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Attachment 3
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Attachment 3
SUNNYVALE FINANCING AUTHORITY
Table of Contents
Fiscal Year Ended June 30, 2024
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Attachment 3
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
City of Sunnyvale, California
Opinions
We
have audited the accompanying financial statements of the governmental activities and the major fund of the Sunnyvale Financing Authority (Authority), a component unit of the City of Sunnyvale, California (City), California, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the Table of Contents.
In our opinion, based on our audit, the financial statemen ts referred to above present fairly, in all material respects, the financial position of the governmental activities and the major fund of the Authority as of June 30, 2024, and the changes in financial posit ion for the year then ended in a ccordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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 th e United States of America; and for the design, implementation, and maintenance of in ternal control relevant to the pr eparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substant ial doubt about The Authority’s ability to continue as a going concern for twelve months beyond the financia l 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 ge nerally accepted auditing standards will always detect a material misstatement when it exists . The risk of not detecting a materi al misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forg ery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individu ally or in the aggregate, they wo uld influence the judgment made by a reasonable user based on the financial statements.
Attachment 3
In performing an audit in accordance with generally accepted auditing standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstateme nt of the financial statements, whether due to fraud or error, and design and perform audi t procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circum stances, but not for the purpose of expressing an opinion on the effectiveness of The Authority’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting polici es used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditi ons or events, considered in the aggregate, that raise substantial doubt about The Authority’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit,
significant audit findings, and certa in internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis be presented to supplement th e basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required s upplementary 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 compari ng 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.
Pleasant Hill, California
November 27, 2024
Attachment 3
3
Management’s Discussion and Analysis
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Management’s Discussion and Analysis (Unaudited)
Fiscal Year Ended June 30, 2024
4 This analysis of the Sunnyvale Financing Authority (Authority) of the City of Sunnyvale’s (City) financial performance provides an overview of the Authority’s financial activities for the fiscal year ended June 30, 2024. Please read it in conjunction with the accompanying basic financial statements and the accompanying notes to basic financial statements.
A. FINANCIAL HIGHLIGHTS
At June 30, 2024, the Authority’s net position is $0. The Authority receives lease payments from the City and makes debt service payments to the fiscal agent when due. The fiscal agent (trustee of bond project funds) handles such transactions for the Authority. At June 30, 2024, other than the uns pent bond proceeds held by the fiscal agent as security for the bondholders, the Authority’s major asset includes the lease receivable from the City, which should be sufficient to pay off the outstanding bonds payable in the remaining bond years. Any excess reserve (primarily interest earned and accrued) can be applied by the City to reduce future lease payments to the Authority.
The unspent bond proceeds of 2020 Ci vic Center Lease Revenue Bonds issued to finance the first phase of the City’s Civic Center Modernization Project totaled $22,743 as of June 30, 2024. The 2020 Civic Center Lease Revenue Bonds was the only outstanding debt of the Authority at the end of fiscal year 2024.
B. OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Authority’s basic financial statements, which consist of three components: 1) government-wide financial statements, 2) governmental fund financial statements, and 3) notes to basic financial statements.
The Authority’s main function is the issuance and service of debt for the benefit of the City. The Authority’s revenue sources are lease payments from the City and interest income from unexpended bond proceeds held by the fiscal agent.
Government-Wide Financial Statements
The government-wide financial statements are reporte d using the economic res ources measurement focus and the accrual basis of accounting. Revenues are record ed when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
The statement of net position presents information on all of the Authority’s assets and liabilities, with the difference between the two reported as net position.
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Management’s Discussion and Analysis (Unaudited), Continued Fiscal Year Ended June 30, 2024
5 B. OVERVIEW OF FINANCIAL STATEMENTS, Continued
The statement of activities presents information about how the Authority’s net position changed during the year. All changes in net position ar e reported as the underlying event giving rise to the change occurs, regardless of timing of related cash flows.
Governmental Fund Financial Statements
The governmental fund financial st atements include statements for the governmental funds which are prepared using the current financial resources measurement focus and modified accrual basis of accounting.
Revenues are recognized as soon as they become measurable and av ailable. Revenues are considered available when they are collectible within the current period or soon enough (within 60 days of the end of the current fiscal period) thereafter to pay liabili ties of the current period. Expenditures generally are recorded when a liability is incurred except for debt service expenditures which are recorded when payment is due.
The 2020 Civic Center Lease Revenue Bonds is presented as a major debt service fund.
Reconciliation of the fund financial statements to the government-wide financial statements is provided in the basic financial statements to explain the differences created by the integrated approach.
Notes to the Basic Financial Statements
The notes provide additional information that expl ain the data provided in the government-wide and governmental fund financial statements.
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Management’s Discussion and Analysis (Unaudited), Continued Fiscal Year Ended June 30, 2024
6 C. GOVERNMENT-WIDE FINANCIAL ANALYSIS
Statement of Net Position
The following are the condensed comparative statements of net position at June 30, 2024 and 2023.
Sunnyvale Financing Authority
Condensed Statements of Net Position
(Am ounts in T housand s)
2024 2023
Assets:
Current Assets 1,256 $ 2,492 $
Noncurrent Assets 146,067 147,942
Total Assets 147,323 150,434
Liab ilities:
Current Liabilities 1,233 1,264
Noncurrent Liabilities 146,090 149,170
Total Liabilities 147,323 150,434
Net Position:
Restricted for Debt Service -$ -$
Current assets decreased as the 2020 Lease Revenue Bond proceeds were drawn to fund continued construction costs of the Civic Center Modernization Project. Non-current assets decreased reflecting a corresponding decrease in outstanding lease receivable balance. In 2024, the City made payments towards the principal, as per th
e lease payment schedule, resulting in a decrease to the outstanding lease receivable balance. The City will continue to make payments accordance to the lease payment schedule. The liabilities will be funded from lease payments by the City, with credits of the interest earned from the reserve funds, and excess reserve.
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Management’s Discussion and Analysis (Unaudited), Continued Fiscal Year Ended June 30, 2024
7 C. GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued
Statement of Activities
The following are the condensed compar ative statements of ac tivities for the fiscal years ended June 30, 2024 and 2023.
2024 2023
Revenues:
Program Revenues:
Charges for Services -
Lease Revenue 6,884$ 71,040$
G eneral Revenues:
Investm ent Earnings 27 847
Expe ns e s :
Intergov Disbusements to the City (1,248) (66,193)
Interest Expense and Fiscal Charges (5,663) (5,694)
Change in Net Position - -
Net Position - Beginning of Y ear - -
Net Position - Ending of Y ear -$ -$
Sunnyvale Financing Authority
Condensed Statements of Activ ities
(Am ounts in T housand s)
Intergovern
mental expenses associated with the Civic Center Modernization Project totaled to $1.2 million.
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Management’s Discussion and Analysis (Unaudited), Concluded Fiscal Year Ended June 30, 2024
8 D. GOVERNMENTAL FUND FINANCIAL STATEMENT ANALYSIS
The focus of the Authority’s governmental fund is to provide information on the inflows, outflows and balances of spendable resources. Such informati on is useful in assessing the Authority’s financing requirements.
As of the end of fiscal year 2024, the Authority’s governmental fund reported an ending fund balance of $22,832. All of the fund balance was restricted for the purposes of meeting future debt service requirements.
E. LONG-TERM OBLIGATIONS
At June 30, 2024, the only outstanding debt issues of the Authority is the 2020 Civic Center Lease Revenue Bonds in the amount of $146.7 million.
For more information on the Authority’s long-term debt, see Note 4 to the basic financial statements.
F. REQUEST FOR INFORMATION
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the Authority’s finances and to demonstrate the Author ity’s accountability for the funds it receives. If you have questio ns about this report or need additio nal financial information, contact the Finance Department of the City of Sunnyvale, 456 W. Olive Avenue, Sunnyvale, California 94088.
Attachment 3
Government-Wide Financial Statements
9 Attachment 3
SUNNYVALE FINANCING AUTHORITY
Statement of Net Position
June 30, 2024
Governmental
Activities
Assets:
Current Assets:
Restricted Cash and Investments Held by Fiscal Agent 22,743$ Interest Receivable 89
Lease Interest Receivable 1,233,169
Total Current Assets 1,256,001
Noncurrent Assets:
Lease Receivable 146,067,546
Total Assets 147,323,547
Liabilities:
Current Liabilities:
Interest Payable 1,233,169
Total Current Liabilities 1,233,169
Noncurrent Liabilities:
Long-Term Debt - Due in More Than One Year 146,090,378
Total Liabilities 147,323,547
Net Position -$
See Accompanying Notes to the Basic Financial Statements. 10 Attachment 3
SUNNYVALE FINANCING AUTHORITY
Statement of Activities
Year Ended June 30, 2024
Governmental
Activities
Program Expenses:
Intergovernmental Disbursements to the City 1,248,316$
Interest Expense and Fiscal Charges 5,663,534
Total Program Expenses 6,911,850
Program Revenues:
Charges for Services - Lease Revenue 6,884,230
General Revenues:
Investment Earnings 27,620
Change in Net Position -
Net Position - Beginning of Year
Net Position - End of Year -$
See Accompanying Notes to the Basic Financial Statements. 11 Attachment 3
Governmental Funds Financial Statements
The 2020 Civic Center Lease Revenue Fund is used to account for the resources accumulated for the repayment of the principal and interest of the 2020 Civic Center Lease Revenue Bonds. 12 Attachment 3
SUNNYVALE FINANCING AUTHORITY
Balance Sheet
Governmental Fund
June 30, 2024
2020
Civic Center
Lease Revenue
Bonds
Assets:
Restricted Cash and Investments Held by Fiscal Agent 22,743$ Interest Receivable 89
Lease Receivable 146,067,546
Total Assets 146,090,378$
Deferred Inflows of Resources:
Lease Revenue to be Collected 146,067,546$
Fund Balances:
Restricted for Debt Service 22,832
Total Deferred Inflows of Resources
and Fund Balances 146,090,378$
See Accompanying Notes to the Basic Financial Statements. 13 Attachment 3
SUNNYVALE FINANCING AUTHORITY
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
Total Fund Balances - Total Governmental Funds 22,832$
Interest portion of the lease installment receivable due from the City, which is used to pay the interest payable on long-term debt. 146,067,546
(146,090,378)
(1,233,169)
1,233,169
Net Position of Governmental Activities -$
June 30, 2024
Amounts reported for governmental activities in the statement of net position are different because:
Lease receivable reported in the funds are not available to pay for current expenditures and are deferred in the fund financial statements.
Lease revenue on interest accrual are not reported as receivable in the fund financials.
Interest expense accrual does not require the use of current financial resources and therefore are not reported as payable in the fund financials.
Long-term debt are not due and payable in the current period and therefore they are not reported in the governmental fund balance sheet.
See Accompanying Notes to the Basic Financial Statements. 14 Attachment 3
SUNNYVALE FINANCING AUTHORITY
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
Year Ended June 30, 2024
2020
Civic Center
Lease Revenue
Bonds
Revenues:
Lease Revenue 7,525,572$
Investment Earnings 27,620
Total Revenues 7,553,192
Expenditures:
Intergovernmental Disbursements to the City 1,248,316
Debt Service:
Principal Retirement 2,455,000
Interest 5,055,425
Total Expenditures 8,758,741
Excess (Deficiency) of Revenues
Over (Under) Expenditures (1,205,549)
Net Change in Fund Balances (1,205,549)
Fund Balances - Beginning of Year 1,228,381
Fund Balances - End of Year 22,832$
See Accompanying Notes to the Basic Financial Statements. 15 Attachment 3
SUNNYVALE FINANCING AUTHORITY
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities Year Ended June 30, 2024
Net Changes in Fund Balances - Total Governmental Funds (1,205,549)$ (641,343)
2,455,000
(608,109)
Change in Net Position of Governmental Activities -$
Amounts reported for governmental activities in the statement of activities are different because:
Lease revenues reported in the fund financials reflected the timing of collection revenues which are not includable as revenues in the government-wide financials.
Repayment of principal on the bonds is reported in the fund financials as expenditures.
Interest expense accrual does not require the use of current financial resources and therefore are not reported as expenditures in the fund financials.
See Accompanying Notes to the Basic Financial Statements. 16 Attachment 3
SUNNYVALE FINANCING AUTHORITY
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
17 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Sunn yvale Financing Authority (Authority), a component unit of the City of Sunnyvale, California (City), have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the Authority’s accounting policies are described below.
A. Reporting Entity
The Authority was established on September 29, 1992 by the Joint Exercise of Powers Agreement between the City and the former Redevelopment Agency of the City of Sunnyvale.
The Authority is administered by a Board of Directors consisting of seven persons, each serving in his or her individual capacity as a Director of the Authorit y. The sitting members of the City Council constitute the Directors of the Authority until such time as they cease to be members of the City Council.
Additionally, the Authority shall have four officers as follows:
Chairperson – Mayor of the City
Vice-Chairperson – Vice-Mayor of the City
Executive Director – City Manager
Treasurer – Dir ector of Finance
The City Attorney shall serve as General Counsel to the Authority and the City Clerk shall serve as Secretary.
In addition to having the same governing board, the C ity is financially accountable for the Authority and conducts management activities of the Authority. Though legally a sepa rate entity, the Authority is, in substance, a component unit of the City and is blended into the City’s Comprehensive Annual Financial Report.
The Board of Directors of the Authority is required to hold at least one regular meeting each year.
B. Basis of Accounting and Measurement Focus
The accounts of the Authority are organi zed on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for in a separa te set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. Authority resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled.
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Notes to Basic Financial Statements, Continued
Fiscal Year Ended June 30, 2024
18 NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES, Continued
Government-Wide Financial Statements
The Authority’s government-wide financial statements include a statement of net position and a statement of activities. These statements present summaries of governmental activities for the Authority. The Authority has no business-type activities.
The government-wide financial statements are presented on an “economic resources” measurement focus an d the accrual basis of accounting. Accordingly, all current and non-current assets and liabilities are included in the statement of net position. The stat ement of activities pres ents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are ea rned while expenses are recognized in the period in which the liability is incurred. Revenues for the Authority includes lease revenues received from the City and investment earnings.
Governmental Fund Financial Statements
Governmental fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances. An accompanying schedule is presented to reconcile and to explain the differences in fund balance as presented in these statements to the net position presented in the government-wide financial statements.
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingl y, only current assets and current liabilities are included on the balance sheets. The statement of revenues, expenditures and changes in fund balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Revenues are recognized as soon as they become measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Authority c onsiders revenues to be available if they are collected within 60 days of the end of the current period. The primary revenue sources, which have been treated as susceptible to accrual by the Authority, are lease revenues from the City and investment earnings.
Expenditures are recorded in the accounting period in which the related fund liability is liquidated.
For the year ended June 30, 2024, the Authority repor ted the following major governmental fund for the activities of its only remaining outstanding debt:
- The 2020 Lease Revenue Bonds Fund is a debt services fund used to account for the resources accumulated for the repayment of the principal and interest.
Reconciliation of the fund financial statements to the government-wide fi nancial statements is provided to explain their differences.
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Notes to Basic Financial Statements, Continued
Fiscal Year Ended June 30, 2024
19 NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES, Continued
C. Restricted Cash and Investments Held by Fiscal Agent Restricted cash and investments held by the fiscal agent could include unexpended bond proceeds and reserves established in accordance with related bond indentures. The Authority’s investments are stated at fair value.
D. Net Position and Fund Balance
Restricted net position and fund balance represent external rest rictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. The Authority’s net position and fund balance are restricted for debt service purposes.
E. Deferred Inflows of Resources
Deferred inflows of resources represent an acquisition of net position or fund balances that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. On the governmental funds balance sheet, the unavailable lease revenues fro m the City corresponding to the lease receivable are recorded as deferred inflows of resources since the balances are not current financial resources.
F. Effects of New Pronouncements
As of July 1, 2023, the Authority implemented the following GASB Statements:
In April 2022, the GASB issued Statement No. 99, "Omnibus 2022." The objectives of this Statement are to enhance comparability in accounting a nd financial reporting and to improve the consistency of authoritative literature by addressing (a) practice issues that have been identified during implementation and application of certain GASB Statements and (b) accounting and financial reporting for financial guarantees. The requirements related to leases, PPPs, and SBITAs took effect for financial statements starting with the fiscal year that ends June 30, 2023. The implementation of this statement did not have a significant im pact on the Authority’s financial statements for fiscal year ended June 30, 2024.
In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections – An Amendment of GASB Statement No. 62. The primary objective of this statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant consistent, and co mparable information for making decisions or assessing accountability.
The implementation of this statement did not have a significant impact on the Authority’s financial statements for fiscal year ended June 30, 2024.
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Notes to Basic Financial Statements, Continued
Fiscal Year Ended June 30, 2024
20 NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES, Continued
The Authority is currently analyzin g its accounting practices to identify the potential impact on the financial statements for the GASB statements as follows:
In June 2022, the GASB i ssued Statement No. 101, Compensated Absences . The objective of this statement is to better meet the informa tion needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previ ously required disclosures. The requirements of this statement are effective for the Authority’s fiscal year ending June 30, 2025.
In December 2023, 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 risk related to government’s vulnerabilities due to certain concentrations or constraints. This statement defines a concentration as a lack of diversity related to an aspect of a significant inflow of resources or outflow of resources. A constraint is a limitation imposed on a government by external party or by formal action of the government’s highest level of decision-making authority. Concentrations and constraints may limit a government’s ability to acquire resources or control spending. The requirements of this statement are effective for the City’s fiscal year ending June 30, 2025.
In April 2024, the GASB issued Statement No. 103, Financial Reportion Model Improvements. The objective of this statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This statement also addresses certain application issues. Th e requirements of this statement are effective for the City’s fiscal year ending June 30, 2026.
In September 2024, 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 statemen t requires certain capital assets to be disclosed separately in the capital assets note disclosures required by statement 34. The requirements of this statement are effective for the City’s fiscal year ending June 30, 2026.
G. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclo sure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenditures and expenses. Actual results could di ffer from these estimates and assumptions.
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Notes to Basic Financial Statements, Continued
Fiscal Year Ended June 30, 2024
21 NOTE 2 – RESTRICTED CASH AND INVESTMENTS HELD BY CITY AND BY FISCAL AGENT At June 30, 2024, the Authority had the following cash and investments held in City Treasury Pool and held by fiscal agent, respectively:
Credit Ratings Maturity (in years) T otal Fair
Investments S&P/Moody's 1 year or less 1 to 2 years 2 to 5 years 5 to 10 years Value Treasury Obligation Mutual Funds Not Rated 22,743 - - - 22,743 Total 22,743$ -$ - $ - $ 22,743$
* S hort-term, highly liquid investments are not subject to the fair value hierarchy disclosure requirements of GASB Statement No. 72.
Concentration of credit risk is the risk of loss attributed to the magnitude of investment in any single issuer.
The Authority’s investment in the corporate note is in excess of 5% of the total cash and investments.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between ma
rket participants at the measurement date. The Authority categorizes its fair value measurements within the fair value hierarchy established by GASB Statement No. 72. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant observable inputs; Level 3 inputs are significant unobservable inputs.
The Authority’s investment options for the debt service reserve are specified by the trust indenture.
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Notes to Basic Financial Statements, Continued
Fiscal Year Ended June 30, 2024
22 NOTE 3 - LEASE RECEIVABLE
In accordance with a Lease Agreement for the 2020 Lease Revenue Bonds, de bt service is funded with lease payments made by the City to the Authority. The C ity has covenanted to make payments in amounts corresponding to the Authority’s debt service requirements to the exte nt that funds are unexpended upon completion of the Phase I of the Civi c Center Modernization Project, such funds will be used to retire outstanding debt and the lease payments required from the City will be reduced accordingly.
Using fixed interest rates 5.0% until 2024 and 4.0% until 2050 and 2.5% therea fter until the final payment in 2052, the estimated future lease payments from the City as of June 30, 2024 are as follows: 2026 2,680,000 4,829,475
2027 2,790,000 4,722,275
2028 2,900,000 4,610,675
2029 3,015,000 4,494,675
2030-2034 16,995,000 20,564,175
2035-2039 20,675,000 16,882,375
2040-2044 25,160,000 12,402,575
2045-2049 30,600,000 6,952,375
2050-2052 21,350,000 1,181,875
$81,573,150
Unamortized premium 17,345,378
Total Outstanding $146,090,378
Unexpended bond proceeds (22,832)
Lease Receivable $146,067,546
Attachment 3
SUNNYVALE FINANCING AUTHORITY
Notes to Basic Financial Statements, Concluded
Fiscal Year Ended June 30, 2024
23 NOTE 4 – LONG-TERM DEBT
Following is a summary of long-term debt transactions during the fiscal year ended June 30, 2024:
Description
Balance
July 1, 2023 Additions Reductions
Premium
Amortization
Balance
June 30, 2024
2020 Lease Revenue Bonds 149,170,437$ -$ (2,455,000)$ (625,059)$ 146,090,378$ $131,200,000 2020 Civic Center Lease Revenue Bonds
Due in original installments of $2,455,000-$4,645,000 until April 1, 2040 and term bonds in the amounts of $26,165,000, $31,825,000, and $14,475,000 due on April 1, 2045, 2050, 2052, respectively. The bonds have fixed interest rates 5.0% in 2024 and 4.0% until 2050 a nd 2.5% thereafter until the final payment in 2052.
Repayments, secured by a first pledge and lien on lease revenue, will be made from the lease revenue received
by the Authority under a leas e agreement dated November 1, 2020 betw een the Authority, as lessor and the City, as lessee.
The debt service requirements for the bonds at June 30, 2024 were as follows:
Year Ending June 30, Principal Interest Total
2025 2,580,000 4,932,675 7,512,675
2026 2,680,000 4,829,475 7,509,475
2027 2,790,000 4,722,275 7,512,275
2028 2,900,000 4,610,675 7,510,675
2029 3,015,000 4,494,675 7,509,675
2030-2034 16,995,000 20,564,175 37,559,175
2035-2039 20,675,000 16,882,375 37,557,375
2040-2044 25,160,000 12,402,575 37,562,575
2045-2049 30,600,000 6,952,375 37,552,375
2050-2052 21,350,000 1,181,875 22,531,875
128,745,000$ 81,573,150$ 210,318,150$
Add Unamortized
Premium 17,345,378 - 17,345,378
146,090,378$ 81,573,150$ 227,663,528$
Attachment 3
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Attachment 3