967.00 -295,658.00 UNITED STATES TREASURY 12/31/2020 0.375% 12/31/2025 91282CBC4 3, 820,000.00 AA+ 5/3/2021 3,751,956.25 0.76% 848,016.01 -2,903,940.24 UNITED STATES TREASURY 1/31/2021 0.375% 1/31/2026 91282CBH3 4, 050,000.00 AA+ 1/6/2022 3,906,351.56 1.27% 895,343.96 -3,011,007.60 UNITED STATES TREASURY 1/31/2021 0.375% 1/31/2026 91282CBH3 7,735, 000.00 AA+ 2/25/2022 7,305,949.22 1.84% 1,709,996.43 -5,595,952.79 UNITED STATES TREASURY 1/31/2021 0.375% 1/31/2026 91282CBH3 8, 710,000.00 AA+ 5/3/2022 7,905,345.70 3.00% 13,362,292.31 5,456,946.61 UNITED STATES TREASURY 1/31/2021 0.375% 1/31/2026 91282CBH3 8, 025,000.00 AA+ 11/30/2021 7,817,478.52 1.01% 12,311,411.69 4,493,933.17 UNITED STATES TREASURY 2/28/2021 0.500% 2/28/2026 91282CBQ3 3,575, 000.00 AA+ 8/31/2021 3,574,577.43 0.70% 1,947,275.68 -1,627,301.75 UNITED STATES TREASURY 2/28/2021 0.500% 2/28/2026 91282CBQ3 5, 175,000.00 AA+ 12/7/2021 5,035,517.58 1.15% 7,877,712.50 2,842,194.92 UNITED STATES TREASURY 5/31/2021 0.750% 5/31/2026 91282CCF6 5,860, 000.00 AA+ 3/21/2022 5,520,989.84 2.20% 3,416,428.43 -2,104,561.41 UNITED STATES TREASURY 5/31/2021 0.750% 5/31/2026 91282CCF6 9, 250,000.00 AA+ 6/8/2022 8,477,480.47 2.99% 13,570,139.90 5,092,659.43 UNITED STATES TREASURY 8/15/2016 1.500% 8/15/2026 9128282A7 5,350, 000.00 AA+ 8/15/2022 5,033,388.67 3.08% 4,876,632.00 -156,756.67 UNITED STATES TREASURY 9/30/2021 0.875% 9/30/2026 91282CCZ2 8, 500,000.00 AA+ 4/5/2022 7,878,769.53 2.61% 7,584,890.00 -293,879.53 UNITED STATES TREASURY 10/31/2021 1.125% 10/31/2026 91282CDG3 5, 700,000.00 AA+ 8/8/2022 5,267,601.56 3.05% 5,107,314.00 -160,287.56 UNITED STATES TREASURY 11/15/2016 2.000% 11/15/2026 912828U24 8,840, 000.00 AA+ 6/8/2022 8,472,242.19 3.01% 4,392,115.96 -4,080,126.23 UNITED STATES TREASURY 12/31/2021 1.250% 12/31/2026 91282CDQ1 5, 340,000.00 AA+ 4/14/2022 5,000,617.97 2.69% 4,783,465.20 -217,152.77 UNITED STATES TREASURY 2/15/2017 2.250% 2/15/2027 912828V98 2,100, 000.00 AA+ 4/20/2022 2,040,691.41 2.88% 1,046,921.24 -993,770.17 UNITED STATES TREASURY 2/15/2017 2.250% 2/15/2027 912828V98 5,400, 000.00 AA+ 6/13/2022 5,159,109.38 3.29% 2,692,083.20 -2,467,026.18 UNITED STATES TREASURY 2/15/2017 2.250% 2/15/2027 912828V98 7,910, 000.00 AA+ 7/7/2022 7,705,452.34 2.85% 14,219,885.70 6,514,433.36 UNITED STATES TREASURY 3/31/2022 2.500% 3/31/2027 91282CEF4 940,000.00 AA+ 11/30/2022 883,159.38 4.03% 873,137.80 -10,021.58 UNITED STATES TREASURY 4/30/2020 0.500% 4/30/2027 912828ZN3 7,000, 000.00 AA+ 8/3/2022 6,262,812.50 2.89% 6,035,330.00 -227,482.50 UNITED STATES TREASURY 5/15/2017 2.375% 5/15/2027 912828X88 5,400, 000.00 AA+ 8/8/2022 5,248,546.88 3.01% 4,979,826.00 -268,720.88 UNITED STATES TREASURY 6/30/2020 0.500% 6/30/2027 912828ZV5 5,675, 000.00 AA+ 8/15/2022 5,034,789.06 3.00% 4,861,659.00 -173,130.06 UNITED STATES TREASURY 7/31/2022 2.750% 7/31/2027 91282CFB2 10, 800,000.00 AA+ 9/14/2022 10,392,046.88 3.60% 10,060,416.00 -331,630.88 UNITED STATES TREASURY 8/15/2017 2.250% 8/15/2027 9128282R0 11,115, 000.00 AA+ 9/6/2022 10,537,975.20 3.40% 10,157,220.45 -380,754.75 UNITED STATES TREASURY 9/30/2022 4.125% 9/30/2027 91282CFM8 3, 785,000.00 AA+ 11/3/2022 3,760,308.79 4.27% 3,706,196.30 -54,112.49 UNITED STATES TREASURY 10/31/2020 0.500% 10/31/2027 91282CAU5 21, 480,000.00 AA+ 1/6/2023 18,292,401.56 3.91% 18,169,932.00 -122,469.56 UNITED STATES TREASURY 10/31/2022 4.125% 10/31/2027 91282CFU0 10, 930,000.00 AA+ 12/8/2022 11,081,995.31 3.81% 10,697,300.30 -384,695.01 UNITED STATES TREASURY 10/31/2022 4.125% 10/31/2027 91282CFU0 5, 100,000.00 AA+ 12/13/2022 5,165,343.75 3.83% 4,991,421.00 -173,922.75 UNITED STATES TREASURY 10/31/2022 4.125% 10/31/2027 91282CFU0 4, 750,000.00 AA+ 1/31/2023 4,833,310.55 3.72% 4,648,872.50 -184,438.05 UNITED STATES TREASURY 12/31/2022 3.875% 12/31/2027 91282CGC9 8, 255,000.00 AA+ 1/31/2023 8,320,459.57 3.70% 8,000,580.90 -319,878.67 10/11/2023 4:52 PM 1 of 5
Attachment A
City of Santa Clara Monthly Report
9/30/2023
Description Issue Date Coupon  Rate Maturity  Date CUSIP Par Value S&P  Rating Settle  Date Cost  Value YTM  at Cost Market  Value Unrealized  G/L UNITED STATES TREASURY 12/31/2022 3.875% 12/31/2027 91282CGC9 4, 850,000.00 AA+ 2/2/2023 4,906,078.13 3.62% 4,700,523.00 -205,555.13 UNITED STATES TREASURY 12/31/2022 3.875% 12/31/2027 91282CGC9 7, 325,000.00 AA+ 2/8/2023 7,333,583.98 3.85% 7,099,243.50 -234,340.48 UNITED STATES TREASURY 1/31/2021 0.750% 1/31/2028 91282CBJ9 5,815, 000.00 AA+ 2/7/2023 5,009,758.79 3.83% 2,983,204.67 -2,026,554.12 UNITED STATES TREASURY 1/31/2023 3.500% 1/31/2028 91282CGH8 7,505, 000.00 AA+ 5/16/2023 7,508,517.97 3.49% 3,774,798.48 -3,733,719.49 UNITED STATES TREASURY 2/28/2023 4.000% 2/29/2028 91282CGP0 6,600, 000.00 AA+ 3/7/2023 6,526,781.25 4.25% 3,387,523.22 -3,139,258.03 UNITED STATES TREASURY 2/28/2023 4.000% 2/29/2028 91282CGP0 7, 360,000.00 AA+ 5/16/2023 7,532,500.00 3.46% 8,130,586.39 598,086.39 UNITED STATES TREASURY 3/31/2021 1.250% 3/31/2028 91282CBS9 5,820, 000.00 AA+ 5/9/2023 5,236,408.59 3.50% 3,262,013.43 -1,974,395.16 UNITED STATES TREASURY 3/31/2021 1.250% 3/31/2028 91282CBS9 5,470, 000.00 AA+ 5/10/2023 4,912,530.08 3.54% 3,065,844.24 -1,846,685.84 UNITED STATES TREASURY 3/31/2023 3.625% 3/31/2028 91282CGT2 5, 030,000.00 AA+ 5/2/2023 5,023,712.50 3.65% 5,468,408.01 444,695.51 UNITED STATES TREASURY 3/31/2023 3.625% 3/31/2028 91282CGT2 5, 765,000.00 AA+ 5/4/2023 5,816,569.73 3.42% 10,348,842.65 4,532,272.92 UNITED STATES TREASURY 4/30/2023 3.500% 4/30/2028 91282CHA2 5, 075,000.00 AA+ 5/2/2023 5,042,488.28 3.64% 4,837,134.75 -205,353.53 UNITED STATES TREASURY 5/31/2023 3.625% 5/31/2028 91282CHE4 11,735, 000.00 AA+ 6/5/2023 11,695,577.73 3.70% 9,805,105.59 -1,890,472.14 UNITED STATES TREASURY 6/30/2023 4.000% 6/30/2028 91282CHK0 1, 700,000.00 AA+ 7/3/2023 1,687,183.59 4.17% 1,442,187.81 -244,995.78 UNITED STATES TREASURY 6/30/2023 4.000% 6/30/2028 91282CHK0 11, 300,000.00 AA+ 7/10/2023 11,117,699.22 4.36% 12,653,160.00 1,535,460.78 UNITED STATES TREASURY 7/31/2023 4.125% 7/31/2028 91282CHQ7 4, 950,000.00 AA+ 8/2/2023 4,921,962.89 4.25% 4,843,278.00 -78,684.89 UNITED STATES TREASURY 8/31/2023 4.375% 8/31/2028 91282CHX2 1, 735,000.00 AA+ 8/31/2023 1,742,726.17 4.28% 1,717,788.80 -24,937.37 U.S. Treasury Bond / Note Subtotal 373,975,000.00 362,334,012.01 346,835,292.10 -15,498,719.91 FANNIE MAE 7/8/2019 1.750% 7/2/2024 3135G0V75 15,000,000. 00 AA+ 12/18/2019 15,566,089.75 0.90% 14,585,400.00 -980,689.75 FANNIE MAE 1/10/2020 1.625% 1/7/2025 3135G0X24 7,500,000. 00 AA+ 1/22/2020 7,499,025.00 1.63% 7,157,475.00 -341,550.00 FANNIE MAE 4/24/2020 0.625% 4/22/2025 3135G03U5 10,000,000. 00 AA+ 5/7/2020 10,050,600.00 0.52% 9,306,400.00 -744,200.00 FANNIE MAE 11/12/2020 0.500% 11/7/2025 3135G06G3 1,860,000. 00 AA+ 12/29/2020 1,864,929.00 0.44% 1,691,446.80 -173,482.20 FNMA Medium Term Note Subtotal 34,360,000.00 34,980,643.75 32,740,721.80 -2,239,921.95 FEDERAL FARM CREDIT BANKS 4/22/2019 2.450% 7/22/2024 3133EKHV1 5,000,000.00 AA+ 9/4/2019 5,250,650.00 1.38% 4,883,050.00 -367,600.00 FEDERAL FARM CREDIT BANKS 11/1/2019 1.650% 11/1/2024 3133EK4Y9 5,000,000.00 AA+ 11/8/2019 4,962,850.00 1.81% 4,802,450.00 -160,400.00 FEDERAL FARM CREDIT BANKS 1/23/2020 1.650% 1/23/2025 3133ELJM7 7,320,000.00 AA+ 5/18/2020 7,689,367.20 0.56% 6,971,714.40 -717,652.80 FEDERAL FARM CREDIT BANKS 5/14/2020 0.500% 5/14/2025 3133ELZM9 10,000,000.00 AA+ 5/15/2020 9,982,800.00 0.53% 9,275,400.00 -707,400.00 FEDERAL FARM CREDIT BANKS 6/9/2020 0.500% 6/9/2025 3133ELH23 10,000,000.00 AA+ 6/12/2020 9,997,540.00 0.50% 9,225,600.00 -771,940.00 FFCB Medium Term Note Subtotal 37,320,000.00 37,883,207.20 35,158,214.40 -2,724,992.80 FEDERAL FARM CREDIT BANKS 7/2/2020 0.500% 7/2/2025 3133ELR71 10,000,000.00 AA+ 7/14/2020 10,017,640.00 0.46% 9,209,700.00 -807,940.00 FFCB Coupon Note Subtotal 10,000,000.00 10,017,640.00 9,209,700.00 -807,940.00 FEDERAL HOME LOAN BANKS 5/8/2014 2.875% 6/14/2024 3130A1XJ2 5,000,000.00 AA+ 11/20/2019 5,270,205.00 1.64% 4,904,200.00 -366,005.00 FEDERAL HOME LOAN BANKS 11/6/2014 2.750% 12/13/2024 3130A3GE8 5,000,000.00 AA+ 3/12/2020 5,461,300.00 0.77% 4,844,500.00 -616,800.00 FHLB Medium Term Note Subtotal 10,000,000.00 10,731,505.00 9,748,700.00 -982,805.00 FREDDIE MAC 2/14/2020 1.500% 2/12/2025 3137EAEP0 5,000,000.00 AA+ 5/20/2020 5,226,960.00 0.53% 4,752,600.00 -474,360.00 FREDDIE MAC 8/30/2022 4.050% 8/28/2025 3134GXS54 5,000,000. 00 AA+ 8/30/2022 4,998,000.00 4.06% 4,874,950.00 -123,050.00 FREDDIE MAC 9/25/2020 0.375% 9/23/2025 3137EAEX3 9,390,000.00 AA+ 9/25/2020 9,361,736.10 0.44% 8,561,426.40 -800,309.70 FHLMC Medium Term Note Subtotal 19,390,000.00 19,586,696.10 18,188,976.40 -1,397,719.70 10/11/2023 4:52 PM 2 of 5
Attachment A
City of Santa Clara Monthly Report
9/30/2023
Description Issue Date Coupon  Rate Maturity  Date CUSIP Par Value S&P  Rating Settle  Date Cost  Value YTM  at Cost Market  Value Unrealized  G/L FANNIEMAE-ACES 7/1/2023 4.190% 7/1/2028 3136BQDE6 7,600,000.00 AA+ 7/31/2023 7,471,156.25 4.58% 7,271,155.60 -200,000.65

FHLMC MULTIFAMILY
STRUCTURED P 1/30/2017 3.347% 11/1/2026 3137BTUM1 5,354,000.00 AA+ 5/ 24/2023 5,189,197.19 4.31% 5,051,552.54 -137,644.65

FHLMC MULTIFAMILY
STRUCTURED P 5/15/2017 3.224% 3/1/2027 3137BXQY1 8,000,000.00 AA+ 8/18/2023 7,546,250.00 4.98% 7,504,480.00 -41,770.00

FHLMC MULTIFAMILY
STRUCTURED P 7/1/2017 3.243% 4/1/2027 3137F1G44 4,545,000.00 AA+ 8/18/2023 4,285,260.35 4.97% 4,264,482.60 -20,777.75

FHLMC MULTIFAMILY
STRUCTURED P 8/1/2017 3.117% 6/1/2027 3137F2LJ3 6,525,000.00 AA+ 8/22/2023 6,101,894.53 5.01% 6,072,360.75 -29,533.78

FHLMC MULTIFAMILY
STRUCTURED P 7/1/2023 4.819% 6/1/2028 3137HACX2 7,500,000.00 AA+ 7/20/2023 7,574,910.00 4.59% 7,352,550.00 -222,360.00

FHLMC MULTIFAMILY
STRUCTURED P 7/1/2023 4.777% 6/1/2028 3137HAD45 6,104,092.67 AA+ 7/27/2023 6,103,940.06 4.78% 5,992,265.69 -111,674.37 Federal Agency Commercial Mortgage-Backed Security Subtotal 45,628,092.67 44,272,608.38 43,508,847.18 -763,761.20

INTER-AMERICAN
DEVELOPMENT BANK 9/23/2021 0.500% 9/23/2024 4581X0DZ8 11,065,000.00 AAA 9/23/2021 11,056,811.90 0.52% 10,527,019.70 -529,792.20 Supranational Subtotal 11,065,000.00 11,056,811.90 10,527,019.70 -529,792.20

LOS ANGELES COMMUNITY
COLLEGE DISTRICT C 11/10/2020 0.773% 8/1/2025 54438CYK2 2,715,000.00 AA+ 11/10/2020 2,715,000.00 0.77% 2,494,650.60 -220,349.40 Municipals Subtotal 2,715,000.00 2,715,000.00 2,494,650.60 -220,349.40 3M COMPANY 3/27/2020 2.650% 4/15/ 2025 88579YBM2 2,560,000.00 BBB+ 4/25/2022 2,511,616.00 3.32% 2,434,560.00 -77,056.00 ADOBE INC 1/26/2015 3.250% 2/1/2025 00724FAC5 4,000,000.00 A+ 1/26/2022 4,183, 680.00 1.68% 3,885,800.00 -297,880.00 ALPHABET INC 8/9/2016 1.998% 8/15/2026 02079KAC1 5,740,000. 00 AA+ 1/30/2023 5,354,386.80 4.05% 5,054,359.72 -300,027.08 AMAZON.COM INC 5/12/2021 0.450% 5/12/2024 023135BW5 245, 000.00 AA 5/12/2021 302,801.19 0.50% 227,129.08 -75,672.11 AMAZON.COM INC 5/12/2021 0.450% 5/12/2024 023135BW5 4,000,000.00 AA 3/14/2022 3,874,280.00 1.94% 4,113,447.45 239,167.45 AMAZON.COM INC 4/13/2022 3.300% 4/ 13/2027 023135CF1 6,715,000.00 AA 4/25/2022 6, 672,964.10 3.44% 6,318,143.50 -354,820.60 APPLE INC 11/13/2017 2.750% 1/13/2025 037833DF4 5,000,000.00 AA+ 3/9/2021 5,340,100.00 0.94% 4,832,650.00 -507,450.00 APPLE INC 11/13/2017 2.750% 1/13/2025 037833DF4 5,000,000.00 AA+ 3/29/2021 5,355,200.00 0.84% 4,832,650.00 -522,550.00 BANK OF AMERICA CORP 3/22/2022 3.384% 4/2/2026 06051GKM0 5,000,000.00 A- 3/22/2022 5,005,100.00 3.36% 4,785,500.00 -219,600.00 BANK OF AMERICA CORP 8/18/2023 5. 526% 8/18/2026 06428CAA2 4,000,000.00 A+ 8/18/2023 3,998,360.00 5.54% 3,980,600.00 -17,760.00 BANK OF AMERICA CORP 4/22/2021 1.734% 7/22/2027 06051GJS9 1, 420,000.00 A- 8/10/2022 1,281,251.80 3.92% 1,258,347.20 -22,904.60 BANK OF NY MELLON CORP 1/28/2021 0.750% 1/28/2026 06406RAQ0 9 ,000,000.00 A 2/10/2021 9,025,920.00 0.69% 8,081,190.00 -944,730.00 BLACKROCK INC 3/28/2017 3.200% 3/15/ 2027 09247XAN1 4,140,000.00 AA- 5/18/2022 4,085,352.00 3.50% 3,872,556.00 -212,796.00 BLACKROCK INC 3/28/2017 3.200% 3/15/ 2027 09247XAN1 4,140,000.00 AA- 5/18/2022 4,086,055.80 3.50% 3,872,556.00 -213,499.80 BRISTOL-MYERS SQUIBB CO 11/13/2020 0.750% 11/13/2025 110122DN5 5, 725,000.00 A+ 6/30/2021 5,672,673.50 0.96% 5,203,051.75 -469,621.75 CITIGROUP INC 9/29/2023 5.803% 9/ 29/2028 17325FBB3 11,225,000.00 A+ 9/29/2023 11,225,000.00 5.80% 11,226,571.50 1,571.50 ELI LILLY & CO 3/5/2015 2.750% 6/1/2025 532457BH0 5,415,000.00 A+ 2/10/2022 5,559,255.60 1.91% 5,189,248.65 -370,006.95 HERSHEY COMPANY 8/21/2015 3.200% 8/21/2025 427866AU2 3,000,000.00 A 3/30/2022 3,014,040.00 3.05% 2,886,030.00 -128,010.00 10/11/2023 4:52 PM 3 of 5
Attachment A
City of Santa Clara Monthly Report
9/30/2023
Description Issue Date Coupon  Rate Maturity  Date CUSIP Par Value S&P  Rating Settle  Date Cost  Value YTM  at Cost Market  Value Unrealized  G/L HOME DEPOT INC 9/14/2017 2.800% 9/14/2027 437076BT8 7,805, 000.00 A 1/27/2023 7,364,719.95 4.15% 7,149,067.80 -215,652.15 HONEYWELL INTERNATIONAL 5/18/2020 1.350% 6/1/2025 438516CB0 5,000,000.00 A 9/8/2021 5,097,900.00 0.82% 4,679,600.00 -418,300.00 HONEYWELL INTERNATIONAL 5/18/2020 1.350% 6/1/2025 438516CB0 2,255,000.00 A 3/22/2022 2,181,960.55 2.41% 2,110,499.60 -71,460.95 JOHN DEERE CAPITAL CORP 6/17/2021 1.050% 6/17/2026 24422EVR7 5 ,000,000.00 A 12/8/2021 4,908,600.00 1.47% 4,026,432.89 -882,167.11 JOHN DEERE CAPITAL CORP 7/14/2023 4.950% 7/14/2028 24422 EXB0 505,000.00 A 7/14/2023 504,247.55 4.98% 447,917.11 -56,330.44 JOHN DEERE CAPITAL CORP 7/14/2023 4.950% 7/14/2028 24422 EXB0 605,000.00 A 7/18/2023 610,874.55 4.73% 1,094,670.90 483,796.35 JOHNSON & JOHNSON 8/25/2020 0.550% 9/1/2025 478160CN2 5,000,000.00 AAA 9/3/2020 5,023,550.00 0.45% 4,573,400.00 -450,150.00 JPMORGAN CHASE & CO 8/10/2021 0.768% 8/9/2025 46647PCM6 2,340,000.00 A- 8/10/2021 2,340,000.00 0.77% 2,228,803.20 -111,196.80 JPMORGAN CHASE & CO 3/13/2020 2.005% 3/13/2026 46647PBH8 2,800,000.00 A- 3/22/2022 2,712,500.00 2.84% 2,636,676.00 -75,824.00 JPMORGAN CHASE & CO 4/22/2021 1.578% 4/22/2027 46647PCB0 4,100,000.00 A- 8/10/2022 3,710,746.00 3.80% 3,658,963.00 -51,783.00 JPMORGAN CHASE & CO 2/24/2022 2.947% 2/24/2028 46647PCW4 2,925,000.00 A- 9/18/2023 2,674,532.25 5.13% 2,653,413.75 -21,118.50 MASTERCARD INC 12/3/2019 2.000% 3/3/2025 57636QAN4 5,000, 000.00 A+ 3/9/2021 5,213,450.00 0.91% 4,765,150.00 -448,300.00 MASTERCARD INC 12/3/2019 2.000% 3/3/2025 57636QAN4 5,000, 000.00 A+ 3/10/2022 4,990,800.00 2.06% 4,765,150.00 -225,650.00 MERCK & CO INC 3/7/2019 2.900% 3/7/2024 58933YAU9 5,375, 000.00 A+ 11/23/2021 5,623,916.25 0.85% 5,309,640.00 -314,276.25 MICROSOFT CORP 2/12/2015 2.700% 2/12/2025 594918BB9 5,000,000. 00 AAA 3/9/2021 5,341,700.00 0.92% 4,827,700.00 -514,000.00 MICROSOFT CORP 11/3/2015 3.125% 11/3/2025 594918BJ2 5,100,000. 00 AAA 1/25/2023 4,940,982.00 4.33% 4,886,259.00 -54,723.00 NOVARTIS CAPITAL CORP 11/20/2015 3.000% 11/20/2025 66989HAJ7 10,000,000.00 AA- 1/31/2023 9,638,600.00 4.38% 9,530,500.00 -108,100.00 QUALCOMM INC 5/20/2015 3.450% 5/20/2025 747525AF0 5,850,000. 00 A 5/19/2022 5,860,588.50 3.39% 5,661,688.50 -198,900.00 STATE STREET BANK & TR 2/7/2022 1.746% 2/6/2026 857477BR3 1,115,000.00 A 2/7/2022 1,115,000.00 1.75% 568,280.87 -546,719.13 STATE STREET BANK & TR 10/29/2020 2.901% 3/30/2026 857477BM4 4, 250,000.00 A 3/14/2022 4,275,372.50 2.74% 4,054,202.50 -221,170.00 TARGET CORP 1/24/2022 1.950% 1/15/2027 87612EBM7 990,000.00 A 1/24/2022 988,317.00 1.99% 483,888.88 -504,428.12 TARGET CORP 1/24/2022 1.950% 1/15/2027 87612EBM7 4,595, 000.00 A 2/1/2022 4,567,889.50 2.08% 5,044,036.90 476,147.40 TOYOTA MOTOR CREDIT CORP 9/11/2023 5.250% 9/11/2028 89236TLB9 5 ,600,000.00 A+ 9/11/2023 5,590,256.00 5.29% 5,568,416.00 -21,840.00 WAL-MART STORES INC 6/27/2018 3.550% 6/26/2025 931142ED1 5, 700,000.00 AA 2/8/2022 6,011,847.00 1.87% 5,522,160.00 -489,687.00 Corporate Note Subtotal 188,235,000.00 187,836,386.39 178,300,907.75 -9,535,478.64

AMERICAN EXPRESS CREDIT
ACCOUN 9/19/2023 5.230% 9/15/2028 02582JKD1 6,170,000.00 AAA 9/19/2023 6,169,724.20 5.23% 6,157,845.10 -11,879.10 BANK OF AMERICA AUTO TRUST 7/31/2023 5.530% 2/15/2028 06428AAC2 3,120,000.00 NR 7/31/2023 3,119,881.75 5.53% 3,117,753.60 -2,128.15 CARMAX AUTO OWNER TRUST 4/21/2021 0.520% 2/17/2026 14314QAC8 1,244,378.61 AAA 4/21/2021 1,244,110.46 0.52% 1,210,357.30 -33,753.16 CHASE ISSUANCE TRUST 9/15/2023 5.160% 9/15/2028 161571HT4 6,045,000.00 AAA 9/15/2023 6,043,324.33 5.17% 6,022,754.40 -20,569.93

DISCOVER CARD EXECUTION
NOTE TRUST 9/27/2021 0.580% 9/15/2026 254683CP8 2,100,000.00 AAA 9/27/2021 2,099,550.39 0.58% 1,996,470.00 -103,080.39 FIFTH THIRD AUTO TRUST 8/23/2023 5.530% 8/15/2028 31680EAD3 5,270,000.00 AAA 8/23/2023 5,269,673.26 5.53% 5,254,769.70 -14,903.56

HONDA AUTO RECEIVABLES
OWNER T 11/24/2021 0.880% 1/21/2026 43815GAC3 1,384,279.89 NR 11/ 24/2021 1,383,988.08 0.89% 1,330,306.82 -53,681.26

HONDA AUTO RECEIVABLES
OWNER T 8/22/2023 5.410% 2/18/2028 43815QAC1 4,825,000.00 AAA 8/22/2023 4,824,005.09 5.42% 4,813,275.25 -10,729.84

HYUNDAI AUTO RECEIVABLES
TRUST 4/28/2021 0.380% 9/15/2025 44933LAC7 684,252.35 AAA 4/28/2021 684,180.37 0.38% 670,368.87 -13,811.50

HYUNDAI AUTO RECEIVABLES
TRUST 11/17/2021 0.740% 5/15/2026 44935FAD6 1,066,799.82 AAA 11/17/2021 1,066,561.72 0.75% 1,030,966.01 -35,595.71 KUBOTA CREDIT OWNER TRUST 7/26/2023 5.280% 1/18/2028 500945AC4 1,925,000.00 NR 7/26/2023 1,924,513.75 5.29% 1,906,674.00 -17,839.75

TOYOTA AUTO RECEIVABLES
OWNER 9/27/2021 0.430% 1/15/2026 89239BAC5 1,965,514.64 AAA 9/27/2021 1,965,357.99 0.43% 1,901,320.93 -64,037.06

TOYOTA AUTO RECEIVABLES
OWNER 8/15/2023 5.160% 4/17/2028 89231FAD2 1,505,000.00 AAA 8/15/2023 1,504,659.57 5.17% 1,492,403.15 -12,256.42
10/11/2023 4:52 PM 4 of 5
Attachment A
City of Santa Clara Monthly Report
9/30/2023
Description Issue Date Coupon  Rate Maturity  Date CUSIP Par Value S&P  Rating Settle  Date Cost  Value YTM  at Cost Market  Value Unrealized  G/L USAA AUTO OWNER TRUST 9/15/2023 5.580% 5/15/2028 90291VAC4 6,030,000.00 AAA 9/15/2023 6,028,944.75 5.58% 6,018,543.00 -10,401.75 Asset-Backed Security Subtotal 43,335,225.31 43,328,475.71 42,923,808.13 -404,667.58 COOPERATIEVE RABOBANK U.A. 7/20/2023 5.080% 7/17/2026 21684LGS5 7,500,000.00 A+ 7/20/2023 7,500,000.00 5.08% 7,492,725.00 -7,275.00 TORONTO DOMINION BANK NY 10/31/2022 5.470% 10/25/2024 89115B6F2 7 ,270,000.00 A 10/31/2022 7,270,000.00 5.44% 7,252,552.00 -17,448.00 Certificate of Deposit Subtotal 14,770,000.00 14,770,000.00 14,745,277.00 -24,723.00

PRINCIPAL PUBLIC DEPOSIT
SWEEP PROGRAM 2.850% 10/1/2023 992995944 117,864.27 9/1/2020 117,864.27 117,864.27 -

LOCAL AGENCY INVESTMENT
FUND 3.534% 10/1/2023 5,761,428.75 9/30/1997 5,761,428.75 5,761,428.75 -

CALIFORNIA ASSET
MANAGEMENT PROGRAM 5.550% 10/1/2023 178,476,288.98 10/4/2022 178,476,288.98 178,476,288.98 - DREYFUS TREASURY 5.220% 10/1/2023 2,259,418.65 10/31/1997 2,259,418.65 2,259,418.65 - Cash Equivalent Subtotal 186,615,000.65 186,615,000.65 186,615,000.65 - Grand Total Count 146 977,408,318.63 966,127,987.09 930,997,115.71 (35,130,871.38) 10/11/2023 4:52 PM 5 of 5
Attachment A
Attachment 3
Department/Item
Source of
Funds
Use of
Funds Explanation
Fire Department - Other Fees
for Services /
Materials/Services/Supplies
(Ambulance Transport
Revenue)
150,000 150,000 Recognizes revenue for ambulance transport payments received from public healthcare providers
and patients for Fire Department ambulance
transports to hospitals. Ambulance transports
began in March 2023 under the current Santa Clara
County dispatch orders, allowing agencies with
ambulances to transport patients to hospitals in
conjunction with County contracted ambulance
services. These funds will be used for ambulance
maintenance and repairs, the purchase of an
additional defibrillator for Medic 91, and the
purchase and installation of power gurneys in the
ambulances (five affirmative Council votes
required to appropriate additional revenue).
150,000 150,000
Department/Item
Source of
Funds
Use of
Funds Explanation
Transfer From Convention
Center Enterprise Fund / Santa
Clara Convention Center
Condition Assessment Repair
Project
90,000 90,000 Recognizes and appropriates a transfer from the Convention Center Enterprise Fund for the Santa
Clara Convention Center Condition Assessment
Repair project to provide funding for a
comprehensive assessment of the facility's roof.

The Convention Center has been facing persistent
challenges related to water leakage and an
assessment is needed to identify necessary repairs,
maintenance, or replacements (five affirmative
Council votes required to appropriate additional
revenue).
90,000 90,000
Department/Item
Source of
Funds
Use of
Funds Explanation
Transfer to Convention Center
Capital Fund
90,000 Establishes a transfer to the Convention Center Capital Fund for the Santa Clara Convention Center
Condition Assessment Repair project to provide
funding for a comprehensive assessment of the
facility's roof (five affirmative Council votes
required for the use of unused balances).

Ending Fund Balance -
Operating Surplus
(90,000) Decreases the ending fund balance - operating
surplus to offset the action recommended above
(five affirmative Council votes required for the
use of unused balances).
- -
General Fund (001)
FY 2023/24 Budget Amendments
Convention Center Enterprise Fund (860)
Convention Center Capital Fund (865)
1 Attachment 3
FY 2023/24 Budget Amendments
Department/Item
Source of
Funds
Use of
Funds Explanation
Major Engine Overhaul and
Repair
3,500,000 During the scheduled November power plant
outage at Don Von Raesfield (DVR) to perform
repairs and inspections, an engine was deemed
unserviceable due to deterioration of turbine blades.

This engine needs to be overhauled to make it
operational. While this work is being done, the
spare engine will be installed to keep the power
plant online. Funding of $3.5 million is needed to
service and make the necessary repairs to the
turbine blades (five affirmative Council votes
required for the use of unused balances).

Unrestricted Ending Fund
Balance
(3,500,000) Decreases the unrestricted ending fund balance to offset the action recommended above (five
affirmative Council votes required for the use of
unused balances).
- -
Department/Item
Source of
Funds
Use of
Funds Explanation
Fire Department - Other Fees
for Services / Salaries (Intel
Reimbursements)
2,887 2,887 Recognizes $2,887 in Intel reimbursements to reimburse up to 25% of Deputy Fire Marshal
position costs in the Fire Development Services
Fund. The reimbursement covers costs for plan
review and fire permit inspection services for Intel
development projects for July and August 2023
(five affirmative Council votes required to
appropriate additional revenue).
2,887 2,887
Department/Item
Source of
Funds
Use of
Funds Explanation
Other Agencies Revenue /
2023 International Association
of Fire Chiefs Grant
2,832 2,832 Establishes a grant appropriation for the 2023 International Association of Fire Chiefs (IAFC)
Grant Program award. The grant reimburses the
Fire Department for staff attendance at the IAFC's
Developing Inclusive Teams Workshop in
Spanaway, WA (five affirmative Council votes
required to appropriate additional revenue).
2,832 2,832
Fire Development Services Fund (158)
Fire Operating Grant Trust Fund (178)
Electric Utility Capital Fund (591)
2 City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1096 Agenda Date: 12/12/2023

REPORT TO COUNCIL

SUBJECT
Action on the City of Santa Clara Audited Annual Comprehensive Financial Report and Audited Silicon Valley Power Financial Statements for Fiscal Year Ended June 30, 2023, as Recommended by the Audit Committee

COUNCIL PILLARS
Enhance Community Engagement and Transparency
Promote Sustainability and Environmental Protection

BACKGROUND
On November 27, 2023, the Audit Committee took action to accept the City of Santa Clara Audited Annual Comprehensive Financial Report (ACFR) and Silicon Valley Power (SVP) Financial Statements for Fiscal Year Ended June 30, 2023 and referred the reports to the City Council to be noted and filed at the December 12, 2023 Council meeting.

The annual financial audit is a requirement of Section 1319 of the City Charter. The ACFR presents the audited financial information of the City in accordance with Generally Accepted Accounting Principles (GAAP) applicable to government entities, and it also provides the City Council valuable information for financial oversight and informs Santa Clara residents and businesses as well as creditors .

The separate audited annual financial report for SVP is presented to make available additional information and disclosure relevant to the electric industry. The unmodified opinions from the auditor enhance the SVP’s reputation , and its adherence to GAAP applicable to governmental entities.

DISCUSSION
The annual financial audit of the City was recently completed and the City's external auditor, Maze & Associates (“Maze”), issued an unmodified (“clean”) opinion on the City’s ACFR for fiscal year ended June 30, 2023. The ACFR includes an extensive discussion and presentation of the City’s financial data and its related agencies in accordance with GAAP. The ACFR also includes selected multi-year statistical information about the City. In addition, the City issued a separate, audited comparative financial statement report for SVP for fiscal year ended June 30, 2023.

City Finance staff prepares the financial statements and Maze audits the financial information contained within them. Part of the audit is to determine whether City staff have the appropriate skills, knowledge, and expertise to prepare the ACFR in accordance with GAAP and other reporting requirements. Based on their audit, Maze determined that the City’s Finance staff has the necessary skills, knowledge, and expertise to compile high quality reports.

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Overall, the City’s financial condition was solid at the end of the fiscal year 2022/23. Key financial highlights for fiscal year June 30, 2023 are as follows:
· The assets and deferred outflows of resources of the City, as a whole, exceeded its liabilities and deferred inflows of resources by $2.3 billion in fiscal year 2022/23. · The City’s total net position increased by $141 million and primarily includes a $28 million increase in the governmental activities and a $113 million increase in business activities. · At the close of fiscal year 2022/23, the General Fund had assets of $431 million and a fund balance of $153 million. This represents an increase in fund balance of $12 million, or 8.5% from the prior fiscal year. The increase reflects the modest growth of the local economy since the pandemic.
· The City’s total outstanding long-term debt decreased by $52 million during the current fiscal year primarily due to the repayment of Stadium Authority debt. · The City’s total net pension liability, which includes governmental activities and business-type activities, increased by $214 million to $662 million at June 30, 2023. The changes were mainly due to the decrease in investment earnings from the California Public Employees Retirement System (CalPERS). The City is a member of the CalPERS, 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.

City staff and Maze met with the City Council Audit Committee on November 27, 2023. Committee members Watanabe, Jain and Park attended the meeting during which . Maze gave a presentation about the audit process, scope of work, and the auditor’s opinion. The Director of Finance and staff gave an overview of the financial reports. Maze and staff responded to Committee member questions. The Audit Committee accepted the ACFR and SVP Financial Statements presented at the Committee meeting and recommended that the City Council note and file the reports at a December 12, 2023 Council meeting.

ENVIRONMENTAL REVIEW
There is no action being taken; therefore, the California Environmental Quality Act (CEQA) is not applicable.

FISCAL IMPACT
The staff and the external auditor costs associated with the audit and financial reports production are included in the annual appropriations.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.

RECOMMENDATION
Note and file, as recommended by the Audit Committee:

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23-1096 Agenda Date: 12/12/2023

1. The audited City of Santa Clara Annual Comprehensive Financial Report (ACFR) for fiscal year ended June 30, 2023; and

2. The audited City of Santa Clara Electric Utility Enterprise Fund (Silicon Valley Power) Financial Statements for fiscal year ended June 30, 2023.

Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager

ATTACHMENTS

1. Annual Comprehensive Financial Report (ACFR)

2. Silicon Valley Power (SVP) Financial Statements
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Annual Comprehensive
Financial Report
Annual Comprehensive
Financial Report
Fiscal Year Ended June 30, 2023
City of
Santa Clara
The Center of What's Possible
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ANNUAL COMPREHENSIVE FINANCIAL
REPORT
FISCAL YEAR ENDED JUNE 30, 2023
THE

MISSION CITY

CITY OF SANTA CLARA, CALIFORNIA
15 00 WARBURTON AVENUE
SANTA CLARA, CA 95050-3796

PREPARED BY DEPARTMENT OF FINANCE

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Introductory Section
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CITY OF SANTA CLARA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

TABLE OF CONTENTS
For the year ended June 30, 2023
Page
i

INTRODUCTORY SECTION
Let
ter of Transmittal .......................................................................................................................................... v Roster of Council and Commission Members ................................................................................................ xiv Executive Management Team .......................................................................................................................... xv GFOA Certificate of Achievement ................................................................................................................. xvi Organization Chart ......................................................................................................................................... xvii Local Map ..................................................................................................................................................... xviii

FINANCIAL SECTION
Ind
ependent Auditor’s Report on Basic Financial Statements .......................................................................... 1 Management’s Discussion and Analysis ............................................................................................................ 5 Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position ........................................................................................................................... 28 Statement of Activities ............................................................................................................................... 30 Fund Financial Statements
Governmental Funds
Balance Sheet.............................................................................................................................................. 34 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ................ 37 Statement of Revenues, Expenditures, and Changes in Fund Balances ..................................................... 38 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ....................................................................... 41 Proprietary Funds
Statement of Net Position ........................................................................................................................... 44 Statement of Revenues, Expenses, and Changes in Fund Net Position ...................................................... 48 Statement of Cash Flows ............................................................................................................................ 50 Fiduciary Funds
Statement of Fiduciary Net Position ........................................................................................................... 56 Statement of Fiduciary Net Position ........................................................................................................... 57 Notes to Basic Financial Statements ................................................................................................................ 59

CITY OF SANTA CLARA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

TABLE OF CONTENTS
For the year ended June 30, 2023
Page
ii
Req
uired Supplementary Information
Schedule of Changes in the Net Pension Liability and Related Ratios (Miscellaneous Plan) .................. 154 Schedule of Plan Contributions (Miscellaneous Plan).............................................................................. 156 Schedule of Changes in the Net Pension Liability and Related Ratios (Safety Plan) .............................. 158 Schedule of Plan Contributions (Safety Plan) .......................................................................................... 160 Schedule of Changes in the Net OPEB Liability and Related Ratios (OPEB Plan) ................................. 162 Schedule of Plan Contributions (OPEB Plan) .......................................................................................... 163 Notes to Schedule of Employer Contributions (OPEB Plan) ................................................................... 164 General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis) ......................................................................................................................... 165 Santa Clara Housing Successor Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis) .......................................................................................... 167 Notes to Required Supplementary Information ........................................................................................ 168 Supplementary Information
Non-Major Governmental Funds
Combining Balance Sheet ......................................................................................................................... 174 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ................................ 178 Special Revenue Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis) ...................................................................................................... 182 Non-Major Enterprise Funds
Combining Statement of Net Position ...................................................................................................... 184 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ................................. 188 Combining Statement of Cash Flows ....................................................................................................... 190 Internal Service Funds
Combining Statement of Net Position ...................................................................................................... 196 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ................................. 200 Combining Statement of Cash Flows ....................................................................................................... 202 Private Purpose Trust Funds
Combining Statement of Net Position ...................................................................................................... 208 Combining Statement of Changes in Net Position ................................................................................... 209 Custodial Funds
Combining Statement of Net Position ...................................................................................................... 210 Combining Statement of Changes in Net Position ................................................................................... 211

CITY OF SANTA CLARA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

TABLE OF CONTENTS
For the year ended June 30, 2023
Page
iii

STATISTICAL SECTION (UNAUDITED)
Cit
y of Santa Clara

1. Net Position by Component – Last Ten Fiscal Years .......................................................................... 216

2. Changes in Net Position – Last Ten Fiscal Years ............................................................................... 217

3. Fund Balances – Governmental Funds – Last Ten Fiscal Years ......................................................... 220

4. Changes in Fund Balances – Governmental Funds – Last Ten Fiscal Years ...................................... 221

5. Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ......................... 223

6. Property Tax Rates Direct and Overlapping Governments – Last Ten Fiscal Years........................... 224

7. Principal Property Tax Payers 2022-23 and 2013-14 Comparison for General Fund ........................ 225

8. Property Tax Levies and Collections – Last Ten Fiscal Years ............................................................ 226

9. Principal Sale/Use Tax Contributors ................................................................................................... 227

10. Electric Utility Charge for Services by Source ................................................................................... 228

11. Ratios of Outstanding Debt by Type – Last Ten Fiscal Years............................................................ 229

12. Population and Assessed Valuation – Last Ten Fiscal Years ............................................................. 230

13. Computation of Direct and Overlapping Bonded Debt ...................................................................... 231

14. Legal Debt Margin Information – Last Ten Fiscal Years ................................................................... 232

15. Pledged Revenue Coverage Electric Revenue Bond – Last Ten Fiscal Years ................................... 233

16. Demographic and Economic Statistics – Last Ten Calendar Years.................................................... 234

17. Principal Employers – Current Year and Ten Years Ago ................................................................... 235

18. Full-Time Equivalent Budgeted City Employees by Program/Function – Last Ten Fiscal Years ..... 236

19. Operating Indicators by Function/Activity – Last Ten Fiscal Years .................................................. 237

20. Capital Assets Statistics by Function – Last Ten Fiscal Years ........................................................... 238

21. Statement of Insurance Coverage ....................................................................................................... 239 Successor Agency

1. Historical Tax Increment – Last Ten Fiscal Years ............................................................................... 243

2. Ten Largest Assessees – Taxable Value ............................................................................................... 244

3. Assessment Appeal Activity of Top 20 Assessees ............................................................................... 245

4. Computation of Direct and Overlapping Bonded Debt ........................................................................ 246 v
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1500 Warburton Avenue ● Santa Clara, CA 95050 ● Phone: 408-615-2340 ● Fax: 408-243-8687 ● S antaClaraCA.gov Finance Department
Nove
mber 30, 2023
The Honorable Mayor and City Council and Residents of the City of Santa Clara City of Santa Clara
Santa Clara, CA 95050
Dear Mayor and Members of the City Council and Residents of the City of Santa Clara:

It is our pleasure to submit for your information the Annual Comprehensive Financial Report (ACFR) of the
City of Santa Clara (City) for the fiscal year ended June 30, 2023. The City compiles and prepares the annual financial report to provide interested parties with reliable information concerning the financial condition and results of operations for the City.

Responsibility for the accuracy of the data and the fairness of presentation, including all footnotes and disclosures, rests with the City. Management of the City has established a comprehensive internal control framework that is designed to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with Generally Accepted Accounting Principles (GAAP). Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal control has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

Per the City Charter (Section 1319, Independent Audit) the City’s financial statements have been audited by Maze & Associates, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2023 are free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City’s financial statements for the fiscal year ended June 30, 2023 are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. v
City of
Santa Clara
The Center of What 's Possible
vi
The
independent audit of the financial statements of the City was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require that agencies expending more than $750,000 in federal monies, are required to have the independent auditor report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and legal requirements involving the administration of federal awards. These reports are available in the City’s separately issued Single Audit Report, scheduled for release in March 2024.

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

This report is divided into three sections:
 The Introductory Section includes this letter of transmittal, an organizational overview of the City government, and prior awards received.
 The Financial Section consists of the independent auditor’s report, Management’s Discussion and Analysis, Basic Financial Statements (which include the Government-Wide Financial Statements, Fund Financial Statements, and Notes to Basic Financial Statements), Required Supplementary Information, and a Supplementary Section containing the Combined and Individual Fund Financial Statements and Schedules.
 The Statistical Section includes a number of tables of unaudited data depicting the financial history of the City, demographics, and other selected information about the City.

PROFILE OF THE CITY OF SANTA CLARA
The City is located in the County of Santa Clara, California, and is approximately 45 miles southeast of Sa
n Francisco and three miles west of downtown San Jose. It is situated in the northern part of the County and occupies approximately 19.3 square miles.

The City enjoys a diversified industrial and commercial base. Santa Clara is headquarters to some of the nation's leading electronics, telecommunications, computer, and semiconductor firms. The City is also home to a university, a community college, an adult learning center, a general hospital, a theme park, and a stadium.

The City’s population is estimated at 132,476 indicating the City remains an attractive place both to live and work. The City is one of the most highly desirable areas to live because of the high- quality services it provides to residents and its business friendly environment.

The City of Santa Clara, also known as the Mission City, is a charter city incorporated in 1852 under the laws of the State of California. The City’s powers are exercised through a Council/Manager form of government. The City Council is made up of the Mayor, elected at large, and six councilmembers elected by district serving as the legislative authority. The City Council appoints a City Manager who is responsible for the overall management and administration of the City, a City Attorney to represent and advise the City Council and all City officers in all matters of law pertaining to their offices, and a City Auditor to audit and approve all bills, invoices, payrolls, demands or charges against the City government before payment and, with the advice of the City Attorney, advise the City Council as to the regularity, legality and correctness of such claims, demands or charges. The Police Chief and the City Clerk are also publicly elected officials. vii
The
City provides a full range of services. These services include police, fire protection and emergency dispatch; electric, water, and sanitary sewer services; the construction and maintenance of streets and infrastructure; parks and recreational activities and cultural events; planning and zoning; library; cemetery; and general administrative and support services.

LOCAL ECONOMY
The local economy continued to improve during FY 2022/23 as the nation, State, and local economies co
ntinued to recover from COVID-19. On a national level, unemployment rates in June 2023 totaled 3.6%.

This rate was well below the record setting high of 14.7% in April 2020, and almost at the pre-pandemic unemployment rate of 3.5%. The unadjusted unemployment rate in the San José-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) was 3.7% in June 2023.

At the local level, several of the City’s General Fund revenues recovered from the lows experienced during the COVID-19 pandemic with transient occupancy tax, sales tax, and fees for services categories among revenue categories experiencing recovery. In response to the economic environment stemming from impacts of the COVID-19 pandemic, the City implemented various cost savings strategies at the end of March 2020. These actions included a hiring freeze in addition to more controls across overtime, as-needed staffing, marketing, travel, and technology and vehicle purchases. These controls were in place until the lifting of the COVID-19 emergency at the end of FY 2022/23.

While the nature of business travel, work, and how customers transact goods and services has evolved through the pandemic, FY 2022/23 saw the continued recovery of the impact of COVID-19 on the local economy. Sales Tax exceeded pre-pandemic levels, reflecting both a local recovery and the impact of inflation on the prices of goods for which this tax is applied. The City continued budget balancing efforts during the fiscal year in part through the use of one-time reserves and federal stimulus funds, expenditure reductions, and new revenues. As the City looks ahead, the City Council adopted a balanced FY 2023/24 and FY 2024/25 operating budget. Forecasts currently show a small deficit beyond the two-year budget. In addition, significant capital infrastructure needs have been identified. A workplan considering several options of new revenues is underway.

FINANCIAL INFORMATION
Long-term Financial Planning
Th
e City Council has adopted key Council Strategic Pillars to guide long-term policy decisions and address the economic challenges that the City faces. The Council Strategic Pillars are:
 Promote and Enhance Economic, Housing and Transportation Development  Deliver and Enhance High Quality Efficient Services and Infrastructure  Enhance Community Sports, Recreational and Arts Assets  Enhance Community Engagement and Transparency
 Ensure Compliance with Measure J and Manage Levi’s Stadium  Manage Strategically Our Workforce Capacity and Resources viii
 Pro
mote Sustainability and Environmental Protection
In addition, the City produces an annual Ten-Year Financial Forecast. The purpose of the Forecast is to provide policy-makers and the public an updated assessment of the City’s fiscal health that takes into account the latest economic developments. The report includes historical perspective on revenues and expenditures and a ten-year financial outlook beyond the adopted budget year. The value of this type of analysis is to give the City Council, staff, and the public a tool to assist with strategic decision-making as they work to adopt the budget for the coming year. The Forecast is a collaborative effort between the City Manager’s Office, Finance Department, and City departments. Individual projections of revenues and expenditures are developed based on trend analyses, input from available economic reports, consultant recommendations, and input from other subject matter experts. The most current information available is incorporated into the Plan and refined on a moving forward basis as part of the City’s commitment to fiscal responsibility.

The Forecast does not include the following:
 One-time funding sources and one-time expenditure needs;  The cost to address unmet/deferred capital infrastructure needs;  Revenue and staffing impacts of development projects; and  Additional contributions to Reserves (Budget Stabilization Reserve, Capital Projects Reserve, Pension Reserve).

Historically, the City has funded many of capital infrastructure and equipment needs with one-time funds on a pay-as-you-go basis. The use of one-time funds as the funding mechanism for capital improvements and various equipment that rely on the General Fund creates challenges. The lack of sufficient one-time funding has resulted in a backlog of unmet/deferred infrastructure needs. As part of the budget process, in May 2021, staff presented an updated unmet/deferred infrastructure need of over $570 million over the next five-years. Staff will continue to evaluate potential options to create capacity to address those funding needs including new revenue options at the November 2024 ballot.

In addition to the elements described above that are not factored into the Forecast, the City has identified various factors that could have potential positive or negative impacts on the Forecast. These include:
 Less economic recovery as a result of worsening COVID-19 impacts;  Future economic slowdown/recession;
 State/federal legislative changes and legal challenges;  Labor costs outside the budget assumptions;
 CalPERS actuarial changes or reform actions;
 Unanticipated critical capital/infrastructure needs; and  Maintenance impacts and timing of development projects.

In June 2022, the Forecast indicated that the City was facing a $27 million ongoing deficit starting in FY 2023/24. The City’s financial position significantly improved during the latter half of FY 2022/23. The ix
Ten
-Year General Fund Forecast produced in March 2023 showed smaller deficits of $8.0 million and $8.9 million in FY 2023/24 and FY 2024/25. This is well below the $27 million deficit projected in June 2022 and reflects stronger revenue growth from the pandemic recovery.

While we continue to face impacts from the pandemic, and recovery has begun, many economists are now projecting a continued unsettled economic environment with high inflation, continued supply chain issues, geo-political instability, and the potential for a potential extended recession.

Internal Controls
The management of the City is responsible for establishing and maintaining internal controls designed to ensure that the assets of the City are protected from loss, theft or misuse, and that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles (GAAP). Internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within the stated framework. City management believes the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions.

Budgetary Controls
As part of the City's internal controls, it maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annually appropriated budget approved by the City Council. In addition, a two-year Capital Improvement Project Budget or a two-year Operating Budget is adopted annually and a Ten-Year Financial Forecast is updated and presented as part of the budget each year. The City Council is responsible for approving the appropriation of fiscal resources to cover estimated expenditures for each fiscal year. Expenditures are appropriated in each fund to departments, offices, and agencies for various goods, services, and capital projects described in the budget.

The legal appropriation control is established at the department level in each fund. For select funds where expenditures are not allocated to a specific department, the appropriation control is established at the fund level. For capital funds, the appropriation control is at the project level. Transfers of funding between budgetary funds require City Council appropriation and approval. City Council approval is required for a budget amendment during the fiscal year which may include the use of reserves or fund balances, and approval of appropriations of grant monies. The City also maintains an encumbrance accounting system as one technique for accomplishing budgetary control. Encumbrances outstanding at year-end are included within the specific fund balance category of the underlying resource. Per Article XIII, Section 1305 of the City Charter, appropriations lapse at the end of each fiscal year; therefore, unencumbered funds allocated for specific projects, donations, and grants require City Council appropriation for use in the following fiscal year.

Budgetary transfers between accounts or expenditure category may be done through Finance Department as long as they are conducted within the legal appropriation control limit set by the City Council.

Independent Audit
The City Charter and State of California statutes require the City to have an annual audit by an independent certified public accountant. The City goes to the market with a formal Request for Proposal for audit services every five years. The accounting firm of Maze & Associates, Certified Public Accountants, was selected by the City Council again in 2021 after the City conducted a competitive procurement process.

This is the second year of audit in the new contract with Maze & Associates. In addition to meeting the requirements set forth in the City Charter and State statutes, the audit is designed to meet the requirements x
of
the federal Single Audit Act of 1984, as amended in 1996 and by the recent Uniform Guidance. The auditors' report on the basic financial statements and the supplementary combining statements and schedules are included in the financial section of this report. The auditors' reports related specifically to the single audit are included in a separately issued single audit document on file with the City Clerk’s Office.

MAJOR INITIATIVES
Addressing our Capital Infrastructure
Lo
oking ahead, the City Council took action to adopt a two-year capital investment plan that focuses on our capital infrastructure, supporting the facilities that serve our residents and community. The Biennial FY 2022/23 and FY 2023/24 Capital Budget totals $588 million and the Five-Year CIP totals $830 million, supporting infrastructure improvements throughout the City. Of this CIP amount, $627 million (76%) funds capital projects for the City’s utilities and there is sufficient funding in the associated utility funds to support these projects. The other projects total $203 million and fund improvements to the parks, trails, libraries, transportation system, storm system, convention center and other City facilities. There are significant funding gaps in these areas and unfunded projects identified in this budget total $571 million over the next five years. This funding gap does not fully represent all the unmet/deferred infrastructure needs throughout the City beyond the five-year CIP period. Long term funding strategies are needed to meet these infrastructure needs as the General Fund does not have sufficient funding to cover these capital costs. Staff discussed initial revenue options with the City Council in October 2023 with additional voter research required to determine if there will be a viable measure to generate new revenue to address the unmet infrastructure needs as part of the November 2024 ballot.

Fiscal Sustainability
The FY 2022/23 General Fund balancing strategy adopted as part of the FY 2021/22 and FY 2022/23 biennial budget remains in place. The use of one-time reserves and federal stimulus funds, new revenues, and expenditure reductions has balanced the competing goals of aligning ongoing revenues and expenditures and minimizing the service delivery impacts to the community. It has also allowed time for General Fund revenues to recover. This strategy has positioned the City well for the FY 2023/24 and FY 2024/25 Adopted Budget that solves a smaller projected General Fund deficit. While the financial picture is much better, it is important to note that significant economic uncertainty and the risk of a recession persist.

Development Projects
More than $3 billion in new development projects are on the horizon for Santa Clara in the next few years, with the likelihood of more to come. There are many residential and commercial projects in various stages of planning. While these projects are underway, it is important to note that changes due to COVID-19 has caused some pause to activity as developers learn about the long-term impacts related to community gatherings, engagement, and regulations. Furthermore, the recent fiscal uncertainty with high inflation impacts to construction costs and a sharp interest rates increases resulting in higher borrowing costs creates a potential for a slowdown in economic activity. As these projects are both sensitive to new community requirements and an economic downturn: therefore, flexibility will be required. Below are highlights of a few of the larger projects:

Related Santa Clara Project
Related Santa Clara is a unique partnership between the City of Santa Clara and Related Companies to create a LEED-certified, multi-phased, mixed-use destination adjacent to Levi’s Stadium. This urban center xi
wil
l incorporate residential units, restaurants, entertainment venues, hotels, retail, and office space to establish a new neighborhood in a pedestrian oriented “live, work, play” environment.

Related Santa Clara consists of 9.2 million square feet of mixed-use development with a city center of commercial office, retail/entertainment including a globally inspired food market, 1,680 residential units, 700 hotel rooms and approximately 5 million square feet of corporate office space. The development will also feature new roadways and the creation of a 30-acre city park. The project site consists of 240 acres located at 5155 Stars & Stripes Drive in Santa Clara, CA.

Downtown Master Plan
The City of Santa Clara is in the process of planning for the revitalization of our Downtown by developing a Precise Plan that will provide guidance for new development within a portion of the Downtown Focus Area. Following an initial community engagement effort, three land use scenarios/conceptual plans have been developed. Additional review and testing of the land use/design options, a larger context study to understand compatibility and competition from other large development projects, and an El Camino Real intersection study to understand multi modal connectivity from regional transit to downtown will be performed. This work will focus on market feasibility, retail strategy and connectivity.

Freedom Circle Mixed Use Project
This project proposes a General Plan Amendment and Re-zoning to Planned Development to construct a mixed-use development project on a 13.3 acre site within the Freedom Circle focus plan area, that consists of up to 1,100 residential units With 1,540 parking spaces, up to 2,000 square feet of commercial space with 10 parking spaces and a two-acre public park.

Gateway Crossing Mixed Use Project
Developed by Hunter/Storm, this project currently under construction consists of up to 1,565 residential units, a 152,000 square foot, 225 room, full-service hotel, 45,000 square feet of supporting retail, a 2.1 acre park, structured parking facilities, private and public streets, and on and off-site public and private improvements. Phase One of this project is currently under construction.

Mission Point by Kylii Mixed Use Development Project
This project is in review for a General Plan amendment for a nine-parcel property to amend the designation from High-Intensity Office/Research to a newly-established mixed-use designation allowing a high-intensity mix of office, commercial, and residential uses. The Project proposes a rezone for the development of 3,000,000 +/- square feet of commercial office/lab space, 100,000 +/- square feet of neighborhood retail, 1,800 +/- new multi-family residential, a childcare facility, and indoor and outdoor community spaces, as well as a large network of diverse, accessible and interconnected park, trail, and open spaces, and related infrastructure improvements.

Patrick Henry Drive Specific Plan
The City has developed a Specific Plan to implement the City’s General Plan goals and policies for the Patrick Henry Drive plan area by providing more detailed guidance for future land uses and urban design elements. The vision is to transform a series of 1970s office parks several existing office parks into a cohesive, high-density mixed-use community that fosters economic vitality, helps ameliorate the State’s housing shortage, and enhances quality of life for those who live, work, and recreate in the area. The Patrick xii
Hen
ry Drive Specific Plan planning area encompasses approximately 74-acres of land bounded by Calabazas Creek, Mission Community College, Great America parkway, and the SFPUC right of way, as shown below.

Lawrence Station Area Plan
The Lawrence Station Area Plan provides a mixed-use development on an approximately 72 acres site (65 acres of developable land area excluding existing public right-of-way) located in close proximity to the Caltrain Lawrence Station serving the communities of Santa Clara and Sunnyvale. The Plan will create a lively neighborhood that accommodates up to 3,500 residential dwelling units, roughly 100,000 square feet of neighborhood oriented and convenience retail, and approximately 6.3 acres of public open space in conjunction with various outdoor recreational facilities and landscape features, such as a community garden, a public plaza, pocket parks and paseos. The targeted residential density is 45 - 56 dwelling units per acre. An existing Santa Clara Fire Department Station will remain in place as a component of the Plan, potentially incorporating a Santa Clara Police Department Substation. Associated infrastructure improvements are also required, including an internal road network comprised of public and private streets, and upgrades to sewer, water, and storm drain systems.

Tasman East Specific Plan
The project area is an existing industrial neighborhood 45 acres in size, and is bounded by Tasman Drive to the south, the Guadalupe River to the East, the Santa Clara golf course to the north, and Lafayette Street to the west. The Plan creates a framework for the development of a high-density and transit-oriented neighborhood (currently proposed to be up to 100 Dwelling units per acre), along with supportive retail services. The specific plan will lay out allowed uses, densities, height limits and design criteria in the Tasman East area. Connections to the existing Guadalupe River trail, potential locations for parkland, and strategies for better access to transit will also be incorporated into the plan. The City is currently developing an amendment to the Tasman East Specific Plan that would allow an additional 1,500 units within the existing Specific Plan boundaries. City staff are currently exploring ways to provide additional dedicated parkland as a part of the Amendment.

FINANCIAL POLICIES
The City has adopted a comprehensive set of financial policies. These policies address items such as bu
dget, cash management, interfund loans, investments, reserves, and debt management. The City Council reviews and approves budgetary policies as part of the annual budget process. Investment and debt policy statements are reviewed and approved by the City Council under separate cover.

AWARDS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Ce
rtificate of Achievement in Excellence in Financial Reporting to the City for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2022. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of state and local government financial reports and is valid for a period of one year only. The City has received this prestigious award for the past thirty one consecutive years.

To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements. We believe that our current Annual Comprehensive Financial Report continues to meet the Certificate of Achievement Programs' requirements and we are submitting it to GFOA to determine its eligibility for another certificate.

ACKNOWLEDGEMENTS
The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Department. We wish to thank all City departments for their assistance in providing the data necessary to prepare this repo1i. Credit and thanks are also due to the Mayor and City Councilmembers for their unfailing support for maintaining the highest standards of professionalism in the management of the City's finances.

Kenn Lee
Director of Finance
xiii
xiv
Roster of Council and Commission Members

ROSTER OF COUNCIL AND COMMISSION MEMBERS

CITY COUNCIL
Mayor Lisa M. Gillmor
Councilmember District 1 Kathy Watanabe
Councilmember District 2 Raj Chahal
Councilmember District 3 Karen Hardy
Councilmember District 4 Kevin Park
Councilmember District 5 Sudhanshu “Suds” Jain
Councilmember District 6 Anthony J. Becker

BOARD OF LIBRARY TRUSTEES CIVIL SERVICE COMMISSION
Leonne Broughman, Jan Hintermeister, Stephen
Ricossa, Debbie Tryforos, Jonathan Evans
Tahir Naim, Willie D. Brown Jr., Franklin J.

Felizardo, Carolyn G. McAllister, Vacant

CULTURAL COMMISSION HISTORICAL AND LANDMARKS

COMMISSION
Candida A. Diaz, Neetu Garg, Debra von Huene,
Jonathan Marinaro, Paul McNamara, Louis
Samara, Siddarth Sundaram
Kathleen Romano, Michael Celso, Ivonne
Inc
iarte, Amy Kirby, Patricia Leung, Ana
Vargas-Smith, Ed Stocks

PLANNING COMMISSION PARKS AND RECREATION COMMISSION
Nancy A. Biagini, Mario Bouza, Eric Cruthchlow,
Qian Huang, Lance Saleme, Priya Cherukuru,
Yashraj Bhatnagar
Burt Field, Sajid Hai, Maureen Reilly Chu, Kelly
Gon
zalez, Brittany Ricketts, Eversley Forte,
Dana Caldwell
SEN

IOR ADVISORY COMMISSION SAL

ARY SETTING COMMISSION
Rick Andrews, Edmund Drozek, Tom Freitas,
Judy Hubbard, Grant L. McCauley, Veena
Sterling, Maria Vaz
Natasha Humphries, MV Kumar, Donald
Law
son, John Sontag, Vacant

YOUTH COMMISSION
Jul
ianna Arias Hernandez (Alternate) Namita
Gaidhani, Simren Garg, Aarav Gupta, Fatimah
Ismail, Maryam Ismail, Khadeejah Khan, Ryan
Kim, Kira Liang, Malia Martin, Samaira Mehta,
Hiranya Parekh, Sudeepthi Ravipati, Samarth
Suresh, Niharika Uppalapati (A;lternate), Sarah
Zuo

DOWNTOWN COMMUNITY TASK FORCE
But
ch Coyne, Rob Mayer, Dan Ondrasek,
Mathew Reed, Chan Thai, Adam Thompson,
Ana Vargas-Smith, Atisha Varshney, Debra Von
Huene
xv

EXECUTIVE MANAGEMENT TEAM

CITY MANAGER
Jōvan D. Grogan

CITY ATTORNEY CITY AUDITOR
Glen Googins Vacant

CITY CLERK
Hosam Haggag

CHIEF OPERATING OFFICER
Nadine Nader

ASSISTANT CITY MANAGER CHIEF ELECTRIC UTILITY OFFICER
Cynthia Bojorquez Manuel Pineda

CHIEF OF POLICE FIRE CHIEF
Pat Nikolai Ruben Torres

DIRECTOR OF HUMAN RESOURCES DIRECTOR OF FINANCE
Aracely Azevedo Kenn Lee

DIRECTOR OF PARKS & RECREATION DIRECTOR OF INFORMATION TECHNOLOGY James F. Teixeira Gaurav Garg

CITY LIBRARIAN DIRECTOR OF WATER AND SEWER UTILITIES
Patty Wong Gary Welling

DIRECTOR OF PUBLIC WORKS DIRECTOR OF COMMUNITY DEVELOPMENT Craig Mobeck Andrew Crabtree
Executive Management Team
xvi
GFOA Certificate of Achievement
p ovemment Finance Officers Association
Certificate of
Achie vement
for Excellence
in Financial
Reporting
Presented to
City of Santa Clara
California
For its Annual Comprehensive
Financia l Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
xvii
Organization Chart

CITY ORGANIZATION CHART
Chief of Police (Elected)
Boards and
Commissions
City Attorney
--------- Police
Community
Development
Electric Utility
Finance
Fire
Human Resources
Electorate
Mayor and Council City Clerk (Elected)
City Manager City Auditor
City Departments
City Clerk's Office -----------·
Information Technology
Library
Parks and Recreation
Public Works
Water and Sewtr
Utilities
xviii
Local Map
I BAY AREA 0 10
--== Miles
5 l
Financial Section
Thi
s page intentionally left blank
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
Opinions
We ha
ve audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remain ing fund information of the City of Santa Clara, California, as of and for the year ended June 30, 20 23, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents. We did not audit the component unit financial statements of the Santa Clara Stadium Authority (Stadium Authority), as of and for the year ended March 31, 2023, which is bo th a major fund and 42.7%, 6.8%, and 8.8% of the assets, net position and revenues, respectively, of the business-type activities. The financial statements of the Stadium Authority were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Stadium Authority, is based solely on the report of other auditors.

We also did not audit the fina ncial statements of Northern California Power Agency (NCPA), Transmission Agency of Northern California (T ANC), M-S-R Energy Authority (MSR EA), M-S-R Public Power Agency (MSR PPA), and San Jose-San ta Clara Regional Wastewater Facility and Clean Water Financing Authority (SJSC) as of and for the year ended June 30, 2023, related to the calculation of the Investments in Joint Ventures. The Investment in these Joint Ventures collectively represents 9.2%,

18.7%, and 0.8%, respectively, of to tal assets, net position and revenues of the business-type activities.

The financial statements of the NCPA, TANC, MS R EA, MSR PPA and SJSC 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 respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting prin ciples generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing sta ndards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United Stat es. 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 inde pendent of the City 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 opinions. 1 Accountancy Corporation
3478 Buskirk Avenue, Suite 217
Pleasant Hill, CA 94523
T 925.228 .2800
, [email protected]
w mazeassociates.com
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fa ir presentation of these financial statements in accordance with accounting principles generally accep ted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance ab out whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conduc ted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists.

The risk of not detecting a material misstatement re sulting 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 cons idered material if, there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstate ment of the financial statements, whether due to fraud or error, and design and perform audit procedures respon sive 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 inte rnal control relevant to the a udit in order to design audit procedures that are appropriate in the circumst ances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policie s used and the reasonableness of significant accounting estimates made by ma nagement, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are cond
itions or events, considered in the aggregate,
that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant au dit findings, and certain internal control-related matters that we identified during the audit.
2 Changes in Accounting Principles
Management adopted the provisions of Governmental Accounting Standards Board Statement No. 96, Subscription-based Information Technology Arrangements, which became effective during the year ended June
30, 2023. As a result, the balances of the SBITA payable and intangible right-to-use assets were
$3,834,441 as of July 1, 2022. The City restated and increased the balances in that amount, and the net effect on the beginning net position and fund balance was zero. See the SBITA disclosure in Note 9.

The Stadium Authority
implemented GASB 87, Leases, during the year ended March 31, 2023. The GASB 87 reporting requirement for
the Stadium Lease applies to the Citywide financial statements level and the results are included in the proprietary major fu nd statements. As a result, the net position was
restated to increase by $4,702,
635. See disclosure in Note 6F.

The emphasis on these matters does not cons
titute 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.

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

Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the Introductory
Section and Statistical Section listed in the Table of Contents, but does not include the b
asic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other in
formation, and we do not express an opinion or any form of assurance thereon.
3 In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists betw een the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrect ed material misstatement of the other information exits, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 30, 2023,
on our consideration of the City ’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulat ions, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financ ial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Pleasant Hill, California
November 30, 2023
4 5
Man
agement’s Discussion and Analysis
MANAGEMENT’S DISCUSSION AND ANALYSIS
The Management’s Discussion and Analysis (MD&A) of the City of Santa Clara’s (City) Annual Comprehensive Financial Report provides an overview of the City’s financial activities for the fiscal year ended June 30, 2023. The intent of this discussion and analysis is to look at the City’s financial performance. Readers should review the discussion and analysis in conjunction with the basic financial statements, as well as the notes to the financial statements to enhance their understanding of the City’s financial performance.

FINANCIAL HIGHLIGHTS
Financial highlights for fiscal year June 30, 2023 are as follows:
 In
the fiscal year 2022-23, the City's assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $2.3 billion. Out of this amount, $(69) million represents unrestricted net position, which is $101 million higher than in the fiscal year 2021-22.

This deficit is made up of a negative balance of $287 million for governmental activities and a positive balance of $218 million for business-type activities. The negative net position in governmental activities primarily stems from a net pension liability of $517 million and a net Other Post Employment Benefits (OPEB) liability of $28 million as of June 30, 2023.  The City's total net position, which grew by $141 million, is comprised of a $28 million increase in governmental activities, primarily driven by the moderately growing economy since the pandemic, and a $113 million increase in business-type activities, mainly attributed to rate increases in the Electric Utility and higher revenue from NFL games, ticketed non-NFL events, and smaller special events.
 The total net pension liability, encompassing both governmental activities and business-type activities, experienced a significant increase of $214 million or 47.8% during fiscal year 2022-23, reaching $662 million from $448 million. This increase was primarily driven by the adjustments in the change in assumption and discount rate in the liability calculation. As of June 30, 2023, there were deferred outflows of resources related to pensions amounting to $176 million, reflecting an increase of $89 million compared to the previous year. In contrast, there were deferred inflows of resources related to pensions totaling $5 million at June 30, 2023, which marked a decrease of $113 million from the prior fiscal year. This decrease is primarily attributed to a lower net return on investments from CalPERS. For more detailed information regarding the net pension liability, please refer to Note 13.
 The net OPEB liability decreased by $3 million or 7.3% during fiscal year 2022-23, reducing it to $38 million at June 30, 2023, compared to $41 million in fiscal year 2021-22. More details on the net OPEB liability are included in Note 16.
 The City’s total liabilities, excluding net pension liability and net OPEB liability, decreased by $69 million to $1,038 million at June 30, 2023. The reduction of the liabilities is mainly attributed to the repayment of $46 million long term obligation in the enterprise funds and a decrease of $27 million in accrued liabilities when compared to the fiscal year 2021-22. The prior year’s total liabilities were also restated to increase by $3 million as a result of the implementation of Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology Arrangements (SBITA), in fiscal year 2022-23.  As of June 30, 2023, the City’s governmental funds reported combined fund balances of $369 million, an increase of $44 million from the prior year. At June 30, 2023, $93 million is in the unassigned fund balance and available for spending at the City’s discretion.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
6  At the close of fiscal year 2022-23, the General Fund had assets of $431 million and a fund balance of
$153 million. This represents an increase in fund balance of $12 million, or 8.5% from prior fiscal year. The increase reflects the modest growth of the local economy since the pandemic. Of the total fund balance, $125 million was unrestricted (the total of committed, assigned, and unassigned components of fund balance).
 In November 2012, the Santa Clara Stadium Authority (Stadium Authority) elected to adjust its fiscal year to April 1 through March 31 to conform with the fiscal year of Stadium Funding Trust (FinanceCo). This report covers the twelve month period from April 1, 2022 through March 31, 2023. As of March 31, 2023, the carrying value of Levi’s Stadium, net of depreciation, is $689 million, and the assets of the Stadium Authority exceeded its liabilities and deferred inflow of the lease revenues by $112 million.
 The City’s total outstanding long-term debt decreased by $52 million, primarily as a result of the repayment of Stadium Authority debt and Electric revenue bonds.

OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of a series of financial statements and notes to those statements. These st
atements are organized so the reader can understand the City as a whole. This report consists of six parts – introductory section, financial/MD&A section, basic financial statements, required supplementary information, supplementary information, and statistical section.

The basic financial statements include two types of statements that present different views of the City:
 The Government-wide Financial Statements provide both long-term and short-term information about the City’s overall financial status.
 The Fund Financial Statements focus on individual parts of the government, reporting the City’s operations in more detail than the government-wide statements.

Government-wide Financial Statements
Government-wide statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. They include the Statement of Net Position and the Statement of Activities.

The Statement of Net Position presents information on all of the government’s assets, deferred outflows of resources, liabilities and deferred inflows of resources. Over time, increases or decreases in the City’s net position may serve as an indicator of whether the financial position of the City is improving or deteriorating.

The Statement of Activities provides information about the City’s revenues and expenses, regardless of the timing of related cash flows. The Statement of Activities explains in detail the change in net position for the fiscal year.

The Government-wide Financial Statements are divided into two categories:
 Governmental Activities—all of the City’s basic services are governmental activities. Included in basic services are the City Council, City Manager, City Clerk, City Attorney, Information Technology, Human Resources, Finance, Parks and Recreation, Library, Planning and Inspection, MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
7 Pub
lic Works, Police, and Fire. These services are p r incipally supported by taxes and intergovernmental revenues.
 Business-Type Activities—unlike governmental services, these services are intended to recover all or a significant portion of their costs through user fees and charges. All the City’s enterprise activities are reported as business-type activities, including the Major funds (Electric, Water, Sewer, Water Recycling utilities, and Stadium Authority) and Non-Major funds (Solid Waste, Cemetery, Santa Clara Convention Center, and Sports and Open Space Authority).

The City is the primary government in this report. These financial statements include four entities that, although legally separate, are important because they are blended component units of the City. These component units are the Santa Clara Stadium Authority, City of Santa Clara Sports and Open Space Authority, the Santa Clara Housing Authority, and the City of Santa Clara Public Facilities Financing Corporation. These component units have been included as an integral part of the City (that is, they have been “blended” with those of the City) and they are not reported as separate discrete component units in these financial statements.

Fund Financial Statements
The Fund Financial Statements provide detailed information about each of the City’s most significant funds, called major funds. Each major fund is presented individually, with all non-major funds combined in a single column on each fund statement. The non-major fund statements are presented in the Supplementary Information section of this report. Major funds present the primary activities of the City for the year and may change from year to year as a result of changes in the pattern of the City’s activities. All the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds: Most of the City’s basic services are included in Governmental Funds which focus on how money flows into and out of these funds and the balance left at fiscal year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental funds statements provide a detailed short-term view of the City’s general governmental operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Because the focus of governmental funds is narrower than that of the Government-wide Financial Statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the Government-wide Financial Statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

Proprietary Funds: Enterprise and Internal Service Fund Financial Statements are prepared on the full accrual basis of accounting, similar to that used by private sector companies. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Revenues, Expenses, and Changes in Net Position. The City’s Proprietary Funds are the same as the business-type activities reported in the Government-wide Statements but provide more detail and additional information, such as cash flows.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
8 Si
nce the City’s Internal Service Funds provide goods and services only to the City’s governmental and business-type activities, their activities are only reported at the fund level. Internal Service Funds cannot be considered major funds because their revenues are derived from other City funds. Revenues between funds are eliminated in the Government-wide Financial Statements and any related profits or losses are returned to the activities in which they were created, along with any residual net position of the Internal Service Funds.

Fiduciary Funds: Fiduciary Funds are prepared on the full accrual basis, similar to the Proprietary Funds.

The City has three types of Fiduciary Funds: the Custodial Funds (which includes Employee Supplemental Funds, Special Assessments, and Custodial Deposits), and the Private Purpose Trust Funds (which includes the Charitable Trust and Successor Agency). The City’s fiduciary activities are reported separately in the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position. These activities are excluded from the City’s Financial Statements because the City cannot use these assets to finance its own operations.

Notes to the Financial Statements
The notes provide additional information that is necessary to acquire a full understanding of the data provided in the Government-wide and Fund Financial Statements. The Notes to the Financial Statements follow the basic financial statements.

Other information
In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information. This information includes budgetary comparison schedules and the City’s progress in funding its obligation to provide pension and other post-employment benefits to its employees.

Required supplementary information can be found immediately following the Notes to the Financial Statements.

GOVERNMENT-WIDE FINANCIAL STATEMENTS ANALYSIS
Citywide Financial Statements
Th
is section focuses on the City’s net position and changes in net position of its governmental and business- type activities for the fiscal year ending June 30, 2023. As noted earlier, the City’s total assets and deferred outflows of resources exceed total liabilities and deferred inflows of resources by $2.3 billion at the end of the fiscal year, an increase in net position of $141 million.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
9 2023 2022(1)
2023 20 22(1)
2023 20 22(1)
Cash and investments 40 7$ 371 $ 746$ 688 $ 1,153 $ 1,059 $ Lease receivable 255 160 610 5 865 165
Other assets 134 145 490 539 624 684
Capital assets 652 640 1,470 1,465 2,122 2,105 Total Assets 1,448 1,316 3,316 2,697 4,764 4,013 Deferred outflows on derivative - - 1 - 1 -
Deferred outflows from refunding - - 5 6 5 6
Deferred outflows OPEB related 2 2 1 2 3 4
Deferred outflows pension related 141 69 35 18 176 87 - - Total Deferred Outflows of Resources 143 71 42 26 185 97 11 12 400 451 411 463
Right-to-use assets liability 9 2 5 1 14 3
Net OPEB liability 28 23 10 18 38 41
Net pension liability 517 347 145 101 662 448 Other liabilities 80 89 533 552 613 641
Total Liabilities 645 473 1,093 1,123 1,738 1,596 - - 23 42 23 42
Deferred inflows from refunding - - 1 2 1 2
Deferred inflows Lease related 251 159 600 4 851 163 Deferred inflows OPEB related 3 2 1 1 4 3
Deferred inflows pension related 4 93 1 25 5 118 Total Deferred Inflows of Resources 258 254 626 74 884 328 Net investment in capital assets 632 626 1,089 1,080 1,721 1,706 Restricted 343 317 332 333 675 650
Unrestricted (287) (283) 218 113 (69) (170)
Total Net Position 688$ 660 $ 1,639$ 1,526 $ 2,327 $ 2,186 $ Table 1
Governmental And Business-Type Net Position
(in millions)
Governmental Activities
Long-term debt outstanding
Business-Type Activities Total
(1) The net potions in fiscal year 2021-22 were not restated for the implementation of GASB Statement No. 96, SBITA, discussed in Notes 2C and 10.

Deferred inflows on derivative instruments
MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
10 Th
e largest portion of the City’s net position, $1.7 b illion (74%), is its investment in capital assets (e.g., land, infrastructure, buildings, machinery and equipment, right-to-use leased assets, and right-to-use SBITA), less any related outstanding debt that was used to acquire those assets and right-to-use liabilities.

The City uses these capital assets to provide services to its residents and other stakeholders. Accordingly, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, the resources needed to repay this debt must be provided from other sources because the capital assets themselves cannot be used to liquidate these liabilities.

The restricted portion of the City’s net position of $675 million (29%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $(69) million (-3%) is unrestricted and is negative due to the City’s net pension and OPEB liabilities.

At the end of the current fiscal year, the City is able to report positive balances in all reported categories of net position except for the Information Technology Services Internal Service Fund and Workers’ Compensation Insurance Claims Internal Service Fund.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
11 2023 2022 2023 2022 2023 2022
57 $ 48 $ 992 $ 889 $ 1,049 $ 937 $
6 34 - - 6 34
9 6 2 1 11 7
64 57 - - 64 57
84 74 - - 84 74
19 11 - - 19 11
7 7 - - 7 7
30 27 - - 30 27
13 6 29 12 42 18
(6) (14) (4) (27) (10) (41)
- - 9 14 9 14
10 7 - - 10 7
Other 43 59 - - 43 59
336 322 1,028 889 1,364 1,211
33 38 - - 33 38
1 1 - - 1 1
3 2 - - 3 2
2 2 - - 2 2
10 10 - - 10 10
45 39 - - 45 39
26 20 - - 26 20
88 72 - - 88 72
73 58 - - 73 58
19 15 - - 19 15
13 11 - - 13 11
- - 659 552 659 552
- - 49 46 49 46
- - 86 30 86 30
- - 7 6 7 6
- - 34 33 34 33
- - 1 1 1 1
- - 17 12 17 12
- - 62 65 62 65
313 268 915 745 1,228 1,013
23 54 113 144 136 198
5 (6) (5) 6 - -
28 48 108 150 136 198
Change in accounting principal - - 5 - 5 -
660 612 1,526 1,376 2,186 1,988
688 $ 660 $ 1,639 $ 1,526 $ 2,327 $ 2,186 $ Net position - July 1
Net position - June 30
Santa Clara Stadium Authority
Increase in net position before transfers
Increase in net position
Total expenses
Water
Sewer
Transfers in (out)
Water Recycling
Solid Waste
Cemetery
Equity in income of joint ventures
Library
Utilities:

Electric
General revenues:

Taxes:

Transient occupancy
Other
Ad valorem property
Sales
Capital grants and contributions
Operating grants and contributions
Revenues:

Program revenues:

Activities
Charges for services
Activities Total
Table 2
Governmental and Business-Type Changes in Net Position
(in millions)
Governmental Business-Type
Contribution in lieu of taxes
Investment earnings
Net increase (decrease) in fair value of investments
Planning and Inspection
Finance
Public Works
Parks and Recreation
Public Safety:

Police
Fire
Rents and royalties
Total revenues
Expenses:

General Administration
City Clerk
City Attorney
Human Resources
Santa Clara Convention Center
MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
12 Go
vernmental Activities – the City’s governmental activities boosted its net position by $28 million, mainly attributed to the increased revenue from sales tax, property tax, and transient occupancy tax receipt in fiscal year 2022-23.

Business-type Activities – the City’s business-type activities contributed to an increase of $1113 million in the City’s net position. This significant increase is primarily due to a $100 million increase in the Electric Utility driven by a higher charge for services resulting from an 8% rate increase and a $60 million recognized gain in the wholesale resources trading.

Governmental Activities
The chart below presents revenues by source for Governmental Activities. General revenues are composed of taxes and other revenues not specifically generated by, or restricted to, individual activities. All tax revenues and investment earnings are included in general revenues.

Sales taxes
19%
Ad valorem property taxes
25%
Transient occupancy taxes
6%
Other taxes
2%
Investment earnings
2%
Contribution in lieu
9%Rents and royalties
3%
Program revenues
21%
Other revenues
13%
Sources of Revenue
MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
13 Th
e following analysis presents a comparison of fisca l year 2022-23 and fiscal year 2021-22 by the total cost and net cost of each of the City’s largest programs. Net cost is defined as total program cost less the revenues generated by those specific activities. It is common to see Governmental Activities as net cost generators, wherein costs of governmental activities are greater than the revenues they generate.

Total Cost
of Services
2023 2022 2023 2022
General Administration 33$ 38 $ 17 $ - $
City Clerk 1 1 1 1
City Attorney 3 2 3 2
Human Resources 2 2 2 2
Finance 10 10 9 10
Public Works 45 39 26 24
Parks and Recreation 26 20 23 18
Public Safety:

Police 88 72 86 70
Fire 73 58 64 49
Planning and Inspection 19 15 (3) (6)
Library 13 11 13 11
Totals 313$ 268$ 241$ 181$
of Services
Net Cost
Table 3
Governmental Activities
(in millions)
In
fiscal year 2022-23, the total cost of services increased by $45 million, leading to a net cost increase of $60 million. Within the General Administration, the total cost of services amounted to $33 million, which was a $5 million decrease from the previous fiscal year. However, the net total cost of services in the General Administration reached $17 million, marking a substantial increase of $17 million from the prior fiscal year. This increase in the net cost of services in General Administration is primarily attributed to the utilization of one-time federal stimulus funds amounting to $26 million, which were used to sustain critical essential public safety services.

In the category of Public Safety, the total cost of services amounted to $161 million, representing an increase of $31 million from fiscal year 2021-22. This increase is primarily attributed to a $21 million rise in the CalPERS pension expenditure due to lower investment earnings.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
14 Bu
siness-type Activities
The
following analysis provides the total costs and net costs of each of the City’s enterprise funds. Net cost is defined as total program cost less the revenues generated by each enterprise fund.

Total Cost
of Services
2023 2022 2023 2022
Utilities:

Electric 659 $ 552 $ (93)$ (59)$
Water 49 46 (1) (6)
Sewer 86 30 28 (86)
Water Recycling 7 6 - -
Solid Waste 34 33 (2) (2)
Cemetery 1 1 1 -
Santa Clara Convention Center 17 12 (1) 3
Santa Clara Stadium Authority 62 65 (13) 6
Totals 915 $ 745 $ (81)$ (144)$
Net Cost
of Services
Table 4
Business-Type Activities
(in millions)
In f
iscal year 2022-23, the City's business-type total cost of services surged by $170 million, resulting in a net cost of services increase of $63 million. Specifically, the net cost of services for the Sewer Utility reached $28 million, marking a substantial increase of $114 million from the previous year. This significant net cost increase is primarily attributed to an equity loss of $51 million in the sewer joint project with the City of San Jose, which is a stark contrast to the $55 million equity gain in the prior year.

The total cost of services in the Electric Utility Fund increased by $107 million due to higher expenses related to resource purchases to meet the elevated demand in the City. The net cost of services in the Electric Utility Fund is now negative $93 million, reflecting a decrease of $34 million from fiscal year 2021-22.

This reduction in net cost is primarily due to a $60 million recognized gain in wholesale resources trading activities.

FUND FINANCIAL STATEMENTS
Fin
ancial Analysis of Governmental Funds
The City uses fund accounting to ensure and demonstrate compliance with finance-related legal re
quirements. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
15 At
June 30, 2023, the City’s governmental funds repor t ed a combined fund balance of $369 million, an increase of $44 million or 13.4% in comparison with the prior fiscal year. Approximately 25.2% or $93 million constitutes unassigned fund balance, which is available for spending at the City’s discretion. The remainder of the fund balance is either nonspendable, restricted, committed, or assigned to indicate that it is 1) not in spendable form, $3 million, 2) restricted for particular purposes, $162 million, 3) committed for particular purposes, $97 million, or 4) assigned for particular purposes, $14 million.

Governmental fund revenues were $365 million, showing a substantial increase of $43 million, or 13.4%, from $322 million in the prior year. The majority of this increase is attributed to following factors:
 a $14 million or 34.1% increase in the other revenue primarily due to a significant rise in the impact fee in the Park and recreation development projects.
 a $13 million or 97.2% increase in the interest and rent revenues, stemming from the inclusion of income from three new ground leases with Related Santa Clara, LLC and higher interest earning in the fiscal year 2022-23.
 a $8 million or $75.6% increase in the transient occupancy tax revenue.  a $8 million or 57.5% less unrealized loss in the investment.

Governmental fund expenditures were $332 million, reflecting an increase of $29 million or 9.7% compared to the prior year. The increase is primarily due to a $9 million increase in the personnel expenditure in the Public Safety program and a $14 million increase in capital outlay within the Park and Recreation capital projects and Street and Highway construction.

General Fund
Revenues
The City’s General Fund revenues totaled $275 million in fiscal year 2022-23, an increase of $54 million or 24.3% from the prior fiscal year.

Sales tax accounts for approximately 23.5% of direct General Fund revenues. Sales tax revenue increased $7.6 million from the prior year to $64.5 million. The growth was driven by the lifting of pandemic-related restrictions and overall improvement of in the economic environment. However, sales tax revenue was still a little lower than pre-pandemic levels.

Property tax (ad valorem) stands as the largest revenue source among General Fund revenues. In the fiscal year 2022-23, property tax revenues amounted to $85 million, reflecting an increase of $10 million, or a

13.4% growth compared to the previous year. This increase can be attributed to several factors, including reassessments following the sale of properties and the addition of new construction projects to the tax rolls.

These factors have collectively contributed to the significant boost in property tax revenue for the fiscal year.

Transient occupancy taxes (TOT) are calculated as a percentage of the charges for hotel and motel rooms within the city. The City Council approved a rate increase from 9.5% to 11.5%, effective from January 1, 2022. This increase was the first step in implementing a rate adjustment, as previously approved by the voters in November 2020, allowing for a potential four percentage point increase. The COVID-19 MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
16 pa
ndemic, along with related safety restrictions, sign ificantly impacted TOT revenues towards the end of the fiscal year 2019-20 and throughout fiscal year 2020-21. However, there has been a notable recovery in fiscal year 2022-23, with TOT revenues reaching $19 million. This represents a substantial $8 million increase, equivalent to a 75.6% growth when compared to fiscal year 2021-22. The resurgence in TOT revenues can be attributed to the robust growth in both occupancy rates and room rates within the city.

Licenses, permits, fines and penalties revenues excluding building related activities were $6.6 million in business licenses, parking permit, and miscellaneous permit in fiscal year 2022-23 compared to $5.4 million in the non-building related revenues in the previous year. The 22.9% increase is the result of a moderately growing local economy.

Intergovernmental revenues were $1.7 million in fiscal year 2022-23 compared to $3.1 million in the previous year. The decrease is due to $1.4 million less mutual aid reimbursement revenues in the fire departments when comparing to the prior year.

Charges for service, which excludes building development related activities, totaled $42 million in fiscal year 2022-23 compared to $37 million in the prior fiscal year, an increase of 14.5%. This increase is largely attributed to the recovery in revenues from parks and recreation services and from reimbursements related to the stadium events.

Contributions in-lieu of taxes were approximately $29.6 million in fiscal year 2022-23, a $2.3 million increase from the prior fiscal year. The increase is the result of higher consumption and retail rates.

Interest and rent revenues were $23 million in fiscal year 2022-23, a $11 million increase from the prior fiscal year due to higher interest rates and the inclusion of three new long term ground leases with Related Santa Clara, LLC. in the current fiscal year.

Expenditures
General Fund expenditures totaled $258 million for fiscal year 2022-23, 22.9% increase from the prior fiscal year total of $210 million. This amount excludes encumbrances, re-appropriations, and building related activities.

Salaries and benefits expenditures were $198 million in fiscal year 2022-23, a significant increase from the $161 million spent in the previous fiscal year, 2020-21. This increase is mainly attributed to the one-time transfer of specific public safety expenditures to the ARPA (American Rescue Plan Act) fund in the prior year.

Other operating expenditures, encompassing various categories such as materials, services, supplies, internal service fund charges, debt service, and minor capital outlays were $60 million in fiscal year 2022- 23, an increase of $11 million from the prior fiscal year. The increase can be primarily attributed to two key factors: a $6 million rise in capital outlays and a $1 million increase in debt service payments, primarily due to the implementation of GASB 96 standards, which have impacted the accounting and reporting of the debt service obligations.

The uses of the other financing sources for fiscal year 2022-23 were $5 million, reflecting a substantial decrease of $43 million when compared to the prior fiscal year. This decrease can be primarily attributed to a one-time transfer of funds from the building inspection reserve to the newly established New Development Service Fee fund in the previous year.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
17 Fun
d Balance
As
of June 30, 2023, total fund balance in the General Fund was $153 million, up $12 million from the fiscal year 2021-22. Table 5A shows the breakdown of various components compared with the prior fiscal year.
2023 2022 Net Change
Nonspendable 3 $ 7 $ (4) $
Restricted 25 23 2
Committed 18 24 (6)
Assigned 14 10 4
Unassigned 93 77 16
Total General Fund Balance 153$ 141$ 12$
Table 5A
General Fund Balance for the Fiscal Year Ended June 30, 2023 (in millions)
Gen
eral Fund Budgetary Highlights
The City’s budget is a flexible-spending plan, which commits resources to the accomplishment of City Council goals and objectives. During the fiscal year, the City Council took action to amend the adopted General Fund budget. A summary of the budgetary comparison schedule for the General Fund, located in the required supplementary information following the notes to the financial statements, is shown in the following table:

Original Budget Compared to Final Budget
Original Final
Budgeted Budgeted Net
Amount Amount Change
Revenues $ 238 $ 251 $ 13
Expenditures $ 261 $ 269 $ 8
Other financing sources (uses) $ (8) $ (11) $ (3)
General Fund Budget for the Fiscal Year Ended June 30, 2023 Table 5B
(in millions)
Adju
stments to the original budget were based on the following:
 The $13 million decrease in budgeted revenues is mainly due to a $8.9 million mid-year budgetary adjustment in the property tax due to the solid growth of the projected receipts and a $2.5 million MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
18 in
crease for charge for services due to the higher th a n anticipated revenues from events at Levi’s Stadium.
 The increase in budgeted expenditures is primarily due to a $7 million mid-year budget increase in the salary expenditure to reflect the latest negotiated salary adjustments and higher than anticipated personnel cost for the events at Lev’s Stadium.
 The increase in budgeted Other Financing Uses is primarily due to a $2.1 million transfer out for a fire engine purchase and $764 thousand transfer to the Citywide financial and payroll system upgrade project.

Final Budget Versus Actual
Final
Bu
dgeted Actual
Amount Amount Variance
Revenues 251 $ 277 $ 26 $
Expenditures 269 $ 251 $ (18) $
Other financing sources (uses) (11) $ (11) $ - $
General Fund Final Budget Versus Actual for the Fiscal Year Ended June 30, 2023 Table 5C
(in millions)
The
most significant differences between actual and final budgeted amounts are explained as follows:
 The final budgeted revenues resulted in a $26 million positive variance mainly due to a $6 million increase in the transient occupancy taxes, a $4 million increase in the interest and rent, a $4 million increase in the sales taxes, a $3 million increase in the contribution in-lieu, and a $2.3 million increase in the other revenues from Forty Niners Stadium Company LLC and the Stadium Authority for the revolving credit settlement.
 Actual expenditures were $18 million lower than the final budget as a result of lower departmental costs. See the General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget Actual (Non-GAAP Basis) for additional details.

Santa Clara Housing Successor
The Santa Clara Housing Successor (SCHS) Fund accounts for the activities related to the housing assets assumed by the City as Housing Successor to the Redevelopment Agency. The activities are governed by Community Redevelopment Law and must be used to provide housing for people with low and moderate incomes.

The SCHS’s revenues were approximately $1.2 million in fiscal year 2022-23. A decrease of $5.3 million in other revenues is due to a one-time developer contribution on the Multi-family housing project at 2330 Monroe street in the prior year.

The general expenditures were $628 thousand, $16 thousand or 2.5% increase from the prior year.

Expenditures are for case management services offered to persons experiencing (or at risk of) homelessness, MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
19 on
-going administration and labor cost related to dev e loping land held for development of affordable housing and managing and monitoring assets.

Non-Major Governmental Funds
These funds are not presented separately in the Basic Financial statements but are individually presented in th
e Supplemental Information section of this report.

Financial Analysis of Enterprise Funds
At the end of fiscal year 2022-23, the Enterprise Fund net position totaled $1.6 billion, reflecting an increase of
$113 million or 7.3% compared to the prior fiscal year. The major contributor to this increase was the Electric Utility Fund, which shown a $100 million increase. The increase in the Electric Utility Fund can be attributed to a $57 million increase in the charge for service and a $60 million recognized gain in the wholesale resources trading activities.

In fiscal year 2022-23, the equity of the joint venture experienced a loss of $43 million, a significant change from the $70 million gain recorded in the previous fiscal year. This decrease of $113 million is mostly due to $107 million in the equity loss associated with the San Jose Santa Clara Joint Wastewater Treatment Facility project.

Excluding joint venture activity and net change in the fair value of the investment, non-operating expenses in fiscal year 2022-23 were $17 million, a decrease of $1 million from the previous fiscal year.

Electric Utility
This fund accounts for the operation of the City’s electric utility services. Charges for Services revenues were $559 million in fiscal year 2022-23, an increase of $57 million, or 11.3% from fiscal year 21-22. The primary driver for this increase was an 8% rate increase effective January 1, 2023 and increased consumption.

Retail operating expenses reached $655 million in fiscal year 2022-23, making a significant increase from the $550 million in fiscal year 2021-22. The increase of $105 million or 19% in the operating expenses were primarily attributed to the higher costs in the purchased resources due to elevated prices.

Revenues from wholesale resource operations surged to $85 million in the current fiscal year, a significant increase from the $36 million recorded in fiscal year 2021-22. The increase is mainly attribute to a $60 million gain recognized in the wholesale resources trading activities in fiscal year 2022-23. The costs related to wholesale resources purchases increased to $19 million from $18 million in the prior fiscal year.

The slight increase in wholesale power in fiscal year 2022-23 was influenced by the overall high-priced resource market.

Interest revenues was $8 million in fiscal year 2022-23, up from $6 million recorded in fiscal year 2021-

22. This increase is primarily due to a higher interest rate environment. Interest expense remains at $3 million in the current year.

The Electric Utility Fund had a net position of $1,071 million at June 30, 2023, an increase of $99 million or 10.2% from the prior fiscal year. Of this amount, $527 million was net investment in capital assets, $6 million was restricted for contractual obligation, and $538 million was unrestricted. The Electric Utility MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
20 Fu
nd is a participant in a number of joint ventures in cluding Northern California Power Agency (NCPA), the Transmission Agency of Northern California (TANC), M-S-R Public Power Agency (MSR PPA), and M-S-R Energy Authority (MSR EA).

Water Utility
This fund accounts for the operation of the City’s water utility services. Operating revenues were $50 million for fiscal year 2022-23 which is consistent with the prior fiscal year.

Operating expenses were $49 million in fiscal year 2022-23, compared to $46 million in fiscal year 2021-

22. The increase is primarily due to higher consulting fees and higher maintenance cost which includes emergency repairs for aging equipment. The Water Utility Fund’s net position was $76 million at June 30, 2023.

Sewer Utility
This fund accounts for the maintenance of the City’s sewer lines and related facilities. Operating revenues of the Sewer Utility was $51 million in fiscal year 2022-23 and non-operating revenue was $7 million in the current year.

Operating expenses were $33 million in fiscal year 2022-23. This increase is primarily due to the rise of the legal fees related to sewer operations.

The Sewer Utility Fund had a net position of $339 million at June 30, 2023. Of this amount, $32 million was net investment in capital assets, $241 million was restricted for joint venture capital projects and $66 million was unrestricted and other. The Sewer Utility, together with the City of San Jose, owns the San Jose/Santa Clara Regional Wastewater Facility which is administered by the City of San Jose. The Sewer Utility’s ownership share is approximately 19.46% of the assets, capital, and operating costs. In fiscal year 2021-22, the City of San Jose reported that the loss of the Utility’s equity in the Regional Wastewater Facility was $52 million (fiscal year 2022-23 amounts were not available at the time of this report).

Water Recycling
This fund accounts for the ongoing maintenance and operations of the City’s wastewater reclamation system. Operating revenues is $6.3 million, an increase of $0.2 million from the prior year and operation expenses is $6.6 million, an increase of $0.9 million from fiscal year 2021-22 due to higher resource cost.

The net position at June 30, 2023 remained at $6 million.

Santa Clara Stadium Authority (Stadium Authority)
These funds account for the development and operation of Levi’s Stadium. As of March 31, 2023, the Stadium Authority recorded approximately $72 million in operating revenue, $21 million more than prior year. This was mainly due to increase in charges for services from NFL games, Non-NFL events and smaller special events being held, and increase in rents and licenses. Operating expenses were $49 million, decreasing $2 million from the prior fiscal year. This decrease is primarily due to higher Stadium Manager expenses and Non-NFL events expenses offsets by zero settlement expense true-up. The Stadium Authority recognized additional expenses for the unpaid Shared Stadium Expenses and Other Expenses in fiscal year 2021-22 as part of the Settlement Agreement. Net position at March 31, 2023 was $110 million, an increase of $30 million from the previous fiscal year. Refer to Note 6.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
21 So
lid Waste
Thi
s fund accounts for the administration of the City’s garbage and rubbish collection service. Operating revenues were $36 million in fiscal year 2022-23, an increase of $1 million from the prior fiscal year.

Operating expenses were $34 million in fiscal year 2022-23, an increase of $700 thousand from fiscal year 2021-22. The Solid Waste Fund’s net position was $1 million at June 30, 2023.

Cemetery
This fund accounts for the Mission City Memorial Park’s operations. Operating revenues were $932 thousand, down 9% over the prior fiscal year. Operating expenses remained consistent with the prior year at $1.4 million. The net position at June 30, 2023 was $3.0 million.

Santa Clara Convention Center
This fund accounts for the operations of the Santa Clara Convention Center. Operating revenues were $17.4 million in fiscal year 2022-23 compared to $8.5 million in fiscal year 2021-22. Expenses were $16.6 million in the fiscal year 2022-23 compared to $11.8 million in prior fiscal year. The increased costs are directly related to the increased events at the Convention Center. Net position at June 30, 2023 was $26 million. On November 1, 2019, the City entered into an agreement with Levy Premium Foodservice Limited Partnership (Levy) to manage the foodservice operations at the Convention Center and Levy agreed to pay an operating investment of $5.75 million to promote the economic development of the City. The investment is amortized on a straight-line basis over 15 years.

Sports and Open Space Authority (SOSA)
This fund accounts for the acquisition and preservation of open space within the City and the development of local sports activities. There were no operating revenues in fiscal year 2022-23 due to the expiration of the operating lease. Operating expenses were $10 thousand, with a net position at June 30, 2023 of $2 million.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
22 CAPITAL ASSETS
At June 30, 2023, the City’s capital assets totaled $652 million in Governmental Activities, and $1.47 bi
llion in Business-Type Activities, net of depreciation. Capital Assets are invested in a broad range of categories, as shown in Table 6.
2023 2022 Net Change
Governmental Activities:

Land 125$ 125$ -$
Construction in progress 39 52 (13)
Land improvements 60 29 31
Buildings 217 217 -
Infrastructure 633 624 9
Machinery and equipment 87 86 1
Right-to-use leased Equipment 1 1 -
Right-to-use SBITA(1) 11 2 9
Less accumulated depreciation (521) (496) (25)
Totals 652$ 640$ 12$
Business-Type Activities:

Land 19$ 19$ -$
Construction in progress 74 64 10
Buildings 919 919 -
Infrastructure 1,262 1,223 39
Machinery and equipment 28 26 2
Right-to-use leased building 3 3 -
Right-to-use SBITA(1) 3 1 2
Less accumulated depreciation (838) (790) (48)
Totals 1,470$ 1,465$ 5$
Table 6
Capital Assets at June 30, 2023
(in millions)
(1) Certain amounts in the prior year have been restated due to the implementation of GASB 96.

The
increase of $31 million in the Governmental Funds land improvement was primarily due to a $26 million youth soccer field and $4 million of new neighborhood park and community garden. The $39 million increase in Enterprise Funds infrastructure is mainly due to $35 million in Electric infrastructure improvements related to substation and transformer projects, as well as a $3 million project from replacement of the water distribution system.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
23 Th
e Capital Improvement Project Budget for fiscal year 2022-23 and the Five-Year Financial Plan for fiscal year 2022-23 through fiscal year 2026-27 contain more detailed discussions of Capital Projects planned for the City of Santa Clara. See Note 9 to the financial statements for additional details on fiscal year 2022-23 capital assets.

DEBT ADMINISTRATION
Each of the City’s debt issues is discussed in detail in Note 10 to the financial statements. At June 30, 2023 th
e City’s debt was comprised of the following:

Balance Balance
Governmental Activity Debt: June 30, 2023 June 30, 2022 Net Change Refunding Certificates of Participation, Series 2013 11$ 12$ (1) $ Business-Type Debt:

Electric Utility Revenue Bonds, net of unamortized discount 33 44 (11) Electric Loan Agreements 95 99 (4)
Sewer Utility Loan Agreements 27 28 (1)
StadCo Subordinated Loan(1) - 20 (20)
StadCo CFD Advance (1) 30 30 -
Stadium Funding Trust Loan(1) 215 230 (15)
Total Debt 411$ 463$ (52)$
(1) Stadium Authority's long-term obligations are based on a March 31 fiscal year end.

Table 7
Outstanding Debt at June 30, 2023
(in millions)

SUCCESSOR AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (AB 26) that provided fo
r the dissolution of all redevelopment agencies in the State of California. On February 1, 2012 all redevelopment agencies in California were effectively dissolved. The Successor Agency for the Santa Clara Redevelopment Agency is currently in the process of winding down the affairs of the former Redevelopment Agency.

See Notes 21 and 22 for further information on the Redevelopment Agency dissolution and Successor Agency activities.

ECONOMIC OUTLOOK
The economy of the City is discussed in the accompanying Transmittal Letter.

MAN
AGEMENT’S DISCUSSION AND ANALYSIS (continued)
24 CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This Annual Comprehensive Financial Report is intended to provide citizens, taxpayers, investors, and cr
editors with a general overview of the City’s finances. A separate Annual Financial Report for Silicon Valley Power is available upon request. Questions about this Report should be directed to the City of Santa Clara Finance Department, 1500 Warburton Avenue, Santa Clara, California, 95050, telephone (408) 615- 2340.

Basic Financial Statements
Thi
s page intentionally left blank
27 CIT

Y OF SANTA CLARA

GOVERNMENT-WIDE FINANCIAL STATEMENTS

STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire City’s financial activities and financial position. They are prepared on the same basis as is used by most businesses, which means they include all the City’s assets and deferred outflows of resources and all its liabilities and deferred inflows of resources, as well as all its revenues and expenses. This is known as the full accrual basis—the effect of all the City’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between City funds have been eliminated.

The Statement of Net Position reports the excess of the City’s total assets and deferred outflows of resources over the City’s total liabilities and deferred inflows of resources, including all the City’s capital assets and all its long-term debt. The Statement of Net Position presents similar information to the balance sheet format, but presents it in a way that focuses the reader on the composition of the City’s net position, by subtracting total liabilities and deferred inflows from total assets and deferred outflows.

The Statement of Net Position summarizes the financial position of all the City’s Governmental Activities in a single column, and the financial position of all the City’s Business-Type Activities in a single column; these columns are followed by a total column that presents the financial position of the entire City.

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

The Statement of Activities reports increases and decreases in the City’s net position. It is also prepared on the full accrual basis, which means it includes all the City’s revenues and all its expenses, regardless of when cash changes hands. This differs from the “modified accrual” basis used in the Fund financial statements, which reflect only current assets, current liabilities, available revenues and measurable expenditures.

The format of the Statement of Activities presents the City’s expenses first, listed by program, and follows these with the expenses of its business-type activities. Program revenues—that is, revenues which are generated directly by these programs—are then deducted from program expenses to arrive at the net (expense) revenue of each governmental and business-type program. The City’s general revenues are then listed in the Governmental Activities or Business-Type Activities column, as appropriate, and the Change in Net Position is computed and reconciled with the Statement of Net Position.

Both these Statements include the financial activities of the City, the Santa Clara Housing Authority, the Santa Clara Stadium Authority, the City of Santa Clara Sports and Open Space Authority, and the City of Santa Clara Public Facilities Financing Corporation, which are legally separate but are component units of the City.

See accompanying notes to basic financial statements
28 Governmental Business-Type
Activities Activities Total
ASSETS
Current Assets
Cash and investments (Note 7):

Pooled cash and investments 381,870,430$ 673,249,316$ 1,055,119,746$ Investments with fiscal agent 11,187 40,463,291 40,474,478 Receivables (net of allowance for uncollectible):

Accounts 5,681,192 133,451,727 139,132,919
Interest 3,502,941 2,579,574 6,082,515
Intergovernmental 14,044,074 - 14,044,074
Leases receivable (Note 4) 3,248,448 11,978,951 15,227,399 Derivative financial instruments (Note 10D) - 8,294,280 8,294,280 Materials, supplies and prepaid 980,351 18,148,225 19,128,576 Land held for development (Note 2H) 7,103,770 - 7,103,770 Total Current Assets 416,442,393 888,165,364 1,304,607,757 Noncurrent Assets
Restricted Cash (Note 7) 24,711,385 10,078,956 34,790,341 Investment with fiscal agent (Note 7) 716,910 11,536,235 12,253,145 Derivative financial instruments (Note 10D) - 15,163,920 15,163,920 Deposits (Note 7) - 11,127,179 11,127,179
Leases receivable, noncurrent (Note 4) 251,626,055 598,146,262 849,772,317 Internal balances (Note 8D) (5,589,090) 5,616,205 27,115 Long term loans, net 102,303,135 - 102,303,135
Capital assets (Note 9):

Land and construction in progress 163,523,633 93,160,925 256,684,558 Capital assets being depreciated, net 488,589,345 1,376,612,598 1,865,201,943 Investment in joint ventures (Note 12) 5,836,493 305,928,066 311,764,559 Other 22,680 - 22,680
Total Noncurrent Assets 1,031,740,546 2,427,370,346 3,459,110,892 Total Assets 1,448,182,939 3,315,535,710 4,763,718,649

DEFERRED OUTFLOWS OF RESOURCES
Derivative instruments (Note 10D) - 783,790 783,790
Refunding - 5,333,697 5,333,697
OPEB related items (Note 16) 2,331,591 860,206 3,191,797 Pension related items (Note 13) 140,880,030 34,731,680 175,611,710 Total Deferred Outflows of Resources 143,211,621 41,709,373 184,920,994

CITY OF SANTA CLARA

STATEMENT OF NET POSITION
June 30, 2023
Statement of Net Position
See accompanying notes to basic financial statements
29 Governmental Business-Type
Activities Activities Total

LIABILITIES
Current Liabilities
Accrued liabilities 33,172,079 47,071,430 80,243,509 Deposits 4,857,612 - 4,857,612
Interest payable 349,024 7,328,829 7,677,853
Accrued compensated absences (Note 2K) 1,812,117 674,468 2,486,585 Unearned revenue, current portion 328,031 22,843,344 23,171,375 Landfill closure liability (Note 11) - 765,000 765,000 Derivative financial instruments (Note 10D) - 783,790 783,790 Current portion of lease obligation (Note 10H) 212,705 681,619 894,324 Current portion of SBITA (Note 10I) 1,638,865 392,381 2,031,246 Long-term debt due within one year (Note 10) 1,030,000 31,393,893 32,423,893 Total Current Liabilities 43,400,433 111,934,754 155,335,187 Noncurrent Liabilities
Long-term portion estimated claims (Note 19) 21,715,000 - 21,715,000 Accrued compensated absences (Note 2K) 18,852,451 7,016,852 25,869,303 Landfill closure liabilities (Note 11) - 5,367,036 5,367,036 Accrued liabilities - 7,149,723 7,149,723
Unearned revenue - 432,484,579 432,484,579
Long-term lease obligation (Note 10H) 39,413 951,003 990,416 Long-term SBITA obligation (Note 10I) 7,278,939 2,325,628 9,604,567 Long-term debt due after one year (Note 10) 9,530,097 369,182,938 378,713,035 Net OPEB liability due after one year (Note 16) 27,552,661 10,165,126 37,717,787 Net pension liability due after one year (Note 13) 516,806,096 144,831,507 661,637,603 Total Noncurrent Liabilities 601,774,657 979,474,392 1,581,249,049 Total Liabilities 645,175,090 1,091,409,146 1,736,584,236

DEFERRED INFLOWS OF RESOURCES
Derivative instruments (Note 10D) - 23,458,200 23,458,200 Refunding - 1,280,797 1,280,797
Leases related (Note 4) 251,501,567 599,639,702 851,141,269 OPEB related items (Note 16) 2,654,666 979,401 3,634,067 Pension related items (Note 13) 4,091,705 1,124,061 5,215,766 Total Deferred Inflows of Resources 258,247,938 626,482,161 884,730,099 NET POSITION (Note 18)
Net investment in capital assets 632,382,959 1,088,898,959 1,721,281,918 Restricted for:

Capital projects and other agreements 140,457,105 323,516,269 463,973,374 Debt service 536,429 - 536,429
Housing activities 135,415,654 - 135,415,654
Community development 34,969,769 - 34,969,769
Transportation 3,831,532 - 3,831,532
Pension rate stabilization program 22,309,426 8,557,917 30,867,343 Other purposes 4,946,251 - 4,946,251
Total Restricted Net Position 342,466,166 332,074,186 674,540,352 Unrestricted Net Position (286,877,593) 218,380,631 (68,496,962) Total Net Position 687,971,532$ 1,639,353,776$ 2,327,325,308$

CITY OF SANTA CLARA

STATEMENT OF NET POSITION
June 30, 2023
See accompanying notes to basic financial statements
30 Indirect Operating Capital
Expenses Charges for Grants and Grants and
Functions/Programs Expenses Allocation Services Contributions Contributions Governmental Activities:

General Administration 37,659,438$ (5,306,038)$ 14,252,163$ 952,723$ 215,724$ City Clerk 1,710,963 (381,535) 38,170 - -
City Attorney 2,981,363 (452,190) - - -
Human Resources 3,677,884 (1,639,189) - - -
Finance 16,347,529 (6,316,529) 1,354,388 - -
Public Works 47,094,357 (2,255,682) 6,931,929 3,224,303 8,318,344 Parks and Recreation 25,906,726 - 3,225,156 133,466 - Public Safety:

Police 88,388,974 - 785,561 1,273,331 -
Fire 73,153,709 - 8,247,338 909,354 -
Planning and Inspection 19,218,408 - 21,754,872 - - Library 12,766,176 - 9,591 157,989 - Interest on long term debt 348,521 - - - -
Total Governmental Activities 329,254,048 (16,351,163) 56,599,168 6,651,166 8,534,068 Business-type Activities:

Utilities:

Electric 650,337,021 8,263,126 751,408,844 - -
Water 46,132,420 2,877,531 50,518,737 - -
Sewer 84,782,290 1,425,447 57,997,844 - -
Water Recycling 6,513,067 91,784 6,394,638 - - Solid Waste 32,267,456 1,928,973 35,944,131 - - Cemetery 1,262,701 132,307 932,128 - -
Sports and Open Space Authority 10,199 - - - -
Santa Clara Convention Center 16,529,872 - 17,429,458 - - Santa Clara Stadium Authority 60,186,017 1,631,995 72,311,334 - 2,126,817 Total Business-type Activities 898,021,043 16,351,163 992,937,114 - 2,126,817 Total 1,227,275,091$ -$ 1,049,536,282$ 6,651,166$ 10,660,885$ General Revenues:

Taxes:

Sales
Ad valorem property
Transient occupancy
Other
Contribution in lieu of taxes
Investment earnings
Net (decrease) in the fair value of investments
Equity in gains/(losses) of joint ventures
Rents and royalties
Other
Transfers (Note 8A)
Total General Revenues and Transfers
Change in Net Position
Net Position - beginning
GASB 87 implementation (Note 6F)
Net Position - beginning, as restated
Net Position - ending
Program Revenues

STATEMENT OF ACTIVITIES

CITY OF SANTA CLARA
For the year ended June 30, 2023
Statement of Activities
See accompanying notes to basic financial statements
31 Governmental Business-Type
Activities Activities Total
(16,932,790)$ -$ (16,932,790)$
(1,291,258) - (1,291,258)
(2,529,173) - (2,529,173)
(2,038,695) - (2,038,695)
(8,676,612) - (8,676,612)
(26,364,099) - (26,364,099)
(22,548,104) - (22,548,104)
(86,330,082) - (86,330,082)
(63,997,017) - (63,997,017)
2,536,464 - 2,536,464
(12,598,596) - (12,598,596)
(348,521) - (348,521)
(241,118,483) - (241,118,483)
- 92,808,697 92,808,697
- 1,508,786 1,508,786
- (28,209,893) (28,209,893)
- (210,213) (210,213)
- 1,747,702 1,747,702
- (462,880) (462,880)
- (10,199) (10,199)
- 899,586 899,586
- 12,620,139 12,620,139
- 80,691,725 80,691,725
(241,118,483) 80,691,725 (160,426,758)
64,497,774 - 64,497,774
84,046,735 - 84,046,735
18,989,011 - 18,989,011
6,737,707 - 6,737,707
29,584,030 - 29,584,030
13,299,082 28,656,562 41,955,644
(5,787,602) (3,863,299) (9,650,901)
- 8,532,699 8,532,699
10,030,584 - 10,030,584
43,058,186 - 43,058,186
4,963,654 (4,963,654) -
269,419,161 28,362,308 297,781,469
28,300,678 109,054,033 137,354,711
659,670,854 1,525,597,108 2,185,267,962
- 4,702,635 4,702,635
659,670,854 1,530,299,743 2,189,970,597
687,971,532$ 1,639,353,776$ 2,327,325,308$
Net (Expense) Revenue and Changes in Net Position

CITY OF SANTA CLARA

STATEMENT OF ACTIVITIES
For the year ended June 30, 2023
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33 C

ITY OF SANTA CLARA

FUND FINANCIAL STATEMENTS

GOVERNMENTAL FUNDS
The funds described below were determined to be Major Funds by the City in fiscal year 2022-23. Individual non-major funds may be found in the Supplementary section.

MAJOR GOVERNMENTAL FUNDS

GENERAL FUND
The General Fund accounts for resources and services traditionally associated with government. The General Fund provides administrative, financial, police protection, fire protection, community development, recreation, and maintenance services to the community and other funds. The General Fund accounts for revenues that have unrestricted uses and are not required legally or by contractual agreement to be accounted for in another fund.

SANTA CLARA HOUSING SUCCESSOR FUND
The Santa Clara Housing Successor Fund accounts for the activities related to the housing assets assumed by the City as Housing Successor to the former Redevelopment Agency. The activities are governed by Community Redevelopment Law and must be used to provide housing for people with low and moderate incomes.

See accompanying notes to basic financial statements
34 General Santa Clara
Fund Housing Successor
ASSETS
Cash and investments (Note 7):

Pooled cash and investments 129,831,402$ 3,984,014$
Investments with fiscal agent - current - -
Restricted cash 22,309,426 -
Receivables (net of allowance for uncollectibles):

Accounts 3,608,162 -
Interest 3,502,941 -
Loans 4,244,948 102,753,161
Intergovernmental 12,797,709 -
Due from other funds (Note 8B) 170,011 -
Materials, supplies and prepaids 618 -
Land held for development (Note 2H) - 7,103,770
Investments with fiscal agent - noncurrent (Note 7) - - Leases Receivable (Note 4) 254,874,503 -
Other 22,680 -
Total Assets 431,362,400$ 113,840,945$

LIABILITIES
Accrued liabilities 17,114,267$ 189,163$
Deposits 4,857,612 -
Unearned revenue 328,031 -
Total Liabilities 22,299,910 189,163

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - Lease revenues (Note 4) 251,501,567 - Unavailable revenue - Loans 4,244,948 102,753,161
Total Deferred Inflows of Resources 255,746,515 102,753,161 FUND BALANCES (Note 18)
Nonspendable 3,396,234 -
Restricted 24,689,167 10,898,621
Committed 18,575,249 -
Assigned 13,862,662 -
Unassigned 92,792,663 -
Total Fund Balances 153,315,975 10,898,621
Total Liabilities, Deferred Inflows of Resources
and Fund Balances 431,362,400$ 113,840,945$

CITY OF SANTA CLARA

GOVERNMENTAL FUNDS

BALANCE SHEET
June 30, 2023
Balance Sheet
See accompanying notes to basic financial statements
35 Non-Major Total
Governmental Funds Governmental Funds
206,815,403$ 340,630,819$
11,187 11,187
2,401,959 24,711,385
1,559,408 5,167,570
- 3,502,941
76,026,181 183,024,290
1,246,365 14,044,074
- 170,011
- 618
- 7,103,770
716,910 716,910
- 254,874,503
- 22,680
288,777,413$ 833,980,758$
8,061,206$ 25,364,636$
- 4,857,612
- 328,031
8,061,206 30,550,279
- 251,501,567
76,026,181 183,024,290
76,026,181 434,525,857
- 3,396,234
126,485,623 162,073,411
78,204,403 96,779,652
- 13,862,662
- 92,792,663
204,690,026 368,904,622
288,777,413$ 833,980,758$

BALANCE SHEET
June 30, 2023

CITY OF SANTA CLARA

GOVERNMENTAL FUNDS
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See accompanying notes to basic financial statements
37 TOTAL GOVERNMENTAL FUND BALANCE 368,904,622$
Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds above because of the following:

CURRENT LIABILITIES
The assets and liabilities below are due and payable in less than one year and more than 90 days and therefore are not reported in the Funds:

Current portion of accrued compensated absences (excluding Internal Service Funds) (1,752,366) Interest payable (208,995)

CAPITAL ASSETS
Capital assets used in Governmental Activities are not current assets or financial resources and, therefore, are not reported in the Governmental Funds. 642,915,347 Right to use leases assets used in governmental activities are not financial resources and therefore are not reported in the funds.

Right to use asset equipment net of amortization 251,608 Right to use SBITA net of amortization 8,946,023
INVESTMENT IN NON-BUSINESS-TYPE JOINT VENTURE 5,836,493

DEFERRED OUTFLOWS OF RESOURCES
OPEB related (excluding Internal Service Funds) 2,271,925 Pension related (excluding Internal Service Funds) 138,646,090

ALLOCATION OF INTERNAL SERVICE FUND NET POSITION
Internal Service Funds are not governmental funds. However, they are used by management to charge the costs of certain activities, such as insurance and central services and maintenance, to individual governmental funds. The net current assets of the Internal Service Funds are therefore included in Governmental Activities in the following line items in the Statement of Net Position:

Cash and investments 41,239,611
Accounts receivable 513,622
Materials, supplies and prepaid 979,733
Deferred outflows OPEB related items 59,666
Deferred outflows pension related items 2,233,940
Accrued liabilities, including short-term portion of estimated claims (7,807,443) Long-term portion of estimated claims (21,715,000)
Compensated absences - current (59,751)
Compensated absences - long-term (621,626)
Internal balances (5,759,101)
Lease obligations (253,690)
SBITA obligations (1,808,348)
Net OPEB liability (705,080)
Net pension liability (8,974,179)
Deferred inflows OPEB related items (67,933)
Deferred inflows pension related items (69,650)

LONG TERM LIABILITIES
The assets and liabilities below are not due and payable in the current period and, therefore, are not reported in the Funds:

Reserve against conditional grant balances (9,679,750)
Long-term debt (10,560,097)
Long-term liability associated with lease agreements (excluding Internal Service Funds) (138,457) Long-term liability associated with SBITA agreements (excluding Internal Service Funds) (7,109,456) Non-current portion of accrued compensated absences
(excluding Internal Service Funds) (18,230,825)
Net OPEB liability (excluding Internal Service Funds) (26,847,581) Net pension liability (excluding Internal Service Funds) (507,831,917)

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues recorded in governmental funds financial statements resulting from activities in which revenues were earned but funds were not available are reclassified as revenues in Government-Wide Financial Statements. 111,982,885 (2,586,733)
(4,022,055)
NET POSITION OF GOVERNMENTAL ACTIVITIES 687,971,532$
June 30, 2023

CITY OF SANTA CLARA
Pension related (excluding Internal Service Funds)

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
OPEB related (excluding Internal Service Funds)
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position See accompanying notes to basic financial statements
38 General Santa Clara
Fund Housing Successor

REVENUES
Taxes:

Sales 64 ,497,774$ -$
Ad valorem 84,599,469 -
Transient occupancy 18,989,011 -
Other 6,378,388 -
Licenses, permits, fines, and penalties 6,593,214 1,176 Intergovernmental 1,674,936 -
Charges for services 42,115,561 1,215
Contributions in-lieu of taxes 29,584,030 -
Interest and rents 23,336,037 75,550
Net increase (decrease) in the fair
value of investments (5,787,602) -
Other 2,953,182 1,126,022
Total Revenues 274,934,000 1,203,963

EXPENDITURES
Current:

General Administration 18,332,449 5,627,859
City Clerk 1,793,016 -
City Attorney 3,062,065 -
Human Resources 3,697,722 -
Finance 18,110,951 -
Public Works 22,767,600 -
Parks and Recreation 20,190,175 -
Public Safety:

Police 80,863,583 -
Fire 66,999,955 -
Planning and Inspection 4,226,819 -
Library 10,609,591 -
Capital outlay 6,486,020 -
Debt service (Note 10):

Principal payments 992,539 -
Interest and fiscal fees 61,204 -
Total Expenditures 258,193,689 5,627,859

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 16,740,311 (4,423,896)

OTHER FINANCING SOURCES (USES)
Subscription based IT Arragement Liabilities (Note 9) 6,425,640 - Transfers in (Note 8A) 4,693,804 -
Transfers (out) (Note 8A) (15,658,501) -
Total Other Financing Sources (Uses) (4,539,057) -
NET CHANGE IN FUND BALANCE 12,201,254 (4,423,896)
Fund balances - beginning 141,114,721 15,322,517
Fund balances - ending 153,315,975$ 10,898,621$

CITY OF SANTA CLARA

GOVERNMENTAL FUNDS

AND CHANGES IN FUND BALANCES

STATEMENT OF REVENUES, EXPENDITURES
For the year ended June 30, 2023
Statement of Revenues, Expenditures, and Changes in Fund Balances See accompanying notes to basic financial statements
39 Non-Major Total
Governmental Funds Governmental Funds
-$ 64,497,774$
- 84,599,469
- 18,989,011
359,319 6,737,707
11,795,557 18,389,947
11,624,119 13,299,055
9,859,269 51,976,045
- 29,584,030
2,653,160 26,064,747
- (5,787,602)
52,301,850 56,381,054
88,593,274 364,731,237
12,343,023 36,303,331
- 1,793,016
- 3,062,065
- 3,697,722
- 18,110,951
7,407,851 30,175,451
2,320,459 22,510,634
272,243 81,135,826
1,136,609 68,136,564
14,879,572 19,106,391
122,776 10,732,367
28,312,328 34,798,348
1,084,186 2,076,725
442,905 504,109
68,321,952 332,143,500
20,271,322 32,587,737
1,776,143 8,201,783
22,306,913 27,000,717
(8,611,113) (24,269,614)
15,471,943 10,932,886
35,743,265 43,520,623
168,946,761 325,383,999
204,690,026$ 368,904,622$

CITY OF SANTA CLARA

GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
For the year ended June 30, 2023
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See accompanying notes to basic financial statements
41 CITY OF SANTA CLARA

AND CHANGES IN FUND BALANCES TO THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 43,520,623$ Amounts reported for governmental activities in the Statement of Activities are different because of the following:

ACCRUAL OF CURRENT ITEMS
The amounts below included in the Statement of Activities do not provide or (require) the use of financial resources over 90 days and therefore are not reported as revenue or expenditures in governmental funds (net change):

Current portion of accrued compensated absences 510,713

CAPITAL ASSET TRANSACTIONS
Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.

The capital outlay expenditures are therefore added back to fund balance 26,596,565 Depreciation expense is deducted from the fund balance
(Depreciation expense is net of Internal Service Fund depreciation of $2,552,188 which has already been allocated to service funds.) (22,252,639) Retirements of capital assets (net of Internal Service Fund retirement of $39,274) (124) Contributions of infrastructure improvements by developers and equipment are capitalized in the Statement of Activities, but are not recorded in the Governmental Fund Statements because no cash changed hands. 1,938,180
JOINT VENTURES - PROFIT FROM EQUITY 350,764

LONG TERM DEBT PROCEEDS AND PAYMENTS
Repayment of bond principal is an expenditure in the governmental funds, but in the Statement of Net Position the repayment reduces long-term liabilities.

Repayment of debt principal is added back to fund balance 980,000 Amortization of bond premium 54,297

ACCRUAL OF NON-CURRENT ITEMS
The amounts below included in the Statement of Activities do not provide or (require) the use of current financial resources and therefore are not reported as revenue or expenditures in governmental funds (net change):

Provision for reserve of conditional grants (12,974,621) Non-current portion of accrued compensated absences (717,793) Interest payable 20,417
Unavailable revenue (1,499,288)
Lease related expense (74)
SBITA related expense (184,428)
OPEB related expense (6,199,563)
Pension related expense (8,290,382)

ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY
Internal Service Funds are used by management to charge the costs of certain activities, such as equipment acquisition, maintenance, and insurance to individual funds.

The portion of the net revenue (expense) of these Internal Service Funds, arising out of their transactions with Governmental Funds, is reported with governmental activities, because they service those activities.

Change in Net Position - All Internal Service Funds, net 9,335,353 Change in Net Position of Internal Service Funds reported with Business-Type Activities (2,887,322) CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 28,300,678$ For the year ended June 30, 2023

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities Thi
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43 C

ITY OF SANTA CLARA

MAJOR PROPRIETARY FUNDS
Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges. Individual non-major Proprietary funds may be found in the Supplementary section.

The City has identified the funds below as major proprietary funds in fiscal year 2022-23.

GAAP does not require the disclosure of budget versus actual comparisons regarding proprietary funds that are major funds.

ELECTRIC UTILITY FUND
This fund accounts for the operation of the City’s electric utility, a self-supporting activity that provides services on a user charge basis to residences and businesses.

WATER UTILITY FUND
This fund accounts for the operation of the City’s water utility, a self-supporting activity that provides services on a user charge basis to residences and businesses.

SEWER UTILITY FUND
The sewer utility fund accounts for the maintenance of the City’s sewer lines and related facilities. It is a self- supporting activity that provides services on a user charge basis to residences and businesses.

WATER RECYCLING UTILITY FUND
This fund accounts for the ongoing maintenance and operations of the City’s waste water reclamation system.

It is a self-supporting activity that provides services on a user charge basis from the sale of non-potable water for irrigation and landscaping.

SANTA CLARA STADIUM AUTHORITY FUND
The Santa Clara Stadium Authority Fund was established in 2011 to provide for development and operation of Levi’s Stadium (home of the NFL’s San Francisco 49ers). In November 2012, the Santa Clara Stadium Authority changed its fiscal year ending date from June 30 th to March 31st to conform with the fiscal year of St
adium Funding Trust.

See accompanying notes to basic financial statements
44 Ele
ctric Water Sewer
Utility Utility Utility
ASSETS
Current assets:

Cash and investments (Note 7):

Pooled cash and investments 461,055,857$ 25,653,223$ 88,849,468$ Investments with fiscal agent 16,197,916 - -
Receivables (net of allowance for uncollectible):

Accounts 91,998,401 8,909,024 5,777,378
Interest 1,768,781 107,527 345,455
Other - - -
Leases receivable (Note 4) 249,167 29,990 29,990
Derivative financial instrument (Note 10D) 8,294,280 - - Due from other funds (Note 8B) 3,209,849 1,278,857 964,694 Materials, supplies and prepaids 15,827,132 1,827,968 493,125 Total current assets 598,601,383 37,806,589 96,460,110 Noncurrent assets:

Restricted cash (Note 7) 6,324,045 1,563,207 585,544 Investment with fiscal agent (Note 7) - - -
Derivative financial instrument (Note 10D) 15,163,920 - - Deposits (Note 7) 11,127,179 - -
Leases receivable, noncurrent (Note 4) 2,112,910 908,045 908,045 Capital assets (Note 9):

Land 14,371,743 661,268 725,328
Construction in progress 71,262,465 46,977 196,473
Buildings, infrastructure and land improvements 1,101,647,613 108,697,517 62,579,441 Equipment 10,297,966 3,948,487 5,005,789
Right-to-use leased assets 2,916,623 - -
Right-to-use SBITA 3,108,024 - -
1,203,604,434 113,354,249 68,507,031
Less accumulated depreciation 547,761,849 52,855,662 29,182,047 Net capital assets 655,842,585 60,498,587 39,324,984
Investment in joint ventures (Note 12) 65,844,941 - 240,083,125 Total noncurrent assets 756,415,580 62,969,839 280,901,698 Total assets 1,355,016,963 100,776,428 377,361,808

DEFERRED OUTFLOWS OF RESOURCES
Derivative instruments (Note 10D) 783,790 - -
Refunding 5,333,697 - -
OPEB related items (Note 16) 616,793 135,864 64,557 Pension related items (Note 13) 26,223,040 4,542,264 2,134,704 Total deferred outflows of resources 32,957,320 4,678,128 2,199,261

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
June 30, 2023
Business-type Activities-Enterprise Funds

PROPRIETARY FUNDS
Statement of Net Position
See accompanying notes to basic financial statements
45 Water Santa Clara Non-Major Internal Service
Recycling Stadium Authority Enterprise Funds
Utility (as of March 31, 2023)
restated (Note 6) Funds TOTAL (Note 2B)
6,992,755$ 66,012,284$ 22,168,191$ 670,731,778$ 43,757,149$ - 24,265,375 - 40,463,291 -
1,038,772 18,657,911 7,070,241 133,451,727 513,622 21,462 336,349 - 2,579,574 -
- - - - -
- 11,669,804 - 11,978,951 -
- - - 8,294,280 -
- - 305,701 5,759,101 37,569
- - - 18,148,225 979,733
8,052,989 120,941,723 29,544,133 891,406,927 45,288,073 103,323 - 1,502,837 10,078,956 -
- 11,536,235 - 11,536,235 -
- - - 15,163,920 -
- - - 11,127,179 -
- 594,217,262 - 598,146,262 -
- - 3,092,872 18,851,211 -
- 2,095,393 708,406 74,309,714 -
1,257,070 826,227,884 80,211,731 2,180,621,256 -
- 6,141,531 3,012,143 28,405,916 42,896,174
- - - 2,916,623 658,444
- - - 3,108,024 2,397,211
1,257,070 834,464,808 87,025,152 2,308,212,744 45,951,829 184,496 145,388,928 63,066,239 838,439,221 32,590,788 1,072,574 689,075,880 23,958,913 1,469,773,523 13,361,041 - - - 305,928,066 -
1,175,897 1,294,829,377 25,461,750 2,421,754,141 13,361,041 9,228,886 1,415,771,100 55,005,883 3,313,161,068 58,649,114 - - - 783,790 -
- - - 5,333,697 -
9,491 - 33,501 860,206 59,666
363,122 - 1,468,550 34,731,680 2,233,940
372,613 - 1,502,051 41,709,373 2,293,606
(continued)
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
June 30, 2023
See accompanying notes to basic financial statements
46 Ele
ctric Water Sewer
Utility Utility Utility

LIABILITIES
Current liabilities:

Accrued liabilities 33,601,331 5,122,371 1,025,584
Interest payable 1,389,163 - 554,285
Unearned revenue - - -
Due to other funds (Note 8B) - - -
Accrued compensated absences (Note 2K) 566,004 75,510 22,068 Current portion of landfill closure liability (Note 11) - - - Current portion of long-term debt (Note 10) 15,140,000 - 794,893 Current portion derivative financial instruments (Note 10D) 783,790 - - Current portion of leases obligation (Note 10H) 681,619 - - Current portion of SBITA (Note 10I) 392,381 - -
Total current liabilities 52,554,288 5,197,881 2,396,830 Noncurrent liabilities:

Unearned revenue - - -
Long-term accrued liabilities - - -
Long-term portion estimated claims - - -
Long-term compensated absences (Note 2K) 5,888,451 785,568 229,581 Landfill closure liability (Note 11) - - -
Long-term debt (Note 10) 113,302,932 - 26,064,269
Long-term derivative financial instruments (Note 10D) - - - Long-term leases obligation (Note 10H) 951,003 - -
Long-term SBITA (Nte 10I) 2,325,628 - -
Net OPEB liability (Note 16) 7,288,705 1,605,510 762,876 Net pension liability (Note 13) 105,823,291 20,241,038 10,087,765 Total noncurrent liabilities 235,580,010 22,632,116 37,144,491 Total liabilities 288,134,298 27,829,997 39,541,321

DEFERRED INFLOWS OF RESOURCES
Derivative instruments (Note 10D) 23,458,200 - -
Refunding 1,280,797 - -
Leases related (Note 4) 2,282,329 885,653 885,653
OPEB related items (Note 16) 702,262 154,690 73,502 Pension related items (Note 13) 821,311 157,094 78,293 Total deferred inflows of resources 28,544,899 1,197,437 1,037,448 NET POSITION (Note 18)
Net investment in capital assets 527,101,920 60,498,587 32,465,822 Restricted for capital projects and other agreements 6,324,045 1,260,117 240,668,669 Unrestricted 537,869,121 14,668,418 65,847,809
Total net position 1,071,295,086$ 76,427,122$ 338,982,300$ Adjustment to report the cumulative internal balance for the net effect of the activity between the internal service funds and the enterprise funds over time.

Net position of business-type activities
June 30, 2023
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
See accompanying notes to basic financial statements
47 Water Santa Clara Non-Major Internal Service
Recycling Stadium Authority Enterprise Funds
Utility (as of March 31, 2023)
restated (Note 6) Funds TOTAL (Note 2B)
1,405,136 1,852,581 4,064,427 47,071,430 7,807,443 - 5,385,381 - 7,328,829 10,808
- 16,374,980 6,468,364 22,843,344 -
- 142,896 - 142,896 5,796,670
- - 10,886 674,468 59,751
- - 765,000 765,000 -
- 15,459,000 - 31,393,893 -
- - - 783,790 -
- - - 681,619 208,162
- - - 392,381 588,336
1,405,136 39,214,838 11,308,677 112,077,650 14,471,170 - 432,484,579 - 432,484,579 -
- 7,149,723 - 7,149,723 -
- - - - 21,715,000
- - 113,252 7,016,852 621,626
- - 5,367,036 5,367,036 -
- 229,815,737 - 369,182,938 -
- - - - -
- - - 951,003 34,720
- - - 2,325,628 1,220,012
112,151 - 395,884 10,165,126 705,080
1,768,633 - 6,910,780 144,831,507 8,974,179
1,880,784 669,450,039 12,786,952 979,474,392 33,270,617 3,285,920 708,664,877 24,095,629 1,091,552,042 47,741,787 - - - 23,458,200 -
- - - 1,280,797 -
- 595,586,067 - 599,639,702 -
10,805 - 38,142 979,401 67,933
13,727 - 53,636 1,124,061 69,650
24,532 595,586,067 91,778 626,482,161 137,583
1,072,574 443,801,143 23,958,913 1,088,898,959 11,309,811 103,323 79,817,751 3,900,281 332,074,186 -
5,115,150 (412,098,738) 4,461,333 215,863,093 1,753,539 6,291,047$ 111,520,156$ 32,320,527$ 1,636,836,238 13,063,350$ 2,517,538
1,639,353,776$
June 30, 2023
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
See accompanying notes to basic financial statements
48 Electric Water Sewer
Utility Utility Utility
Operating revenues:

Charges for services 559,165,545$ 50,019,592$ 50,905,071$ Rents, royalties and licensing - - -
Insurance refunds and other - - -
Mandated program receipts 15,926,482 - -
Renewable energy credits 3,916,420 - -
Wholesale resource sales 85,035,267 - -
Other 23,120,361 - -
Total operating revenues 687,164,075 50,019,592 50,905,071 Operating expenses:

Salaries and benefits 48,401,324 6,677,861 3,274,092 Materials, services and supplies 555,704,205 40,453,370 28,580,725 General and administrative - - -
Mandated program disbursements 4,541,142 - -
Wholesale resources purchases 19,474,055 - -
Amortization- Right to use assets 1,051,552 - -
Depreciation 25,934,672 1,878,604 1,319,796
Total operating expenses 655,106,950 49,009,835 33,174,613 Operating income (loss) 32,057,125 1,009,757 17,730,458 Nonoperating revenues (expenses):

Interest revenue 8,392,327 433,387 1,424,290
Net change in the fair value of investments (2,841,392) (112,869) (934,636) Rents and royalties 3,845,365 54,223 54,223
Other revenue 60,399,404 444,922 7,038,550
Interest expense (2,659,346) - (1,100,443)
Other expense (3,763,379) - -
Equity in income (losses) of joint ventures 8,532,699 - (51,843,992) Gain (loss) on retirement of assets - - -
Total nonoperating revenues (expenses) 71,905,678 819,663 (45,362,008) Income (loss) before
contributions and transfers 103,962,803 1,829,420 (27,631,550) Contributions - - -
Transfers in (Note 8A) 208,290 - 22,812
Transfers (out) (Note 8A) (3,706,812) (1,926,424) (447,112) Change in net position 100,464,281 (97,004) (28,055,850) Total net position - beginning 970,830,805 76,524,126 367,038,150 GASB 87 implementation (Note 6F) - - -
Total net position - beginning as adjusted (Note 6F) 970,830,805 76,524,126 367,038,150 Total net position - ending 1,071,295,086$ 76,427,122$ 338,982,300$ Adjustment for the net effect of the current year activity between the internal service funds and the enterprise funds.

Change in net position of business-type activities
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
For the year ended June 30, 2023
Statement of Revenues, Expenses, and Changes in Fund Net Position See accompanying notes to basic financial statements
49 Water Santa Clara Non-Major
Recycling Stadium Authority Enterprise Internal Service Utility (as of March 31, 2023)
restated (Note 6) Funds Total Funds
6,303,474$ 33,161,155$ 54,211,827$ 753,766,664$ 39,974,468$ - 38,532,268 - 38,532,268 -
- - - - 85,428
- - - 15,926,482 -
- - - 3,916,420 -
- - - 85,035,267 -
- - 82,244 23,202,605 -
6,303,474 71,693,423 54,294,071 920,379,706 40,059,896 515,128 - 2,385,882 61,254,287 7,139,270
6,074,687 28,308,133 48,213,715 707,334,835 13,779,078 - 2,751,739 - 2,751,739 9,193,468
- - - 4,541,142 -
- - - 19,474,055 -
- - - 1,051,552 713,293
25,141 17,207,818 1,568,405 47,934,436 2,512,914 6,614,956 48,267,690 52,168,002 844,342,046 33,338,023 (311,482) 23,425,733 2,126,069 76,037,660 6,721,873 73,526 18,178,056 154,976 28,656,562 -
25,598 - - (3,863,299) -
- - 11,646 3,965,457 -
91,164 617,911 - 68,591,951 474,890
- (13,550,322) - (17,310,111) (54,687)
- - - (3,763,379) -
- - - (43,311,293) -
- - - - (39,274)
190,288 5,245,645 166,622 32,965,888 380,929
(121,194) 28,671,378 2,292,691 109,003,548 7,102,802 - 2,126,817 - 2,126,817 -
- - 920,589 1,151,691 3,275,783
(29,054) - (5,943) (6,115,345) (1,043,232)
(150,248) 30,798,195 3,207,337 106,166,711 9,335,353 6,441,295 76,019,326 29,113,190 3,727,997
- 4,702,635 - -
6,441,295 80,721,961 29,113,190 3,727,997
6,291,047$ 111,520,156$ 32,320,527$ 13,063,350$
2,887,322
109,054,033$
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
For the year ended June 30, 2023
See accompanying notes to basic financial statements
50 Electric Water Sewer
Utility Utility Utility

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 587,190,157$ 50,325,034$ 54,098,205$ Payments to suppliers (583,494,659) (40,440,811) (30,054,104) Payments to employees for salaries and benefits (52,546,917) (6,863,132) (3,129,953) Internal activity - payments to other funds - - -
Claims paid - - -
Rents, royalties and licenses received 3,774,218 49,163 49,163 Other receipts 69,427,502 452,265 7,048,661
Renewable energy credits 3,916,420 - -
Wholesale resource sales 85,035,267 - -
Wholesale resources purchases (19,474,055) - -
Resource trading escrow deposit 8,391,775 - -
Charges for joint project contributions - - (11,669,577) Net cash provided (used) by operating activities 102,219,708 3,522,519 16,342,395

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
(Increase) in due from other funds (522,955) (809,925) (214,460) Increase in due to other funds - - -
Deposits to (withdraws from) pension rate stabilization fund 177,687 (7,343) (10,111) Transfers in 208,290 - 22,812
Transfers (out) (3,706,812) (1,926,424) (447,112)
Cash Flows from Noncapital Financing Activities (3,843,790) (2,743,692) (648,871)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Contribution from Community Facilities District - - - Acquisition and construction of capital assets, net (45,362,719) (3,228,631) (428,689) Principal payments on capital debt (14,573,440) - (778,152) Interest paid on capital debt (3,089,729) - (1,107,381) Cash Flows from Capital and Related
Financing Activities (63,025,888) (3,228,631) (2,314,222)

CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in the fair value of investments (2,841,392) (112,869) (934,636) Interest and dividends 8,236,726 408,753 1,330,916
Fiscal agent investment sales 16,555,791 - -
Fiscal agent investment purchases (13,650,909) - -
Cash Flows from Investing Activities 8,300,216 295,884 396,280 For the year ended June 30, 2023
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS
Statement of Cash Flows
See accompanying notes to basic financial statements
51 Water Santa Clara Non-Major
Recycling Stadium Authority Enterprise Internal Service Utility (as of March 31, 2023) Funds Totals Funds
6,161,295$ 32,312,422$ 55,611,120$ 785,698,233$ 39,899,743$ (5,984,870) (30,064,398) (50,017,321) (740,056,163) (15,081,383) (523,313) - (2,581,308) (65,644,623) (7,329,373)
- - - - (324,190)
- - - - (12,223,413)
- 49,947,986 11,646 53,832,176 -
96,556 - - 77,024,984 475,304
- - - 3,916,420 -
- - - 85,035,267 -
- - - (19,474,055) -
- - - 8,391,775 -
- - - (11,669,577) -
(250,332) 52,196,010 3,024,137 177,054,437 5,416,688 - - (24,747) (1,572,087) (2,589)
- 629,529 - 629,529 1,574,676
(5,392) - - 154,841 -
- - 920,589 1,151,691 3,275,783
(29,054) - (5,943) (6,115,345) (1,043,232)
(34,446) 629,529 889,899 (5,751,371) 3,804,638
- 2,248,478 - 2,248,478 -
- (3,108,564) (123,277) (52,251,880) (1,719,206)
- (35,038,955) - (50,390,547) (785,978)
- (13,918,397) - (18,115,507) (54,687)
- (49,817,438) (123,277) (118,509,456) (2,559,871) (continued) 25,598 - - (3,863,299) -
78,230 4,503,381 154,976 14,712,982 -
- (48,589,276) - (32,033,485) -
- 51,327,563 - 37,676,654 -
103,828 7,241,668 154,976 16,492,852 -
(continued)

STATEMENT OF CASH FLOWS
For the year ended June 30, 2023

CITY OF SANTA CLARA

PROPRIETARY FUNDS
Business-type Activities-Enterprise Funds
See accompanying notes to basic financial statements
52 Electric Wa ter Sewer
Utility Utility Utility
Net increase (decrease) in cash and cash
equivalents 43,650,246 (2,153,920) 13,775,582
Cash and cash equivalents at beginning of period 423,729,656 29,370,350 75,659,430 Cash and cash equivalents at end of period 467,379,902$ 27,216,430$ 89,435,012$ Cash and cash equivalents:

Pooled cash and investments 461,055,857$ 25,653,223$ 88,849,468$ Restricted cash 6,324,045 1,563,207 585,544
Total cash and cash equivalents 467,379,902$ 27,216,430$ 89,435,012$ Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:

Operating income (loss) 32,057,125$ 1,009,757$ 17,730,458$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:
(Decrease) Increase in lease and SBITA obligation 1,006,894 - - (Decrease) Increase in due to OPEB system (5,395,611) (818,165) (445,477) (Decrease) Increase in due to retirement system 1,566,196 773,041 514,347 Depreciation 25,934,672 1,878,604 1,319,796
Change in assets and liabilities:

Receivables, net 6,417,073 316,551 1,010,652
Prepaid expense - - -
Inventory (2,022,294) (567,222) -
Restricted Cash (177,687) 7,343 10,111
Accrued liabilities (25,723,647) 568,672 709,103
Long-term portion estimated claims - - -
Compensated absences (316,178) (140,147) 75,269
Unearned revenue - - -
Other receipts 64,244,769 494,085 7,087,713
Other expenses (3,763,379) - -
Wholesale trading escrow deposit 8,391,775 - -
Charges for joint project contributions - - (11,669,577) Net cash provided (used) by operating activities 102,219,708$ 3,522,519$ 16,342,395$ NONCASH TRANSACTIONS:

Joint Ventures
Nonoperating income (loss) 8,532,699$ -$ (51,843,992)$ -$ -$ -$ Capital Contribution
For the year ended June 30, 2023
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS
See accompanying notes to basic financial statements
53 Water Santa Clara Non-Major
Recycling Stadium Authority Enterprise Internal Service Utility (as of March 31, 2023) Funds Totals Funds
(180,950) 10,249,769 3,945,735 69,286,462 6,661,455 7,277,028 55,762,515 19,725,293 611,524,272 37,095,694 7,096,078$ 66,012,284$ 23,671,028$ 680,810,734$ 43,757,149$ 6,992,755$ 66,012,284$ 22,168,191$ 670,731,778$ 43,757,149$ 103,323 - 1,502,837 10,078,956 -
7,096,078$ 66,012,284$ 23,671,028$ 680,810,734$ 43,757,149$ (311,482)$ 23,425,733$ 2,126,069$ 76,037,660$ 6,721,873$ - 7,745,255 - 8,752,149 713,291
(99,956) - (433,405) (7,192,614) (369,571)
101,322 - 346,224 3,301,130 122,684
25,141 17,207,818 1,568,405 47,934,436 2,512,914 (142,179) (5,689,607) 1,827,634 3,740,124 (70,451) - 1,015,999 - 1,015,999 -
- - - (2,589,516) (694,383)
5,392 - - (154,841) -
89,817 (539,569) (1,803,606) (26,699,230) (1,847,757) - - - - (2,204,000)
(9,551) - (108,245) (498,852) 56,784
- 9,030,381 (510,585) 8,519,796 -
91,164 - 11,646 71,929,377 414
- - - (3,763,379) 474,890
- - - 8,391,775 -
- - - (11,669,577) -
(250,332)$ 52,196,010$ 3,024,137$ 177,054,437$ 5,416,688$ -$ -$ -$ (43,311,293)$ -$
-$ 2,126,817$ -$ 2,126,817$ -$
For the year ended June 30, 2023
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS
This page intentionally left blank
55 CITY OF SANTA CLARA

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

PRIVATE PURPOSE TRUST FUNDS
These funds are used to report resources of all other trust arrangements under which principal and income benefit individuals, private organizations, or other governments.

CUSTODIAL FUNDS
Custodial funds are used to account for assets held by the City for community or private organizations, or as an agent for its employees or for assessment districts. The financial activities of these funds are excluded from the City-wide financial statements, but are presented in separate Fiduciary Fund financial statements. Individual non- major Custodial funds may be found in the Supplementary section.

See accompanying notes to basic financial statements
56 Statement of Fiduciary Net Position
Private Purpose Custodial
Trust Funds Funds
ASSETS
Current assets
Cash and investments:

Pooled cash and investments (Note 7) 1,320,265$ 834,036$ Receivables (net of allowance for uncollectibles):

Interest and rent 240,332 -
Leases receivable (Note 22) 874,098 -
Total current assets 2,434,695 834,036
Noncurrent assets
Leases receivable-noncurrent (Note 22) 42,824,370 -
Investment with fiscal agent-noncurrent-noncurrent (Note 7) 2,895,085 - Land held for resale 532,542 -
Total noncurrent assets 46,251,997 -
Total Assets 48,686,692 834,036

LIABILITIES
Unearned revenues 110,917 -
Due to other agencies 640,000 -
Total Liabilities 750,917 -

DEFERRED INFLOWS OF RESOURCES
Leases related (Note 22) 42,005,237 -
Total deferred inflows of resources 42,005,237 -

NET POSITION
Held in trust for private purpose 3,588,728 -
Restricted for individuals, organization and other governments 2,341,810 834,036 Total Net Position 5,930,538$ 834,036$

CITY OF SANTA CLARA

FIDUCIARY FUNDS

STATEMENT OF FIDUCIARY NET POSITION
June 30, 2023
See accompanying notes to basic financial statements
57 Statement of Fiduciary Net Position
Private Purpose Custodial
Trust Funds Funds

ADDITIONS
Contributions:

Employee contributions -$ 26,572$
Other plans - 2,631,584
Gifts and bequest - 930
Total contributions - 2,659,086
Investment income:

Net change in fair value of investments 39,749 -
Interest and rents 3,625,559 4,869
Net investment income 3,665,308 4,869
Other - -
Total additions 3,665,308 2,663,955

DEDUCTIONS
General and administrative 86,031 82,514
Benefits paid - 51,403
Pass through to the Stadium Authority - 2,489,168
Pass through to the County of Santa Clara 2,620,000 - Total deductions 2,706,031 2,623,085
959,277 40,870
Net position - beginning 4,971,261 793,166
Net position - ending 5,930,538$ 834,036$

CITY OF SANTA CLARA

FIDUCIARY FUNDS

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
For the Year Ended June 30, 2023
Net increase (decrease) in fiduciary net
position
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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
59 Notes to Basic Financial Statements
NOTE 1 – DEFINITION OF THE REPORTING ENTITY
The City of Santa Clara (City), also known as the Mission City, is a charter city incorporated in 1852 under th
e laws of the State of California. The City Charter establishes the Council/Manager form of government.

The City’s citizens elect a City Council of seven citizens, six councilpersons and a Mayor elected at-large, who serve a term of four years each, and who, in turn, appoint a City Manager.

The City is located in the County of Santa Clara, California, approximately 45 miles southeast of San Francisco. It is situated in the northern part of the County and occupies approximately 18.41 square miles.

The City's population of 132,476 accounts for 7.0% of the total Santa Clara County estimated population of

1.9 million.

The City provides a full range of municipal services, including police and fire, library, recreation, community services, public works, parks, sanitation, planning and community development, public improvements, electric, water and sewer services.

The accompanying basic financial statements present the financial activity of the City, which is the primary government presented, along with the financial activities of its component units. Although they are separate legal entities, blended component units are in substance part of the City’s operations and are reported as an integral part of the City’s financial statements. The City’s component units which are described below are all blended.

A. City of Santa Clara Sports and Open Space Authority
The City of Santa Clara Sports and Open Space Authority (SOSA) was created by the City Council in 1974 fo
r the acquisition and development of open space within the City. The members of the City Council are also members of SOSA's Board of Directors and, as such, are authorized to transact business and exercise power to purchase, lease or otherwise obtain and dispose of real and personal property, to acquire, construct, maintain, repair, manage and operate real and personal property, including leasing to private operators for commercial purposes, surplus space which is not economical to use for open space planning. The City performs all accounting and administrative functions of SOSA. The operations of SOSA have been included in the Supplementary Information section in the Non-Major Enterprise Funds.

B. City of Santa Clara Public Facilities Financing Corporation The City of Santa Clara Public Facilities Financing Corporation (PFFC) was formed in 1997 for the purpose of
issuing Certificates of Participation (COPs) to provide financing for the construction of the major City facilities. Members of the City Council are also members of the PFFC Board. Debt service on the COPs is secured by lease payments made by the City's General Fund to the PFFC for the use of the constructed facilities for public purposes. In accordance with lease agreements, the PFFC assigns lease payments received from the City to the trustee for payment to the certificate holders. The operations of PFFC have been included in the Supplementary Information section in the Non-Major Governmental Fund. The individual COPs and the related facilities are described in Note 10B.

C. Santa Clara Housing Authority
The Santa Clara Housing Authority (SCHA) was established by the City Council in 2011 to assume the re
sponsibility of housing projects for the former Redevelopment Agency (former RDA). SCHA also assumes the responsibility for housing loans, which are long-term and were made under various programs, for

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 1 – DEFINITION OF THE REPORTING ENTITY (continued) 60 qualifying individuals and groups. The members of the City Council are also members of SCHA's Board of Directors and, as such, are authorized to transact business and exercise power to plan, engineer, and implement development projects. The City performs all accounting and administrative functions of SCHA. The financial activities of SCHA have been reported in the accompanying Non-Major Governmental Fund financial statements.

D. Santa Clara Stadium Authority
The Santa Clara Stadium Authority (SCSA) was established by the City Council in 2011 to provide for de
velopment and operation of Levi’s Stadium. The members of the City Council are also members of SCSA's Board of Directors and, as such, are authorized to manage the stadium, transact business and exercise power to plan, engineer, and construct the stadium. The City performs all accounting and administrative functions of SCSA. The financial activities of SCSA have been reported in the accompanying Enterprise Fund financial statements.

On November 13, 2012, an amendment was made to the JPA Agreement to change SCSA’s fiscal year end date from June 30 th to March 31 st. As such, the financial activities reported for SCSA are as of fiscal year en
ded March 31, 2023. In addition, the annual financial report was audited by KPMG, an independent auditing firm, and a copy of the report can be found on the City’s website.

NOTE 2 - FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT AC

COUNTING POLICIES
A. Basic Financial Statements
The City's Basic Financial Statements are prepared in conformity with accounting principles generally ac
cepted in the United States of America (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.

The significant accounting policies are described below:

Government-wide Financial Statements: The Statement of Net Position and the Statement of Activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Interfund Services provided and used are allocated to governmental and business-type activities, as appropriate. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.

Business-type activities are financed in whole or in part by fees charged to external parties.

The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City's governmental activities.

Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
61 acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements: The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category- governmental, proprietary, and fiduciary-are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds, except for fiduciary funds.

Enterprise funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with an enterprise fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds are charges to customers for services. Operating expenses for the City's enterprise funds include the costs of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

B. Major Funds
Major funds are defined as funds that have either assets combined with deferred outflows of resources, li
abilities combined with deferred inflows of resources, revenues or expenditures/expenses equal to 10% of corresponding totals for all governmental or enterprise funds and at least 5% of the aggregate amount to all governmental and enterprise fund for the same item. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds. All other funds, called non-major funds, are combined, and reported in a single column, regardless of their fund-type.

The City reported the following major governmental funds in the accompanying financial statements:

General Fund - This is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Santa Clara Housing Successor Fund - This fund accounts for the activities related to the housing assets assumed by the City as Housing Successor to the former Redevelopment Agency. The activities are governed by Community Redevelopment Law and must be used to provide housing for people with low and moderate incomes. Revenues received are primarily loan repayments on low income loans and investment earnings that are restricted for use on other low and moderate income housing loans and projects.

The City reported the following enterprise funds as major funds in the accompanying financial statements:

Electric Utility Fund - This fund accounts for the operation of the City's electric utility, a self-supporting activity that provides services on a user charge basis to residences and businesses.

Water Utility Fund - This fund accounts for the operation of the City's water utility, a self-supporting activity that provides services on a user charge basis to residences and businesses.

Sewer Utility Fund - This fund accounts for the maintenance of the City's sewer lines and related facilities. It is a self-supporting activity that provides services on a user charge basis to residences and businesses.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
62 Water Recycling Utility Fund - This fund accounts for the ongoing maintenance and operations of the City's wastewater reclamation system. It is a self-supporting activity that provides services on a user charge basis from the sale of non-potable water for irrigation and landscaping.

Santa Clara Stadium Authority Fund - The Stadium Authority was established to provide for development and operation of Levi’s Stadium.

The City also reports the following fund types:

Internal Service Funds - These funds account for maintenance of vehicles and communication equipment, information technology, public works capital project management, general liability, and workers' compensation claims, all of which are provided to other departments on a cost-reimbursement basis.

Fiduciary Funds - These funds account for assets held by the City in trust for community or private organizations, or as an agent for its employees or for assessment districts without city commitment. The financial activities of these funds are excluded from the City-wide financial statements, but are presented in separate Fiduciary Fund financial statements.

The Successor Agency to the Redevelopment Agency of the City of Santa Clara (Successor Agency) was created to serve as a custodian for the assets and to wind down the affairs of the former RDA. The Successor Agency is a separate public entity from the City, subject to the direction of an Oversight Board. The Oversight Board is comprised of seven-member representatives from local government bodies: two County of Santa Clara (County) representatives; the Mayor of the City of Santa Clara; the County Superintendent of Education; the Chancellor of California Community Colleges; one Santa Clara Valley Water District representative; and one former RDA employee appointed by the Mayor. The City performs all accounting and administrative functions of the Successor Agency. The financial activities of the Successor Agency have been reported in the accompanying basic financial statements in the Private Purpose Trust Fund. See Notes 21 and 22 for information regarding the Successor Agency.

C. Basis of Accounting
The government-wide financial statements and the fund category, proprietary, and fiduciary fund category fi
nancial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, including lease liabilities and subscription-based IT arrangement (SBITA) liabilities as well as claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions, including entering into contracts giving the City right to use leased assets and SBITA assets, are reported as expenditures in governmental funds. Proceeds of general long-term debt and financing through leases are reported as other financing sources.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
63 The City allocates certain indirect expenses incurred by the General Government activity to those activities that benefit from services received.

During the year ended June 30, 2023, the City implemented the following GASB Statements:

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. The provisions of this Statement were implemented during fiscal year 2023. The implementation had no effect on the financial statement.

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 (LIBOR). The provisions of this Statement will be implemented during fiscal year 2023.

The removal of LIBOR as an appropriate benchmark interest rate is effective for reporting periods ending after December 31, 2021. The provisions of this Statement were implemented during fiscal year 2023. The implementation required a change to the disclosure in Note 10.

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. The provisions of this Statement were implemented during fiscal year 2023. The implementation had no effect on the financial statement.

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. The provisions of this Statement were implemented during fiscal year 2023.

As a result, the balances of the SBITA payable and intangible right-to-use asset were $3,834,441 as of July 1, 2022. The City restated and increased the balances in that amount, and the net effect on beginning net position and fund balance was zero. See the SBITA disclosure in Note 10.

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. This statement becomes effective for periods beginning after June 15, 2022. The provisions of this Statement related to PPPs, SBITAS, and financial guarantees and the classification and reporting of derivative instructions within the scope of Statement 53 were implemented in fiscal year 2023.

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

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. The City is currently evaluating the impact on the financial statements.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
64 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. The City is currently evaluating the impact on the financial statements.

D. Cash and Investments
While maintaining safety and liquidity, the City maximizes investment return by pooling its available cash for in
vestment 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 7).

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. Interfund Transactions and Balances
During the course of operations, numerous transactions occur between individual funds for goods provided or se
rvices rendered. The related receivables and payables are classified as "due from other funds," and "due to other funds" in the fund financial statements. Long-term interfund receivables and payables are recorded as advances to/from other funds in the fund financial statements.

Transactions constituting reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are generally recorded as expenditures/expenses in the reimbursing fund and as revenue in the fund that is reimbursed.

Internal balances represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business-type activities, and are reported only in the government-wide financial statements.

F. Inventory of Materials and Supplies
Inventory of materials and supplies is accounted for using the consumption method and is stated at average co
st. Inventory consists of expendable supplies held for consumption by all departments of the City. The cost is recorded as an expenditure or expense in the appropriate fund at the time individual inventory items are withdrawn for use. The General Fund inventory amount is equally offset by a non-spendable fund balance, which indicates that it does not constitute available expendable resources.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
65 G. Restricted Assets
Restricted assets are monies or other resources, the use of which is restricted by legal or contractual re
quirements.

H. Land Held for Development
The Santa Clara Housing Successor, through execution of an assignment and assumption agreement with the Ci
ty and the former RDA has assumed responsibility for housing projects and parcels of land purchased to develop or redevelop blighted properties within the Redevelopment areas. Such land parcels are accounted for as investments on the balance sheet at the lower of cost or net realizable value or agreed-upon sales price if a disposition agreement has been made with a developer.

Individual parcels which have experienced other than temporary fair value decline are written down to estimated current market value. No appreciation is recorded if the current estimated net realizable value of an individual parcel exceeds cost.

I. Capital Assets
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available ex
cept for intangible right-to-use lease assets, the measurement of which is discussed in Note 2W below.

Contributed capital assets are valued at their estimated acquisition value on the date contributed. The City's policy is to capitalize equipment and right-to-use leased equipment with costs exceeding $5,000, buildings, improvements and infrastructure with costs exceeding $20,000, and the right-to-use Subscription based IT Arrangement (SBITA) with costs exceeding $400,000.

Major outlays for capital assets and improvements are capitalized as projects are constructed.

Public domain (infrastructure) assets, which include roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and traffic signals, have been capitalized and reported in the government-wide financial statements. Depreciation has been calculated on all capital assets, including infrastructure, the right-to-use leased buildings and equipment, and the right-to-use SBITA assets on a straight-line basis over the estimated useful lives of the assets.

Useful Lives
Years
Capitalization Threshold
Buildings and improvements 20-50 $ 20,000
Right-to-use leased buildings 20-50 20,000
Land improvements 20-50 20,000
Machinery and equipment 3-25 5,000
Right-to-use leased equipment 3-25 5,000
Right-to-use SBITA 3-25 400,000
Infrastructure 10-50 20,000

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
66 Some capital assets may be acquired using Federal and State grant funds, or they may be contributed by developers or other governments. These contributions are accounted for as revenues at the time the capital assets are contributed.

The costs 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 acquired under lease/purchase agreements are capitalized and accounted for in accordance with current accounting standards.

J. Subscription-Based Information Technology Arrangements (SBITAs) Accounting A Subscription-Based Information Technology Arrangement (SBITA) is a contract that conveys control of the ri
ght to use another party’s (a SBITA vendor’s) IT software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange- like transaction.

At the commencement of a SBITA, the City initially measures the subscription liability at the present value of payments expected to be made during the contract term. Subsequently, the subscription liability is reduced by the principal portion of payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for payments made at or before the SBITA commencement date, plus certain initial direct costs. Subsequently, the subscription asset is amortized on a straight‐line basis over shorter of the subscription term or the useful life of the underlying IT assets. The City recognizes SBITA liabilities with an initial, individual value of $400,000 or more for all funds.

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

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

Subscription assets are reported with other capital assets and subscription liabilities are reported with liabilities on the statement of net position.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
67 K. Joint Ventures
The City participates in several joint ventures. In accordance with GAAP investments in these joint ventures ar
e accounted for on the equity method (see Note 12). If the City's equity in net losses of joint ventures exceeds its investment, use of the equity method is suspended except to the extent that the City is obligated to provide further financial support or has guaranteed obligations of the joint ventures.

The City 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.

L. Compensated Absences
Amounts of vested or accumulated vacation leave and certain benefits that are not expected to be liquidated wi
th expendable available financial resources are reported in the Governmental Activities portion of the government-wide financial statements only. Vested or accumulated vacation leave and benefits of proprietary funds are recorded as an expense and liability of those funds as the benefits accrue to employees. Vacation time is earned based on length of service in amounts ranging between 10 and 24 days per year. City employees are allowed to carry over unused vacation earned. The maximum amount of time that can be carried over varies, depending on the employee's rate of accrual, with an upper limit of 400 hours for most employees.

Employees are paid for unused vacation and certain benefits upon separation from employment.

In accordance with GAAP a liability for sick leave and benefits is accrued using the vesting method. The vesting method provides that a governmental entity estimates its accrued sick leave liability based on the sick leave accumulated at the balance sheet 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. Amounts of sick leave payments that are not expected to be liquidated with expendable available financial resources are reported in the Governmental Activities portion of the government-wide financial statements only. No expenditure is reported for these amounts in the governmental fund financial statements.

That portion of compensated absences that is unused reimbursable leave still outstanding following an employee's resignation or retirement at year end, is an expense and current liability to the respective fund(s) that an employee charges their time to.

The accrual for compensated absences comprised the following at June 30, 2023. The long-term portion of governmental activities compensated absences is liquidated primarily by the General Fund.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
68 Governmental Business-Type
Activities Activities Total
Beginning Balance 20,400,704$ 8,190,172$ 28,590,876$ Additions 1,448,338 179,710 1,628,048
Payments (1,184,474) (678,562) (1,863,036)
Ending Balance 20,664,568$ 7,691,320$ 28,355,888$
Current Portions 1,812,117$ 674,468$ 2,486,585$
M. Risk Management
The City is self-insured up to $3 million to provide general liability protection. In addition to the City's self- insurance, the City also maintains excess general liability with coverage up to $50 million.

The City is also self-insured up to $750,000 per claim for Workers' Compensation Claims. These self- insurance programs are administered by outside agencies. The City also maintains excess workers' compensation insurance for workers' compensation claims over $750,000 per claim with coverage up to statutory limits with PRISM (formerly CSAC Excess Insurance Authority).

The City maintains property damage coverage through the Public Entity Property Insurance Program (APIP), which has a plan limit of $917 million. The City maintains boiler and machinery property coverage of $100 million per occurrence in excess of self-insured amounts varying from $25,000 to $100,000 per occurrence.

No claims settlement amount exceeded the City's insurance coverage in the past fiscal years.

The City also maintains a Faithful Performance, Crime Coverage Bond with a plan limit of $10 million through PRISM.

N. Long-Term Obligations
Long-term obligations are reported in the Governmental Activities portion of the government-wide financial statements. Long-term liabilities expected to be financed from proprietary fund operations are accounted for in those funds.

O. Pensions
For purposes of measuring the net pension liability and deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of Santa Clara, California Public Employees’ Retirement System (CalPERS) plan (Plan) and additions to and deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

P. Accounting for Encumbrances
The City utilizes an encumbrance system of accounting wherein encumbrances outstanding at year end, for which the goods or services have not been received, are not reported as expenditures, but are reported as a

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
69 component of the fund balance category available for subsequent year expenditures based on the encumbered appropriation authority carried over to the next fiscal year. The City Charter requires recording encumbrances as a charge against appropriations in the accounting period in which a purchase order is issued, rather than in the accounting period when goods or services are received.

Under the modified accrual basis of accounting, in accordance with GAAP, expenditures are recorded when the goods or services are received. Adjustments to convert expenditures from the modified accrual basis to the budgetary basis are reflected in the schedule of revenues, expenditures, and changes in fund balances - budget and actual (non-GAAP legal basis) (see Note 3 and Required Supplementary Information).

Q. 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. The City has three items that qualify for reporting in this category: deferred outflow related to the refunding of debt, 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 the City reports deferred amounts related to derivative instruments, refunding of debt, leases and deferred amounts related to pension and OPEB.

R. Net Position and Fund Balance Equity
Fund balances and net position are reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. For governmental fund reporting, the City considers restricted fund balance to have been spent first when an expenditure is incurred, followed by committed, assigned and unassigned fund balances (in order of spending). For government-wide reporting, the City considers restricted net position to have been spent first when an expenditure is incurred, followed by unrestricted net position.

S. Bond Discounts/Premiums
In governmental funds, bond discounts and premiums are recognized in the current period. Bond discounts and premium for proprietary funds and entity-wide financial statements are deferred and amortized over the term of the bonds using the straight-line method of accounting.

T. Property Taxes
The State of California Constitution Article XIII A provides that the combined maximum tax rate on any given property may not exceed 1% of its assessed value except for voter approved incremental property taxes adopted prior to the passage of Article XIII A and any additional amount for general obligation debt approved by voters subsequent to the passage of Article XIII A.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
70 Assessed value is calculated at 100% of market value as defined by Article XIII A and may be increased by no more than 2% per year unless there is a new construction on the property or the property is sold or transferred. The State Legislature has determined the method of distribution of receipts from the 1% tax levy among the counties, cities, school districts and other districts.

Santa Clara County (County) assesses properties and bills and collects property taxes on behalf of the City as follows:

Secured Unsecured
Valuation dates January 1 January 1
Lien/levy dates January 1 January 1
Due dates 50% on November 1, 50% on February 1 Upon receipt of billing Delinquent as of December 10 (for November), April 10 (for February)
August 31
The
term "unsecured" refers to taxes on property not secured by liens on real property and generally includes business use personal property.

The City participates in the Teeter Plan offered by the County whereby cities receive 100% of secured property tax levied in exchange for foregoing any interest and penalties collected on delinquent taxes.

Property taxes levied are recorded as revenue when received from the County. Property taxes expected to be collected within 60 days of the end of the fiscal year are recorded as revenue.

The City's net assessed valuation for the year ended June 30, 2023, was $57 billion, an increase of 8.9% compared to the previous year. The average tax rate was 1.17% per $100 of assessed valuation.

U. Contribution In-Lieu of Taxes
Contribution in lieu of taxes is a general revenue of the governmental funds. It is levied on receipts of the City- owned and operated Electric Utility (Silicon Valley Power) in accordance with the City Charter. Non-City owned and operated electric utilities pay a franchise fee, which is also a governmental activities general revenue source.

V. Special Assessment Districts with City Commitment
Recognition of revenue related to noncurrent receivables of special assessment district funds is deferred until such receivables become current. There is no reserve for delinquent receivables since liens exist against the related properties and hence the City's management believes the City will ultimately receive value equal to the delinquent receivables. Surplus fund balances remaining at the completion of a special assessment district project are disposed of in accordance with City Council resolutions and with the applicable assessment bond laws of the State of California.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
71 W. Income Taxes
The City falls under the purview of Internal Revenue Code, Section 115 and corresponding California Revenue and Taxation Code provisions. As such, it is not subject to federal or state income taxes.

X. 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.

Lessee - The City is a lessee for noncancellable lease of equipment and buildings. The City recognizes a lease liability and an intangible right‐to‐use lease asset (lease asset) in the government‐wide financial statements.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs.

Subsequently, the lease asset is amortized on a straight‐line basis over its useful life.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments as follows:
 The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
 The lease term includes the 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 the City is reasonably certain to exercise.

The City 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 - The City is a lessor for noncancellable leases of land, building, and fiber optics. The City recognizes a lease receivable and a deferred inflow of resources in the government‐wide and governmental fund financial statements.

At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
72 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.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts as follows:
 The City 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.

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

Y. Arbitrage Rebate Liability
Arbitrage rebate liabilities, if any, are included in accrued liabilities.

Z. Revenue Recognition
Electric, Water, Sewer and Solid Waste Fund revenues are recognized based on cycle billings periodically rendered to customers. Revenues for services provided, but not billed at the end of a fiscal year, are recognized and accrued based on estimated consumption.

Governmental Activities revenues subject to accrual include taxes, intergovernmental revenues, interest and charges for services.

AA. Non-exchange Transactions
The City gives or receives value without directly receiving or giving equal value in exchange, including grants, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

BB. Financial Instruments
Financial instruments included in the City's basic financial statements, excluding cash and investments, consisted of accounts receivable, accrued liabilities and bonds payable. The carrying amounts are a reasonable estimate of fair value.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
73 CC. Conditional Grants
The City has several programs under which it extends loans to qualifying individuals or groups for the purpose of improving the City's housing stock and/or its supply of low-and moderate-income housing. Certain of these loans provide for the eventual forgiveness of the loan balance if the borrower complies with all the terms of the loan over its full term. The City accounts for these loans as conditional grants in the City-wide financial statements, and provides a reserve against their eventual forgiveness using the straight-line method over the life of the respective loan. As of June 30, 2023, conditional grants of $24,357,245 were offset by reserves of $9,679,750.

DD. Use of Estimates
The preparation of basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the basic financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

EE. Vehicle Registration Fee
On November 2, 2010, Santa Clara County voters approved Measure B, which levies a $10 annual vehicle registration fee (VRF). The statue requires that fees collected be used only to pay for programs and projects that have a relationship or benefit to the owners of motor vehicles paying the fee and are consistent with the regional transportation plan. All revenue collected by Santa Clara Valley Transportation Authority, administrator of VRF are allocated on a population basis to cities in Santa Clara County. The City has committed and used the revenue from Measure B towards various street maintenance and traffic signal timing upgrade projects. The Vehicle Registration Fees are reported in the Streets and Highways Improvement Capital Projects Fund.

As of June 30, 2023, the balance of the Vehicle Registration Fees are as follows:

Vehicle Registration
Fee
Beginning Balance July 1, 2022 2,746,489$
Intergovernmental revenue 750,365
Interest 47,337
Expenditures (45,524)
Ending Balance June 30, 2023 3,498,667$

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
74 NOTE 3 – BUDGETS AND BUDGETARY ACCOUNTING
The budget of the City is a detailed operating plan that identifies estimated costs and activities in relation to estimated revenues. The budget includes: (1) the projects, services and activities to be provided during the fiscal year, (2) the estimated revenue available to finance the operating plan, and (3) the estimated spending requirements of the operating plan.

The budget process is the mechanism through which policy decisions are made, implemented and controlled.

The City Charter requires that the City establish a budgetary system for general operations and prohibits expending funds for which there is no legal appropriation. The City is required to adopt a budget on or before June 30 for the ensuing fiscal year that begins July 1. Activities of the General Fund, the Santa Clara Housing Successor, and the Maintenance Special Revenue Funds are included in the annual appropriated operating budget. The procedures followed to establish the budgetary data reflected in the accompanying required supplementary information to the basic financial statements are as follows:

1. The City Manager submits to the City Council a propos e d operating budget for the fiscal year
commencing the following July 1. This includes a Five-Year Financial Plan to aid in the planning and funding of operations and capital projects over the next five years.

2. Public hearings are conducted to obtain public comment s.

3. The operating and capital budgets are legally enacted through the passage of a minute order.

From the effective date of the budget, the amounts stated therein as proposed expenditures become appropriations to the applicable governmental funds. The City Council may amend the budget by motion during the fiscal year. The legal appropriation control is established at the department level in each fund. For select funds where expenditures are not allocated to a specific department, the appropriation control is established at the fund level. Transfers of funding between budgetary funds require City Council appropriation and approval. City Council approval is required for a budget amendment during the fiscal year which may include the use of reserves or fund balances, and approval of appropriations of grant monies. Per Article XIII, Section 1305 of the City Charter, appropriations lapse at the end of each fiscal year; therefore, unencumbered funds allocated for specific projects, donations, and grants require City Council appropriation for use in the following fiscal year.

Budgetary transfers between accounts or expenditure category may be done through Finance Department or City Manager’s Office approval as long as they are conducted within the legal appropriation control limit set by the City Council.

Budget information is presented on a non-GAAP budgetary basis. Budgeted revenue amounts represent the original budget modified by adjustments authorized during the year. Budgeted expenditure amounts represent original appropriations adjusted for supplemental appropriations and transfers during the year. Budget amounts in the schedules of revenues, expenditures and changes in fund balances-budget and actual, include supplemental appropriations approved by the City Council during the year.

For the actual GAAP basis financial statements, encumbered appropriations are not reported as expenditures, but are reported as a reservation of fund balance available for subsequent year expenditures, based on the encumbered appropriation authority carried over to the next fiscal year.

In addition to the annual Operating Budget, each year the City Council adopts a project length Capital Improvement Project budget biennially.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
75 NOTE 4 – LEASE AGREEMENTS
In June 2017, the Government Accounting Standards Board (GASB) issued Statement No. 87, Leases. GASB Statement No. 87 (GASB 87) increases the usefulness of governmental financial statements by requiring recognition of certain lease assets and liabilities for all leases, including those that previously were classified as operating leases and recognized as income by lessors and expenditures by lessees. GASB 87 replaces the previous lease accounting methodology and establishes a single model for lease accounting based on the foundational principle that leases are a financing of the right to use an underlying asset.

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. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. The provisions of this Statement were implemented during fiscal year 2021-22.

The balances related to leases receivable and deferred inflows of resources as of June 30, 2023 are:

Leases Receivable
Deferred Inflow of
Resources
Governmental activities
General Fund 254,874,503$ 251,501,567 $
Business-type activities
Electric Utility 2,362,077$ 2,282,329$
Water Utility 938,035 885,653
Sewer Utility 938,035 885,653
Stadium Authority (as of March 31, 2023) 605,887,066 595,586,067 610,125,213$ 599,639,702 $
Total leases receivable 864,999,716$ 851,141,269$ A d
iscussion of the most significant leases follows:

A. Peddler’s Plaza and Commerce Plaza Leases
During the current fiscal year, the City began leasing the two properties located at 1000 Lafayette Street, known as Peddler’s Plaza, and 900 Lafayette Street, known as Commerce Plaza. In 1971, the City entered long-term ground leases which expired in September 2021 and April 2022 respectively. These two properties have been long discussed as integral components of a long-term vision for rebuilding downtown. The planning process on a specific plan for downtown is not complete and it will be several more years before any redevelopment of the properties could begin to occur. The two buildings are occupied, and it would be beneficial to the City if there is ongoing occupancy of the structures.

The City extended their respective current leases under generally the same terms for a limited period (up to two years) to allow time for the City and its new management company to transition into their new roles. The City recognized $111,072 in lease revenue and $517 in interest revenue for Peddler’s Plaza, $1,501,210 in lease revenue and $5,539 in interest revenue for Commerce Plaza, during the current fiscal year related to these two leases.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 4 – LEASE AGREEMENTS (continued)
76 As of June 30, 2023, the City’s receivable for lease payments was $27,854 for Peddler’s Plaza and $1,404,649 for Commerce Plaza. Also, the City has deferred inflow of resources associated with leases that will be recognized as revenue over the lease term. As of June 30, 2023, the balance of the deferred inflow of resources was
$27,768 for Peddler’s Plaza and $1,402,733 for Commerce Plaza.

B. Irvine Company Ground Leases
Irvine Company Disposition and Development Agreement With Ground Lease (DDA) for Office Park Development
In April 2000, the former RDA entered into a Disposition and Development Agreement (DDA) with Ground Lease with The Irvine Company (Developer) for development of the site as an office/R&D complex. The DDA contemplated the former RDA obtaining title to the entire property from the City prior to entering into ground leases with the Developer. The site is subdivided into three parcels to accommodate the phased development of the project. Only Parcel 2 was conveyed to the former RDA. Parcels 1 & 3 were always held by the City and not subject to terms of the subsequent RDA dissolution.

In March 2006, the DDA and the Ground Lease were amended to update the status of conditions precedent; amend the schedule of performance; and clarify terms and conditions relating to Parcel 1 and Parcel 3. In October 2012, the City entered into two ground leases with the Irvine Company for Parcels 1 and 3. The term of both leases is 80 years after the effective date of October 31, 2012, and therefore both leases shall expire on October 31, 2092. The rent commencement date is November 1, 2012. Under the terms of the leases the City will receive specified amounts for minimum rent subject to certain events or time periods and then inflationary adjustments at times specified in the leases. For the fiscal year ended June 30, 2023, the City recognized $1,313,233 in lease revenue and $2,113,336 in interest revenue for Parcel 1 and $633,168 in lease revenue and $1,018,933 in interest revenue for Parcel 3. As of June 30, 2023, the City’s receivable for lease payments for Parcel 1 was $92,431,190 and the balance of the deferred inflow of resources was $91,050,850. The City’s receivable for lease payments for Parcel 3 was $44,565,158 and the balance of the deferred inflow of resources was $43,899,636.

C. City Leases Pursuant to the Terms of the January 8, 2016 Settlement Agreement On March 8, 2011, the City and the former RDA adopted resolutions authorizing the execution of property conveyance agreements for the conveyance of certain real property owned by the former RDA. The agreements conveyed the properties subject to existing leases to the City. Properties included California’s Great America Theme Park, Techmart, Hyatt Regency, and Hilton Hotel.

The actions taken by the former RDA related to the asset transfers were validly authorized and conformed with the requirements of the Community Redevelopment Law as it existed at the time of the actions. Pursuant to ABx1 26, the Redevelopment Dissolution Law, the State Controller’s Office is to review any asset transfers that occurred between a redevelopment agency and any other public agency after January 1, 2011 and if the assets have not been contractually committed to a third party and to the extent allowed by state and federal law, the Controller, after completing its review is to order the return of the assets to the Successor Agency.

The Successor Agency received a Controller’s order on September 10, 2013 ordering the City to transfer the assets back to the Successor Agency. The validity of that order was the subject of litigation in Sacramento Superior Court (Sharma vs. City of Santa Clara). Additionally, on July 26, 2013, the Court granted the County of Santa Clara, the Santa Clara Unified School District, and the Santa Clara County Office of Education

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 4 – LEASE AGREEMENTS (continued)
77 (Petitioners) motion for a preliminary injunction (temporary restraining order), restricting the City from selling, transferring, encumbering, spending, or otherwise depleting or wasting any real property interests received from the former RDA.

On January 8, 2016 the City executed a Settlement Agreement in Sharma vs 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 returned are as follows:

The Great America Theme Park Property, the Hilton Hotel Property, the North/South Parking Lots, the Gateway Parcel 2 Property, the Hyatt Hotel Property, The Techmart Property, and the Martinson Childcare Center Property. The Settlement Agreement requires the City to forego the long-term lease revenues generated by the properties. Lease revenues collected from July 1, 2012 to June 30, 2016 have been passed on to the Successor Agency. Additional information concerning the Settlement Agreement can be found in Note 22.

The Settlement Agreement provides clarity that the City retains title to the main parking lot property for the Great America Theme Park and the Hyatt Hotel Ballroom Space. The agreement provides that rental income from these properties beginning July 1, 2015 is the property of the City.

California’s Great America Theme Park Parking Lot Lease The City and Cedar Fair entered into various agreements to operate and manage the theme park. As agreed in the Settlement Agreement, the Great America Theme Park Main Parking Lot is and always has been owned by the City and the City is entitled to any lease revenues generated from the Main Parking Lot after June 30, 2015. Pursuant to the Fourth Amendment of the ground lease, the City allows Cedar Fair to use certain City property adjacent to the Theme Park property for parking. Under the terms of the amended Ground Lease, Cedar Fair pays the City annually for use of such property for parking. For the fiscal year ended June 30, 2023, the City recognized $107,932 in lease revenue and $7,251 in interest revenue. As of June 30, 2023, the City’s receivable for lease payments was $588,358 and the balance of the deferred inflow of resources was $602,623.

Hyatt Ballroom Lease Agreement
In April 1985, the former RDA entered into various agreements for the development of a certain piece of land for the eventual operation of a high quality hotel and related facilities, including a ballroom. The resulting lease agreement pertaining to the City owned ballrooms 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 2013, Hyatt Equities, LLC. sold its interest to Inland American Lodging Acquisitions, Inc., the terms and conditions of the lease agreements remain in effect.

The minimum rent of the Ballroom lease is adjusted every three years according to the April 1985 agreement.

Due to the COVID-19 impacts, the City agreed to waive and abate the ballroom lease from March 1, 2020 to October 1, 2021. For the fiscal year ended June 30, 2023, the City recognized $327,695 in lease revenue and $95,239 in interest revenue. As of June 30, 2023, the City’s receivable for lease payments was $4,040,082 and the balance of the deferred inflow of resources was $3,877,726.

D. North South Parking Lot Lease
On May 22, 2018, the City Council authorized the City Manager to make an offer to purchase the Successor Agency owned North South Parcel and further authorized the execution of a Purchase and Sale Agreement for the property. The transfer of the property was settled on July 24, 2018. As part of the acquisition, the City

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 4 – LEASE AGREEMENTS (continued)
78 accepted and assumed all of the duties, obligations, liabilities, commitments and covenants of Successor Agency accruing from and after the settlement date with respect to or arising under the lease with Cedar Fair.

For the fiscal year ended June 30, 2023, the City recognized $26,174 in lease revenue and $5,263 in interest revenue. As of June 30, 2023, the City’s receivable for lease payments was $461,431 and the balance of the deferred inflow of resources was $460,229.

E. Related Santa Clara Ground Lease
The City and Related Santa Clara, LLC, a Delaware limited liability company, entered into the certain Disposition and Development Agreement (City Place Santa Clara) on August 12, 2016. The duly adopted Development Agreement requires the City to convey the Property by lease in accordance with the DDA. In December 2022, the City entered into three ground leases with the Related Santa Clara for Phase 1-A, Phase 1-B, and Phase 1-C. The term of the three leases is 99 years after the effective date of January I, 2023. The rent commencement date was on December 20, 2022. Under the terms of the lease, the City will receive specified amounts for minimum rent subject to certain events or time periods and then inflationary adjustments at times specified in the leases. For the fiscal year ended June 30, 2023, the City recognized $216,295 in lease revenue and $896,807 in interest revenue for Phase 1-A, recognized $190,124 in lease revenue and $788,295 in interest revenue for Phase 1-B, recognized $86,847 in lease revenue and $360,085 in interest revenue for Phase 1-C. As of June 30, 2023, the City’s receivable for lease payments was $42,785,031 and the balance of the deferred inflow of resources was $42,596,142 for Phase 1-A, the lease receivable $37,608,110 and the balance of the deferred inflow of resources was $37,442,077 for Phase 1-B, $17,179,016 and the balance of the deferred inflow of resources was $17,103,173 for Phase 1-C.

F. Future Lease Payments
As of June 30, 2023, the City’s receivable for future lease payments to maturity for the leasing assets to other entities with the funds in which payments will be received are as follows:

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 4 – LEASE AGREEMENTS (continued)
79 (excluding Santa Clara Stadium Authority)
For the Year
Ending June 30 Principal Interest Principal (1)
Interest
2024 3,248,448$ 4,296,876$ 309,146$ 101,919$
2025 1,669,672 4,270,233 325,595 94,605
2026 1,693,898 4,257,475 342,725 86,924
2027 1,754,666 4,427,307 343,940 79,061
2028 1,808,507 4,428,058 356,180 71,459
2029-2033 9,491,046 23,145,603 1,192,367 247,143
2034-2038 10,152,556 23,949,212 1,051,829 117,059
2039-2043 10,593,543 25,470,828 316,365 6,405
2044-2048 7,134,125 29,957,926 - -
2049-2053 7,616,094 32,714,481 - -
2054-2058 8,497,947 35,596,650 - -
2059-2063 9,523,459 39,746,545 - -
2064-2068 10,668,090 44,033,034 - -
2069-2073 11,961,266 49,457,447 - -
2074-2078 13,404,835 55,963,589 - -
2079-2083 15,022,650 62,441,118 - -
2084-2088 16,834,648 72,464,209 - -
2089-2093 16,226,898 81,403,902 - -
2094-2098 - 95,636,297 - -
2099-2103 - 110,687,354 - -
2104-2108 - 131,380,290 - -
2109-2113 - 152,056,671 - -
2114-2118 - 180,483,577 - -
2119-2123 97,572,155 42,570,894 - -
254,874,503$ 1,310,839,576$ 4,238,147$ 804,575$
Governmental Activities Business-Type Activities
(1) Please refer to Santa Clara Stadium Authority 's separately issued Financial Statement Note 2k for the principal outstanding for Stadium Authority.

NOTE 5 - ENTERPRISE FUND MANAGEMENT AGREEMENTS
A. Santa Clara Convention Center
Dur
ing fiscal year 2018-19, the City performed a competitive bidding process to select a new management company for the Convention Center. On March 12, 2019, the City Council approved a resolution to enter into a new agreement with Global Spectrum, LP, doing business as Spectra Venue Management (Spectra), to manage and operate the Convention Center effective March 18, 2019. The initial term of this agreement began on March 18, 2019 and runs through June 30, 2024 with the option to extend the agreement for two subsequent

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 5 – ENTERPRISE FUND MANAGEMENT AGREEMENTS (continued) 80 terms of five (5) years by serving notice to Spectra no later than 180 days from the expiration of the term period. Under the terms of this agreement, Spectra will receive an annual base management fee for its’ operation of the Convention Center and an additional management fee if certain performance measures are met. For fiscal year ended June 30, 2023, the City paid Spectra $167,475 in management fees.

In May 2019, the City issued a request for proposal (RFP) to select a qualified company to provide Food and Beverage Operations for the Convention Center. The City entered into an agreement with Levy Premium Foodservice Limited Partnership (Levy) on November 1, 2019 to manage the foodservice operations at the Convention Center. The initial term of this agreement began on November 1, 2019 and expires on June 30, 2025. Upon expiration of the initial term, the City has the option to extend this agreement for two subsequent terms of five (5) years each by serving notice to Levy no later than 180 calendar days from expiration of term period. Under the terms of this agreement, Levy will receive management fees equal to 4.5% of gross receipts plus an additional fee of 8% of net receipts. For the fiscal year ended June 30. 2023, the City paid Levy $302,270 in fees.

In accordance with the November 1, 2019 executed agreement, Levy agreed to pay the City $5,750,000 consisting of $5,000,000 for an Operations Investment to be used for pre-opening expenses and other improvements to the foodservice facilities at the Convention Center, and a $750,000 Community Enrichment Investment to be spent on programs that drive community enrichment, develop local partnerships and promote economic development of the City. Both of these are amortized on a straight-line basis over 15 years. In the event that this agreement terminates for any reason prior to full amortization of the investment funds, the City is obligated to reimburse Levy for the unamortized amount.

NOTE 6 – SANTA CLARA STADIUM AUTHORITY
A. Credit Agreement
The Restated Credit Agreement dated as of June 19, 2013 was entered into by and among Stadium Funding Trust (FinanceCo), SCSA, and Goldman Sachs Bank. Under the Restated Credit Agreement, FinanceCo issued private placement notes and obtained a loan from a consortium of lenders and will loan SCSA up to $450 million and StadCo up to $400 million. Additionally, SCSA and StadCo entered into the Restated StadCo Obligations Agreement on June 19, 2013 under which StadCo will loan up to $500 Million to SCSA to pay costs associated with the development of Levi’s Stadium.

B. Management Agreement
The Stadium Management Agreement dated as of March 28, 2012 was entered into by and among the SCSA, Forty Niners Stadium Management Company LLC (ManagementCo), and StadCo. The SCSA and StadCo selected ManagementCo to provide management services for the Stadium on each entity’s behalf on a continual, year-round basis, including overseeing the day-to-day operations and maintenance of the Stadium.

The Stadium Management Agreement has an initial term of 25 years, plus a 15-year renewal option. On November 13, 2012, the First Amendment to the Stadium Management Agreement was approved. This First Amendment establishes incentive management fees, clarifies certain responsibilities of ManagementCo, preserves the amount of concessions income earned by SCSA and StadCo, and addresses liability issues regarding a possible Solar Site License Agreement with NRG.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 6 – SANTA CLARA STADIUM AUTHORITY (continued)
81 The Stadium Management Agreement gives ManagementCo the responsibility to oversee the concessions agreements but not to enter into the concessions agreements without SCSA and StadCo’s prior consent. The Concessions Operating Agreement dated February 2018 was reviewed by SCSA and StadCo and entered into by and between ManagementCo and Levy Premium Foodservice Limited Partnership (Levy). The Concessions Operating Agreement has an initial term of 12 years which runs from April 16, 2018 through April 15, 2030 and it grants Levy the exclusive right to provide food and beverage services and merchandise services at all events at Levi’s Stadium.

The Stadium Management Agreement also authorizes ManagementCo to pay for services related to the Stadium operations on behalf of the SCSA. For the years ended March 31, 2023 and 2022, ManagementCo charged the SCSA $8.1 million and $6.8 million in Shared Expenses, and $7.4 million and $7.8 million in Other Operating and Management Expenses, respectively.

C. ManagementCo Expense Settlement
On August 31, 2022, SCSA, StadCo and ManagementCo settled the arbitration and disputes regarding the partially suspended Shared Expenses and Operating and Management Expenses from June 2019. As part of the settlement, under section 11(b)(iii), SCSA agreed to recognize the $15.8 million unpaid expenses along with $426 thousand interest expenses under the Revolving Loan incurred from fiscal year 2019-20 through fiscal year 2021-22, ManagementCo's prior unauthorized payments of the unpaid expenses through the Revolving Loan are now treated as timely SCSA payments, but without SCSA agreeing to ManagementCo's actions or draws under the Revolving Loan. The $16.3 million in ManagementCo expenses were recorded in fiscal year ended March 31, 2022. These are the Shared Expenses and Operating and Management Expenses that were previously withheld in 2020 and 2021.

In addition, the SCSA agreed to discontinue the current practice of reviewing the prevailing wage documentations and sending it off to a labor consultant to review and approve prior to payments. The SCSA will rely on ManangementCo’s new internal Prevailing Wage Laws compliance policy and procedures and process the Capital Expenditures invoice payments as they come in. The SCSA also agreed to restart paying the Operating and Management Expenses and Shared Stadium Expenses based on the approved budget and have ManagementCo provide a year-end true up of the actual expenses at the end of each fiscal year.

D. Ground Lease
On February 28, 2012, the SCSA entered into a lease (the Ground Lease) with the City whereby the City leases the Stadium site to the SCSA. The Ground Lease was amended on June 19, 2013.

The Ground Lease has an initial term of 40 years. The first lease year commenced on the first day following the substantial completion of construction (August 1, 2014) and ended on the next following March 31st. The subsequent lease years will start on April 1st and end on the following March 31st. The SCSA will have five successive extension options, each four years in duration, which would commence following the initial term expiration date.

The Ground Lease provides that the City will receive a fixed ground rent (Fixed Ground Rent) of $180 thousand for the first year of Stadium operations payable by the SCSA. Beginning in the second year of Stadium operations and annually thereafter through the tenth year of Stadium operations, the Fixed Ground Rent will increase annually by $35 thousand. Beginning in the 11th year of Stadium operations, Fixed Ground

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 6 – SANTA CLARA STADIUM AUTHORITY (continued)
82 Rent will be increased to equal $1 million, and thereafter will be increased by $100 thousand every five years through the end of the initial term of the Ground Lease. If the term of the Ground Lease is extended, then, during the first extension term, the Fixed Ground Rent will equal $1.58 million; and if and to the extent the Ground Lease is further extended, the Fixed Ground Rent will be increased by $80 thousand every four years thereafter through the expiration of the term of the Ground Lease. While the Fixed Ground Rent payments vary over the course of the Ground Lease, Ground Lease expense is recorded on a straight-line basis. Therefore $979 thousand of ground lease expense was reported in each of the fiscal years ended March 31, 2022 and 2021.

The Ground Lease also provides that the City will receive a performance-based rent equal to 50% of the net income from non-NFL events, less certain credits including 50% of the Fixed Ground Rent, payable by the SCSA. If certain of the credits are not used within the year incurred or the next five succeeding years, the credits will expire. The SCSA reported a net Non-NFL event profit of $8,809,167 for fiscal year 2022-23, which triggers the performance-based rent. However, the SCSA did not pay the performance-based rent due because there are excess public safety cost credits that may offset the performance-based rent for the year. The performance-based rent amount based on potential credits from public safety costs in excess of a disputed threshold are the subject of pending litigation. More details on the ligation are included in Note 20.

The following schedule summarizes the minimum future payments due under this lease:

Fiscal Year Ground Lease
Ending March 31 Amount
2024 495,000$
2025 1,000,000
2026 1,000,000
2027 1,000,000
2028 1,000,000
Thereafter 33,500,000
Total 37,995,000$
E. Stadium Lease
On March 28, 2012, the SCSA entered into a lease with StadCo whereby the SCSA leases the Stadium to StadCo. On June 19, 2013, the same parties entered into an Amended and Restated Stadium Lease Agreement (the Stadium Lease).

The Stadium Lease has an initial term of 40 years commencing on the first day following the substantial completion of construction (August 1, 2014) and includes five successive options to extend the term by four years each. The Stadium Lease is divided into two seasons:
 the Tenant Season, which includes the NFL season (including preseason, regular season and postseason NFL games) and runs from August 1 through January 31; and  the SCSA Season, which runs from February 1 through July 31.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 6 – SANTA CLARA STADIUM AUTHORITY (continued)
83 Pursuant to the Stadium Lease, the SCSA and StadCo will be entitled to receive and collect separate revenues.

Initially, rent payable by StadCo to the SCSA was $24.5 million per year. This amount was established pursuant to the Stadium Lease in connection with the take-out financing, which occurred on June 19, 2013.

The Stadium Lease allowed for one opportunity to adjust the rent if operating or debt service expenses are either more or less than projected in determining the initial rent. Based on the changes to the projected operating and debt service expenses, the provisions for a one-time rent adjustment were triggered. At the SCSA Board (Board) meeting held on March 22, 2016, the Board decided not to adjust the rent, and instead passed a motion to pursue the informal dispute resolution procedures and to proceed to the arbitration process if necessary.

Thereafter, on May 3, 2016 StadCo filed for arbitration with the SCSA.

On June 18, 2018, the arbitrator entered an Arbitration Award in favor of the SCSA and against StadCo. This award adjusted the facility rent from $24.5 million to $24.76 million, an increase of $262,000. This increase is retroactive to the first lease year resulting in a total amount owed to the SCSA of $1.31 million for the first five lease years, through March 31, 2019. In addition to the adjustment to the facility rent, the SCSA was entitled to reimbursement of its legal fees, determined by the arbitrator to be $2.28 million. The lease also provides for a fair market rent adjustment in year 33.

The SCSA received $24.7 million and $25.3 million in stadium rent from StadCo in each of the fiscal years ended March 31, 2023 and 2022, respectively.

The SCSA may elect to expand the Tenant Season to consist of the entire lease year, from April 1 through the next succeeding March 31 (Stadium Authority Put Right), by delivering written notice to StadCo. The SCSA Put Right may be exercised at any time during lease year 13, or at any time that the Management Company Revolving Loan balance exceeds $20 million. The expansion of the Tenant Season will be effective as of the applicable Tenant Season Expansion Date as set forth in the Stadium Lease. Effective from and after the Tenant Season Expansion Date, and continuing through the remainder of the Stadium Lease term, the Tenant Season will consist of the entire lease year.

F. GASB 87 Lease Agreements Implementation and Restatement The SCSA implemented GASB 87, Leases, during the year ended March 31, 2023. The SCSA is a lessee for the Ground Lease with the City and is required to recognize the lease liability and intangible right-to-use lease asset in the statement of net position. The SCSA adjusted the statements of net position for fiscal year 2021- 22 for the implementation and presented a two-year comparative data in its annual financial report. For the year ended March 31, 2023, the SCSA recognized $29,321,106 in lease liability, $27,934,663 in intangible right-to-use lease asset and $562,904 in interest payable in the statement of net position, and $460,000 in rents and licensing revenue, $798,133 in depreciation expense and $647,999 in interest expense in the statements of revenues, expenses, and change in net position for the Ground Lease. The GASB 87 reporting requirement for the Ground Lease does not apply at the Citywide financial statements level. As a result, the discreetly presented SCSA financial statements have been restated in the proprietary major fund statements. The right-to-use lease asset, lease liability and interest payable related to the Ground Lease were eliminated in statement of net position and the net impact in the unrestricted net position is $1,949,347. The related rents and licensing revenue, depreciation expense and interest expense were also eliminated in the statements of revenues, expenses, and change in net position and the net impact in net position is $986,132.

The SCSA is a lessor for the Stadium Lease with StadCo and is required to recognize the lease receivable and deferred inflow of resources in the statement of net position. The SCSA adjusted the statements of net position

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 6 – SANTA CLARA STADIUM AUTHORITY (continued)
84 for fiscal year 2021-22 to recognize $617,305,447 in lease receivable and $612,602,812 in deferred inflow of resources for the Stadium Lease. The GASB 87 reporting requirement for the Stadium Lease applies to the Citywide financial statements level and the results are included in the proprietary major fund statements. As a result, the net position was restated to increase by $4,702,635. Refer to Note 4 for more information on the balances of lease receivable and deferred inflow of resources of the Stadium Lease.

NOTE 7 – CASH AND INVESTMENTS
A. Pooled Cash and Investments
The City pools cash from all sources and all funds except restricted cash and investments with fiscal agent.

Allocable portions of the pooled portfolio for each fund type are reported under the captions “Pooled cash and investments” and “Restricted Cash”. Interest income earned on pooled cash and investments is allocated to various funds based on average cash balances of each fund unless there are specific legal or contractual requirements to do otherwise.

Total cash and investments of the City was $1,158.8 million as of June 30, 2023. This amount includes the City’s pooled cash and cash investments of $1,101.8 million, and cash and investments with fiscal agents of $55.6 million.

Of the City's total cash and investments, the following shows the allocation as presented on the accompanying statements of net position:

Statement of Net Position
Pooled cash and investments 1,055,119,746$
Investments with fiscal agent - current 40,474,478
Restricted cash 34,790,341
Deposits 11,127,179
Investments with fiscal agent - noncurrent 12,253,145
Fiduciary Funds
Pooled cash and investments 2,154,301
Investments with fiscal agent - noncurrent 2,895,085
Total Cash and Investments 1,158,814,275$

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 7 – CASH AND INVESTMENTS (continued)
85 The City’s cash and investments balances in Governmental Funds, Enterprise Funds, Internal Service Funds, Private Purpose Trust, and Fiduciary Funds were as follows:

Governmental Enterprise
Internal
Service Fiduciary
Funds Funds Funds Funds Total
Pooled cash and
investments 340,630,819$ 670,731,778 $ 43,757,149$ 2,154,301$ 1,057,274,047$ Investments with fiscal
agent - current 11,187 40,463,291 - - 40,474,478 Restricted cash 24,711,385 10,078,956 - - 34,790,341 Investments with fiscal
agent - noncurrent 716,910 11,536,235 - 2,895,085 15,148,230 Deposits - 11,127,179 - - 11,127,179
Total cash and
investments 366,070,301$ 743,937,439$ 43,757,149$ 5,049,386$ 1,158,814,275$ B. Investments Authorized by the California Government Code and the City’s Investment Policy
The City’s investment strategy is to invest cash not required for current obligations in U.S. government securities, federal government agency securities, highly rated money market instruments and other investments in accordance with the City’s investment policy for a maximum term of five years for the General Fund portfolio. The City Council has authorized the purchase of securities with maturities greater than five years, specifically for the Electric Cost Reduction Account. This strategy allows the City to minimize its exposure to credit, market, and liquidity risk while maintaining a reasonable return on its portfolio.

The City’s investment policy, in compliance with the City of Santa Clara Charter, Article IX, Section 904 (d) and (h), and the California Government Code authorizes the City to invest in securities that are consistent with the City’s cash management strategy and long-term goals and objectives. The City is authorized to invest in the following types of instruments, and the table also identifies certain provisions of the California Government Code, or the City’s investment policy where it is more restrictive:

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 7 – CASH AND INVESTMENTS (continued)
86 Authorized Investment Type
Maximum
Maturity
Minimum
Credit
Quality
Maximum
Percentage of
Portfolio
Maximum
Investment In One
Issuer
U.S. Treasury Obligations 7 years N/A 100% 100%
U.S. Agency Securities (A) 7 years Top three
ra
tings
categories
80%(B) 40%
Ne
gotiable 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% (C)
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
25% 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 (D) AA 15% 5%
(
A) Securities issued by the Federal Farm Credit Bank (FFCB), the Federal Home Loan Bank (FHLB), (B) Callable securities are limited to 30% of the portfolio. (C) 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.

Corporation (FHLMC), local agencies and other U.S. government -sponsored enterprises. the Federal National Mortgage Association (FNMA), and the Federal Home Loan Mortgage (D) Maximum Weighted Average Life with Current Public Securities Association Assumptions =12 years at C. Investments with Fiscal Agents
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 proceeds investments are reported monthly to the City Council.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 7 – CASH AND INVESTMENTS (continued)
87 The City 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 the City 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.

Former RDA and Electric Reserve Fund bond proceeds restricted for construction projects are invested and held by the trustee as fiscal agent investments. All funds have been invested as permitted under the Code.

These investments are usually scheduled to mature when cash is needed to fulfill the requirements of the underlying bond and trust agreements.

The City also invests funds in the Bentzien Trust in accordance with the investment policy of the Trust that allows investment in cash and short-term investments (up to 20%), fixed income investments including U.S.

Government, U.S. Government Agency, Asset and Mortgage Backed securities, debt issued by U.S.

Corporations and fixed income mutual funds (30% to 60% of portfolio’s aggregate fair value), and equity securities or mutual funds (40% to 70% of portfolio’s aggregate fair value). Investments in U.S. Corporate debt shall be limited to an amount per issuer not to exceed 10% of the aggregate fair value of the portfolio, and upon initial purchase by the Adviser, must be of investment grade as rated by Moody’s and/or Standard and Poor’s rating services. The maximum maturity of an individual bond shall not exceed fifteen years and the average maturity shall not exceed ten years. Individual equity purchases shall have an equivalent securities rating of B- or better. Individual equity purchases shall not exceed five percent of the portfolio’s aggregate fair value.

D. 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.

E. Interest Rate, Credit Risks and Fair Value Measurement Interest rate risk is the risk that an investment’s value will be adversely affected by a change in interest rates.

In general, the longer the time to maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. To reduce interest rate risk, the City diversifies the portfolio into a wide range of investments with different maturities, and maintains a reasonable average maturity of less than three years.

This approach significantly mitigates adverse market volatility and maximizes returns.

The average maturity of the City’s pooled investment portfolio at June 30, 2023 was approximately 2.05 years and the City has the ability to and generally intends to hold all investments to maturity. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustees) to market

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 7 – CASH AND INVESTMENTS (continued)
88 interest rate fluctuations is provided in the investment table that shows the distribution of the City's investments by maturity.

Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.

Credit risk is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Presented below is the actual rating as of June 30, 2023 for each investment type:

Credit Under 180 181 - 365 1 - 3 3 - 5 Over 5 Fair
Type of Investment Rating Days Days Years Years Years Value Cash N/A 107,383,900$ -$ -$ -$ - $ 107,383,900$ US Treasury Notes Aa a 4,498,687 66 ,693,279 123,766,381 208,138,626 - 403,096,973 Federal Farm Credit Bank Aa a - 4, 908,250 44,136,188 - - 49,044,438 Federal Home Loan Bank Aa a 9,890,100 4, 878,500 4,822,900 - - 19,591,500 Federal National Mortgage Association Aa a 5,118,097 - 3 2,510,030 - 37,628,127 Federal Home Loan Mortgage Corporation Aa a - - 18,103,354 - - 18,103,354 Federal Home Loan Mortgage Corporation

Mortagage-Backed Security Aaa - - - 5,090,101 - 5,090,101 Corporate Notes Aa a - - 14,301,059 - - 14,301,059 Corporate Notes Aa - 4, 069,809 24,761,551 19,544,828 - 48,376,188 Corporate Notes A 653,770 21 ,647,817 79,061,861 13,642,516 - 115,005,964 Supranational Notes Aa a - - 10,424,890 - - 10,424,890 Asset-Backed Securities Aa a - - 7,497,590 1,976,562 - 9,474,152 Municipal Notes Aa a 1,430,000 - 2 ,467,338 - - 3,897,338 Municipal Notes No t Rated - - - - - -
Certificates of Deposit A- 1 - - 7,268,183 - - 7,268,183 Money Market Funds No t Rated 204,099,241 - - - - 204,099,241 State Investment Pool (LAIF) No t Rated 5,716,605 - - - - 5,716,605 Total Cash and Investments -

City Treasury 338,790,400 10 2,197,655 369,121,325 248,392,633 - 1,058,502,013 Cash (Debt Fund) N/ A 6,195,375 - - - - 6,195,375 Cash (Benzient Trust) N/ A 17,182 - - - - 17,182 Cash (Pension Rate Stabilization Investment) N/ A 20,938 - - - - 20,938 U.S. Treasury Notes
(Bentzien Trust) Aaa 49,672 - - 49,719 - 99,391 Federal Home Loan Bank

(Bentzien Trust) Aaa - - 116,905 184,439 139,179 440,523 Federal Farm Credit Bank
(Bentzien Trust) Aaa - - - - - -
Government Agency Notes (Bentzien Trust) Aa a - - - - - - Municipal Notes (Bentzien Trust) A aa 50,014 - 71,932 - 74,310 196,256 Municipal Notes (Bentzien Trust) A a 34,981 - 1 03,909 36,769 100,508 276,167 Municipal Notes (Bentzien Trust) A 34,935 - 45,495 - - 80,430 Municipal Notes (Bentzien Trust) B BB - - - 9,001 - 9,001 Corporate Notes (Bentzien Trust) BB B - - 67,581 34,571 - 102,152 Corporate Notes (Bentzien Trust) A - 24 ,625 - 57,640 - 82,265 Corporate Stock (Bentzien Trust) A & B 896,261 - - - - 896,261 (continued)
Maturity

Cash and Investments - Other:

Cash and Investments - City Treasury:

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 7 – CASH AND INVESTMENTS (continued)
89 Credit Under 180 181 - 365 1 - 3 3 - 5 Over 5 Fair
Type of Investment Rating Days Days Years Years Years Value Mutual Fund - Dreyfus Money Market (Bond Proceeds) Aaam 2,230,329 - - - - 2,230,329 Mutual Fund - Blackrock Money Market (Debt Fund) Aaam 728,097 - - - - 728,097 Mutual Fund - JP Morgan Mutual Fund
(Debt Fund) Aaam 10,002,541 - - - - 10,002,541 Mutual Fund - International
Equities (Bentzien Trust) Not Rated 166,857 -
- - - 166,857
Mutual Fund - Fixed Income
(
Bentzien Trust) Not Rated 668,274 - - - - 668,274 Mutual Fund - Equities
(B
entzien Trust) Not Rated 150,141 - - - - 150,141 Exchange Traded Funds
(Bentzien Trust) Not Rated
45,241 - - - - 45,241
Mutual Fund- Money Market
(Bentzien Trust) Not Rated
129,647 - - - - 129,647
Mutual Fund - Fidelity Treasury
(SCSA Debt Fund) Not Rated 11,536,236 -
- - - 11,536,236
Morgan Stanley Institutional Liquidity
Tr
easury Securities (SCSA Debt Fund) Not Rated 24,265,375 - - - - 24,265,375 Pension Rate Stabilization Investment
(
Cash Equivalents)) Not Rated 1,368,788 - - - - 1,368,788 Pension Rate Stabilization Investment
(
Mutual Funds-Equity) Not Rated 8,900,746 - - - - 8,900,746 Pension Rate Stabilization Investment
(
Mutual Funds-Fixed Income) Not Rated 20,576,870 - - - - 20,576,870 Collateral Obligations (ADM & CAISO) N ot Rated 11,127,179 - - - - 11,127,179 99,195,679 24,625 405,822 372,139 313,997 100,312,262 Total Cash and Investments 437,986,079$ 1 02,222,280$ 369,527,147$ 248,764,772$ 313,997 $ 1,158,814,275$ Total Cash and Investments - Other
Ma
turity
Cash and Investments - Other: (continued)
The
City accounts for investments in accordance with GAAP, which requires governmental entities to report certain investments at fair value based on quoted market information obtained from recognized sources. The City has reported its investments at fair value with the exception of its share of external investment pools and mutual funds, the carrying value of which approximates fair value. In determining the change in fair value of its investments, the City used an aggregate method of calculation.

The City 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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 7 – CASH AND INVESTMENTS (continued)
90 Investments and
Derivative
Instruments
Measured at Fair
Value
Quoted Prices in
Active Markets for
Identical Assets
Significant Other
Observable Inputs
6/30/2023 Level 1 Level 2 Exempt
(1)
Investments by Fair Value Level
U.S. Treasury Notes 403,096,973$ 403,096,973$ -$ -$ Federal Farm Credit Bank 49,044,438 - 49,044,438 - Federal Home Loan Bank 19,591,500 - 19,591,500 -
Federal National Mortgage Association 37,628,127 - 37,628,127 - Federal Home Loan Mortgage Corporation 18,103,354 - 18,103,354 - Federal Home Loan Mortgage Corporation
Mortagage-Backed Security 5,090,101 - 5,090,101 - Corporate notes 177,683,211 - 177,683,211 -
Municipal Notes 3,897,338 - 3,897,338 -
Asset-Backed Securities 9,474,152 - 9,474,152 -
Supranational Notes 10,424,890 - 10,424,890 -
Certificates of Deposit 7,268,183 - 7,268,183 -
Wells Fargo Money Market Fund 204,099,241 204,099,241 - - Total Short Term Investments 945,401,508 607,196,214 338,205,294 - U.S. Treasury Notes (Bentzien Trust) 99,391 99,391 - - Federal Home Loan Bank (Bentzien Trust) 440,523 - 440,523 - Municipal Notes (Bentzien Trust) 196,256 - 196,256 - Municipal Notes (Bentzien Trust) 276,167 - 276,167 - Municipal Notes (Bentzien Trust) 80,430 - 80,430 -
Municipal Notes (Bentzien Trust) 9,001 - 9,001 - Corporate Notes (Bentzien Trust) 102,152 - 102,152 - Corporate Notes (Bentzien Trust) 82,265 - 82,265 - Mutual Fund - Dreyfus Money Market (Bond Proceeds) 2,230,329 - - 2,230,329 Mutual Fund - Blackrock Money Market (Debt Fund) 728,097 - - 728,097 Mutual Fund - JP Morgan Money Market Funds (Debt Fun d) 10,002,541 - - 10,002,541 (continued)
Fair Value Measurements Using
Short Term Investments
Debt Securities and Other

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 7 – CASH AND INVESTMENTS (continued)
91 Investments and
Derivative
Instruments
Measured at Fair
Value
Quoted Prices in
Active Markets for
Identical Assets
Significant Other
Observable Inputs
6/30/2023 Level 1 Level 2 Exempt
(1)
Mutual Fund - International Equities (Bentzien Trust) 166,857 - 166,857 - Mutual Fund - Fixed Income (Bentzien Trust) 668,274 - 668,274 - Mutual Fund - Equities (Bentzien Trust) 150,141 - 150,141 - Mutual Fund- Money Market (Bentzien Trust) 129,647 - 129,647 - Mutual Fund - Fidelity Treasury ( SCSA Debt Fund) 11,536,236 - - 11,536,236 Morgan Stanley Institutional Liquidity
Tr
easury Securities (SCSA Debt Fund) 24,265,375 - - 24,265,375 Pension Rate Stabilization Investment
(
Cash and Equivalents) 1,368,788 1, 368,788 - -
Pension Rate Stabilization Investment
(
Mutual Funds-Equity) 8,900,746 8, 900,746 - -
Pension Rate Stabilization Investment
(
Mutual Funds-Fixed Income) 20,576,870 18 ,603,770 1,973,100 - Collateral Obligations (ADM & CAISO) 11,127,179 - - 11,127,179 Total Debt Securities and Other 93,137,265 28 ,972,695 4,274,813 59,889,757 Corporate Stock (Bentzien Trust) 896,261 89 6,261 - - Exchange Traded Funds (Bentzien Trust) 45,241 45 ,241 - - Total Equity Securities 941,502 94 1,502 - -
Total Investment by Fair Value Level 1,039,480,275 6 37,110,411 342,480,107 59,889,757 Investments Measured at the Amortized Cost
St
ate Investment Pool (LAIF) 5,716,605 - - 5,716,605 Total Investments Measured at the Amortized Cost 5,716,605 - - 5,716,605 Total Investments 1,045,196,880 6 37,110,411$ 342,480,107$ 65,606,362$ Cash in Banks 113,617,395
Total Cash and Investments 1,158,814,275$
I
nvestments Derivative Instruments
Op
en contract power trading - Current Assets 756,675$ 7 56,675 Open contract power trading - liabilities (667,540) (6 67,540) Open contract gas trading - liabilities (116,250) (1 16,250) Open contract gas trading - Non-current Assets 22,701,525 22 ,701,525 Total Investment Derivative Instruments 22,674,410$ 2 2,674,410$ (1) Accounts in exempt column are Mutual Fund-Money Market, Collateral Obligations, and LAIF investments which are exempt from the fair value hierarchy, or reported at amortized cost.

Equity Securities
Fair Value Measurements Using
Debt Securities and Other (continued)
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.

Bentzien Trust investment in stocks and U.S. Treasuries are valued using prices quoted in active markets for those securities. All other Bentzien Trust debt securities are valued using a Market Approach methodology by Standard & Poor’s Securities Evaluation Inc. The Market Approach uses prices and other relevant information

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 7 – CASH AND INVESTMENTS (continued)
92 generated by market transactions involving identical or similar assets, liabilities or a group of assets and liabilities.

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.

F. Concentration of Credit Risk
None of the investments in the securities of any individual issuers is greater than 5% of total Citywide investments.

G. 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.

H. Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City has no investments that are highly sensitive to interest rate fluctuations to a greater degree than already disclosed in the Interest Rate Risk Section above.

I. Local Agency Investment Fund
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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
93 NOTE 8 – INTERFUND TRANSACTIONS AND BALANCES
A. Interfund Transfers
With Council approval, resources may be transferred from one City fund to another.

Transfers between funds during the fiscal year ended June 30, 2023 were as follows:

Fund Receiving Transfers Fund Making Transfers Amount
General Fund Non-Major Governmental 2,443,811$ A
Internal Service Fund 1,020,420 B
Electric Utility 1,229,573 C
Non-Major Governmental General Fund 12,596,912 D
Cemetery 822 E
Sewer Utility 407,381 E
Solid Waste 5,121 E
Water Utility 1,466,693 E
Water Recycling Utility 20,226 E
Electric Utility 1,642,456 E
Non-Major Governmental 6,167,302 F
Internal Service Funds General Fund 2,141,000 G
Electric Utility 834,783 H
Water Utility 300,000 I
Cemetery General Fund 879,225 J
Electric Utility Sewer Utility 39,731 K
Water Utility 159,731 K
Water Recycling Utility 8,828 K
Sewer Utility Internal Service Funds 22,812 L
Solid Waste General Fund 35,364 M
Santa Clara Open Space Authority General Fund 6,000 N
Total Interfund Transfers 31,428,191$

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 8 – INTERFUND TRANSACTIONS AND BALANCES (continued) 94 The reasons for material transfers are set forth below:
(A) Transfer to general fund from capital project funds and special revenue funds to return the excess funding. (B) Return the savings from electric vehicle purchase in the Automotive Service fund and CIP Management Service Fee fund.
(C) Transfer to general fund for the positions to support Electric Utility operation. (D) Transfer to fund various capital projects, maintenance district and to pay the debt. (E) Transfer to fund their respective share of financial, human resources software, utility billing, and other projects.
(F) Transfer from Special Revenue fund to fund various street related capital projects. (G) Transfer to Automotive Service for fire engine purchase. (H) Transfer from electric Greenhouse Gas program to fund the vehicle revolving fund on the electric vehicle purchases.
(I) Transfer to Automotive Services for replacement of two utility crew trucks. (J) Transfer to Cemetery fund to subsidize the cemetery operation. (K) Transfer to fund the Electric Utility fiber project and utility yard building and ground improvement project. (L) Returning the saving from CIP Management Service Fee fund to the original funding source. (M) Transfer to Solid Waste to subsidize the rate assistance program. (N) Transfer to Santa Clara Open Space Authority for the annual audit expenditures.

B. Current Interfund Balances
Current interfund balances arise in the normal course of business and are expected to be repaid shortly after the end of the fiscal year. The following is a summary of interfund balances as of June 30, 2023.

Receivable Fund Payable Fund Amount
General Fund Santa Clara Stadium Authority 170,011$
Receivable by Governmental Funds 170,011
Electric Utility Internal Service Funds 3,209,849
Water Utility Internal Service Funds 1,278,857
Sewer Utility Internal Service Funds 964,694
Cemetery Internal Service Funds 305,701
Receivable by Enterprise Funds 5,759,101
Internal Service Funds Internal Service Funds 37,569
Receivable by Internal Service Funds 37,569
Total 5,966,681$
Not
e: The City uses due to/due from as a balancing mechanism in funds with negative cash balances.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 8 – INTERFUND TRANSACTIONS AND BALANCES (continued) 95 C. Long-Term Interfund Advances
On March 21, 2023, Parks and Recreation Facilities Fund has paid off the remaining balance of $5,539,540 advance from the general fund with the year-to-date interest of $58,675. As of June 30, 2023, the City does not have any long-term interfund advances.

D. Internal Balances
Internal balances represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental, successor agency and business-type activities. The $27,115 net internal balance in the Statement of Net Position is due to the different fiscal year end dates between the City and the Santa Clara Stadium Authority (refer to Note 1D for more information).

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
96 NOTE 9 – CAPITAL ASSETS
A. Capital Assets Summary
Capital Assets at June 30, 2023 are comprised of:

Balance
June 30, 2022 Retirements/ Balance
(Restated) Additions Adjustments Transfers June 30, 2023 Governmental Activities
Non Depreciable Assets:

Land 124,518,835$ -$ $ - $ - 124,518,835$
Construction in progress 52,256,469 26,117,294 - (39,368,965) 39,004,798 - - Total Non Depreciable Assets 176,775,304 26,117,294 - (39,368,965) 163,523,633 Capital assets being depreciated:

Land improvements 29,082,674 - - 31,134,218 60,216,892 Buildings 217,367,037 - - 74,986 217,442,023
Infrastructure 624,299,954 1,938,180 - 6,940,659 633,178,793 Machinery & equipment 85,336,172 2,198,478 (1,488,178) 1,219,102 87,265,574 Right-to-use leased equipment 676,479 - - - 676,479 Right-to-use Subscription based IT arrangement 2,397,211 8,201,783 - - 10,598,994 - -
Total Capital assets being depreciated 959,159,527 12,338,441 (1,488,178) 39,368,965 1,009,378,755 Less accumulated depreciation for:

Land improvements (19,203,323) (1,958,823) - - (21,162,146) Buildings (78,219,413) (4,259,040) - - (82,478,453) Infrastructure (330,396,037) (14,973,231) - - (345,369,268) Machinery & equipment (67,576,022) (3,574,459) 1,448,780 - (69,701,701) Right-to-use leased equipment (212,436) (212,436) - - (424,872) Right-to-use Subscription based IT arrangement - (1,652,970) - - (1,652,970) - -
Total accumulated depreciation (495,607,231) (26,630,959) 1,448,780 - (520,789,410) - - Net Depreciable Assets 463,552,296 (14,292,518) (39,398) 39,368,965 488,589,345 - - Governmental Activity Net Capital Assets 640,327,600$ 11,824,776$ (39,398)$ -$ 652,112,978$

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
97 NOTE 9 – CAPITAL ASSETS (continued)
Balance
June 30, 2022 Retirements/ Balance
(Restated) Additions Adjustments Transfers June 30, 2023 Business-Type Activities
Non Depreciable Assets:

Land 18,851,211$ $ - $ - $ - 18,851,211$
Construction in progress 64,337,733 49,224,174 (128,079) (39,124,114) 74,309,714 Total Non Depreciable Assets 83,188,944 49,224,174 (128,079) (39,124,114) 93,160,925 Capital Assets being depreciated:

Land Improvements 102,407 - - - 102,407
Buildings 918,503,578 - - - 918,503,578
Infrastructure 1,222,891,157 - - 39,124,114 1,262,015,271 Machinery & equipment 25,821,050 2,878,611 (293,746) - 28,405,915 Right-to-use leased equipment 2,916,623 - - - 2,916,623 Right-to-use Subscription based IT arrangement 1,437,230 1,670,794 - - 3,108,024 - - Total Capital Assets being depreciated 2,171,672,045 4,549,405 (293,746) 39,124,114 2,215,051,818 Less accumulated depreciation for:

Land Improvements (79,696) (2,571) - - (82,267) Buildings & improvements (194,037,651) (18,219,533) - - (212,257,184) Infrastructure (575,745,131) (28,167,675) - - (603,912,806) Machinery & equipment (19,211,433) (1,544,657) 293,746 - (20,462,344) Right-to-use leased equipment (673,067) (673,067) - - (1,346,134) Right-to-use Subscription based IT arrangement - (378,485) - - (378,485) Total accumulated depreciation (789,746,978) (48,985,988) 293,746 - (838,439,220) Net Depreciable Assets 1,381,925,067 (44,436,583) - 39,124,114 1,376,612,598 Enterprise Activity Net Capital Assets 1,465,114,011$ 4,787,591$ (128,079)$ -$ 1,469,773,523$

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
98 NOTE 9 – CAPITAL ASSETS (continued)
B. Construction in Progress Summary
Construction in Progress for governmental activities as of June 30, 2023 consisted of the following projects:

Future
Governmental Projects Authorized Expended Commitments
Transportation Improvements 43,300,056$ 17,427,624$ 25,872,432$ Parks and Recreation Improvements 26,399,389 10,779,639 15,619,750 City Building Improvements 19,659,612 10,797,535 8,862,077 Total 89,359,057$ 39,004,798$ 50,354,259$
Con
struction in Progress for business-type activities as of June 30, 2023 consisted of the following:

Future
Enterprise Fund Projects Authorized Expended Commitments Electric Projects 190,726,842 $ 71,262,465$ 119,464,377$ Water and Sewer Projects 7,176,755 243,450 6,933,305 Stadium Authority Projects 21,586,935 2,095,393 19,491,542 Santa Clara Convention Center Projects 2,850,161 708,406 2,141,755 Total 222,340,693$ 74,309,714$ 148,030,979$
Det
ails of these projects are available from the City on request.

C. Depreciation Allocation
Depreciation expense is charged to functions and programs based on their usage of the related assets including the right-to-use leased assets. The amounts allocated to each function or program are as follows:

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 9- CAPITAL ASSETS (continued)
99 Governmental Activities:

General Administration 2,202,403$
Finance 5,033
Public Works 15,520,489
Parks and Recreation 2,617,655
Public Safety
Police 1,011,127
Fire 572,832
Planning and Inspection 8,712
Library 1,466,501
23,404,752
Capital assets held by the City's Internal Service
Funds are charged to the various functions
based on their usage of the assets 3,226,207
Total Governmental Activities 26,630,959$
Business-Type Activities:

Utility Funds:

Electric Utility 26,986,225$
Water Utility 1,878,604
Sewer Utility 1,319,796
Water Recycling Utility 25,141
Solid Waste 6,079
Cemetery 6,287
Santa Clara Convention Center 1,556,039
Santa Clara Stadium Authority 17,207,818
Total Business-Type Activities 48,985,988$

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
100
100
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS
A. Summary of Long-Term Obligations
Issue Date Final Maturity Interest rate
Governmental Activity Debt:

General Long-Term Debt:

General obligation bonds
2013 Refunding Certificates of Participation 3/28/2012 2/1/2032 2%-3.75% Unamortized Premium/Discount
Subtotal Government Activity Debt
Business-Type Activity Debt:

Electric Utility:
2013 Series A Revenue Bonds 4/24/2013 7/1/2022 3%-5%
2018 Series A Revenue Bonds 12/18/2018 7/1/2027 0.05
Unamortized Premium/Discount
Santa Clara Stadium Authority
(2)
:

Term A loan 6/19/2013 4/1/2039 5.00%
Subtotal Business Activity Debt-Bonds and Loan
Direct borrowing:

Electric Utility:
2020-1 Series Revenue Bonds 4/10/2020 7/1/2032 1.74%
2020-2 Series Revenue Bonds 4/10/2020 7/1/2028 1.31%
2020-3 Series Revenue Bonds 4/10/2020 7/1/2024 0.58%
Sewer Utility:
2016 Trimble Road Loan 3/8/2016 2/1/2031 2.14%
2020 Sewer Installment Sale Agreement 6/11/2020 7/1/2024 Variable Santa Clara Stadium Authority
(2)
:

StadCo CFD Advance
(1)
4/1/2013 12/31/2054 5.73%
StadCo Subordinated Loan 3/28/2012 3/31/2043 5.50%
Subtotal Business Activity Debt from Direct Borrowing
Subtotal Enterprise Activity Debt
Total Long-Term Debt Obligations
(2) Stadium Authority's long-term obligations are based on a March 31 fiscal year end. (see Note 1D) Type of Indebtedness
(1) Payments are made as the Mello-Roos tax is collected and transmitted to the Community Facilities District (CFD) by the hotels in the District.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 101
Authorized
Outstanding as of
June 30, 2022
Additions,
Transfers, and
Amort. of
Discounts
Debt Retired /
Defeased
Outstanding as
of June 30, 2023
Current
Portion
18,540,000$ 11,065,000$ - $ 980,000$ 10,085,000$ 1,030,000$ 529,394 (54,297) - 475,097 -
18,540,000 11,594,394 (54,297) 980,000 10,560,097 1,030,000 64,380,000 4,545,000 - 4,545,000 - -
48,800,000 35,325,000 - 5,110,000 30,215,000 5,440,000 3,766,165 (753,233) - 3,012,932 -
282,794,108 230,138,239 - 14,722,999 215,415,240 15,459,000 395,974,108 273,774,404 (753,233) 24,377,999 248,643,172 20,899,000 52,985,000 52,985,000 - - 52,985,000 -
34,315,000 34,315,000 - - 34,315,000 5,755,000
16,720,000 11,840,000 - 3,925,000 7,915,000 3,945,000 12,000,000 7,637,314 - 778,152 6,859,162 794,893
50,000,000 20,000,000 - - 20,000,000 -
38,000,000 30,374,503 515,006 29,859,497 -
233,138,533 19,800,950 - 19,800,950 - -
437,158,533 176,952,767 - 25,019,108 151,933,659 10,494,893 833,132,641 450,727,171 (753,233) 49,397,107 400,576,831 31,393,893 851,672,641$ 462,321,565$ (807,530)$ 50,377,107$ 411,136,928$ 32,423,893$

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 102
B. City’s Long-term Obligations
2013 Central Park Library Refunding Certificates of Participation (2013 COPs) On March 28, 2013, the PFFC issued $18.54 million to provide funds to refund outstanding 2002A COPs. The 2013 COPs mature annually beginning February 1, 2014 through February 1, 2032 and bear coupon rates ranging from 2% to 3.75%. Debt Service is secured by lease payments to be made by the City to the PFFC for use of the library. The PFFC assigns the lease payments to the certificate owners.

In the event of default there is no remedy of acceleration of the total lease payments nor the maturities of the Certificates. The City will be liable only for the lease payments on an annual basis, and in the event of default, the trustee would be required to seek a separate judgement each year for that year’s defaulted lease payments.

Compliance
Various debt agreements governing the City’s bonds contain a number of covenants, including continuing disclosure requirements. The City is in compliance with these specific covenants and all other material covenants governing the particular bond issues. No event of default, as defined in the bond indentures, has occurred or is occurring.

Various debt agreements governing the Enterprise Funds’ revenue bonds contain a number of covenants, including those that require the City to maintain and preserve the respective 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. The City 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 is occurring.

C. Enterprise Funds
Electric Utility
Electric Revenue Refunding Bonds, Series 2013A
On April 24, 2013, the City issued $64.38 million of the Electric Revenue 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 (“tax reform”), the tax legislation eliminated advance refunding of tax-exempt bonds beginning Jan 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

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 103
$203 amounted to $1,703,470. See Notes below for Subordinated Electric Revenue Refunding Bonds, Series 2020-2.

As of June 30, 2023, the City’s has paid off the Electric 2013A Revenue Refunding Bonds.

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 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, the City 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.

Subordinate Electric Revenue Refunding Bonds, Series 2020-1 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 of the 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 “Loan Agreement”) 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 were originally issued as taxable bonds with coupon rates of 1.74% and were converted to a tax-exempt rate of 1.36% per annum effective April 2, 2021. The Electric 2020-1 Bonds 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%. 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 Senior Electric Revenue Bonds, if any.

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. 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.

The Electric 2020-2 Bonds bear 1.31% coupon rates, mature annually beginning on July 1, 2023 through July

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 104
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 tax-exempt at the earlier of the call date of January 1, 2023 or the reversal of the advance refunding prohibition. Both the taxable rate and tax-exempt rate at conversion were fixed at the time of issuance. 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 Senior Electric Revenue Bonds, if any.

Subordinate Electric Revenue Refunding Bonds, Series 2020-3 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 of the outstanding Electric Series 2014; 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 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 Senior Electric Revenue Bonds, if any.

In the event of default under the loan agreement for the 2020-1 bonds, 2020-2 bonds or 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.

Pledges of Future Electric Revenues
The pledge of future Electric Fund revenues ends upon repayment of all outstanding principal on bonds and loans, which is scheduled to occur in fiscal year 2032-33. For fiscal year 2022-23, Electric Fund revenues, including operating revenues and non-operating interest earnings, amounted to $635.1million and operating costs including operating expenses, but not interest, depreciation or amortization whole amounted to $602.4 million. Net revenues available for debt service amounted to $32.7 million which represented a coverage ratio of 2.01 on the $16.3 million of debt service.

Sewer Utility
Installment Sale Agreement, Series 2016
On March 8, 2016, the City entered into an Installment Sale Agreement with the PFFC in order to provide funds for the Trimble Road Trunk Sanitary Sewer Improvement Project (the “Project”). The PFFC entered into a separate Assignment Agreement with the DNT Asset Trust, a wholly owned subsidiary of JP Morgan Chase National Association (the “Agreement”), to assign its rights under the Installment Sale Agreement to DNT Asset Trust. The Agreement, in the amount of $12,000,000, carries an interest rate of 2.14% and the final payment is due February 1, 2031. Installment payments on the Agreement are secured by a pledge of net

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 105
revenues of the Wastewater System. Net revenue of $19.0 million was available for debt service payments of $0.9 million.

In the event of default there is no remedy of acceleration of the total installment payments. The City will be liable only for the installment payments as they become due during the terms of the agreement. There are no significant finance-related consequences for termination.

Installment Sale Agreement, Series 2020
On June 11, 2020, the City entered into an Installment Sale Agreement (the “ISA”) with the PFFC to provide funds for the San Jose/Santa Clara Regional Wastewater Facility Project (the “Project”). The PFFC entered into a separate Assignment Agreement with JPMorgan Chase Bank, N.A. (the “Assignment Agreement”), to assign its rights under the ISA to JPMorgan Chase Bank, N.A. The ISA in the amount of $50,000,000 carries a variable rate of interest equal to 80% of 1-month LIBOR (reset daily), plus .95% per annum. The City may draw on the Installment Sale Agreement as necessary with an initial $20,000,000 drawn on the date of closing.

Interest is due each January 1 and July 1, commencing January 1, 2021. Principal on outstanding advances is due on or before July 1, 2024. In addition, the PFFC shall pay an undrawn fee on any amount not yet drawn at a rate of .325% per annum on each interest payment date. Installment payments on the Agreement are secured by a pledge of net revenues of the Wastewater System on a subordinate basis to the Trimble Road Installment Payments. Net revenue of $19.0 million less the Installment Sale Agreement, Series 2016 debt service payment of $0.9 million are available for current year payments of $0.9 million.

In the event of default there is no remedy of acceleration of the total installment payments. The City will be liable only for the installment payments as they become due during the terms of the agreement. There are no significant finance-related consequences for termination.

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 amended the ISA with JPMorgan Chase Bank, N.A. which replaced LIBOR with SOFR (Secured Overnight Financing Rate administered by the New York Federal Reserve Bank) as the benchmark. Effective April 2023, interest expense for the drawn amount is calculated using a variable rate of interest equal to 80% of 1-month adjusted SOFR (SOFR plus adjustment of .10% per annum) plus .95% per annum.

The City is working with financial advisor on the ISA refunding and ISA is expected to be fully refunded by the end of the October 2023.

Santa Clara Stadium Authority
Stadium Funding Trust Loan
The Restated Credit Agreement by and among FinanceCo, the SCSA and Goldman Sachs Bank was entered into on June 19, 2013. FinanceCo agreed to loan the SCSA 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 SCSA paid the remaining amount due on the Term B Loan.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 106
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, 2023, $215.4 million was outstanding. Debt service on this loan is secured by a pledge of available SBL revenues of SCSA.

In the event of default under the loan agreement, FinanceCo has the right, upon written notice to the SCSA, to accelerate and declare the SCSA’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 SCSA, and StadCo entered into a Reimbursement Agreement under which the CFD would agree to reimburse the SCSA 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 SCSA funds to pay for the CFD Infrastructure (StadCo CFD Advance).

To evidence the SCSA’s obligation to repay the StadCo CFD Advance, the SCSA 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, 2023, as the special CFD tax was submitted to the SCSA, 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 in interest and $515 thousand in principal. As of March 31, 2023, $29.9 million was outstanding.

StadCo Subordinated Loan
The Restated StadCo Obligations Agreement dated as of June 19, 2013 was entered into by and between StadCo and the SCSA as part of the take-out financing process. Under the Restated StadCo Obligations Agreement, StadCo will loan the SCSA an amount not to exceed $500 million with a fixed 5.50% interest rate.

Required principal repayments started in March 2016 and the SCSA may prepay the loan at any time.

Payments totaling $20.8 million were made on the loan during the year. This included a $19.8 million in principal prepayment and $1 million in interest. As of March 31, 2023, the StadCo Subordinate Loan has been paid off.

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

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 107
Pledges of Future Stadium Revenues
The pledges of future revenues ends upon repayment of the $215.4 million in outstanding principal on the Term A which is scheduled to occur in fiscal year 2039-40. For fiscal year 2022-23, revenues including operating revenues and nonoperating interest earnings amounted to $90.3 million and operating costs including operating expenses, but not interest, depreciation, or amortization amounted to $31.1 million. Net revenues available for debt service amounted to $59.2 million, which represented a coverage ratio of 3.82 on the $15.5 million of debt service.

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, 2023 with Archer Daniels Midland Company to hedge cash flows on sales of excess resources in CAISO market in June and purchase of power from CAISO in the future months.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 108
Long Short
Effective
Date
Maturity
Date
Average
Price Classification Amount Classification Amount
18,720 6/1/2022 6/30/2023 $54.00 Derivative
Instrument 507,125$ Deferred
inflow 507,125$
20,000 7/1/2022 7/31/2023 95.00 Derivative
Instrument (551,000) Deferred
outflow (551,000)
21,600 8/1/2022 8/31/2023 95.00 Derivative
Instrument 139,320 Deferred
inflow 139,320
20,000 9/1/2022 9/30/2023 95.00 Derivative
Instrument 88,000 Deferred
inflow 88,000
8,600 6/1/2022 7/31/2023 67.75 Derivative
Instrument (110,940) Deferred
inflow (110,940)
7,800 7/1/2022 8/31/2023 67.75 Derivative
Instrument 22,230 Deferred
outflow 22,230
8,000 8/1/2022 9/30/2023 67.75 Derivative
Instrument (5,600) Deferred
inflow (5,600)
89,135$ 89,135$
Long Short
Effective
Date
Maturity
Date
Average
Price Classification Amount Classification Amount
3,655,000 7/1/2020 12/31/2025 $2.42 Derivative
Instrument 4,796,510$ Deferred
inflow 4,796,510$
3,655,000 1/1/2021 12/31/2025 0.56 Derivative
Instrument 3,597,425 Deferred
inflow 3,597,425
8,840,000 1/1/2022 12/31/2025 2.64
Derivative
Instrument 8,613,890 Deferred
inflow 8,613,890
8,895,000 1/1/2022 12/31/2025 1.03 Derivative
Instrument 5,693,700 Deferred
inflow 5,693,700
155,000 1/1/2022 8/31/2023 2.70 Derivative
Instrument (116,250) Deferred
inflow (116,250)
22,585,275$ 22,585,275$
Grand Total 22,674,410$ 22,674,410$
Notional
Notional
Amount (MMBtu) Fair Value Change in Fair Value
Amount (MWh) Fair Value Change in Fair Value
Cre
dit risk
Cre
dit 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, 2023, $23.5 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. $0.8 million of SVP’s open derivative power contracts were in a liability position, and the fair values of those open contracts were negative. The 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, 2023.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 109
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, 2023, SVP had posted collateral of $11,127,179 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, 2023, 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:

Government Activities
For
the Year
Ending June 30 Principal Interest Principal Interest Principal Interest 2024 1,030,000$ 371,275$ 5,440,000$ 1,374,750 $ 10,494,893$ 1,218,281$ 2025 1,085,000 319,775 5,795,000 1,093,875 30,476,995 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 1,195,000 209,219 6,655,000 166,375 6,915,540 873,647 2029-2033 4,505,000 389,581 - - 60,624,959 1,963,429 10,085,000$ 1,825,188$ 30,215,000$ 3,924,625 $ 122,074,162$ 7,160,054$ Business-Type Activities (excluding Santa Clara Stadium Authority) Bonds Debt from direct borrowingCertificates of Participation

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 110
Principal Outstanding as Reported in Government Activities 10,085,000$ Principal Outstanding as Reported in Business Type Activities 152,289,162 Total Principal Outstanding as Reported 162,374,162
Principal Outstanding - Stadium Authority
(1)
245,274,737
Unamortized Discount/Premium 3,488,029
Total Long-term Obligations 411,136,928$
(1) The principal outstanding for Stadium Authority is as of March 31, 2023. 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, 2023, is $8.5 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, 2023, 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.

H. Lease Liabilities
The City has recorded right to use leased assets as result of implementing GASB87. The assets are right to use assets for leased equipment in governmental activities and leased building in the business-type activities. The lease liabilities are amortized on a straight-line basis over the terms of the related leases.

A summary of governmental activities and business-type activities lease payable transactions for the fiscal year ended June 30, 2023, are as follows:

Balance
June 30, 2022 Addition Retirment
Balance
June 30, 2023
Current
portion
Governmental activities
Lease liabilities 464,409$ - $ (212,291)$ 252,118$ 212,705 $ Business-type activities
Lease liabilities 2,286,666$ - $ (654,044)$ 1,632,622$ 681,619 $ Total Lease liabilities 2,751,075$ - $ (866,335)$ 1,884,740$ 894,324 $

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 111
The future principal and interest lease payments as of June 30, 2023, are as follows:

For the Year
Ending June 30 Principal Interest Principal Interest
2024 212,705 $ 438 $ 681,619 $ 14,596 $
2025 39,413 102 710,181 6,920
2026 - - 240,822 553
Total 252,118 $ 540 $ 1,632,622 $ 22,069 $
Governmental activities Busines-type activities
I. Subscription Based IT Arrangements and Liabilities
In fiscal year 2023, the City implemented the provisions of GASB Statement No. 96, Subscription-Based Information Technology Arrangements, which required the City to record an intangible right-to-use subscription asset. As a result, a right-to-use subscription asset was recorded in the amount of $10,598,995 in governmental activities and $3,108,024 in business-type activities. As of June 30, 2023, the City has recorded a net intangible right-to-use subscription asset amounting to $8,946,025 with accumulated amortization of $1,652,970 in governmental activities and a net intangible right-to-use subscription asset amounting to $2,729,539 with accumulated amortization of $378,485 in business-type activities. The subscription assets are offset with subscription liabilities.

A summary of governmental activities and business-type activities SBITA payable transactions for the fiscal year ended June 30, 2023, are as follows:

Balance
June 30, 2022 Balance Current
(as restated) Additions Retirements June 30, 2023 Portion Governmental activities
SBITA liabilites 2,397,211$ 8,201,784 $ (1,681,191)$ 8,917,804$ 1,638,865 $ Business-type activities
SBITA liabilites 1,437,230$ 1,670,794 $ (390,015)$ 2,718,009$ 392,381 $ Total SBITA liabilities 3,834,441$ 9,872,578 $ (2,071,206)$ 11,635,813$ 2,031,246 $ As
of June 30, 2023, the value of the subscription liability was $8,917,804 in governmental activities and $2,718,009 in business-type activities. The City is required to make annual principal and interest payments throughout the life of the subscription. The interest rate of the subscription is based on the State of California incremental borrowing rate for GASB96. As part of the subscription, the City has recorded an intangible right to use subscription asset and accumulated amortization as disclosed in Note 9A.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 112
The future principal and interest SBITA payments as of June 30, 2023, are as follows:

For the Year
En
ding June 30 Principal Interest Principal Interest
2024 1,638,865$ 245,753 $ 392,381$ 78,573 $
2025 1,697,498 203,493 406,699 67,322
2026 1,742,255 158,736 421,745 55,433
2027 1,155,381 113,300 437,181 43,251
2028 617,562 82,012 453,148 30,634
2029-2033 1,740,883 170,361 606,855 35,448
2034-2038 325,360 16,038 - -
Total 8,917,804$ 989,693 $ 2,718,009$ 310,661 $
Governmental activities Business-type activities
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 $262,210 for postclosure maintenance expenses and $223,998 for corrective action in 2023-24. These amounts are subject to annual inflation factors, as stipulated by CalRecycle.

At June 30, 2023, a liability in the amount of $6,132,036 was reported based on the estimated remaining postclosure care costs to meet the regulatory requirements. During fiscal year 2023, the City incurred post- closure expenses of $739,167 and increased the liability by $665,217 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, 2023. 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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
113
113
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 6/30/2022 651 Commerce Dr. Roseville, CA 95678
TANC 6/30/2022 P.O. Box 15129 Sacramento, CA 95851
SJSC 6/30/2022 200 E. Santa Clara St. San Jose, CA 95113 MSR EA 12/31/2022 P.O. Box 4060 Modesto, CA 95352
MSR PPA 12/31/2022 P.O. Box 4060 Modesto, CA 95352
SVACA 6/30/2022 3370 Thomas Road Santa Clara, CA 95051 The
City’s basic financial statements reflect the following investments in joint ventures as of June 30, 2022 (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% 7,631,453 Equity
SJSC
(1) 19.46% 2 40,083,125 Equity
MSR EA 33.40% - Suspended
MSR PPA 35.00% 13,745,836 Equity
SVACA 56.50% 5,836,493 Equity
Total $311,764,559
$44,467,652 Equity
(1) The investment in San Jose/Santa Clara Regional Wastewater Facility includes the current year capital contribution.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
114

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, 2022, the City was contingently liable for long-term debt as follows (in thousands):

Total Participating Contingent
Debt Share Liability
NCPA 547,666$ 34.84% 190,813$
TANC 167,800 9.65% 16,195
Total 715,466$ 207,008$
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.

Take-or-Pay commitments expire upon final maturity of outstanding debt for each project. Final fiscal year debt expirations as of June 30, 2022 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% 34.5385%
TANC - CA-OR Transmission Project (COTP) May-2039 9.6514% 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 s
ummary 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, 2022 is as follows (latest information available):

Fiscal Year NGP NHP NLEC COTP Total
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 5,286,447$ 106,292,509$ 145,489,795$ 24,330,361$ 281,399,112$

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
115

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 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.

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 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

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
116

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 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 the major environmental requirements.

As of June 30, 2022, the most recent data available, TANC’s investment in the Project was $549.7 million, less accumulated depreciation and amortization of $297.0 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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
117

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 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, 2022, 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

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
118

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 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,

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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, 2023, the City funded its share of operating costs 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.

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. 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.

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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 funding up to 33.4% of MSR EA’s operating cost, to the extent such funding is necessary. During the year ended June 30, 2023, the City funded its share of operating in the Electric Utility Enterprise Fund 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 of Santa Clara, through a Gas Supply Agreement with MSR EA dated September 10, 2009, a secure and long-term 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 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, 2023, the City of Santa Clara contributed $1,101,269 to SVACA. The City’s equity interest in SVACA was $5,836,493 at June 30, 2022 (the most recent audited information available). Audited financial statements are available from SVACA, located at 3370 Thomas Road, Santa Clara, CA 95051.

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121
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN A. Plan Description
The City contributes to the California Public Employees Retirement System (CalPERS), an agent multiple- employer 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.

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 2023 calendar year is $330,000. Employees with membership dates prior to July 1, 1996 are not impacted by this limit. The compensation limit for PEPRA for calendar year 2023 is $146,042 for employees covered by Social Security and is adjusted annually with the CPI for all Urban Consumers.

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NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 122

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 2023 is $175,250 for employees not covered by Social Security and is adjusted annually with the CPI for all Urban Consumers.

The Plans provisions and benefits in effect at June 30, 2023 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 10.930% 10.930% 20.880% 20.880% Required unfunded liability contribution
Miscellaneous Safety
$26,915,580 $23,818,952
Beg
inning 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 $26,915,580 in fiscal year 2022-23. The City’s required contribution for the safety plan’s unfunded liability was $23,818,952 in fiscal year 2022-23.

Employees Covered
At the valuation date, June 30, 2021 and measurement date June 30, 2022, the following employees were covered by the benefits terms for each Plan:

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NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 123

Miscellaneous Safety
1,058 505
548 80
Active employees 709 272
Total 2,315 857
Inactive employees or beneficiaries currently
receiving benefits
Inactive employees entitled to but not yet
receiving benefits
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, 20233, the City’s contributions to the miscellaneous and safety plans were $36,763,760 and $35,094,101, 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, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

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For the year ended June 30, 2023
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 124

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
Mo
rtality (2)
(1) Net of pension plan investment and administrative expenses; including inflation Al
l Plans
June 30, 2021
June 30, 2022

6.90%

2.30%
Entry-Age Normal Cost Method
Derived using CalPERS' membership data for all funds
(2)The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS' November 2021 experience study report available on CalPERS' website.

The lesser of Contract COLA or 2.3% until Purchasing Power applies, 2.3% thereafter

2.80%
Varies by Entry-Age and Service

7.00%
Discount Rate
The discount rate used to measure the total pension liability for the Plan was 6.90%. 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 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

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For the year ended June 30, 2023
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 125

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.

Asset Class (1)
Assumed Asset
Al
location
Real Return
(1)&(2)
Global Equity - Cap-weighted 30 .00% 4.54%
Global Equity - Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% 0.59%
100.00%

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For the year ended June 30, 2023
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 126

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, 2021 measurement date 826,996,697$ 599,409,321$ 227,587,376$ Changes in the year:

Service cost 16,172,784 - 16,172,784
Interest on the total pension liability 57,377,858 - 57,377,858 Changes of assumptions 24,297,391 - 24,297,391
Differences between expected and actual
experience (3,601,124) - (3,601,124)
Contributions - employer - 34,036,195 (34,036,195)
Contributions - employees - 6,369,047 (6,369,047)
Net investment income - (45,722,450) 45,722,450
Benefit payments, including refunds of
employee contributions (48,432,370) (48,432,370) -
Administrative expense - (373,396) 373,396
Net changes 45,814,539 (54,122,974) 99,937,513
Balance at June 30, 2022 measurement date 872,811,236$ 545,286,347$ 327,524,889$ Increase (Decrease)

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Safety Plan:

Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability/(Asset)
Balance at June 30, 2021 measurement date 871,051,109$ 650,833,939$ 220,217,170$ Changes in the year:

Service cost 17,072,526 - 17,072,526
Interest on the total pension liability 60,648,121 - 60,648,121 Changes of assumptions 27,501,978 - 27,501,978
Differences between expected and actual
experience (3,595,795) - (3,595,795)
Contributions - employer - 31,703,230 (31,703,230)
Contributions - employees - 5,872,012 (5,872,012)
Net investment income - (49,438,525) 49,438,525
Benefit payments, including refunds of
employee contributions (49,070,549) (49,070,549) -
Administrative expense - (405,431) 405,431
Net changes 52,556,281 (61,339,263) 113,895,544
Balance at June 30, 2022 measurement date 923,607,390$ 589,494,676 $ 334,112,714 $ Combined Total 1,796,418,626$ 1,134,781,023$ 661,637,603$ 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 5.90% 5.90%
Net Pension Liability 437,654,553$ 457,776,872$
Current Discount Rate 6.90% 6.90%
Net Pension Liability 327,524,889$ 334,112,714$
1% Increase 7.90% 7.90%
Net Pension Liability 236,109,309$ 232,689,310$
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

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NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 128

F. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 20233, the City recognized pension expense of $39,886,300 for the Miscellaneous Plan and $43,685,832 for the Safety Plan, for total pension expense of $83,572,132.

At June 30, 2023, 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 36,763,760$ -$ Changes of assumptions 17,151,100 -
Differences between expected and actual experience 1,865,672 (2,541,970) Net differences between projected and actual earnings
on pension plan investments 27,105,090 -
Total 82,885,622$ (2,541,970)$
Safety Plan:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to measurement date 35,094,101$ -$ Changes of assumptions 20,450,189 -
Differences between expected and actual experience 7,664,177 (2,673,796) Net differences between projected and actual earnings
on pension plan investments 29,517,621 -
Total 92,726,088$ (2,673,796)$
Combined Total 175,611,710$ (5,215,766)$
The
reported $36,763,759 for the Miscellaneous Plan and $35,094,101 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, 2024. Other amounts reported as deferred outflows of

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NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 129

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
2023 11,971,571$ 15,619,377$
2024 10,021,074 12,725,333
2025 4,236,300 7,837,514
2026 17,350,947 18,775,967
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 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

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NOTE 15 – DEFERRED COMPENSATION PLAN (continued)
130

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 $300 to each employee. The City’s required contributions for the year ended June 30, 2023 totaled $424,403.

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 $4,788 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.

Generally accepted accounting principles require that the reporting results must pertain to liability and asset information within certain defined timeframes. For the fiscal year 2022-23, the following time frames were used.

Measurement Date
Measurement Period
Actuarial valuation date (1)
June 30, 2023
Ju
ne 30, 2022
July 1, 2022 to June 30, 2023
(1) Update procedures were used to roll forward the Total OPEB liability from the valuation date to the measurement date.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
131

B. Plan Membership
As of June 30, 2023, membership in the plan consisted of the following:

Number of
Covered Employees
641
257
Active employees 988
Total 1,886
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, 2023 the City’s cash contributions were $3,842,000 in payments to the trust, $18,934 in administrative expenses paid outside of the trust, and the estimated implied subsidy was $1,054,000, for total contributions of $4,914,034.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
132

D. Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2023 and the total OPEB liability used to calculate the Net OPEB liability was determined by an actuarial valuation dated June 30, 2022, rolled forward to June 30, 2023 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
Healthcare participation for future
retirees - PEMHCA implied subsidy
PEMHCA minimum only: Currently covered: 50%, Waived: 25% Other plans: : Currently covered: 80%, Waived: 40%
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, 2022

4.50% at June 30, 2023

2.50%
Medicare (Non-Kaiser) - 7.5% for 2023 scaling down to 3.45% in year 2076
PARS portfolio: Moderately Conservative
Non-Medicare - 8.5% for 2023, scaling down to 3.45% in year 2076 Mortality projected fully generational with Scale MP-2021 Aggregate 2.75%
PEMHCA minimum only: Currently covered: 50%, Waived: 25% Other plans: : Currently covered: 80%, Waived: 25%
CalPERS 2000-2019 Experience Study
Full pre-funding to PARS trust

4.75% at June 30, 2022
Medicare (Kaiser) - 6.25% for 2023 scaling down to 3.45% in year E. Discount Rate
The discount rates used to measure the total OPEB liability was 4.50% as of June 30, 2023. 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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
133

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
Global Equity 30% 4.56%
Mutual Funds - Fixed Income 65% 0.78%
Cash and equivalent 5% -0.50%
100%
Expected Inflation 2.50%
Discount Rate 4.50%
F. Changes in the OPEB Liability
The changes in the Net OPEB liability and Fiduciary Net Position are as follows:
2023 2022
Total OPEB Liability $ 67,386 $ 67,638
Fiduciary Net Position (29,668) (27,223)
Net OPEB Liability 37,718$ 40,415$
Plan Fiduciary Net Position as a
percentage of the Total OPEB Liability 44.0% 40.2%
Net OPEB Liability
(In Thousands)

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
134

The changes in Net OPEB details as follow:

Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability/(Asset)
Balance at June 30, 2022 measurement date 67,638$ 27,223$ 40,415$ Changes in the year:

Service cost 2,415 - 2,415
Interest 3,244 - 3,244
Differences between expected and actual
experience (1,652) - (1,652)
Change in Assumption (760) - (760)
Contributions - employer (1) - 4,915 (4,915)
Net investment income - 1,094 (1,094)
Benefit payments (3,499) (3,499) -
Administrative expense - (65) 65
Net changes (252) 2,445 (2,697)
Balance at June 30, 2023 measurement date 67,386$ 29,668$ 37,718$ (1) Includes implied subsidy of $1,054 thousand
Increase (Decrease)
Changes in Net OPEB Liability
(In Thousands)
G. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following table presents the net OPEB liability of the Plan as of June 30, 2023, calculated using the discount rate of 4.50%, as well as what the plan’s net OPEB liability would be if it were calculated using a discount rate that is 1% point lower or 1% point higher than the current rate. 1% Decrease Current Rate 1% Increase
(3.50%) (4.50%) (5.50%)
Net OPEB Liability 46,329$ 37,718$ 30,590$
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, 2023
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
135

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, 2023, 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
Net OPEB Liability 29,178$ 37,718$ 48,291$
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, 2023, the City recognized OPEB expense as follows:
2023
Fund level expense $ 3,861
Actuarial Expense (309)
OPEB Expense 3,552$
OPEB Expense
(In Thousands)
As
of fiscal year ended June 30, 2023, 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 895$ 1,763$
Differences between expected and actual experience - 1,871 Net differences between projected and actual earnings
on OPEB plan investments 2,297 -
Total 3,192$ 3,634$
Deferred Outflows and Inflows Balance
(In Thousands)

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)
136

Amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:

For the Year ending June 30 Amount
2024 (766)$
2025 239
2026 801
2027 (281)
2028 (395)
Thereafter (40)
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 proceeds and costs related to generation, either owned or under PPAs, except ancillary services are 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 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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 17 – ELECTRIC UTILITY – SILICON VALLEY POWER (SVP) (continued) 137

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. The primary type of forward contracts SVP currently engages in is the Futures contracts SVP transacts on Intercontinental Exchange (ICE). The Futures transactions for both natural gas and power are recorded on cash basis under Wholesale Trading activities starting fiscal year 2022-23. 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 $85.0 million and $19.5 million, respectively, for fiscal year ended June 30, 2023, 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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 18 – NET POSITION/FUND EQUITY (continued)
138

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:

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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 18 – NET POSITION/FUND EQUITY (continued)
139

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 $50.0 million, $11.8 million, and $31.0 million, respectively. Additional information is described in the Stabilization Arrangement section of this note.

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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 18 – NET POSITION/FUND EQUITY (continued)
140

Fund Balance Classification
Non-Major Fund Balance
General Santa Clara Governmental June 30,
Fund Housing Successor Funds 2023
Nonspendable:

Receivables, inventory & prepaid 23,298$ -$ -$ 23,298$ Leases 3,372,936 - - 3,372,936
Total Nonspendable 3,396,234 - - 3,396,234
Restricted For:

Gas tax programs - - 3,831,532 3,831,532
Housing & Community Development - 10,898,621 17,765,913 28,664,534 Maintenance districts - - 1,911,739 1,911,739
Operating grants - - 1,257,939 1,257,939
Debt service - - 745,424 745,424
Environmental enforcements 596,438 - - 596,438
Parks & recreation - - 54,247,324 54,247,324
Streets and highway - - 43,430,147 43,430,147
Public safety 773,511 - - 773,511
Library 19,488 - - 19,488
Public facilities 235,055 - 2,380,881 2,615,936
Donations 755,249 - 480,756 1,236,005
Pension rate stabilization program 22,309,426 - - 22,309,426 Storm drain - - 433,968 433,968
Total Restricted 24,689,167 10,898,621 126,485,623 162,073,411 Committed to:

Housing programs - - 4,447,985 4,447,985
Parks & recreation - - 1,348,339 1,348,339
Streets and highway - - 11,970,617 11,970,617
Storm drain - - 4,456,615 4,456,615
Public safety - - 1,306,924 1,306,924
Library - - 301,104 301,104
Public facilities - - 20,581,186 20,581,186
Building inspection - - 33,791,633 33,791,633
Land investment 18,481,037 - - 18,481,037
Historical preservation 94,212 - - 94,212
Total Committed 18,575,249 - 78,204,403 96,779,652
Assigned to:

General Government 13,758,389 - - 13,758,389
Other purposes 104,273 - - 104,273 29,261
Total Assigned 13,862,662 - - 13,862,662
Unassigned: 92,792,663 - - 92,792,663
Total Fund Balances 153,315,975$ 10,898,621$ 204,690,026$ 368,904,622$ Major Funds

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 18 – NET POSITION/FUND EQUITY (continued)
141

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, 2023, the Budget Stabilization and Capital Projects Reserves were $53.4 million and $11.8 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 on 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, 2023, 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, 2023
NOTE 18 – NET POSITION/FUND EQUITY (continued)
142

Pension Rate
Stabilization
Balances
General Fund: 22,309,426$
Enterprise Funds:

Electric Utility 6,324,045
Water Utility 1,260,117
Sewer Utility 585,544
Water Recycling 103,323
Solid Waste 284,887
30,867,342$
Fund Name
D. Net Position/Fund Balance Deficits
The funds listed below had an accumulated deficit as of June 30, 2023:

Accumulated
Deficit
Internal Service Funds:

Information Technology Services 630,972$
Workers’ Compensation Insurance Claims 10,344,962$
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 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 workers’ compensation claims are based on case reserves and include amounts for claims incurred but not reported

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 19 – RISK MANAGEMENT (continued)
143

(IBNR). At June 30, 2023, the estimated claims payable of $28,120,000, 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, 2023, totaled $8,351,000 and $22,973,000 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, 2021 resulted from the following:

Special
Liability
Workers'
Compensation Total
Liability as of June 30, 2021 6,934,000$ 21,803,000$ 28,737,000$ Claims and changes in estimates during fiscal 2022 9,903,230 3,804,070 13,707,300 Claim payments (6,780,230) (4,636,070) (11,416,300)
Liability as of June 30, 2022 10,057,000$ 20,971,000$ 31,028,000$ Claims and changes in estimates during fiscal 2023 4,786,243 4,529,170 9,315,413 Claim payments (7,026,243) (5,197,170) (12,223,413)
Liability as of June 30, 2023 7,817,000$ 20,303,000$ 28,120,000$ Current Claims Payable 2,402,000$ 4,003,000$ 6,405,000$ Long Term Claims Payable 5,415,000 16,300,000 21,715,000 Liability as of June 30, 2023 7,817,000$ 20,303,000$ 28,120,000$ Wit
h respect to the Special Liability accrual of $8 million, the City has numerous unsettled lawsuits filed or claims asserted against it as of June 30, 2023. 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, 2023, 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, 2023
144
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, 2023, total governmental fund encumbrance balances for the City are as follows:

General Fund 4,796,278$
Santa Clara Housing Successor 343,660
Nonmajor Governmental Funds 42,824,578
Total Governmental Funds 47,964,516$
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’ 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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 20 – COMMITMENTS AND CONTINGENCIES (continued)
145

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 $508,859 during fiscal year 2022-23, which is included as a component of purchased water expenses in the Water Enterprise Fund. The surcharge for fiscal year 2023-24 is estimated to be $534,180.

E. Santa Clara Stadium Authority and Litigation
Asset Retirement Obligation
Pursuant to the Ground Lease, the SCSA 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 SCSA 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 SCSA received an invoice in the amount of $4,388,709 for previously un-billed “complimentary” buffet costs associated with certain SBL holders for the NFL seasons from 2014 through 2018. On May 13, 2020, the SCSA issued a response letter disputing the newly-billed costs 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 SCSA’s position and dispute is still outstanding.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 20 – COMMITMENTS AND CONTINGENCIES (continued)
146

In fiscal year 2021-22, ManagementCo invoiced an additional $902,081 in new buffet costs to the SCSA through the fiscal year 2021-22 Non-NFL events’ net loss. ManagementCo also issued a certificate of loan to the SCSA under the Management Company Revolving Loan for the buffet amount and subsequently paid off the loan through the year-end excess cash distribution. SCSA 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 SCSA payment, under protest, and with a full reservation of SCSA's rights and claims. The SCSA recorded a receivable from ManagementCo for the loan draw on the buffet costs as of March 31, 2023.

In fiscal year 2022-23, ManagementCo reported $1,164,668 in buffet costs to be charged to the SCSA for the 2022-23 season. The SCSA did not record a liability for this cost since the dispute is still outstanding.

Public Safety Costs
In June 2019, StadCo filed an Arbitration Demand regarding alleged amounts due from the SCSA under the public safety costs terms of the Stadium Lease, for fiscal year 2017-18. According to the Stadium Lease, StadCo is required to reimburse the City for the costs incurred for providing public safety services for NFL events that exceed the revenue from off-site parking permit fees. The Stadium Lease contains a provision that creates a "threshold" on the amount of public safety costs that StadCo must pay for each of the NFL seasons.

If the total public safety costs exceed the threshold, then the Stadium Lease requires the SCSA to reimburse or credit to StadCo the costs above the threshold in the form of rent credits. The Stadium Lease includes an obligation for StadCo to negotiate a threshold increase in good faith if the total amounts are over the threshold for three consecutive years. The SCSA invoked the good faith negotiation process after costs exceeded the threshold for three seasons, which was in advance of the incurred public safety costs for fiscal year 2017-2018.

StadCo filed several amended Arbitration Demands or formal demand letters for public safety costs damages for the subsequent NFL seasons and fiscal years 2018-2019, 2019-2020, 2021-2022, and 2022-2023.

The Ground Lease contains provisions that provide rent credits to the SCSA in the event that public safety costs exceed the threshold. The rent credit is equivalent to the public safety costs that exceed the threshold in a fiscal year. The SCSA is allowed to use these excess credits to apply against the performance-based rent owed to the City in the event that public safety costs exceed the threshold, and that excess amount is not paid directly by the SCSA. Both the performance-based rent credit from the City and rent credit from the SCSA expire in the next five succeeding years if not used within the year incurred. The public safety costs, threshold amount and calculations, and credits are currently under litigation with StadCo. As of March 31, 2023, the SCSA did not record a liability for this cost since the dispute is still outstanding and the amount in question is not estimable.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
147
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
31,411,295$ 21,958,264$
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.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 22 – SUCCESSOR AGENCY LEASE AGREEMENTS (continued) 148

Lease revenues collected from July 1, 2012 to June 30, 2022 in the amount of $12,604,167 were passed on to the Successor Agency. For the fiscal year ended June 30, 2023, the Successor Agency recognized $1,268,251 in lease revenue and $906,622 in interest revenue. As of June 30, 2023, the Successor Agency’s receivable for lease payments was $39,553,901 and the balance of the deferred inflow of resources was $37,941,849.

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 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, 2022 in the amount of $15,114,141were passed on to the Successor Agency. For the fiscal year ended June 30, 2023, the Successor Agency recognized $343,385 in lease revenue and $97,702 in interest revenue. As of June 30, 2023, the Successor Agency’s receivable for lease payments was $4,144,566 and the balance of the deferred inflow of resources was $4,063,388.

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2023
NOTE 22 – SUCCESSOR AGENCY LEASE AGREEMENTS (continued) 149

C. Schedule of the Future Lease Payments
As of June 30, 2023, the future lease payments to be received by the Successor Agency for the above leases are as follows:

For the Year
Ending June 30 Principal Interest
2024 874,098$ 990,002$
2025 896,947 967,153
2026 917,614 946,486
2027 938,757 925,343
2028 970,110 906,191
2029-2033 5,931,210 4,134,761
2034-2038 6,188,252 3,417,649
2039-2043 7,069,746 2,690,078
2044-2048 8,954,915 1,780,893
2049-2053 10,956,819 636,426
43,698,468$ 17,394,982$
Lease Receivable
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Required Supplementary Information
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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
2022 2021
Total Pension Liability
Service cost 16,172,784$ 15,428,984$
Interest 57,377,858 56,183,036
Changes of assumptions 24,297,391 -
Differences between expected and actual experience (3,601,124) 1,328,853 Benefit payments, including refunds of employee contributions (48,432,370) (45,355,148) Net change in total pension liability 45,814,539 27,585,725 Total pension liability - beginning 826,996,697 799,410,972 Total pension liability - ending 872,811,236$ 826,996,697$ Plan Fiduciary Net Position
Contributions - employer 34,036,195$ 31,272,528$
Contributions - employee 6,369,047 6,333,120
Net investment income (45,722,450) 112,780,714
Benefit payments, including refunds of employee contributions (48,432,370) (45,355,148) Plan to plan resource movement - -
Administrative expense (373,396) (494,347)
Other Misc Income/(Expense)
(2)
- -
Net change in plan fiduciary net position (54,122,974) 104,536,867 Plan fiduciary net position - beginning 599,409,321 494,872,454 Plan fiduciary net position - ending 545,286,347$ 599,409,321$ Net Pension Liability - ending 327,524,889$ 227,587,376$

62.47% 72.48%
Covered payroll 92,642,754$ 89,321,766$
Net pension liability as percentage of covered payroll 353.54% 254.79% Notes to schedule:
(1) Fiscal year 2014-15 was the first year of implementation.

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.

MISCELLANEOUS PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years for the Measurement Periods Ended June 30 (1)

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

CITY OF SANTA CLARA
Schedule of Changes in the Net Pension Liability and Related Ratios (Miscellaneous Plan) 155

2020 2019 2018 2017 2016 2015 2014
15,079,332$ 14,448,007$ 13,159,021$ 11,975,850$ 10,415,730$ 9,909,421$ 10,345,749$ 54,277,035 51,858,572 49,394,806 47,384,580 46,283,869 44,755,550 42,969,016 - - (5,067,759) 37,018,109 - (10,233,178) -
9,229,485 10,888,358 10,229,369 (2,176,270) (2,265,081) 108,957 - (43,050,194) (41,003,947) (38,252,869) (35,744,281) (33,491,738) (31,858,297) (29,847,146) 35,535,658 36,190,990 29,462,568 58,457,988 20,942,780 12,682,453 23,467,619 763,875,314 727,684,324 698,221,756 639,763,768 618,820,988 606,138,535 582,670,916 799,410,972$ 763,875,314$ 727,684,324$ 698,221,756$ 639,763,768$ 618,820,988$ 606,138,535$ 28,827,466$ 25,715,248$ 22,508,822$ 22,015,885$ 18,464,042$ 15,625,285$ 14,887,751$ 6,650,350 6,182,683 5,957,917 5,247,078 5,151,548 4,755,791 5,439,513 24,008,623 30,342,401 36,908,188 44,308,442 2,186,435 9,037,882 61,358,126 (43,050,194) (41,003,947) (38,252,869) (35,744,281) (33,491,738) (31,858,297) (29,847,146) - - (1,065) - (788) (368) -
(675,430) (326,982) (674,790) (587,320) (247,274) (457,051) - - 1,065 (1,281,438) - - - -
15,760,815 20,910,468 25,164,765 35,239,804 (7,937,775) (2,896,758) 51,838,244 479,111,639 458,201,171 433,036,406 397,796,602 405,734,377 408,631,135 356,792,891 494,872,454$ 479,111,639$ 458,201,171$ 433,036,406$ 397,796,602$ 405,734,377$ 408,631,135$ 304,538,518$ 284,763,675$ 269,483,153$ 265,185,350$ 241,967,166$ 213,086,611$ 197,507,400$