HomeMy WebLinkAbout11-19-2014 - Annual Audit Reports
Item
13
Revisions
Page
1
of
2
CITY
OF
SARATOGA
Memorandum
To:
Saratoga
City
Council
From:
Anthony
McFarlane,
Finance
Manager
Date:
November
19,
2014
Subject:
Item
13
Revisions
–
Annual
Audit
Reports
Two
text
modifications
to
the
Comprehensive
Annual
Financial
Report,
noted
below,
were
identified
after
the
City
Council
packet
was
prepared.
The
following
is
a
substitute
recommended
action
to
include
the
modifications
to
the
report:
RECOMMENDED
ACTION:
Review
and
accept
the
following
annual
audit
reports,
including
revisions
to
pages
23
and
128
of
the
Comprehensive
Annual
Financial
Report
(CAFR),
for
Fiscal
Year
2013/14:
1. Comprehensive
Annual
Financial
Report
(CAFR)
2. Single
Audit
Report
(Federal
Grant
Awards)
3. Transportation
Development
Act
Report
(MTC
Grants)
4. Appropriation
Limit
Report
(Gann)
5. SAS
114
Report
PROPOSED
TEXT
MODIFICATIONS:
1. On
page
23
of
the
CAFR,
the
wrong
page
number
is
referenced
in
the
bullet
points.
FISCAL
YEAR
2014
FINANCIAL
HIGHLIGHTS
•
Total
net
position
increased
by
$1.6
million
last
fiscal
year.
• The
City's
assets
exceed
its
liabilities
by
almost
$
129.3
million;
with
total
assets
of
$144
million
and
liabilities
of
$
14.8
million.
• Net
Position
is
comprised
of
$112.1
million
for
investment
in
capital
assets,
net
of
depreciation
and
related
debt;
$2.0
million
restricted
for
specific
purposes;
and
$15.1
million
in
unrestricted
Net
Position
(reference
pg.
#3839).
• Total
City-‐wide
revenues
of
$22.1
million
consist
of
$14.8
million
in
general
revenue
and
$7.3
million
in
program
revenue
(reference
pg.
#3940).
• City
expenses
total
$20.6
million
(reference
pg
#3940).
Item
13
Revisions
Page
2
of
2
• The
Governmental
Fund’s
fund
balances
total
$16.6
million,
with
$11.8
million
in
the
General
Fund,
$3.1
million
in
the
Capital
Improvement
Funds,
and
$1.6
million
in
the
Other
Governmental
Funds.
This
represents
an
increase
of
$1.75
million
from
last
year
(reference
pg
#4041).
• General
Fund
revenues
total
$18.3
million,
while
General
Fund
expenditures
total
$16.1 million (reference pg #4243).
2. In
the
table
of
principal
employers
located
on
page
128
of
the
CAFR,
the
Saratoga
Union
School
District
is
listed
incorrectly
and
the
word
“school”
is
misspelled.
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment Employees Rank Employment
West Valley Community College 474 1 3.34%- 0.00%
Saratoga Retirement Community 272 2 1.92%- 0.00%
Saratoga Union High Scool School District 240 3 1.69%- 0.00%
Mountain Winery 224 4 1.58%- 0.00%
Sub-Acute Saratoga Hospital 149 5 1.05%- 0.00%
Saratoga High School 133 6 0.94%- 0.00%
YMCA 130 7 0.92%- 0.00%
Our Lady Fatima Villa 101 8 0.71%- 0.00%
Prospect High School 100 9 0.70%- 0.00%
Safeway 91 10 0.64%65 2 0.52%
Gene's Fine Foods 85 1 0.67%
Saratoga Country Club 65 3 0.52%
24 Hour Fitness 30 4 0.24%
Windermere 27 5 0.21%
CVS 20 6 0.16%
Classic Car Wash 20 7 0.16%
Harmonic European Day Spa 20 8 0.16%
Hinshaw, Draa & Marsh 20 9 0.16%
Bella Saratoga 20 10 0.16%
Total City Employment1 14,200 12,600
1EDD Labor Market Information Division, MuniServices LLC
2014 20051
CITY of SARATOGA
C A L I F O R N I A
EDWARD OH
7TH GRADE
ARBOR
DAY
2013
POSTER
WINNERS
CRYSTAL WANG
3RD GRADE
ESAU VANDERBECK
12TH GRADE
FISCAL YEAR 2013/14
COMPREHENSIVE ANNUAL FINANCIAL REPORT
T HE C ITY OF S ARATOGA IS P R OUD TO BE A T REE C ITY USA
Saratoga, California
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2014
City Council
Emily Lo ..................................................................................................................... Mayor
Howard Miller .................................................................................................... Vice Mayor
Chuck Page ................................................................................................ Council Member
Manny Cappello ......................................................................................... Council Member
Jill Hunter................................................................................................... Council Member
Presented under the direction of:
James Lindsay, City Manager
Finance & Administrative Services Department
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CITY OF SARATOGA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2014
5
TABLE OF C ONTENTS
I NTRODUCTORY SECTION
Letter of Transmittal ......................................................................................................... 9
GFOA Certificate of Achievement for Excel lence in Financial Reporting ......................... 15
Pri ncipal Officers of the City .......................................................................................... 16
Organization Chart ......................................................................................................... 17
F INANCIAL S ECTION
Independent Au ditor s ’ Report ........................................................................................... 21
Management’s Discussion and Analysis (Required Supplementary Information) ............. 23
Basic Financi al Statements:
Government -Wide Financial Statements
Statement of Net Position .......................................................................................... 39
Statement of Acti vities and Changes in Net Position .................................................. 40
Fund Financial Statements
Governmental Funds:
Balance Sheet ........................................................................................................... 41
Reconciliation of the Government Funds Balance She et
to the Government -Wide Financial Statement of Net Position ............................... 42
Statement of Revenues, Expenditures and Changes in Fund Balances ......................... 43
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances t o the Government -Wide
Statement of Activities and Changes in Net Position ............................................. 44
Proprietary Funds:
Statement of Net Position .......................................................................................... 45
Statement of Revenues, Expenses, a nd Changes in Fund Net Position ......................... 46
Statement of Cash Flows ........................................................................................... 47
Basic Financial Statem ent Notes:
Notes to the Basic Financial Statements ..................................................................... 49
Required Supplementary Information
Budgetary Information .............................................................................................. 73
Modified Approach for City Streets Infrastructure Capital Assets ............................... 75
CITY OF SARATOGA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2014
6
TABLE OF C ONTENTS C ONTINUED
SUPPLEMENTARY I NFORMATION :
Non -Maj or Governmental Funds
Combining Balance Sheets ....................................................................................... 82
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........ 83
Schedule of Revenues, Exp and Changes in Fun d Balances – Budget and Actual:
Capital Improvements .......................................................................................... 84
Lighting & Landscape Assessment Districts Special Revenue Funds ..................... 85
Library Bond Debt Service Fund .......................................................................... 86
Internal Service Funds
Combining Statement of Net Position ........................................................................ 88
Combining Statement of Revenues, Expense s, and Change in Fund Balance ............... 90
Comb ining Statement of Cash Flows ......................................................................... 92
Capital Assets Used in the Operation of Governmental Funds
Comparative Schedule by Source ............................................................................... 97
Schedule by Function and Activity ............................................................................ 98
Schedule of Changes by Function and Activity ........................................................ 100
Statistical Section (Unaudited)
Net Position by Component ..................................................................................... 1 0 4
Changes in Net Position .......................................................................................... 106
Fund Balance of Governmental Funds ...................................................................... 108
Governmental Activities Tax Revenues by Source ................................................... 1 10
Changes in Fund Balances of Governmental Funds .................................................. 1 12
Property Tax Rates - Direct and Overlapping Government s ...................................... 1 14
Assessed Value of Taxable Property ........................................................................ 1 16
Principal Property Taxpayers ................................................................................... 1 18
Property Tax Levies and Collections ........................................................................ 1 19
Ratio s of Outstanding Debt by Type ........................................................................ 120
Ratios of Ge neral Bonded Debt Outstanding ............................................................ 1 22
Legal Debt Margin Information ............................................................................... 1 24
Direct and Overlapping Governmental A ctivities Debt ............................................. 1 26
Demographic and Economic Statistics ..................................................................... 1 27
Principal Employers ............................................................................................... 1 28
Full -Time Equivalent City Government Employees by Function ............................... 1 30
Operating Indicators by Function ............................................................................. 1 32
Capital Asset Statistics by Function ......................................................................... 1 34
7
INTRODUCTORY SECTION
8
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9
C ITY OF S ARATOGA
C ITY H ALL
13777 F RUITVALE A VENUE
S ARATOGA , C ALIFORNIA 95070
(408) 868 -1200
November 19, 2014
Honorable Mayor, City Council, and Citizens of the City of Saratoga, California
The Comprehensive Annual Financial Report (CAFR) of the City of Saratoga for the year ended June 30,
2014 is hereby submitted in accordance with mandated statutes. These statutes require the City of Saratoga to
annually issue a report on its financial position and activity, and that an independent firm of certified public
accountants audits this report. This annual report was prepared in accordance with accounting principles
generally accepted in the United States of America. City Management is responsible for both the accuracy of
the data and the completeness and fairness of the presentation, including all disclosures.
To provide a reasonable basis for making these representations, the City has established internal controls to
provide reasonable rather than absolute assurance that the financial statements will be free of material
misstatement. To the best of our knowledge and belief, the enclosed data is accurate in all material respects
and is reported in a manner designed to present fairly the financial position and results of operations of the
various funds of the City. Information contained in this report is intended to present the reader with a
comprehensive view of the City’s financial position and the results of its operations for the fiscal year ending
June 30, 2014, along with additional disclosures and financial information designed to enable the reader to
gain an understanding of the City’s financial activities.
The report was prepared as prescribed in Governmental Accounting Standards Board (GASB) Statement
No. 34, Basic Financial Statements and Management’s Discussions and Analysis for State and Local
Governments. To facilitate the general public’s understanding and usefulness of the City of Saratoga’s
financial statements, GASB Statement 34 requires that management provide a narrative introduction,
overview, and analysis to accompany the basic financial statements in the form of Management’s
Discussion and Analysis (MD&A). This formal letter of transmittal is designed to complement the
MD&A and should be read in conjunction with it.
Unaudited sections of this document are presented to supplement the basic financial statements. While not
audited, the supplemental information is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for operational, economic and historical context.
THE REPORTING ENTITY AND ITS SERVICES
The City of Saratoga (City), incorporated in 1956, is located 40 miles south of San Francisco in the Santa
Clara Valley. The City currently covers a land area of approximately 12 square miles and contained a
population of 30,887 at January 1, 2014, as reported by the Department of Finance. The City is a general law
city of the State of California and operates under a council-manager form of government. Policymaking and
legislative authority are vested in the City Council, which consists of a Mayor, Vice Mayor and three
10
additional council members. City Council members are elected at-large for staggered four-year terms. The
Mayor is selected annually by the City Council. The City Council is responsible for, among other things,
passing ordinances, adopting the budget, appointing members to the City’s seven advisory commissions and
hiring the City Manager and City Attorney. The City Manager is responsible for implementing the policies
and ordinances of the City Council, overseeing the daily operations of the City, and recommending
appointments of the City's department directors to the City Council.
The City provides a limited range of services including public safety, development regulation, public works,
community and recreation activities and events, and general administrative functions. As a minimal service
city, activities are supplemented through numerous contracts with others. Contracted services include, but
are not limited to, public safety, infrastructure maintenance, engineering services, legal services and
recreation activities. The City is also committed to citizen participation in the evaluation, expansion and
enhancement of services.
Saratoga residents who wish to assist the City Council in forming government policy may do so by serving
on an advisory commission. The commissions act in an advisory capacity to the City Council, and are
comprised of the Heritage Preservation Commission, Library Commission, Parks and Recreation
Commission, Planning Commission, Public Safety Commission, and Youth Commission.
The financial reporting entity (the City) includes all the fund activity of the primary government, as well as
all of its component units. Component units are legally separated entities for which the City is fully
accountable. The City’s Saratoga Public Financing Authority (PFA) component unit which provided
financial oversight of local bond obligations was finalized in fiscal year 2005/06. The Authority’s final
financial report was issued for fiscal year 2006/07. Blended component units, although legally separate
entities, are in substance, part of the City’s operations and data from these units are combined with data of the
City. Accordingly, the operations of the Landscaping and Lighting Assessment Districts are reported in the
City’s financial statements.
ECONOMIC CONDITIONS AND OUTLOOK
Within close proximity to many businesses associated with the high technology industry, Saratoga is viewed
as a desirable place to live and serves primarily as a residential community to the Silicon Valley. There is
limited commercial or industrial activity within city boundaries.
Due to its highly rated schools and beautiful neighborhoods nestled within the foothills at the edge of the
valley, Saratoga has grown into an affluent residential city and in general is fiscally protected by the
stability of its’ tax and development fee revenues. As is typical for California cities, the City of
Saratoga’s largest funding sources are property tax, franchise fees, sales tax, and development fees and
permits. It should be noted however, that while development fees are a significant funding source;
expenses related to the intake of this fee-based revenue more than offsets the revenue received.
Property Tax
Effective with the 2006/07 fiscal year, the City began receiving a significant increase in property tax
revenues due to the passage of Assembly Bill 117. This legislation increased the property tax percentage
allocated to the City under the Tax Equity Allocation (TEA) formula.
Allocation inequality originally arose from the passage of Proposition 13 in 1978, which froze property
taxes at their current level for all cities across the State. This action created significant problems for cities
with low property tax rates. Subsequently, Section 98 of the California Revenue and Taxation Code was
passed establishing a minimum tax equity allocation of 7% of the 1.0% ad valorem tax to those cities
11
below the average rate as a condition for Counties to receive trial court funding. Impacts to ERAF
created by the shift were backfilled by the State. Because Santa Clara County determined it would
receive less from trial court funding than from the additional tax moneys flowing to the four low tax cities
(Saratoga, Cupertino, Los Altos Hills, and Monte Sereno), additional legislation was enacted which
limited the four low property tax cities in Santa Clara County to just 55% of the 7% minimum allocation.
In 2006, Assembly Bill 117 repealed the 55% limit, however the four cities were required to continue to
remit the County’s ERAF rate on these funds so that the bill would have no effect on the State Budget,
and therefore avoid the Appropriations Committee. Unfortunately, the ERAF rate the County remits to
the State is much higher at 47.7% than the four city’s ERAF rates ranging from 7.53% to 17.37 %.)
Although made partially whole, these four cities continue to be treated differently than the State’s other
TEA cities. For Saratoga, the 2006 legislative adjustments increased revenues from 3.85% to 5.46% of
the 1.0% property tax paid by residents; however it remains below the minimum 7.0%. Due to this
difference in treatment, efforts to bring the four cities up to the full tax rate continue.
Franchise Fees
Franchise Fees are assessments on a number of utility services, including gas, electricity, water, cable, and
solid waste. These assessments are integrated into the utility agreements, to be collected and remitted by the
service companies. The assessments are determined by easement formulas or a percentage of service costs
and are a pass-through fee on their billings. With most of these services considered necessities in an urban
setting, there is little fluctuation in most of the revenues stream. Cable revenue has increased due to growth
in the use of enhanced cable services. And, over the last several years, solid waste franchise fee revenue has
increased with the rise in service charges. Both of these fees are expected to remain fairly flat in the future.
Sales Tax
With Saratoga primarily a residential community with limited retail sources, Sales Tax is small in comparison
to other cities of similar size. In an average year, the City receives approximately $1 million in Sales Tax,
which is derived primarily from restaurants, grocery and drug stores, and gas stations. These revenue
categories have remained fairly consistent over time as they provide a good balance to meet local needs.
Revenue is not expected to grow significantly in the future as spending habits are migrating to online
purchases, nor is it expected to decrease significantly as the Sales Tax comes from basic services and goods
the community requires.
Development Fees
Development Fees revenue is derived from services related to planning reviews, planning applications,
building plan reviews, engineering reviews, building inspections, and all permits, fees and costs associated
with performing these activities. These services are regulatory to ensure compliance with all applicable laws,
and to ensure health and safety of the community. Although the entire community benefits from an enforced
regulatory program, the service requestor initiates the development change and benefits the most from it, and
therefore should pay most if not all of the costs. While in the past, the financial strength of the Saratoga
community has insulated this revenue source from minor economic fluctuations, the last few years have
proven that development activity does correlate with the stronger economic highs and lows.
Fiscal Outlook
For Saratoga, these main funding sources continue to be stable and reliable. The City’s property and sales tax
performances have weathered the storm of the “Great Recession” caused by the economic downturn of 2008.
Over the past two fiscal years, California has experienced a recovery that is being led by the Silicon Valley’s
strong housing and labor markets.
General Fund Property Tax revenues increased more than 6% in FY 2013/14 as the region’s assessed value of
properties continues to exceed expectations. While Property Tax revenues continue to grow, there are signs
12
that the housing market has tempered its pace, prompting conservative Property Tax revenue projections of
3% for the following budget year and into the near future.
Franchise Fee revenue remained stable throughout the recession due to the nature of the revenue. With no
expectation for growth, minimal revenue increases are projected each year, in line with service fee increases.
FY 2013/14 Sales Tax revenue fell slightly from the prior year, but as the decrease was due to corrections in
the State’s allocations, it was clear the overall strength of the economy remained strong. While encouraging,
minimal actual growth is expected in future years as the City’s land use structure consists primarily of built-
out residential neighborhoods and a small number of commercial developments, thereby limiting large Sales
Tax revenue generating sources.
Development Fees have stabilized over the past three fiscal years as a result of increasing housing prices.
Revenues have almost returned to pre-recession levels; in FY 2013/14 revenues maintained the healthy
resurgence in construction activity in alignment with other strengthening revenues.
California’s overall economy is improving, with Saratoga and the rest of the San Francisco Bay Area cities at
the forefront of this swell. Even the State’s finances appear to have stabilized. However, ongoing reduced
funding levels continue to have cities concerned that any unprotected State or County-based funding is still at
risk, even with Proposition 1A protecting cities from unrestrained State takeaways. With this continuing
fiscal uncertainty and with the anticipation of ever-increasing operating and capital improvement costs,
Saratoga plans to continue operations at basic service levels in preparation for funding impacts as the new
normal of government emerges. The Capital Improvement Program, primarily infrastructure, continues to be
funded through dedicated funding sources, grant money, and residual funding from prior year operations.
FINANCIAL INFORMATION AND MAJOR INITIATIVES
Financial Controls
Management of the City is responsible for establishing and maintaining an internal control structure designed
to ensure that the assets of the City are protected from loss, theft or misuse, and to ensure that adequate
accounting data is compiled to allow for the preparation of financial statements in conformity with generally
accepted accounting principles. The internal control structure is 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 benefits likely to be derived, and (2) the valuation of costs and benefits
requires estimates and judgments by management.
As a recipient of federal, state and local financial assistance, the City is also responsible for guaranteeing that
an adequate internal control structure is in place to ensure and document compliance with applicable laws and
regulations related to these programs. This internal control structure is subject to periodic evaluation by the
City’s management.
For Cash Management, the City practices a passive approach to investments and maintains flexibility by
managing a pooled cash system. Under the pooled cash concept, the City invests the cash of all funds with
maturities planned to coincide with cash needs. Idle cash is invested in certain eligible securities as
constrained by law and further limited by the City’s investment policy. The goals of the City’s investment
policy are safety, liquidity and yield. Cash management is tracked by fund and reconciled monthly.
In addition, the City maintains extensive budgetary controls. The objective of these controls is to ensure
compliance with legal provisions embodied in the annual appropriated budget approved by the City Council.
13
Activities of the general fund, special revenue funds, capital projects funds and debt service funds are
included in the annual appropriation.
The level of budgetary control (i.e., the level at which expenditures cannot exceed the appropriated amount)
is at the fund level. The City also maintains an encumbrance accounting system as another method of
maintaining budgetary control. Encumbered amounts lapse at year-end with the exception of the Capital
Improvements Projects, which are multiple-year projects. On occasion, outstanding encumbrances of a
material nature are reviewed by the responsible department at year end, and if deemed critical, a
recommendation is made to the City Council to take action by Resolution to re-appropriate these funds into
the following year’s budget.
Major Initiatives
The fiscal year 2013/14 Budget was developed with a focus on attaining a sustainable operating structure
with some minor service level improvements under the slowly improving financial outlook. In some
instances, staffing levels were restored or reorganized. Contracts were also restructured in order to improve
customer service levels.
The Operating Budget focused on maintaining core services. The City also supported healthier life choices
for youth in the community by committing to the Let’s Move City campaign led by First Lady Michelle
Obama. On the environmental front, the City partnered with the County of Santa Clara and Joint Venture
Silicon Valley to develop an Energy Efficient Climate Action Plan.
With limited funding available for new Capital Projects in FY 2013/14, staff concentrated on completing
existing projects already budgeted and standard ongoing maintenance projects for storm drain and sidewalk
repairs, and traffic safety. Available City funding was used primarily to leverage grant funding for Street
projects and for two safety projects with some funding provided for the Quarry Park Master Plan.
INDEPENDENT AUDIT
The City engaged Chavan & Associates, LLP to express an opinion on the financial statements based on
their audit. The audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estima tes
made by management, and evaluating the overall financial statement presentation. Generally accepted
auditing standards set forth in the General Accounting Office’s Government Auditing Standards were used by
the auditors in conducting the engagement. The City’s Annual Financial Report received an unqualified
(clean) opinion from the auditors. The independent auditors’ report is presented as the first component of
the financial section of this report.
In addition to meeting the requirements set forth in statutes, the audit was also designed to meet the
requirements of the federal Single Audit Act of 1984, as amended, and the related U.S. Office of
Management and Budget’s Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations. The City’s federal financial assistance program also received an unqualified (clean)
opinion from the auditors.
14
Awards
The Government Finance Officers Association (GFOA) of the United States and Canada awarded a
Certificate of Achievement to the City for its Excellence in Financial Reporting on the CAFR for the fiscal
year ended June 30, 2013. In order to be awarded a Certificate of Achievement, the City published an easily
readable and efficiently organized financial report. This report satisfied both generally accepted accounting
principles and applicable legal requirements.
The Certificate of Achievement is valid for a period of one year. We believe our current CAFR continues to
meet the Certificate of Achievement program’s requirements, and plan on submitting it to the GFOA to
determine its eligibility for another certificate.
ACKNOWLEDGEMENTS
This CAFR represents the culmination of numerous hours of hard work expended by many individuals in the
Finance & Administrative Services Department. In particular, we would like to express our appreciation to
Anthony McFarlane, Finance Manager for his preparation of this annual financial report, and to our
supporting staff members: Ann Xu, Accountant; Julie Ingraham, Karen Caselli, and Gina Fitch, Accounting
Technicians for their assistance with the audit and exemplary services throughout the year. Furthermore, we
would like to thank Chavan & Associates, LLP Certified Public Accountants for their helpful assistance in
the preparation of this report. Finally, we would like to give credit to the City Council and retiring City
Manager, Dave Anderson for their ongoing interest and support in planning, conducting and advising on the
operations of the City in a responsible and representative manner.
Respectfully submitted,
James Lindsay Mary Furey
City Manager Finance and Administrative Services Director
15
Government Finance Officers Association
Certificate of
Achievem ent
for Excellence in
Financial
Reporting
Presented to
City of Saratoga California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2013
Executive Director/CEO
16
CITY OF SARATOGA
ELECTED OFFICIALS AND
ADMINISTRATIVE PERSONNEL
As of Aug 29, 2014
CITY COUNCIL
Emily Lo - Mayor
Howard Miller – Vice Mayor
Chuck Page
Manny Cappello
Jill Hunter
CITY STAFF
James Lindsay – City Manager
Crystal Bothelio – City Clerk
Mary Furey – Administrative Services Director
Vacant – Community Development Director
John Cherbone – Public Works Director
Michael Taylor – Recreation & Facilities Director
CITY ATTORNEY
Richard S. Taylor – Shute, Mihaly & Weinberger
INDEPENDENT AUDITORS
Chavan & Associates, LLP Certified Public Accountants
17
FY 2013/14
City of Saratoga - Organization Chart
City AttorneyCity Manager
Community Development
Department
Community Development
Director
Facilities Division
1 Facility Maint.Manager
1 Facility Maint. Leadworker
2 Facility Maint. Workers
.60 Facility Coordinator
Planning Division
1 Senior Planner
2 Planners
1 Arborist
1 Office Specialist
Engineering Division
1 Sr. Civil Engineer
1 Engineer
.90 Administrative Analyst
.75 Office Specialist
Parks Division
1 Manager -Parks
1 Park Maint. Leadworker
6 Park Maint. Workers
.50 Office Specialist
Finance Services Division
1 Finance Manager
.90 Accountant
3 Accounting Technicians
Information Technology
Division
1 IT Analyst
1 IT Technician
Finance & Administrative
Services Department
Finance & Administrative
Services Director
Recreation & Facilities
Department
Recreation & Facilities
Director
Public Works
Department
Public Works Director
Recreation Services Division
1 Recreation Supervisor
2 Recreation Coordinators
1 Office Specialist
Streets and Fleet Division
1 Manager -Streets and Fleet
2 Street Maint. Leadworker
4 Street Maint. Workers
.50 Office Specialist
Building Division
1 Sr. Building Inspector
2 Building Inspectors
1 Plan Check Engineer
1 Permit Technician
1 Office Specialist
Citizen Advisory Commissions
& Committees
Citizens of Saratoga
Elected City Council
Human Resources Division
1 HR Manager
.75 HR Technician
City Manager's Office
1 Administrative Analyst
.50 Executive Assistant
Office of the City Clerk
1 City Clerk
.50 Deputy City Clerk
18
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19
FINANCIAL SECTION
20
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21
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the
City Council of the City of Saratoga
Saratoga, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund,
and the aggregate remaining fund information of the City of Saratoga (the “City"), as of and for the year
ended June 30, 2014, and the related notes to the financial statements, which collectively comprise City’s
basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
The City’s 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; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America, the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, each major fund, and the aggregate remaining
fund information of the City of Saratoga, as of June 30, 2014, and the respective changes in financial
position and, where applicable, cash flows thereof for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
22
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and required supplementary information, as listed in the table of contents, be presented to
supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America,
which consisted of inquiries of management about the methods of preparing the information and comparing
the information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s financial statements as a whole. The introductory section, combining individual non-
major fund statements and schedules, and statistical section, as listed in the table of contents, are presented
for purposes of additional analysis and are not a required part of the financial statements. The combining
individual non-major fund statements and schedules have been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole. The introductory and statistical sections have not
been subjected to the auditing procedures applied in the audit of the basic financial statements and,
accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated August 29, 2014
on our consideration of the City’s internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose
of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on 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.
August 29, 2014
San Jose, California
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
23
INTRODUCTION
The Management’s Discussion and Analysis (MD&A) is a required section of the City’s Comprehensive
Annual Financial Report (CAFR), as shown in the overview below. The purpose of the MD&A is to
present discussion and analysis of the City’s financial performance during the fiscal year that ended on
June 30, 2014. This report will (1) focus on significant financial issues, (2) provide an overview of the
City’s financial activity, (3) identify changes in the City’s financial position, (4) identify any individual
fund issues or concerns, and (5) provide descriptions of significant asset and debt activity.
This information, presented in conjunction with the annual Transmittal Letter and Basic Financial
Statements is intended to provide a comprehensive understanding of the City’s operations and financial
standing.
Required Components of the Annual Financial Report
FISCAL YEAR 2014 FINANCIAL HIGHLIGHTS
Total net position increased by $1.6 million last fiscal year.
The City's assets exceed its liabilities by almost $ 129.3 million; with total assets of $144
million and liabilities of $ 14.8 million.
Net Position is comprised of $112.1 million for investment in capital assets, net of depreciation
and related debt; $2.0 million restricted for specific purposes; and $15.1 million in unrestricted
Net Position (reference pg. #39).
Total City-wide revenues of $22.1 million consist of $14.8 million in general revenue and $7.3
million in program revenue (reference pg. #40).
City expenses total $20.6 million (reference pg. #40).
The Governmental Fund’s fund balances total $16.6 million, with $11.8 million in the General
Fund, $3.1 million in the Capital Improvement Funds, and $1.6 million in the Other
Governmental Funds. This represents an increase of $1.75 million from last year (reference pg.
#41).
General Fund revenues total $18.3 million, while General Fund expenditures total $16.1 million
(reference pg. #43).
Management’s
Discussion & Analysis
Government-Wide
Financial Statements
Fund
Financial Statements
Notes to the
Financial Statements
Basic
Financial Statements
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
24
THE BASIC FINANCIAL STATEMENTS
The Basic Financial Statements are comprised of 1) Government-Wide (City-wide) Financial Statements,
and; 2) Fund Financial Statements. These two sets of financial statements provide the reader two different
perspectives of the City's financial activities and financial position.
Government-Wide Financial Statements provide a longer-term view of the City's activities as a whole, and
are comprised of the Statement of Net Position and the Statement of Activities. The Statement of Net Position
provides summary level information about the financial position of the City, including all its capital assets
and long-term liabilities on a full accrual basis, similar to that used by corporations. The Statement of
Activities provides summary level information about the City's revenues and expenses, also on a full accrual
basis, with the emphasis on measuring net revenues and/or expenses for each of the City's programs. The
Statement of Activities illustrates the change in Net Position for the fiscal year.
City financial activities are required to be grouped as either government activities or business-type activities.
The amount in the Statement of Net Position and the Statement of Activities are required to be separated into
governmental activities or business-type activities in order to distinguish between the two types of activities.
In the case of the City of Saratoga, there are no business-type activities as of June 30, 2014.
Fund Financial Statements report the City's operations in more detail than Government-Wide statements and
focus primarily on the short-term activities of the City's general fund and other major funds. The Fund
Financial Statements measure current revenues and expenditures and fund balances; they exclude capital
assets, long-term debt, and other long-term amounts.
Major funds account for the major financial activities of the City and are presented individually, while the
activities of non-major funds are presented in summary, with subordinate schedules presenting the detail for
each of these other funds in the Supplementary Information section. Major funds are explained below.
The Government-Wide Financial Statements
Government-Wide financial statements are prepared on the accrual basis, which means they measure the flow
of all economic resources of the City as a whole. The Statement of Net Position and the Statement of
Activities present information about the following:
Governmental Activities - All of the City's basic services are considered to be governmental activities,
including general government, community development, public safety, transportation, and, culture and
leisure. These services are supported by general City revenues such as taxes, and by specific program
revenues such as development and recreation program fees.
Business-Type Activities - This category includes enterprise activities such as water, sewer, and utilities.
Unlike governmental services, these activities are meant to be fully supported by charges paid by users, based
on the services used. The City of Saratoga does not have any business-type activities at this time.
Fund Financial Statements
A fund represents a grouping of related accounts and is used to maintain control over resources that are
segregated for specific activities or objectives. The City, like other local governments, uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements.
Fund financial statements provide detailed information about each of the City's most significant funds, called
major funds. The concept of major funds, and the determination of which funds are classified as major funds,
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
25
was established by GASB Statement 34 and replaces the concept of combining like funds and presenting
them in total. Instead, each major fund is presented individually, with all non-major funds summarized and
presented in a single column. Subordinate schedules present the detail of these non-major funds. Major
funds present the major activities of the City for the fiscal year, and may change from year to year as a result
of changes in the pattern of the City's activities. The City's funds are segregated into three types:
governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds - The City's basic services are reported in governmental funds, which focus on how
money flows into and out of those funds and the balances available at year-end. Financial statements are
prepared on the modified accrual basis, which means they measure only current financial resources and uses.
Carrying amounts for capital assets and other long-lived assets, along with long-term liabilities are not
presented on the balance sheet in the governmental fund financial statements. Unlike the Government-Wide
financial statements, Governmental Fund financial statements focus on near-term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the fiscal year.
Such information may be useful in evaluating the City's near-term financing requirements.
Proprietary Funds – Internal service funds are an accounting device used to accumulate and allocate costs
internally among the City’s various functions. The City uses internal service funds to account for liability
insurance and risk management, workers compensation, office equipment support services, information
technology services, vehicle and building maintenance, and vehicle and information technology
equipment replacement. Because internal service funds primarily benefit governmental functions, they
have been included with the governmental activities in the Government-Wide financial statements.
Fiduciary Funds – These funds account for assets held by the City in a trustee capacity or as an agent for
individuals, private organizations, other governmental units, and/or other funds. Fiduciary funds are not
reflected in the government-wide financial statements because these resources are not available to support
the City's programs. Currently the City does not have any fiduciary funds.
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements provide additional information that is essential to a full understanding of
the data provided in the government-wide and fund financial statements. The notes can be found
immediately following the fund financial statements.
REQUIRED SUPPLEMENTARY INFORMATION
Required supplementary information, other than presented in this MD&A, follows the Notes Section and
includes a budgetary comparison for the General Fund as presented in the Governmental Fund financial
statements, and information on the modified approach for city streets and infrastructure.
SUPPLEMENTARY INFORMATION
Combining and individual fund statements and schedules are included to provide additional information
on non-major governmental funds including special revenue, debt service, and capital project funds, as
well as proprietary internal service fund information and uses of capital assets. An un-audited statistical
section provides historical and current data on financial trends, revenue and debt capacity, demographic
and economic information, and operating information.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
26
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net Position may serve over time as an indicator of the City's financial position. The City's Total Net
Position increased $1,574,709, from $127,681,352 in fiscal year 2012/13 to $129,256,061 in fiscal year
2013/14.
The most significant portion of the City's Net Position ($112,116,255 or 86.7%) accounts for its investment in
capital assets, (e.g., land, buildings, general government infrastructure, equipment, etc.) less any related debt
used to acquire those assets that are still outstanding. These capital assets represent infrastructure which
provides services to the citizens, consequently, these assets are not available for future spending.
$2,044,800 or 1.6% of the City's Net Position is subject to external restrictions on how the funding may be
used. Within the restricted Net Position total, $733,832 is for lighting and landscaping assessment districts,
$413,182 is for environmental programs, and $897,786 is for repayment of long-term debt.
The remaining $15,095,078 or 11.7% of the City's Net Position are unrestricted and may be used to meet the
City's ongoing obligations to citizens and creditors.
Governmental Activities
2014 2013
Assets
Current assets 20,853,961$ 18,646,780$
Capital assets 123,171,255 123,893,273
Total Assets 144,025,216 142,540,053
Liabilities
Current liabilities 3,633,553 3,228,709
Long-term debt 11,135,528 11,629,992
Total Liabilities 14,769,081 14,858,701
Net Position
Net investment in capital assets 112,116,257 112,353,273
Restricted for environmental services 413,182 463,182
Restricted for special assessment funds 733,832 621,948
Restricted for debt service 897,786 885,757
Unrestricted 15,095,078 13,357,192
Total Net Position 129,256,135$ 127,681,352$
Net Position
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
27
Governmental Activities Increase
Functions/Programs 2014 2013 (Decrease)
Program Revenues
Charges for services 6,396,863$ 7,154,600$ (757,737)$
Operating grants and contributions 116,667 75,000 41,667
Capital grants and contributions 807,481 599,067 208,414
Total Program Revenues 7,321,011 7,828,667 (507,656)
General Revenues
Property taxes 9,737,144 9,152,499 584,645
Sales taxes 941,350 1,051,121 (109,771)
Local taxes 822,271 769,357 52,914
Franchise taxes 1,948,642 1,919,750 28,892
Motor vehicle in-lieu 13,575 16,402 (2,827)
Intergovernmental revenues 980,937 766,090 214,847
Investment earnings 61,895 50,562 11,333
Other revenues 305,011 112,906 192,105
Total General Revenues 14,810,825 13,838,687 972,138
Expenses
General and intergovernmental services 4,521,784 4,143,254 378,530
Public safety 4,491,384 4,381,644 109,740
Public works 7,378,503 6,921,349 457,154
Community services 1,586,353 1,804,331 (217,978)
Community development services 2,178,634 1,712,706 465,928
Interest on long-term debt (unallocated)400,469 410,118 (9,649)
Total Expenses 20,557,127 19,373,402 1,183,725
Increase / (Decrease) in Net Position 1,574,709 2,293,952 (719,243)
Net Position, Beginning of Year 127,681,352 125,387,400 2,293,952
Net Position, End of Year 129,256,061$ 127,681,352$ 1,574,709$
Statement of Changes in Net Position
As shown in the above Statement of Changes in Net Position schedule, program revenues decreased by
$507,656 from the prior fiscal year for governmental activities. General revenues increased by $972,138
from the prior year. This resulted in a total increase in revenues of $464,482. Expenses increased by
$1,183,725 from the prior year.
With total program and general revenues for fiscal year 2013/14 at $22,131,836 and total expenses at
$20,557,127, the net activity resulted in an increase in Net Position of $1,574,709.
An analysis and graphical representation of the changes in revenues and expenditures by type of
significant events follows:
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
28
Revenues
The large increases from Property Tax and Capital Grants & Contributions revenue was offset by a large
decrease in Charges for Services during FY 2013/14, resulting in a net increase of $464,482 in total
general and program revenues.
CHART OF REVENUE INCREASE OR (DECREASE)
Increase in Revenues
General Revenues increased $972,138 from the prior year. The most significant changes include:
A $584,685 increase in Property Tax Revenue due to higher assessed valuations of property within
the City.
A $214,847 increase in Intergovernmental Revenue as a result in an increased Traffic Congestion
Relief allocation to Gasoline Tax revenue.
A $192,105 increase in Other Revenue as a result of a new Solid Waste JPA distribution of $43,959
and a one-time payment from an insurance claim of $156,884
Program Revenues increased in grant revenues:
An increase of $208,414 in Capital Grants and Contributions is a result of grant reimbursement for
the Highway 9 Safety Improvement Project.
An increase of $41,667 in Operating Grants & Contributions revenue due to the timing of
Supplemental Law Enforcement Support (SLESF) grant disbursements.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
29
General Revenues decreased substantially in one category:
A $109,771 decrease in Sales Tax revenues resulted from a combination of the State’s estimates
being too high in a prior year, which subsequently resulted in a reconciling reduction in FY 2013/14
payments to compensate for the overpayment and adjustments for incorrect allocations.
Program Revenues decreases were due to a substantial decrease in one category:
Charge for Services revenue decreased by $757,737 due in part to the elimination of the road impact
fee ($523,773) and a reduction in the refund amount received from the Sheriff’s contract ($261,761).
Expenses
The FY 2013/14 net change in expenses for Governmental Activities was an increase of $1,183,725. The
increases were spread between Community Development, Public Works and General and
Intergovernmental Services as illustrated in the chart below.
CHART OF EXPENSE INCREASE OR (DECREASE)
Increases in Expenses
Significant increases in expenditures from the prior year occurred in several categories:
Community Services capital improvements (primarily parks and trail improvement projects)
increased by $459,696.
Public Works expenses increased $291,741 as a result of growth in labor and operating costs.
Community Development expenses increased by $134,857 as a result of growth in labor and
operating costs.
Public Safety increased by $99,540 as a result of additional costs for Sheriff and Animal Control
contract services.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
30
Decreases in Expenses
A notable decrease is related to a reduction in capital project expenditures:
Public Works (primarily street capital improvement projects) decreased in total by $1,389,314. This
decrease is primarily due to the cyclical nature of CIP Streets projects. There was a decrease in
Highway 9 Safety Improvement project activity of $1,030,844 due to the completion of one phase last
year and the transitioning into a new phase during the current year. Construction costs increase as a
phase is closer to completion as opposed to the costs associated with planning and development when
a new phase of the project is started.
MAJOR AND OTHER GOVERNMENTAL FUNDS: CHANGE IN FUND BALANCE
A summary of the changes in fund balance of the Major Funds and Other Governmental Funds is
presented below:
Other
Capital Governmental
General Improvement Funds
Total Revenues 18,268,368$ 2,587,657$ 1,422,842$
Total Expenditures 16,137,578 3,095,514 1,298,928
Revenues Over (Under) Expenditures 2,130,790 (507,857) 123,914
Transfers in 167,050 618,038 -
Transfers out (380,880) (404,208) -
Net change in fund balances 1,916,960 (294,027) 123,914
Beginning of year 9,918,674 3,420,334 1,507,705
End of year 11,835,634$ 3,126,307$ 1,631,619$
Major Funds
Included in the Major Funds are the General Fund and the Capital Improvement Funds. The Other
Governmental Funds include twenty-five Lighting and Landscape Assessment Districts (accounted for as
one fund in the financials) and the Library Bond Debt Service Fund. The total net change from fiscal year
transactions, including Major Funds and Other Governmental Funds, was an increase of $1,746,847.
General Fund
As shown in the preceding Major Funds table, the net change in the General Fund's ending fund balance
is an increase of $1,916,960. A Net Gain is a result of the net operating revenues exceeding net operating
expenditures. A number of the General Fund revenue categories increased from the prior year for a net
revenue gain of $632,380, most notably property tax revenue. General Fund revenues budgets are
conservatively based upon prior year experience and revenue specific information; however the
strengthening of the housing market at a fairly rapid pace and a couple of added revenue streams resulted
in a positive variance from budgeted revenues.
Expenses are budgeted at anticipated program needs at not-to-exceed projected funding levels. With an
increase in development activity, related expenditures also increased from the prior year. Additional
increases came from rising salary and benefit costs, sheriff and animal contract costs, and internal service
fund costs.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
31
Capital Improvement Project Fund
As shown in the table above, the net change in the Capital Improvement Fund decreased by $294,027 as a
portion of the capital improvement project work completed over the course of the year utilized prior year
funding in addition to current year funding.
Other Governmental Funds
Of the net $123,914 increase in Other Governmental Funds, the collective 25 Landscaping & Lighting
funds comprise $111,885 of the total. The Library Bond debt service fund accounts for the remaining
$12,029 of the increase. Both net gains represent a small excess of revenue over expenditures in the
normal course of operations.
GENERAL FUND – BUDGETARY HIGHLIGHTS
Changes from the City's General Fund original budget to the final budget are detailed in the Required
Supplementary Information Section along with a comparison to actual activity for the year ended.
Changes to the City's budget that increase or decrease appropriations in a fund must be approved by a
resolution of the City Council. Modifications to the budget that are a realignment of fiscal activities with
no impact to the fund's bottom line may be approved by the City Manager. Significant changes from the
City’s original budget to the final budget are summarized as follows:
Revenues and Transfers In
The General Fund adopted revenue budget was $17,195,646, and adopted transfers in was $106,000, as
shown in the first column in the schedule below:
Adopted to Final Budget
Fiscal Year Ended June 30, 2014
+=
Adopted Budget Final
Budget Adjustments Budget
Revenues 17,195,646$ 878,417 18,074,063$
Transfers in 106,000$ - 106,000$
At mid-year, budget adjustments were made to increase expected revenues. The Sheriff’s Office provided
the City with a contract refund of $41,533. This refund was not budgeted as refunds may or may not be
received, and the amount is unknown at the time of budget adoption. Impacts from the upturn in the
housing market coupled with historically low interest rates contributed to an expected $350,000 increase
in property taxes, $155,000 in in-lieu taxes, $130,000 in building fees, and a one-time insurance claim
reimbursement of $156,844.
The $106,000 of budgeted transfers in was from Gas Tax funds to reimburse the General Fund for
engineering, administrative, and project management staff time.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
32
Expenses and Transfers Out
The General Fund adopted expenditure budget was set at $16,646,407 and adopted transfers out at
$380,800, as shown in the first column in the schedule below:
Adopted to Final Budget
Fiscal Year Ended June 30, 2014
+=
Adopted Budget Final
Budget Adjustments Budget
Expenditures 16,646,407$ 196,501 16,842,908$
Transfers out 380,880$ - 380,880$
Several budget adjustments were made at the City’s mid-year review; City Council members approved:
$39,000 in additional expenditures in development, engineering and parks programs, plus $73,101 for
carry-forward programs. $10,000 was also budgeted for the General Plan update. As a result of the
retirement announcement of City Manager Dave Anderson, $24,400 was budgeted for executive
recruitment funding. A hazardous material spill late in the fiscal year required an additional adjustment of
$50,000 to mitigate the impact of the spill into Saratoga Creek.
The original amount of $380,800 of budgeted transfers from the General Fund to the Capital
Improvement funds was allocated as follows; $150,000 for street, sidewalk, and storm drain repair,
$45,880 for trail improvements, $100,000 for various facility improvements and $85,000 for various
administrative projects.
CAPITAL ASSETS
The City of Saratoga elected to use the "Modified Approach" as defined by GASB Statement No. 34 for
infrastructure reporting in which eligible infrastructure capital assets are not required to be depreciated if
the following requirements are met:
The City manages the assets using an asset management system which requires that the City (1)
perform an up-to-date inventory; (2) perform condition assessments and summarize the results using
a measurement scale; and (3) estimate the annual amount to preserve the assets at the established
condition assessment level.
The City documents that the eligible infrastructure capital assets are being preserved approximately
at or above the established and disclosed condition assessment level.
City policy is to achieve a Pavement Condition Index (PCI) average rating of 70 for all streets, at
minimum. The City’s overall rating was 69 with 0% of streets rated as Excellent, 81% of streets rated as
“Very Good” to "Good", 16% of streets rated “Poor”, and 3% of streets rated as "Very Poor". With the
overall rating below target, the City will need to review infrastructure investment strategies.
Overall, the City spent $2,079,413 to maintain and preserve eligible infrastructure assets. For more
detailed information on Capital Assets activity, please refer to Note 4 in the section entitled "Notes to the
Basic Financial Statements" and Note 2 in the "Required Supplementary Section". The latest assessment
study was conducted during the fall of 2013.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
33
As reflected in the following schedule, the City has $123,171,870 invested in a variety of capital assets as
of June 30, 2014. This represents a decrease of $721,403 or a 0.6% decrease from the prior year.
Governmental Activities
2014 2013
Land 14,585,401$ 14,585,401$
Building and structures 17,738,462 18,203,584
Machinery and equipment 715,874 663,288
Infrastructure 81,607,369 82,825,336
Construction in progress 8,524,764 7,615,664
Total Capital Assets, Net of Depreciation 123,171,870$ 123,893,273$
Capital Assets at Year End
Net of Depreciation
The following reconciliation summarizes the changes in Capital Assets.
Balance Balance
July 1, 2013 Additions Retirements Reclassification June 30, 2014
Land 14,585,401$ -$ -$ -$ 14,585,401$
Building and structures 25,480,150 221,180 - - 25,701,330
Machinery and equipment 2,470,326 177,961 (58,847) - 2,589,440
Infrastructure 105,026,791 - - - 105,026,791
Construction in progress 7,615,664 1,287,076 (249,096) (128,880) 8,524,764
Depreciation (31,285,059) (2,029,644) 58,847 - (33,255,856)
Total Capital Assets,
Net of Depreciation 123,893,273$ (343,427)$ (249,096)$ (128,880)$ 123,171,870$
Changes in Capital Assets
Major capital projects in progress during fiscal year 2013/14 included the following expenditures:
Quito Road Bridge Replacement - $109,842
Highway 9 Traffic Safety - $173,306
De Anza Trail Improvement - $214,785
Saratoga to Sea Master Plan - $220,996
Village Sidewalk, Curb, and Gutters - $119,698
Hakone Gardens Driveway & Retaining Wall - $310,375
Additional information on Capital Assets is included in Note 4 to the financial statements.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
34
DEBT AND OTHER LONG-TERM OBLIGATION ADMINISTRATION
The net change in outstanding obligations for the City of Saratoga is a decrease of $457,334. Total long
term bonded debt, net of premium decreased by $506,892. Outstanding compensated absences increased
by $49,558.
Governmental Activities
2014 2013
2011 General obligation bond 11,055,000$ 11,540,000$
Net original issue premuim 394,062 415,954
Compensated absences 671,537 621,979
Total Outstanding long-term obligations 12,120,599$ 12,577,933$
Outstanding Long-Term Obligation at Year End
The current portion of long-term debt ($495,000 for the refunded 2001 General Obligation Bonds for
fiscal year 2013/14) and $21,892 of amortized net original premium, are classified as a current liability in
the City's Statement of Net Position.
General Obligation Bonds
The City refunded the 2001 General Obligation Bonds and in their place issued 2011 General Obligation
Bonds in the amount of $11,995,000 on July 14, 2011 with interest rates on the bonds ranging from 2.0%
to 4.0%, with final payment due August 1, 2031. Principal of $485,000 and interest of $403,085 were
paid during the fiscal year.
Compensated absences are accrued liabilities for vested and unpaid vacation and sick pay. The
compensated absences balance increased during the fiscal year by $49,558 due to a decrease in use and
payouts of unused compensated absences to retiring, terminated, and general employee payouts. An
estimated current liability of $468,179 is expected to be used in the next fiscal year.
Additional information on outstanding obligations can be found in Note 5 to the financial statements.
ECONOMIC FACTORS
The fiscal year 2013/14 budget was developed in early spring of 2013 amidst the “new normal”.
Increases continue to be seen in the local tax base as the overall health of the economy recovers. Factors
that continue to put pressure on the budget include operating cost increases related to health care,
pensions and public safety. Infrastructure costs continuing to increase coupled with decreasing state and
federal aid. The City continues to budget using conservative revenue projections while pursuing
decreases in ongoing program expenditures in order to maintain a sustainable Operating Budget.
As a carryover trend from fiscal year 2012/13, the City continues to see some stability in revenues.
General Fund Property Taxes increased in total by 6.0%, with increases of $443,000 in Secured
Property Tax, more than $70,000 in Unsecured Property Tax, and $21,000 in Transfer Tax.
Development fees maintained stability as evidenced by:
Construction Tax and Supplemental Business License Tax (based on building permit values)
revenues increases of 7.6% – almost $31,000
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
35
Planning and Building revenues jumped by 1.7% and Development Engineering revenues
increased by 17.2% - almost $25,000
Transient Occupancy Tax, long an indicator of economic temperament, saw a strong uptick with an
11% increase – almost $29,000.
Interest rates remain at historical lows with a bleak outlook projected.
Development engineering income decreased, primarily from reduced encroachment permit revenue. Many
other revenues remained flat – however General Fund expenses continued to increase.
Salary and Benefit costs increased by $104,569 (1.4%), primarily due to the hiring of additional
personnel to address service levels. With new employee benefit levels reduced through the
implementation of lower cost pension plans and the capping of medical benefits, future labor cost
increases will be mitigated with the turnover of staff over time.
Labor costs also contributed to the $76,000 (1.8%) increase in Sheriff Services, in combination with
operational cost increases. However, Public Safety labor costs will be mitigated as time goes on due
to the new lower cost State regulated pension plans for Public Safety employees.
Consultant and Contract Services grew by more than $256,470. This is in part attributable to the
$107,627 increase in advanced planning costs related to the general plan update. Legal services
increased $88,957 related to litigation and employee law services. Public safety increased $81,368 as
a result of increases in the Santa Clara county sheriff and City of San Jose animal control contracts.
Overall, FY 2013/14 revenues grew at a faster pace than expenditures (net of transfers), both in dollars
and percentage. The substantial revenue increase which occurred in FY 2013/14 helped to firm the City’s
long-term fiscal sustainability at current levels while allowing the reinstatement of some expenditure
appropriations at mid-year for operational right-sizing and flexibility and in response to unplanned needs.
Outlook
Although the City’s fiscal health continues to show improvement, General Fund revenues are not
expected to continue on this rapid growth trajectory. Fiscal projections anticipate a leveling off in
revenues as the initial rebound is tempered by economic hesitation. Fiscal uncertainty remains with us in
this new normal, therefore the City plans to continue to maintain operations at core service levels in
preparation of potential funding impacts. Potential revenue impacts include State takeaways of
unprotected funding and changes in State directed revenue allocations. Known impacts will come from
reductions in capital funding grants from state and federal sources to fund infrastructure improvement
projects.
In addition to generally rising operational costs, aging infrastructure maintenance expenses are increasing
as our city ages. New infrastructure also adds to rising maintenance expenses, such as the annual
refinishing of the Community Center’s new wood floor, or maintenance of new trails, and increased water
bills for tree plantings and median improvements.
In a long term status-quo projection, rising expenditures are certain, while revenue growth is not. As
local governments do not have the ability to increase taxes or other revenues at a sufficient pace to
maintain increasing operations, management must consider a long term view in the decision-making
process. One of the hardest challenges the City faces is balancing community expectations against the
fiscal reality of long-term operational practicality. The City continues to focus on this challenge.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2014
36
REQUEST FOR FINANCIAL INFORMATION
This financial report is designed to provide a general overview of the City of Saratoga's finances for all of
Saratoga's residents, taxpayers, customers, investors, and creditors. This financial report seeks to
demonstrate the City's accountability for the money it receives. Questions concerning any of the
information provided in this report or requests for additional information should be addressed to the
Administrative Services Department, 13777 Fruitvale Avenue, Saratoga, California 95070.
37
BASIC FINANCIAL STATEMENTS
38
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CITY OF SARATOGA
STATEMENT OF NET POSITION
JUNE 30, 2014
39
Primary Government
Governmental
Activities
ASSETS
Current Assets:
Cash and investments 19,656,310$
Receivables:
Accounts 1,196,389
Interest 55
Prepaid 1,207
Total Current Assets 20,853,961
Noncurrent Assets:
Capital Assets:
Non-depreciable 72,265,784
Depreciable, net 50,905,471
Total Capital Assets 123,171,255
Total Noncurrent Assets 123,171,255
Total Assets 144,025,216
LIABILITIES
Current Liabilities:
Accounts payable 983,952$
Accrued payroll 157,224
Other payable 24,556
Interest payable 165,932
Deposits payable 1,142,289
Unearned Revenue 135,031
Claims payable 39,500
Long-term obligations - due within one year 985,071
Total Current Liabilities 3,633,555
Noncurrent Liabilities:
Long-term obligations - due in more than one year 11,135,528
Total liabilities 14,769,083
Net Position
Net investment in capital assets 112,116,255
Restricted for:
Environmental funds 413,182
Special assessment funds 733,832
Debt service 897,786
Total Restricted 2,044,800
Unrestricted 15,095,078
Total Net Position 129,256,133$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
STATEMENT OF ACTIVITIES AND CHANGES IN NET POSITION
JUNE 30, 2014
40
Net (Expense)
Revenue and
Changes in
Program Revenues Net Position
Primary
Operating Capital Government
Charges for Grants and Grants and Governmental
Functions/Programs Expenses Services Contributions Contributions Total Activities
Primary Government:
Governmental Activities:
General and intergovtl services 4,521,784$ 120,189$ -$ -$ 120,189$ (4,401,595)$
Public safety 4,491,384 330,358 116,667 - 447,025 (4,044,359)
Public works 7,378,436 2,768,179 - 807,481 3,575,660 (3,802,776)
Community services 1,586,353 958,203 - - 958,203 (628,150)
Community development services 2,178,634 2,219,935 - - 2,219,935 41,301
Interest on long-term debt (unall.)400,469 - - - - (400,469)
Total 20,557,060$ 6,396,864$ 116,667$ 807,481$ 7,321,012$ (13,236,048)$
General Revenues:
Taxes
Property taxes 9,737,145$
Sales taxes 941,350
Local taxes 822,272
Franchise taxes 1,948,642
Motor vehicle-in-lieu 13,575
Total taxes 13,462,984
Intergovernmental 980,938
Investment earnings 61,895
Other revenues 305,012
Total General Revenues 14,810,829
Change in Net Position 1,574,781
Net Position - Beginning of Year 127,681,352
Net Position - End of Year 129,256,133$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
GOVERNMENTAL FUNDS - BALANCE SHEET
JUNE 30, 2014
41
Other Total
Capital Governmental Governmental
General Improvement Funds Funds
ASSETS
Cash and investments 13,020,301$ 3,101,484$ 1,657,159$ 17,778,944$
Receivables:
Accounts 615,883 565,054 4,926 1,185,863
Interest 55 - - 55
Prepaid Items 1,207 - - 1,207
Total assets 13,637,446$ 3,666,538$ 1,662,085$ 18,966,069$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 497,302$ 403,682$ 30,467$ 931,451$
Accrued payroll 137,659 1,518 - 139,177
Deposits payable 1,142,289 - - 1,142,289
Other payable 24,556 - - 24,556
Unearned Revenue 6 135,031 - 135,037
Total liabilities 1,801,812 540,231 30,467 2,372,510
Fund Balances:
Restricted:
Environmental services 413,182 - - 413,182
Special assessment funds - - 733,832 733,832
Debt service - - 897,786 897,786
Committed:
Capital improvement program - 3,126,307 - 3,126,307
Hillside stability 992,934 - - 992,934
Assigned:
Future capital & efficiency 1,928,915 - - 1,928,915
Carryforwards 118,788 - - 118,788
Facility replacement 600,000 - - 600,000
Unassigned:
Working capital 2,930,184 - - 2,930,184
Fiscal stabilization 1,500,000 - - 1,500,000
Compensated absences 223,846 - - 223,846
Development services 705,459 - - 705,459
Other unassigned 2,422,326 - - 2,422,326
Total fund balances 11,835,634 3,126,307 1,631,618 16,593,559
Total liabilities and fund balances 13,637,446$ 3,666,538$ 1,662,085$ 18,966,069$
The accompanying notes are an integral part of these financial statements
Major Funds
CITY OF SARATOGA
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET POSITION
JUNE 30, 2014
42
Total Fund Balances - Total Governmental Funds 16,593,559$
Amounts reported for governmental activities in the statement of net position were
different because:
Capital assets used in governmental activities were not current financial resources. Therefore,
they were not reported in the Governmental Funds Balance Sheet. The capital assets were
adjusted as follows:
Non-depreciable capital assets 72,265,784
Depreciable capital assets, net 50,705,634
Total Capital Assets 122,971,418
Interest payable on long-term debt did not require current financial resources. Therefore,
interest payable was not reported as a liability in Governmental Funds Balance Sheet.(165,932)
Internal service funds are used by management to charge the costs of office stores,
vehicle and equipment maintenance and replacement, information services and replacement,
building maintenance, risk management, and workers compensation. The assets and
liabilities of the internal service funds are included in the governmental activities in
the statement of net assets 1,977,681
Long-term receivables were not current available resources and therefore, were offset by
a deferred revenue amount equal to the net receivable in the governmental funds.6
Long-term obligations were not due and payable in the current period. Therefore, they were not
reported in the Governmental Funds Balance Sheet. The long-term liabilities were adjusted
as follows:
General obligation bonds (11,055,000)
Compensated absences (671,537)
Net original issue premium (394,062)
Total Long-Term Obligations (12,120,599)
Net Position of Governmental Activities 129,256,133$
CITY OF SARATOGA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGE
IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2014
43
Other Total
Capital Governmental Governmental
General Improvement Funds Funds
REVENUES:
Property taxes 9,525,980$ -$ 211,164$ 9,737,144$
Special assessments 208 - 1,206,708 1,206,916
Sales taxes 941,350 - - 941,350
Other local taxes 822,271 - - 822,271
Licenses & permits 1,463,784 559,789 - 2,023,573
Fines & forfeiture 144,890 51,190 - 196,080
Intergovernmental - Federal - 796,277 - 796,277
Intergovernmental - State 417,217 992,584 - 1,409,801
Intergovernmental - Other 49,207 79,952 - 129,159
Franchise fees 1,948,642 - - 1,948,642
Use of money and property 482,210 35,132 3,265 520,607
Other revenue 2,472,609 72,733 1,705 2,547,047
Total revenues 18,268,368 2,587,657 1,422,842 22,278,867
EXPENDITURES:
Current:
General and intergovernmental services 3,247,245 - - 3,247,245
Public safety 4,491,384 - - 4,491,384
Public works 4,833,962 - 409,419 5,243,381
Community services 1,383,277 - - 1,383,277
Community development services 2,181,710 - - 2,181,710
Capital outlay - 3,095,514 - 3,095,514
Debt service:
Principal - - 485,000 485,000
Interest and fiscal charges - - 404,510 404,510
Total expenditures 16,137,578 3,095,514 1,298,929 20,532,021
REVENUES OVER
(UNDER) EXPENDITURES 2,130,790 (507,857) 123,913 1,746,846
OTHER FINANCING SOURCES (USES):
Transfers in 167,050 618,038 - 785,088
Transfers out (380,880) (404,208) - (785,088)
Total other financing sources (uses)(213,830) 213,830 - -
Net change in fund balances 1,916,960 (294,027) 123,913 1,746,846
FUND BALANCES:
Beginning of year 9,918,674 3,420,334 1,507,705 14,846,713
End of year 11,835,634$ 3,126,307$ 1,631,618$ 16,593,559$
The accompanying notes are an integral part of these financial statements.
Major Funds
CITY OF SARATOGA
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TO THE
GOVERNMENT-WIDE STATEMENT OF ACTIVITIES AND CHANGES IN NET
POSITION
FOR THE YEAR ENDED JUNE 30, 2014
44
Net Change in Fund Balances - Total Governmental Funds 1,746,846$
Amounts reported for governmental activities in the Statement of Activities and Changes
in Net Position were different because:
Governmental Funds report capital outlay as expenditures. However, in the Government-Wide
Statement of Activities and Changes in Net Position, the cost of those assets was allocated over
their estimated useful lives as depreciation expense. This is the amount of capital assets
recorded in the current period.1,099,349
Depreciation expense on capital assets was reported in the Government-Wide Statement
of Activities and Changes in Net Position, but it did not require the use of current financial
resources. Therefore, depreciation expense was not reported as expenditures in the
Governmental Funds.(1,920,232)
Internal service funds are used by management to charge the costs of office stores,
vehicle and equipment maintenance and replacement, information services and replacement,
building maintenance, risk management, and workers' compensation. The net revenue
or excess expenses of the internal service funds is reported with government activities.253,891
Certain revenues were not recorded or recorded as unearned revenue in the governmental funds
because they did not meet the revenue recognition criteria of availability. However, they were
included as revenue in the Government-Wide Statement of Activities and Changes in
Net Position under the full accrual basis.(66,148)
Long-term compensated absences and claims payables were reported in the Government-Wide
Statement of Activities and Changes in Net Position, but they did not require the use of current
financial resources. Therefore, long-term compensated absences and claims payable were not
reported as expenditures in governmental funds.
Compensated absences (49,858)
Repayment of bond principal was an expenditure in governmental funds, but the repayment
reduced long-term liabilities in the Government-Wide Statement of Net Position.
Long-term debt repayments 485,000
Revenues resulting from the refunding of outstanding debt are not available to pay
current-period expenditures and therefore, are revenue in the funds.
Net original issue premium 21,892
Interest expense on long-term debt was reported in the Government-Wide Statement of
Activities and Changes in Net Position, but it did not require the use of current financial
resources. Therefore, interest expense was not reported as expenditures in governmental
funds. The following amount represented the change in accrued interest from prior year.4,041
Change in Net Position of Governmental Activities 1,574,781$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2014
45
Governmental
Activities -
Internal
Service Funds
ASSETS
Current assets:
Cash and investments 1,877,366$
Accounts receivable 10,526
Total current assets 1,887,892
Noncurrent assets:
Capital assets:
Machinery and equipment 941,365
Less: accumulated depreciation (741,528)
Total capital assets (net of
accumulated depreciation) 199,837
Total assets 2,087,729
LIABILITIES
Liabilities:
Current liabilities:
Accounts payable 52,501$
Accrued payroll 18,047
Other payables 39,500
Total current liabilities 110,048
NET POSITION
Net investment in capital assets 199,837
Unrestricted 1,777,844
Total net position 1,977,681$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
46
Governmental
Activities -
Internal
Service Funds
Operating revenues:
Charges for services 2,360,000$
Other operating revenues 60,282
Total operating revenues 2,420,282
Operating expenses:
Cost of services 1,091,010
Administration 1,024,885
Depreciation 50,497
Total operating expenses 2,166,392
Operating income (loss)253,890
Transfers out -
Change in net position 253,890
Total net position - beginning 1,723,791
Total net position - ending 1,977,681$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
JUNE 30, 2014
47
Governmental
Activities -
Internal
Service Funds
Cash flows from operating activities:
Receipts from customers and users 2,420,266$
Payments to suppliers (1,227,773)
Payments to employees (882,441)
Net cash provided (used) by operating activities 310,052
Cash flows from capital activities:
Acquisition of capital assets (149,363)
Net cash provided for the acquisition of capital assets (149,363)
Net increase in cash and cash equivalents 160,689
Cash and cash equivalents, beginning of year 1,716,677
Cash and cash equivalents, ending of year 1,877,366$
Reconciliation of operating income to net cash provided
by operating activities:
Operating income (loss)253,891$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation 50,497
Change in operating assets and liabilities:
Accounts receivables (16)
Accounts payable (13,363)
Claims payable 14,700
Accured payroll 4,343
Net cash provided (used) by operating activities 310,052$
The accompanying notes are an integral part of these financial statements
48
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CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
49
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Saratoga, California, (the City) have been prepared in
conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies.
The Governmental Accounting Standards Boards (GASB) is the accepted standard setting body for
establishing governmental accounting and financial reporting principles. The more significant of the
City's accounting policies are described below.
A. Financial Reporting Entity
The City was incorporated as a municipal corporation in 1956 under the general laws of the State of
California, and had a population of 30,887 at June 30, 2014. The City is a largely residential community
located in the foothills of the Santa Cruz Mountains.
The City operates under the Council-Manager form of government, with five-elected Council members
served by a full-time City Manager and staff. At June 30, 2014, the City's staff was comprised of 57 full-
time or part-time employees, and numerous part-time temporary and seasonal employees. Staff is
responsible for the following City services:
Public Safety - The City provides round-the-clock police services under a contract with the Santa
Clara County Sheriff's offices. Emergency management and Fire services are provided by a special
district. Code enforcement and inspection services are provided by City employees.
Public Works/Maintenance - The City builds and maintains its parks, streets, curbs, gutters, and
related public property with a force of 21 employees. Major projects may be contracted out to
reduce costs.
Community Development - Zoning administration, plan checking and advance planning services are
provided by 12 employees.
Culture, Recreation and Community Support services are provided by a total of 10 employees.
General Government services are provided by a total of 14 employees.
As required by GAAP, these basic financial statements present the City and its component units, entities
for which the City is considered to be financially accountable. The City Council acts as the governing
board. In addition, the City staff performs all administrative and accounting functions for these entities
and these entities provide their services entirely to the City. Blended component units, although legally
separate entities are, in substance, part of the City's operations and data from these units are combined
with data of the City. Discretely presented component units, on the other hand, are reported in a separate
column in the government-wide financial statements to emphasize their legal separateness from the City.
Each blended component unit has a June 30 year-end. The City had no discretely presented component
units.
The following entity is reported as blended component unit:
Lighting and Landscaping Assessment District - The Lighting and Landscaping Assessment District
(the District) was established in 1980, for the levy and the collection of assessments upon the several lots
or parcels of land in the District, and for the construction or installation of improvements, includi ng
maintenance. The District is reported as a blended component unit of the City because it has the same
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
50
Governing Board as the City. The activity for the District has been included in the accompanying basic
financial statements and no separate financial statements are issued.
B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for with a separate s et of self-balancing
accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as
appropriate. Governmental resources are allocated to and accounted for in individual funds based upon
the purposes for which they are to be spent and the means by which spending activities are controlled.
Government-Wide Financial Statements
The City's government-wide financial statements include a Statement of Net Position and a Statement of
Activities and Changes in Net Position. These statements present summaries of governmental activities
for the City. Fiduciary activities of the City are not included in these statements.
These statements are presented on an "economic resources" measurement focus and the accrual basis of
accounting. Accordingly, all of the City's assets and liabilities, including capital assets, as well as
infrastructure assets, long-term liabilities, and deferred inflows and outflows of resources are included in
the accompanying Statement of Net Position. The Statement of Activities presents changes in net position.
Under the accrual basis of accounting, revenues are recognized in the period in which they are earned
while expenses are recognized in the period in which the liability is incurred.
Certain types of transactions are reported as program revenues for the City in three categories:
Charges for services
Operating grants and contributions
Capital grants and contributions
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund
activities, payables, and receivables. All internal balances in the Statement of Net Position have been
eliminated. The following interfund activities have been eliminated:
Transfers in/Transfers out
Internal Service Fund charges
Land and Lighting District Service Fees
Deferred Outflow of Resources and Deferred Inflow of Resources
Deferred outflow of resources is a consumption of net assets by the City that is applicable to a future
reporting period, such as prepaid items and deferred charges.
Deferred inflow of resources is an acquisition of net assets by the City that is applicable to a future
reporting period, such as unearned revenue and advance collections.
Unearned Revenue
Unearned revenue arises when assets are received before revenue recognition criteria have been satisfied.
Grants and entitlements received before eligibility requirements are met are recorded as deferred inflows
from unearned revenue. In the governmental fund financial statements, receivables associated with non-
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
51
exchange transactions that will not be collected within the availability period have been recorded as
deferred inflows from unearned revenue.
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues,
Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds
aggregated. An accompanying schedule is presented to reconcile and explain the differences in net
position as presented in these statements to the net position presented in the government-wide financial
statements. The City has presented all major funds that met the applicable criteria. The following funds
are major funds:
General Fund
The General Fund is used to account for all of the general resources of the City not specifically levied or
collected for other City funds and the related expenditures. The General Fund accounts for all financial
resources of the City which are not accounted for in another fund.
Capital Improvement Capital Projects Fund
This fund accounts for resources used for the major capital acquisition and construction activities.
All governmental funds are accounted for on a spending or "current financial resources" measurement
focus and the modified accrual basis of accounting. Accordingly, only current assets, deferred outflows
of resources, current liabilities and deferred inflows of resources are included on the balance sheets. The
Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and
other financing sources) and decreases (expenditures and other financing uses) in net current assets.
Under the modified accrual basis of accounting, revenues are recognized in the accounting period in
which they become both measurable and available to finance expenditures of the current period.
Accordingly, revenues are recorded when received in cash, except that revenues subject to accrual (up to
45 days after year-end) are recognized when due. The primary revenue sources, which have been treated
as susceptible to accrual by the City, are property tax, sales tax, special assessments, intergovernmental
revenues, other taxes, interest revenue, rental revenue and certain charges for services. Fines, forfeitures,
licenses and permits and parking meter revenues are not susceptible to accrual because they are usually
not measurable until received in cash. Expenditures are recorded in the accounting period in which the
related fund liability is incurred.
Unearned revenues arise when potential revenues do not meet both the "measurable" and "available"
criteria for recognition in the current period. Unearned revenues also arise when the government receives
resources before it has a legal claim to them, as when grant monies are received prior t o incurring
qualifying expenditures. In subsequent periods when both revenue recognition criteria are met or when
the government has a legal claim to the resources, the unearned revenue is removed from the combined
balance sheet and revenue is recognized.
Reconciliation of the Fund Financial Statements to the Government -Wide Financial Statements is
provided to explain the differences created by the integrated approach of GASB Statement No. 34.
Proprietary Funds
The City’s internal service funds are proprietary funds. In the fund financial statements, proprietary funds
are presented using the accrual basis of accounting. Revenues are recognized when they are earned and
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
52
expenses are recognized when the related goods or services are delivered. In the fund financial
statements, proprietary funds are presented using the “economic resources measurement focus”. This
means all assets and liabilities (whether current or noncurrent) associated with their activities are included
on their balance sheets. Proprietary fund type operating statements present increases (revenues) and
decreases (expenses) in total net position.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions
associated with principal activity of the fund. Exchange transactions are those in which each party
receives and gives up essentially equal value. Non-operating revenues, such as subsidies, taxes, and
investment earnings result from nonexchange transactions or ancillary activities. Amounts paid to acquire
capital assets are capitalized as assets in the internal service funds financial statements.
Internal service funds account for charges to City departments for services provided, on a cost
reimbursement basis, in the following areas: general liability, workers’ compensation, office stores,
information technology services, vehicle maintenance, building maintenance, equipment replacement, and
information technology replacement.
Fiduciary Fund Financial Statements
During fiscal year 2013/14 the City has no fiduciary responsibility as prior reported agency funds have
been transferred to other outside government agencies.
C. Cash, Cash Equivalents and Investments
The City pools its available cash for investment purposes. The City's cash and cash equivalents are
considered to be cash on hand, demand deposits, and short-term investments with original maturity of
three months or less from the date of acquisition. Cash and cash equivalents are combined with
investments and displayed as Cash and Investments.
Deposit and Investment Risk Disclosures - In accordance with GASB Statement No. 40, Deposit and
Investment Disclosures (Amendment of GASB Statement No. 3), certain disclosure requirements, if
applicable, for Deposits and Investment Risks in the following areas:
Interest Rate Risk
Credit Risk
▬ Overall
▬ Custodial Credit Risk
▬ Concentrations of Credit Risk
Foreign Currency Risk
Other disclosures are specified including use of certain methods to present deposits and investments,
highly sensitive investments, credit quality at year-end and other disclosures.
The City participates in an investment pool managed by the State of California titled Local Agency
Investment Fund (LAIF), which has invested a portion of the pool funds in Structured Notes and Asset
Backed Securities. LAIF's investments are subject to credit risk with the full faith and credit of the State
of California collateralizing these investments. In addition, these Structured Notes and Asset -Backed
Securities are subject to market risk as to change in interest rates.
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NOTES TO FINANCIAL STATEMENTS
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D. Interfund Transactions
Interfund services provided and used are accounted for as revenue, expenditures or expenses, as
appropriate. Transactions that constitute reimbursements to a fund for expenditures/expenses initi ally
made from it that are properly applicable to another fund are recorded as expenditures/expenses in the
reimbursed fund. All other interfund transactions, except for interfund services provided and used and
reimbursements, are reported as transfers. Nonrecurring or nonroutine permanent transfers of equity are
reported as residual equity transfers. All other interfund transfers are reported as transfers.
E. Capital Assets
Capital assets, which include land, buildings, improvements, furniture, equipment and infrastructure
assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental
activities in the government-wide financial statements. Capital assets were recorded at historical cost or
estimated historical cost if actual cost was not available. Donated assets were valued at their fair market
value on the date of donation. City policy has set the capitalization threshold for reporting capital assets
at $10,000. The City has chosen the Modified Approach for reporting the streets subsystem of
infrastructure capital assets.
Depreciation is recorded on a straight-line basis over the useful lives of the assets as follows:
Buildings and structures 40 Years
Machinery and equipment 5 to 10 Years
Infrastructure 15 to 50 Years
In June 1999, GASB issued Statement No. 34 Basic Financial Statements – and Management’s
Discussion and Analysis – for State and Local Governments which requires the inclusion of infrastructure
capital assets in local governments' basic financial statements. In accordance with Statement No. 34, the
City has included the value of all infrastructure in its basic financial statements.
The City defines infrastructure as the basic physical assets that allow the City to function, which includes
the street system, park and recreation lands and improvements system; storm water conveyance and
drainage system, buildings combined with site amenities such as parking and landscaping areas used by
the City in the conduct of its business.
Each major infrastructure system can be divided into subsystems. For example the street system can be
subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices
(signs, signals and pavement markings), landscaping and land. These subsystems were not delineated in
the basic financial statements. The appropriate operating department maintains information regarding the
subsystems. The City elected to use the Modified Approach as defined by GASB Statement No. 34 for
infrastructure reporting of its streets, concrete and asphalt pavements. The City commissioned a physical
assessment of the streets condition as of June 30, 2013. This condition assessment was performed in the
fall of 2013 with the final report presented in March, 2014. A Pavement Condition Index (PCI) was
assigned to each street segment. The index is expressed in a continuous scale from 0 to 100, where 0 is
assigned to the least acceptable physical condition and 100 is assigned to segments of street that have the
physical characteristics of a new street.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
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The following conditions were defined:
Condition Rating
Excellent 80 - 100
Very Good 70 - 79
Good 50 - 69
Poor 25 - 49
Very Poor 0 - 24
The City's policy relative to maintaining the street assets is to achieve an average rating of 70 for all street
segments. This acceptable rating allows minor cracking and raveling of the pavement along with minor
roughness that could be noticeable to drivers traveling at the posted speeds. For all other infrastructure
systems, the City elected to use the Basic Approach as defined by GASB Statement No. 34 for
infrastructure reporting. An appraisal determined the original cost, which is defined as the actual cost to
acquire new property in accordance with market prices at the time of first construction/acquisition.
Original costs were developed in one of three ways: 1) historical records; 2) standard unit costs
appropriate for the construction/acquisition date; or 3) present cost indexed by a reciprocal factor of the
price increase from the construction/acquisition date to the current date. The accumulated depreciation,
defined as the total depreciation from the date of construction/acquisition to the current date on a straight
line, unrecovered cost method was computed using industry accepted life expectancies for each
infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation
from the original cost.
F. Interest Payable
In the government-wide financial statements, interest payable of long-term debt is recognized as an
incurred liability for governmental fund types. The City has not allocated the interest on long-term debt
to departments.
In the fund financial statements, governmental fund types do not recognize the interest payable when the
liability is incurred. Interest on long-term debt is recorded in the fund statements when payment is made.
G. Claims Payable
The City records a liability to reflect an actuarial estimate of ultimate uninsured losses for both general
liability claims (including property damage claims) and workers ' compensation claims. The estimated
liability for workers' compensation claims and general liability claims includes "incurred but not
reported" (IBNR) claims. There is no fixed payment schedule to pay these liabilities.
H. Compensated Absences
In the government-wide financial statements, compensated absences are recorded as incurred and the
related expenses and liabilities are reported.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
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In the fund financial statements, compensated absences are recorded as expenditures in the years paid, as
it is the City's policy to liquidate any unpaid compensated absences at June 30 from future resources,
rather than currently available financial resources. Only the amounts which become due at June 30 are
reported in the fund financial statements as a liability.
I. Long- Term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported
as liabilities in the applicable governmental activities. Bond premiums and discounts, as well as issuance
costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds
payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financial sources. Premiums received on debt issuance are reported as other financing sources while
discounts on debt issuance reported as other financing uses. Issuance costs, whether or not withheld from
the actual debt proceeds received, are reported as debt service expenditures.
J. Fund Balances
In February 2009, the Governmental Accounting Standards Board (GASB) issued Statement No. 54,
Fund Balance Reporting and Governmental Fund Type Definitions. This standard left unchanged the
total amount reported as fund balance, but substantially altered the categories and terminology used to
describe its components. Rather than focus on financial resources available for appropriation, the new
categories focus on “the extent for which the government is bound to honor constraints in the specific
purposes for which amounts in the reserve can be spent”.
The components of fund balance are now categorized as follows: “non-spendable fund balance”,
resources that are inherently non-spendable from the vantage point of the current period; “restricted fund
balance”, resources that are subject to enforceable legal restrictions; “committed fund balance”, resources
whose specified use is constrained by limitations the government entity imposes upon itself through
formal action at its highest level of decision making and remains binding unless removed in the same
manner; “assigned fund balance”, resources that reflects a government’s intended general use of
resources, such intent would have to be established at either the highest level of decision making, by a
body, or an official designated for that purpose; and “unassigned fund balance”, net resources in excess of
what can properly be classified in one of the other four categories. Currently, the City’s fund balance
reserves fall into one of the four spendable categories; restricted, committed, assigned, or unassigned fund
balance.
The City maintains three restricted fund balances constrained by external legal restrictions that can be
spent only for the stipulated purposes. These fund balances are:
Special Assessments Fund Balance – collectively represents year-end fund balances of twenty-
five landscape and/or lighting assessment districts which use is restricted to the individual district.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
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Environmental Services Fund Balance – represents surcharges collected on solid waste bills for
use as supplemental funding of Environmental Services program fees for household hazardous
waste fees, storm drain, street sweeping, and other pollution mitigation expenses related to
integrated waste programs and storm water management. These funds are used to supplement
environmental expenditures by using $50,000 per year.
Debt Service Fund Balance – represents funding collected for and use in the City’s general
obligation bond debt.
The committed category, in which fund balance is constrained by limitations that the government imposes
upon itself at its highest level of decision making by formal vote, and remain binding unless removed in
the same manner, includes the following:
Capital Improvement Program (CIP) Fund Balance – represents the collective balance of funding
appropriated for specific capital improvement projects. Capital Projects are funded through direct
revenues or budgeted transfers for improvement work within the following program funds:
Streets, Park & Trail, Facility, or Administrative Improvements.
Hillside Stability - funding set aside for use either in emergency repairs or high-cost and non-
routine mitigation of hillside or landslide projects.
In the assigned category, fund balance reflects an intended use as established by Council. Use of
Assigned Fund Balance is approved by formal vote of the Council or official authorized to assign
amounts to a specific purpose, either through specific action, fund balance policy, or through budget
direction and approval. This category includes the following reserves:
Future Capital & Efficiency Funding - represents General Fund funding set aside for capital
and/or efficiency projects but not yet committed for a specific improvement project.
Facility Replacement Reserve – represents accumulated funding for the future replacement, major
rehabilitation, or new construction of City-owned facilities. This funding is to be used for
funding the construction or provide for the services of related debt, but is not yet committed for a
specific improvement project.
Carryforward – represents either prior-year funds designated for one-time operational activities
not yet completed by year-end, or to carryforward prior-year funding for specific activities as
directed by Council. Carryover funds are appropriated for use in the following fiscal year.
The Unassigned Fund Balance category represents funding which may be held for specific types of uses
or stabilization purposes, but is not yet directed to be used for a specific purpose. Reserve amounts are
determined by, and align with, fund policy direction.
Working Capital Reserve – provides funds for cash flow. Council policy set aside $2,000,000 on
July 1, 1999, to be increased annually by an amount equal to the interest the City earned on the
equivalent amount of cash and investments. As of June 30, 2014 this fund balance has grown to
$2,930,184. This fund balance is not appropriated for use.
Fiscal Stabilization Reserve – Council policy is to maintain $1,500,000 for use by Council
direction in case of disasters, emergencies, and economic downturns.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
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Development Services Reserve– represents reserve funds collected for development services to
be used to support multi-year funding levels for zoning administration, inspection services, and
development regulation programs during periods where expenditures exceed revenues.
Compensated Absences Reserve – represents reserve funding for employee payout compensation
equal to the one-third of annual liability balance. This funding level is anticipated to be the
maximum potential payout in excess of budgeted salary in a fiscal year.
Other Unassigned Fund Balance – represents funding not yet appropriated or assigned for use.
Council policy is to maintain a minimum of $500,000 in unassigned funds as a buffer for
unplanned expenditures or revenue shortfalls.
Flow Assumption / Spending Order Policy – When expenditures are incurred for purposes for which both
restricted and unrestricted fund balance is available, the City considers restricted funds to be spent first.
When expenditures are incurred for which committed, assigned, or unassigned fund balances are
available, the City considers amounts to be spent first out of committed funds, then assigned funds, and
finally unassigned funds, as needed, unless the City Council has directed otherwise.
K. Net Position
In the government-wide financial statements, net position is classified in the following categories:
Net Investment in Capital Assets – This amount consists of capital assets net of accumulated
depreciation and reduced by outstanding debt that attributed to the acquisition, construction,
or improvement of the assets. In addition, deferred outflows of resources and deferred inflows
of resources that are attributable to the acquisition, construction, or improvement of those
assets or related debt also are included in the net investment in capital assets component of
net position.
Restricted Net Position – This amount is restricted by external creditors, grantors,
contributors, or laws or regulations of other governments.
Unrestricted Net Position – This amount is all net position that does not meet the definition of
"invested in capital assets, net of related debt" or "restricted net position."
L. Use of Restricted/Unrestricted Net Position
When an expense is incurred for purposes for which both restricted and unrestricted net positions are
available, the City's policy is to apply restricted net position first.
M. Property Tax and Special Assessments
County tax assessments include secured and unsecured property taxes and special assessments.
"Unsecured" refers to taxes on personal property. These tax assessments are secured by liens on the
property being taxed.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
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Revenue is recognized in the period for which the tax and assessment is levied. The County of Santa
Clara levies, bills and collects property taxes for the City, the County remits the entire amount levied and
handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are
levied on January 1.
Secured property tax is due in two installments on November 1 and February 1, and becomes a lien on
those dates. It becomes delinquent on December 10 and April 10, respectively. Unsecured property tax is
due on July 1 and becomes delinquent on August 31.
N. Use of Estimates
The preparation of basic financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
O. Subsequent Events
Management has reviewed subsequent events and transactions that occurred after the date of the financial
statements through the date of issuance. The financial statements include all events or transactions,
including estimates, required to be recognized in accordance with generally accepted accounting
principles. Management has determined that there are no non-recognized subsequent events that require
additional disclosure.
P. New GASB Pronouncements
GASB Statement No. 61 – In November, 2010, GASB issued Statement No. 61, The Financial
Reporting Entity: Omnibus—an amendment of GASB Statements No. 14 and No. 34. The objective of this
Statement is to improve financial reporting for a governmental financial reporting entity. The
requirements of Statement No. 14, The Financial Reporting Entity, and the related financial reporting
requirements of Statement No. 34, Basic Financial Statements—and Management’s Discussion and
Analysis—for State and Local Governments, were amended to better meet user needs and to address
reporting entity issues that have arisen since the issuance of those Statements. This pronouncement is
effective for periods beginning after June 15, 2013. The City does not believe there will be a significant
financial statement effect related to this Statement.
Statement No. 67 - In June, 2013, GASB issued Statement No. 67, Financial Reporting for Pension
Plans – amendment of GASB Statement No. 25. The objective of this Statement is to improve financial
reporting by state and local government pension plans. This Statement results from a comprehensive
review of the effectiveness of existing standards of accounting and financial reporting for pensions with
regards to providing decision-useful information, supporting assessments of accountability and inter -
period equity, and creating additional transparency. The requirements of this Statement are effective for
periods beginning after June 15, 2013. The City is in the process of determining the impact this statement
will have on the financial statements.
Statement No. 68 - In June, 2013, GASB issued Statement No. 68, Accounting and Financial Reporting
for Pensions – an amendment of GASB Statement No. 27. This Statement replaces the requirements of
Statements No. 27 and No. 50 related to pension plans that are administered through trusts or equivalent
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
59
arrangements. The requirements of Statements No. 27 and No. 50 remain applicable for pensions that are
not administered as trusts or equivalent arrangements. The primary objective of this Statement is to
improve accounting and financial reporting by state and local governments for pensions. It also improves
information provided by state and local government employers about financial support for pensions that is
provided by other entities. The requirements of this Statement are effective for financial statements for
fiscal years beginning after June 15, 2014. The City is in the process of determining the impact this
statement will have on the financial statements.
Statement No. 69 – In January, 2013, GASB issued Statement No. 69, Government Combinations and
Disposal of Government Operations. This Statement establishes accounting and financial reporting
standards related to government combinations and disposal of government operations. As used in this
Statement, combinations includes a variety of transactions referred to as mergers, acquisitions, and
transfers of operations. The requirements of this Statement are effective for periods beginning after
December 15, 2013. The City believes there will be no financial statement effect related to this Statement.
Statement No. 70 – In April, 2013, GASB issued Statement No 70, Accounting and Financial Reporting
for Nonexchange Financial Guarantees. Some governments extend financial guarantees for the
obligations of another government, a not-for-profit entity, or private entity without directly receiving
equal or approximately equal value in exchange (a non-exchange transaction). The requirements of this
Statement are effective for periods beginning after June 15, 2013. The City does not participate in
nonexchange transactions and this Statement will have no financial statement effect.
Statement No. 71 – In November, 2013, GASB issued Statement No. 71, Pension Transition for
Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68.
The objective of this Statement is to address an issue regarding the application of the transition provisions
of Statement No. 68. The issue relates to amounts associated with contributions, if any, made by a state,
or local government, employer or non-employer contributing entity to a defined benefit pension plan after
the measurement date of the government’s beginning net liability. The requirements of this Statement are
effective for periods beginning after December 15, 2013, in conjunction with Statement No. 68. The City
is in the process of determining the impact this statement will have on the financial statements.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
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NOTE 2 - CASH AND INVESTMENTS
The City maintains a cash and investment pool, which includes cash balances and authorized investments
of all funds, which the City Treasurer invests to enhance interest earnings. The pooled interest earned is
allocated to the funds based on average month-end cash and investment balances in these funds. The City
has the following cash and investments at June 30, 2014:
Statement of
Net Position
Governmental
Activities
Cash and investments 19,656,310$
The City's Cash and Investments at June 30, 2014, in more detail:
Cash and cash equivalents:
Petty cash 1,450$
Demand deposits 84,656
Total Cash and Cash Equivalents 86,106
Investments:
Local Agency Investment Fund (LAIF)19,570,204
Total Cash and Investments 19,656,310$
A. Cash Deposits
The carrying amounts of the City's cash deposits were $291,747 at June 30, 2014. Bank balances before
reconciling items were $347,976 at that date due to deposits in transit and outstanding checks. The total
amount was collateralized or insured with securities held by the pledging financial institutions.
The California Government Code requires California banks and savings and loan associations to secure
the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in
this manner shall have the effect of perfecting a security interest, and places the City ahead of general
creditors of the institution.
The market value of pledged securities must equal at least 110 percent of the City's cash deposits.
California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes
that have a value of 150 percent of the City's total cash deposits. The City has waived the collateral
requirements for cash deposits which are fully insured to $250,000 by the Federal Deposit Insurance
Corporation (FDIC). Other accounts are insured up to $250,000 per custodian within agency.
The City follows the practice of pooling cash and investments of all funds, except for funds required to be
held by fiscal agents under the provisions of bond indentures. Interest income from cash and investments
with fiscal agents is credited directly to the related fund.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
61
B. Investments
Under the provisions of the City's investment policy, and in accordance with California Government
Code, the following investments are authorized:
Securities of the U.S. Government or its agencies.
Certificates of Deposit (or Time Deposits) placed with commercial banks and/or savings
and loan companies.
Negotiable Certificates of Deposit.
California Local Agency Investment Fund.
Investment-grade obligations of State, local governments or public authorities.
Money market mutual funds.
Passbook savings account and demand deposits.
The City is in compliance with GASB Statement No. 31, Accounting and Financial Reporting for Certain
Investments and for External Investments Pools which requires the City's investments be recorded at fair
value instead of cost. Under GASB 31, the carrying value of investments are adjusted to reflect their fair
value at each fiscal year-end, with the effects of these adjustments included in the carrying value of the
investments.
C. External Investment Pool
The City's investments with LAIF at June 30, 2014, include a portion of the pool funds invested in
Structured Notes and Asset-Backed Securities. These investments include the following:
Structured Notes - debt securities (other than asset-backed securities) whose cash flow
characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or
more indices and/or that have embedded forwards or options.
Asset-Backed Securities - the bulk of which are mortgage-backed securities, entitle their
purchasers to receive a share of the cash flows from a pool of assets such as principal and
interest repayments from a pool of mortgages (such as CMO's) or credit card receivables.
LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in
accordance with State statute. The approved investments policy is listed on the LAIF website, located at
http://www.treasurer.ca.gov/pmia-laif/
As of June 30, 2014, the City had $19,570,204 invested in LAIF. The LAIF fair value factor of
1.00029875 was used to calculate the fair value of the investments in LAIF.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
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D. Risk Disclosures
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the term of an investment’s maturity, the greater the sensitivity to
changes in market interest rates. Although the City’s investment policy allows for a broad range of
investment instruments with varying terms of maturity, investments are limited to the Local Agency
Investment Fund (LAIF) which is managed by the State Treasurer Office and overseen by the Pooled
Money Investment Board, the State Treasurer investment committee, and a Local Agency Advisory
Board.
Included in LAIF’s investment portfolio are U.S. Treasuries, Federal Agency obligations, time deposits,
negotiable certificates of deposits, commercial paper, corporate bonds, and security loans. Funds are
available for withdrawal on demand, and are recorded on an amortized cost basis. At June 30, 2014, these
investments had a weighted average maturity of 232 days. The City had the following invested in LAIF:
Investment
Maturities in Years
Fair Less Than
Value One Year
State of California - Local Agency Investment Fund (LAIF)19,650,820$ 19,650,820$
Credit Risk
As of June 30, 2014, the City's investments in external investment pools are unrated. The City only
invests in LAIF, therefore has no other policy relating to the credit risk of investments.
Custodial Credit Risk
For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the
City will not be able to recover the value of its investments or collateral securities that are in the
possession of an outside party. The City did not hold any securities through investment counterparties at
the year ended June 30, 2014.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
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NOTE 3 - FUND FINANCIAL STATEMENTS INTERFUND TRANSACTIONS
Transfers In/Out
Transfers for the year ended June 30, 2014 were as follows:
Transfer in Transfer out Amount
General Fund Capital Improvement Fund 167,050$
Capital Improvement Fund General Fund 380,880
Total 547,930$
The General Fund received monies from the Capital Improvement Fund from the Gas Tax Fund for
general administration of $106,000 and the return of surplus funding from completed Hillside Reserve
funded projects in the amount of $61,050, $59,837 from the Hakone Gardens Driveway and Retaining
Wall repair project and $1,214 from the Parking District #3 Storm Damage Repair project.
The Capital Improvement Fund received monies from the General Fund from the adopted budget of
$100,000 for annual facility improvement projects, $150,000 for Roadway Safety, Sidewalk Maintenance
and Traffic Calming, $45,880 for trail improvements, and $85,000 for various administrative projects.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
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NOTE 4 - CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2014 is illustrated in the following
table:
Primary Government
Balance Balance
July 1, 2013 Additions Retirements Reclassifications June 30, 2014
Governmental activities:
Capital assets, not being depreciated:
Land and land improvements 14,585,401$ -$ -$ -$ 14,585,401$
Construction in progress 7,615,664 1,287,076 (249,096) (128,880) 8,524,764
Infrastructure:
Street pavement system 49,155,619 - - - 49,155,619
Total capital assets, not being depreciated 71,356,684 1,287,076 (249,096) (128,880) 72,265,784
Capital assets, being depreciated:
Buildings and structures 25,480,150 221,180 - - 25,701,330
Machinery and equipment
Governmental funds 1,678,323 28,598 (58,847) - 1,648,074
Internal service funds 792,003 149,363 - - 941,366
Infrastructure:
Bridges 1,563,654 - - - 1,563,654
Signs and lights 1,835,143 - - - 1,835,143
Drainage system 40,100,053 - - - 40,100,053
Sidewalks 12,372,322 - - - 12,372,322
Total capital assets, being depreciated 83,821,648 399,141 (58,847) - 84,161,942
Accumulated depreciation:
Buildings and structures (7,276,566) (686,302) - - (7,962,868)
Machinery and equipment
Governmental funds (1,116,007) (74,878) 58,847 - (1,132,039)
Internal service funds (691,031) (50,497) - - (741,528)
Infrastructure:
Bridges (1,052,821) (23,596) - - (1,076,417)
Signs and lights (991,651) (65,874) - - (1,057,525)
Drainage system (14,731,371) (802,001) - - (15,533,372)
Sidewalks (5,425,612) (326,497) - - (5,752,109)
Total accumulated depreciation (31,285,059) (2,029,644) 58,847 - (33,255,857)
Total capital assets, being depreciated, net 52,536,589 (1,630,504) - - 50,906,085
Governmental activities capital assets, net 123,893,273$ (343,428)$ (249,096)$ (128,880)$ 123,171,869$
In accordance with GASB Statement No. 34, the City has reported all capital assets including
infrastructure in the Government-Wide Statement of Net Position. The City elected to use the "Modified
Approach" as defined by GASB Statement No. 34 for infrastructure reporting for its pavement system.
As a result, no accumulated depreciation or depreciation expense has been recorded for this system. A
more detailed discussion of the "Modified Approach" is presented in the Required Supplementary
Information section of this report. All other capital assets including other infrastructure systems were
reported using the Basic Approach whereby accumulated depreciation and depreciation expense have
been recorded.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
65
NOTE 5 – LONG-TERM OBLIGATIONS
A summary of the City's long-term obligations transactions for the year ended June 30, 2014, is presented
below:
Classification
Balance Balance Due Within Due In More
Description July 1, 2013 Additions Retirements June 30, 2014 One Year Than One Year
General Obligation Bonds:
2011 Library bonds 11,540,000 - (485,000) 11,055,000 495,000 10,560,000
Net original issue premium 415,954 - (21,892) 394,062 21,892 372,170
Compensated absences 621,679 49,858 - 671,537 468,179 203,358
Total 12,577,633$ 49,858$ (506,892)$ 12,120,599$ 985,071$ 11,135,528$
General Obligation 2011 Library Bonds - Original Issue $11,995,000
On July 14, 2011, the City issued General Obligation Bonds Series 2011 in the amount of $11,995,000.
The bonds were issued to fully refund the General Obligation 2001 Library Bonds. The bonds are
payable from and secured by certain property taxes within the City. Interest on the bonds ranges from
2.0 percent to 4.0 percent and is payable on February 1 and August 1 of each year, commencing February
1, 2012. Principal is due annually beginning on August 1, 2012, in amounts ranging from $455,000 to
$790,000, with a final payment on August 1, 2031 of $820,000. The bonds maturing on or before August
1, 2021 are not subject to redemption prior to their respective stated maturity dates. Bonds maturing on or
after August 1, 2022 are subject to redemption prior to their respective stated maturity dates at the option
of the city at the principal amount of the bonds called for redemption, together with interest accrued
thereon to the date of redemption, without premium.
The annual debt service requirements on these bonds are as follows:
Year Ended Principal Interest Total
2015 495,000$ 393,285$ 888,285$
2016 500,000 393,285 893,285
2017 475,000 383,335 858,335
2018 485,000 371,210 856,210
2019 500,000 356,811 856,811
2020-2024 2,825,000 1,387,500 4,212,500
2025-2029 3,405,000 803,623 4,208,623
2030-2032 2,370,000 144,600 2,514,600
Total 11,055,000$ 4,233,649$ 15,288,649$
Compensated Absences
The City's liability for vested and unpaid compensated absences (accrued vacation and sick pay) has been
accrued and amounts to $671,537 at June 30, 2014. The compensated absences liability will generally be
liquidated through the General Fund.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
66
NOTE 6 - RISK MANAGEMENT
The City participates in the two following public entity risk pools:
ABAG Plan Corporation (ABAG PLAN) - covers general liability claims up to a limit of $5 million
and purchases an additional $15 million of excess insurance coverage, for a total of $20 million per
occurrence limit. The City has a deductible or uninsured liability of up to $25,000 per claim. Once the
City's deductible is met, ABAG PLAN becomes responsible for payment of all claims up to the limi t.
During the fiscal year ended June 30, 2014, the City contributed $182,465 for current year coverage and
received no refund of prior year excess contributions.
ABAG Workers' Compensation Pool Insurance Authority (ABAG POOL) – covers workers'
compensation coverage up to $250,000 and excess coverage provides an employer liability limit of $5
million per occurrence, and workers’ compensation per occurrence limit to $100 million. The City has no
deductible for these claims. During the fiscal year ended June 30, 2014, the City contributed $188,889
for current year coverage. The City's contribution equals the ratio of the City's payroll to the total
payrolls of all entities participating in the same layer of each program, in each program year.
Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread
to member entities on a percentage basis after a retrospective rating.
There have been no significant reductions of insurance settlements that exceeded insurance coverage for
the past three years.
The workers’ compensation and general liability claims payable of $39,500 reported at June 30, 2014, are
based on the requirements of GASB Statement No. 10, which requires that a liability for claims be
reported if information prior to the issuance of the basic financial statements indicates that it is probable
that a liability has incurred at the date of the basic financial statements and the amount of the loss can be
reasonably estimated. Changes in the claims payable amounts were as follows:
The General Fund has been used in the prior years to liquidate the liability for claims and judgments.
Year Ended Year Ended
June 30, 2014 June 30, 2013
Claims payable, beginning of year 24,800$ 21,247$
Fiscal year claims and changes in estimates 14,700 24,800
Claims payments - (21,247)
Claims payable, end of year 39,500$ 24,800$
Each risk pool is governed by a board consisting of representatives from member municipalities. The
board controls the operations of each risk pool, including selection of management and approval of
operating budgets, independent of any influence by member municipalities beyond their representation on
the Board.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
67
The following represents summary audited financial information of ABAG Plan Corporation and the
ABAG Workers’ Compensation Pool Insurance Authority for the fiscal year ended June 30, 2013 (most
recent available):
Plan Comp Shared
Corporation Risk Pool
Total Assets 45,141,862$ 3,978,862$
Total Liabilities 24,677,330 791,665
Net Assets 20,464,532$ 3,187,197$
Total Revenues 9,110,482$ 557,954$
Total Expenses 15,179,160 471,897
Net Increase in Net Assets (6,068,678)$ 86,057$
Audited financial information for each risk pool may be obtained from ABAG at P.O. Box 2089,
Oakland, California 94604-2089.
NOTE 7 - RETIREMENT PLANS
Pension Plan
Plan Description - The City contributes to the California Public Employees' Retirement System
(CalPERS), a cost-sharing multiple-employer defined benefit plan. CalPERS provide retirement and
disability benefits, annual cost-of-living adjustments, and death benefits to plan members and
beneficiaries. CalPERS act as a common investment and administrative agent for participating public
entities within the State of California. Benefit provisions and all other requirements are established by
State statute and City ordinance. Copies of CalPERS' annual financial report may be obtained from their
Executive Office located at 400 P Street, Sacramento, California 95811.
Funding Policy – The City employer is required to contribute an actuarially determined rate of annual
covered payroll for its miscellaneous employees. Active plan members are required by State statute to
contribute 7 percent of their annual covered salary.
Annual Pension Cost - For fiscal year 2013/14, the City's annual pension cost was $603,323. The
required contribution was determined as part of the June 30, 2011, actuarial valuation using the entry age
normal actuarial cost method. CalPERS actuarial assumptions included (a) 7.5 percent (7.50%)
investment rate of return (net of administrative expenses), (b) projected annual salary increases ranging
from 3.30 percent to 14.20 percent for miscellaneous employees depending on age, service, and type of
employment, and (c) 3.00 percent per year payroll growth adjustments. Both (a) and (b) included an
inflation component of 2.75 percent. The actuarial value of CalPERS assets was determined using
techniques that smooth the effects of short-term volatility in the market value of investments over a three-
year period. CalPERS’ unfunded actuarial accrued liability (or surplus) is amortized as a level percentage
of projected payroll on a closed basis. The amortization period at June 30, 2013, was 22 years for
miscellaneous employees for prior and current service unfunded liability.
Required Supplementary Information
The funding history below shows the actuarial accrued liability, the plan’s share of the pool’s market
value of assets, the plan’s share of the pool’s unfunded liability, funded ratio and the annual covered
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
68
payroll as of June 30, 2013. This was provided by CalPERS in the City’s 2013 Annual Valuation report
dated October 2014.
Accrued Share of Pool's Plan's Share of Annual
Valuation Liability Market Value of Pool's Unfunded Funded Covered
Date (AL)Assets (MVA)Liability Ratio Payroll
6/30/2011 33,070,836$ 26,749,324$ 6,321,512$ 80.9%4,896,568$
6/30/2012 34,752,043 26,587,593 8,164,450 76.5%4,763,600
6/30/2013 37,035,095 30,098,271 6,936,824 81.3%4,714,858
NOTE 8 - NET POSITION
A. Net Investment in Capital Assets
As of June 30, 2014, the net investment in capital assets consisted of the following:
Capital assets, net 123,171,255$
2011 general obligation library bonds (11,055,000)
Net investment in capital assets 112,116,257$
B. Restricted Net Position
As of June 30, 2014, the restricted net position consisted of the following:
Environmental Special Debt
Services Assessments Service Total
Restricted Net Assets 413,182$ 733,832$ 897,786$ 2,044,800$
Restricted For
NOTE 9 - JOINT POWERS AGREEMENTS
The City is a member of several Joint Power Agreements, as follows:
The Santa Clara County Valley Transportation Authority (VTA) consists of various cities in the San
Francisco Bay area. The Transportation Authority was formed in 1985, by a joint exercise of powers
agreement between the County of Santa Clara and the cities of Santa Clara County for the purpose of
financing highway capital improvements within the County to serve transportation needs. Financial
statements may be obtained from the Traffic Authority at 1754 Technology Drive, Suite 224, San Jose,
California 95110.
The West Valley Solid Waste Management Joint Powers Authority consists of the west valley cities of
Campbell, Los Gatos, Monte Sereno, and Saratoga. The JPA was formed to coordinate efforts in carrying
out solid waste collection and disposal activities, and in meeting the mandates of AB939, the States’
Integrated Waste Management Act.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
69
The Silicon Valley Regional Interoperability Authority (SVRIA) consists of Silicon Valley agencies
formed to coordinate the design and implementation of an interoperable public safety communication
system.
The Santa Clara County Library System JPA consists of various member agencies as a policy making and
governing body of the County’s library system.
These JPA's are governed by boards consisting of representatives from their members. The boards
control the operations of each JPA, including selection of management and approval of operating budgets,
independent of any influence by its members beyond their representation on the board.
NOTE 10 - EXCESS EXPENDITURES OVER APPROPRIATIONS
There were no excess of expenditures over appropriations in individual funds during fiscal year 2013/14.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
A. Lawsuits
The City is presently involved in certain matters of litigation tha t have arisen in the normal course of
conducting City business. City management believes, based upon consultation with the City Attorney,
that these cases, in the aggregate, are not expected to result in a material adverse financial impact on the
City. Additionally, City management believes that the City's insurance programs are sufficient to cover
any potential losses should an unfavorable outcome materialize.
B. Federal and State Grant Programs
The City participates in Federal and State grant programs. These programs are audited by the City's
independent accountants in accordance with the provisions of the Federal Single Audit Act Amendments
of 1996 and applicable State requirements. For Federal programs, the City reached the level of qualifying
cost during the current fiscal year so a single audit was required. Expenditures which may be disallowed,
if any, by the granting agencies, cannot be determined at this time. The City expects such amounts, if
any, to be immaterial.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
70
C. Commitments
The City had several outstanding contracts or planned construction projects as of June 30, 2014. These
projects are evidenced by contractual commitments with contractors and include:
Encumbrance Commitment as of June 30, 2014
Charles M. Salter Associates 19,900$ 18,220$
David J. Powers & Associates 48,744 38,416
David L. Gates & Associates 6,900 317
Guerra Construction Group 1,053,940 1,007,032
Heid, W. Jeffrey 9,570 2,900
HT Harvey & Associates 14,074 8,654
Labor Consultants 7,875 2,625
Mark Thomas & Company 397,462 275,043
Phillip A. Murray Construction 7,500 7,500
Richard May Construction 98,800 43,515
Signet Testing Laboratory 3,142 3,142
Steve Benzing Architect 7,925 764
T.A.K.'s Equipment Sales 7,847 7,847
Testing Engineers 8,078 6,147
1,691,757$ 1,422,120$
Vendor
Original
Commitment
Commitment
Remaining
As of June 30, 2014, in the opinion of City management, there were no additional outstanding matters
that would have a significant effect on the financial position of the funds of the City.
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REQUIRED SUPPLEMENTARY INFORMATION
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CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2014
73
NOTE 1 - BUDGETARY INFORMATION
The following is the budget comparison schedules for General Fund.
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Property taxes 8,965,400$ 9,470,400$ 9,525,980$ 55,580$
Special assessments - - 208 208
Sales taxes 1,050,000 1,050,000 941,350 (108,650)
Other local taxes 745,000 745,000 822,271 77,271
Licenses & permits 1,340,565 1,465,565 1,463,784 (1,781)
Fines & forfeitures 220,025 220,025 144,890 (75,135)
Intergovermental - state 355,000 355,000 417,217 62,217
Intergovermental - other 37,216 37,216 49,207 11,991
Franchise fees 1,896,000 1,896,000 1,948,642 52,642
Use of money & property 465,175 465,175 482,210 17,035
Other revenue 2,121,265 2,369,682 2,472,609 102,927
Total revenues 17,195,646 18,074,063 18,268,368 194,305
EXPENDITURES:
Current:
General and intergovernmental services 3,593,955 3,692,376 3,247,245 445,131
Public safety 4,516,155 4,491,155 4,491,384 (229)
Public works 4,841,301 4,917,301 4,833,962 83,339
Community services 1,450,396 1,450,396 1,383,277 67,119
Community development services 2,244,600 2,291,680 2,181,710 109,970
Total expenditures 16,646,407 16,842,908 16,137,578 705,330
REVENUES OVER
(UNDER) EXPENDITURES 549,239 1,231,155 2,130,790 899,635
OTHER FINANCING SOURCES (USES):
Transfers in 106,000 106,000 167,050 61,050
Transfers out (380,880) (380,880) (380,880) -
Total other financing sources (uses)(274,880) (274,880) (213,830) 61,050
Net change in fund balances 274,359$ 956,275$ 1,916,960 960,685$
FUND BALANCES:
Beginning of year 9,918,674
End of year 11,835,634$
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2014
74
Through the budget, the City Council sets the direction of the City, allocates its resources and establishes
its priorities. The Annual Operating and Capital Budgets assure the efficient and effective uses of the
City's economic resources, as well as establishing that the highest priority objectives are accomplished.
The annual budgets are adopted for the period of July 1 to June 30, and prepared to accurately and openly
communicate service and infrastructure priorities to the community, businesses, vendors, employees, and
other public agencies. The Annual Operating Budget is developed on a program basis for all funds with
fund level authority. It establishes the foundation of effective financial planning by providing resource
planning, performance measures and controls that permit the evaluation and adjustment of the City's
performance. The City adopts an annual budget for the capital projects as part of adopting the five-year
Capital Improvement Plan. The annual capital budget is adopted on a project-by-project basis.
The City follows these procedures in establishing the budgetary data reflected in the basic financial
statements:
a. The City Manager submits to the City Council a proposed operating budget for the fiscal year
commencing the following July 1. The operating and capital budgets include proposed
expenditures and the means of financing them.
b. Public hearings are conducted to obtain taxpayer comments.
c. The budgets are legally enacted through the passage of a resolution.
d. For the Operating Budget, the City Manager may authorize transfers of budget amounts within a
fund. However, any revisions that increase the total budgeted expenditures of any fund must be
approved by the City Council. Expenditures may not legally exceed budgeted appropriations at
the fund level without City Council approval.
e. As Capital Projects are adopted on a project basis, the City Council must approve increases or
decreases of budgeted amounts or changes in project scope. Upon project completion, immaterial
amounts are transferred to ongoing maintenance projects within the capital program. If remaining
project funds are material, the project balance is brought back to Council for approval to transfer.
f. Formal budgetary integration in the form of legally adopted budgets is employed as a
management control device for all funds. Budgets are adopted on a basis consistent with
generally accepted accounting principles. Budgeted expenditures reported are as amended by
supplemental appropriations of the City Council.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the appli cable appropriation, is
employed as an extension of formal budgetary integration in the General, Special Revenue, Internal
Service, and Capital funds. Unexpended and unencumbered appropriations automatically lapse at the end
of the fiscal year.
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2014
75
NOTE 2 - MODIFIED APPROACH FOR CITY STREETS INFRASTRUCTURE CAPITAL
ASSETS
In accordance with GASB Statement No. 34, the City is required to account for and report infrastructure
capital assets. The City defines infrastructure as the basic physical assets that allow the City to function
and those resources utilized primarily by the public which provide future economic benefits for a
minimum of two years. Infrastructure can be defined as assets that are immovable and of value only to
the government. Major infrastructure includes the street system, park and recreation lands and
improvements; storm water conveyance and drainage systems, and buildings combined with site
amenities such as parking and landscaping areas used by the City in the conduct of its business. Each
major infrastructure system can be divided into subsystems. For example, the street system can be
divided into concrete and asphalt pavements, concrete curb and gutters, sidewalks, medians, streetlights,
traffic control devices (signs, signals and pavement markings), landscaping and land. Subsystem detail is
not presented in these basic financial statements; however, the City maintains detailed information on
these subsystems.
The City has elected to use the "Modified Approach" as defined by GASB Statement No. 34 for
infrastructure reporting for its Streets Pavement System. Under GASB Statement No. 34, eligible
infrastructure capital assets are not required to be depreciated under the following requirements:
The City manages the eligible infrastructure capital assets using an asset management system
with characteristics of (1) an up-to-date inventory; (2) perform condition assessments and
summarize the results using a measurement scale; and (3) estimate annual amount to maintain
and preserve at the established condition assessment level.
The City documents that the eligible infrastructure capital assets are being preserved
approximately at or above the established and disclosed condition assessment level.
The City commissioned a physical assessment of the streets conditions with the final report received
March 17, 2014. The study assists the City by providing current inspection data used to evaluate current
pavement condition. This helps to maintain a City-defined desirable level of pavement performance
while optimizing the expenditure of limited fiscal resources. The entire pavement network within the
City is composed of approximately 141.1 centerline miles of paved surfaces. The City’s road system can
be grouped by function class and includes 24.2 centerline miles of arterial, 23.2 centerline miles of
collector, and 93.7 miles as residential.
A visual survey of all pavement segments was conducted to assess the existing surface condition of each
of the individual pavement segments. Upon completion of the study, a Pavement Condition Index (PCI)
was calculated for each segment in the City's pavement network to reflect the overall pavement condition.
Rating between 0 and 100, a PCI of 0 would correspond to a badly deteriorated pavement with virtually
no remaining life. A PCI of 100 would correspond to a pavement with proper engineering design and
construction at the beginning of its life cycle. The assessment study was conducted during the fall of
2013.
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2014
76
The following conditions were defined:
Condition Rating
Excellent 80 - 100
Very Good 70 - 79
Good 50 - 69
Poor 25 - 49
Very Poor 0 - 24
The City's policy is to achieve an average rating of 70 for all streets, which is a very good rating. This
rating allows minor cracking and raveling of the pavement along with minor roughness that could be
noticeable to drivers traveling at the posted speeds. As of June 30, 2014, the City's street system was
rated at a PCI index of 69 on the average with the detail condition as follows:
Percent of
Condition Streets
Excellent 0%
Very Good 58%
Good 23%
Poor 16%
Very Poor 3%
The City expended $2,079,413 on street maintenance for the year ended June 30, 2014. These projects
include resurfacing, safety improvements, sidewalks, curbs and gutters, storm drain improvements,
beautification projects, and various other routine maintenance projects help to delay deterioration and
beautify the City’s roadway system. Council policy requires a minimum of $1,000,000 be budgeted for
the CIP Streets program on an annual basis. Approximately $10, 732, 208 is budgeted for various
projects in the five-year CIP for fiscal year 2014/15.
A schedule of estimated annual amount calculated to maintain and preserve its streets at the current level
compared to actual expenditures for street maintenance for the last ten years is presented below:
Funded By
Fiscal Actual Other Gas Tax Total PCI
Year Budget Expenditures Sources Fund Funded Index
2004-05 1,800,000 2,609,648 1,478,216 1,131,432 2,609,648 70
2005-06 1,156,547 1,030,382 353,652 676,730 1,030,382 70
2006-07 2,026,404 1,156,889 19,899 970,818 990,717 70
2007-08 2,246,152 1,691,466 1,252,709 438,757 1,691,466 70
2008-09 2,680,504 1,574,485 1,148,650 425,835 1,574,485 70
2009-10 1,811,130 771,386 575,710 195,676 771,386 70
2010-11 4,770,782 1,847,221 1,449,686 397,535 1,847,221 76
2011-12 4,683,078 2,856,603 1,622,401 1,234,202 2,856,603 76
2012-13 4,826,265 2,417,444 1,660,028 757,416 2,417,444 76
2013-14 11,191,684 2,079,413 1,651,156 428,256 2,079,413 69
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2014
77
As of June 2014, approximately 19 percent of the City's streets were rated below the average standard of
“Good”. The City will continue to rehabilitate these segments of the streets. Total deficiencies (deferred
maintenance) identified in the Pavement Management System Report at the end of a five-year period
(2014-2018) will amount to approximately $15,400,000 for all streets and are expected to be rehabilitated
with a minimum annual budget of $1,000,000.
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SUPPLEMENTARY INFORMATION
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NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Lighting and Landscape Assessment District Funds – These funds account for revenues and
expenditures associated with maintaining the City’s 25 Landscape and Lighting districts which were
approved by consent of property owners living along or within the boundaries of the Districts.
Debt Service Fund
Library Bond - Santa Clara County general obligation bond tax revenues are accumulated in this fund to
pay annual principal and interest payments on the voter approved 2001 Library Improvement Bond.
CITY OF SARATOGA
COMBINING BALANCE SHEETS
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2014
82
Special
Revenue Debt Service
Lighting and Total
Landscaping Other
Assessment Library Governmental
District Bond Funds
ASSETS
Cash and investments 763,649$ 893,510$ 1,657,159$
Receivables:
Accounts 650 4,276 4,926
Interest - - -
Total assets 764,299$ 897,786$ 1,662,085$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 30,467$ -$ 30,467$
Total liabilities 30,467 - 30,467
Fund Balances:
Restricted:
Special revenue funds 733,832 - 733,832
Debt service - 897,786 897,786
Total fund balances 733,832 897,786 1,631,618
Total liabilities and fund balances 764,299$ 897,786$ 1,662,085$
CITY OF SARATOGA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
83
Special Debt
Revenue Service
Lighting and Total
Landscaping Other
Assessment Library Governmental
District Bond Funds
REVENUES:
Property taxes 211,010$ 154$ 211,164$
Special assessment 306,844 899,864 1,206,708
Use of money and property 1,744 1,521 3,265
Other revenue 1,705 - 1,705
Total revenues 521,303 901,539 1,422,842
EXPENDITURES:
Current:
General and ingov't services
Public works 409,418 - 409,418
Debt service:
Principal - 485,000 485,000
Interest and fiscal charges - 404,510 404,510
Total expenditures 409,418 889,510 1,298,928
REVENUES OVER
(UNDER) EXPENDITURES 111,885 12,029 123,914
Net change in fund balances 111,885 12,029 123,914
FUND BALANCES:
Beginning of year 621,947 885,757 1,507,704
End of year 733,832$ 897,786$ 1,631,618$
CITY OF SARATOGA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CAPITAL IMPROVEMENT
FOR THE YEAR ENDED JUNE 30, 2014
84
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Licenses & permits 425,000$ 190,148$ 559,789$ 369,641$
Fines & forfeitures - - 51,190 51,190
Intergovermental - federal 3,934,428 7,351,856 796,277 (6,555,579)
Intergovermental - state 1,018,662 1,132,556 992,584 (139,972)
Intergovermental - other 390,088 644,024 79,952 (564,072)
Use of money and property 35,000 35,000 35,132 132
Other revenue 323,212 256,350 72,734 (183,616)
Total revenues 6,126,390 9,609,934 2,587,658 (7,022,276)
EXPENDITURES:
Capital outlay 13,270,147 13,270,147 3,095,514 10,174,633
Total expenditures 13,270,147 13,270,147 3,095,514 10,174,633
REVENUES OVER
(UNDER) EXPENDITURES (7,143,757) (3,660,213) (507,856) 3,152,357
OTHER FINANCING SOURCES (USES):
Transfers in 420,880 420,880 618,037 197,157
Transfers out (146,000) (146,000) (404,208) (258,208)
Total other financing sources (uses)274,880 274,880 213,829 (61,051)
Net change in fund balances (6,868,877)$ (3,385,333)$ (294,027) 3,091,306$
FUND BALANCES:
Beginning of year 3,420,334
End of year 3,126,307$
CITY OF SARATOGA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LIGHTING & LANDSCAPING ASSESSMENT DISTRICT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2014
85
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Property taxes 180,500$ 180,500$ 211,010$ 30,510$
Special assessments 304,436 304,436 306,844 2,408
Use of money and property 1,995 1,995 1,744 (251)
Other revenue - - 1,704 1,704
Total revenues 486,931 486,931 521,302 34,371
EXPENDITURES:
Current:
Public works 602,137 602,137 409,418 192,719
Total expenditures 602,137 602,137 409,418 192,719
REVENUES OVER
(UNDER) EXPENDITURES (115,206) (115,206) 111,884 227,090
Net change in fund balances (115,206)$ (115,206)$ 111,884 227,090$
FUND BALANCES:
Beginning of year 621,948
End of year 733,832$
CITY OF SARATOGA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LIBRARY BOND DEBT SERVICE FUND
FOR THE YEAR ENDED JUNE 30, 2014
86
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Special assessments 860,000$ 860,000$ 900,018$ 40,018$
Use of money and property 1,500 1,500 1,521 21
Total revenues 861,500 861,500 901,539 40,039
EXPENDITURES:
Debt service:
General and ingov't services - - - -
Principal 485,000 485,000 485,000 -
Interest and fiscal charges 404,860 404,860 404,510 350
Total expenditures 889,860 889,860 889,510 350
REVENUES OVER
(UNDER) EXPENDITURES (28,360) (28,360) 12,029 40,389
Net change in fund balances (28,360)$ (28,360)$ 12,029 40,389$
FUND BALANCES:
Beginning of year 885,757
End of year 897,786$
87
INTERNAL SERVICE FUNDS
Liability/Risk Management Insurance Fund – Accounts for insurance premiums, self-insurance portion
of claims, and administrative cost associated with settling claims. Charges made to operating departments
are based on liability risk and claim occurrence history.
Worker’s Compensation Self-insurance Fund – Accounts for insurance premiums, self insured portion
of claims, and administrative costs associated with settling claims. Charges made to operating
departments are based on liability risk and claim occurrence history.
Office Stores Fund - Photocopy equipment, postage and bulk mail meter expenses are controlled at one
source point and expended to the departments as goods or services are utilized.
Information Technology Services Fund – Supports the delivery of technology based services and
infrastructure, including desktop support, network systems, technology upgrades and initiatives,
community systems, and associated information technology equipment.
Vehicle & Equipment Maintenance Fund – Accounts for the cost of operating and maintaining
automotive equipment used for service operations in various City departments.
Building Maintenance Fund – Accounts for operating costs associated with building maintenance.
Expenses include custodial supplies and services, maintenance and repair, utilities, and staffing costs.
Vehicle & Equipment Replacement Fund – Established to accumulate funding for the replacement of
vehicles and equipment. Replacement costs are charged to program over the asset’s life span, reflective
of usage.
Information Technology Equipment Replacement Fund – Established to accumulate funding for the
replacement of information technology equipment. Replacement costs are charged to departments over
the asset’s lifespan, reflective of usage.
CITY OF SARATOGA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 2014
88
Liability /
Risk Workers'Office
Management Compensation Stores
ASSETS
Current assets:
Cash and investments 319,887$ 279,439$ 55,021$
Accounts receivable 4,743 4,337 -
Total current assets 324,630 283,776 55,021
Noncurrent assets:
Capital assets:
Machinery and equipment - - -
Less: accumulated depreciation - - -
Total capital assets (net of
accumulated depreciation) - - -
Total assets 324,630 283,776 55,021
LIABILITIES
Liabilities:
Current liabilities:
Accounts payable 434$ 1,499$ 1,901$
Accrued payroll 1,570 635 -
Claims payable 39,500 - -
Total current liabilities 41,504 2,134 1,901
NET POSITION
Investment in capital assets - - -
Unrestricted 283,126 281,642 53,120
Total net position 283,126$ 281,642$ 53,120$
89
Information
Information Vehicle Vehicle Technology
Technology and Equipment Building and Equipment Equipment
Services Maintenance Maintenance Replacement Replacement Total
275,437$ 47,226$ 236,259$ 509,492$ 154,605$ 1,877,366$
652 - 794 - - 10,526
276,089 47,226 237,053 509,492 154,605 1,887,892
- - - 830,900 110,465 941,365
- - - (649,265) (92,263) (741,528)
- - - 181,635 18,202 199,837
276,089 47,226 237,053 691,127 172,807 2,087,729
8,741$ 9,327$ 28,169$ 612$ 1,818$ 52,501$
5,278 1,549 9,015 - - 18,047
- - - - - 39,500
14,019 10,876 37,184 612 1,818 110,048
- - - 181,635 18,202 199,837
262,070 36,350 199,869 508,880 152,787 1,777,844
262,070$ 36,350$ 199,869$ 690,515$ 170,989$ 1,977,681$
CITY OF SARATOGA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2014
90
Liability /
Risk Workers'Office
Management Compensation Stores
Operating revenues:
Charges for services 375,000$ 200,000$ 55,000$
Other operating revenues 14,810 17,432 10,027
Total operating revenues 389,810 217,432 65,027
Operating expenses:
Cost of services - - -
Administration 336,743 229,510 35,928
Depreciation - - -
Total operating expenses 336,743 229,510 35,928
Operating income 53,067 (12,078) 29,099
Transfers out - - -
Change in net position 53,067 (12,078) 29,099
Total net position - beginning 230,059 293,720 24,021
Total net position - ending 283,126$ 281,642$ 53,120$
91
Information
Information Vehicle Vehicle Technology
Technology and Equipment Building and Equipment Equipment
Services Maintenance Maintenance Replacement Replacement Total
400,000$ 250,000$ 825,000$ 200,000$ 55,000$ 2,360,000$
3,489 1 7,474 7,049 - 60,282
403,489 250,001 832,474 207,049 55,000 2,420,282
- 224,078 817,506 11,121 38,305 1,091,010
422,704 - - - - 1,024,885
- - - 48,474 2,023 50,497
422,704 224,078 817,506 59,595 40,328 2,166,392
(19,215) 25,923 14,968 147,454 14,672 253,890
- - - - - -
(19,215) 25,923 14,968 147,454 14,672 253,890
281,285 10,427 184,901 543,061 156,317 1,723,791
262,070$ 36,350$ 199,869$ 690,515$ 170,989$ 1,977,681$
CITY OF SARATOGA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2014
92
Liability /
Risk Workers'Office
Management Compensation Stores
Cash flows from operating activities:
Receipts from customers and users 390,734$ 213,095$ 65,054$
Payments to suppliers (260,096) (204,472) (39,260)
Payments to employees (60,996) (25,477) -
Net cash provided by operating activities 69,642 (16,854) 25,794
Cash flows from capital activities:
Acquisition of capital assets - - -
Net cash used for acquisition of capital assets - - -
Net increase (decrease) in cash and cash equivalents 69,642 (16,854) 25,794
Cash and cash equivalents, beginning of year 250,245 296,293 29,227
Cash and cash equivalents, ending of year 319,887$ 279,439$ 55,021$
Reconciliation of operating income to net cash provided
by operating activities:
Operating income (loss)53,067$ (12,078)$ 29,099$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation - - -
Change in operating assets and liabilities:
Accounts receivables 924 (4,337) 28
Accounts payable 434 (715) (3,333)
Claims payable 14,700 - -
Accrued payroll 517 276 -
Net cash provided (used) by operating activities 69,642$ (16,854)$ 25,794$
93
Information
Information Vehicle Vehicle Technology
Technology and Equipment Building and Equipment Equipment
Services Maintenance Maintenance Replacement Replacement Total
402,990$ 250,001$ 836,343$ 207,049$ 55,000$ 2,420,266$
(182,290) (138,410) (344,199) (10,508) (48,538) (1,227,773)
(236,841) (79,411) (479,716) - - (882,441)
(16,141) 32,180 12,428 196,541 6,462 310,052
- - - (129,138) (20,225) (149,363)
- - - (129,138) (20,225) (149,363)
(16,141) 32,180 12,428 67,403 (13,763) 160,689
291,578 15,046 223,831 442,089 168,368 1,716,677
275,437$ 47,226$ 236,259$ 509,492$ 154,605$ 1,877,366$
(19,214)$ 25,923$ 14,968$ 147,454$ 14,672$ 253,891$
- - - 48,474 2,023 50,497
(500) - 3,869 - - (16)
2,503 5,971 (8,603) 613 (10,233) (13,363)
- - - - - 14,700
1,070 286 2,194 - - 4,343
(16,141)$ 32,180$ 12,428$ 196,541$ 6,462$ 310,052$
94
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95
CAPITAL ASSETS
USED IN THE OPERATION OF GOVERNMENTAL FUNDS
96
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CITY OF SARATOGA
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULE BY SOURCE
JUNE 30, 2014 AND 2013
97
2014 2013
Governmental Funds Capital Assets:
Land and land improvements 14,585,401$ 14,585,401$
Buildings and structures 25,701,330 25,480,150
Machinery and equipment 1,647,393 1,678,323
Infrastructure 105,026,791 105,026,791
Construction in progress 8,524,764 7,615,664
Total Governmental Funds Capital Assets 155,485,679 154,386,329
Accumulated depreciation (32,514,261) (30,594,028)
Total Governmental Funds Capital Assets, Net 122,971,418$ 123,792,301$
Investments in Governmental Funds
Capital Assets by Source:
General Fund 115,272,417$ 115,331,263$
Special revenue funds 960,972 960,972
Capital projects funds 38,404,942 37,246,746
Donations 847,348 847,348
Accumulated depreciation (32,514,261) (30,594,028)
Total Governmental Funds Capital Assets 122,971,418$ 123,792,301$
1 This schedule presents only the capital asset balances related to governmental funds. Accordingly
the capital assets reported in internal service funds are excluded from the above amounts.
Generally, the capital assets of internal service funds are included as governmental activities in the
statement of net position.
CITY OF SARATOGA
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY1
JUNE 30, 2014
98
Land Buildings
and Land and
Improvements Structures
Function and Activity
General and intergovernmental services:
Management services -$ 564,632$
Administrative services - 521,073
Intergovernmental services 118,184 3,138,641
Total General and Intergovernmental Services:118,184 4,224,346
Public safety:
Police services - -
Code enforcement - -
Total Public Safety:- -
Public works:
Streets and sidewalks 835,154 62,921
Parks/open space 3,712,061 2,761,389
Total Public Works:4,547,215 2,824,310
Community services 8,177,538 4,337,775
Community development services 1,742,464 14,314,899
Total Governmental Funds Capital Assets 14,585,401 25,701,330
Accumulated depreciation - (7,962,868)
Total Governmental Funds Capital Assets, Net 14,585,401$ 17,738,462$
1 This schedule presents only the capital asset balances related to governmental funds. Accordingly
the capital assets reported in internal service funds are excluded form the above amounts.
Generally, the capital assets of internal service funds are included as governmental activities in the
statement of net position.
99
Machinery Construction
and in
Equipment Infrastructure Progress Total
553,507$ -$ 372,748$ 1,490,887$
140,332 - - 661,405
22,225 - - 3,279,050
716,064 - 372,748 5,431,342
15,435 - - 15,435
7,548 - - 7,548
22,983 - - 22,983
376,303 104,899,554 5,296,512 111,470,444
150,019 - 131,746 6,755,215
526,322 104,899,554 5,428,258 118,225,659
365,392 127,237 2,650,848 15,658,790
16,632 - 72,910 16,146,905
1,647,393 105,026,791 8,524,764 155,485,679
(1,131,971) (23,419,422) - (32,514,261)
515,422$ 81,607,369$ 8,524,764$ 122,971,418$
CITY OF SARATOGA
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGE BY FUNCTION AND ACTIVITY
JUNE 30, 2014
100
Governmental Governmental
Funds Capital Funds Capital
Assets Assets
July 1, 2013 Additions Deletions June 30, 2014
Function and Activity
General and intergovernmental services:
Management services 1,473,244$ 17,644$ -$ 1,490,888$
Administrative services 661,405 - - 661,405
Intergovernmental services 3,279,050 - - 3,279,050
Total General and Intergovernmental Services:5,413,699 17,644 - 5,431,343
Public safety:
Police services 29,459 - (14,025) 15,434
Code enforcement 7,548 - - 7,548
Total Public Safety:37,007 - (14,025) 22,982
Public works:
Streets and sidewalks 111,088,255 427,010 (44,822) 111,470,443
Parks/open space 6,586,513 168,702 - 6,755,215
Total Public Works:117,674,768 595,712 (44,822) 118,225,658
Community services 15,137,622 521,168 - 15,658,790
Community development services 16,123,233 23,672 - 16,146,905
Total Governmental Funds Capital Assets 154,386,329 1,158,196 (58,847) 155,485,678
Accumulated depreciation (30,594,028) (1,920,233) - (32,514,261)
Total Governmental Funds Capital Assets, Net 123,792,301$ (762,037)$ (58,847)$ 122,971,417$
1 This schedule presents only the capital asset balances related to governmental funds. Accordingly
the capital assets reported in internal service funds are excluded form the above amounts.
Generally, the capital assets of internal service funds are included as governmental activities in the
statement of net position.
101
STATISTICAL SECTION
102
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103
This part of the City of Saratoga's comprehensive annual financial report presents detailed information as
a context for understanding what the information in the financial statements, note disclosures and required
supplementary information says about the government's overall financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how
the government's financial performance and well being have changed over time. 104-109
Revenue Capacity
These schedules contain information to help the reader assess the government’s
most significant local revenue source; property tax. 110-119
Debt Capacity
These schedules present information to help the reader assess the affordability
of the government's current levels of outstanding debt and the government's ability
to issue additional debt in the future. 120-126
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government's financial activities
take place. 127-129
Operating Information
These schedules contain service and infrastructure data to help the reader understand
how the information in the government's financial report relates to the services the
government provides and the activities it performs. 130-135
The City of Saratoga implemented GASB Statement No. 34 in fiscal year 2001/02; schedules presenting
government-wide information include information beginning in that year.
The City of Saratoga implemented GASB Statement No. 44 in fiscal year 2007/08; newly required
schedules presenting information in the Statistical Section include the earliest available information.
CITY OF SARATOGA
NET POSITION BY COMPONENT
LAST TEN YEARS
(ACCRUAL BASIS OF ACCOUNTING)
104
(amounts expressed in thousands)
2005 2006 2007 2008
Primary government
Governmental activities
Net investment in capital assets 105,784$ 107,100$ 108,102$ 109,818$
Restricted 6,328 5,370 5,928 5,940
Unrestricted 6,789 9,955 8,593 9,710
Total primary government 118,901$ 122,425$ 122,623$ 125,468$
Source: CAFR
Fiscal Year
$-
$50,000
$100,000
$150,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Net Position by Component
Net investment in capital assets Restricted Unrestricted
105
2009 2010 2011 2012 2013 2014
108,818$ 108,966$ 110,016$ 111,201$ 112,353$ 112,116$
5,281 5,519 5,830 1,938 1,971 2,045
8,759 8,533 7,964 12,248 13,357 15,095
122,858$ 123,018$ 123,810$ 125,387$ 127,681$ 129,256$
CITY OF SARATOGA
CHANGES IN NET POSITION
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
106
(amounts expressed in thousands)
2005 2006 2007 2008
Expenses:
Governmental activities:
General and intergovernmental services 4,160$ 3,473$ 4,532$ 6,293$
Public safety 3,736 3,427 3,844 4,166
Public works 3,829 4,752 6,425 5,325
Community services 1,929 1,395 1,437 1,286
Community development services 2,349 2,226 1,993 2,032
Interest on long-term debt (unallocated)760 754 768 714
Total governmental activities expenses 16,763 16,027 18,999 19,816
Program revenues:
Charges for services:
General and intergovernmental services - 31 452 1,787
Public safety 141 122 - 411
Public works 1,988 1,890 528 1,705
Community services 757 1,008 604 911
Community development services 1,890 2,665 1,328 2,110
Operating grants and contributions 1,218 1,549 2,155 151
Capital grants and contributions 865 1,568 1,282 1,715
Total governmental activates program revenues 6,859 8,833 6,349 8,790
Net (expense) revenue and change in net assets (9,904) (7,194) (12,650) (11,026)
General revenue and other changes in net assets
Taxes:
Property taxes 4,841 5,652 5,772 8,099
Sales taxes 1,011 988 995 1,058
Local taxes 1,143 1,288 1,099 694
Franchise taxes 995 1,040 1,187 1,625
Motor vehicle in-lieu 420 718 177 149
Total Taxes 8,410 9,686 9,230 11,625
Intergovernmental - - 673 841
Investment earnings 283 709 2,813 1,057
Other revenues 193 323 132 348
Total general revenues 8,886 10,718 12,848 13,871
Change in net assets (1,018) 3,524 198 2,845
Net position - beginning of year 119,919 118,901 122,425 122,623
Net position - end of year 118,901$ 122,425$ 122,623$ 125,468$
Source: CAFR
Fiscal Year
107
2009 2010 2011 2012 2013 2014
5,595$ 3,729$ 4,368$ 3,486$ 4,143$ 4,522$
4,211 4,339 4,457 4,300 4,382 4,491
7,643 6,535 6,645 9,121 6,922 7,379
1,634 1,711 1,846 1,996 1,804 1,586
2,000 1,751 1,839 1,553 1,713 2,179
697 677 656 453 410 400
21,780 18,742 19,811 20,909 19,374 20,557
133 125 171 140 102 120
520 425 561 594 607 330
2,379 2,535 2,771 2,079 3,316 2,768
935 917 1,020 890 946 958
1,802 1,586 1,734 1,923 2,184 2,220
228 275 401 1,319 75 117
339 674 1,221 2,337 599 808
6,336 6,537 7,879 9,282 7,829 7,321
(15,444) (12,205) (11,932) (11,627) (11,545) (13,236)
8,336 8,371 8,199 8,457 9,153 9,737
1,043 955 991 1,101 1,051 941
663 560 632 683 769 822
1,657 1,664 1,821 1,852 1,920 1,949
116 101 146 16 16 14
11,815 11,651 11,789 12,109 12,909 13,463
474 522 773 910 766 981
397 101 65 67 51 62
148 91 97 118 113 305
12,834 12,365 12,724 13,204 13,839 14,811
(2,610) 160 792 1,577 2,294 1,575
125,468 122,858 123,018 123,810 125,387 127,681
122,858$ 123,018$ 123,810$ 125,387$ 127,681$ 129,256$
CITY OF SARATOGA
FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
108
(amounts expressed in thousands)
2005 2006 2007 2008
General fund:
Restricted 899$ 910$ 711$ 679$
Committed - - - -
Assigned 75 615 831 1,258
Unassigned 6,002 8,854 7,619 8,459
Total general fund 6,976$ 10,379$ 9,161$ 10,396$
All other governmental funds:
Restricted
Special revenue funds 202$ 919$ 844$ 318$
Debt service 856 865 746 854
Committed
Capital project funds 5,321 3,586 4,338 4,768
Total all other governmental funds 6,379$ 5,370$ 5,928$ 5,940$
Source: CAFR
Information prior to fiscal year 2011 have been updated to conform with GASB 54 requirements
Fiscal Year
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
General -
Restricted
General -
Committed
General -
Assigned
General -
Unassigned
Debt Service Special
Revenue
Capital
Projects
Fund Balances of Governmental Funds
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
109
2009 2010 2011 2012 2013 2014
613$ 563$ 513$ 513$ 463$ 413$
550 300 500 600 675 993
322 196 667 3,161 792 2,648
6,744 6,952 5,804 4,655 7,989 7,782
8,229$ 8,011$ 7,484$ 8,929$ 9,919$ 11,836$
484$ 569$ 504$ 563$ 622$ 734$
931 893 851 862 886 898
3,866 4,057 4,475 3,544 3,420 3,126
5,281$ 5,519$ 5,830$ 4,969$ 4,928$ 4,758$
CITY OF SARATOGA
GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE
LAST TEN YEARS
(ACCRUAL BASIS OF ACCOUNTING)
110
(amounts expressed in thousands)
2005 2006 2007 2008
Tax revenues:
Property taxes 4,841$ 5,652$ 5,772$ 8,099$
Special assessments 1,476 1,369 271 1,392
Sales taxes 1,011 988 995 1,058
Local taxes 1,143 1,288 1,099 694
Franchise taxes 995 1,040 1,187 1,625
Motor vehicle in-lieu 420 718 177 149
Total tax revenues 9,886$ 11,055$ 9,501$ 13,017$
Source: CAFR
Fiscal Year
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Property
taxes
Special
assessments
Sales taxes Local taxes Franchise
taxes
Motor
vehicle in-lieu
Tax Revenues by Source
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
111
2009 2010 2011 2012 2013 2014
8,336$ 8,371$ 8,199$ 8,457$ 9,153$ 9,737$
1,368 1,247 1,255 1,243 1,185 1,207
1,043 955 991 1,101 1,051 941
663 560 632 683 769 822
1,657 1,664 1,821 1,852 1,920 2,024
116 101 146 16 16 14
13,183$ 12,898$ 13,044$ 13,352$ 14,094$ 14,745$
CITY OF SARATOGA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
112
(amounts expressed in thousands)
2005 2006 2007 2008
Revenues:
Property taxes 4,893$ 5,652$ 4,758$ 7,877$
Special assessments 1,411 1,370 1,285 1,566
Sales taxes 1,011 987 995 1,058
Other local taxes 851 1,288 1,126 773
Licensed and permits 100 79 1,340 1,671
Fines and forfeitures 162 259 396 344
Intergovernmental - federal 90 - - -
Intergovernmental - state 1,375 2,660 3,631 1,641
Intergovernmental - other 671 976 629 777
Franchise fees 1,294 1,041 1,187 1,622
Use of money any property 664 752 2,813 924
Other revenues 153 1,719 151 326
Total tax revenues 15,768 19,498 19,211 22,763
Expenditures:
Current:
General and intergovernmental services 3,238 3,346 3,806 4,083
Public safety 3,731 3,423 3,824 4,166
Public works 2,599 3,501 5,714 4,717
Community services 1,875 1,210 1,381 1,262
Community development services 1,990 1,847 1,962 2,026
Capital outlay 1,777 2,908 2,130 4,246
Debt service:
Principal 255 270 280 295
Interest and fiscal charges 766 760 774 721
Total expenditures 16,231 17,265 19,871 21,515
Excess of revenues (463) 2,233 (660) 1,247
Other financing sources (uses):
Transfers in 2,492 499 3,422 2,241
Transfers out (2,492) (499) (3,422) (2,241)
Total other financing sources (uses)- - - -
Net change in fund balances (463)$ 2,233$ (660)$ 1,247$
Debt as a percentage of noncapital expenditures 7.06%7.17%5.94%5.62%
Source: CAFR
Fiscal Year
CITY OF SARATOGA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
113
2009 2010 2011 2012 2013 2014
8,335$ 8,371$ 8,199$ 8,457$ 9,153$ 9,737$
1,368 1,247 1,255 1,243 1,185 1,207
1,043 954 991 1,101 1,051 941
663 560 632 683 769 823
1,460 1,489 1,950 1,728 2,177 2,023
360 359 285 234 199 196
- 430 1,033 1,915 975 796
1,283 1,258 1,480 1,728 1,142 1,410
290 258 337 73 269 129
1,657 1,664 1,821 1,852 1,920 1,949
794 595 550 589 527 521
1,966 1,794 2,169 2,199 2,421 2,547
19,219 18,979 20,702 21,802 21,788 22,279
3,330 3,102 3,524 3,145 3,269 3,247
4,206 4,349 4,467 4,310 4,392 4,491
4,700 4,730 4,717 4,751 4,966 5,243
1,424 1,223 1,322 1,269 1,318 1,383
2,450 2,111 2,193 1,888 2,047 2,182
4,060 2,584 3,704 5,179 3,979 3,096
310 330 350 370 455 485
705 685 665 551 414 405
21,185 19,114 20,942 21,463 20,840 20,532
(1,966) (135) (240) 339 948 1,747
2,043 1,172 1,725 510 1,291 785
(2,043) (1,017) (1,700) (485) (1,291) (785)
- 155 25 245 - -
(1,966)$ 20$ (215)$ 584$ 948$ 1,747$
4.89%5.80%5.56%4.68%4.76%4.33%
CITY OF SARATOGA
PROPERTY TAX RATES – DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN YEARS
114
(Property Tax Rates per $100 of Assessed Value)
2005 2006 2007 2008
General 1.0000 1.0000 1.0000 1.0000
County Retirement Levy 0.0388 0.0388 0.0388 0.0388
County Library 0.0024 0.0024 0.0024 0.0024
City of Saratoga 0.0148 0.0117 0.0096 0.0113
1.0560 1.0529 1.0508 1.0525
Campbell School District 0.0529 0.0512 0.0508 0.0475
County Bond 2008 Hospital 0.0000 0.0000 0.0000 0.0000
Campbell Elementary 2002 0.0000 0.0000 0.0000 0.0000
Campbell Elementary 2010 0.0000 0.0000 0.0000 0.0000
Campbell Union High 1999 0.0198 0.0224 0.0198 0.0285
Campbell Union High 2006 0.0000 0.0000 0.0000 0.0000
Cupertino Elementary School District 0.0360 0.0350 0.0289 0.0337
Moreland Elementary School District 0.0612 0.0561 0.0556 0.0569
Saratoga School District 0.0361 0.0356 0.0351 0.0363
Campbell Union High School District 0.0197 0.0224 0.0198 0.0285
Fremont Union High School District 0.0268 0.0260 0.0243 0.0241
Los Gatos-Saratoga Joint Union High School District 0.0409 0.0371 0.0651 0.0345
Foothill-DeAnza Community College District 0.0129 0.0119 0.0346 0.0113
West Valley Community College District 2004 0.0000 0.0140 0.0126 0.0118
West Valley Community College District 2012 0.0000 0.0000 0.0000 0.0000
Saratoga Fire District 0.0017 0.0052 0.0049 0.0053
Santa Clara Valley Water District - State Water Project 0.0086 0.0069 0.0070 0.0067
Santa Clara Valley Water District - Zone W-1 0.0006 0.0009 0.0002 0.0040
0.3172 0.3247 0.3587 0.3291
Total Tax Rate 1.3732 1.3776 1.4095 1.3816
Source: California Municipal Statistics, Inc.
Fiscal Year
115
2009 2010 2011 2012 2013 2014
1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
0.0388 0.0388 0.0388 0.0388 0.0388 0.0388
0.0024 0.0024 0.0024 0.0024 0.0024 0.0024
0.0104 0.0094 0.0094 0.0088 0.0080 0.0074
1.0516 1.0506 1.0506 1.0500 1.0492 1.0486
0.0524 0.0285 0.0249 0.0283 0.0246 0.0264
0.0000 0.0122 0.0095 0.0047 0.0051 0.0035
0.0000 0.0267 0.0298 0.0266 0.0220 0.0288
0.0000 0.0000 0.0005 0.0003 0.0086 0.0000
0.0299 0.0183 0.0196 0.0186 0.0165 0.0134
0.0000 0.0131 0.0131 0.0156 0.0160 0.0156
0.0306 0.0000 0.0000 0.0000 0.0000 0.0000
0.0565 0.0000 0.0000 0.0000 0.0000 0.0000
0.0363 0.0000 0.0000 0.0000 0.0000 0.0000
0.0299 0.0000 0.0000 0.0000 0.0000 0.0000
0.0339 0.0000 0.0000 0.0000 0.0000 0.0000
0.0330 0.0000 0.0000 0.0000 0.0000 0.0000
0.0123 0.0000 0.0000 0.0000 0.0000 0.0000
0.0032 0.0140 0.0139 0.0137 0.0139 0.0125
0.0000 0.0000 0.0000 0.0000 0.0150 0.0130
0.0053 0.0000 0.0000 0.0000 0.0000 0.0000
0.0059 0.0071 0.0070 0.0063 0.0069 0.0070
0.0002 0.0003 0.0002 0.0001 0.0000 0.0000
0.3294 0.1202 0.1185 0.1142 0.1286 0.1202
1.3810 1.1708 1.1691 1.1642 1.1778 1.1688
CITY OF SARATOGA
ASSESSED VALUE OF TAXABLE PROPERTY
LAST TEN YEARS
116
(amounts expressed in thousands)
Fiscal
Year Total
Ended Residential Commercial Industrial Other Unsecured Assessed
June 30 Property Property Property Property Property Property
2005 7,114,095$ 166,071$ 8,746$ 138,912$ 42,965$ 7,470,789$
2006 7,883,965 177,149 8,921 161,496 46,874 8,278,405
2007 8,467,894 187,142 9,099 192,470 39,764 8,896,369
2008 9,025,628 208,369 9,281 210,269 35,775 9,489,322
2009 9,605,309 213,951 9,467 223,190 43,933 10,095,850
2010 9,724,687 120,769 9,656 327,898 58,210 10,241,220
2011 9,639,782 107,269 9,633 323,881 57,172 10,137,737
2012 9,834,082 111,232 9,706 323,563 55,535 10,334,118
2013 10,312,597 112,875 11,455 335,765 62,378 10,835,070
2014 11,158,775 113,915 11,684 352,830 59,684 11,696,888
Source:Santa Clara County Assessor data, MuniServices, LLC
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Total Assessed Property
Unsecured
Other
Industrial
Commercial
Residential
117
Total
Less:Total Taxable Direct
Tax Exempt Assessed Tax
Real Property Value Rate
(76,932)$ 7,393,857$ 1.0560
(133,951) 8,144,454 1.0529
(140,859) 8,755,510 1.0508
(159,369) 9,329,953 1.0525
(161,488) 9,934,362 1.0516
(230,127) 10,011,093 1.0506
(230,477) 9,907,260 1.0506
(230,868) 10,103,250 1.0476
(233,895) 10,601,175 1.0492
(238,683) 11,458,205 1.0486
CITY OF SARATOGA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
JUNE 30, 2014
118
(amounts expressed in thousands)
% of Total % of Total
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Cupertino Village Associates, LLC 36,486$ 1 0.32%
Quito Village Group, LLC 20,808 2 0.18%16,640 2
San Jose Water Works 18,661 3 0.16%9,904$ 3 0.13%
John I. and Michelle Keller 14,932 4 0.13%
Gregpenn Properties, LLC 13,554 5 0.12%7,440 9
Argonaut Associates, LLV 13,194 6 0.12%
Stormin Norman LLC 12,600 7 0.11%
Balakrishnan Balu and Mohimi 10,288 8 0.09%
Public Storage Inc 9,877 9 0.09%8,530 8
Morrison Terri E 9,143 10 0.08%
Saratoga Office Center Partner 19,300 1 0.26%
Krishnamurthi Ashok 9,455 4 0.13%
Peterschmidt David C Roxanne N 9,166 5 0.12%
Jordan Deloise A Trust 9,006 6 0.12%
House David L 8,865 7 0.12%
Jf Plaza Partners 6,700 10 0.09%
Top Ten Total Assessed Value 159,543$ 105,006$
City Total Assessed Value 11,458,206$ 7,347,133$
Source: Santa Clara County Assessor data, MuniServices, LLC
2014 2005
CITY OF SARATOGA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN YEARS
119
Fiscal Year Total Tax Collections in
Ended Levy for Subsequent
June 30 Fiscal Year Amount Percentage Years Amount Percentage
2005 4,972,875$ 4,972,875$ 100.0%-$ 4,972,875$ 100.0%
2006 5,243,038 5,243,038 100.0%- 5,243,038 100.0%
2007 6,032,558 6,032,558 100.0%- 6,032,558 100.0%
2008 8,108,364 8,108,364 100.0%- 8,108,364 100.0%
2009 8,332,184 8,332,184 100.0%- 8,332,184 100.0%
2010 8,371,396 8,371,396 100.0%- 8,371,396 100.0%
2011 8,199,341 8,199,341 100.0%- 8,199,341 100.0%
2012 8,456,687 8,456,687 100.0%- 8,456,687 100.0%
2013 9,152,865 9,152,865 100.0%- 9,152,865 100.0%
2014 9,737,144 9,737,144 100.0%- 9,737,144 100.0%
Source: City of Saratoga
Collected within the
Fiscal Year of the Levy Total Collections to Date
CITY OF SARATOGA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN YEARS
120
(amounts expressed in thousands, except per capita amounts)
2005 2006 2007 2008
Governmental activities
General obligation bonds 14,440$ 14,170$ 13,890$ 13,595$
Net original issue premium - - - -
Total primary government 14,440$ 14,170$ 13,890$ 13,595$
Percentage of Personal Income 1 0.91%0.82%0.75%0.74%
Per capita 2 468 460 443 430
Source: CAFR
1US Census Bureau, adjusted for inflation, MuniServices LLC
2Population information from California State Controller's Office
Fiscal Year
121
2009 2010 2011 2012 2013 2014
13,285$ 12,955$ 12,605$ 11,995$ 11,540$ 11,055$
- - - 438 416 394
13,285$ 12,955$ 12,605$ 12,433$ 11,956$ 11,449$
0.76%0.54%0.57%0.57%0.53%0.49%
419 405 417 409 389 371
CITY OF SARATOGA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN YEARS
122
(amounts expressed in thousands, except per capita amounts)
2005 2006 2007 2008
General obligation bonds 14,440$ 14,170$ 13,890$ 13,595$
Net original issue premium - - - -
Less: Amount available in debt service fund (855) (865) (747) (854)
Total primary government 13,585$ 13,305$ 13,143$ 12,741$
Percentage of actual taxable
value of property 0.18%0.16%0.15%0.14%
Per capita1 440 431 419 403
Source: CAFR
1Population information from California State Controller's Office
Fiscal Year
123
2009 2010 2011 2012 2013 2014
13,285$ 12,955$ 12,605$ 11,995$ 11,540$ 11,055$
- - - 438 416 394
(926) (890) (848) (860) (885) (898)
12,359$ 12,065$ 11,757$ 11,135$ 10,655$ 10,157$
0.12%0.12%0.12%0.11%0.10%0.09%
390 377 389 367 347 329
CITY OF SARATOGA
LEGAL DEBT MARGIN INFORMATION
LAST TEN YEARS
124
(amounts expressed in thousands)
2005 2006 2007 2008 2009
Debt Limit 1,120,618$ 1,241,761$ 1,334,455$ 1,423,398$ 1,514,378$
Total net debt applicable to limit 13,585 13,305 13,143 12,741 12,359
Legal debt margin 1,107,033$ 1,228,456$ 1,321,312$ 1,410,657$ 1,502,019$
Total net debt applicable to the limit
as a percentage of debt limit 1.21%1.07%0.98%0.90%0.82%
Legal debt margin calculation
Assessed value 7,393,857$ 8,144,454$ 8,755,510$ 9,329,953$ 9,934,362$
Add back: exempt real property 76,932 133,951 140,859 159,369 161,488
Total assessed value 7,470,789$ 8,278,405$ 8,896,369$ 9,489,322$ 10,095,850$
Debt limit (15% of total assessed value)1,120,618$ 1,241,761$ 1,334,455$ 1,423,398$ 1,514,378$
Debt applicable to limit:
General obligation bonds 14,440$ 14,170$ 13,890$ 13,595$ 13,285$
Net original issue premium - - - - -
Less: Amount available in debt service fund (855) (865) (747) (854) (926)
Total net debt applicable to limit 13,585$ 13,305$ 13,143$ 12,741$ 12,359$
Legal debt margin 1,107,033$ 1,228,456$ 1,321,312$ 1,410,657$ 1,502,019$
Source: CAFR
Fiscal Year
125
2010 2011 2012 2013 2014
1,536,183$ 1,520,660$ 1,550,118$ 1,625,261$ 1,754,233$
12,065 11,757 11,135 10,655 10,157
1,524,118$ 1,508,903$ 1,538,983$ 1,614,606$ 1,744,076$
0.79%0.77%0.72%0.66%0.58%
10,011,093$ 9,907,259$ 10,103,250$ 10,601,175$ 11,458,205$
230,127 230,477 230,868 233,895 236,683
10,241,220$ 10,137,736$ 10,334,118$ 10,835,070$ 11,694,888$
1,536,183$ 1,520,660$ 1,550,118$ 1,625,261$ 1,754,233$
12,955$ 12,605$ 11,995$ 11,540$ 11,055$
- - 438 416 394
(890) (848) (860) (885) (898)
12,065$ 11,757$ 11,135$ 10,655$ 10,157$
1,524,118$ 1,508,903$ 1,538,983$ 1,614,606$ 1,744,076$
CITY OF SARATOGA
DIRECT AND OVERLAPPING
GOVERNMENTAL ACTIVITIES DEBT
126
(amount expressed in thousands)
Estimated
Estimated Share of
Debt Percentage Overlapping
Outstanding Applicable1 Debt
Direct Debt:
City of Saratoga 11,055$ 100.000%11,055$
Total Direct Debt 11,055
Overlapping Tax and Assessment Debt:
Santa Clara County 804,700 3.442%27,698
Foothill-De Anza Community College District 613,179 1.655%10,148
West Valley Community College District 294,323 10.189%29,989
Campbell Union High School District 152,410 5.635%8,588
Fremont Union High School District 290,570 3.656%10,623
Los Gatos-Saratoga Joint Union High School District 41,805 39.165%16,373
Campbell Union School District 160,845 6.946%11,161
Cupertino Union School District 261,223 6.056%15,820
Moreland School District 94,833 13.025%12,352
Saratoga Union School District 40,224 86.028%34,604
Saratoga Fire Protection District 3,909 97.140%3,797
Santa Clara Valley Water District Benefit Assessment 115,045 3.442%3,960
Total Overlapping Tax and Assessment Debt 185,113
Overlapping General Fund Debt:
Santa Clara County General Fund Obligations 757,814$ 3.442%26,084$
Santa Clara County Pension Obligations 375,419 3.442%12,922
Santa Clara County Board of Education
Certificates of Participation 9,730 3.442%335
Santa Clara County Vector Control District
Certificates of Participation 3,275 3.442%113
Foothill-De Anza Community College District
Certificates of Participation 13,469 1.655%223
West Valley-Mission College District
General Fund Obligations 65,095 10.189%6,633
Campbell Union High School District
Certificates of Participation 10,160 5.635%573
Los Gatos-Saratoga Joint Union High School District
Certificates of Participation 7,925 39.165%3,104
Campbell Union High School District
Certificates of Participation 3,500 6.946%243
Saratoga Union School District
Certificates of Participation 5,240 86.028%4,508
Midpeninsula Open Space Park District
General Fund Obligations 133,209 5.948%7,923
Total Overlapping General Fund Debt 62,661
Total Overlapping Tax & Assessement and General Fund Debt 247,774
Combined Total Debt2 258,829$
1Percentage of overlapping agency's assessed valuation located within boundaries of the city.
2Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation
bonds and non-bonded capital lease obligations.
Source: California Municipal Statistics, Inc.
CITY OF SARATOGA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN YEARS
127
Personal Per Capita
Fiscal City Income Personal Labor Unemployment
Year Population1 (in thousands)2 Income 2 Force3 Rate3
2005 30,850 1,586,245$ 51,418$ 12,600 2.5%
2006 30,835 1,719,175 55,754 12,700 2.1%
2007 31,352 1,860,365 59,338 12,900 2.3%
2008 31,592 1,843,425 58,351 13,100 3.2%
2009 31,679 1,747,699 55,169 13,300 6.0%
2010 31,997 2,401,151 75,043 13,200 5.6%
2011 30,195 2,211,963 73,256 13,400 5.0%
2012 30,363 2,119,463 69,804 14,000 4.4%
2013 30,706 2,179,904 70,993 13,900 4.2%
2014 30,887 2,243,458 72,634 14,200 3.4%
Source:1Popluaton information from California State Controller's Office
2US Census Data, adjusted for inflation, MuniServices LLC
3EDD Labor Market Information Division, MuniServices LLC
10,000
15,000
20,000
25,000
30,000
35,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Labor Force vs. Population
Population
Labor Force
CITY OF SARATOGA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO AT JUNE 30, 2014
128
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment Employees Rank Employment
West Valley Community College 474 1 3.34%- 0.00%
Saratoga Retirement Community 272 2 1.92%- 0.00%
Saratoga Union School District 240 3 1.69%- 0.00%
Mountain Winery 224 4 1.58%- 0.00%
Sub-Acute Saratoga Hospital 149 5 1.05%- 0.00%
Saratoga High School 133 6 0.94%- 0.00%
YMCA 130 7 0.92%- 0.00%
Our Lady Fatima Villa 101 8 0.71%- 0.00%
Prospect High School 100 9 0.70%- 0.00%
Safeway 91 10 0.64%65 2 0.52%
Gene's Fine Foods 85 1 0.67%
Saratoga Country Club 65 3 0.52%
24 Hour Fitness 30 4 0.24%
Windermere 27 5 0.21%
CVS 20 6 0.16%
Classic Car Wash 20 7 0.16%
Harmonic European Day Spa 20 8 0.16%
Hinshaw, Draa & Marsh 20 9 0.16%
Bella Saratoga 20 10 0.16%
Total City Employment1 14,200 12,600
1EDD Labor Market Information Division, MuniServices LLC
2014 20051
129
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CITY OF SARATOGA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
LAST NINE FISCAL YEARS
130
2005 2006 2007 2008
Function
General government 12.65 10.75 11.00 13.00
Public works 20.75 20.75 21.75 22.75
Community development 14.00 13.00 14.00 14.00
Parks and recreation 10.35 10.35 10.60 10.60
Total 57.75 54.85 57.35 60.35
Source: City of Saratoga Budget Document
Fiscal Year
-
10
20
30
40
50
60
70
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Full-Time Equivalents
Parks & Rec
Comm Development
Public works
General gov't
131
2009 2010 2011 2012 2013 2014
12.00 11.75 11.45 10.80 10.90 13.65
21.75 21.75 21.65 21.55 20.65 20.65
14.00 12.00 12.00 12.00 11.00 12.00
10.60 9.35 9.50 9.50 9.35 9.60
58.35 54.85 54.60 53.85 51.90 55.90
CITY OF SARATOGA
OPERATING INDICATORS BY FUNCTION
LAST TEN FISCAL YEARS
132
2005 2006 2007 2008
Function
Part 1 crimes1 463 426 425 381
Total incidents 42,011 40,567 39,663 41,243
Police reports 1,767 1,659 1,767 1,941
Public Works
Street resurfacing (miles)- 5 14 -
Street lights repaired 2 3 3 12
Potholes filled (sq. ft.)- 5,000 5,000 7,000
Community Development
Total permit valuation ($000)74,668 94,485 69,935 70,442
Parks and Recreation
Classes, trips (enrollment) community events 5,604 5,712 4,817 4,782
Adult Exercise (e.g. JS Dance. Jazzerxcise)272 312 285 362
Sports programs (e.g. Adult basketball, softball)470 473 515 591
Preschool programs (enrollment)200 163 159 225
Staffed Day/summer camps (enrollment)301 287 205 242
Teen/youth council (enrollment)2,506 3,798 2,221 94
Senior center (enrollment/attendance days)22,312 22,591 18,515 17,826
1Part 1 Crimes are the following as reported to DOJ: homicide, rape, robbery, burglary, assault, theft,
auto theft, and arson.
Source: City of Saratoga various records
Fiscal Year
133
2009 2010 2011 2012 2013 2014
282 173 373 287 277 408
41,384 39,942 41,642 35,664 40,141 41,228
1,949 1,273 1,549 1,329 1,106 978
6 3 - 6 6.2 4.3
25 24 25 41 29 34
10,000 10,000 11,000 10,000 12,060 11,000
61,117 44,658 50,936 59,675 79,896 79,702
4,698 4,366 6,135 5,479 5,365 6,235
515 545 661 647 1,663 2,173
459 423 - - - -
171 161 142 132 188 274
225 331 326 - 45 160
419 2,110 1,323 787 605 673
16,325 16,533 14,640 15,221 12,269 12,941
CITY OF SARATOGA
CAPITAL ASSET STATISTICS BY FUNCTION
LAST TEN FISCAL YEARS
134
2005 2006 2007 2008
Function
Public safety
Police Station 1 1 - -
Fire Station
Saratoga Fire District 1 1 1 1
Central Fire District 1 1 1 1
Public Works
Street Miles - Private 13 13 13 13
Street Miles - Public 137 137 137 137
West Valley Sanitation District
Number of Connections 8,601 8,621 8,651 8,651
Length of Sewer Lines 120 120 127 127
Cupertino Valley Sanitation District
Number of Connections 2,118 2,118 2,915 2,927
Length of Sewer Lines 36 36 36 36
Parks and Recreation
Parks Acreage 81 81 81 81
Parks 15 15 15 15
Source: City of Saratoga various records
Fiscal Year
135
2009 2010 2011 2012 2013 2014
- - - - - -
1 1 1 1 1 1
1 1 1 1 1 1
14 14 14 14 14 14.5
140 140 140 140 141 142
8,683 8,687 8,664 8,679 8,821 8,919
127 127 127 127 127 127
2,938 2,949 2,954 2,959 2,961 2,963
37 37 37 37 37 37
84 84 84 84 84 84
15 15 15 15 15 15
136
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