Agenda packet — Audit Committee, November 21, 2024 (part 1 of 2)

City of Santa Clara
Meeting Agenda
Audit Committee
Hybrid Meeting
CMO Sparacino Conference
Room/Virtual
City Hall - East Wing
1500 Warburton Avenue
Santa Clara, CA 95050
9:00 AMThursday, November 21, 2024
Committee Member Jain will be participating remotely from the following location:

VTA Administrative Offices - 3331 N First Street, San José, California 95134 Training Lab B, Building B, First Floor
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

CONSENT CALENDAR

1. Action on Audit Committee Minutes of September 17, 202424-1110 Approve the Audit Committee minutes of September
17, 2024.

Recommendation:

PUBLIC PRESENTATIONS
[This item is reserved for persons to address the body on any matter not on the agenda that is within the subject matter
jurisdiction of the body. 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.]

GENERAL BUSINESS

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Audit Committee Meeting Agenda November 21, 2024

2. Overview of the Draft City of Santa Clara Audited Annual Comprehensive Financial Report (ACFR) and Audited Silicon Valley Power (SVP) Financial Statements for Fiscal Year Ended June 30, 2024
24-1109
Accept the City of Santa Clara Audited Annual
Comprehensive Financial Report and Silicon Valley
Power Financial Statements for Fiscal Year Ended
June 30, 2024 and recommend that the reports are
forwarded for note and file to the full Council at the
December 3, 2024 Council and Authorities
Concurrent meeting.

Recommendation:

ADJOURNMENT
Future Audit Committee Meetings will be scheduled at a later date.

MEETING DISCLOSURES

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Audit Committee Meeting Agenda November 21, 2024
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.

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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-1110 Agenda Date: 11/21/2024

REPORT TO AUDIT COMMITTEE

SUBJECT
Action on Audit Committee Minutes of September 17, 2024

RECOMMENDATION
Approve the Audit Committee minutes of September 17, 2024.

City of Santa Clara Printed on 11/15/2024Page 1 of 1
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City of Santa Clara
Meeting Minutes
Audit Committee
Draft
9:00 AM CMO Sparacino Conference Room
1500 Warburton Avenue
Santa Clara, CA 95050
09/17/2024
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 Watanabe called the meeting to order at 9:04 AM.

Member Park was not present when the meeting was called to order, however, arrived late at 9:08 AM.

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

CONSENT CALENDAR
A motion was made by Member Jain, seconded by Chair Watanabe, to approve the Consent Calendar.

Aye: Chair Watanabe, and Member Jain2 -

Absent: Member Park1 -

1.A 24-886 Action on Audit Committee Minutes of February 28, 2024 Recommendation: Approve the Audit Committee minutes of February 28, 2024.

A motion was made by Member Jain, seconded by Chair Watanabe, to approve the Audit Committee Minutes of February 28, 2024.

Aye: Chair Watanabe, and Member Jain2 -

Absent: Member Park1 -

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09/17/2024Audit Committee Meeting Minutes

1.B 24-919 Action on Audit Committee Minutes of March 21, 2024 Recommendation: Approve the Audit Committee minutes of March 21, 2024.

A motion was made by Member Jain, seconded by Chair Watanabe, to approve the Audit Committee Minutes of March 21, 2024.

Aye: Chair Watanabe, and Member Jain2 -

Absent: Member Park1 -

1.C 24-887 Action on Audit Committee Minutes of September 3, 2024 Recommendation: Approve the Audit Committee minutes of September 3, 2024.

A motion was made by Member Jain, seconded by Chair Watanabe, to approve the Audit Committee Minutes of September 3, 2024.

Aye: Chair Watanabe, and Member Jain2 -

Absent: Member Park1 -

PUBLIC PRESENTATIONS
Member of the public, Christine, expressed concern regarding the review of internal controls, the validation process, and accessing prior billing and payment data/reports for utilities.

GENERAL BUSINESS

2. 24-888 Overview of Santa Clara Stadium Authority Fiscal Year 2023/24 Annual Financial Statements and Audit Results
Recommendation: Accept the Santa Clara Stadium Authority Fiscal Year 2023/24 Annual Financial Statements and recommend that the Stadium Authority note and file the report at the September 24, 2024 Joint Council and Authorities Concurrent and Stadium Authority meeting.

Treasurer, Kenn Lee, gave a brief overview of the discussion at the September 3, 2024 meeting and noted minor changes.

A motion was made by Member Jain, seconded by Member Park, to accept the Santa Clara Stadium Authority Fiscal Year 2023/24 Annual Financial Statements and recommend that the Stadium Authority note and file the report at the September 24, 2024 Joint Council and Authorities Concurrent and Stadium Authority meeting.

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

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09/17/2024Audit Committee Meeting Minutes

3. 24-895 Action to Accept Report of Whistleblower Hotline Activity for Fiscal Year 2023-24
Recommendation: Accept the report on the Whistleblower Hotline activity for Fiscal Year 2023-24.

Audit Manager, David Noce, gave an overview of the report and staff addressed Committee Members' questions.

A motion was made by Member Jain, seconded by Member Park to accept the report on the Whistleblower Hotline activity for Fiscal Year 2023-24.

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

4. 24-917 Status Update on the Proposed 2024-2025 Audit Work Plan Recommendation: Note and file staff update.

Audit Manager, David Noce, gave an overview of the work plan and staff addressed Committee Members' questions.

A motion was made by Member Jain, seconded by Member Park, to note and file the staff update.

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

ADJOURNMENT
Chair Watanabe adjourned the meeting at 10:14 AM.

Future Audit Committee Meetings will be scheduled at a later date.

MEETING DISCLOSURES

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09/17/2024Audit 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.

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.

Page 4 ends

City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-1109 Agenda Date: 11/21/2024

REPORT TO AUDIT COMMITTEE

SUBJECT
Overview of the Draft City of Santa Clara Audited Annual Comprehensive Financial Report (ACFR) and Audited Silicon Valley Power (SVP) Financial Statements for Fiscal Year Ended June 30, 2024

BACKGROUND
City Charter Section 1319 requires that an independent certified public accountant (CPA) audit the City’s records and accounts on an annual basis. In compliance with the Charter, the City engaged the audit firm of Maze and Associates to perform an independent audit of the City’s financial statements.

The ACFR and SVP financial statements present the audited financial information of the City in accordance with Generally Accepted Accounting Principles (GAAP) applicable to government entities. The statements provide the Audit Committee (Committee) and City Council valuable information for financial oversight as well as providing information to the residents of Santa Clara.

DISCUSSION
The role of the Committee is to provide oversight of the City’s financial reporting processes, internal controls, and independent auditors. Amy Meyer, Shareholder, from Maze and Associates will present the audit results to the Committee and provide an overview of the audit. This includes the audit report, financial statement disclosures, internal control related matters and other items.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environment Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.

FISCAL IMPACT
Costs associated with the preparation of this report are included in the City’s FY 2024-25 Adopted Operating Budget.

PUBLIC CONTACT
Public contact was made by posting the Audit Committee 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 protected] < mailto:[email protected]>, or at the public information desk at any City of Santa Clara public library.

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24-1109 Agenda Date: 11/21/2024

RECOMMENDATION
Accept the City of Santa Clara Audited Annual Comprehensive Financial Report and Silicon Valley Power Financial Statements for Fiscal Year Ended June 30, 2024 and recommend that the reports are forwarded for note and file to the full Council at the December 3, 2024 Council and Authorities Concurrent meeting.

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

ATTACHMENTS

1. Draft Annual Comprehensive Financial Report (ACFR)

2. Draft Silicon Valley Power (SVP) Financial Statements

3. Draft Memorandum on Internal Control

4. FY 2023-24 Audit Overview Presentation from Staff

5. Audit Presentation from Maze
City of Santa Clara Printed on 11/15/2024Page 2 of 2
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Annual CAnnual Compromprehensi vehensivee
FFinancial Rinancial Reporeportt
Fiscal Year Ended June 30, 2024
City of
Santa Clara
The Center of What's Possible
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ANNUAL COMPREHENSIVE FINANCIAL
REPORT

FISCAL YEAR ENDED JUNE 30, 2024

THE

MISSION CITY

CITY OF SANTA CLARA, CALIFORNIA
1500 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, 2024

Page

INTRODUCTORY SECTION
Letter of Transmittal .......................................................................................................................................... 5 Roster of Council and Commission Members ................................................................................................ xiv Executive Management Team .......................................................................................................................... xv GFOA Certificate of Achievement ................................................................................................................. xvi Organization Chart ......................................................................................................................................... xvii Local Map ..................................................................................................................................................... xviii

FINANCIAL SECTION
Independent 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 DRAFT

CITY OF SANTA CLARA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

TABLE OF CONTENTS
For the year ended June 30, 2024

Page

Required Supplementary Information
Schedule of Changes in the Net Pension Liability and Related Ratios (Miscellaneous Plan) .................. 156 Schedule of Plan Contributions (Miscellaneous Plan).............................................................................. 158 Schedule of Changes in the Net Pension Liability and Related Ratios (Safety Plan) .............................. 160 Schedule of Plan Contributions (Safety Plan) .......................................................................................... 162 Schedule of Changes in the Net OPEB Liability and Related Ratios (OPEB Plan) ................................. 164 Schedule of Plan Contributions (OPEB Plan) .......................................................................................... 165 Notes to Schedule of Employer Contributions (OPEB Plan) ................................................................... 166 General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis) ......................................................................................................................... 167 Santa Clara Housing Successor Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis) .......................................................................................... 169 Notes to Required Supplementary Information ........................................................................................ 170 Supplementary Information
Non-Major Governmental Funds
Combining Balance Sheet ......................................................................................................................... 176 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ................................ 180 Special Revenue Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis) ...................................................................................................... 184 Non-Major Enterprise Funds
Combining Statement of Net Position ...................................................................................................... 186 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ................................. 190 Combining Statement of Cash Flows ....................................................................................................... 192 Internal Service Funds
Combining Statement of Net Position ...................................................................................................... 198 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ................................. 202 Combining Statement of Cash Flows ....................................................................................................... 204 Private Purpose Trust Funds
Combining Statement of Net Position ...................................................................................................... 210 Combining Statement of Changes in Net Position ................................................................................... 211 Custodial Funds
Combining Statement of Net Position ...................................................................................................... 212 Combining Statement of Changes in Net Position ................................................................................... 213 DRAFT

CITY OF SANTA CLARA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

TABLE OF CONTENTS
For the year ended June 30, 2024

Page

iii

STATISTICAL SECTION (UNAUDITED)
City of Santa Clara

1. Net Position by Component – Last Ten Fiscal Years .......................................................................... 218

2. Changes in Net Position – Last Ten Fiscal Years ............................................................................... 219

3. Fund Balances – Governmental Funds – Last Ten Fiscal Years ......................................................... 222

4. Changes in Fund Balances – Governmental Funds – Last Ten Fiscal Years ...................................... 223

5. Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ......................... 225

6. Property Tax Rates Direct and Overlapping Governments – Last Ten Fiscal Years........................... 226

7. Principal Property Tax Payers 2022-23 and 2013-14 Comparison for General Fund ........................ 227

8. Property Tax Levies and Collections – Last Ten Fiscal Years ............................................................ 228

9. Principal Sale/Use Tax Contributors ................................................................................................... 229

10. Electric Utility Charge for Services by Source ................................................................................... 230

11. Ratios of Outstanding Debt by Type – Last Ten Fiscal Years............................................................ 231

12. Population and Assessed Valuation – Last Ten Fiscal Years ............................................................. 232

13. Computation of Direct and Overlapping Bonded Debt ...................................................................... 234

14. Legal Debt Margin Information – Last Ten Fiscal Years ................................................................... 234

15. Pledged Revenue Coverage Electric Revenue Bond – Last Ten Fiscal Years ................................... 235

16. Demographic and Economic Statistics – Last Ten Calendar Years.................................................... 236

17. Principal Employers – Current Year and Ten Years Ago ................................................................... 237

18. Full-Time Equivalent Budgeted City Employees by Program/Function – Last Ten Fiscal Years ..... 238

19. Operating Indicators by Function/Activity – Last Ten Fiscal Years .................................................. 239

20. Capital Assets Statistics by Function – Last Ten Fiscal Years ........................................................... 240

21. Statement of Insurance Coverage ....................................................................................................... 241 Successor Agency

1. Historical Tax Increment – Last Ten Fiscal Years ............................................................................... 245

2. Ten Largest Assessees – Taxable Value ............................................................................................... 246

3. Assessment Appeal Activity of Top 20 Assessees ............................................................................... 247

4. Computation of Direct and Overlapping Bonded Debt ........................................................................ 248

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Letter of Transmittal

November 30, 2024

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, 2024. 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, 2024 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, 2024 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.

DRAFT

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 2025.

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 San 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 132,048 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.

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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 fiscal year 2023-24 as the nation, State, and local economies continued to recover from COVID-19. On a national level, unemployment rates in June 2024 totaled 4.1%, an increase of 0.5% compared to the prior year. This rate is still below the record setting high of 14.8% in April 2020, and slightly above the pre-pandemic unemployment rate of 3.5%. The unadjusted unemployment rate in the San José-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) increased slightly from 3.7% in June 2023 to 4.2% in June 2024.

The City’s financial position has improved since the adoption of the fiscal year 2022-23 budget. Fiscal year 2023-24 saw the continued recovery of the impact of COVID-19 on the local economy. Strong Property Tax collections continued to reflect high assessed valuation growth due to property sales and new construction projects. Despite slowing growth due to higher interest and inflation rates, Property Tax remains the largest revenue category for the City’s General Fund. 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, expenditure reductions, and new revenues. As the City looks ahead, the City Council amended a balanced fiscal year 2024-25 Operating Budget and approved a two-year fiscal year 2024-25 and 2025-26 Capital Budget. Forecasts currently show a small deficit beyond the two-year budget.

Significant funding gaps for certain capital infrastructure needs have been identified. A total of $626 million of unfunded projects which include the City’s parks, fire stations, transportation, storm and other city infrastructure over the next five-years. A workplan considering several options of new revenues is underway including a $400 million General Obligation Bond Measure that voters passed in November 2024.

FINANCIAL INFORMATION
Long-term Financial Planning
The 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 DRAFT

viii

 Promote 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;  Potential additional revenue from the Stadium (performance rent/excess revenue) and the Related project (future project phases);
 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 2024, staff presented an updated unmet/deferred infrastructure need of over $626 million over the next five-years. Staff will continue to evaluate potential options to create capacity to address those funding.

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:
 Future economic slowdown/recession;
 Re-assessment of properties for property tax purposes;  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.

DRAFT

The City’s financial position has significantly improved since the adoption of the fiscal year 2024-25 budget. The latest Ten-Year General Fund Forecast, updated in April 2024, shows smaller deficits of $6.0 million and $11.9 million in fiscal year 2025-26 and fiscal year 2026-27. The out-years of the forecast shows shortfalls ranging from $6.0 million to $19.3 million which equates to 1.9% to 5.0% of expenditures annually.

While we continue to face a structural budget imbalance, impacts from the pandemic, and significant recovery has been achieved. As we look ahead, additional work efforts will be needed to generate new revenues, reduce costs, or use reserves to balance the forthcoming budget.

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.

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/g55/g75/g72/g3/g42/g82/g89/g72/g85/g81/g80/g72/g81/g87/g3/g41/g76/g81/g68/g81/g70/g72/g3/g50/g73/g73/g76/g70/g72/g85/g86/g3/g36/g86/g86/g82/g70/g76/g68/g87/g76/g82/g81/g3/g82/g73/g3/g87/g75/g72/g3/g56/g81/g76/g87/g72/g71/g3/g54/g87/g68/g87/g72/g86/g3/g68/g81/g71/g3/g38/g68/g81/g68/g71/g68/g3/g11/g42/g41/g50/g36/g12/g3/g68/g90/g68/g85/g71/g72/g71/g3/g68/g3 /g38/g72/g85/g87/g76/g73/g76/g70/g68/g87/g72/g3/g82/g73/g3/g36/g70/g75/g76/g72/g89/g72/g80/g72/g81/g87/g3/g76/g81/g3/g40/g91/g70/g72/g79/g79/g72/g81/g70/g72/g3/g76/g81/g3/g41/g76/g81/g68/g81/g70/g76/g68/g79/g3/g53/g72/g83/g82/g85/g87/g76/g81/g74/g3/g87/g82/g3/g87/g75/g72/g3/g38/g76/g87/g92/g3/g73/g82/g85/g3/g76/g87/g86/g3/g36/g81/g81/g88/g68/g79/g3/g38/g82/g80/g83/g85/g72/g75/g72/g81/g86/g76/g89/g72/g3 /g41/g76/g81/g68/g81/g70/g76/g68/g79/g3/g53/g72/g83/g82/g85/g87/g3/g73/g82/g85/g3/g87/g75/g72/g3/g73/g76/g86/g70/g68/g79/g3/g92/g72/g68/g85/g3/g72/g81/g71/g72/g71/g3/g45/g88/g81/g72/g3/g22/g19/g15/g3/g21/g19/g21/g22/g17/g3/g55/g75/g72/g3/g38/g72/g85/g87/g76/g73/g76/g70/g68/g87/g72/g3/g82/g73/g3/g36/g70/g75/g76/g72/g89/g72/g80/g72/g81/g87/g3/g76/g86/g3/g68/g3/g83/g85/g72/g86/g87/g76/g74/g76/g82/g88/g86/g3 /g81/g68/g87/g76/g82/g81/g68/g79/g3/g68/g90/g68/g85/g71/g15/g3/g85/g72/g70/g82/g74/g81/g76/g93/g76/g81/g74/g3/g70/g82/g81/g73/g82/g85/g80/g68/g81/g70/g72/g3/g90/g76/g87/g75/g3/g87/g75/g72/g3/g75/g76/g74/g75/g72/g86/g87/g3/g86/g87/g68/g81/g71/g68/g85/g71/g86/g3/g73/g82/g85/g3/g83/g85/g72/g83/g68/g85/g68/g87/g76/g82/g81/g3/g82/g73/g3/g86/g87/g68/g87/g72/g3/g68/g81/g71/g3/g79/g82/g70/g68/g79/g3 /g74/g82/g89/g72/g85/g81/g80/g72/g81/g87/g3/g73/g76/g81/g68/g81/g70/g76/g68/g79/g3/g85/g72/g83/g82/g85/g87/g86/g3/g68/g81/g71/g3/g76/g86/g3/g89/g68/g79/g76/g71/g3/g73/g82/g85/g3/g68/g3/g83/g72/g85/g76/g82/g71/g3/g82/g73/g3/g82/g81/g72/g3/g92/g72/g68/g85/g3/g82/g81/g79/g92/g17/g3/g3/g55/g75/g72/g3/g38/g76/g87/g92/g3/g75/g68/g86/g3/g85/g72/g70/g72/g76/g89/g72/g71/g3/g87/g75/g76/g86/g3 /g83/g85/g72/g86/g87/g76/g74/g76/g82/g88/g86/g3/g68/g90/g68/g85/g71/g3/g73/g82/g85/g3/g87/g75/g72/g3/g83/g68/g86/g87/g3/g87/g75/g76/g85/g87/g92/g3/g87/g90/g82/g3/g70/g82/g81/g86/g72/g70/g88/g87/g76/g89/g72/g3/g92/g72/g68/g85/g86/g17/g3/g3 DRAFT
/g3
/g91/g76/g76/g76/g3
/g3
/g55/g82/g3/g69/g72/g3/g68/g90/g68/g85/g71/g72/g71/g3/g68/g3/g38/g72/g85/g87/g76/g73/g76/g70/g68/g87/g72/g3/g82/g73/g3/g36/g70/g75/g76/g72/g89/g72/g80/g72/g81/g87/g15/g3/g68/g3/g74/g82/g89/g72/g85/g81/g80/g72/g81/g87/g3/g80/g88/g86/g87/g3/g83/g88/g69/g79/g76/g86/g75/g3/g68/g81/g3/g72/g68/g86/g76/g79/g92/g3/g85/g72/g68/g71/g68/g69/g79/g72/g3/g68/g81/g71/g3/g72/g73/g73/g76/g70/g76/g72/g81/g87/g79/g92/g3 /g82/g85/g74/g68/g81/g76/g93/g72/g71/g3/g68/g81/g81/g88/g68/g79/g3/g70/g82/g80/g83/g85/g72/g75/g72/g81/g86/g76/g89/g72/g3/g73/g76/g81/g68/g81/g70/g76/g68/g79/g3/g85/g72/g83/g82/g85/g87/g17/g3/g55/g75/g76/g86/g3/g85/g72/g83/g82/g85/g87/g3/g80/g88/g86/g87/g3/g86/g68/g87/g76/g86/g73/g92/g3/g69/g82/g87/g75/g3/g68/g70/g70/g82/g88/g81/g87/g76/g81/g74/g3/g83/g85/g76/g81/g70/g76/g83/g79/g72/g86/g3 /g74/g72/g81/g72/g85/g68/g79/g79/g92/g3/g68/g70/g70/g72/g83/g87/g72/g71/g3/g76/g81/g3/g87/g75/g72/g3/g56/g81/g76/g87/g72/g71/g3/g54/g87/g68/g87/g72/g86/g3/g82/g73/g3/g36/g80/g72/g85/g76/g70/g68/g3/g68/g81/g71/g3/g68/g83/g83/g79/g76/g70/g68/g69/g79/g72/g3/g79/g72/g74/g68/g79/g3/g85/g72/g84/g88/g76/g85/g72/g80/g72/g81/g87/g86/g17/g3/g3/g58/g72/g3/g69/g72/g79/g76/g72/g89/g72/g3/g87/g75/g68/g87/g3/g82/g88/g85/g3 /g70/g88/g85/g85/g72/g81/g87/g3 /g36/g81/g81/g88/g68/g79/g3 /g38/g82/g80/g83/g85/g72/g75/g72/g81/g86/g76/g89/g72/g3 /g41/g76/g81/g68/g81/g70/g76/g68/g79/g3 /g53/g72/g83/g82/g85/g87/g3 /g70/g82/g81/g87/g76/g81/g88/g72/g86/g3 /g87/g82/g3 /g80/g72/g72/g87/g3 /g87/g75/g72/g3 /g38/g72/g85/g87/g76/g73/g76/g70/g68/g87/g72/g3 /g82/g73/g3 /g36/g70/g75/g76/g72/g89/g72/g80/g72/g81/g87/g3 /g51/g85/g82/g74/g85/g68/g80/g86/g182/g3/g85/g72/g84/g88/g76/g85/g72/g80/g72/g81/g87/g86/g3/g68/g81/g71/g3/g90/g72/g3/g68/g85/g72/g3/g86/g88/g69/g80/g76/g87/g87/g76/g81/g74/g3/g76/g87/g3/g87/g82/g3/g42/g41/g50/g36/g3/g87/g82/g3/g71/g72/g87/g72/g85/g80/g76/g81/g72/g3/g76/g87/g86/g3/g72/g79/g76/g74/g76/g69/g76/g79/g76/g87/g92/g3/g73/g82/g85/g3/g68/g81/g82/g87/g75/g72/g85/g3/g70/g72/g85/g87/g76/g73/g76/g70/g68/g87/g72/g17/g3/g3 /g36/g38/g46/g49/g50/g58/g47/g40/g39/g42/g40/g48/g40/g49/g55/g54/g3 /g55/g75/g72/g3/g83/g85/g72/g83/g68/g85/g68/g87/g76/g82/g81/g3/g82/g73/g3/g87/g75/g76/g86/g3/g85/g72/g83/g82/g85/g87/g3/g90/g82/g88/g79/g71/g3/g81/g82/g87/g3/g75/g68/g89/g72/g3/g69/g72/g72/g81/g3/g83/g82/g86/g86/g76/g69/g79/g72/g3/g90/g76/g87/g75/g82/g88/g87/g3/g87/g75/g72/g3/g72/g73/g73/g76/g70/g76/g72/g81/g87/g3/g68/g81/g71/g3/g71/g72/g71/g76/g70/g68/g87/g72/g71/g3/g86/g72/g85/g89/g76/g70/g72/g86/g3/g82/g73/g3 /g87/g75/g72/g3/g72/g81/g87/g76/g85/g72/g3/g86/g87/g68/g73/g73/g3/g82/g73/g3/g87/g75/g72/g3/g41/g76/g81/g68/g81/g70/g72/g3/g39/g72/g83/g68/g85/g87/g80/g72/g81/g87/g17/g3/g3/g58/g72/g3/g90/g76/g86/g75/g3/g87/g82/g3/g87/g75/g68/g81/g78/g3/g68/g79/g79/g3/g38/g76/g87/g92/g3/g71/g72/g83/g68/g85/g87/g80/g72/g81/g87/g86/g3/g73/g82/g85/g3/g87/g75/g72/g76/g85/g3/g68/g86/g86/g76/g86/g87/g68/g81/g70/g72/g3/g76/g81/g3 /g83/g85/g82/g89/g76/g71/g76/g81/g74/g3/g87/g75/g72/g3/g71/g68/g87/g68/g3/g81/g72/g70/g72/g86/g86/g68/g85/g92/g3/g87/g82/g3/g83/g85/g72/g83/g68/g85/g72/g3/g87/g75/g76/g86/g3/g85/g72/g83/g82/g85/g87/g17/g3/g3/g38/g85/g72/g71/g76/g87/g3/g68/g81/g71/g3/g87/g75/g68/g81/g78/g86/g3/g68/g85/g72/g3/g68/g79/g86/g82/g3/g71/g88/g72/g3/g87/g82/g3/g87/g75/g72/g3/g48/g68/g92/g82/g85/g3/g68/g81/g71/g3/g38/g76/g87/g92/g3 /g38/g82/g88/g81/g70/g76/g79/g80/g72/g80/g69/g72/g85/g86/g3/g73/g82/g85/g3/g87/g75/g72/g76/g85/g3/g88/g81/g73/g68/g76/g79/g76/g81/g74/g3/g86/g88/g83/g83/g82/g85/g87/g3/g73/g82/g85/g3/g80/g68/g76/g81/g87/g68/g76/g81/g76/g81/g74/g3/g87/g75/g72/g3/g75/g76/g74/g75/g72/g86/g87/g3/g86/g87/g68/g81/g71/g68/g85/g71/g86/g3/g82/g73/g3/g83/g85/g82/g73/g72/g86/g86/g76/g82/g81/g68/g79/g76/g86/g80/g3/g76/g81/g3/g87/g75/g72/g3 /g80/g68/g81/g68/g74/g72/g80/g72/g81/g87/g3/g82/g73/g3/g87/g75/g72/g3/g38/g76/g87/g92/g182/g86/g3/g73/g76/g81/g68/g81/g70/g72/g86/g17/g3/g3/g3 /g3
/g53/g72/g86/g83/g72/g70/g87/g73/g88/g79/g79/g92/g3/g86/g88/g69/g80/g76/g87/g87/g72/g71/g15/g3/g3 /g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g3/g3 /g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g66/g3 /g45/g448/g89/g68/g81/g3/g39/g17/g3/g42/g85/g82/g74/g68/g81/g3/g3 /g46/g72/g81/g81/g3/g47/g72/g72/g3 /g3 /g38/g76/g87/g92/g3/g48/g68/g81/g68/g74/g72/g85/g3/g3 /g39/g76/g85/g72/g70/g87/g82/g85/g3/g82/g73/g3/g41/g76/g81/g68/g81/g70/g72/g3 /g3
/g3
/g3
/g3
/g3 /g3
DRAFT

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

Jonathan Evans, Daniel Huynh, Ghouse Salim
Monammed, Stephen Ricossa, Debbie Tryforos,
Ron Billingsley, Wesley Dudzinski, Franklin J.

Felizardo, Samuel Pumarejo, Arti Purohit

CULTURAL COMMISSION HISTORICAL AND LANDMARKS

COMMISSION

Candida A. Diaz, Neetu Garg, Jonathan Marinaro,
Paul McNamara, Abinas Roy, Louis Samara,
Debra von Huene,
Michael Celso, , Ivonne Inciarte, Amy Kirby,
Patricia Leung, Kathleen Romano, Ed Stocks,
Ana Vargas-Smith

PLANNING COMMISSION PARKS AND RECREATION COMMISSION

Yashraj Bhatnagar, Mario Bouza, Nancy A.

Biagini, Priya Cherukuru, Eric Cruthchlow, Qian
Huang, Lance Saleme
Dana Caldwell, Maureen Reilly Chu, Derek
DeMarco, Eversley Forte, Vikas Gupta, Sajid
Hai, Brittany Ricketts

SENIOR ADVISORY COMMISSION

SALARY SETTING COMMISSION
Rick Andrews, Edmund Drozek, Tom Freitas,
Judy Hubbard, Srinivasan Manivannan, Veena
Sterling, Maria Vaz
Natasha Humphries, MV Kumar, Donald
Lawson, John Sontag, Vacant

YOUTH COMMISSION

Julianna Arias Hernandez, Allysa Domensino,
Mateo Espinal (Alternate), Namita Gaidhani,
Simren Garg, Srikha Gopisetti, Maryam Ismail,
Neha Israni, Ryan Kim, Rebecca Kunze, Kira
Liang, Malia Martin, Samaira Mehta, Hiranya
Parekh, Brian Rong, Samarth Suresh, Niharika
Uppalapati (Alternate), Aneesha Vemu
(Alternate)

DOWNTOWN COMMUNITY TASK FORCE

Butch Coyne, Rob Mayer, Dan Ondrasek,
Mathew Reed, Chan Thai, Adam Thompson,
Ana Vargas-Smith, Atisha Varshney, Debra Von
Huene

DRAFT

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 ASSISTANT CITY MANAGER
Clarence Baker Cynthia Bojorquez

CHIEF OF POLICE FIRE CHIEF
Pat Nikolai Ruben Torres

DIRECTOR OF HUMAN RESOURCES DIRECTOR OF FINANCE
Aracely Azevedo Kenn Lee

INTERIM DIRECTOR OF PARKS & RECREATION DIRECTOR OF INFORMATION TECHNOLOGY Cynthia Bojorquez Gaurav Garg

CITY LIBRARIAN CHIEF ELECTRIC UTILITY OFFICER
Patty Wong Manuel Pineda

DIRECTOR OF WATER AND SEWER UTILITIES DIRECTOR OF PUBLIC WORKS Gary Welling Craig Mobeck

INTERIM DIRECTOR OF COMMUNITY

DEVELOPMENT

Reena Brilliot

Executive Management Team
DRAFT

xvi

GFOA Certificate of Achievement

DRAFT
..

Government Finance Officers Association
Certificate of
Achie vement
for Excellence
in Financial
Reporting
Presented to
City of Santa Clara
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
xvii
Organization Chart
DRAFT

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
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I BAY AREA
\
10 --== Miles
0 5
,....
-_,...
(

Financial Section
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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 have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund , and the aggreg ate remaining fund information of the City of Santa Clara, California, as of and for the year ended June 30, 2 024, 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, 2024, which is both a major fund and 39.6%, 6.9%, and 9.3% 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 financial statements of Northern California Power Agency (NCPA), Transmission Agency of Northern California (TANC), M-S-R Energy Authority (MSR EA), M-S-R Public Power Agency (MSR PPA), and San Jose-Sant a Clara Regional Wastewater Facility and Clean Water Financing Authority (SJSC) as of and for the year ended June 30, 2024, related to the calculation of the Investments in Joint Ventures. The Investment in these Joint Ventures collectively represents 9.4%,

17.6%, and 1.7%, respectively, of total 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, 2024, 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 standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United St ates. Our respons ibilities under thos e standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the C ity 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.

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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 fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of 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 subs tantial doubt about the City’s ability to continue as a going concern for twelve months beyond the fina ncial statement date, 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 about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with 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 resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are 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 misstatemen t of the financial statements, whether due to fraud or error, and design and perform audit pr ocedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

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

 Evaluate the appropriateness of accounting polic ies used and the reasonableness of significant accounting estimates made by management, as we ll 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 a udit findings, and certain internal control-related matters that we identified during the audit.

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Emphasis of Matters

As discussed in Note 6, the Stadium Authority restated balances related to the accounting and reporting of leases in the Santa Cl ara Stadium Authority Enterprise Fund as of March 31, 2023. In addition, the City determined that the Stadium Authority’s ground lease with the City is not subject to GASB 87, Leases, in the City’s Annual Comprehensive Financial Report a nd as a result, the Santa Clara Stadiu m Authority Enterprise Fund net position has been restated to reflect the eliminat ion and reclassification of that transaction for reporting in the City’s financial statements. The emphasis of these matters does not constitute a modification to our opinions.

Required Supplementary Information

Accounting principles generally accepted in the United States of America requir e 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 info rmation is the responsibility of management and, although not a part of the basic fi nancial statements, is re quired 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 opi nions 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 proc edures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the 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 Sec tion listed in the Table of Contents, but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

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

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Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards , we have also issued our report dated November __, 2024, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regula tions, contracts, and grant agreements and other matters. The purpose of that report is solely to descr ibe the scope of our testing of internal control over financial reporting and compliance and the results of th at testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Pleasant Hill, California
November __, 2024

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5 Management’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, 2024. 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, 2024 are as follows:
 In the fiscal year 2023-24, the City's assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $2.6 billion. Out of this amount, $107 million represents unrestricted net position, which is $176 million higher than in the fiscal year 2022-23.

This is made up of a negative balance of $282 million for governmental activities and a positive balance of $389 million for business-type activities. The negative net position in governmental activities primarily stems from a net pension liability of $538 million and a net Other Post Employment Benefits (OPEB) liability of $26 million as of June 30, 2024.  The City's total net position increased by $313 million, with $33 million increase in governmental activities, primarily driven by the steady economic growth since the pandemic. The remaining $280 million increase came from business-type activities, including a $222 million rise in the Electric Utility Fund, mainly due to higher rates and reduced resource purchase expenditures, and a $36 million increase in the Sewer Utility Fund, largely due to the higher equity income in the joint project with City of San Jose.
 The total net pension liability, encompassing both governmental activities and business-type activities, experienced an increase of $24 million or 3.6% during fiscal year 2023-24, reaching $686 million from $662 million. This increase was primarily driven by the change in the differences between expected and actual experience liability calculation. As of June 30, 2024, there were deferred outflows of resources related to pensions amounting to $169 million, reflecting a decrease of $7 million compared to the previous year. In contrast, there were deferred inflows of resources related to pensions totaling $4 million at June 30, 2024, which marked a decrease of $1 million from the prior fiscal year. For more detailed information regarding the net pension liability, please refer to Note 13.
 The net OPEB liability decreased by $2 million or 5.4% during fiscal year 2023-24, reducing it to $36 million at June 30, 2024, compared to $38 million in fiscal year 2022-23. 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, increased by $12 million, reaching to $1,050 million as of June 30, 2024. The increase of the liabilities is mainly attributed to $32 million in accrued liabilities, partially offset by the net reduction/repayment of $18 million of long term obligations when compared to the fiscal year 2022-23.  As of June 30, 2024, the City’s governmental funds reported combined fund balances of $401 million, an increase of $32 million from the prior year. At June 30, 2024, $109 million is in the unassigned fund balance and available for spending at the City’s discretion.  At the close of fiscal year 2023-24, the General Fund had assets of $457 million and a fund balance of $181 million. This represents an increase in fund balance of $28 million, or 18.3% from prior fiscal year. The increase reflects the modest growth of the local economy since the pandemic. Of DRAFT

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

6 the total fund balance, $144 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, 2023 through March 31, 2024. As of March 31, 2024, the carrying value of Levi’s Stadium, net of depreciation, is $679 million, and the assets of the Stadium Authority exceeded its liabilities and deferred inflow of the lease revenues by $133 million.
 The City’s total outstanding long-term debt decreased by $18 million, primarily due to the repayment of $54 million for Stadium Authority debt, Electric revenue bonds, and Sewer loans partially offset by the issuance of $36 million in Sewer Certificates of Participation.

OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of a series of financial statements and notes to those statements. These statements 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, Public Works, Police, and Fire. These services are principally supported by taxes and intergovernmental revenues.

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MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

7  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.

Since 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 DRAFT

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

8 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
This 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, 2024. As noted earlier, the City’s total assets and deferred outflows of resources exceed total liabilities and deferred inflows of resources by $2.6 billion at the end of the fiscal year, an increase in net position of $313 million.

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MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

9 2024 2023 2024 2023(1)
2024 2023(1)
Cash and investments 442$ 407$ 936$ 746$ 1,378$ 1,153$ Lease receivable 252 255 598 610 850 865 Other assets 140 134 549 490 689 624 Capital assets 669 652 1,498 1,470 2,167 2,122 Total Assets 1,503 1,448 3,581 3,316 5,084 4,764 Deferred outflows on derivative - - - 1 - 1 Deferred outflows from refunding - - 5 5 5 5 Deferred outflows OPEB related 1 2 - 1 1 3 Deferred outflows pension related 136 141 33 35 169 176 - - Total Deferred Outflows of Resources 137 143 38 42 175 185 9 11 384 400 393 411 Right-to-use assets liability 9 9 4 5 13 14 Net OPEB liability 26 28 10 10 36 38 Net pension liability 538 517 148 145 686 662 Other liabilities 87 80 557 533 644 613 Total Liabilities 669 645 1,103 1,093 1,772 1,738 - - 12 23 12 23 Deferred inflows from refunding - - 1 1 1 1 Deferred inflows Lease related 246 251 582 600 828 851 Deferred inflows OPEB related 1 3 1 1 2 4 Deferred inflows pension related 3 4 1 1 4 5 Total Deferred Inflows of Resources 250 258 597 626 847 884 Net investment in capital assets 650 632 1,145 1,089 1,795 1,721 Restricted 353 343 385 332 738 675 Unrestricted (282) (287) 389 218 107 (69) Total Net Position 721$ 688$ 1,919$ 1,639$ 2,640$ 2,327$ (1) Not restated for the changes dicussed in Note 6E.

Governmental Activities
Long-term debt outstanding
Business-Type Activities Total
Deferred inflows on derivative instruments
Table 1
Governmental And Business-Type Net Position
(in millions)

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MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

10 The largest portion of the City’s net position, $1.8 billion (68%), 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 $738 million (28%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $107 million (4%) is unrestricted.

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.

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MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

11 2024 2023 2024 2023 2024 2023
63$ 57$ 1,040$ 992$ 1,103$ 1,049$ 23 6 - - 23 6 11 9 3 2 14 11 62 64 - - 62 64 90 84 - - 90 84 22 19 - - 22 19 7 7 - - 7 7 33 30 - - 33 30 18 13 36 29 54 42 10 (6) 12 (4) 22 (10) - - 19 9 19 9 10 10 - - 10 10 Other 12 43 - - 12 43 361 336 1,110 1,028 1,471 1,364 33 33 - - 33 33 1 1 - - 1 1 2 3 - - 2 3 2 2 - - 2 2 9 10 - - 9 10 46 45 - - 46 45 28 26 - - 28 26 98 88 - - 98 88 80 73 - - 80 73 19 19 - - 19 19 13 13 - - 13 13 - - 584 659 584 659 - - 58 49 58 49 - - 36 86 36 86 - - 9 7 9 7 - - 38 34 38 34 - - 1 1 1 1 - - 19 17 19 17 - - 91 62 91 62 331 313 836 915 1,167 1,228 30 23 274 113 304 136 3 5 (3) (5) - - 33 28 271 108 304 136 Restatement/Change in accounting principal - - 9 5 9 5 688 660 1,639 1,526 2,327 2,186 721$ 688$ 1,919$ 1,639$ 2,640$ 2,327$
Expenses:

General Administration
City Clerk
City Attorney
Human Resources
Santa Clara Convention Center
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
Table 2
Governmental and Business-Type Changes in Net Position
(in millions)
Governmental Business-Type
Activities TotalActivities
Charges for services
Capital grants and contributions
Operating grants and contributions
Revenues:

Program revenues:

General revenues:

Taxes:

Transient occupancy
Other
Ad valorem property
Sales
Transfers in (out)
Water Recycling
Solid Waste
Cemetery
Equity in income of joint ventures
Library
Utilities:

Electric
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

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MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

12 Governmental Activities – the City’s governmental activities boosted its net position by $33 million, mainly attributed to the higher revenue from charge for services and operational grants received from other agencies during the fiscal year 2023-24.

Business-type Activities – the City’s business-type activities contributed to an increase of $280 million in the City’s net position. This substantial growth is primarily due to a $220 million increase in the Electric Utility Fund, resulting from a higher charge for services resulting from an 5% rate increase effective July 1, 2023, and a 10% rate increase effective January 1, 2024, along with an $80 million reduction in resource purchase expenditures.

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
17% Ad valorem property taxes
25%
Transient occupancy taxes
6%
Other taxes
2%
Investment earnings
8%
Contribution in lieu
9%Rents and royalties
3%
Program revenues
27%
Other revenues
3%
Sources of Revenue

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MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

13 The following analysis presents a comparison of fiscal year 2023-24 and fiscal year 2022-23 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
2024 2023 2024 2023
General Administration 33$ 33$ 8$ 17$ City Clerk 1 1 1 1 City Attorney 2 3 2 3 Human Resources 2 2 2 2 Finance 9 10 6 9 Public Works 46 45 15 26 Parks and Recreation 28 26 24 23 Public Safety:

Police 98 88 96 86 Fire 80 73 67 64 Planning and Inspection 19 19 (1) (3) Library 13 13 13 13 Totals 331$ 313$ 233$ 241$ of Services
Net Cost
Table 3
Governmental Activities
(in millions)

In fiscal year 2023-24, the total cost of services increased by $18 million, while the net cost of services decreased $8 million compared to the previous year.

The increase in the total cost of services is largely driven by a $17 million rise in the Public Safety costs during fiscal year 2023-24. This growth is primarily attributed to a $11 million rise in CalPERS Safety pension expenditures and a $7 million increase in the personnel costs in the Fire Department compared to the prior year.

The net cost of services in the General Administration decreased $9 million from the prior year, reaching $8 million in fiscal year 2023-24. This decrease is primarily attributed to a $7 million increase in revenue from charges for services, resulting from the voter-approved change to the Business License Tax effective July 1, 2023. In Public Works, the net cost of services decreased by $11 million from the previous year, dropping to $15 million in fiscal year 2023-24, mainly due to a $10 million increase in grants received from other agencies.

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MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

14 Business-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
2024 2023 2024 2023
Utilities:

Electric 584$ 659$ (200)$ (93)$ Water 58 49 2 (1) Sewer 36 86 (32) 28 Water Recycling 9 7 - - Solid Waste 38 34 (1) (2) Cemetery 1 1 - 1 Santa Clara Convention Center 19 17 (1) (1) Santa Clara Stadium Authority 91 62 6 (13) Totals 836$ 915$ (226)$ (81)$ of Services
Table 4
Business-Type Activities
(in millions)
Net Cost

In fiscal year 2023-24, the City's business-type total cost of services decreased by $79 million, leading to a $145 million reduction in the net cost of services.

The cost of services in the Electric Utility Fund decreased by $75 million to $584 million in fiscal year 2023-24. The decrease was driven by lower expenses for resource purchases. The net cost of services in the Electric Utility Fund is at negative $200 million, reflecting a $107 million reduction from fiscal year 2022-23. This decrease in net cost is primarily due to a $97 million increase in revenue on charges for services as a result of two phases of rate increases during the fiscal year.

The cost of services in the Sewer Utility Fund decreased by $50 million to $36 million. This reduction is primarily attributed to the prior year’s recognition of a $52 million equity loss in the sewer joint project with the City of San Jose. The net cost of services for the Sewer Utility fell to negative $32 million, marking a $60 million decrease from the previous year. This significant net cost change is primarily due to the $20 million equity gain in the sewer joint project with the City of San Jose, a stark contrast to the $52 million equity loss recognized in the prior year.

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MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
15 FU

ND FINANCIAL STATEMENTS
Financial Analysis of Governmental Funds
The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. 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.

At June 30, 2024, the City’s governmental funds reported a combined fund balance of $401 million, an increase of $32 million or 8.6% in comparison with the prior fiscal year. Approximately 27.3% or $109 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, $6 million, 2) restricted for particular purposes, $168 million, 3) committed for particular purposes, $102 million, or 4) assigned for particular purposes, $16 million.

Governmental fund revenues were $375 million, reflecting an increase of $10 million, or 2.7%, from $365 million in the prior year. However, the other revenues decreased from $56 million in fiscal year 2022-23 to $9 million in fiscal year 2023-24, primarily due to reduced developer contribution in the park and recreation capital improvement fund and the City affordable housing fund. The overall revenue increase is mainly attributed to following factors:
 a $17 million or 131.1% increase in intergovernmental revenue largely due to a $11 million rise for Street and Highway development projects and a $7 million increase in Fire department grants.  a $16 million or 272.2% increase in unrealized gain from investment activities.  a $7 million or 12.5% increase in charges for services.  a $6 million or 7.2% increase in property tax revenues.  a $4 million increase in interest and rent driven by new ground leases effective from January 2023 and higher interest revenue compared to the previous fiscal year.  a $4 million increase in the contribution in-lieu tax from the Electric Utility Fund, resulting from higher charges for services due to rate increases.

Governmental fund expenditures were $343 million, reflecting an increase of $11 million or 3.3% compared to the prior year. The increase is primarily due to a $7 million increase in the personnel expenditure within the Public Safety program, and a $10 million increase in capital outlays for subscription-based IT arrangements for the City’s library and the transfer of land held for development in the Housing Successor fund to capital assets.

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MA
NAGEMENT’S DISCUSSION AND ANALYSIS (continued)
16 G
eneral Fund
Re
venues
The City’s General Fund revenues totaled $311 million in fiscal year 2023-24, an increase of $36 million or 13.2% from the prior fiscal year.

Sales tax accounts for approximately 19.9% of the General Fund’s direct revenues. Sales tax revenue fell by $2.7 million, or 4.2% compared to the previous year, totaling $61.8 million. The decline was primarily due to an economic contraction resulting from a mild recession during the current fiscal year.

Property tax (ad valorem) stands as the largest revenue source among General Fund revenues. In the fiscal year 2023-24, property tax revenues amounted to $91 million, reflecting an increase of $6.1 million, or a

7.2% growth from 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 continued rise 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. In November 2020, Santa Clara voters approved to increase the Transient Occupancy Tax rate by up to 4%, and the first two percentage point increase went into effect on January 1, 2022. The City raised the rate from 11.5% to 12.5% in January 2024 from with the final one percentage point increase expected in January 2025, bringing the rate to 13.5%. The COVID-19 pandemic, along with related safety restrictions, significantly impacted TOT revenues towards the end of the fiscal year 2019-20 and throughout fiscal year 2020-21. However, fiscal year 2022-23 saw a notable recovery, which continued into 2023-24, with revenues increasing by $3.4 million, or 17.7%, compared to 2022-23, totaling $22.3 million. This growth is largely attributed to both the tax rate increase and the ongoing recovery from the pandemic.

Licenses, permits, fines and penalties revenues were $11.6 million in business licenses, parking permit, and miscellaneous permit in fiscal year 2023-24, compared to $6.6 million in the previous year. The 76.1% increase is attributed to the voter-approved change to the Business License Tax effective July 1, 2023, which updated the structure of the business tax and increased the amount of license and permit revenue.

Intergovernmental revenues were $0.9 million in fiscal year 2023-24 compared to $1.7 million in the previous year. The decrease is due to $0.8 million reduction in mutual aid reimbursement revenues for the fire departments and mandated reimbursement revenue for the police department when comparing to the prior year.

Charges for services, which excludes building development related activities, totaled $45.7 million in fiscal year 2023-24 compared to $42.1 million in the prior fiscal year, an increase of 8.6%. This increase is largely attributed to the ambulance transportation services and from service reimbursements related to the stadium events.

Contributions in-lieu of taxes were approximately $33.1 million in fiscal year 2023-24, a $3.6 million increase from the prior fiscal year. The increase is the result of higher consumption and retail rates.

Interest and rent revenues were $27.2 million in fiscal year 2023-24, reflecting a $3.9 million increase from the prior fiscal year. This increase was drive by higher interest rates and the addition of three new long- term ground leases with Related Santa Clara, LLC. effective January 1, 2023.

DRAFT
MA
NAGEMENT’S DISCUSSION AND ANALYSIS (continued)
17 E
xpenditures
Ge
neral Fund expenditures totaled $267 million for fiscal year 2023-24, 3.5% increase from the prior fiscal year total of $258 million. This amount excludes encumbrances, re-appropriations, and building related activities.

Salaries and benefits expenditures were $205 million in fiscal year 2023-24, a $7 million or 3.2% increase from the $198 million spent in the previous fiscal year 2022-23. The increase is primarily attribute to a $3.1 million increase in the police department, and $3.2 million increase in the general administration and public work departments.

Other operating expenditures, encompassing various categories such as materials, services, supplies, internal service fund charges, debt service, and minor capital outlays were $62 million in fiscal year 2023- 24, an increase of $2 million from the prior fiscal year. The increase can be primarily attributed to a $2 million increase in the internal service fund cost allocation.

The uses of the other financing sources for fiscal year 2023-24 were $16 million, reflecting a increase of $12 million when compared to the prior fiscal year. This increase can be primarily attributed to an increase of $6.3 million for the various governmental capital improvement projects and a one-time transfer of $3.5 million for radio replacement project.

Fund Balance
As of June 30, 2024, total fund balance in the General Fund was $181 million, up $28 million from the fiscal year 2022-23. Table 5A shows the breakdown of various components compared with the prior fiscal year.
2024 2023 Net Change
Nonspendable 6 $ 3 $ 3 $
Restricted 32 25 7
Committed 18 18 -
Assigned 16 14 2
Unassigned 109 93 16
Total General Fund Balance 181 $ 153 $ 28 $
Table 5A
General Fund Balance for the Fiscal Year Ended June 30, 2024 (in millions)
Ge
neral 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 DRAFT

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

18 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 $ 272 $ 281 $ 9
Expenditures $ 270 $ 276 $ 6
Other financing sources (uses) $ (9) $ (18) $ (9) General Fund Budget for the Fiscal Year Ended June 30, 2024 Table 5B
(in millions)

Adjustments to the original budget were based on the following:
 The $9 million increase in budgeted revenues is attributed to several factors: a $1 million mid-year budgetary adjustment in the property tax due to the solid growth of the projected receipts, a $4 million increase in charge for services driven by higher than anticipated revenues from events at Levi’s stadium and ambulance transportation, a $1 million rise in the penalties due to a higher actual collection, a $1 million increase in rental revenue from Commerce and Peddlers lease payments, and a $1 million increase in contribution in-lieu tax based on the higher than anticipated electric revenues in fiscal year 2023-24.
 The increase in budgeted expenditures is primarily due to a $3 million mid-year budget increase in the stadium operations to account for the cost associated with additional events, a $2 million increase in appropriations in the general administration for HVAC repairs and replacements, and a $1 million increase in the salary and benefits in the Fire department due to overtime.  The increase in budgeted Other Financing Uses is primarily due to a $3.5 million transfer to communication acquisition fund for radio replacements, a $3.7 million transfer to support the storm drain and city hall capital improvement projects, and a $1.3 million transfer to fire new development service fund to true up the fund balance.

Final Budget Versus Actual
Final
Budgeted Actual
Amount Amount Variance
Revenues 281 $ 294 $ 13 $
Expenditures 276 $ 266 $ (10) $
Other financing sources (uses) (18) $ (18) $ - $ General Fund Final Budget Versus Actual for the Fiscal Year Ended June 30, 2024 Table 5C
(in millions)

DRAFT

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

19 The most significant differences between actual and final budgeted amounts are explained as follows:
 The final budgeted revenues resulted in a $13 million positive variance mainly due to a $6 million increase in the property taxes, sales taxes, and transient occupancy taxes, a $4 million increase in the interest and rents, a $3 million increase in the charges for services.  Actual expenditures were $10 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 $956 thousand in fiscal year 2023-24, a decrease of $248 thousand from the previous year. The decrease is primarily due to lower principal and interest payments received from the multi-family developer loans.

The SCHS’s expenditures totaled $5.9 million, an increase of $358 thousand or 6.4% compared to $5.6 million in fiscal year 2022-23. Of this amount, $5.4 million was attributed to the cost of transferring land held for development to capital assets. The general expenditures account for case management services offered to persons experiencing or at risk of homelessness, on-going administration, and labor cost related to developing land held for development of affordable housing and managing assets. In fiscal year 2023- 24, the general expenditures were $585 thousand, a decrease of $43 thousand or 6.8% from the previous year. The reduction was mainly due to lower spending on contractual services.

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

Financial Analysis of Enterprise Funds
At the end of fiscal year 2023-24, the Enterprise Fund net position totaled $1.9 billion, reflecting an increase of $280 million or 17.1% compared to the prior fiscal year. The major contributor to this increase was the Electric Utility Fund, which shown a $222 million increase. The increase in the Electric Utility Fund can be attributed to a $97 million increase in the charges for services and a $80 million decrease in the resource purchase expenses.

In fiscal year 2023-24, the equity of the joint venture recognized a gain of $19 million, a significant increase from the $43 million loss recorded in the previous fiscal year. This increase of $62 million is mostly due to a $71 million increase in the equity associated with the San Jose Santa Clara Joint Wastewater Treatment Facility project in the Sewer Utility fund, offset by a $9 million decrease in the Electric Utility joint venture equity.

Excluding joint venture activity and net change in the fair value of investments, non-operating expenses in fiscal year 2023-24 were $16 million, a decrease of $1 million from the previous fiscal year.

DRAFT

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

20 Electric Utility
This fund accounts for the operation of the City’s electric utility services. Charges for Services revenues were $656 million in fiscal year 2023-24, an increase of $97 million, or 17.3% from fiscal year 22-23. The primary driver for this increase was a 5% rate increase effective July 1, 2023, a 10% rate increase effective January 1, 2024, and increased consumption.

Retail operating expenses reached $580 million in fiscal year 2023-244, a reduction from the $665 million in fiscal year 2022-23. The decrease of $75 million or 11% in the operating expenses were primarily attributed to the lower costs in the purchased resources due to decreased gas prices.

Revenues from wholesale resource operations was $11.5 million in the current fiscal year, a significant decrease from the $85 million recorded in fiscal year 2022-23. The decrease is mainly attribute to a $60 million gain recognized in the wholesale resources trading activities in fiscal year 2022-23 and lower future gas price. The costs related to wholesale resources purchases decreased to $10 million from $19 million in the prior fiscal year. The decrease in wholesale power in fiscal year 2032-24 was influenced by the lower gas price in resource market.

Interest revenues was $14 million in fiscal year 2023-24, up from $8 million recorded in fiscal year 2022-

23. This increase is primarily due to a higher interest rate environment. Interest expense was $2 million in the current year.

The Electric Utility Fund had a net position of $1,293 million at June 30, 2024, an increase of $222 million or 20.7% from the prior fiscal year. Of this amount, $576 million was net investment in capital assets, $10 million was restricted for contractual obligations, and $707 million was unrestricted. The Electric Utility Fund is a participant in a number of joint ventures including 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 $57 million for fiscal year 2023-24 compared to $50 million for the prior fiscal year. Increased water usage and water utility rates increase are the main factors for the revenue variance of $7 million.

Operating expenses were $58 million in fiscal year 2023-24, compared to $49 million in fiscal year 2022-

23. The increase is primarily due to increased resource costs, higher maintenance cost and increased interfund allocation per the most recent rate study. The Water Utility Fund’s net position was $76 million at June 30, 2024.

Sewer Utility
This fund accounts for the maintenance of the City’s sewer lines and related facilities. Operating revenues of the Sewer Utility were $45 million for fiscal year 2023-24 compared to $51 million in fiscal year 2023-

24. The additional revenue earned from the increase in sewer utility rates was offset by lower sewer conveyance fees for upsizing existing structures. Non-operating revenue was $4 million in the current year.

Operating expenses were $34 million in fiscal year 2023-24, compared to $33 million in the prior year. This increase is primarily due to higher salaries and benefits cost.

DRAFT

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

21 The Sewer Utility Fund had a net position of $375 million at June 30, 2024. Of this amount, $33 million was net investment in capital assets, $273 million was restricted for joint venture capital projects and $69 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 19.71% of the assets, capital, and operating costs. In fiscal year 2022-23, the City of San Jose reported that a gain of the Utility’s equity in the Regional Wastewater Facility was $19 million (fiscal year 2023-24 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 $8 million, an increase of $2 million from the prior year. Revenue increase is due to a combination of recycled water utility rates increase, increased usage and higher other agencies revenue due to reimbursement for an emergency leak repair. Operating expenses is $9 million, an increase of $2 million from fiscal year 2022-23 due to higher resource cost, and higher maintenance cost for an emergency leak repair. The net position at June 30, 2024 remains 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, 2024, the Stadium Authority recorded approximately $81 million in operating revenue, $9 million more than prior year. This was mainly due to increases in revenue from ticketed Non-NFL events, rents and licenses and NFL ticket surcharge. Operating expenses were $79 million, increasing $31 million from the prior fiscal year. This increase is primarily due to the 2024 Settlement Agreement, which resulted in an increase in buffet costs, performance-based rent and public safety costs over the threshold. Non-NFL event expenses also increased due to larger ticketed Non-NFL events. Net position at March 31, 2024 was $133 million, an increase of $21 million from the previous fiscal year. Refer to Note 6 for additional information.

Solid Waste
This fund accounts for the administration of the City’s garbage and rubbish collection service. Operating revenues were $39.3 million in fiscal year 2023-24, an increase of $3.3 million from the prior fiscal year.

Operating expenses were $37.8 million compared to $34 million in the prior fiscal year, mainly due to the increases in materials, services, and supplies cost. The Solid Waste Fund’s net position was $2.6 million at June 30, 2024.

Cemetery
This fund accounts for the Mission City Memorial Park’s operations. Operating revenues were $775 thousand, down 17% over the prior fiscal year. Operating expenses were down by 13% due to a decrease of $233 thousand in salary and benefits. Net position at June 30, 2024, was $3.4 million.

Santa Clara Convention Center
This fund accounts for the operations of the Santa Clara Convention Center. Operating revenues were $20 million in fiscal year 2023-24 compared to $17 million in fiscal year 2022-23. Expenses were $19 million in the fiscal year 2023-24 compared to $17 million in prior fiscal year. The increased costs are directly related to the increased events at the Convention Center. Net position at June 30, 2024, was $27 million.

On November 1, 2019, the City entered into an agreement with Levy Premium Foodservice Limited DRAFT
MA
NAGEMENT’S DISCUSSION AND ANALYSIS (continued)
22 P
artnership (Levy) to manage the foodservice operatio ns 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 2023-24 due to the expiration of the operating lease. Operating expenses were $10 thousand, with a net position at June 30, 2024 of $2 million.

CAPITAL ASSETS
At June 30, 2024, the City’s capital assets totaled $669 million in Governmental Activities, and $1.498 b
illion in Business-Type Activities, net of depreciation. Capital Assets are invested in a broad range of categories, as shown in Table 6.
2024 2023 Net Change
Governmental Activities:

Land 130$ 125$ 5$
Construction in progress 59 39 20
Land improvements 60 60 -
Buildings 217 217 -
Infrastructure 646 633 13
Machinery and equipment 89 87 2
Right-to-use leased Equipment 1 1 -
Right-to-use SBITA 13 11 2
Less accumulated depreciation (546) (521) (25)
Totals 669$ 652$ 17$
Business-Type Activities:

Land 19$ 19$ -$
Construction in progress 93 74 19
Buildings 922 919 3
Infrastructure 1,316 1,262 54
Machinery and equipment 30 28 2
Right-to-use leased building 3 3 -
Right-to-use SBITA 4 3 1
Less accumulated depreciation (889) (838) (51)
Totals 1,498$ 1,470$ 28$
Table 6
Capital Assets at June 30, 2024
(in millions)
DRAFT
MA
NAGEMENT’S DISCUSSION AND ANALYSIS (continued)
23 T
he increase of $13 million in the Governmental Funds infrastructure was primarily due to $8 million in the improvement in street and sidewalk infrastructure and $4 million of Contributed Infrastructure from various developers. The $54 million increase in Enterprise Funds infrastructure was mainly due to $39 million in Electric infrastructure improvements related to substation and transformer projects, $5 million in sanitary sewer system improvement, and $3 million in replacement of the water distribution system.

The Capital Improvement Project Budget for fiscal year 2023-24 and the Five-Year Financial Plan for fiscal year 2023-24 through fiscal year 2027-28 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 2023-24 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, 2024 t
he City’s debt was comprised of the following:

Balance Balance
Governmental Activity Debt: June 30, 2024 June 30, 2023 Net Change Refunding Certificates of Participation, Series 2013 9$ 11$ (2) $ Business-Type Debt:

Electric Utility Revenue Bonds, net of unamortized discount 27 33 (6) Electric Loan Agreements 86 95 (9)
Sewer Utility Loan Agreements 6 27 (21)
Sewer Utility Certificates of Participation 2023 36 - 36 StadCo CFD Advance (1)
29 3 0 (1)
Stadium Funding Trust Loan(1)
200 2 15 (15)
Total Debt 393$ 411$ (18) $
(1) Stadium Authority's long-term obligations are based on a March 31 fiscal year end.

Table 7
Outstanding Debt at June 30, 2024
(in millions)

SUCCESSOR AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (AB 26) that provided f
or 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.

DRAFT

MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)

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

CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This Annual Comprehensive Financial Report is intended to provide citizens, taxpayers, investors, and creditors 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.

DRAFT

Basic Financial Statements

DRAFT

27 CITY 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.

DRAFT

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 409,840,935 787,747,851 $ 1,197,588,786$ Investments with fiscal agent 48,901 32,506,728 32,555,629 Receivables (net of allowance for uncollectible):

Accounts 8,056,985 167,107,083 175,164,068 Interest 7,582,817 4,487,443 12,070,260 Intergovernmental 19,465,431 - 19,465,431 Leases receivable (Note 4) 1,635,317 12,252,358 13,887,675 Derivative financial instruments (Note 10D) - 7,119,963 7,119,963 Materials, supplies and prepaids 2,505,265 21,062,541 23,567,806 Land held for development (Note 2H) 1,703,500 - 1,703,500 Total Current Assets 450,839,151 1,032,283,967 1,483,123,118 Noncurrent Assets
Restricted Cash (Note 7) 31,763,107 94,295,087 126,058,194 Investment with fiscal agent (Note 7) 719,134 11,562,642 12,281,776 Derivative financial instruments (Note 10D) - 4,867,018 4,867,018 Deposits (Note 7) - 9,449,807 9,449,807 Leases receivable, noncurrent (Note 4) 249,956,383 585,893,904 835,850,287 Internal balances (Note 8C) (6,808,252) 6,558,214 (250,038) Long term loans, net 102,259,111 - 102,259,111 Capital assets (Note 9):

Land and construction in progress 188,556,761 111,492,874 300,049,635 Capital assets being depreciated, net 480,381,920 1,386,646,274 1,867,028,194 Investment in joint ventures (Note 12) 5,501,554 337,582,904 343,084,458 Other 22,680 534,892 557,572 Total Noncurrent Assets 1,052,352,398 2,548,883,616 3,601,236,014 Total Assets 1,503,191,549 3,581,167,583 5,084,359,132

DEFERRED OUTFLOWS OF RESOURCES
Derivative instruments (Note 10D) - 7,708 7,708 Refunding of debt - 4,474,983 4,474,983 OPEB related items (Note 16) 1,175,912 433,841 1,609,753 Pension related items (Note 13) 136,293,702 33,154,106 169,447,808 Total Deferred Outflows of Resources 137,469,614 38,070,638 175,540,252

CITY OF SANTA CLARA

STATEMENT OF NET POSITION
June 30, 2024

Statement of Net Position
DRAFT
See accompanying notes to basic financial statements
29 Governmental Business-Type
Activities Activities Total

LIABILITIES
Current Liabilities
Accrued liabilities 35,071,427 82,810,384 117,881,811 Deposits 5,631,370 - 5,631,370
Interest payable 280,863 6,921,257 7,202,120
Accrued compensated absences (Note 2L) 1,517,925 578,025 2,095,950 Unearned revenue, current portion 328,031 22,439,187 22,767,218 Landfill closure liability (Note 11) - 788,000 788,000 Derivative financial instruments (Note 10D) - 7,708 7,708 Current portion of lease obligation (Note 10H) 39,413 710,181 749,594 Current portion of SBITA (Note 10I) 2,011,963 481,034 2,492,997 Long-term debt due within one year (Note 10) 1,085,000 24,306,891 25,391,891 Total Current Liabilities 45,965,992 139,042,667 185,008,659 Noncurrent Liabilities
Long-term portion estimated claims (Note 19) 22,756,000 - 22,756,000 Accrued compensated absences (Note 2L) 20,689,883 7,878,680 28,568,563 Landfill closure liabilities (Note 11) - 5,925,426 5,925,426 Unearned revenue - 431,418,058 431,418,058
Long-term lease obligation (Note 10H) - 240,824 240,824 Long-term SBITA obligation (Note 10I) 7,191,980 2,495,434 9,687,414 Long-term debt due after one year (Note 10) 8,390,800 358,927,512 367,318,312 Net OPEB liability due after one year (Note 16) 26,077,531 9,620,901 35,698,432 Net pension liability due after one year (Note 13) 537,991,162 148,179,823 686,170,985 Total Noncurrent Liabilities 623,097,356 964,686,658 1,587,784,014 Total Liabilities 669,063,348 1,103,729,325 1,772,792,673

DEFERRED INFLOWS OF RESOURCES
Derivative instruments (Note 10D) - 11,986,981 11,986,981 Refunding of debt - 1,024,530 1,024,530
Leases related (Note 4) 245,748,566 582,229,348 827,977,914 OPEB related items (Note 16) 1,446,368 533,618 1,979,986 Pension related items (Note 13) 2,578,910 655,703 3,234,613 Total Deferred Inflows of Resources 249,773,844 596,430,180 846,204,024 NET POSITION (Note 18)
Net investment in capital assets 650,219,524 1,145,343,708 1,795,563,232 Restricted for:

Capital projects and other agreements 142,129,746 384,617,264 526,747,010 Debt service 597,880 - 597,880
Housing activities 128,513,549 - 128,513,549
Community development 37,791,655 - 37,791,655
Transportation 4,889,228 - 4,889,228
Pension rate stabilization program 29,226,846 - 29,226,846 Maintenance 2,474,601 - 2,474,601
Other purposes 7,638,904 - 7,638,904
Total Restricted Net Position 353,262,409 384,617,264 737,879,673 Unrestricted Net Position (281,657,962) 389,117,744 107,459,782 Total Net Position 721,823,971 1,919,078,716$ $ 2,640,902,687

CITY OF SANTA CLARA

STATEMENT OF NET POSITION
June 30, 2024
DRAFT
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 38,816,294$ (5,672,334)$ 21,733,373$ 2,971,195$ 203,494$ City Clerk 1,669,643 (461,058) 21,252 - -
City Attorney 2,748,865 (430,321) - - -
Human Resources 3,611,651 (1,721,282) - - -
Finance 16,247,051 (7,423,030) 3,185,275 - -
Public Works 48,511,286 (2,346,978) 6,061,820 13,950,965 11,063,241 Parks and Recreation 27,658,938 - 3,589,000 161,915 - Public Safety:

Police 97,507,011 - 1,059,513 830,610 -
Fire 79,840,376 - 8,866,965 3,998,213 -
Planning and Inspection 18,723,508 - 18,953,027 1,024,894 - Library 13,056,165 - 9,958 179,325 -
Interest on long term debt 546,405 - - - -
Total Governmental Activities 348,937,193 (18,055,003) 63,480,183 23,117,117 11,266,735 Business-type Activities:

Utilities:

Electric 575,096,910 8,975,561 784,316,159 - -
Water 55,075,142 2,963,626 57,514,540 - -
Sewer 34,661,494 1,500,450 48,790,966 - -
Water Recycling 8,908,204 86,874 8,796,611 - -
Solid Waste 35,862,680 1,946,726 39,286,895 - -
Cemetery 1,094,830 132,888 774,643 - -
Sports and Open Space Authority 10,498 - - - -
Santa Clara Convention Center 18,645,254 280,583 19,670,945 - - Santa Clara Stadium Authority 88,878,746 2,168,295 81,107,805 - 3,467,625 Total Business-type Activities 818,233,758 18,055,003 1,040,258,564 - 3,467,625 Total 1,167,170,951$ -$ 1,103,738,747$ 23,117,117$ 14,734,360$ General Revenues:

Taxes:

Sales
Ad valorem property
Transient occupancy
Other
Contribution in lieu of taxes
Investment earnings
Net increase in the fair value of investments
Equity in gains of joint ventures
Rents and royalties
Gain on retirement of capital asset
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, 2024
Statement of Activities
DRAFT
See accompanying notes to basic financial statements
31 Governmental Business-Type
Activities Activities Total
(8,235,898)$ -$ (8,235,898)$
(1,187,333) - (1,187,333)
(2,318,544) - (2,318,544)
(1,890,369) - (1,890,369)
(5,638,746) - (5,638,746)
(15,088,282) - (15,088,282)
(23,908,023) - (23,908,023)
(95,616,888) - (95,616,888)
(66,975,198) - (66,975,198)
1,254,413 - 1,254,413
(12,866,882) - (12,866,882)
(546,405) - (546,405)
(233,018,155) - (233,018,155)
- 200,243,688 200,243,688
- (524,228) (524,228)
- 12,629,022 12,629,022
- (198,467) (198,467)
- 1,477,489 1,477,489
- (453,075) (453,075)
- (10,498) (10,498)
- 745,108 745,108
- (6,471,611) (6,471,611)
- 207,437,428 207,437,428
(233,018,155) 207,437,428 (25,580,727)
61,776,044 - 61,776,044
90,176,113 - 90,176,113
22,347,394 - 22,347,394
7,115,826 - 7,115,826
33,143,505 - 33,143,505
17,939,203 35,798,886 53,738,089
9,968,998 11,712,312 21,681,310
- 18,555,751 18,555,751
9,753,446 - 9,753,446
- 1,071 1,071
12,124,140 - 12,124,140
2,525,925 (2,525,925) -
266,870,594 63,542,095 330,412,689
33,852,439 270,979,523 304,831,962
687,971,532 1,639,353,776 2,327,325,308
- 8,745,417 8,745,417
687,971,532 1,648,099,193 2,336,070,725
721,823,971$ 1,919,078,716$ 2,640,902,687$
Net (Expense) Revenue and Changes in Net Position

CITY OF SANTA CLARA

STATEMENT OF ACTIVITIES
For the year ended June 30, 2024
DRAFT
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DRAFT
33 CITY OF SANTA CLARA

FUND FINANCIAL STATEMENTS

GOVERNMENTAL FUNDS
The funds described below were determined to be Major Funds by the City in fiscal year 2023-24. 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.

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

Pooled cash and investments 143,861,990$ 4,305,770$
Investments with fiscal agent - current - -
Restricted cash 29,226,846 -
Receivables (net of allowance for uncollectibles):

Accounts 7,193,374 -
Interest 7,582,817 -
Loans 4,339,823 103,509,057
Intergovernmental 12,599,452 -
Due from other funds (Note 8B) 223,091 -
Materials, supplies and prepaids 23,593 -
Land held for development (Note 2H) - 1,703,500
Investments with fiscal agent - noncurrent (Note 7) - - Leases Receivable (Note 4) 251,591,700 -
Other 22,680 -
Total Assets 456,665,366$ 109,518,327$

LIABILITIES
Accrued liabilities 19,298,124$ 140,463$
Deposits 5,631,370 -
Unearned revenue 328,031 -
Total Liabilities 25,257,525 140,463

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - Lease revenues (Note 4) 245,748,566 - Unavailable revenue - Loans 4,339,823 103,509,057
Total Deferred Inflows of Resources 250,088,389 103,509,057 FUND BALANCES (Note 18)
Nonspendable 5,880,051 -
Restricted 31,841,260 5,868,807
Committed 18,577,142 -
Assigned 15,756,256 -
Unassigned 109,264,743 -
Total Fund Balances 181,319,452 5,868,807
Total Liabilities, Deferred Inflows of Resources
and Fund Balances 456,665,366$ 109,518,327$

CITY OF SANTA CLARA

GOVERNMENTAL FUNDS

BALANCE SHEET
June 30, 2024
Balance Sheet
DRAFT
See accompanying notes to basic financial statements
35 Non-Major Total
Governmental Funds Governmental Funds
210,327,750$ 358,495,510$
48,901 48,901
2,536,261 31,763,107
389,518 7,582,892
- 7,582,817
78,767,881 186,616,761
6,865,979 19,465,431
- 223,091
- 23,593
- 1,703,500
719,134 719,134
- 251,591,700
- 22,680
299,655,424$ 865,839,117$
7,502,881$ 26,941,468$
- 5,631,370
- 328,031
7,502,881 32,900,869
- 245,748,566
78,767,881 186,616,761
78,767,881 432,365,327
- 5,880,051
129,755,688 167,465,755
83,628,974 102,206,116
- 15,756,256
- 109,264,743
213,384,662 400,572,921
299,655,424$ 865,839,117$

BALANCE SHEET
June 30, 2024

CITY OF SANTA CLARA

GOVERNMENTAL FUNDS
DRAFT
Th
is page intentionally left blank
DRAFT
See accompanying notes to basic financial statements
37 TOTAL GOVERNMENTAL FUND BALANCE 400,572,921$
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) (1,466,067) Interest payable (187,537)

CAPITAL ASSETS
Capital assets used in Governmental Activities are not current assets or financial resources and, therefore, are not reported in the Governmental Funds. 659,663,679 Right to use leases assets and SBITA assets used in governmental activities are not financial resources and therefore are not reported in the funds. 9,275,002 INVESTMENT IN NON-BUSINESS-TYPE JOINT VENTURE 5,501,554

DEFERRED OUTFLOWS OF RESOURCES
OPEB related (excluding Internal Service Funds) 1,145,821 Pension related (excluding Internal Service Funds) 134,144,284

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 51,345,425
Accounts receivable 474,093
Materials, supplies and prepaid 2,481,672
Deferred outflows OPEB related items 30,091
Deferred outflows pension related items 2,149,418
Accrued liabilities, including short-term portion of estimated claims (8,129,959) Long-term portion of estimated claims (22,756,000)
Compensated absences - current (51,858)
Compensated absences - long-term (706,850)
Internal balances (7,031,343)
Lease obligations, including interest payable (34,722)
SBITA obligations, including interest payable (1,227,314) Net OPEB liability (667,331)
Net pension liability (9,181,654)
Deferred inflows OPEB related items (37,012)
Deferred inflows pension related items (40,629)

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 (10,035,548) Long-term debt (9,475,800)
Long-term liability associated with lease agreements (excluding Internal Service Funds) (4,731) Long-term liability associated with SBITA agreements (excluding Internal Service Funds) (8,069,916) Non-current portion of accrued compensated absences
(excluding Internal Service Funds) (19,983,033)
Net OPEB liability (excluding Internal Service Funds) (25,410,200) Net pension liability (excluding Internal Service Funds) (528,809,507)

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. 112,294,659 (1,409,356)
(2,538,281)
NET POSITION OF GOVERNMENTAL ACTIVITIES 721,823,971$
June 30, 2024

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 DRAFT
See accompanying notes to basic financial statements
38 General Santa Clara
Fund Housing Successor

REVENUES
Taxes:

Sales 61,776,044$ -$
Ad valorem 90,710,410 -
Transient occupancy 22,347,394 -
Other 6,741,057 -
Licenses, permits, fines, and penalties 11,610,060 -
Intergovernmental 889,326 -
Charges for services 45,715,376 15,648
Contributions in-lieu of taxes 33,143,505 -
Interest and rents 27,193,406 77,056
Net increase (decrease) in the fair
value of investments 9,968,998 -
Other 1,196,420 862,868
Total Revenues 311,291,996 955,572

EXPENDITURES
Current:

General Administration 28,020,144 5,985,386
City Clerk 1,746,564 -
City Attorney 2,834,635 -
Human Resources 3,520,797 -
Finance 18,081,016 -
Public Works 24,514,543 -
Parks and Recreation 20,518,817 -
Public Safety:

Police 84,399,853 -
Fire 65,032,429 -
Planning and Inspection 4,408,690 -
Library 10,571,512 -
Capital outlay 2,109,475 -
Debt service (Note 10):

Principal payments 1,092,217 -
Interest and fiscal fees 195,159 -
Total Expenditures 267,045,851 5,985,386

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 44,246,145 (5,029,814)

OTHER FINANCING SOURCES (USES)
Subscription Based IT Arragement Liabilities (Note 10) 2,078,197 - Transfers in (Note 8A) 2,861,559 -
Transfers (out) (Note 8A) (21,182,424) -
Total Other Financing Sources (Uses) (16,242,668) -
NET CHANGE IN FUND BALANCE 28,003,477 (5,029,814)
Fund balances - beginning 153,315,975 10,898,621
Fund balances - ending 1 81,319,452$ 5,868,807$

CITY OF SANTA CLARA

GOVERNMENTAL FUNDS

AND CHANGES IN FUND BALANCES

STATEMENT OF REVENUES, EXPENDITURES
For the year ended June 30, 2024
Statement of Revenues, Expenditures, and Changes in Fund Balances DRAFT
See accompanying notes to basic financial statements
3 9
Non-Major Total
Governmental Funds Governmental Funds
-$ 61,776,044$
- 90,710,410
- 22,347,394
374,769 7,115,826
8,540,817 20,150,877
29,840,188 30,729,514
13,580,919 59,311,943
- 33,143,505
3,159,380 30,429,842
- 9,968,998
6,800,489 8,859,777
62,296,562 374,544,130
7,316,005 41,321,535
- 1,746,564
- 2,834,635
- 3,520,797
- 18,081,016
7,185,694 31,700,237
2,699,325 23,218,142
581,290 84,981,143
7,045,055 72,077,484
14,470,224 18,878,914
187,843 10,759,355
28,990,995 31,100,470
1,146,047 2,238,264
427,037 622,196
70,049,515 343,080,752
(7,752,953) 31,463,378
- 2,078,197
30,885,841 33,747,400
(14,438,252) (35,620,676)
16,447,589 204,921
8,694,636 31,668,299
204,690,026 368,904,622
213,384,662$ 400,572,921$

CITY OF SANTA CLARA

GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
For the year ended June 30, 2024
DRAFT
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is page intentionally left blank
DRAFT
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L O ·R ~ ITE
irhe amounts below i11cludc:.di in tb Statem c11t of A, · 1iviti.e.s do not provide or i:cquire) 1hc use of finan .ial i:c:souroc:s ov« 90 days andi thci:cfo~ arc mrt ns,pmtc:d rc,,cnuc: or-expenditures in cm men tal funds (net chllll )c
ri:cnt portion of ccruc:d compen satc:.di ab:sc11ccs
AL 'JR.AN IO
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(De;p1iec:falllon ,cxprnsc is net of [mlenrral Service Fund dc:prc:cia tiOll of 2,41 ,C 7 whi lb has already been Lloc,atcdi lo ser.rice funds.

Rc:tircum:n ofCillpital ts m:1 o. ·internal Servi.cc: F u: □ di rotirem ent,of d0,I07), onlribu tiOlls.ofinlra.s tructure lmpr~wc:ments by dc:,;"CloJICl"S and cq11ip1111.a11 arc: aipi talizcdi in lhc Sratcmcn t of Activi ties but arc llDI reco lidcdi in the Govan menml . und Ste.tcments Ix-cause llD cash che:mrc:d b8!10s.

LO ~ 1' EDS ID ~ -fE TS
l=ianc.c: ,ofSBt A liahil ty is dedu.c1c:d Imm fund bllllloc ( 2;078,,1.91), R.c,payment of 0000 pri mcipal .i:s an expcndiiture in lhc , vcmmc:n tal funds bat l □ Inc: Statcn1c:nt of c:t Pos ition l:bc: i:c:pa)'lflWTII i:c:duocs. IOll -tc:lflll liab.ilitie.s.

Rc:p,n::,'lflWDt of debt princ ipal is added back lo fund balB.lloc Amortize.l:lon of oomrl prcrafom
'R L O 0 - . R ITE J
irhe amounts below includcdi in Inc Statement of A,ctiviti.e.s do not provide or i:c:quire the

1.1sc:· ,of ililtrc:nt 6nan ial i:csoaroc:s and lh= ibn: a:rc:· 1Jot rcpo:rtro i:c:ll-en ue or c~n ditu res in , v m mcn tal funds (net chllllge)i:

ProvisiOll for reserve of conditiOllal gran ts
on-currc:m.t portiOll o acc ru.c:d com pcn satc:d absc nce<.i, r1□ tc:re.sl payable
UmavaU:ablc: i:c,;'Cllue
Lease related expense:

SBI A rela ted cxp ens.::

OPEB rc:la1c:d c:xpc:1!1:Sc
Pc:m:sion i:c:lat di ,cxprns:e
l LOCAifm O INT IRNAL nrv
lntems.l Savi.cc:· Funds arc 1.1s.::d by mana c:mcnl to char!!c the cos ts.of min ac11v1t1cs, uch as c:quipmc:nt aoqu isilliol!I, maiintrn ancc:, andi ins urance: to incfividual funds. irhe portiOll o l:bc: ll C:I revenue ( xpens.:: ofl:bcsc: [ntcmal Service u11ds nrisin , ,01.in of11beir lral!IYI.Cbons wulh Gov«l!l :m 111al Funds , is rcpoirtc:d w ith "'O\'Cmm n ral activilllc:s., lbc 1.1s.:: tfu.cy t="ice lhos:e aclivi tie.s.
hllll in c:t Po.siliOll - All Jm .rnlal SCTVice umds, 11 I . in Nc:t Po.siliOll of'lntcmal Service Funds i:c:ported • 'ne.ss- yp,:: A•ctiwllies • I NET PO l 10 0 .O\ . R- -I ITIE.
31,668,2 9
286.299
34,42 _S4tt
(22,909,250),
(219tt .),
4,(160, [68,
3 .939),
1,mo,000
54,297
35:5.19
(1,752,20 '),

21.45 311.77
7::;,

6.143),
1,-488,654
(23, 99:5,622),
7,827,416
2,(168,210

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DRAFT

43 CITY 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 2023-24.

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
Stadium Funding Trust.

DRAFT
See accompanying notes to basic financial statements
44 El
ectric Water Sewer
Utility Utility Utility
ASSETS
Current assets:

Cash and investments (Note 7):

Pooled cash and investments 609,040,674$ 25,420,688$ 102,158,565$ Investments with fiscal agent 16,596,885 - -
Receivables (net of allowance for uncollectible):

Accounts 122,946,617 9,678,377 5,996,715
Interest 3,761,308 139,299 570,526
Leases receivable (Note 4) 259,985 32,805 32,805
Derivative financial instrument (Note 10D) 7,119,963 - - Due from other funds (Note 8B) 4,017,195 1,621,839 1,126,387 Materials, supplies and prepaids 19,366,588 1,695,953 - Total current assets 783,109,215 38,588,961 109,884,998 Noncurrent assets:

Restricted cash (Note 7) 10,065,874 2,230,727 958,752 Investment with fiscal agent (Note 7) - - 26,407
Derivative financial instrument (Note 10D) 4,867,018 - - Deposits (Note 7) 9,449,807 - -
Leases receivable, noncurrent (Note 4) 1,852,925 875,240 875,240 Capital assets (Note 9):

Land 14,371,743 661,268 725,328
Construction in progress 86,463,324 167,655 364,713 Buildings, infrastructure and land improvements 1,147,187,859 111,885,017 68,370,301 Equipment 10,212,515 4,172,275 5,462,089
Right-to-use leased assets 2,916,623 - -
Right-to-use SBITA 3,837,038 - -
1,264,989,102 116,886,215 74,922,431
Less accumulated depreciation 576,144,800 54,697,373 30,560,821 Net capital assets 688,844,302 62,188,842 44,361,610 Investment in joint ventures (Note 12) 65,209,772 - 272,373,132 Other assets - - -
Total noncurrent assets 780,289,698 65,294,809 318,595,141 Total assets 1,563,398,913 103,883,770 428,480,139

DEFERRED OUTFLOWS OF RESOURCES
Derivative instruments (Note 10D) 7,708 - -
Refunding of debt 4,474,983 - -
OPEB related items (Note 16) 311,077 68,522 32,559
Pension related items (Note 13) 25,096,908 4,241,869 2,137,766 Total deferred outflows of resources 29,890,676 4,310,391 2,170,325

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
June 30, 2024
Business-type Activities-Enterprise Funds

PROPRIETARY FUNDS
Statement of Net Position
DRAFT

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, 2024)
restated (Note 6) Funds TOTAL (Note 2B)
6,459,997$ 18,485,558$ 25,733,041$ 787,298,523$ 51,794,753$ - 15,909,843 - 32,506,728 - 1,597,714 19,453,027 7,434,633 167,107,083 474,093 16,310 - - 4,487,443 - - 11,926,763 - 12,252,358 - - - - 7,119,963 - - - 265,923 7,031,344 41,213 - - - 21,062,541 2,481,672 8,074,021 65,775,191 33,433,597 1,038,865,983 54,791,731 168,123 78,573,023 2,298,588 94,295,087 - - 11,536,235 - 11,562,642 - - - - 4,867,018 - - - - 9,449,807 - - 582,290,499 - 585,893,904 - - - 3,092,872 18,851,211 - - 4,202,330 1,443,641 92,641,663 - 1,257,070 830,191,432 80,211,731 2,239,103,410 - - 7,002,901 3,006,588 29,856,368 45,087,709 - - - 2,916,623 34,655 - - - 3,837,038 1,386,483 1,257,070 841,396,663 87,754,832 2,387,206,313 46,508,847 209,637 162,827,215 64,627,319 889,067,165 32,683,436 1,047,433 678,569,448 23,127,513 1,498,139,148 13,825,411 - - - 337,582,904 - - 534,892 - 534,892 - 1,215,556 1,351,504,097 25,426,101 2,542,325,402 13,825,411 9,289,577 1,417,279,288 58,859,698 3,581,191,385 68,617,142 - - - 7,708 - - - - 4,474,983 - 4,787 - 16,896 433,841 30,091 398,746 - 1,278,817 33,154,106 2,149,418 403,533 - 1,295,713 38,070,638 2,179,509 (continued)
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
June 30, 2024

DRAFT

See accompanying notes to basic financial statements
46 Electric Water Sewer
Utility Utility Utility

LIABILITIES
Current liabilities:

Accrued liabilities 44,808,600 7,353,649 476,633 Interest payable 1,190,752 - 731,599 Unearned revenue - - - Due to other funds (Note 8B) - - - Accrued compensated absences (Note 2L) 472,381 61,405 24,070 Current portion of landfill closure liability (Note 11) - - - Current portion of long-term debt (Note 10) 15,460,000 - 1,546,995 Current portion derivative financial instruments (Note 10D) 7,708 - - Current portion of leases obligation (Note 10H) 710,181 - - Current portion of SBITA (Note 10I) 481,034 - - Total current liabilities 63,130,656 7,415,054 2,779,297 Noncurrent liabilities:

Unearned revenue - - - Long-term portion estimated claims - - - Long-term compensated absences (Note 2L) 6,438,722 836,972 328,076 Landfill closure liability (Note 11) - - - Long-term debt (Note 10) 97,089,699 - 40,469,883 Long-term leases obligation (Note 10H) 240,824 - - Long-term SBITA (Nte 10I) 2,495,434 - - Net OPEB liability (Note 16) 6,898,479 1,519,553 722,033 Net pension liability (Note 13) 108,269,790 20,708,985 10,320,983 Total noncurrent liabilities 221,432,948 23,065,510 51,840,975 Total liabilities 284,563,604 30,480,564 54,620,272

DEFERRED INFLOWS OF RESOURCES
Derivative instruments (Note 10D) 11,986,981 - - Refunding of debt 1,024,530 - - Leases related (Note 4) 1,997,165 831,430 831,430 OPEB related items (Note 16) 382,621 84,281 40,047 Pension related items (Note 13) 479,098 91,638 45,671 Total deferred inflows of resources 15,870,395 1,007,349 917,148 NET POSITION (Note 18)
Net investment in capital assets 575,817,583 62,188,842 33,260,715 Restricted for capital projects and other agreements 10,065,874 1,927,637 273,331,884 Unrestricted 706,972,133 12,589,769 68,520,445 Total net position 1,292,855,590$ 76,706,248$ 375,113,044$ 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, 2024
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
DRAFT
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, 2024)
restated (Note 6) Funds TOTAL (Note 2B)
1,601,637 23,637,965 4,931,900 82,810,384 8,129,958 - 4,998,906 - 6,921,257 7,304
- 16,900,628 5,538,559 22,439,187 -
- 473,130 - 473,130 7,072,557
61 - 20,108 578,025 51,858
- - 788,000 788,000 -
- 7,299,896 - 24,306,891 -
- - - 7,708 -
- - - 710,181 34,720
- - - 481,034 602,683
1,601,698 53,310,525 11,278,567 139,515,797 15,899,080 - 431,418,058 - 431,418,058 -
- - - - 22,756,000
829 - 274,081 7,878,680 706,850
- - 5,925,426 5,925,426 -
- 221,367,930 - 358,927,512 -
- - - 240,824 -
- - - 2,495,434 617,329
106,147 - 374,689 9,620,901 667,331
1,809,522 - 7,070,543 148,179,823 9,181,654
1,916,498 652,785,988 13,644,739 964,686,658 33,929,164 3,518,196 706,096,513 24,923,306 1,104,202,455 49,828,244 - - - 11,986,981 -
- - - 1,024,530 -
- 578,569,323 - 582,229,348 -
5,887 - 20,782 533,618 37,012
8,008 - 31,288 655,703 40,629
13,895 578,569,323 52,070 596,430,180 77,641
1,047,433 449,901,622 23,127,513 1,145,343,708 12,570,679 168,123 94,236,867 4,886,879 384,617,264 -
4,945,463 (411,525,037) 7,165,643 388,668,416 8,320,087 6,161,019$ 132,613,452$ 35,180,035$ 1,918,629,388 20,890,766$ 449,328
1,919,078,716$
June 30, 2024
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
DRAFT

See accompanying notes to basic financial statements
48 Electric Water Sewer
Utility Utility Utility
Operating revenues:

Charges for services 656,147,118$ 57,051,908$ 44,530,605$ Rents, royalties and licensing - - - Insurance refunds and other - - - Mandated program receipts 20,120,470 - - Renewable energy credits 10,502,295 - - Wholesale resource sales 11,470,683 - - Other 43,225,175 - - Total operating revenues 741,465,741 57,051,908 44,530,605 Operating expenses:

Salaries and benefits 60,073,452 7,489,714 3,923,106 Materials, services and supplies 475,459,245 48,560,558 28,688,090 General and administrative - - - Mandated program disbursements 6,179,170 - - Wholesale resources purchases 9,785,427 - - Amortization- Right to use assets 1,158,632 - - Depreciation 27,322,314 1,927,329 1,382,392 Total operating expenses 579,978,240 57,977,601 33,993,588 Operating income (loss) 161,487,501 (925,693) 10,537,017 Nonoperating revenues (expenses):

Interest revenue 13,871,450 621,481 2,194,821 Net change in the fair value of investments 8,702,128 733,792 2,100,610 Rents and royalties 3,484,588 56,610 56,610 Other revenue 39,365,830 406,022 4,203,751 Interest expense (2,206,422) - (1,557,125) Other expense - - (550,331) Equity in income (losses) of joint ventures (635,169) - 19,190,920 Gain (loss) on retirement of assets - 1,071 - Total nonoperating revenues (expenses) 62,582,405 1,818,976 25,639,256 Income (loss) before
contributions and transfers 224,069,906 893,283 36,176,273 Contributions - - - Transfers in (Note 8A) 376,500 218,118 113,266 Transfers (out) (Note 8A) (2,885,902) (832,275) (158,795) Change in net position 221,560,504 279,126 36,130,744 Total net position - beginning 1,071,295,086 76,427,122 338,982,300 GASB 87 implementation (Note 6E) - - - Total net position - beginning as adjusted (Note 6E) 1,071,295,086 76,427,122 338,982,300 Total net position - ending 1,292,855,590$ 76,706,248$ 375,113,044$ 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, 2024

Statement of Revenues, Expenses, and Changes in Fund Net Position DRAFT

See accompanying notes to basic financial statements
49 Water Santa Clara Non-Major
Recycling Stadium Authority Enterprise Internal Service Utility (as of March 31, 2024)
restated (Note 6) Funds Total Funds
8,668,005$ 40,611,283$ 59,159,905$ 866,168,824$ 39,278,769$ - 40,496,522 - 40,496,522 - - - - - 193,973 - - - 20,120,470 - - - - 10,502,295 - - - - 11,470,683 - - - 561,112 43,786,287 - 8,668,005 81,107,805 59,721,017 992,545,081 39,472,742 867,765 - 2,675,931 75,029,968 8,396,743 8,090,909 59,885,259 53,683,823 674,367,884 13,636,273 - 2,033,263 - 2,033,263 12,789,818 - - - 6,179,170 - - - - 9,785,427 - - - - 1,158,632 713,293 25,141 17,438,287 1,566,634 49,662,097 2,473,907 8,983,815 79,356,809 57,926,388 818,216,441 38,010,034 (315,810) 1,750,996 1,794,629 174,328,640 1,462,708 58,652 18,819,490 232,992 35,798,886 - 175,782 - - 11,712,312 - - - 11,466 3,609,274 - 128,606 - - 44,104,209 2,036,276 - (11,690,232) - (15,453,779) (40,662) - - - (550,331) - - - - 18,555,751 - - - - 1,071 (30,107) 363,040 7,129,258 244,458 97,777,393 1,965,507 47,230 8,880,254 2,039,087 272,106,033 3,428,215 - 3,467,625 - 3,467,625 - - - 847,864 1,555,748 4,955,105 (177,258) - (27,443) (4,081,673) (555,904) (130,028) 12,347,879 2,859,508 273,047,733 7,827,416 6,291,047 111,520,156 32,320,527 13,063,350 - 8,745,417 - - 6,291,047 120,265,573 32,320,527 13,063,350 6,161,019$ 132,613,452$ 35,180,035$ 20,890,766$ (2,068,210)
270,979,523$
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, 2024

DRAFT

See accompanying notes to basic financial statements
50 Electric Water Sewer
Utility Utility Utility

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 668,767,150$ 56,268,434$ 44,310,904$ Payments to suppliers (465,537,231) (46,305,916) (29,405,529) Payments to employees for salaries and benefits (56,790,537) (6,838,553) (3,667,375) Internal activity - payments to other funds - - - Claims paid - - - Rents, royalties and licenses received 4,543,348 53,879 53,879 Other receipts (payments) 48,902,208 (261,498) 3,830,543 Renewable energy credits 10,502,295 - - Wholesale resource sales 11,470,683 - - Wholesale resources purchases (9,785,427) - - Resource trading escrow deposit 1,677,372 - - Charges for joint project contributions - - (13,099,087) Net cash provided (used) by operating activities 213,749,861 2,916,346 2,023,335

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
(Increase) in due from other funds (807,346) (342,982) (161,693) Increase in due to other funds - - - Deposits to (withdraws from) pension rate stabilization fund 3,741,829 667,520 373,208 Transfers in 376,500 218,118 113,266 Transfers (out) (2,885,902) (832,275) (158,795) Cash Flows from Noncapital Financing Activities 425,081 (289,619) 165,986

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Contribution from Community Facilities District - - - Acquisition and construction of capital assets, net (63,780,946) (3,495,175) (6,250,530) Proceeds from sale of assets - 1,071 - Proceeds from debt - - 34,585,000 Premium on issuance of debt - - 1,367,609 Cost of issuance - - (550,331) Principal payments on capital debt (16,292,173) - (20,798,120) Interest paid on capital debt (2,555,621) - (909,865) Cash Flows from Capital and Related
Financing Activities (82,628,740) (3,494,104) 7,443,763

CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in the fair value of investments 8,702,128 733,792 2,100,610 Interest and dividends 11,877,286 568,570 1,948,611 Fiscal agent investment sales 17,593,392 - - Fiscal agent investment purchases (17,992,362) - - Cash Flows from Investing Activities 20,180,444 1,302,362 4,049,221

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS
For the year ended June 30, 2024
Business-type Activities-Enterprise Funds

Statement of Cash Flows
DRAFT

See accompanying notes to basic financial statements
51 Water Santa Clara Non-Major
Recycling Stadium Authority Enterprise Internal Service Utility (as of March 31, 2024) Funds Totals Funds
8,109,065$ 41,368,043$ 57,866,548$ 876,690,144$ 39,322,277$ (7,894,410) (38,995,500) (52,234,959) (640,373,545) (14,829,607) (873,547) - (2,200,682) (70,370,694) (8,095,531) - - - - (405,304) - - - - (11,139,607) - 47,106,805 11,466 51,769,377 - 63,806 - 560,272 53,095,331 2,036,276 - - - 10,502,295 - - - - 11,470,683 - - - - (9,785,427) - - - - 1,677,372 - - - - (13,099,087) - (595,086) 49,479,348 4,002,645 271,576,449 6,888,504 - - - (1,312,021) (3,644) - 330,234 - 330,234 1,275,886 64,800 - - 4,847,357 - - - 847,864 1,555,748 4,955,105 (177,258) - (27,443) (4,081,673) (555,904) (112,458) 330,234 860,199 1,379,423 5,671,443 - 2,840,331 - 2,840,331 - - (7,079,493) (735,235) (81,341,379) (3,681,678) - - - 1,071 - - - - 34,585,000 - - - - 1,367,609 - - - - (550,331) - - (16,606,911) - (53,697,204) (800,003) - (12,076,707) - (15,542,193) (40,662) - (32,922,780) (735,235) (112,337,096) (4,522,343) 175,782 - - 11,712,312 - 63,804 5,803,963 232,992 20,495,226 - - (28,306,155) - (10,712,763) - - 36,661,687 - 18,669,325 - 239,586 14,159,495 232,992 40,164,100 - (continued)

STATEMENT OF CASH FLOWS
For the year ended June 30, 2024

CITY OF SANTA CLARA

PROPRIETARY FUNDS
Business-type Activities-Enterprise Funds

DRAFT
See accompanying notes to basic financial statements

52 Electric Water Sewer
Utility Utility Utility
Net increase (decrease) in cash and cash
equivalents 151,726,646 434,985 13,682,305
Cash and cash equivalents at beginning of period 467,379,902 27,216,430 89,435,012 Cash and cash equivalents at end of period 619,106,548$ 27,651,415$ 103,117,317$ Cash and cash equivalents:

Pooled cash and investments 609,040,674$ 25,420,688$ 102,158,565$ Restricted cash 10,065,874 2,230,727 958,752
Total cash and cash equivalents 619,106,548$ 27,651,415$ 103,117,317$ Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:

Operating income (loss) 161,487,501$ (925,693)$ 10,537,017$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:
(Decrease) Increase in lease and SBITA obligation (34,360) - - (Decrease) Increase in due to OPEB system (404,151) (89,024) (42,300) (Decrease) Increase in due to retirement system 3,230,418 702,886 197,534 Depreciation 28,480,946 1,927,329 1,382,392
Change in assets and liabilities:

Receivables, net (30,948,216) (769,353) (219,337)
Inventory (3,539,456) 132,015 -
Restricted Cash (3,741,829) (667,520) (373,208)
Accrued liabilities 14,234,570 2,108,870 (717,439)
Long-term portion estimated claims - - -
Compensated absences 456,648 37,299 100,497
Unearned revenue - - -
Other receipts 42,850,418 459,537 4,257,266
Wholesale trading escrow deposit 1,677,372 - -
Charges for joint project contributions - - (13,099,087) Net cash provided (used) by operating activities 213,749,861$ 2,916,346$ 2,023,335$ NONCASH TRANSACTIONS:

Joint Ventures
Nonoperating income (loss) (635,169)$ -$ 19,190,920$ -$ -$ -$
729,014$ -$ -$
(729,014)$ -$ -$
Addition of SBITA Asset
Issuance of SBITA Liability
Capital Contribution
For the year ended June 30, 2024
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS
DRAFT

See accompanying notes to basic financial statements
53 Water Santa Clara Non-Major
Recycling Stadium Authority Enterprise Internal Service Utility (as of March 31, 2024) Funds Totals Funds
(467,958) 31,046,297 4,360,601 200,782,876 8,037,604 7,096,078 66,012,284 23,671,028 680,810,734 43,757,149 6,628,120$ 97,058,581$ 28,031,629$ 881,593,610$ 51,794,753$ 6,459,997$ 18,485,558 $ 25,733,041$ 787,298,523$ 51,794,753$ 168,123 78,573,023 2,298,588 94,295,087 - 6,628,120$ 97,058,581$ 28,031,629$ 881,593,610$ 51,794,753$ (315,810)$ 1,750,996$ 1,794,629$ 174,328,640$ 1,462,708$ - 7,745,256 - 7,710,896 713,294 (6,218) - (21,950) (563,643) (39,095) (454) - 327,148 4,457,532 262,976 25,141 17,438,287 1,566,634 50,820,729 2,473,907 (558,942) 657,660 (364,392) (32,202,580) 39,529 - - - (3,407,441) (1,501,939) (64,800) - - (4,847,357) - 196,501 22,428,022 1,448,864 39,699,388 322,517 - - - - 1,041,000 890 - 170,051 765,385 77,331 - (540,873) (929,805) (1,470,678) - 128,606 - 11,466 47,707,293 2,036,276 - - - 1,677,372 - - - - (13,099,087) - (595,086)$ 49,479,348$ 4,002,645$ 271,576,449$ 6,888,504$ -$ -$ -$ 18,555,751$ -$ -$ 3,467,625$ -$ 3,467,625$ -$ -$ -$ -$ 729,014$ -$ -$ -$ -$ (729,014)$ -$ For the year ended June 30, 2024
Business-type Activities-Enterprise Funds

CITY OF SANTA CLARA

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS

DRAFT

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DRAFT

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.

DRAFT

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) 1,556,057$ 945,303$ Receivables (net of allowance for uncollectibles):

Interest and rent 195,975 -
Leases receivable (Note 22) 896,947 -
Total current assets 2,648,979 945,303
Noncurrent assets
Leases receivable-noncurrent (Note 22) 41,927,423 - Investment with fiscal agent-noncurrent-noncurrent (Note 7) 2,902,022 - Land held for resale 532,542 -
Total noncurrent assets 45,361,987 -
Total Assets 48,010,966 945,303

LIABILITIES
Accrued liabilities - 1,100 Unearned revenues 122,008 -
Due to other agencies 740,000 -
Total Liabilities 862,008 1,100

DEFERRED INFLOWS OF RESOURCES
Leases related (Note 22) 40,393,601 -
Total deferred inflows of resources 40,393,601 -

NET POSITION
Held in trust for private purpose 3,721,814 - Restricted for individuals, organization and other governments 3,033,543 944,203 Total Net Position 6,755,357$ 944,203$

CITY OF SANTA CLARA

FIDUCIARY FUNDS

STATEMENT OF FIDUCIARY NET POSITION
June 30, 2024

DRAFT

See accompanying notes to basic financial statements
57 Statement of Fiduciary Net Position

Private Purpose Custodial
Trust Funds Funds

ADDITIONS
Contributions:

Employee contributions -$ 63,557$ Other plans - 3,281,253
Gifts and bequest - 1,740
Total contributions - 3,346,550 Investment income:

Net change in fair value of investments 129,146 - Interest and rents 3,725,137 8,012
Net investment income 3,854,283 8,012
Total additions 3,854,283 3,354,562

DEDUCTIONS
General and administrative 109,464 83,063 Benefits paid - 56,059
Pass through to the Stadium Authority - 3,105,273 Pass through to the County of Santa Clara 2,920,000 - Total deductions 3,029,464 3,244,395
824,819 110,167
Net position - beginning 5,930,538 834,036
Net position - ending 6,755,357$ 944,203$

CITY OF SANTA CLARA

FIDUCIARY FUNDS

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
For the Year Ended June 30, 2024
Net increase (decrease) in fiduciary net
position
DRAFT

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DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024

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 the 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 132,048 accounts for 6.95% 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 for 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 responsibility 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 DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
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 development 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 ended March 31, 2024. 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

ACCOUNTING POLICIES
A. Basic Financial Statements
The City's Basic Financial Statements are prepared in conformity with accounting principles generally accepted 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 DRAFT

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NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
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, liabilities 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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
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 financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on 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, financing through leases, and issuance of subscription liabilites are reported as other financing sources.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
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, 2024, the City implemented the following GASB Statements:

The GASB issued Statement No. 100, Accounting Changes and Errors Corrections . The objective of this statement is to establish accounting and financial reporting requirements for (a) accounting changes and (b) the correction of an error in previously issued financial statements. The provisions of this Statement were implemented during fiscal year 2024. The implementation required a change to the disclosure in Note 6.

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

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.

The GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. This statement is effective for fiscal years beginning after June 15, 2024. The City is currently evaluating the impact on the financial statements.

The GASB issued Statement No. 103, Financial Reporting Model Improvements . The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This statement is effective for fiscal years beginning after June 15, 2025. The City is currently evaluating the impact on the financial statements.

The GASB issued Statement No. 104, Disclosure of Certain Capital Assets. The objective of this Statement is to provide users of government financial statements with essential information about certain types of capital assets. This statement is effective for fiscal years beginning after June 15, 2025. 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 investment purposes. Unless there are specific legal or contractual requirements to do otherwise, interest earnings are apportioned among funds according to average monthly cash and investment balances. It is generally the City's intention to hold investments until maturity. City investments are stated at fair value (see Note 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 DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

64 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 services 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 cost. 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.

G. Restricted Assets
Restricted assets are monies or other resources, the use of which is restricted by legal or contractual requirements.

H. Land Held for Development
The Santa Clara Housing Successor, through execution of an assignment and assumption agreement with the City 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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

65 I. Capital Assets
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available except for intangible right-to-use lease assets, the measurement of which is discussed in Note 2X below, and right-to-use subscription assets, the measurement of which is described in Note 2J 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 assets 3-25 400,000
Infrastructure 10-50 20,000
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 right 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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

66 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.

K. Joint Ventures
The City participates in several joint ventures. In accordance with GAAP investments in these joint ventures are 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 with expendable available financial resources are reported in the Governmental Activities portion of the DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

67 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, 2024. The long-term portion of governmental activities compensated absences is liquidated primarily by the General Fund.

Governmental Business-Type
Activities Activities Total
Beginning Balance 20,664,568$ 7,691,320$ 28,355,888$ Additions 2,686,089 1,270,655 3,956,744 Payments (1,142,849) (505,270) (1,648,119) Ending Balance 22,207,808$ 8,456,705$ 30,664,513$ Current Portions 1,517,925$ 578,025$ 2,095,950$

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 $1 billion. The City maintains boiler and machinery property coverage of $100 DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

68 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 $20 million through PRISM.

The City also had property coverage specific to the electric power plants which has a plan limit of $250 million.

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 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 four items that qualify for reporting in this category: deferred outflows related to the derivative instruments, refunding of debt, pension, and OPEB.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

69 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.

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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

70 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, 2024, was $61 billion, an increase of 7.0% 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.

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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

71 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 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. During the current fiscal year, the City has not engaged in any sublease transactions, sale-leaseback arrangements, or lease-leaseback agreements.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

72 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.

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, 2024, conditional grants of $24,257,245 were offset by reserves of $10,035,548.

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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 2 – FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

73 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, 2024, the balance of the Vehicle Registration Fees are as follows:

Vehicle Registration
Fee
Beginning Balance July 1, 2023 3,498,667$
Intergovernmental revenue 981,645
Interest 67,593
Expenditures (1,011,440)
Ending Balance June 30, 2024 3,536,465$

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 proposed 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 comments.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 3 – BUDGETS AND BUDGETARY ACCOUNTING (continued)

74 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.

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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 4 – LEASE AGREEMENTS (continued)

75 The balances related to leases receivable and deferred inflows of resources as of June 30, 2024 are:

Leases Receivable
Deferred Inflow of
Resources
Governmental activities
General Fund 251,591,700$ 245,748,566$
Business-type activities
Electric Utility 2,112,910$ 1,997,165$
Water Utility 908,045 831,430
Sewer Utility 908,045 831,430
Stadium Authority (as of March 31, 2024) 594,217,262 578,569,323 598,146,262$ 582,229,348$
Total leases receivable 849,737,962$ 827,977,914$

A discussion 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 $27,768 in lease revenue and $16 in interest revenue for Peddler’s Plaza, $1,397,335 in lease revenue and $2,198 in interest revenue for Commerce Plaza, during the current fiscal year related to these two leases.

Both leases expired in May 2024 and were not extended beyond twelve months. As of June 30, 2024, the C
ity’s receivable for lease payments and the deferred inflow of resources associated with leases are zero.

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 DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 4 – LEASE AGREEMENTS (continued)

76 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, 2024, the City recognized $1,313,233 in lease revenue and $2,106,631 in interest revenue for Parcel 1 and $633,168 in lease revenue and $1,015,700 in interest revenue for Parcel 3. As of June 30, 2024, the City’s receivable for lease payments for Parcel 1 was $91,882,951 and the balance of the deferred inflows of resources was $89,737,617. The City’s receivable for lease payments for Parcel 3 was $44,300,828 and the balance of the deferred inflows of resources was $43,266,468.

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 (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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 4 – LEASE AGREEMENTS (continued)

77 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, 2024, the City recognized $107,932 in lease revenue and $6,001 in interest revenue. As of June 30, 2024, the City’s receivable for lease payments was $473,257 and the balance of the deferred inflows of resources was $494,691.

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, 2024, the City recognized $327,695 in lease revenue and $88,691 in interest revenue. As of June 30, 2024, the City’s receivable for lease payments was $3,739,402 and the balance of the deferred inflows of resources was $3,550,031.

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 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, 2024, the City recognized $26,174 in lease revenue and $5,003 in interest revenue. As of June 30, 2024, the City’s receivable for lease payments was $436,607 and the balance of the deferred inflows of resources was $434,054.

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 DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 4 – LEASE AGREEMENTS (continued)

78 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, 2024, the City recognized $432,590 in lease revenue and $1,871,363 in interest revenue for Phase 1-A, recognized $380,247 in lease revenue and $1,644,931 in interest revenue for Phase 1-B, recognized $173,693 in lease revenue and $751,388 in interest revenue for Phase 1-C. As of June 30, 2024, the City’s receivable for lease payments was $42,785,031 and the balance of the deferred inflows of resources was $42,163,552 for Phase 1-A, the lease receivable $37,608,110 and the balance of the deferred inflows of resources was $37,061,830 for Phase 1-B, the lease receivable $17,179,016 and the balance of the deferred inflows of resources was $16,929,480 for Phase 1-C.

F. Future Lease Payments
As of June 30, 2024, 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:

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 4 – LEASE AGREEMENTS (continued)
79 For the Year
Ending June 30 Principal Interest Principal
(1)
Interest
2025 $ 1,635,317$ 4,270,218$ 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 1,761,411 4,410,016 374,801 63,300
2030-2034 9,866,117 23,513,808 1,000,952 217,567
2035-2039 10,144,323 23,984,081 1,122,709 89,445
2040-2044 9,823,424 26,452,489 62,098 296
2045-2049 7,258,765 30,533,165 - -
2050-2054 7,757,603 33,158,032 - -
2055-2059 8,693,749 36,472,461 - -
2060-2064 9,737,690 40,419,958 - -
2065-2069 10,919,096 45,261,627 - -
2070-2074 12,236,867 50,225,267 - -
2075-2079 13,713,698 57,578,988 - -
2080-2084 15,366,846 64,433,349 - -
2085-2089 17,224,481 73,814,801 - -
2090-2094 12,623,086 84,281,008 - -
2095-2099 - 98,027,203 - -
2100-2104 - 115,096,629 - -
2105-2109 - 134,664,798 - -
2110-2114 - 158,113,909 - -
2115-2119 1,659,699 183,335,968 - -
2120-2124 95,912,457 5,382,069 - -
251,591,700$ 1,306,542,684$ 3,929,000 $ 702,657 $
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. (excluding Santa Clara
Stadium Authority)
NOTE 5 - ENTERPRISE FUND MANAGEMENT AGREEMENTS
A. Santa Clara Convention Center
Du
ring 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 DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 5 – ENTERPRISE FUND MANAGEMENT AGREEMENTS (continued)

80 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 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, 2024, the City paid Spectra $171,494 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. 2024, the City paid Levy $341,586 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 Agreements
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 Forty Niners SC Stadium Company LLC (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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 6 – SANTA CLARA STADIUM AUTHORITY (continued)

81 The Stadium Management Agreement also authorizes ManagementCo to pay for services related to the Stadium operations on behalf of the SCSA. For the year ended March 31, 2024, ManagementCo charged the SCSA $8.6 million in Shared Expenses, and $8.5 million in Other Operating and Management Expenses.

C. 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 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. The SCSA paid the City $495 thousand in ground rent in fiscal year ended March 31, 2024.

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 $8.8 million and $8.3 million for fiscal year ended March 31, 2023 and 2024, which triggers the performance-based rent. However, in the prior fiscal year the Stadium Authority did not pay the City any performance-based rent because there remained disputes and pending arbitration with StadCo as to potential credits that needed to be deducted from a performance- based rent amount due public safety costs in excess of a disputed threshold. The 2024 Settlement Agreement will resolve those disputes. The $7.3 million in performance-based rent due to the City for both fiscal years were accrued in fiscal year ended March 31, 2024. However, the payment to the City will not occur until the Final Effective Date of the 2024 Settlement Agreement. More details on the litigation are included in Note 20E.

The following schedule summarizes the minimum future payments due under this lease:

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 6 – SANTA CLARA STADIUM AUTHORITY (continued)

82 Fiscal Year Ground Lease
Ending March 31 Amount
2024 1,000,000$
2025 1,000,000
2026 1,000,000
2027 1,000,000
2028 1,000,000
Thereafter 32,500,000
Total 37,500,000$

D. 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.

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 thousand. 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, 2020. 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 $24.8 million in stadium rent from StadCo for the fiscal years ended March 31, 2024.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 6 – SANTA CLARA STADIUM AUTHORITY (continued)

83 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. Refer to the Stadium Authority Financial Statements, Note 10.

E. Prior Year Correction
During the financial reporting process for March 31, 2024, the Stadium Authority reviewed the accounting and reporting for the GASB 87, Leases, implementation for the ground lease and the stadium lease as of April 1, 2022 and identified errors related to the accumulated deferred rent liability and interest expense and interest revenue calculations as of March 31, 2023. The Stadium Authority determined these to be immaterial corrections of prior year errors and has revised the March 31, 2023 applicable accounts. The beginning net position for fiscal year 2023-24 was increased by $8.7 million from $111.5 million to $120.3 million.

The statement of net position for fiscal year 2022-23 was adjusted as follows:

FY 2023
previously
reported
GASB 87
restatement
FY 2023
restated
Current assets:

Accounts receivable $ 18,994,260 $ 1,100,694 $ 20,094,954 Total change in assets $ 1,100,694
Current liabilities:

Accrued liabilities $ 1,852,581 $ (495,000) 1,357,581
Noncurrent liabilities:

Long-term accrued liabilities 7,149,723 (7,149,723) -
Total change in liabilities $ (7,644,723)
Net position:

Unrestricted deficit (412,098,738) 8,745,417 (403,353,321) Total changes in liabilities and
net position 1,100,694

The statement of revenues, expenses and changes in net position for fiscal year 2022-23 was adjusted as follows:

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 6 – SANTA CLARA STADIUM AUTHORITY (continued)
84 FY 2023
previously
reported
GASB 87
restatement
FY 2023
restated
Operating revenues:

Rents, royalties and licesing $ 38,532,268 $ (460,000) $ 38,072,268 Operating expenses:

Materials, services, and supplies 2,751,739 (979,044) 1,772,695 Total change in operating income 519,044
Nonoperating revenues (expenses):

Interest revenue 18,178,056 581,650 18,759,706
Total change in net position 1,100,694
Net position - beginning of period 80,721,961 7,644,723 88,366,684 Net position - end of period $ 111,520,156 8,745,417 120,265,573 F. Ground Lease 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 in its financial statements. For the year ended March 31, 2024, the SCSA recognized $29.3 million in lease liability, $27.1 million in intangible right-to-use lease asset and $774 thousand in interest payable in the statement of net position, and $495 thousand in leases expenses, $798 thousand in depreciation expense and $652 thousand 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, SCSA Enterprise Fund has 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 $3.0 million. The related lease 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 $955 thousand.

G. Subsequent Event
On May 23, 2024, the Stadium Authority, the City, StadCo, and ManagementCo entered into the 2024 Settlement Agreement that resolved pending arbitration and disputes regarding the complementary SBL buffet costs and NFL public safety cost arbitration, as well as other miscellaneous terms and matters. The 2024 Settlement Agreement includes amendments to the Ground Lease and Stadium Lease. Those lease amendments, which have already been signed and approved by Stadium Authority Board, City Council, StadCo, and ManagementCo, need to be approved by the NFL and the Lenders. Once the NFL and Lenders approve the lease amendments, the 2024 Settlement Agreement will have a Final Effective Date, and the settlement terms can be implemented. To date, the NFL has approved the lease amendments. As part of the settlement, the Stadium Authority agreed to recognize the $902 thousand complimentary SBL buffet expense for fiscal year 2021-22 and $14.7 million of NFL public safety costs over the threshold for fiscal years 2017-18 through 2023-24. The settlement of the NFL public safety cost disputes DRAFT
85 CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 6 – SANTA CLARA STADIUM AUTHORITY (continued)
will also allow for the payment of the performance- based rent from the Stadium Authority to the City in the amount of $7.3 million for fiscal years 2022-23 and 2023-24 after the Final Effective Date of the 2024 Settlement Agreements.

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 $1,383.3 million as of June 30, 2024. This amount includes the City’s pooled cash and cash investments of $1,335.6 million, and cash and investments with fiscal agents of $47.7 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 1,197,588,786$
Investments with fiscal agent - current 32,555,629
Restricted cash 126,058,194
Deposits 9,449,807
Investments with fiscal agent - noncurrent 12,281,776
Fiduciary Funds
Pooled cash and investments 2,501,360
Investments with fiscal agent - current 2,902,022
Total Cash and Investments 1,383,337,574$
DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 7 – CASH AND INVESTMENTS (continued)

86 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 358,495,510$ 787,298,523$ 51,794,753$ 2,501,360$ 1,200,090,146$ Investments with fiscal
agent - current 48,901 32,506,728 - - 32,555,629 Restricted cash 31,763,107 94,295,087 - - 126,058,194 Investments with fiscal
agent - noncurrent 719,134 11,562,642 - 2,902,022 15,183,798 Deposits - 9,449,807 - - 9,449,807 Total cash and
investments 391,026,652$ 935,112,787$ 51,794,753$ 5,403,382$ 1,383,337,574$

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:

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 7 – CASH AND INVESTMENTS (continued)

87 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
ratings
categories
80%(B) 40%
Negotiable Certificates of Deposit 5 years A / A-1 30% 5% Bankers Acceptances 180 days N/A 25% 5%
Commercial Paper 270 days A / A-1 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 A 20% 5%
Medium Term Corporate Notes 5 years A/A- 25% 5%(C)
Mutual Funds / Money Market Funds N/A Top rating
category
20% 10%
Joint Powers Authority Investment Pools N/A N/A 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 and Collateralized
Mortgage Obligations 6-12 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.

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 time of purchase for Mortgage-Backed Securities (MBS) and 6 years at time of purchase for collateralized mortgage obligations (CMO). Maximum Final Maturity for MBS's and CMOs = 30 years with balloon payments.
(C) No more than 10% of the outstanding commercial paper and medium term coporate notes of any single issuer.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 7 – CASH AND INVESTMENTS (continued)

88 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.

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.

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 DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 7 – CASH AND INVESTMENTS (continued)

89 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, 2024 was approximately 2.13 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 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, 2024 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 124,819,760$ -$ -$ -$ -$ 124,819,760$ US Treasury Notes Aaa 17,541,803 14,942,542 161,806,789 293,388,379 - 487,679,513 Federal Farm Credit Bank Aaa 4,935,600 26,352,674 9,534,000 - - 40,822,274 Federal Home Loan Bank Aaa 4,940,800 - - - - 4,940,800 Federal National Mortgage Association Aaa - 17,002,650 1,752,585 - - 18,755,235 Federal Home Loan Mortgage Corporation Aaa - 4,884,950 13,820,277 4,223,733 - 22,928,960 Federal Home Loan Mortgage Corporation
Mortagage-Backed Securities Aaa - - 23,290,112 35,235,371 - 58,525,483 Corporate Notes Aaa - 4,917,900 9,720,871 - - 14,638,771 Corporate Notes Aa - 15,467,849 29,524,919 3,259,824 - 48,252,592 Corporate Notes A - 31,768,585 49,614,792 48,872,169 - 130,255,546 Corporate Notes BBB+ (A) - 2,502,118 - - - 2,502,118 Asset-Backed Securities Aaa - - 11,958,835 51,598,372 - 63,557,207 Certificates of Deposit A & A+ 7,269,709 - 7,574,175 - - 14,843,884 Money Market Funds (CAMP Pool) AAAm 201,720,060 - - - - 201,720,060 Money Market Funds (CAMP Term) AAAf 40,000,000 - - - - 40,000,000 Principal Public Deposit Sweep Program Not Rated 211,384 - - - - 211,384 State Investment Pool (LAIF) Not Rated 5,934,524 - - - - 5,934,524 Total Cash and Investments -
City Treasury 407,373,640 117,839,268 318,597,355 436,577,848 - 1,280,388,111 Cash (Debt Fund) N/A 6,414,375 - - - - 6,414,375 Cash (Pension Rate Stabilization Investment) N/A 12,006 - - - - 12,006 U.S. Treasury Notes
(Bentzien Trust) Aaa 34,867 - - 49,434 147,467 231,768 Federal Home Loan Bank
(Bentzien Trust) Aaa - 49,030 69,597 98,140 137,907 354,674 Municipal Notes (Bentzien Trust) Aaa - - 73,207 - 74,436 147,643 Municipal Notes (Bentzien Trust) Aa 49,925 - 36,252 31,893 69,497 187,567 Municipal Notes (Bentzien Trust) A - - 46,944 - - 46,944 Municipal Notes (Bentzien Trust) BBB - - 9,009 - - 9,009 Corporate Notes (Bentzien Trust) A - - - 58,726 - 58,726 Corporate Notes (Bentzien Trust) BBB 34,971 - 34,367 35,309 - 104,647 Corporate Stock (Bentzien Trust) A & B 991,804 - - - - 991,804 Corporate Stock (Bentzien Trust) C 7,360 - - - - 7,360 (continued)
Maturity
Cash and Investments - Other:

Cash and Investments - City Treasury:

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 7 – CASH AND INVESTMENTS (continued)

90 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 2,349,205 - - - - 2,349,205 Mutual Fund - Blackrock Money Market (Debt Fund) Aaam 768,035 - - - - 768,035 Mutual Fund - JP Morgan Mutual Fund
(Debt Fund) Aaam 10,182,510 - - - - 10,182,510 Mutual Fund - Money Market Funds (Debt Fund) Aaam 26,407 - - - - 26,407 Mutual Fund - International
Equities (Bentzien Trust) Not Rated 175,252 - - - - 175,252 Mutual Fund - Fixed Income
(Bentzien Trust) Not Rated 637,559 - - - - 637,559 Mutual Fund - Equities
(Bentzien Trust) Not Rated 158,612 - - - - 158,612 Exchange Traded Funds
(Bentzien Trust) Not Rated 27,345 - - - - 27,345 Mutual Fund- Money Market
(Bentzien Trust) Not Rated 337,527 - - - - 337,527 Mutual Fund - Fidelity Treasury
(SCSA Debt Fund) Not Rated 11,536,236 - - - - 11,536,236 Morgan Stanley Institutional Liquidity
Treasury Securities (SCSA Debt Fund) Not Rated 15,909,843 - - - - 15,909,843 Pension Rate Stabilization Investment
(Cash Equivalents)) Not Rated 1,764,531 - - - - 1,764,531 Pension Rate Stabilization Investment
(Mutual Funds-Equity) Not Rated 12,902,121 - - - - 12,902,121 Pension Rate Stabilization Investment
(Mutual Funds-Fixed Income) Not Rated 28,138,512 - - - - 28,138,512 Real Estate Investment Trust (Bentzien Trust) B++ 19,438 - - - - 19,438 Collateral Obligations (ADM & CAISO) Not Rated (B) 9,449,807 - - - - 9,449,807 101,928,248 49,030 269,376 273,502 429,307 102,949,463 Total Cash and Investments 509,301,888$ 117,888,298$ 318,866,731$ 436,851,350$ 429,307$ 1,383,337,574$ Note:
(A) The investment in the corporate notes were rated A+ and in compliance with the City's investment policy when purchased. (B) Investments are not rated by S&P, but are rated by Moody's and Fitch, and have ratings in compliance with the City's investment policy.

Total Cash and Investments - Other
Maturity
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.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
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
6/30/2024 Level 1 Level 2 Exempt (1)
Investments by Fair Value Level
U.S. Treasury Notes 487,679,513$ 487,679,513 $ -$ -$ Federal Farm Credit Bank 40,822,274 - 40,822,274 - Federal Home Loan Bank 4,940,800 - 4,940,800 - Federal National Mortgage Association 18,755,235 - 18,755,235 - Federal Home Loan Mortgage Corporation 22,928,960 - 22,928,960 - Federal Home Loan Mortgage Corporation
Mortagage-Backed Securities 58,525,483 - 58,525,483 - Corporate notes 195,649,027 - 195,649,027 - Asset-Backed Securities 63,557,207 - 63,557,207 - Certificates of Deposit 14,843,884 - 14,843,884 - Money Market Funds (CAMP Pool) 201,720,060 - - 201,720,060 Money Market Funds (CAMP Term) 40,000,000 - - 40,000,000 Principal Public Deposit Sweep Program 211,384 - - 211,384 Total Short Term Investments 1,149,633,827 487,679,513 420,022,870 241,931,444 U.S. Treasury Notes (Bentzien Trust) 231,768 231,768 - - Federal Home Loan Bank (Bentzien Trust) 354,674 - 354,674 - Municipal Notes (Bentzien Trust) 147,643 - 147,643 - Municipal Notes (Bentzien Trust) 187,567 - 187,567 - Municipal Notes (Bentzien Trust) 46,944 - 46,944 - Municipal Notes (Bentzien Trust) 9,009 - 9,009 - Corporate Notes (Bentzien Trust) 58,726 - 58,726 - Corporate Notes (Bentzien Trust) 104,647 - 104,647 - Mutual Fund - Dreyfus Money Market (Bond Proceeds) 2,349,205 - - 2,349,205 Mutual Fund - Blackrock Money Market (Debt Fund) 768,035 - - 768,035 Mutual Fund - JP Morgan Money Market Funds (Debt Fund) 10,182,510 - - 10,182,510 Mutual Fund - Money Market Funds (Debt Fund) 26,407 - - 26,407 (continued)
Fair Value Measurements Using
Short Term Investments
Debt Securities and Other

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 7 – CASH AND INVESTMENTS (continued)

92 Investments and
Derivative Instruments
Measured at Fair
Value
Quoted Prices in
Active Markets for
Identical Assets
Significant Other
Observable Inputs
6/30/2024 Level 1 Level 2 Exempt (1)
Mutual Fund - International Equities (Bentzien Trust) 175,252 175,252 - - Mutual Fund - Fixed Income (Bentzien Trust) 637,559 - 637,559 - Mutual Fund - Equities (Bentzien Trust) 158,612 - 158,612 - Mutual Fund- Money Market (Bentzien Trust) 337,527 - - 337,527 Mutual Fund - Fidelity Treasury (SCSA Debt Fund) 11,536,236 - - 11,536,236 Morgan Stanley Institutional Liquidity
Treasury Securities (SCSA Debt Fund) 15,909,843 - - 15,909,843 Pension Rate Stabilization Investment
(Cash and Equivalents)
1,764,531 1,764,531 - - Pension Rate Stabilization Investment
(Mutual Funds-Equity)
12,902,121 12,902,121 - - Pension Rate Stabilization Investment
(Mutual Funds-Fixed Income)
28,138,512 28,138,512 - - Collateral Obligations (ADM & CAISO) 9,449,807 - - 9,449,807 Total Debt Securities and Other 95,477,135 43,212,184 1,705,381 50,559,570 Corporate Stock (Bentzien Trust) 991,804 991,804 - - Corporate Stock (Bentzien Trust) 7,360 7,360 - - Exchange Traded Funds (Bentzien Trust) 27,345 27,345 - - Real Estate Investment Trust (Bentzien Trust) 19,438 19,438 - - Total Equity Securities 1,045,947 1,045,947 - - Total Investment by Fair Value Level 1,246,156,909 531,937,644 421,728,251 292,491,014 Investments Measured at fair value but not subject to fair value hierachy:

State Investment Pool (LAIF) 5,934,524 - - 5,934,524 Total Investments 1,252,091,433 531,937,644$ 421,728,251$ 298,425,538$ Cash in Banks 131,246,141
Total Cash and Investments 1,383,337,574$
Investments Derivative Instruments
Open contract power trading - Current Assets 673,783$ 673,783 Open contract power trading - Current Liabilities (7,708) (7,708) Open contract gas trading - Current Assets 6,446,180 6,446,180 Open contract gas trading - Non-current Assets 4,867,018 4,867,018 Total Investment Derivative Instruments 11,979,273$ 11,979,273$ (1) Accounts in exempt column are Mutual Fund-Money Market, Collateral Obligations, CAMP investments and Deposit Sweep Program 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 DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 7 – CASH AND INVESTMENTS (continued)

93 Standard & Poor’s Securities Evaluation Inc. The Market Approach uses prices and other relevant information 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.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 7 – CASH AND INVESTMENTS (continued)

94 J. California Asset Management Program
The City, as a CAMP shareholder, participates in both the CAMP Pool Portfolio and the CAMP Term Portfolio.

The CAMP Pool is fully liquid, stable net asset value (NAV) investment option with a competitive yield, while the CAMP Term is a fixed-rate, fixed term investment option that offers securities with maturities ranging from 60 days to one year. Investment principal and interest in the CAMP Term account are paid at maturity, with an automatic sweep into the CAMP Pool account. The CAMP Pool is managed to maintain a dollar- weighted average portfolio maturity of 60 days or less and seeks to maintain a constant NAV per share of $1.00. The CAMP Pool invests in obligations of the United States Government and its agencies, high-quality, short-term debt obligations of U.S. companies and financial institutions. The CAMP Term investments are based on a pool of open-market securities similar to those in the CAMP Pool. The investments are matched to the amount invested and maturities selected by the Shareholder.

The City may withdraw all or any portion of the funds in the CAMP Pool account at any time by redeeming shares. The City may withdraw all or a portion of the funds in the CAMP Term account in $10,000 increments prior to maturity, but there is a premature redemption penalty.

The CAMP Declaration of Trust permits the CAMP trustee to suspend the right of withdrawal from CAMP or to postpone the date of payment of redemption proceeds if the New York Stock Exchange is closed other than for customary weekend and holiday closings, if trading on the New York Stock Exchange is restricted, or if, in the opinion of the CAMP trustees, an emergency exists such that disposal of the CAMP pool securities or determination of its net asset value is not reasonably practicable. If the right of withdrawal is suspended, the City may either withdraw its request for that withdrawal or receive payment based on the net asset value of the CAMP pool next determined after termination of the suspension of the right of withdrawal. At June 30, 2024, the fair value approximated the City’s cost. At June 30, 2024, the CAMP Pool investments had an average maturity of 38 days.

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, 2024 were as follows:

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 8 – INTERFUND TRANSACTIONS AND BALANCES (continued) 95 Fund Receiving Transfers Fund Making Transfers Amount General Fund Non-Major Governmental 2,069,172$ A
Internal Service Funds 442,638 B
Electric Utility 349,749 C
Non-Major Governmental General Fund 16,597,660 D
Cemetery 822 E
Sewer Utility 108,795 E
Solid Waste 26,621 E
Water Utility 484,215 E
Electric Utility 1,363,648 E
Non-Major Governmental 12,304,080 F
Internal Service Funds General Fund 3,736,900 G
Electric Utility 1,172,505 H
Water Recycling Utility 9,140 I
Water Utility 36,560 I
Cemetery General Fund 796,000 J
Electric Utility Water Utility 311,500 K
Non-Major Governmental 65,000 K
Sewer Utility Internal Service Funds 113,266 L
Solid Waste General Fund 35,364 M
Water Utility Sewer Utility 50,000 N
Water Recycling Utility 168,118 N
Santa Clara Open Space Authority General Fund 16,500 O Total Interfund Transfers 40,258,253$
DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 8 – INTERFUND TRANSACTIONS AND BALANCES (continued)

96 The reasons for material transfers are set forth below:
(A) Transfer Storm Drain Customer service Fee from Storm Drain Capital Improvement Fund to cover the storm drain maintenance and return of the savings from capital project and special (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 and affordable housing related projects.
(G) Transfer to acquire Citywide communication equipments and the replacement of ambulances for Fire department.
(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 utility crew trucks. (J) Transfer to Cemetery fund to subsidize the cemetery operation. (K) Transfer fund to the Electric Utility fiber project for the utility yard building and water ground improvement project.
(L) Returning the savings 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 update the City's Water Supply Master Plan. (O) Transfer to Santa Clara Open Space Authority for the annual audit expenditures.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 8 – INTERFUND TRANSACTIONS AND BALANCES (continued)

97 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, 2024.

Receivable Fund Payable Fund Amount
General Fund Santa Clara Stadium Authority 223,091$
Receivable by Governmental Funds 223,091
Electric Utility Internal Service Funds 4,017,195
Water Utility Internal Service Funds 1,621,839
Sewer Utility Internal Service Funds 1,126,387
Cemetery Internal Service Funds 265,923
Receivable by Enterprise Funds 7,031,344 41,213
Internal Service Funds Internal Service Funds 41,213
Receivable by Internal Service Funds 41,213
Total 7,295,648$
Note: The City uses due to/due from as a balancing mechanism in funds with negative cash balances.

C. 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 negative $250,038 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).

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
98 NOTE 9 – CAPITAL ASSETS
A. Capital Assets Summary
Capital Assets at June 30, 2024 are comprised of:

Balance Retirements/ Balance
June 30, 2023 Additions Adjustments Transfers June 30, 2024 Governmental Activities
Non Depreciable Assets:

Land 124,518,835$ 5,400,270$ $ - $ - 129,919,105$
Construction in progress 39,004,798 28,612,245 - (8,979,387) 58,637,656 - - Total Non Depreciable Assets 163,523,633 34,012,515 - (8,979,387) 188,556,761 Capital assets being depreciated:

Land improvements 60,216,892 - - 222,929 60,439,821 Buildings 217,442,023 - - - 217,442,023
Infrastructure 633,178,793 4,060,170 - 8,577,639 645,816,602 Machinery & equipment 87,265,574 4,091,704 (1,868,353) 178,819 89,667,744 Right-to-use leased equipment 676,479 - - - 676,479 Right-to-use subscription based IT arrangement 10,598,994 2,078,197 - - 12,677,191 - -
Total Capital assets being depreciated 1,009,378,755 10,230,071 (1,868,353) 8,979,387 1,026,719,860 Less accumulated depreciation for:

Land improvements (21,162,146) (2,694,466) - - (23,856,612) Buildings (82,478,453) (4,234,694) - - (86,713,147) Infrastructure (345,369,268) (14,982,507) - - (360,351,775) Machinery & equipment (69,701,701) (3,471,490) 1,835,455 - (71,337,736) Right-to-use leased equipment (424,872) (212,435) - - (637,307) Right-to-use subscription based IT arrangement (1,652,970) (1,788,393) - - (3,441,363) - -
Total accumulated depreciation (520,789,410) (27,383,985) 1,835,455 - (546,337,940) - - Net Depreciable Assets 488,589,345 (17,153,914) (32,898) 8,979,387 480,381,920 - - Governmental Activity Net Capital Assets 652,112,978$ 16,858,601$ (32,898)$ -$ 668,938,681$ DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
99 NOTE 9 – CAPITAL ASSETS (continued)
Balance Retirements/ Balance
June 30, 2023 Additions Adjustments Transfers June 30, 2024 Business-Type Activities
Non Depreciable Assets:

Land 18,851,211$ $ - $ - $ - 18,851,211$
Construction in progress 74,309,714 77,772,913 (4,922,358) (54,518,606) 92,641,663 Total Non Depreciable Assets 93,160,925 77,772,913 (4,922,358) (54,518,606) 111,492,874 Capital Assets being depreciated:

Land Improvements 102,407 - - - 102,407
Buildings 918,503,578 3,963,548 - - 922,467,126 Infrastructure 1,262,015,271 - - 54,518,606 1,316,533,877 Machinery & equipment 28,405,915 1,643,239 (192,786) - 29,856,368 Right-to-use leased equipment 2,916,623 - - - 2,916,623 Right-to-use Subscription based IT arrangement 3,108,024 729,014 - - 3,837,038 - - Total Capital Assets being depreciated 2,215,051,818 6,335,801 (192,786) 54,518,606 2,275,713,439 Less accumulated depreciation for:

Land Improvements (82,267) (2,571) - - (84,838) Buildings & improvements (212,257,184) (18,203,742) - - (230,460,926) Infrastructure (603,912,806) (29,686,319) - - (633,599,125) Machinery & equipment (20,462,344) (1,769,467) 192,786 - (22,039,025) Right-to-use leased equipment (1,346,134) (673,066) - - (2,019,200) Right-to-use Subscription based IT arrangement (378,485) (485,566) - - (864,051) Total accumulated depreciation (838,439,220) (50,820,731) 192,786 - (889,067,165) Net Depreciable Assets 1,376,612,598 (44,484,930) - 54,518,606 1,386,646,274 Enterprise Activity Net Capital Assets 1,469,773,523$ 33,287,983$ (4,922,358)$ -$ 1,498,139,148$ DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
100
NOTE 9 – CAPITAL ASSETS (continued)
B. Construction in Progress Summary
Construction in Progress for governmental activities as of June 30, 2024 consisted of the following projects:

Future
Governmental Projects Authorized Expended Commitments
Transportation Improvements 59,082,010$ 25,447,373$ 33,634,637$ Parks and Recreation Improvements 27,863,854 19,797,751 8,066,103 City Building Improvements 23,996,321 13,392,532 10,603,789 Total 110,942,185$ 58,637,656$ 52,304,529$
Co
nstruction in Progress for business-type activities as of June 30, 2024 consisted of the following:

Future
Enterprise Fund Projects Authorized Expended Commitments Electric Projects 258,682,442 $ 86,463,324$ 172,219,118$ Water and Sewer Projects 6,972,068 532,368 6,439,700 Stadium Authority Projects 18,963,984 4,202,330 14,761,654 Santa Clara Convention Center Projects 3,166,791 1,443,641 1,723,150 Total 287,785,285$ 92,641,663$ 195,143,622$
De
tails 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:

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 9- CAPITAL ASSETS (continued)
101
Governmental Activities:

General Administration 2,315,688$
Finance 4,587
Public Works 15,531,219
Parks and Recreation 3,385,410
Public Safety
Police 997,425
Fire 516,172
Planning and Inspection 4,316
Library 1,441,968
24,196,785
Capital assets held by the City's Internal Service
Funds are charged to the various functions
based on their usage of the assets 3,187,200
Total Governmental Activities 27,383,985$
Business-Type Activities:

Utility Funds:

Electric Utility 28,480,948$
Water Utility 1,927,329
Sewer Utility 1,382,392
Water Recycling Utility 25,141
Solid Waste 4,308
Cemetery 6,287
Santa Clara Convention Center 1,556,039
Santa Clara Stadium Authority 17,438,287
Total Business-Type Activities 50,820,731$
DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
102
102
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 3/28/2013 2/1/2032 2%-3.75% Unamortized Premium/Discount
Subtotal Government Activity Debt
Business-Type Activity Debt:

Electric Utility:
2018 Series A Revenue Bonds 12/18/2018 7/1/2027 5.00%
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 1.36%
2020-2 Series Revenue Bonds 4/10/2020 7/1/2028 1.02%
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 2023 Wastewater Revenue Certificates of Participation 10/3/2023 2/1/2049 4.25%-5% Unamortized Premium/Discount
Santa Clara Stadium Authority
(2)
:

StadCo CFD Advance
(1)
4/1/2013 12/31/2054 5.73%
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.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 103
Authorized
Outstanding as of
June 30, 2023
Additions,
Transfers, and
Amort. of
Discounts
Debt Retired /
Defeased
Outstanding as
of June 30,
2024
Current
Portion
18,540,000$ 10,085,000$ - $ 1,030,000$ 9,055,000$ 1,085,000$ 475,097 (54,297) - 420,800 -
18,540,000 10,560,097 (54,297) 1,030,000 9,475,800 1,085,000 48,800,000 30,215,000 - 5,440,000 24,775,000 5,795,000 3,012,932 (753,233) - 2,259,699 -
282,794,108 215,415,240 - 15,459,000 199,956,240 7,299,896 331,594,108 248,643,172 (753,233) 20,899,000 226,990,939 13,094,896 52,985,000 52,985,000 - - 52,985,000 -
34,315,000 34,315,000 - 5,755,000 28,560,000 5,695,000 16,720,000 7,915,000 - 3,945,000 3,970,000 3,970,000 12,000,000 6,859,162 - 794,893 6,064,269 811,995 50,000,000 20,000,000 - 20,000,000 - -
34,585,000 - 34,585,000 - 34,585,000 735,000
1,390,789 - 1,367,609 - 1,367,609 -
38,000,000 29,859,497 1,147,911 28,711,586 -
239,995,789 151,933,659 35,952,609 31,642,804 156,243,464 11,211,995 571,589,897 400,567,831 35,199,376 52,541,804 383,234,403 24,306,891 590,129,897$ $ 411,136,928 35,145,079$ 53,571,804$ 392,710,203$ 25,391,891$ DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 104

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 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.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 105

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 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 were converted to tax-exempt basis on December 28, 2022, which now bear 1.02% coupon rates. 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.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 106

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 2023-24, Electric Fund revenues, including operating revenues and non-operating interest earnings, amounted to $635.0 million and operating costs including operating expenses, but not interest, depreciation or amortization whole amounted to $518.5 million. Net revenues available for debt service amounted to $116.5 million which represented a coverage ratio of 6.69 on the $17.4 million of debt service.

Subsequent Event
On October 23, 2024, City issued $112,175,000 of Electric Revenue Bonds, Series 2024 A (Electric 2024A Bonds) to provide funding for several of its capital projects in the System Expansion Plan. These projects include Kifer Receiving Station (KRS) rebuild, Scott Receiving Station (SRS) rebuild, and Northern Receiving Station (NRS) upgrades and expansion. The Electric 2024A Bonds mature annually beginning on July 1, 2025 through July 1, 2044 and bear a coupon rate of 5%, with optional redemption for bonds with maturities after July 1, 2035. Debt service on the Electric 2024A Bonds is secured by a pledge of net revenues of SVP.

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 revenues of the Wastewater System.

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 DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 107

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 was 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.

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 fully refunded this loan in October 2023 with proceeds from the Wastewater Revenue Certificates of Participation, Series 2023.

Wastewater Revenue Certificates of Participation, Series 2023 On October 24, 2023, the PFFC issued $34.59 million of Wastewater Revenue Certificates of Participation (2023 Wastewater COPs) to refund $20.0 million outstanding Series 2020 ISA and fund an additional $15.0 million of improvements for the San Jose/Santa Clara Regional Wastewater Facility Project (Project). The 2023 Wastewater COPs mature annually beginning February 1, 2025, through February 1, 2049 and bear coupon rates ranging from 4.25% to 5.00%. Debt Service is secured by a pledge of net revenues of the Wastewater System in installment payments to be made by the City to the PFFC for use of the Project. The PFFC assigns the lease payments to the certificate owners. This new issuance is on a parity with the obligations of the Series 2016 Trimble Road ISA.

Pledges of Future Sewer Revenues
The pledge of future Sewer Fund revenues ends upon repayment of all outstanding principal on bonds and loans, which is scheduled to occur in fiscal year 2048-49. For fiscal year 2023-24, Sewer Fund revenues, including operating revenues and non-operating interest earnings, amounted to $50.0 million and operating costs including operating expenses, but not interest, depreciation or amortization whole amounted to $32.1 million. Net revenues available for debt service amounted to $17.9 million which represented a coverage ratio of 9.9 on the $1.8 million of debt service.

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.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 108

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, 2024, $200.0 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, 2024, 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 $1.2 million in principal. As of March 31, 2024, $28.7 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 Stadium Authority as part of the take out financing process. Under the Restated StadCo Obligations Agreement, StadCo will loan the Stadium Authority an amount not to exceed $500 million with a fixed 5.50% interest rate. Required principal repayments started in March 2016 and the Stadium Authority may prepay the loan at any time. Debt service on this loan is secured by a pledge of available Stadium Authority revenues on a basis subordinate to outstanding senior loans, if any. As of March 31, 2024, there was no balance outstanding.

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

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 109

Management Company Revolving Loan
The Management Company Revolving Loan dated as of March 28, 2012 was entered into by and between the Stadium Authority and ManagementCo. The Management Company Revolving Loan provides borrowing to the Stadium Authority in an amount not to exceed $25 million through the earlier of the end of the term of the Stadium Lease or the expiration of the Stadium Management Agreement, with interest at the prime rate payable quarterly. The Management Company Revolving Loan may be used solely for the purpose of enabling the Stadium Authority to pay Covered Stadium Authority Operating Expenses (as defined in the agreement) to the extent, and only to the extent, that funds are not otherwise available. As of March 31, 2024, there was no balance outstanding.

Pledges of Future Stadium Revenues
The pledges of future revenues ends upon repayment of the $200.0 million in outstanding principal on the Term A which is scheduled to occur in fiscal year 2039-40. For fiscal year 2023-24, revenues including operating revenues and nonoperating interest earnings amounted to $99.9 million and operating costs including operating expenses, but not interest, depreciation, or amortization amounted to $61.4 million. Net revenues available for debt service amounted to $38.5 million, which represented a coverage ratio of 5.27 on the $7.3 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 hedges 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, 2024 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.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 110
Long Short
Effective
Date
Maturity
Date
Average
Price Classification Amount Classification Amount
24,960 7/1/2023 7/31/2024 $62.02 Derivative
Instrument 144,019$ Deferred
inflow 144,019$
25,920 8/1/2023 8/31/2024 67.70 Derivative
Instrument 296,784 Deferred
inflow 296,784
23,040 9/1/2023 9/30/2024 60.75 Derivative
Instrument 103,680 Deferred
inflow 103,680
16,400 6/1/2023 7/31/2024 47.28 Derivative
Instrument (7,708) Deferred
outflow (7,708)
15,600 7/1/2023 8/31/2024 49.90 Derivative
Instrument 33,540 Deferred
inflow 33,540
16,800 8/1/2023 9/30/2024 53.45 Derivative
Instrument 95,760 Deferred
inflow 95,760
666,075$ 666,075$
Long Short
Effective
Date
Maturity
Date
Average
Price Classification Amount Classification Amount
2,590,000 7/1/2020 12/31/2025 $2.42 Derivative
Instrument 2,314,545$ Deferred
inflow 2,314,545$
5,180,000 1/1/2022 12/31/2025 2.64 Derivative
Instrument 3,489,490 Deferred
inflow 3,489,490
2,745,000 1/1/2021 12/31/2025 0.56
Derivative
Instrument 2,687,338 Deferred
inflow 2,687,338
5,490,000 1/1/2022 12/31/2025 1.03 Derivative
Instrument 2,821,825 Deferred
inflow 2,821,825
11,313,198$ 11,313,198$
Grand Total 11,979,273$ 11,979,273$
Notional
Notional
Amount (MMBtu) Fair Value Change in Fair Value
Amount (MWh) Fair Value Change in Fair Value
Cr
edit risk
Cr
edit 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, 2024, $12.0 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. $8 thousand 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, 2024.

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, DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 111
2024, SVP had posted collateral of $9,449,807 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, 2024, 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 2025 1,085,000$ 319,775$ 5,795,000$ 1,093,875 $ 11,211,995$ 2,745,894$ 2026 1,120,000 285,869 6,005,000 798,875 7,509,465 2,620,975 2027 1,150,000 249,469 6,320,000 490,750 7,632,310 2,504,015 2028 1,195,000 209,219 6,655,000 166,375 7,765,540 2,383,959 2029 1,235,000 167,394 - - 13,264,161 2,222,265 2030-2034 3,270,000 222,187 - - 53,440,798 7,830,788 2035-2049 - - - - 25,340,000 10,068,233
9,055,000$ 1,453,913$ 24,775,000$ 2,549,875 $ 126,164,269$ 30,376,129$ Business-Type Activities (excluding Santa Clara Stadium Authority) Bonds Debt from direct borrowingCertificates of Participation DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 112
Principal Outstanding as Reported in Government Activities 9,055,000$ Principal Outstanding as Reported in Business Type Activities 150,939,269 Total Principal Outstanding as Reported 159,994,269
Principal Outstanding - Stadium Authority
(1)
228,667,826
Unamortized Discount/Premium 4,048,108
Total Long-term Obligations 392,710,203$
(1)The principal outstanding for Stadium Authority is as of March 31, 2024. 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, 2024, is $9.1 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, 2024, the City has nine 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, 2024, are as follows:

Balance
June 30, 2023 Addition Retirment
Balance
June 30, 2024
Current
portion
Governmental activities
Lease liabilities 252,118$ - $ (212,705)$ 39,413$ 39,413 $ Business-type activities
Lease liabilities 1,632,622$ - $ (681,617)$ 951,005$ 710,181 $ Total Lease liabilities 1,884,740$ - $ (894,322)$ 990,418$ 749,594 $ DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 113
The future principal and interest lease payments as of June 30, 2024, are as follows:

For the Year
Ending June 30 Principal Interest Principal Interest
2025 39,413 102 710,181 6,920
2026 - - 240,824 553
Total 39,413 $ 102 $ 951,005 $ 7,473 $
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. As of June 30, 2024, the City has recorded net intangible right-to-use subscription assets amounting to $12,677,191 with accumulated amortization of $3,441,363 in governmental activities and net intangible right-to-use subscription assets amounting to $3,837,038 with accumulated amortization of $864,051 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, 2024, are as follows:

Balance Balance Current
June 30, 2023 Additions Retirements June 30, 2024 Portion Governmental activities
SBITA liabilites 8,917,804 $ 2,078,197 $ (1,792,058)$ 9,203,943$ 2,011,963$ Business-type activities
SBITA liabilites 2,718,009$ 729,014 $ (470,555)$ 2,976,468$ 481,034$ Total SBITA liabilities 11,635,813$ 2,807,211 $ (2,262,613)$ 12,180,411$ 2,492,997$ As
of June 30, 2024, the value of the subscription liability was $9,203,943 in governmental activities and $2,976,468 in business-type activities. The City is required to make annual principal and interest payments throughout the life of each subscription. The interest rate of each subscription is based on the State of California incremental borrowing rate for GASB96 in the year contract is effective. As part of each subscription, the City has recorded an intangible right to use subscription asset and accumulated amortization as disclosed in Note 9A.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 10 – LONG-TERM DEBT AND DERIVATIVE INSTRUMENTS (continued) 114

The future principal and interest SBITA payments as of June 30, 2024, are as follows:

For the Year
Ending June 30 Principal Interest Principal Interest
2025 2,011,963$ 183,845 $ 481,034 $ 80,265 $ 2026 2,013,008 187,444 503,819 67,315 2027 1,435,546 137,403 527,486 53,844 2028 907,479 101,338 552,141 39,762 2029 935,702 78,263 382,523 25,069 2030-2034 1,734,950 130,270 529,465 20,782 2035-2039 165,295 5,403 - - Total 9,203,943$ 823,966 $ 2,976,468 $ 287,037 $ 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 $271,650 for postclosure maintenance expenses and $537,133 for corrective action in 2024-25. These amounts are subject to annual inflation factors, as stipulated by CalRecycle.

At June 30, 2024, a liability in the amount of $6,713,426 was reported based on the estimated remaining postclosure care costs to meet the regulatory requirements. During fiscal year 2024, the City incurred post- closure expenses of $1,274,027 and increased the liability by $1,855,417 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, 2024. 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.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
115
115
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 6/30/2023 651 Commerce Dr. Roseville, CA 95678
TANC 6/30/2023 P.O. Box 15129 Sacramento, CA 95851
SJSC 6/30/2023 200 E. Santa Clara St. San Jose, CA 95113 MSR EA 12/31/2023 P.O. Box 4060 Modesto, CA 95352
MSR PPA 12/31/2023 P.O. Box 4060 Modesto, CA 95352
SVACA 6/30/2023 3370 Thomas Road Santa Clara, CA 95051 Th
e City’s basic financial statements reflect the following investments in joint ventures as of June 30, 2023 (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 9.69% 9,136,635 Equity
SJSC
(1) 19.74% 272,373,132 Equity
MSR EA 33.40% - Suspended
MSR PPA 35.00% 14,325,713 Equity
SVACA 56.50% 5,501,554 Equity
Total $343,084,458
$41,747,424 Equity
(1)The investment in San Jose/Santa Clara Regional Wastewater Facility includes the current year capital contribution.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)

116

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, 2023, the City was contingently liable for long-term debt as follows (in thousands):

Total Participating Contingent
Debt Share Liability
NCPA 500,597$ 35.19% 176,168$
TANC 165,500 9.65% 15,973
Total 666,097$ 192,141$

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, 2023 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 9.6887% 9.6512% (1) The SVP's debt service share in NLEC on issue one is 46.1588%, on issue two is 0%.

A summary of the City’s “Take-or-Pay” contracts and related projects and its contingent liability for the debt service including principal and interest payments at June 30, 2023 is as follows (latest information available):

Fiscal Year NGP NHP NLEC COTP Total
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 - 7,908,013 7,721,815 1,464,831 17,094,659 2028 - 7,905,973 7,723,465 1,464,806 17,094,244 2029-2033 - 40,921,387 38,619,608 7,324,611 86,865,606 2034-2038 - 38,618,066 7,324,419 45,942,485 2039-2041 - - 22,527,489 1,465,338 23,992,827 Total 3,087,584$ 93,422,346$ 137,922,117$ 23,322,055$ 257,754,102$

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
11 7
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 originally owned five 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. Effective September 1, 2010, two units located in the city of Roseville was sold to the City of Roseville. NCPA still owns and operates DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
11 8
two units in the city of Alameda and one unit in the City of Lodi. Each purchaser is responsible under its power sales contract for paying an entitlement share in Combustion Turbine Project No. 1 of all NCPA’s costs of such project.

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

D. Transmission Agency of Northern California (TANC)
TANC was organized under the California Government Code pursuant to a joint powers agreement entered into by 15 Northern California utilities. The purpose of TANC is to provide electric transmission and other 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, 2023, the most recent data available, TANC’s investment in the Project was $545.2 million, less accumulated depreciation and amortization of $267.8 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.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
11 9
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, 2023, the City’s portion of the plant capacity was approximately 19.741%, 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 DRAFT

CITY OF SANTA CLARA

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For the year ended June 30, 2024
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
12 0
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, 2023, DRAFT

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For the year ended June 30, 2024
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
12 1
the date of the latest available audited financial statements, SVP was in a positive equity position of $14.3 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, 2024, 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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NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 12 – PARTICIPATION IN JOINT VENTURES (continued)
12 2
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, 2023, 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, 2024, 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, 2023, bonds issued by MSR EA to finance the City’s share of the Gas Prepay Project were outstanding in the principal amount of $482,400,000. 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, 2024, the City of Santa Clara contributed $1,143,543 to SVACA. The City’s equity interest in SVACA was $5,501,554 at June 30, 2023 (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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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
123
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 2024 calendar year is $345,000. Employees with membership dates prior to July 1, 1996, are not impacted by this limit. The compensation limit for PEPRA for calendar year 2024 is $151,446 for employees covered by Social Security and is adjusted annually with the CPI for all Urban Consumers.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 12 4
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 2024 is $181,734 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, 2024 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% 7.00%
Public Safety - Fire 9. 00% 11.75%
Public Safety - Police 9.00% 11.75%
Required employer contribution rates 11.83% 11.83% 23.05% 23.05% Required unfunded liability contribution
Miscellaneous Safety
$26,529,833 $23,198,740
Be
ginning 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 or the City can elect a discounted lump sum payment option, which the City elected to do in fiscal year 2023-24. The City’s required contribution for the miscellaneous plan’s unfunded liability was $26,529,833 in fiscal year 2023-24. The City’s required contribution for the safety plan’s unfunded liability was $23,198,740 in fiscal year 2023-24.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 12 5
Employees Covered
At the valuation date, June 30, 2022, and measurement date June 30, 2023, the following employees were covered by the benefits terms for each Plan:

Miscellaneous Safety

1,075 513
582 89
Active employees 717 272
Total 2,374 874
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, 2024, the City’s contributions to the miscellaneous and safety plans were $37,993,602 and $37,050,903, 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, 2023, using an annual actuarial valuation as of June 30, 2022, rolled forward to June 30, 2023, 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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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 12 6
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Payroll Growth
Projected Salary Increase
Investment Rate of Return
(1)
Post Retirement Benefit Increase
Mortality
(2)
(1) Net of pension plan investment and administrative expenses; including inflation All Plans
June 30, 2022
June 30, 2023

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

6.90%
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. Using historical returns of all the funds’ assets classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.

The table below reflects the real rates of return by asset class.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 12 7
Asset Class
(1)
Assumed Asset
Allocation
Real Return
(1)&(2)
Global Equity - Cap-weighted 3 0.00% 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%
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management study.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 12 8
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, 2022 measurement date 872,811,236$ 545,286,347$ 327,524,889$ Changes in the year:

Service cost 16,468,193 - 16,468,193
Interest on the total pension liability 59,622,333 - 59,622,333 Changes of benefit terms 643,992 - 643,992
Differences between expected and actual
experience 7,491,260 - 7,491,260
Contributions - employer - 36,574,733 (36,574,733)
Contributions - employees - 6,418,087 (6,418,087)
Net investment income - 34,061,981 (34,061,981)
Benefit payments, including refunds of
employee contributions (50,177,599) (50,177,599) -
Administrative expense - (400,978) 400,978
Net changes 34,048,179 26,476,224 7,571,955
Balance at June 30, 2023 measurement date 906,859,415$ 571,762,571$ 335,096,844$ Increase (Decrease)
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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued) 12 9
Safety Plan:

Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability/(Asset)
Balance at June 30, 2022 measurement date 923,607,390$ 589,494,676$ 334,112,714$ Changes in the year:

Service cost 17,572,981 - 17,572,981
Interest on the total pension liability 63,455,937 - 63,455,937 Changes of benefit terms 261,381 - 261,381
Differences between expected and actual
experience 12,903,735 - 12,903,735
Contributions - employer - 34,987,003 (34,987,003)
Contributions - employees - 6,145,378 (6,145,378)
Net investment income - 36,533,713 (36,533,713)
Benefit payments, including refunds of
employee contributions (51,815,487) (51,815,487) -
Administrative expense - (433,487) 433,487
Net changes 42,378,547 25,417,120 16,961,427
Balance at June 30, 2023 measurement date 965,985,937$ 614,911,796$ 351,074,141$ Combined Total 1,872,845,352$ 1,186,674,367$ 686,170,985$ 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 448,628,717$ 479,585,017$
Current Discount Rate 6.90% 6.90%
Net Pension Liability 335,096,844$ 351,074,141$
1% Increase 7.90% 7.90%
Net Pension Liability 240,809,716$ 245,627,700$
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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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued)

130

F. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2024, the City recognized pension expense of $48,466,316 for the Miscellaneous Plan and $55,294,482 for the Safety Plan, for total pension expense of $103,760,798.

At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Plan:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to measurement date 37,993,602$ -$ Changes of assumptions 10,004,809 -
Differences between expected and actual experience 5,377,517 (1,482,816) Net differences between projected and actual earnings
on pension plan investments 25,549,781 -
Total 78,925,709$ (1,482,816)$

Safety Plan:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to measurement date 37,050,903$ -$ Changes of assumptions 13,398,400 -
Differences between expected and actual experience 12,212,911 (1,751,797) Net differences between projected and actual earnings
on pension plan investments 27,859,885 -
Total 90,522,099$ (1,751,797)$
Combined Total 169,447,808$ (3,234,613)$
The reported $37,993,602 for the Miscellaneous Plan and $37,050,903 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, 2025. Other amounts reported as deferred outflows of DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 13 – RETIREMENT PLAN – DEFINED BENEFIT PENSION PLAN (continued)

131

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
2024 12,946,100$ 16,953,916$
2025 7,161,326 12,066,097
2026 18,686,917 21,958,301
2027 654,948 741,085
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, the Engineers of the City Unit 4, the Unclassified Police DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024

NOTE 15 – DEFERRED COMPENSATION PLAN (continued)

132

Management Association Unit 9A, the Unclassified Fire Management Employees Unit 9B, and the Public Safety Non‐Sworn Employees Association Unit 10, the City is required to make a monthly contribution to each employee who is enrolled in the City’s Section 457 deferred compensation plan.

Under the terms of the MOU with the City’s Employees Association Unit 578, the City has exercised its discretion to provide a one-time discretionary cash payment equivalent to approximately 1.0% of the employee’s base pay for regular employees (pro-rated for part-time employees) in the bargaining unit. The one-time discretionary cash payment was paid on June 28, 2024. Employees were provided the option to receive the one-time discretionary payment as cash or as a contribution to the employee’s deferred compensation account.

The City’s required contributions for the year ended June 30, 2024 totaled $656,195.

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 $4,932 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 2023-24, the following time frames were used.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024

NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)

133

Measurement Date
Measurement Period
Actuarial valuation date
(1)
June 30, 2024
June 30, 2022
July 1, 2023 to June 30, 2024
(1) Update procedures were used to roll forward the Total OPEB liability from the valuation date to the measurement date.

B. Plan Membership
As of June 30, 2024, membership in the plan consisted of the following:

Number of
Covered Employees
641
254
Active employees 1,011
Total 1,906
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, 2024 the City’s cash contributions were $4,175,000 in payments to the trust, $19,208 in administrative expenses paid outside of the trust, and the estimated implied subsidy was $1,054,000, for total contributions of $5,248,208.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024

NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)

134

D. Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2024 and the total OPEB liability used to calculate the Net OPEB liability was determined by an actuarial valuation dated June 30, 2022, rolled forward to June 30, 2024 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, 2024 Measurement Date
June 30, 2022

4.50% at June 30, 2024

2.50%
Medicare (Non-Kaiser) - 7.5% for 2024, scaling down to 3.45% in year 2076
PARS portfolio: Moderately Conservative
Non-Medicare - 8.5% for 2024, scaling down to 3.45% in year 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

4.50% at June 30, 2024
Medicare (Kaiser) - 6.25% for 2024, scaling down to 3.45% in

E. Discount Rate
The discount rates used to measure the total OPEB liability was 4.50% as of June 30, 2024. 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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024

NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)

135

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:
2024 2023
Total OPEB Liability $ 69,211 $ 67,386 Fiduciary Net Position (33,513) (29,668)
Net OPEB Liability 35,698$ 37,718 $
Plan Fiduciary Net Position as a
percentage of the Total OPEB Liability 48.4% 44.0%
Net OPEB Liability
(In Thousands)

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024

NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)

136

The changes in Net OPEB details as follow:

Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability/(Asset)
Balance at June 30, 2023 measurement date 67,386$ 29,668$ 37,718$ Changes in the year:

Service cost 2,303 - 2,303 Interest 3,056 - 3,056 Contributions - employer
(1)
- 5,248 (5,248)
Net investment income - 2,249 (2,249) Benefit payments (3,535) (3,535) - Administrative expense - (118) 118 Net changes 1,824 3,844 (2,020) Balance at June 30, 2024 measurement date 69,210$ 33,512$ 35,698$ (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, 2024, 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 44,519$ 35,698$ 28,394$ Sensitivity of Net OPEB Liability to Changes in Discount Rate (In Thousands)

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024

NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)

137

H. Sensitivity of the Net OPEB Liability to Healthcare Cost Trend Rates The following table presents the net OPEB liability of the City, as of June 30, 2024, 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 26,317$ 35,698$ 47,353$ 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, 2024, the City recognized OPEB expense as follows:
2024
Fund level expense $ 4,194
Actuarial Expense (1,037)
OPEB Expense 3,157$
OPEB Expense
(In Thousands)

As of fiscal year ended June 30, 2024, 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 624$ 697$
Differences between expected and actual experience - 1,283 Net differences between projected and actual earnings
on OPEB plan investments 986 -
Total 1,610$ 1,980$
Deferred Outflows and Inflows Balance
(In Thousands)

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024

NOTE 16 – OTHER POST EMPLOYMENT BENEFITS (continued)

138

Amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:

For the Year ending June 30 Amount
2025 66$
2026 627
2027 (454)
2028 (569)
2029 (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.

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 DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 17 – ELECTRIC UTILITY – SILICON VALLEY POWER (SVP) (continued)

139

of 2000 and 2001. Along with balancing control area responsibility, the CAISO has also announced that it will take on the role of reliability coordinator for the region.

Energy Wholesale Trading and Risk Management
SVP participates in the wholesale gas and power market and the CAISO’s centralized market. Since CAISO’s Market Redesign and Technology Upgrade (MRTU), CAISO has become the ultimate buyer and seller in the California day ahead market. Therefore, SVP engages in the trading of commodity forward contracts (gas and electric energy contracts) to secure fuel supply and hedge daily power purchase/sales from/to CAISO. 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 $11.5 million and $9.8 million, respectively, for fiscal year ended June 30, 2024, 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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 18 – NET POSITION/FUND EQUITY (continued)

140

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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 18 – NET POSITION/FUND EQUITY (continued)

141

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 $56.6 million, $24.8 million, and $27.8 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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 18 – NET POSITION/FUND EQUITY (continued)

142

Fund Balance Classification
Non-Major Fund Balance
General Santa Clara Governmental June 30,
Fund Housing Successor Funds 2023
Nonspendable:

Receivables, inventory & prepaid 36,917$ -$ -$ 36,917$ Leases 5,843,134 - - 5,843,134 Total Nonspendable 5,880,051 - - 5,880,051 Restricted For:

Gas tax programs - - 4,889,228 4,889,228 Housing & Community - 5,868,807 19,167,638 25,036,445 Maintenance districts - - 2,474,601 2,474,601 Operating grants - - 4,928,385 4,928,385 Debt service - - 785,417 785,417 Environmental enforcements 580,761 - - 580,761 Parks & recreation - - 47,280,005 47,280,005 Streets and highway - - 46,297,616 46,297,616 Public safety 831,708 - - 831,708 Library 19,488 - - 19,488 Public facilities 261,272 - 3,197,254 3,458,526 Donations 921,185 - 434,784 1,355,969 Pension rate stabilization program 29,226,846 - - 29,226,846 Storm drain - - 300,760 300,760 Total Restricted 31,841,260 5,868,807 129,755,688 167,465,755 Committed to:

Housing programs - - 1,217,992 1,217,992 Parks & recreation - - 1,115,843 1,115,843 Streets and highway - - 14,678,115 14,678,115 Storm drain - - 4,574,099 4,574,099 Public safety - - 1,264,005 1,264,005 Library - - 261,531 261,531 Public facilities - - 23,160,518 23,160,518 Building inspection - - 37,356,871 37,356,871 Land investment 18,481,037 - - 18,481,037 Historical preservation 96,105 - - 96,105 Total Committed 18,577,142 - 83,628,974 102,206,116 Assigned to:

General Government 15,652,776 - - 15,652,776 Other purposes 103,480 - - 103,480 29,261 Total Assigned 15,756,256 - - 15,756,256 Unassigned: 109,264,743 - - 109,264,743 Total Fund Balances 181,319,452$ 5,868,807$ 213,384,662$ 400,572,921$ Major Funds

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 18 – NET POSITION/FUND EQUITY (continued)

143

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, 2024, the Budget Stabilization and Capital Projects Reserves were $56.6 million and $24.8 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, 2024, the balances in the pension rate stabilization program trust for the General Fund and Enterprise Funds are listed as follows:

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 18 – NET POSITION/FUND EQUITY (continued)

144

Pension Rate
Stabilization
Balances
General Fund: 29,226,846$
Enterprise Funds:

Electric Utility 10,065,874
Water Utility 1,927,637
Sewer Utility 958,752
Water Recycling 168,123
Solid Waste 469,938
42,817,170$
Fund Name

D. Net Position/Fund Balance Deficits
The funds listed below had an accumulated deficit as of June 30, 2024:

Accumulated
Deficit
Internal Service Funds:

Information Technology Services 601,769 $
Workers’ Compensation Insurance Claims 10,518,154$
Fund Name

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 (IBNR). At June 30, 2024, the estimated claims payable of $29,496,000, consisting of reserves for both reported and IBNR losses, as well as, allocated loss adjustment expenses, have been recorded in the Special DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 19 – RISK MANAGEMENT (continued)

145

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, 2024, totaled $9,271,000 and $23,574,000 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, 2022 resulted from the following:

Special
Liability
Workers'
Compensation Total
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$ Claims and changes in estimates during fiscal 2024 6,284,583 6,231,024 12,515,607 Claim payments (5,415,583) (5,724,024) (11,139,607) Liability as of June 30, 2024 8,686,000$ 20,810,000$ 29,496,000$ Current Claims Payable 2,630,000$ 4,110,000$ 6,740,000$ Long Term Claims Payable 6,056,000 16,700,000 22,756,000 Liability as of June 30, 2024 8,686,000$ 20,810,000$ 29,496,000$ With respect to the Special Liability accrual of $8.6 million, the City has numerous unsettled lawsuits filed or claims asserted against it as of June 30, 2024. 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 special liability for claims and lawsuits as of June 30, 2024, are approximately $9 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.

DRAFT

CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
146

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, 2024, total governmental fund encumbrance balances for the City are as follows:

General Fund 6,162,368$
Santa Clara Housing Successor 110,010
Nonmajor Governmental Funds 43,401,659
Total Governmental Funds 49,674,037$

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 DRAFT

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NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 20 – COMMITMENTS AND CONTINGENCIES (continued)

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principal balance without penalty or premium. This prepayment was executed through the issuance of bonds by BAWSCA which provide a better interest rate given the favorable rate environment.

BAWSCA issued Revenue Bonds in the principal amount of $335,780,000 in January 2013 to prepay the capital cost recovery payment obligation and fund a stabilization fund. The Bonds mature in October 2034 and are secured by surcharges to the monthly water purchase charges imposed upon the participating members.

The Bonds are not a debt obligation of any member, and BAWSCA’s failure to pay its Bonds would not constitute a default by any participating member.

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

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

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

The City paid its surcharge of $533,964 during fiscal year 2023-24, which is included as a component of purchased water expenses in the Water Enterprise Fund. The surcharge for fiscal year 2024-25 is estimated to be $531,588.

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 $4.4 million 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 was no justification for delaying DRAFT

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For the year ended June 30, 2024
NOTE 20 – COMMITMENTS AND CONTINGENCIES (continued)

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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 initiated arbitration proceedings to dispute the SCSA’s position and SCSA filed cross-claims.

In fiscal year 2021-22, ManagementCo invoiced an additional $902 thousand 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 disputed 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.

ManagementCo also reported $1.2 million and $1.3 million in buffet costs to be charged to the SCSA for the 2022-23 and 2023-24 respectively. The SCSA had not recorded a liability for this cost because the dispute was outstanding and in pending arbitration.

The parties’ 2024 Settlement Agreement resolved the buffet arbitration (note 6G). Upon the Final Effective Date of the May 2024 Settlement Agreement, first, the parties agreed that the $902 thousand that was drawn from the Management Company Revolving Loan for fiscal year 2021-22 buffet costs would be treated as Stadium Authority’s reimbursement of those costs. Therefore, the Stadium Authority reversed the corresponding receivable from Management Co and recorded a $902 thousand complementary buffet operating expense in fiscal year ended March 31, 2024. Second, StadCo waived all other buffet expenses from fiscal year 2014-15 through 2023-24, and the parties confirmed that those were no longer an obligation of the Stadium Authority and that the reimbursement of those expenses was deemed fully satisfied for said lease years.

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 costs 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 2017-18.

StadCo filed several amended Arbitration Demands or formal demand letters for public safety costs damages for the subsequent NFL seasons and fiscal years 2019-20, 2021-22, 2022-23, and 2023-24 and SCSA filed related response cross-claims in that arbitration.

The Ground Lease contains provisions that provide, in the event that public safety costs exceed the threshold and those amounts are not paid by SCSA’s Discretionary Fund, SCSA is entitled to deduct credits from SCSA’s performance-based rent payments to the City. 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 DRAFT

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NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 20 – COMMITMENTS AND CONTINGENCIES (continued)

149

safety costs, threshold amount and calculations, and credits were part of the Public Safety Cost arbitration with StadCo.

The 2024 Settlement Agreement will resolve the public safety cost arbitration (Note 6G). Upon the Final Effective Date, the parties agreed that approximately $14.8 million of NFL public safety costs over the threshold are owed to StadCo by the Stadium Authority related to fiscal years 2017-18 through 2023-24. This number was approximate in the 2024 Settlement Agreement because, at the time that settlement was signed, the final FY 2023-24 actual NFL public safety costs had not been finalized. Per the 2024 Settlement Agreement, this specific past-due amount of public safety costs will be paid over time and it will not be considered or treated as “Credited Public Safety Costs” that affect performance-based rent and rent calculations going forward. This allows the Stadium Authority to pay the City the full performance-based rent owed for fiscal years 2022-23 and 2023-24. Now that the FY 2023-24 NFL public safety costs have been finalized, the Stadium Authority has recorded a $14.7 million “Public Safety Cost 2024 Outstanding Balance” payable and operating expense as of March 31, 2024.

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$

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
150
NOTE 22 – SUCCESSOR AGENCY LEASE AGREEMENTS
On January 8, 2016 the City executed the Settlement Agreement for Sharma vs Successor Agency to Redevelopment Agency of the City of Santa Clara. This Settlement Agreement calls for the City to return to the Successor Agency certain properties that the former Redevelopment Agency transferred to the City prior to dissolution. The properties transferred are as follows: the Great America Theme Park Property (not including the parking lot, see Note 4B), the Hilton Hotel Property, the North/South Parking Lots, the Gateway Parcel 2 Property, the Hyatt Hotel Property (not including the ballroom, see Note 4B), the Techmart Property, and the Martinson Childcare Center Property. All the properties, other than the Martinson Childcare Center Property will be sold by the Successor Agency. Until the properties are sold the rent revenues will be used to pay the Successor Agency’s enforceable obligations. The Settlement Agreement requires the City to forego the long term lease revenues generated by the properties.

A. Techmart Office Building Ground Lease
In May 1998, the former RDA entered into a long-term ground lease of the Techmart parcel with CarrAmerica.

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

Lease revenues collected from July 1, 2012 to June 30, 2024 in the amount of $5,421,450 were passed on to the Successor Agency. For the fiscal year ended June 30, 2024, the Successor Agency recognized $1,268,251 in lease revenue and $897,434 in interest revenue. As of June 30, 2024, the Successor Agency’s receivable for lease payments was $38,988,260 and the balance of the deferred inflow of resources was $36,673,598.

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.

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CITY OF SANTA CLARA

NOTES TO BASIC FINANCIAL STATEMENTS
For the year ended June 30, 2024
NOTE 22 – SUCCESSOR AGENCY LEASE AGREEMENTS (continued)

151

Lease revenues collected from Hyatt from July 1, 2012 to June 30, 2024 in the amount of $17,816,569 were passed on to the Successor Agency. For the fiscal year ended June 30, 2024, the Successor Agency recognized $343,385 in lease revenue and $90,985 in interest revenue. As of June 30, 2024, the Successor Agency’s receivable for lease payments was $3,816,110 and the balance of the deferred inflow of resources was $3,720,003.

C. Schedule of the Future Lease Payments
As of June 30, 2024, 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
2025 $ 896,947 $ 967,153
2026 917,614 946,486
2027 938,757 925,343
2028 970,110 906,191
2029 1,130,686 879,824
2030-2034 6,230,614 3,996,408
2035-2039 6,105,653 3,277,404
2040-2044 7,428,380 2,526,317
2045-2049 9,379,036 1,571,131
2050-2054 8,826,573 408,723
$ 42,824,370 $ 16,404,980
Lease Receivable

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Required Supplementary Information
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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.

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156

Miscellaneous Plan
2023 2022 2021
Total Pension Liability
Service cost 16,468,193$ 16,172,784$ 15,428,984$ Interest 59,622,333 57,377,858 56,183,036 Changes of benefit terms 643,992 - - Changes of assumptions - 24,297,391 - Differences between expected and actual experience 7,491,260 (3,601,124) 1,328,853 Benefit payments, including refunds of employee contributions (50,177,599) (48,432,370) (45,355,148) Net change in total pension liability 34,048,179 45,814,539 27,585,725 Total pension liability - beginning 872,811,236 826,996,697 799,410,972 Total pension liability - ending 906,859,415$ 872,811,236$ 826,996,697$ Plan Fiduciary Net Position
Contributions - employer 36,574,733$ 34,036,195$ 31,272,528$ Contributions - employee 6,418,087 6,369,047 6,333,120 Net investment income 34,061,981 (45,722,450) 112,780,714 Benefit payments, including refunds of employee contributions (50,177,599) (48,432,370) (45,355,148) Plan to plan resource movement - - - Administrative expense (400,978) (373,396) (494,347) Other Misc Income/(Expense)
(1)
- - - Net change in plan fiduciary net position 26,476,224 (54,122,974) 104,536,867 Plan fiduciary net position - beginning
(2)
545,286,347 599,409,321 494,872,454
Plan fiduciary net position - ending 571,762,571$ 545,286,347$ 599,409,321$ Net Pension Liability - ending 335,096,844$ 327,524,889$ 227,587,376$

63.05% 62.47% 72.48%
Covered payroll 100,304,469$ 92,642,754$ 89,321,766$ Net pension liability as percentage of covered payroll 334.03% 353.54% 254.79% Notes to schedule:
(2) Includes any beginning of year adjustment.

Plan fiduciary net position as a percentage of the total pension liability (1) 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

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) DRAFT

157

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$

61.90% 62.72% 62.97% 62.02% 62.18% 65.57% 67.42%
89,410,939$ 81,872,333$ 75,515,390$ 71,285,526$ 61,942,363$ 58,051,406$ 58,020,890$ 340.61% 347.76% 356.81% 371.95% 390.63% 367.07% 340.41% Changes in assumptions: The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. There were no assumption changes in 2023. Effective with June 30, 2021 valuation date (2022 measurement date), the discount rate was reduced from 7.15% to 6.90%. The accounting discount rate was 7.15% for measurement dates 2017 through 2021. In 2015 and 2016, the discount rate was

7.65% to reflect an adjustment of administrative expense. In 2014, amounts reported were based on the 7.5% discount rate.

CITY OF SANTA CLARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

MISCELLANEOUS PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years for the Measurement Periods Ended June 30

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Miscellaneous Plan
2024 2023 2022 2021
Actuarially determined contribution 37,993,602 $ 36,763,759$ 34,126,897$ 31,035,143$ Contributions in relation to the actuarially
determined contributions (37,993,602) (36,763,759) (34,126,897) (31,035,143) Contribution deficiency (excess) -$ -$ -$ -$ Covered payroll 102,818,912$ 100,304,469$ 92,642,754$ 89,321,766$ Contributions as a percentage of
covered payroll 36.95% 36.65% 36.84% 34.75%
Notes to schedule
Valuation date 6/30/2021 6/30/2020 6/30/2019 6/30/2018
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, closed Remaining amortization period 23 years as of valuation date Asset valuation method Fair value of assets
Inflation
Salary increases Varies by Entry Age and Service
Investment rate of return
Retirement age
Mortality

CITY OF SANTA CLARA

SCHEDULE OF PLAN CONTRIBUTIONS

MISCELLANEOUS PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years Ended June 30
The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale, MP-2016 published by the Society of Actuaries.

The probabilities of Retirement are based on the CalPERS Experience Study

7.50% for 2015 to 2018, 7.375%, for 2019, 7.25% for 2020, and 7.0% for 2021 through 2022, 6.8% for 2023 and 2024, net of pension plan investment expense, including inflation

2.75% for 2015 to 2019, 2.675% for 2020 and 2.50% for 2021 through 2022, 2.30% for 2023 and 2024

Schedule of Plan Contributions (Miscellaneous Plan)
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2020 2019 2018 2017 2016 2015
28,987,800$ 23,615,964$ 25,256,224$ 21,613,984$ 18,543,534$ 15,257,771$ (28,987,800) (23,615,964) (25,256,224) (21,613,984) (18,543,534) (15,257,771) -$ -$ -$ -$ -$ -$ 89,410,939$ 81,872,333$ 75,515,390$ 71,285,526$ 61,942,363$ 58,051,406$

32.42% 28.84% 33.45% 30.32% 29.94% 26.28%
6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012

CITY OF SANTA CLARA

SCHEDULE OF PLAN CONTRIBUTIONS

MISCELLANEOUS PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN Last Ten Fiscal Years Ended June 30

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Safety Plan
2023 2022 2021
Total Pension Liability
Service cost 17,572,981$ 17,072,526$ 15,750,690$ Interest 63,455,937 60,648,121 59,165,587 Changes of benefit terms 261,381 - - Changes of assumptions - 27,501,978 - Differences between expected and actual experience 12,903,735 (3,595,795) 7,316,002 Benefit payments, including refunds of employee contributions (51,815,487) (49,070,549) (46,961,121) Net change in total pension liability 42,378,547 52,556,281 35,271,158 Total pension liability - beginning 923,607,390 871,051,109 835,779,951 Total pension liability - ending 965,985,937$ 923,607,390$ 871,051,109$ Plan Fiduciary Net Position
Contributions - employer 34,987,003$ 31,703,230$ 29,084,516$ Contributions - employee 6,145,378 5,872,012 5,742,937 Net investment income 36,533,713 (49,438,525) 122,207,114 Benefit payments, including refunds of employee contributions (51,815,487) (49,070,549) (46,961,121) Plan to plan resource movement - - - Administrative expense (433,487) (405,431) (540,727) Other Misc Income/(Expense)
(2)
- - - Net change in plan fiduciary net position 25,417,120 (61,339,263) 109,532,719 Plan fiduciary net position - beginning 589,494,676 650,833,939 541,301,220 Plan fiduciary net position - ending 614,911,796$ 589,494,676$ 650,833,939$ Net Pension Liability - ending 351,074,141$ 334,112,714$ 220,217,170$

63.66% 63.83% 74.72%
Covered payroll 62,842,726$ 57,190,646$ 54,912,443$ Net pension liability as percentage of covered payroll 558.66% 584.21% 401.03% Notes to schedule:
(2) Includes any beginning of year adjustment.

Plan fiduciary net position as a percentage of the total pension (1) 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.

CITY OF SANTA CLARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

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

Schedule of Changes in the Net Pension Liability and Related Ratios (Safety Plan) DRAFT

161

2020 2019 2018 2017 2016 2015 2014
15,518,467$ 14,861,460$ 13,999,625$ 13,111,358$ 10,985,005$ 10,678,931$ 10,748,085$ 56,740,930 54,154,256 51,713,042 49,741,737 48,410,844 46,944,730 45,454,864 - - - - - - - - - (3,333,870) 40,842,398 - (11,249,844) - 10,124,845 8,480,853 5,782,119 (1,814,831) (3,491,487) (3,604,245) - (44,599,326) (41,984,265) (38,978,890) (37,370,686) (35,868,203) (34,372,454) (33,072,631) 37,784,916 35,512,304 29,182,026 64,509,976 20,036,159 8,397,118 23,130,318 797,995,035 762,482,731 733,300,705 668,790,729 648,754,570 640,357,452 617,227,134 835,779,951$ 797,995,035$ 762,482,731$ 733,300,705$ 668,790,729$ 648,754,570$ 640,357,452$ 26,654,865$ 23,458,623$ 20,510,633$ 19,580,881$ 16,679,012$ 14,692,277$ 12,839,821$ 5,589,396 5,781,715 5,395,755 4,913,868 4,376,079 4,079,023 4,866,079 26,348,251 33,408,137 40,902,179 49,621,113 2,362,110 10,236,992 70,347,760 (44,599,326) (41,984,265) (38,978,890) (37,370,686) (35,868,203) (34,372,454) (33,072,631) - - (1,182) - 788 - - (744,424) (362,341) (751,243) (658,507) (279,579) (516,273) - - 1,182 (1,426,623) - - - - 13,248,762 20,303,051 25,650,629 36,086,669 (12,729,793) (5,880,435) 54,981,029 528,052,458 507,749,407 482,098,778 446,012,109 458,741,902 464,622,337 409,641,308 541,301,220$ 528,052,458$ 507,749,407$ 482,098,778$ 446,012,109$ 458,741,902$ 464,622,337$ 294,478,731$ 269,942,577$ 254,733,324$ 251,201,927$ 222,778,620$ 190,012,668$ 175,735,115$

64.77% 66.17% 66.59% 65.74% 66.69% 70.71% 72.56%
53,564,578$ 50,808,770$ 47,569,993$ 47,064,869$ 41,116,053$ 38,909,866$ 38,845,554$ 549.76% 531.29% 535.49% 533.74% 541.83% 488.34% 452.39% (1) 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 Changes in assumptions: The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. There were no assumption changes in 2023. Effective with June 30, 2021 valuation date (2022 measurement date), the discount rate was reduced from 7.15% to 6.90%. The accounting discount rate was 7.15% for measurement dates 2017 through 2021. In 2015 and 2016, the discount rate was 7.65% to reflect an adjustment of administrative expense.

In 2014, amounts reported were based on the 7.5% discount rate.

CITY OF SANTA CLARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

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

DRAFT

162

Safety Plan
2024 2023 2022 2021
Actuarially determined contribution 37,050,903$ 35,094,101$ 32,084,531$ 29,295,456$ Contributions in relation to the actuarially
determined contributions (37,050,903) (35,094,101) (32,084,531) (29,295,456) Contribution deficiency (excess) -$ -$ -$ -$ Covered payroll 65,868,106$ 62,842,726$ 57,190,646$ 54,912,443$ Contributions as a percentage of
covered payroll 56.25% 55.84% 56.10% 53.35%
Notes to schedule
Valuation date 6/30/2021 6/30/2020 6/30/2019 6/30/2018
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, closed Remaining amortization period 23 years as of valuation date Asset valuation method Fair value of asset
Inflation
Salary increases Varies by Entry Age and Service
Investment rate of return
Retirement age
Mortality
(1) Fiscal year 2014-15 was the first year of implementation.

7.50% for 2015 to 2018, 7.375%, for 2019, 7.25% for 2020, and 7.0% for 2021 through 2022,

6.8% for 2023 and 2024, net of pension plan investment expense, including inflation The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale. MP-2016 published by the Society of Actuaries.

The probabilities of Retirement are based on the CalPERS Experience Study

CITY OF SANTA CLARA

SCHEDULE OF PLAN CONTRIBUTIONS

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

2.75% for 2015 to 2019, 2.675% for 2020 and 2.50% for 2021 through 2022, 2.30% for 2023 and 2024

Schedule of Plan Contributions (Safety Plan)
DRAFT

163

2020 2019 2018 2017 2016 2015
27,099,469$ 23,484,760$ 22,002,506$ 19,735,867$ 17,365,058$ 14,776,850$ (27,099,469) (23,484,760) (22,002,506) (19,735,867) (17,365,058) (14,776,850) -$ -$ -$ -$ -$ -$ 53,564,578$ 50,808,770$ 47,569,993$ 47,064,869$ 41,116,053$ 38,909,866$

50.59% 46.22% 46.25% 41.93% 42.23% 37.98%
6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012

CITY OF SANTA CLARA

SCHEDULE OF PLAN CONTRIBUTIONS

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

DRAFT

164
2024 2023 2022 2021 2020 2019 2018 2017
Total OPEB Liability
Service cost 2,303 $ 2,415 $ 2,344 $ 2,091 $ 2,030 $ 2,264 $ 2,198 $ 2,134 $ Interest 3,057 3,244 3,145 3,292 3,200 3,478 3,343 3,194 Differences between expected and actual
experience (1,652) - (326) - (1,644) - - Changes of assumptions (760) - 1,709 - (5,838) - - Benefit payments including refunds (3,535) (3,499) (3,437) (3,592) (3,498) (3,096) (3,036) (2,034) Net change in total OPEB liability 1,825 (252) 2,052 3,174 1,732 (4,836) 2,505 3,294 Total OPEB liability - beginning 67,386 67,638 65,586 62,412 60,680 65,516 63,011 59,717 Total OPEB liability - ending 69,211 $ 67,386 $ 67,638 $ 65,586 $ 62,412 $ 60,680 $ 65,516 $ 63,011 $ Plan Fiduciary Net Position
Contributions - employer 5,248 $ 4,915 $ 5,068 $ 4,535 $ 4,696 $ 5,366 $ 6,300 $ 2,733 $ Net investment income 2,249 1,094 (3,222) 2,957 1,403 1,410 524 738 Benefit payments including refunds (3,535) (3,499) (3,437) (3,592) (3,498) (3,096) (3,036) (2,034) Administrative expense (118) (65) (62) (59) (100) (91) (71) (73) Net change in plan fiduciary net position 3,844 2,445 (1,653) 3,841 2,501 3,589 3,717 1,364 Plan fiduciary net position - beginning 29,669 27,223 28,876 25,035 22,534 18,945 15,228 13,864 Plan fiduciary net position - ending 33,513 $ 29,668 $ 27,223 $ 28,876 $ 25,035 $ 22,534 $ 18,945 $ 15,228 $ Net OPEB Liability - ending 35,698 $ 37,718 $ 40,415 $ 36,710 $ 37,377 $ 38,146 $ 46,571 $ 47,783 $

48.4% 44.0% 40.2% 44.0% 40.1% 37.1% 28.9% 24.2%
Covered payroll 193,597 $ 180,100 $ 169,613 $ 163,594 $ 164,431 $ 151,453 $ 135,297 $ 102,468 $

18.4% 20.9% 23.8% 22.4% 22.7% 25.2% 34.4% 46.6%
Notes to schedule:
(1) Fiscal year 2016-17 was the first year of implementation.

CITY OF SANTA CLARA

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS

OPEB PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PLAN Last Ten Fiscal Years for the Measurement Periods Ended June 30 (1)
(In Thousands)
Plan fiduciary net position as a percentage
of the total OPEB liability
Net OPEB liability as percentage of covered
payroll

Schedule of Changes in the Net OPEB Liability and Re lated Ratios (OPEB Plan) DRAFT

165
2024 2023 2022 2021 2020 2019 2018 2017
Actuarially determined contribution 5,229 $ 4,896 $ 4,748 $ 4,826 $ 4,681 $ 5,306 $ 5,466 $ 2,981 $ Contributions in relation to the actuarially
determined contributions 5,248 4,914 5,068 4,535 4,696 5,366 6,300 2,981 Contribution deficiency (excess) (19) $ (18) $ (320) $ 291 $ (15) $ (60) $ (834) $ - $ Covered payroll 193,597 180,100 169,613 163,594 164,431 151,453 135,297 $ 102,468 $ Contributions as a percentage of
covered payroll 2.70% 2.72% 2.99% 2.77% 2.86% 3.54% 4.66% 2.91% Notes to schedule:
(1) Fiscal year 2016-17 was the first year of implementation.

CITY OF SANTA CLARA

SCHEDULE OF PLAN CONTRIBUTIONS

OPEB PLAN, AN AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PLAN Last Ten Fiscal Years Ended June 30
(1)
(In Thousands)

Schedule of Plan Contributions (OPEB Plan)
DRAFT

166

Actuarial valuation date June 30, 2022
Actuarial cost method Entry Age Normal, Level Percentage of Payroll Amortization method Level percent of payroll
Unfunded liability amortization
Asset valuation method
Discount rate 4.50%
General inflation 2.50%
Healthcare trend
Mortality CalPERS 2000-2019 Experience Study
Mortality improvement

CITY OF SANTA CLARA
Notes to Schedule of Employer Contribution (OPEB Plan)
Post-retirement mortality projected fully generational with Scale MP-2021
Methods and Assumptions for 2023-24 Actuarially Determine Contributions 15 years (open period) for method, assumption, plan changes, and gains and losses
Maximum 30-year combined period
Investment gains and losses spread over a 5-year rolling period.

Not less that 80% nor greater than 120% of fair value
Non-Medicare -8.50% for 2024, decreasing to an ultimate rate of 3.45% in 2076
Medicare (Non-Kaiser)- 7.50% for 2024 decreasing to an
ultimate rate of 3.45% in 2076
30 years (closed period) for initial UAAL
(16 Years remaining on June 30, 2023)
20 years (closed period) for implied subsidy on 06/30/2019 (16 years remaining on June 30, 2023)
Medicare (Kaiser)- 6.25% for 2024 decreasing to an ultimate rate of 3.45% in 2076

Notes to Schedule of Employer Contributions (OPEB Pl an) DRAFT

167

Variance with
Budgeted Amounts Final Budget
Actual Amounts Positive
Original Final Budgetary Basis (Negative)

REVENUES
Taxes:

Sales 60,524,000$ 60,524,000$ 61,776,044$ 1,252,044$ Ad valorem 85,800,000 87,143,000 90,710,410 3,567,410 Transient occupancy 21,275,000 21,275,000 22,347,394 1,072,394 Other 6,750,000 6,750,000 6,741,057 (8,943) Licenses, permits, fines and penalties 9,819,000 11,097,589 11,355,736 258,147 Intergovernmental 520,000 651,026 808,452 157,426 Charges for services 38,067,896 41,696,818 44,403,128 2,706,310 Contributions in-lieu of taxes 32,000,000 33,000,000 33,143,505 143,505 Interest and rents 17,127,660 18,161,960 21,754,989 3,593,029 Other 180,000 380,000 986,626 606,626 Total Revenues 272,063,556 280,679,393 294,027,341 13,347,948

EXPENDITURES
General Government:

General Administration 31,035,349 34,253,176 29,944,640 4,308,536 City Clerk 1,947,261 1,746,564 1,643,960 102,604 City Attorney 3,076,516 3,076,516 2,812,947 263,569 Human Resources 4,300,090 4,300,090 3,527,357 772,733 Finance 19,140,702 19,390,702 18,022,041 1,368,661 Total General Government 59,499,918 62,767,048 55,950,945 6,816,103 Public Works 24,857,521 24,952,681 24,825,311 127,370 Parks and Recreation 21,933,152 22,164,117 20,589,041 1,575,076 Public Safety:

Police 85,598,562 85,598,562 84,449,337 1,149,225 Fire 62,616,032 64,879,059 65,070,114 (191,055) Total Public Safety 148,214,594 150,477,621 149,519,451 958,170 Planning and Inspection 4,509,275 4,509,275 4,337,124 172,151 Library 11,135,937 11,135,937 10,824,942 310,995 Total Expenditures 270,150,397 276,006,679 266,046,814 9,959,865 For the year ended June 30, 2024

CITY OF SANTA CLARA

GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL (NON-GAAP LEGAL BASIS)

General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis)

DRAFT

168

Variance with
Budgeted Amounts Final Budget
Actual Amounts Positive
Original Final Budgetary Basis (Negative)

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 1,913,159 4,672,714 27,980,527 23,307,813

OTHER FINANCING SOURCES (USES)
Transfers in 2,200,044 2,856,324 2,855,987 (337) Transfers (out) (11,645,161) (21,141,424) (21,141,424) - Total Other Financing Sources (Uses) (9,445,117) (18,285,100) (18,285,437) (337)

EXCESS (DEFICIENCY) OF REVENUES AND

OTHER SOURCES OVER EXPENDITURES
AND OTHER USES - BUDGETARY BASIS (7,531,958)$ (13,612,386)$ 9,695,090$ 23,307,476$ ADJUSTMENTS TO BUDGETARY BASIS:

Prior year encumbrances recognized on the GAAP basis (4,761,429) Current year encumbrances recognized on the budgetary basis 6,162,368 Net change in receivables recognized on the GAAP basis 16,735,441 Net change in accrued liabilities recognized on the GAAP basis (129,226) Net change in funds for GAAP Basis not included in annual budget 301,233 Beginning Fund balance 153,315,975
Ending Fund balance 181,319,452$
For the year ended June 30, 2024
(continued)

CITY OF SANTA CLARA

GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL (NON-GAAP LEGAL BASIS)

DRAFT

169

Variance
Actual Amount Positive
Original Final Budgetary Basis (Negative)

REVENUES
Charges for services - $ -$ 15,648$ 15,648 $ Interest and rents 186,771 186,771 77,056 (109,715) Other 1,119,555 1,119,555 862,868 (256,687) Total Revenues 1,306,326 1,306,326 955,572 (350,754)

EXPENDITURES
Total General Administration 873,227 873,227 395,926 477,301 Total Expenditures 873,227 873,227 395,926 477,301

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 433,099 433,099 559,646 126,547

EXCESS (DEFICIENCY) OF REVENUES AND

OTHER SOURCES OVER EXPENDITURES
AND OTHER USES 433,099 $ 433,099$ 559,646 126,547 $ ADJUSTMENTS TO BUDGETARY BASIS:

Expenditures of prior year encumbrances recognized on the GAAP basis (343,660) Current year encumbrances recognized on the budgetary basis 110,010 Net change in accrued liabilities recognized on the GAAP basis 44,460 Net change in land held for development recognized on the GAAP basis (5,400,270) Beginning Fund balance 10,898,621
Ending Fund balance 5,868,807$

CITY OF SANTA CLARA

SANTA CLARA HOUSING SUCCESSOR

SCHEDULE OF REVENUES, EXPENDITURES

BUDGET AND ACTUAL (NON-GAAP LEGAL BASIS)
Budgeted Amounts
For the year ended June 30, 2024

AND CHANGES IN FUND BALANCES

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

DRAFT

CITY OF SANTA CLARA

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
June 30, 2024

170

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

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

Notes to Required Supplementary Information
DRAFT

Supplementary Information
DRAFT

DRAFT

173

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS

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

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

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

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

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

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

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

DRAFT

174
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DRAFT

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

175

DEBT SERVICE FUNDS

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

CAPITAL PROJECTS FUNDS

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

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

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

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

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

PUBLIC FACILITIES
This fund is used to account for revenues and expenditures related to the construction, acquisition or modification of public improvements not accounted for in another Capital Projects Fund.

DRAFT

176

HUD City Affordable
Gas Tax Programs Housing
ASSETS
Cash and investments:

Pooled cash and investments 3,983,157$ 1,078,830$ 18,184,913$ Investments with fiscal agent - current - - - Restricted cash - - - Receivables (net of allowance for uncollectibles):

Accounts - - - Loans - 10,785,814 61,760,818 Intergovernmental 906,071 310,704 - Investments with fiscal agent - noncurrent - - - Total Assets 4,889,228$ 12,175,348$ 79,945,731$

LIABILITIES
Accrued liabilities -$ 295,634$ 111,175$ Total Liabilities - 295,634 111,175

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - Loans - 10,785,814 61,760,818 Total Deferred Inflows of Resources - 10,785,814 61,760,818

FUND BALANCES
Restricted 4,889,228 1,093,900 18,073,738 Committed - - - Total Fund Balances 4,889,228 1,093,900 18,073,738 Total Liabilities, Deferred Inflows of Resources
and Fund Balances 4,889,228$ 12,175,348$ 79,945,731$

NON-MAJOR GOVERNMENTAL FUNDS

CITY OF SANTA CLARA

COMBINING BALANCE SHEET
June 30, 2024

SPECIAL REVENUE FUNDS

Combining Balance Sheet

DRAFT

177

Santa Clara Operating New Development Public Facilities Housing Authority Maintenance Grants Fund Service Fee Financing Corp. 1,217,992$ 2,306,655$ 2,500,572$ 38,351,954$ 17,382$ - - - - 48,901 - 187,056 - - - - - 40,691 - - 6,221,249 - - - - - 513 2,474,604 - - - - - - 719,134 7,439,241$ 2,494,224$ 5,015,867$ 38,351,954$ 785,417$ -$ 19,623$ 87,482$ 560,299$ -$ - 19,623 87,482 560,299 - 6,221,249 - - - - 6,221,249 - - - - - 2,474,601 4,928,385 434,784 785,417 1,217,992 - - 37,356,871 - 1,217,992 2,474,601 4,928,385 37,791,655 785,417 7,439,241$ 2,494,224$ 5,015,867$ 38,351,954$ 785,417$

DEBT SERVICE FUNDSPECIAL REVENUE FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
June 30, 2024

DRAFT

178

Parks Streets
and and Storm
Recreation Highways Drain
Facilities Improvement Improvement
ASSETS
Cash and investments:

Pooled cash and investments 49,867,749$ 58,939,342$ 5,229,240$ Investments with fiscal agent - current - - - Restricted cash - 2,349,205 - Receivables (net of allowance for uncollectibles):

Accounts - - 132,108 Loans - - - Intergovernmental - 3,174,087 - Investments with fiscal agent - noncurrent - - - Total Assets 49,867,749$ 64,462,634$ 5,361,348$

LIABILITIES
Accrued liabilities 1,471,901$ 3,486,903$ 486,489$ Total Liabilities 1,471,901 3,486,903 486,489

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

FUND BALANCES
Restricted 47,280,005 46,297,616 300,760
Committed 1,115,843 14,678,115 4,574,099 Total Fund Balances 48,395,848 60,975,731 4,874,859 Total Liabilities, Deferred Inflows of Resources
and Fund Balances 49,867,749$ 64,462,634$ 5,361,348$

CAPITAL PROJECTS FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
June 30, 2024 (continued)

DRAFT

179

Total
Fire Library Non-Major
Department Department Public Governmental
Improvement Improvement Facilities Funds
1,403,868$ 265,270$ 26,980,826$ 210,327,750$ - - - 48,901 - - - 2,536,261 - - 216,719 389,518 - - - 78,767,881 - - - 6,865,979 - - - 719,134 1,403,868$ 265,270$ 27,197,545$ 299,655,424$ 139,863$ 3,739$ 839,773$ 7,502,881$ 139,863 3,739 839,773 7,502,881 - - - 78,767,881 - - - 78,767,881 - - 3,197,254 129,755,688 1,264,005 261,531 23,160,518 83,628,974 1,264,005 261,531 26,357,772 213,384,662 1,403,868$ 265,270$ 27,197,545$ 299,655,424$

CAPITAL PROJECTS FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
June 30, 2024 (continued)

DRAFT

180

HUD City Affordable
Gas Tax Programs Housing

REVENUES
Taxes:

Other -$ - $ -$
Licenses, permits, fines, and penalties - - - Intergovernmental 7,003,071 987,910 3,130 Charges for services - - 57,539 Interest and rents 456,745 2,339 371,084 Other - 376,846 539,302 - - - Total Revenues 7,459,816 1,367,095 971,055

EXPENDITURES
Current:

General Administration - 1,183,637 3,277,157 Public Works - - - Parks and Recreation - - - Public Safety:

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

Principal payments - - - Interest and fiscal fees - - - - - - Total Expenditures - 1,183,637 3,277,157

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 7,459,816 183,458 (2,306,102)

OTHER FINANCING SOURCES (USES)
Transfers in 747,880 - 3,524,369 Transfers (out) (7,150,000) - - Total Other Financing Sources (Uses) (6,402,120) - 3,524,369 NET CHANGE IN FUND BALANCE 1,057,696 183,458 1,218,267 Fund balances - beginning 3,831,532 910,442 16,855,471 Fund balances - ending 4,889,228$ 1,093,900 $ 18,073,738$

SPECIAL REVENUE FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
For the year ended June 30, 2024

Combining Statement of Revenues, Expenditures, and C hanges in Fund Balances

DRAFT

181

DEBT SERVICE FUND
Santa Clara Operating New Development Public Facilities Housing Authority Maintenance Grants Fund Service Fee Financing Corp. -$ 374,769$ -$ -$ -$ - - - 8,540,817 - - - 7,911,575 - - - 980,639 218,622 10,837,722 - 26,615 15,740 5,835 726,991 39,938 373,717 - 4,350 73,778 - - - - - - 400,332 1,371,148 8,140,382 20,179,308 39,938 105,956 - - - - - 1,632,506 - - - - 23,433 188,138 - - - 94,760 486,530 - - - - 3,557,069 3,118,129 - - - 145,289 14,324,935 - - - 184,802 - - - - 293,586 - - - - - - 1,030,000 - - - - 372,385 - - - - - 105,956 1,750,699 4,855,414 17,443,064 1,402,385 294,376 (379,551) 3,284,968 2,736,244 (1,362,447) - 942,413 694,445 1,847,578 1,402,440 (3,524,369) - (308,967) (1,064,556) - (3,524,369) 942,413 385,478 783,022 1,402,440 (3,229,993) 562,862 3,670,446 3,519,266 39,993 4,447,985 1,911,739 1,257,939 34,272,389 745,424 1,217,992$ 2,474,601$ 4,928,385$ 37,791,655$ 785,417$

SPECIAL REVENUE FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
For the year ended June 30, 2024

DRAFT

182

Parks Streets
and and Storm
Recreation Highways Drain
Facilities Improvement Improvement

REVENUES
Taxes:

Other -$ -$ -$
Licenses, permits, fines, and penalties - - - Intergovernmental - 13,934,502 - Charges for services - 26,203 1,460,194 Interest and rents 1,004,848 384,378 5,874 Other 2,654,076 1,363,451 - - - - Total Revenues 3,658,924 15,708,534 1,466,068

EXPENDITURES
Current:

General Administration - - - Public Works - 4,802,568 720,094 Parks and Recreation 2,487,754 - - Public Safety:

Police - - -
Fire - - -
Planning and Inspection - - - Library - - - Capital outlay 9,419,860 16,608,466 859,616
Debt service:

Principal payments - - - Interest and fiscal fees - - - - - - Total Expenditures 11,907,614 21,411,034 1,579,710

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (8,248,690) (5,702,500) (113,642)

OTHER FINANCING SOURCES (USES)
Transfers in 1,058,941 12,025,347 1,617,838
Transfers (out) (10,066) (747,880) (1,519,920) Total Other Financing Sources (Uses) 1,048,875 11,277,467 97,918 NET CHANGE IN FUND BALANCE (7,199,815) 5,574,967 (15,724) Fund balances - beginning 55,595,663 55,400,764 4,890,583 Fund balances - ending 48,395,848$ 60,975,731$ 4,874,859$

CAPITAL PROJECTS FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
For the year ended June 30, 2024 (continued)

DRAFT

183

Total
Fire Library Non-Major
Department Department Public Governmental
Improvement Improvement Facilities Funds
-$ -$ -$ 374,769$ - - - 8,540,817 - - - 29,840,188 - - - 13,580,919 - - 118,993 3,159,380 - - 1,414,969 6,800,489 - - - - - 1,533,962 62,296,562 - - 2,749,255 7,316,005 - - 30,526 7,185,694 - - - 2,699,325 - - - 581,290 369,857 - - 7,045,055 - - - 14,470,224 - 3,041 - 187,843 300,394 36,532 1,472,541 28,990,995 - - 116,047 1,146,047 - - 54,652 427,037 - - - - 670,251 39,573 4,423,021 70,049,515 (670,251) (39,573) (2,889,059) (7,752,953) 627,374 - 6,397,216 30,885,841 (42) - (112,452) (14,438,252) 627,332 - 6,284,764 16,447,589 (42,919) (39,573) 3,395,705 8,694,636 1,306,924 301,104 22,962,067 204,690,026 1,264,005$ 261,531$ 26,357,772$ 213,384,662$

CAPITAL PROJECTS FUNDS

CITY OF SANTA CLARA

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
For the year ended June 30, 2024 (continued)

DRAFT

184

Maintenance
Variance
Actual Amount Positive
Budget Budgetary Basis (Negative)

REVENUES
Taxes-Other 377,955$ 374,769 $ (3,186)$ Charges for services 1,373,759 1,373,643 (116) Interest and rents 2,181 15,740 13,559 Total Revenues 1,753,895 1,764,152 10,257

EXPENDITURES
Current:

Total Public Works 2,188,431 1,650,588 537,843 Total Parks and Recreation 241,292 (98,582) 339,874 Total Police 94,760 94,760 - - Total Expenditures 2,524,483 1,646,766 877,717

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (770,588) 117,386 887,974

OTHER FINANCING SOURCES (USES)
Transfers in 942,413 942,413 - Total Other Financing Sources (Uses) 942,413 942,413 -

EXCESS (DEFICIENCY) OF REVENUES AND

OTHER SOURCES OVER EXPENDITURES
AND OTHER USES 171,825$ 1,059,799 887,974$ ADJUSTMENTS TO BUDGETARY BASIS:

Expenditures of prior year encumbrances recognized on the GAAP basis (308,276) Current year encumbrances recognized on the budgetary basis 223,880 Net change in receivables recognized on the GAAP basis (393,004) Beginning Fund balance 1,911,739
Ending Fund balance 2,474,601$

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL (NON-GAAP LEGAL BASIS)
For the year ended June 30, 2024

CITY OF SANTA CLARA

SPECIAL REVENUE FUNDS

Special Revenue Funds Schedule of Revenues, Expendit ures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Legal Basis)

DRAFT

185

CITY OF SANTA CLARA

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

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

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

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

SPORTS AND OPEN SPACE AUTHORITY FUND (SOSA)
SOSA was created by the City Council in 1974 for the acquisition and development of open space within the City and the development of local sports activities.

DRAFT

186

Solid
Waste Cemetery
ASSETS
Current assets:

Cash and investments:

Pooled cash and investments 9,086,672$ 3,830,325$ Receivables (net of allowance for uncollectible):

Accounts 6,740,671 -
Due from other funds - 265,923 Total current assets 15,827,343 4,096,248
Noncurrent assets:

Restricted cash 1,607,071 -
Capital assets:

Land - 1,096,874
Construction in progress - -
Buildings, infrastructure and land improvements 127,362 1,280,641 Equipment 37,170 12,150
164,532 2,389,665
Less accumulated depreciation 91,932 1,149,169 Net capital assets 72,600 1,240,496
Total noncurrent assets 1,679,671 1,240,496
Total assets 17,507,014 5,336,744

DEFERRED OUTFLOWS OF RESOURCES
OPEB related items 9,645 7,251
Pension related items 945,359 333,458
Total deferred outflows of resources 955,004 340,709

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2024

Combining Statement of Net Position
DRAFT

187

Santa Clara Sports and TOTAL
Convention Open Space Non-Major
Center Authority Enterprise Funds
12,809,383$ 6,661$ 25,733,041$ 693,962 - 7,434,633 - - 265,923 13,503,345 6,661 33,433,597 691,517 - 2,298,588 - 1,995,998 3,092,872 1,443,641 - 1,443,641 78,803,728 - 80,211,731 2,957,268 - 3,006,588 83,204,637 1,995,998 87,754,832 63,386,218 - 64,627,319 19,818,419 1,995,998 23,127,513 20,509,936 1,995,998 25,426,101 34,013,281 2,002,659 58,859,698 - - 16,896 - - 1,278,817 - - 1,295,713 (continued)

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2024

DRAFT

188

Solid
Waste Cemetery

LIABILITIES
Current liabilities:

Accrued liabilities 3,658,754 40,579
Unearned revenue - -
Accrued compensated absences 15,139 4,969 Current portion of landfill closure liability 788,000 - Total current liabilities 4,461,893 45,548
Noncurrent liabilities:

Long-term compensated absences 206,348 67,733 Landfill closure liability 5,925,426 -
Net OPEB liability 213,886 160,803
Net pension liability 5,059,962 2,010,581
Total noncurrent liabilities 11,405,622 2,239,117 Total liabilities 15,867,515 2,284,665

DEFERRED INFLOWS OF RESOURCES
OPEB related items 11,863 8,919
Pension related items 22,391 8,897
Total deferred inflows of resources 34,254 17,816

NET POSITION
Net investment in capital assets 72,600 1,240,496 Restricted for capital projects and other agreements 1,607,071 2,588,291 Unrestricted 880,578 (453,815)
Total net position (deficit) 2,560,249$ 3,374,972$

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2024

DRAFT

189

Santa Clara Sports and TOTAL
Convention Open Space Non-Major
Center Authority Enterprise Funds
1,232,567 - 4,931,900 5,538,559 - 5,538,559 - - 20,108 - - 788,000 6,771,126 - 11,278,567 - - 274,081 - - 5,925,426 - - 374,689 - - 7,070,543 - - 13,644,739 6,771,126 - 24,923,306 - - 20,782 - - 31,288 - - 52,070 19,818,419 1,995,998 23,127,513 691,517 - 4,886,879 6,732,219 6,661 7,165,643 27,242,155$ 2,002,659$ 35,180,035$ June 30, 2024

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF NET POSITION

DRAFT
19 0
Solid
W
aste Cemetery
Operating revenues:

Charges for services 38,715,157$ 773,803$
Other 560,272 840
Total operating revenues 39,275,429 774,643
Operating expenses:

Salaries and benefits 1,891,373 596,740
Materials, services and supplies 35,941,919 613,860
Depreciation 4,308 6,287
Total operating expenses 37,837,600 1,216,887
Operating income (loss) 1,437,829 (442,244)
Nonoperating revenues (expenses):

Interest revenue 25,955 49,619
Rents and royalties 11,466 -
Total nonoperating revenues (expenses) 37,421 49,619
Income (loss) before
contributions and transfers 1,475,250 (392,625)
Transfers in 35,364 796,000
Transfers (out) (26,621) (822)
Change in net position 1,483,993 402,553
Total net position - beginning 1,076,256 2,972,419
Total net position - ending 2,560,249$ 3,374,972$

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
For the year ended June 30, 2024
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position DRAFT
1 91
Santa Clara Sports and TOTAL
Convention Open Space Non-Major
Center Authority Enterprise Funds
19,670,945$ -$ 59,159,905$
- - 561,112
19,670,945 - 59,721,017
181,391 6,427 2,675,931
17,123,973 4,071 53,683,823
1,556,039 - 1,566,634
18,861,403 10,498 57,926,388
809,542 (10,498) 1,794,629
157,260 158 232,992
- - 11,466
157,260 158 244,458
966,802 (10,340) 2,039,087
- 16,500 847,864
- - (27,443)
966,802 6,160 2,859,508
26,275,353 1,996,499 32,320,527
27,242,155$ 2,002,659$ 35,180,035$
For the year ended June 30, 2024

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
DRAFT

192

Solid
Waste Cemetery

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 37,895,428$ 774,643$
Payments to suppliers (34,547,196) (574,840)
Payments to employees for salaries and benefits (1,568,299) (444,565) Rents and royalties received 11,466 -
Net cash provided (used) by operating activities 2,351,671 (244,762)

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Decrease in due from other funds - 39,778 Transfers in 35,364 796,000
Transfers (out) (26,621) (822)
Cash Flows from Noncapital Financing Activities 8,743 834,956

CASH FLOWS FROM CAPITAL AND RELATED

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

CASH FLOWS FROM INVESTING ACTIVITIES
Interest and dividends 25,955 49,619
Cash Flows from Investing Activities 25,955 49,619 Net increase (decrease) in cash and cash
equivalents 2,386,369 639,813
Cash and cash equivalents at beginning of period 8,307,374 3,190,512 Cash and cash equivalents at end of period 10,693,743$ 3,830,325$ Cash and cash equivalents:

Pooled cash and investments 9,086,672$ 3,830,325$ Restricted cash 1,607,071 -
Total cash and cash equivalents 10,693,743$ 3,830,325$

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2024

Combining Statement of Cash Flows
DRAFT

193

Santa Clara Sports and TOTAL
Convention Open Space Non-Major
Center Authority Enterprise Funds
19,196,477$ - $ 57,866,548$ (17,108,852) (4,071) (52,234,959) (181,391) (6,427) (2,200,682) - - 11,466 1,906,234 (10,498) 4,002,645
- - 39,778 - 16,500 847,864 - - (27,443) - 16,500 860,199 (735,235) - (735,235) (735,235) - (735,235) 157,260 158 232,992
157,260 158 232,992
1,328,259 6,160 4,360,601
12,172,641 501 23,671,028 13,500,900$ 6,661$ 28,031,629$
12,809,383$ 6,661$ 25,733,041$
691,517 - 2,298,588 13,500,900$ 6,661$ 28,031,629$
(continued)

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2024

DRAFT

194

Solid
Waste Cemetery
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:

Operating income (loss) 1,437,829$ (442,244)$
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:
(Decrease) Increase in due to OPEB system (12,530) (9,420) (Decrease) Increase in due to retirement system 144,320 182,828 Depreciation 4,308 6,287
Change in assets and liabilities:

Receivables, net (819,729) -
Accrued liabilities 1,394,723 39,020
Compensated absences 191,284 (21,233)
Unearned revenue - -
Other receipts 11,466 -
Net cash provided (used) by operating activities 2,351,671$ (244,762)$

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2024

DRAFT

195

Santa Clara Sports and TOTAL
Convention Open Space Non-Major
Center Authority Enterprise Funds
809,542$ (10,498)$ 1,794,629$
- - (21,950) - - 327,148 1,556,039 - 1,566,634 455,337 - (364,392) 15,121 - 1,448,864 - - 170,051 (929,805) - (929,805) - - 11,466 1,906,234$ (10,498)$ 4,002,645$
For the year ended June 30, 2024

CITY OF SANTA CLARA

NON-MAJOR ENTERPRISE FUNDS

COMBINING STATEMENT OF CASH FLOWS

DRAFT

This page intentionally left blank
DRAFT

197

CITY OF SANTA CLARA

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

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

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

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

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

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

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

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

WORKERS’ COMPENSATION INSURANCE CLAIMS
This fund is used to account for the cost of claims for service connected with injuries and illnesses sustained by members of the City’s work force.

DRAFT

198

Technical PW Capital
Automotive Equipment Projects
Services Services Management
ASSETS
Current assets:

Cash and investments:

Pooled cash and investments 16,894,892$ 8,220,635$ 992,337$ Receivables (net of allowance for
uncollectible):

Accounts 11,941 - - Due from other funds 41,213 - - Materials, supplies and prepaids 2,453,887 - - Total current assets 19,401,933 8,220,635 992,337 Noncurrent assets:

Capital assets:

Equipment 41,702,492 3,379,177 - Right-to-use leased assets - - - Right-to-use SBITA - - - Total capital assets 41,702,492 3,379,177 - Less accumulated depreciation 29,298,320 3,379,177 - Net capital assets 12,404,172 - - Total noncurrent assets 12,404,172 - - Total assets 31,806,105 8,220,635 992,337

DEFERRED OUTFLOWS OF RESOURCES
OPEB related items 21,390 - - Pension related items 1,350,468 - - Total deferred outflows of resources 1,371,858 - -

COMBINING STATEMENT OF NET POSITION

INTERNAL SERVICE FUNDS

CITY OF SANTA CLARA
June 30, 2024

Combining Statement of Net Position

DRAFT

199

Special Workers'
Information Liability Compensation
Technology Insurance Insurance
Services Claims Claims TOTAL
2,860,532$ 12,796,323$ 10,030,034$ 51,794,753$ 26,663 3,977 431,512 474,093 - - - 41,213 - - 27,785 2,481,672 2,887,195 12,800,300 10,489,331 54,791,731 6,040 - - 45,087,709 34,655 - - 34,655 1,386,483 - - 1,386,483 1,427,178 - - 46,508,847 5,939 - - 32,683,436 1,421,239 - - 13,825,411 1,421,239 - - 13,825,411 4,308,434 12,800,300 10,489,331 68,617,142 8,701 - - 30,091 798,950 - - 2,149,418 807,651 - - 2,179,509 (continued)
June 30, 2024

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF NET POSITION

DRAFT

200

Technical PW Capital
Automotive Equipment Projects
Services Services Management

LIABILITIES
Current liabilities:

Accrued liabilities 201,457 - 23,382 Interest payable - - - Due to other funds 5,851,954 1,220,603 - Accrued compensated absences 21,365 - - Current portion of lease obligation - - - Current portion of SBITA - - - Total current liabilities 6,074,776 1,220,603 23,382 Noncurrent liabilities:

Long-term portion estimated claims - - - Long-term compensated absences 291,213 - - Long-term lease obligation - - - Long-term SBITA - - - OPEB pension liability 474,366 - - Net pension liability 6,299,821 - - Total noncurrent liabilities 7,065,400 - - Total liabilities 13,140,176 1,220,603 23,382

DEFERRED INFLOWS OF RESOURCES
OPEB related items 26,310 - - Pension related items 27,877 - - Total deferred inflows of resources 54,187 - -

NET POSITION
Net investment in capital assets 12,404,172 - - Unrestricted 7,579,428 7,000,032 968,955 Total net position (deficit) 19,983,600$ 7,000,032$ 968,955$

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2024

DRAFT

201

Special Workers'
Information Liability Compensation
Technology Insurance Insurance
Services Claims Claims TOTAL
911,436 2,686,198 4,307,485 8,129,958 7,304 - - 7,304 - - - 7,072,557 30,493 - - 51,858 34,720 - - 34,720 602,683 - - 602,683 1,586,636 2,686,198 4,307,485 15,899,080 - 6,056,000 16,700,000 22,756,000 415,637 - - 706,850 - - - - 617,329 - - 617,329 192,965 - - 667,331 2,881,833 - - 9,181,654 4,107,764 6,056,000 16,700,000 33,929,164 5,694,400 8,742,198 21,007,485 49,828,244 10,702 - - 37,012 12,752 - - 40,629 23,454 - - 77,641 166,507 - - 12,570,679 (768,276) 4,058,102 (10,518,154) 8,320,087 (601,769)$ 4,058,102$ (10,518,154)$ 20,890,766$

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2024

DRAFT

202

Technical PW Capital
Automotive Equipment Projects
Services Services Management
Operating revenues:

Charges for services 8,943,898$ 805,515$ 4,113,199$ Insurance refunds and other - - - Total operating revenues 8,943,898 805,515 4,113,199 Operating expenses:

Salaries and benefits 2,730,951 - 3,397,922 Materials, services and supplies 2,931,608 311,831 336,519 General and administrative - - - Amortization - Right to use assets - - - Depreciation 2,419,223 53,476 - Total operating expenses 8,081,782 365,307 3,734,441 Operating income (loss) 862,116 440,208 378,758 Nonoperating revenues (expenses):

Other revenue 286,276 1,750,000 - Interest expense - - - Gain (loss) on retirement of assets (30,107) - - Total nonoperating revenues (expenses) 256,169 1,750,000 - Income (loss) before
contributions and transfers 1,118,285 2,190,208 378,758 Transfers in 1,455,105 3,500,000 - Transfers (out) (149,600) - (406,304) Change in net position 2,423,790 5,690,208 (27,546) Total net position - beginning 17,559,810 1,309,824 996,501 Total net position - ending 19,983,600$ 7,000,032$ 968,955$

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
For the year ended June 30, 2024

Combining Statement of Revenues, Expenses, and Chang es in Fund Net Position

DRAFT

203

Special Workers'
Information Liability Compensation
Technology Insurance Insurance
Services Claims Claims TOTAL
13,108,551$ 6,210,606$ 6,097,000$ 39,278,769$ - - 193,973 193,973 13,108,551 6,210,606 6,290,973 39,472,742 2,267,870 - - 8,396,743 10,056,315 - - 13,636,273 - 6,325,653 6,464,165 12,789,818 713,293 - - 713,293 1,208 - - 2,473,907 13,038,686 6,325,653 6,464,165 38,010,034 69,865 (115,047) (173,192) 1,462,708 - - - 2,036,276 (40,662) - - (40,662) - - - (30,107) (40,662) - - 1,965,507 29,203 (115,047) (173,192) 3,428,215 - - - 4,955,105 - - - (555,904) 29,203 (115,047) (173,192) 7,827,416 (630,972) 4,173,149 (10,344,962) 13,063,350 (601,769)$ 4,058,102$ (10,518,154)$ 20,890,766$

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
For the year ended June 30, 2024

DRAFT

204

Technical PW Capital
Automotive Equipment Projects
Services Services Management

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 8,994,698$ 805,515$ 4,113,199$ Payments to suppliers (4,454,358) (311,831) (123,694) Payments to employees for salaries and benefits (2,576,924) - (3,397,922) Internal activity - payments to other funds (172,073) - (231,771) Claims paid - - - Other receipts 286,276 1,750,000 - Net cash provided (used) by operating activities 2,077,619 2,243,684 359,812

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
(Increase) in due from other funds (3,644) - - Increase in due to other funds 1,086,169 189,717 - Transfers in 1,455,105 3,500,000 - Transfers (out) (149,600) - (406,304) Cash Flows from Noncapital Financing Activities 2,388,030 3,689,717 (406,304)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition and construction of capital assets, net (3,681,678) - - Principal payment on capital debt - - - Interest paid on capital debt - - - Cash Flows from Capital and Related
Financing Activities (3,681,678) - - Net increase (decrease) in cash and cash
equivalents 783,971 5,933,401 (46,492) Cash and investments at beginning of period 16,110,921 2,287,234 1,038,829 Cash and investments at end of period 16,894,892$ 8,220,635$ 992,337$ Cash and cash equivalents:

Pooled cash and investments 16,894,892$ 8,220,635$ 992,337$ Total cash and cash equivalents 16,894,892$ 8,220,635$ 992,337$

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2024

Combining Statement of Cash Flows
DRAFT

205

Special Workers'
Information Liability Compensation
Technology Insurance Insurance
Services Claims Claims TOTAL
13,081,890$ 6,210,606$ 6,116,369$ 39,322,277$ (9,939,724) - - (14,829,607) (2,120,685) - - (8,095,531) (1,460) - - (405,304) - (5,415,583) (5,724,024) (11,139,607) - - - 2,036,276 1,020,021 795,023 392,345 6,888,504 - - - (3,644) - - - 1,275,886 - - - 4,955,105 - - - (555,904) - - - 5,671,443 - - - (3,681,678) (800,003) - - (800,003) (40,662) - - (40,662) (840,665) - - (4,522,343) 179,356 795,023 392,345 8,037,604 - 2,681,176 12,001,300 9,637,689 43,757,149 2,860,532$ 12,796,323$ 10,030,034$ 51,794,753$ 2,860,532$ 12,796,323$ 10,030,034$ 51,794,753$ 2,860,532$ 12,796,323$ 10,030,034$ 51,794,753$ (continued)

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2024

DRAFT

206

Technical PW Capital
Automotive Equipment Projects
Services Services Management
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:

Operating income (loss) 862,116$ 440,208$ 378,758$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities:
(Decrease) Increase in lease and SBITA obligation - - - (Decrease) Increase in due to OPEB system (27,791) - - (Decrease) Increase in due to retirement system 167,754 - - Depreciation 2,419,223 53,476 - Change in assets and liabilities:

Receivables, net 50,800 - - Inventory (1,474,154) - - Accrued liabilities (220,669) - (18,946) Long-term portion estimated claims - - - Compensated absences 14,064 - - Other receipts 286,276 1,750,000 - Net cash provided (used) by operating activities 2,077,619$ 2,243,684$ 359,812$

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2024

DRAFT

207

Special Workers'
Information Liability Compensation
Technology Insurance Insurance
Services Claims Claims TOTAL
69,865$ (115,047)$ (173,192)$ 1,462,708$ 713,294 - - 713,294 (11,304) - - (39,095) 95,222 - - 262,976 1,208 - - 2,473,907 (26,663) (3,977) 19,369 39,529 - - (27,785) (1,501,939) 115,132 273,047 173,953 322,517 - 641,000 400,000 1,041,000 63,267 - - 77,331 - - - 2,036,276 1,020,021$ 795,023$ 392,345$ 6,888,504$

CITY OF SANTA CLARA

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF CASH FLOWS
For the year ended June 30, 2024

DRAFT

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DRAFT

209

CITY OF SANTA CLARA

COMBINING FIDUCIARY FUNDS

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

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

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

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

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

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

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

CUSTODIAL DEPOSITS
This fund accounts for various miscellaneous deposits for other entities.

DRAFT

210

Total
Charitable Successor Private Purpose
Trust Agency Trust
ASSETS
Current assets
Cash and investments:

Pooled cash and investments 809,186$ 746,871$ 1,556,057$ Receivables (net of allowance for uncollectibles):

Interest and rent 10,606 185,369 195,975 Leases receivable - 896,947 896,947 Total current assets 819,792 1,829,187 2,648,979 Noncurrent assets
Leases receivable- noncurrent - 41,927,423 41,927,423 Investment with fiscal agent-noncurrent 2,902,022 - 2,902,022 Land held for resale - 532,542 532,542 Total noncurrent assets 2,902,022 42,459,965 45,361,987 - Total Assets 3,721,814 44,289,152 48,010,966

LIABILITIES
Unearned revenues - 122,008 122,008 Due to other agencies - 740,000 740,000 Total Liabilities - 862,008 862,008

DEFERRED INFLOWS OF RESOURCES
Leases related - 40,393,601 40,393,601 Total deferred inflows of resources - 40,393,601 40,393,601

NET POSITION
Held in trust for private purpose 3,721,814 - 3,721,814 - 3,033,543 3,033,543 - Total Net Position 3,721,814$ 3,033,543$ 6,755,357$

CITY OF SANTA CLARA

PRIVATE PURPOSE TRUST FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2024
Restricted for individuals, organization
and other governments

Private Purpose Trust Funds

Combining Statement of Net Position

DRAFT

211

Total
Charitable Successor Private Purpose
Trust Agency Trust

ADDITIONS
Investment income:

Net change in fair value of investments 129,146$ -$ 129,146$ Interest and rents 112,432 3,612,705 3,725,137 Net investment income 241,578 3,612,705 3,854,283 Total additions 241,578 3,612,705 3,854,283

DEDUCTIONS
General and administrative 108,492 972 109,464 Pass through to the County of Santa Clara - 2,920,000 2,920,000 Total deductions 108,492 2,920,972 3,029,464 133,086 691,733 824,819 Net position - beginning 3,588,728 2,341,810 5,930,538 Net position - ending 3,721,814$ 3,033,543$ 6,755,357$

CITY OF SANTA CLARA

PRIVATE PURPOSE TRUST FUNDS

COMBINING STATEMENT OF CHANGES IN NET POSITION
For the Year Ended June 30, 2024
Net increase (decrease) in fiduciary net position

Combining Statement of Changes in Net Position
DRAFT

212

Employee Contributed Total
Emergency Paid Special Custodial Custodial
Leave Pool Assessments Deposits Funds
ASSETS
Cash and investments:

Pooled cash and investments 417,818$ 505,773 $ 21,712 $ 945,303$ Total cash 417,818 505,773 21,712 945,303 Total Assets 417,818 505,773 21,712 945,303

LIABILITIES
Accrued liabilities - - 1,100 1,100 Total Liabilities - - 1,100 1,100

NET POSITION
417,818 505,773 20,612 944,203 - Total Net Position 417,818$ 505,773 $ 20,612 $ 944,203$

CITY OF SANTA CLARA

CUSTODIAL FUNDS

COMBINING STATEMENT OF NET POSITION
June 30, 2024
Restricted for individuals, organization
and other governments

Custodial Funds

Combining Statement of Net Position

DRAFT

213

Employee Contributed Total
Emergency Paid Special Custodial Custodial
Leave Pool Assessments Deposits Funds

ADDITIONS
Contributions:

Employee contributions 63,557$ - $ - $ 63,557$ Other plans - 3,281,253 - 3,281,253 Gifts and bequest - - 1,740 1,740 Total contributions 63,557 3,281,253 1,740 3,346,550 Investment income:

Interest and rents 8,012 - - 8,012 Net investment income 8,012 - - 8,012 Total additions 71,569 3,281,253 1,740 3,354,562

DEDUCTIONS
General and administrative - 80,000 3,063 83,063 Benefits paid 56,059 - - 56,059 Pass through to the Stadium Authority - 3,105,273 - 3,105,273 Total deductions 56,059 3,185,273 3,063 3,244,395 15,510 95,980 (1,323) 110,167 Net position - beginning 402,308 409,793 21,935 834,036 Net position - ending 417,818$ 505,773$ 20,612 $ 944,203$

Audit CommitteeNovember 21, 2024

Audit Committee
November 21, 2024