HomeMy WebLinkAbout11.29.2022 ACFR FINALAttachment C
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ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2022
CITY COUNCIL
Tina Walia, Mayor
Kookie Fitzsimmons, Vice Mayor
Mary-Lynne Bernald
Rishi Kumar
Yan Zhao
APPOINTED OFFICIALS
James Lindsay, City Manager
Richard Taylor, City Attorney
EXECUTIVE TEAM
Crystal Bothelio, Assistant City Manager
John Cherbone, Public Works Director
Debbie Pedro, Community Development Director
Nick Pegueros, Administrative Services Director
ACFR PREPARATION TEAM
Agnes Pabis, Finance Manager
Ann Xu, Accountant
Evangeline Bundang, Senior Accounting Technician
Gina Scott, Administrative Analyst
Julie Ingram, Accounting Technician
Vivian Lu, Accounting Technician
CONTACT INFORMATION
City of Saratoga · Administrative Services Director
13777 Fruitvale Avenue · Saratoga, California 95070 · www.saratoga.ca.us
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CITY OF SARATOGA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2021
1
T ABLE OF C ONTENTS
I NTRODUCTORY SECTION
Letter of Transmittal ......................................................................................................... 5
GFOA Certificate of Achievement for Excellence in Financial Reporting ......................... 1 2
Principal Officers of the City .......................................................................................... 1 3
Organization Chart ......................................................................................................... 1 4
F INANCIAL S ECTION
Independent Auditors ’ Report ........................................................................................... 1 7
Management’s Discussion and Analysis (Required Supplementary Information) ............. 20
Basic Financial Statements:
Government-Wide Financial Statements
Statement of Net Position .......................................................................................... 3 7
Statement of Activities .............................................................................................. 3 8
Fund Financial Statements
Governmental Funds:
Balance Sheet ........................................................................................................... 3 9
Reconciliation of the Government Funds Balance Sheet
to the Government-Wide Financial Statement of Net Position ................................ 40
Statement of Revenues, Expenditures and Changes in Fund Balances ......................... 41
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Government-Wide
Statement of Activities and Changes in Net Position ............................................. 42
Proprietary Funds:
Statement of Net Position .......................................................................................... 4 3
Statement of Revenues, Expenses, and Changes in Fund Net Position ......................... 4 4
Statement of Cash Flows ........................................................................................... 4 5
Fiduciary Funds:
Statement of Fiduciary Net Position .......................................................................... 4 6
Statement of Changes in Fiduciary Net Position ......................................................... 4 7
Basic Financial Statement Notes:
Notes to the Basic Financial Statements ..................................................................... 4 8
Required Supplementary Information
Budgetary Information .............................................................................................. 7 7
Modified Approach for City Streets Infrastructure Capital Assets ............................... 80
Pension Information .................................................................................................. 82
CITY OF SARATOGA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2021
2
T ABLE OF C ONTENTS C ONTINUED
S UPPLEMENTARY I NFORMATION:
Non-Major Governmental Funds
Combining Balance Sheets ........................................................................................ 8 6
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........ 8 7
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
– Budget and Actual:
Capital Improvements .......................................................................................... 8 8
Landscape & Lighting Districts Special Revenue Funds ........................................ 8 9
Library Bond Debt Service Fund .......................................................................... 90
Internal Service Funds
Combining Statement of Net Position ........................................................................ 92
Combining Statement of Revenues, Expenses, and Change in Fund Balance ............... 9 4
Combining Statement of Cash Flows ......................................................................... 9 6
Capital Assets Used in the Operation of Governmental Funds
Comparative Schedule by Source ............................................................................. 101
Schedule by Function and Activity .......................................................................... 102
Schedule of Changes by Function and Activity ........................................................ 104
Statistical Section (Unaudited)
Net Position by Component ..................................................................................... 1 0 8
Changes in Net Position .......................................................................................... 1 10
Fund Balance of Governmental Funds ...................................................................... 1 12
Governmental Activities Tax Revenues by Source ................................................... 1 1 4
Changes in Fund Balances of Governmental Funds .................................................. 1 1 6
Property Tax Rates - Direct and Overlapping Governments ...................................... 1 1 8
Assessed Value of Taxable Property ........................................................................ 1 20
Principal Property Taxpayers ................................................................................... 1 21
Property Tax Levies and Collections ........................................................................ 1 22
Ratios of Outstanding Debt by Type ........................................................................ 1 2 4
Ratios of General Bonded Debt Outstanding ............................................................ 1 2 6
Legal Debt Margin Information ............................................................................... 1 2 8
Direct and Overlapping Governmental Activities Debt ............................................. 1 30
Demographic and Economic Statistics ..................................................................... 1 31
Principal Employers ............................................................................................... 1 32
Full-Time Equivalent City Government Employees by Function ............................... 1 3 4
Operating Indicators by Function ............................................................................. 1 3 6
Capital Asset Statistics by Function ......................................................................... 1 3 8
3
INTRODUCTORY SECTION
4
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12
13
14
15
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FINANCIAL SECTION
Page | 17 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.cnallp.com
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, 2021, and the related notes to the financial statements, which collectively comprise City’s
basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective
financial position of the business-type activities of City of Saratoga, as of June 30, 2022, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are required to be independent of the City and to meet our other ethical
responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a
going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is
not a guarantee that an audit conducted in accordance with GAAS will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. Misstatements are considered material if there is a
Page | 18 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.cnallp.com
substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a
reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and GAGAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period
of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control–related matters
that we identified during the audit..
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and other 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,
Page | 19 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
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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 November 21,
2022 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.
November 21, 2022
Morgan Hill, California
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
20
INTRODUCTION
The Management’s Discussion and Analysis (MD&A) is a required section of the City’s Annual
Comprehensive Financial Report (ACFR), 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, 2022. 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 2021-22 FINANCIAL HIGHLIGHTS
• Total net position, or the City's assets plus deferred outflow of resources ($170 million) less its
liabilities plus deferred inflow of resources ($17.56 million), was $152.45 million as of June 30,
2022. This is an increase of $15.96 million over the prior fiscal year, which is primarily due to an
increase in tax revenues, the American Rescue Plan Act’s State and Local Fiscal Recovery Fund’s
(ARPA SLFRF) grant allocation, and program revenue.
• The City’s Net Pension Liability was $0.73 million. This is a decrease of $7.48 million over the prior
fiscal year, primarily due to the most recent actuarial valuation by the California Public Employees’
Retirement System (CalPERS) which incorporated favorable investment returns for the fiscal year
ended June 30, 2020, changes in assumptions, and overall plan experience.
• Net Position included $117 million as investment in capital assets, net of depreciation and related
debt, $8.9 million restricted for specific purposes, and $26.5 million in Unrestricted Net Position.
• Total City-wide revenues of $39.5 million consisted of $25.3 million in general revenue and $14.2
million in program revenue. City expenses totaled $23.57 million.
• The Governmental Funds fund balances totaled $31.87 million, with $15.41 million in the General
Fund, $7.13 million in the ARPA SLFRF fund, $7.55 million in the Capital Improvement Funds, and
$1.78 million in Other Governmental Funds. This represents an increase of $9.2 million from the
prior year.
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, 2022
21
• General Fund revenues totaled $26.87 million, while General Fund expenditures totaled $23.73
million.
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.
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
currently does not have any business-type activities.
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 amounts 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, 2022.
Government-Wide Financial Statements
Long-term view, including capital assets and long-term
liabilities similar to corporate financial statements.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
22
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, 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.
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.
Fund Financial Statements
Near-term view, measuring current revenues,
expenditures, and fund balances.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
23
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, 2022
24
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net Position serves over time as an indicator of the City's financial position. The City's Total Net Position
increased $15,958,787 in Fiscal Year 2021-22. The primary reason for the increase in net position is an
increase primarily due to an increase in property tax revenue, program revenue, the ARPA grant, and
reductions to pension liabilities. The most significant portion of the City's Net Position ($117,017,380 or
77%) 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. Of the City’s Net Position, $8,910,134 or 6% is subject to external restrictions
on how the funding may be used. The remaining balance of $26,520,921, or 17% of the City's Net Position, is
unrestricted and may be used to meet the City's ongoing obligations to citizens and creditors.
Governmental Activities
2022 2021
Assets
Current assets 43,363,032$ 32,409,892$
Capital assets 124,201,306 125,442,265
Total Assets 167,564,338 157,852,157
Deferred Outflow of Resources
Deferred Outflow 2,442,854 2,785,827
Total Deferred Outflow of Resources 2,442,854 2,785,827
Liabilities
Current liabilities 7,660,499 6,457,875
Long-term liabilities 7,656,892 15,765,407
Total Liabilities 15,317,391 22,223,282
Deferred Inflow of Resources
Deferred Inflow 2,241,366 1,925,054
Total Deferred Inflow of Resources 2,241,366 1,925,054
Net Position
Net investment in capital assets 117,017,380 117,671,447
Restricted for environmental services - 63,182
Restricted for special assessment funds 977,234 872,945
Restricted for public works programs 7,127,589 -
Restricted for debt service 805,311 791,385
Unrestricted 26,520,921 17,090,689
Total Net Position 152,448,435$ 136,489,648$
Table 1 - Net Position
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
25
As shown in the below summary of the Statement of Activities table, program revenues increased by
$7,214,046 from the prior fiscal year for governmental activities, and general revenues increased by
$107,020 from the prior year. This resulted in a total increase in revenues of $7,321,066. Expenses
decreased by $7,495,298 from the prior year primarily due to pension expense adjustments related to
changes in assumptions and differences between expected and actual investment returns and plan
experience.
Governmental Activities Increase
Functions/Programs 2022 2021 (Decrease)
Program Revenues
Charges for services 6,498,905$ 5,345,704$ 1,153,201$
Operating grants and contributions 7,381,323 563,716 6,817,607
Capital grants and contributions 334,869 1,091,631 (756,762)
Total Program Revenues 14,215,097 7,001,051 7,214,046
General Revenues
Property taxes 17,427,588 16,294,043 1,133,545
Sales taxes 1,393,853 925,289 468,564
Local taxes 1,054,587 868,821 185,766
Franchise taxes 2,496,572 2,338,382 158,190
Intergovernmental revenues 2,477,479 3,105,433 (627,954)
Investment earnings (299,911) 34,240 (334,151)
Other revenues 768,428 1,645,368 (876,940)
Total General Revenues 25,318,596 25,211,576 107,020
Expenses
General and intergovernmental services 4,381,120 7,287,258 (2,906,138)
Public safety 7,197,048 6,734,604 462,444
Public works 9,309,018 12,530,168 (3,221,150)
Community services 532,308 966,536 (434,228)
Community development services 1,881,150 3,262,810 (1,381,660)
Interest on long-term debt (unallocated)274,262 288,828 (14,566)
Total Expenses 23,574,906 31,070,204 (7,495,298)$
Increase / (Decrease) in Net Position 15,958,787 1,142,423 14,816,364
Net Position, Beginning of Year 136,489,648 135,347,225 1,142,423
Net Position, End of Year 152,448,435$ 136,489,648$ 15,958,787$
Table 2 - Statement of Activities
With total program and general revenues for Fiscal Year 2021-22 at $39,533,693 and total expenses at
$23,574,906, the net activity resulted in an increase in Net Position of $15,958,787.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
26
An analysis and graphical representation of the changes in revenues and expenditures by type of
significant events follows:
Revenues
For Fiscal Year 2021-22, the growth in property tax revenues reflect the ongoing strength of the San
Francisco Bay Area economy. The decrease in Capital Grants revenue is due to decreased activity in the
activity for grant-funded Public Works and Community Services capital projects in fiscal year 2021-22.
The increase in operating grants represent the ARPA SLFRF grant for loss revenue making it a operating
grant. The City subsequently allocated the full ARPA SLFRF allocation to clean water capital
improvement programs consistent with the goals and objectives of the ARPA legislation.
General Revenues increased by $107,020 from the prior year. The most significant changes include:
• Property Tax revenue increased $1,133,545 over the prior year. The increase is largely due to an
increase in the City’s Excess ERAF receipts which arise from strong property tax growth and school
funding formulas set by the State of California.
• Intergovernmental revenue decreased $627,954 primarily due to one-time increase Measure B funds
in previous year which were suspended due to legal action in years prior to fiscal year 2020-21.
• Other revenues decreased by $867,940 primarily because of the one-time sale of Rule 20A credits
totaling $1,208,330 which occurred in the prior year.
Program Revenues increased by $7,214,046 from the prior year. The most significant changes include:
• Capital Grants and Contributions increased $6,817,607 from the prior year primarily due to full
receipt of the City’s ARPA SLFRF allocation.
• Charges for Services increased by $1,153,201 from the prior year due to receipt of Park In-lieu
revenue of $970,299.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
27
Expenses
Fiscal year 2021-22 expenses decreased by $9,172,432, primarily due to changes in assumptions,
investment returns and overall plan experience. The fiduciary net position in the pension pools increased
by 23% which was an increase of $10,986,723 in the City’s proportionate share of the assets in the pool.
The fiduciary net position directly offsets the net pension liability and directly affects pension expense.
Readers of the financial statements are encouraged to consider that the positive decrease in pension
liabilities reported in this report does not incorporate CalPERS' negative investment losses for the year
ended June 30, 2022, of 6.1 percent.
The impact to each program is summarized as follows:
Increase
2022 2021 (Decrease)
General and intergovernmental services (2,310,496) 707,070 (3,017,566)
Public works (3,148,421) 894,097 (4,042,518)
Community services (432,005) 119,075 (551,080)
Community development services (1,208,726) 352,542 (1,561,268)
Total Adjustment (7,099,648)$ 2,072,784$ (9,172,432)$
Table 3 - Pension Expense Adjustment by Program
The following summarizes the changes in total government-wide expenses by category:
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
28
The following analysis removes the $10,986,723 adjustment to pension liabilities, discussed above, to
highlight the $1,194,263 operational expenditure changes increase over prior year:
• Public Safety expenses increased by $432,971 due to contractual cost increases for services provided
by the Santa Clara County Sherriff’s Office.
• Internal Service costs increased by $785,951, largely attributed to the liability/ risk management and
information technology funds. Liability insurance premiums increased by $122,945, approximately
40 percent, and claims liability expense increased by $205,555. Information technology expenditures
increased by $160,720.
MAJOR AND OTHER GOVERNMENTAL FUNDS: CHANGE IN FUND BALANCE
A summary of the changes in fund balance of the Major Funds and Other Governmental Funds is
presented below:
Other
ARPA Capital Governmental
General SLFRF Improvement Funds
Total Revenues 26,874,382$ 7,213,238$ 4,132,331$ 1,384,033$
Total Expenditures 23,725,375 - 5,396,532 1,265,818
Revenues Over
(Under) Expenditures 3,149,007 7,213,238 (1,264,201) 118,215
Transfers in - - 3,045,781 -
Transfers out (2,960,132) (85,649) - -
Net change in fund balances 188,875 7,127,589 1,781,580 118,215
Beginning of year 15,221,575 - 5,763,785 1,664,330
End of year 15,410,450$ 7,127,589$ 7,545,365$ 1,782,545$
Major Funds
Table 4 - Changes in Fund Balances
The General Fund, ARPA/SLFRF fund and Capital Improvement Funds are listed as Major Funds in
fiscal year 2021-22. The Other Governmental Funds category includes thirty Landscape and Lighting
Districts and Storm Drain funds (presented as one combined 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 $9,216,259.
General Fund
As shown in the Major Funds table above, the net change in the General Fund's ending fund balance is an
increase of $188,875. General Fund revenue budgets are conservatively based upon prior year experience
and revenue specific information. Overall, revenues increased by $473,532 whereas expenditures
increased by $1,071,625. The growth in expenditures outpaces the growth in revenues raising concern
that the General Fund’s ability to transfer funds to the Capital Improvement Program is quickly
diminishing.
Expenses are budgeted at anticipated program needs at not-to-exceed projected funding levels. However,
the City has opted to commit additional funding towards the Unfunded Accrued Liability (UAL) related
to pensions. In fiscal year 2021-22, the City Council directed staff to make a $1,000,000 payment towards
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
29
the UAL. This payment is more than the required minimum contribution amount required, thereby
reducing the principal at a faster pace. As of June 30, 2022, the Net Pension Liability, or NPL, is
$727,447. This is a decrease of $7.48. million over the prior fiscal year, primarily due to estimated
investments returns vs. actual and overall plan experience.
ARPA SLFRF Fund
The ARPA SLFRF fund is a new fund to record the City’s allocation from the ARPA SLFRF and has a
net increase of $7,213,238. The revenue is an operating grant under the US Department of Treasury’s lost
revenue allowance under the SLFRF final rules. The City subsequently allocated the full ARPA SLFRF
allocation to clean water capital improvement programs consistent with the goals and objectives of the
ARPA legislation.
Capital Improvement Project Fund
The net increase of $1,781,580 in the Capital Improvement Funds occurred due to General Fund transfers
to fund capital improvements offset by current year capital expenditures.
Other Governmental Funds
Other Governmental Funds fund balances increased by a total of $118,215 as special assessments
continue to exceed publics works expenditures and debt service costs.
GENERAL FUND – BUDGETARY HIGHLIGHTS
Changes from the City's General Fund original budget to the final budget are detailed in the Required
Supplementary Information Section along with a comparison to actual activity for the fiscal year.
Changes to the City's budget that increase or decrease appropriations in a fund must be approved by a
resolution of the City Council. Modifications to the budget that are a realignment of fiscal activities with
no impact to the fund's bottom line may be approved by the City Manager. Significant changes from the
City’s original budget to the final budget are summarized as follows:
Revenues and Transfers In
The General Fund adopted and final revenue budget is shown in the schedule below:
Table 5 - Adopted to Final Budget
Fiscal Year Ended June 30, 2022
+=
Adopted Budget Final
Budget Adjustments Budget
Revenues 27,094,296$ (2,785,000)$ 24,309,296$
Transfers in -$ -$ -$
General Fund Revenues and Transfers In
The budget for other revenues decreased by $2,785,000 because the adopted budget included the first half
of ARPA SLFRF allocation as General Fund revenue. With the decision to dedicate the ARPA SLFRF to
clean water projects, the City moved the funds to the newly established ARPA SLFRF fund.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
30
Expenses and Transfers Out
The original and final General Fund expense budget is shown in the schedule below:
Table 6 - Adopted to Final Budget
Fiscal Year Ended June 30, 2022
+=
Adopted Budget Final
Budget Adjustments Budget
Expenses 25,032,141$ 42,000$ 25,074,141$
Transfers out 2,735,131$ 225,001$ 2,960,132$
General Fund Expenditures & Transfers Out
During the fiscal year, the original budget was increased by $42,000 to account for increased contract
costs. Transfers out were increased by $225,001 to fund various additional capital 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 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 most recent overall rating, in 2022, was estimated to be 66 with 49% of streets
rated “Very Good”, 30% rated as “Good”, 15% of streets rated “Poor,” and 6% of streets rated as "Very
Poor." While the City Council continues to review infrastructure investment strategies, the City continues
to make significant investments into City streets in order to bring the average PCI rating up to the target
of 70.
It was estimated in the most recent pavement study in February 2020 that the five-year (2019-2023) cost
to maintain the street infrastructure at its 2019 level (PCI of 67) would be $21,350,000 ($4.27
million/year). 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."
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
31
As reflected in the following schedule, the City has $125,442,265 invested in a variety of capital assets as
of June 30, 2021. This represents an increase of $18,335 from the prior year.
2022 2021
Land 20,173,790$ 20,160,713$
Building and structures 13,639,657 14,335,493
Machinery and equipment 928,166 1,011,404
Infrastructure 80,064,084 80,840,452
Construction in progress 9,395,609 9,094,203
Total Capital Assets, Net of Depreciation 124,201,306$ 125,442,265$
Table 7 - Capital Assets Net of Depreciation
Governmental Activities
The following reconciliation summarizes the changes in Capital Assets.
Balance Balance
June 30, 2021 Additions Retirements Reclassification June 30, 2022
Land 20,160,713$ -$ -$ 13,077$ 20,173,790$
Building and structures 27,370,739 - - 84,543 27,455,282
Machinery and equipment 4,269,711 201,528 - - 4,471,239
Infrastructure 113,118,066 - - 600,143 113,718,209
Construction in progress 9,094,203 999,169 - (697,763) 9,395,609
Depreciation (48,571,167) (2,441,656) - - (51,012,823)
Total Capital Assets,
Net of Depreciation 125,442,265$ (1,240,959)$ -$ -$ 124,201,306$
Table 8 - Changes in Capital Assets
Major capital projects in progress during fiscal year 2021-22 included the following expenditures:
• Mendelsohn Lane Rehabilitation - $109,999
• Saratoga Avenue Sidewalk - $68,801
• Saratoga-Sunnyvale Road Pathway - $110,000
• Quito Road Sidewalk Gap Closure - $142,390
• Quito Road Bridge Replacement – ROW - $95,008
• Orchard Irrigation and Tree Improvements - $89,052
• Blue Hills Elementary Pedestrian Crossing - $57,557
• Community Center Improvements - $66,266
• Senior Center/ Community Center Generator and EV Charging Stations - $76,043
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, 2022
32
DEBT AND OTHER LONG-TERM OBLIGATION ADMINISTRATION
The net change in outstanding obligations for the City of Saratoga was a decrease of $593,884. Total
long-term bonded debt, including premiums, decreased by $586,892. Outstanding compensated absences
decreased by $6,992.
2022 2021
2011 General obligation bond 6,965,000$ 7,530,000$
Net original issue premuim 218,926 240,818
Compensated absences 988,436 995,428
Total Outstanding long-term obligations 8,172,362$ 8,766,246$
Table 9 - Outstanding Long-Term Obligations
Governmental Activities
The current portion of long-term debt ($580,000 for the refunded 2011 General Obligation Bonds for
fiscal year 2021-22) 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
On July 14, 2011 the City refunded the 2001 General Obligation Bonds and, in their place, issued 2011
General Obligation Bonds for $11,995,000. Interest rates on the bonds range from 2.0% to 4.0%, and the
final payment is due August 1, 2031. Principal of $565,000 and interest of $280,852 were paid during the
fiscal year.
Compensated Absences
Compensated absences are accrued liabilities for vested and unpaid vacation and sick pay. The
compensated absences balance decreased during the fiscal year by $6,992 due to a decrease in use of paid
time-off. An estimated current liability of $641,025 is anticipated for the next fiscal year.
Additional information on outstanding obligations can be found in Note 5 of the financial statements.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
33
ECONOMIC FACTORS
The City of Saratoga is primarily a residential community with limited commercial or industrial activity
within its boundaries. Saratoga is considered a desirable place to live due to its highly rated schools,
beautiful neighborhoods, fine dining, and proximity to many technology companies. In 2021-22,
Saratoga’s assessed property values continued to increase, consumer sales tax and hotel tax recovered to
near their pre-pandemic highs, and personal income remained resilient. The following discuss the key
economic factors impacting the city’s finances.
• Assessed values.
The assessed value of property in Saratoga continues to demonstrate strength. Through the Great
Recession, when many communities experienced assessed value losses, Saratoga’s remained
positive, providing stability in the City’s largest revenue source. The October 2022 preliminary
Santa Clara County Assessor’s assessed valuation working file for the fiscal year 2023-24 reports
an increase in Saratoga’s property values of 4.04 percent, outperforming the countywide
valuation increase of 3.5 percent.
• Sales and transient occupancy/hotel taxes.
Unlike many of its neighbors, Saratoga’s consumption-based tax revenues (sales and hotel taxes)
center around experiences such as regional and State parks, the downtown Village, Hakone
Gardens, fine dining, vineyards, and performance venues. UCLA Anderson Forecast notes that
experience-based spending, such as dining, is growing faster than purchasing goods as consumers
return to pre-pandemic social activities. The trend works in Saratoga’s favor resulting in the
City’s rapid recovery of the consumption-based tax revenues to near pre-pandemic highs.
• Employment
The City’s unemployment rate is 2%, on par with the County’s overall unemployment (California
Employment Development Department, September 2022.) UCLA Anderson Forecast’s 2022 San
Francisco Economic Outlook report highlighted that low unemployment would likely persist due
to the impacts of demographic shifts as the oldest segment of the workforce retires and younger
generations are unable to fill the vacancies created.
An additional economic indicator of note by Anderson Forecast is the level of venture capital
flowing into California and the Bay Area. Venture capital investment is largely viewed as an
investment in the future, and the location of the investment can benefit from higher employment,
housing costs, and consumer spending. For the first half of 2022, Anderson Forecast reports that
of the $118 billion in venture capital invested in California, approximately 44% occurred in the
Bay Area region..
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
34
OUTLOOK
Although the City remains optimistic and the near-term economic outlook remains positive, several factors
with yet to be determined impacts warrant monitoring. The factors most concerning in 2023-24 and beyond
are the impacts of inflation, the perpetual threat to local revenue sources, and effects of extreme weather
events. Any one of the three poses a risk to Saratoga’s finances; however, growing evidence suggests that
two or more will converge thereby challenging the City’s ability to balance its budget in 2023-24 and
beyond.
• Cost of Goods and Services.
The impacts of forty-year high inflation weighs on the current and future year budgets. Bids for
public works projects and various contract services have increased between 7 and 15 percent
compared to previous years. As costs increase, whether to maintain current service levels at the
higher cost or to reduce services to hold expenditures flat is a decision required in 2023-24.
• Employee Salaries.
The 2022-23 budget includes increases in employee salaries and benefits afforded by the current
labor agreements, which expire at the end of 2022-23. Employees received a 3 percent cost-of-
living-adjustment for base salary in 2022-23, an increase below the regional inflation rate of 5.2
percent as measured in February 2022. Due to contractual obligations, the 2022-23 budget
includes approximately $450,000 in increased personnel costs. The impact of inflation on City
personnel costs in 2023-24 and beyond is subject to negotiations that commence in January
2023.
• CalPERS Pension Costs.
Inflation has also sparked concerns about an economic downturn and is widely credited with
significant stock market losses in recent months, most notably in the technology sector. If the
recent stock market performance flattens at the current level or worsens, the City’s unfunded
pension liability costs will increase beginning in 2024-25.
• Public Safety Contract Services.
The City contracts with the Santa Clara County Sheriff’s Office for public safety services and the
City of San Jose for animal control services total $7,555,000. As service organizations, both
agencies will experience similar inflationary pressures on employee salaries and benefits as the
City. The animal control contract expires at the end of 2022-23, and the public safety services
contract expires at the end of 2023-24. The 2022-23 budget includes the maximum increase
allowed under the current Sheriff’s contract of approximately $500,000 or 7 percent.
• Revenue Loss Threats.
In 2004, the State permanently reduced the vehicle license fee (VLF) from 2 to 0.65 percent,
which reduced funding for cities and counties by approximately $4.4 billion (in 2004 dollars.) To
mitigate this impact, the State agreed to backfill the lost VLF revenues dollar-for-dollar by
allocating more property tax revenues to cities and counties. The State Department of Finance has
added language to the State’s 2022-23 budget that threatens the VLF backfill for those agencies
that receive more Educational Revenue Augmentation Fund (ERAF) dollars than required to fund
schools up to their minimum state funding levels (“Excess ERAF”). The 2022-23 budget includes
$650,000 of Excess ERAF revenue. Recent court challenges to the Excess ERAF formula
threatens future growth of this revenue source.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
35
• Extreme Weather Events.
2022 is the driest year in California’s 128 years of recorded history. The prolonged drought has
stressed and caused death to trees in all communities; however, Saratoga’s is significantly
impacted due to the number of trees in our community. In high wind and extraordinary wet
weather events, tree failures that block roads and paths require urgent removal to protect
residents’ safety. The City contracts for emergency tree removals, and the emergency tree
removal budget has increased by more than 60 percent in 2022-23 as the frequency of tree
removals have increased and demand for tree removal services is high.
• Property and Liability Insurance Premiums.
The frequency and severity of natural disaster-related insurance claims in California have
impacted the cost of maintaining property and liability insurance. The City has experienced an
increase in premiums of $546,000 from 2018 to 2023. The rapid escalation has occurred primarily
in 2021-22 and the 2022-23 budget, with the prospect of similar increases in future years.
REQUEST FOR FINANCIAL INFORMATION
This financial report is designed to provide a general overview of the City of Saratoga's finances for all of
Saratoga's residents, taxpayers, customers, investors, and creditors. This financial report seeks to
demonstrate the City's accountability for the money it receives. Questions concerning any of the
information provided in this report or requests for additional information should be addressed to the
Administrative Services Director, 13777 Fruitvale Avenue, Saratoga, California 95070.
36
BASIC FINANCIAL
STATEMENTS
CITY OF SARATOGA
STATEMENT OF NET POSITION
JUNE 30, 2022
The accompanying notes are an integral part of these financial statements
37
Governmental
Activities
ASSETS
Current Assets:
Cash and investments 36,477,881$
Restricted cash and investments 1,797,979
Receivables:
Accounts 5,082,691
Prepaids 4,481
Total Current Assets 43,363,032
Noncurrent Assets:
Capital Assets:
Non-depreciable 82,704,176
Depreciable, net 41,497,130
Total Capital Assets 124,201,306
Total Assets 167,564,338$
DEFERRED OUTFLOWS OF RESOURCES
Adjustments related to pension liability 2,442,854$
Total Deferred Outflows of Resources 2,442,854$
LIABILITIES
Current Liabilities:
Accounts payable 1,474,840$
Accrued payroll 285,463
Interest payable 112,410
Deposits payable 4,349,186
Claims payable 195,683
Long-term obligations - due within one year 1,242,917
Total Current Liabilities 7,660,499
Noncurrent Liabilities:
Net pension liabilty 727,447
Long-term obligations - due in more than one year 6,929,445
Total Noncurrent Liabilities 7,656,892
Total Liabilities 15,317,391$
DEFERRED INFLOWS OF RESOURCES
Adjustments related to pension liability 1,958,998$
Unavailable revenue 282,368
Total Deferred Inflows of Resources 2,241,366$
Net Position
Net investment in capital assets 117,017,380$
Restricted for:
Special assessment funds 977,234
Public works programs 7,127,589
Debt service 805,311
Total Restricted 8,910,134
Unrestricted 26,520,921
Total Net Position 152,448,435$
CITY OF SARATOGA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
The accompanying notes are an integral part of these financial statements
38
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 intergovt'l services 4,381,120$ 57,937$ 6,800$ -$ 64,737$ (4,316,383)$
Public safety 7,197,048 573,133 161,285 - 734,418 (6,462,630)
Public works 9,309,018 3,280,102 7,213,238 334,869 10,828,209 1,519,191
Community services 532,308 281,526 - - 281,526 (250,782)
Community development services 1,881,150 2,306,207 - - 2,306,207 425,057
Interest on long-term debt (unall.)274,262 - - - - (274,262)
Total 23,574,906$ 6,498,905$ 7,381,323$ 334,869$ 14,215,097$ (9,359,809)$
General Revenues:
Taxes
Property taxes 17,427,588$
Sales taxes 1,393,853
Local taxes 1,054,587
Franchise taxes 2,496,572
Total taxes 22,372,600
Intergovernmental (not restricted to specific programs)2,477,479
Investment earnings (299,911)
Other revenues 768,428
Total General Revenues 25,318,596
Change in Net Position 15,958,787
Net Position - Beginning of Year 136,489,648
Net Position - End of Year 152,448,435$
CITY OF SARATOGA
GOVERNMENTAL FUNDS – BALANCE SHEET
JUNE 30, 2022
The accompanying notes are an integral part of these financial statements
39
Other Total
ARPA Capital Governmental Governmental
General SLFRF Improvement Funds Funds
ASSETS
Cash and investments 19,909,470$ 3,520,970 7,787,341$ -$ 31,217,781$
Restricted cash and investments - - - 1,797,979 1,797,979
Receivables:
Accounts 961,990 3,606,619 488,619 6,286 5,063,514
Prepaid Items 4,481 - - - 4,481
Total assets 20,875,941$ 7,127,589$ 8,275,960$ 1,804,265$ 38,083,755$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 843,748$ -$ 466,104$ 21,720$ 1,331,572$
Accrued payroll and benefits 254,680 - - - 254,680
Deposits payable 4,349,186 - - - 4,349,186
Total liabilities 5,447,614 - 466,104 21,720 5,935,438
DEFERRED INFLOW OF RESOURCES
Deferred revenue 17,877 - 264,491 - 282,368
Total deferred outflow of resources 17,877 - 264,491 - 282,368
Fund Balances:
Nonspendable:
Prepaid Items 4,481 - - - 4,481
Restricted:
Lighting and landscape assessments - - - 977,234 977,234
Public works programs - 7,127,589 - - 7,127,589
Debt service - - - 805,311 805,311
Committed:
Capital improvement program - - 7,545,365 - 7,545,365
Hillside stability 1,000,000 - - - 1,000,000
Assigned:
Future capital & efficiency 3,509,000 - - - 3,509,000
Carryforwards 20,000 - - - 20,000
Facility replacement 3,700,000 - - - 3,700,000
Unassigned:
Working capital 1,000,000 - - - 1,000,000
Fiscal stabilization 3,250,000 - - - 3,250,000
Compensated absences 330,000 - - - 330,000
Other unassigned 2,596,969 - - - 2,596,969
Total fund balances 15,410,450 7,127,589 7,545,365 1,782,545 31,865,949
Total liabilities and fund balances 20,875,941$ 7,127,589$ 8,275,960$ 1,804,265$ 38,083,755$
Major Funds
CITY OF SARATOGA
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET POSITION
JUNE 30, 2022
The accompanying notes are an integral part of these financial statements
40
Total Fund Balances - Total Governmental Funds 31,865,949$
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 82,704,176
Depreciable capital assets, net 41,028,269
Total Capital Assets 123,732,445
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.(112,410)
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 position 5,378,404
Deferred outflows of resources are transactions that have already taken place but are not ready
to be recognized on the financial statements as expenses
Differences between Expected and Actual Experience 81,575
Change in employer's proportion 604,314
Pension Contributions Made Subsequent to Measurement Date 1,756,965
Total Deferred Outflows of Resources 2,442,854
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 (6,965,000)
Net Pension Liability (727,447)
Compensated absences (988,436)
Net original issue premium (218,926)
Total Long-Term Obligations (8,899,809)
Deferred inflows of resources are transactions that have already taken place but are not ready
to be recognized on the financial statements as revenues
Changes of Assumptions -
Differences between Projected and Actual Investment Earnings (635,022)
Differences between Employer's Contributions and Proportionate Share of Contributions (1,312,975)
Change in employer's proportion (11,001)
Total Deferred Inflows of Resources (1,958,998)
Net Position of Governmental Activities 152,448,435$
CITY OF SARATOGA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2022
The accompanying notes are an integral part of these financial statements
41
Other Total
ARPA Capital Governmental Governmental
General SLFRF Improvement Funds Funds
REVENUES:
Property taxes 17,409,864$ -$ -$ 17,724$ 17,427,588$
Special assessments - - - 1,362,327 1,362,327
Sales taxes 1,393,853 - - - 1,393,853
Other local taxes 1,054,587 - - - 1,054,587
Licenses & permits 2,292,527 - 1,566,313 - 3,858,840
Fines & forfeiture 95,697 - 17,485 - 113,182
Intergovernmental - Federal - 7,213,238 37,183 - 7,250,421
Intergovernmental - State 549,667 - 1,383,412 - 1,933,079
Intergovernmental - Other 46,856 - 963,315 - 1,010,171
Charges for services 923,533 - 3,364 - 926,897
Franchise fees 2,418,837 - 77,735 - 2,496,572
Use of money and property 15,914 - - 3,982 19,896
Other revenue 673,047 - 83,524 - 756,571
Total revenues 26,874,382 7,213,238 4,132,331 1,384,033 39,603,984
EXPENDITURES:
Current:
General and intergovernmental services 5,515,624 - - - 5,515,624
Public safety 7,197,048 - - - 7,197,048
Public works 7,095,948 - - 419,966 7,515,914
Community services 1,031,282 - - - 1,031,282
Community development services 2,885,473 - - - 2,885,473
Capital outlay - - 5,396,532 - 5,396,532
Debt service:
Principal - - - 565,000 565,000
Interest and fiscal charges - - - 280,852 280,852
Total expenditures 23,725,375 - 5,396,532 1,265,818 30,387,725
REVENUES OVER
(UNDER) EXPENDITURES 3,149,007 7,213,238 (1,264,201) 118,215 9,216,259
OTHER FINANCING SOURCES (USES):
Transfers in - - 3,045,781 - 3,045,781
Transfers out (2,960,132) (85,649) - - (3,045,781)
Total other financing sources (uses)(2,960,132) (85,649) 3,045,781 - -
Net change in fund balances 188,875 7,127,589 1,781,580 118,215 9,216,259
FUND BALANCES:
Beginning of year 15,221,575 - 5,763,785 1,664,330 22,649,690
End of year 15,410,450$ 7,127,589$ 7,545,365$ 1,782,545$ 31,865,949$
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, 2022
The accompanying notes are an integral part of these financial statements
42
Net Change in Fund Balances - Total Governmental Funds 9,216,259$
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.999,167
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.(2,258,630)
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.301,868
GASB 68 Adjustments to pension expense
Change in net pension liability - current year 7,476,566
Amortization of changes in deferred outflows (342,973)
Amortization of changes in deferred inflows (33,944)
Adjustments to pension expense as a result of GASB 68 7,099,649
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 6,992
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 565,000
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.6,590
Change in Net Position of Governmental Activities 15,958,787$
CITY OF SARATOGA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2022
The accompanying notes are an integral part of these financial statements
43
Governmental
Activities -
Internal
Service Funds
ASSETS
Current assets:
Cash and investments 5,260,100$
Accounts receivable 19,177
Total current assets 5,279,277
Noncurrent assets:
Capital assets:
Machinery and equipment 2,201,949
Less: accumulated depreciation (1,733,088)
Total capital assets (net of
accumulated depreciation)468,861
Total assets 5,748,138$
LIABILITIES
Liabilities:
Current liabilities:
Accounts payable 143,268$
Accrued payroll and benefits 30,783
Other payables 195,683
Total current liabilities 369,734$
NET POSITION
Net investment in capital assets 468,861$
Unrestricted 4,909,543
Total net position 5,378,404$
CITY OF SARATOGA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
The accompanying notes are an integral part of these financial statements
44
Governmental
Activities -
Internal
Service Funds
Operating revenues:
Charges for services 3,560,000$
Other operating revenues 44,954
Total operating revenues 3,604,954
Operating expenses:
Cost of services 3,120,062
Depreciation 183,024
Total operating expenses 3,303,086
Operating income (loss)301,868
Change in net position 301,868
Total net position - beginning 5,076,536
Total net position - ending 5,378,404$
CITY OF SARATOGA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
The accompanying notes are an integral part of these financial statements
45
Governmental
Activities -
Internal
Service Funds
Cash flows from operating activities:
Receipts from customers and users 3,592,896$
Payments to suppliers (1,846,245)
Payments to employees (1,119,266)
Net cash provided (used) by operating activities 627,385
Cash flows from capital activities:
Acquisition of capital assets (201,528)
Net cash provided for the acquisition of capital assets (201,528)
Net increase in cash and cash equivalents 425,857
Cash and cash equivalents, beginning of year 4,834,243
Cash and cash equivalents, ending of year 5,260,100
Reconciliation of operating income to net cash provided
by operating activities:
Operating income (loss)301,868
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation 183,024
Change in operating assets and liabilities:
Accounts receivables (12,058)
Accounts payable 55,288
Accrued payroll (56,571)
Claims payable 155,834
Net cash provided (used) by operating activities 627,385$
CITY OF SARATOGA
STATEMENT OF
FIDUCIARY NET POSITION
JUNE 30, 2022
The accompanying notes are an integral part of these financial statements
46
West Valley
Clean Total
Water Arrowhead Custodial
Program CFD Funds
ASSETS
Cash and investments 391,660$ 125,102$ 516,762$
Accounts receivable 283,275 300 283,575
Total assets 674,935$ 125,402$ 800,337$
LIABILITIES
Accounts payable 110,745$ 1,000$ 111,745$
Accrued payroll 5,535 - 5,535
Total liabilities 116,280$ 1,000$ 117,280$
NET POSITION
Restricted for individuals, organizations
and other governments 558,655$ 124,402$ 683,057$
Total Net Position 558,655$ 124,402$ 683,057$
CITY OF SARATOGA
STATEMENT OF CHANGES
IN FIDUCIARY NET POSITION
JUNE 30, 2022
The accompanying notes are an integral part of these financial statements
47
West Valley
Clean Total
Water Arrowhead Custodial
Program CFD Funds
ADDITIONS
Taxes collected from community facilities districts -$ 113,250 113,250$
Assessments 677,943 - 677,943
Charges for services 291,267 - 291,267
Other revenue 32,788 - 32,788
Interest income 1,115 - 1,115
Total additions 1,003,113 113,250 1,116,363
DEDUCTIONS
Personnel Costs 421,973 - 421,973
Professional Services 404,458 - 404,458
Insurance 16,946 - 16,946
Fees and charges 61,191 - 61,191
Materials and Supplies 13,013 - 13,013
Rent 22,584 - 22,584
Travel and Meetings 8,797 - 8,797
Utilities 7,366 - 7,366
Grant expenses 26,155 - 26,155
Debt service payments for community facilities districts - 378,466 378,466
Total deductions 982,483 378,466 1,360,949
Change in net position 20,630 (265,216) (244,586)
Total net position - beginning 538,025 746,458 1,284,483
Prior period adjustments:
Correction to cash with fscial agent balances - (356,840) (356,840)
Total net position - beginning, as adjusted 538,025 389,618 927,643
Total net position - ending 558,655$ 124,402$ 683,057$
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
48
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. The City is a largely residential community located in the foothills of the Santa Cruz
Mountains with a population of 30,667 as of January 1, 2022.
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, 2022, the City's staff was comprised of 57 full-
time or part-time employees, and various part-time temporary and seasonal employees. Staff is
responsible for the following City services:
• Public Safety - The City provides around-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 23.5 employees. Major projects may be contracted out to
reduce costs.
• Community Development - Zoning administration, plan checking and advance planning services are
provided by 15.5 employees.
• Culture, Recreation and Community Support services are provided by a total of 3 employees.
• General Government services are provided by a total of 15 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 separation from the City.
Each blended component unit has a June 30 year-end. The City has no discretely presented component
units.
The following entity is reported as blended component unit:
Landscape & Lighting District - The Landscape & Lighting District (the District) was established in 1980
for the levy and the collection of assessments upon lots or parcels of land in the District, and for the
construction or installation of improvements and maintenance. The District is reported as a blended
component unit of the City because it has the same Governing Board as the City and the City is financial
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
49
responsible for the District and its operations.. 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 set of self-balancing
accounts that are comprised of 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 inter-fund
activities, payables, and receivables. All internal balances in the Statement of Net Position have been
eliminated. The following inter-fund activities have been eliminated:
• Transfers in/Transfers out
• Internal Service Fund charges
• Landscape and Lighting District Service Fees
Interfund services provided and used are not eliminated in the process of consolidation.
Deferred Outflow of Resources and Deferred Inflow of Resources
Deferred outflow of resources is a consumption of net position by the City that is applicable to a future
reporting period, such as deferred charges.
Deferred inflow of resources is an acquisition of net position by the City that is applicable to a future
reporting period, such as unavailable revenue and advance collections.
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 aggregated non-major
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
50
funds. 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 related expenditures. The General Fund accounts for all financial
resources of the City which are not accounted for in another fund.
ARPA/SLFRF Fund
This fund accounts for federal grants from the America Rescue Plan Act (ARPA), including the
Coronavirus State and Local Fiscal Recovery Funds (SLFRF).
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 to 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 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
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
51
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 non-exchange 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 support,
information technology services, vehicle maintenance, building maintenance, equipment replacement, and
information technology replacement.
Fiduciary Fund Financial Statements
Fiduciary Funds Financial Statements include a Statement of Net Position and a Statement of Changes in
Net Position for Trust Funds. The City's fiduciary funds include Custodial Funds which are accounted for
on the accrual basis of accounting. The City is reporting the following Custodial Funds:
West Valley Clean Water Program. The Cities of Campbell, Monte Sereno, Saratoga and the Town of Los
Gatos, representing the West Valley Communities, joined together to create West Valley Clean Water
Program (WVCWP) in 1994. Together they work to control discharge of polluted stormwater into local
creeks and the San Francisco Bay. Their mission is to:
• Reduce pollutants in stormwater and discharges from storm drains into creeks
• Maximize the effectiveness of pollution prevention efforts and work toward repair of impaired waters
• Help the four West Valley Communities meet State Water Resources Control Board & Federal Clean
Water Act goals for clean and healthy local water bodies
In late 2017, after notification from West Valley Sanitation District that the District would no longer be
involved in or provide fiscal agent services for WVCWP after June 30, 2018, the four agencies decided to
establish the operation as a legal entity by entering into a Joint Powers Agreement, consistent with what
the agencies had already set up for the West Valley Solid Waste Management oversight activities. With
this action, the West Valley Clean Water Program is now overseen by the same Board that includes
Council representation from each of the four municipalities. The Clean Water Program’s dedicated
program staff and contractors carry out the day-to-day operations. The JPA also collaborates with Santa
Clara Valley Urban Runoff Pollution Prevention Program, West Valley Sanitation District, and the Santa
Clara County Fire District in their operational activities.
With the loss of West Valley Sanitation functioning as the fiscal agent for the group, the four cities
determined one of the cities would take on this role. Effective July 1, 2018, the City of Saratoga began
performing these duties, which are limited to payroll and vendor payment functions, in addition to
financial reporting. The City does not oversee operational aspects of the WVCWP and is acting only in a
fiduciary function
Arrowhead Bond and Project Funding. The Arrowhead Community Facilities District encompasses 39
homes located along the hillside between Rolling Hills Road and Blue Hills Lane, off of Prospect Road.
Since 1951, this neighborhood has operated its own private water company (Arrowhead Cooperative
Company Inc., aka ACCI). Over the years the number of Arrowhead Cooperative residents and water
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
52
service meters have increased, to the extent that the water system infrastructure is no longer sufficient for
water and fire protection needs. The potential of the fire danger situation prompted the Arrowhead Board
to ask the City for assistance to issue a bond for the purpose of financing improvements to the water
system. Subsequently, on December 21, 2016, the City Council approved the formation of the Arrowhead
Community Facility District (CFD). On May 2, 2017, the CFD’s 39 residential parcel owners
unanimously approved Measure L, which allowed for the assessment of a special tax levy to finance a
bond.
On October 17, 2018, the City Council authorized the issuance of the Saratoga Community Facilities
District 2016-1 (Arrowhead Project) Special Tax Bonds, Series 2018, with the issue date of December 10,
2018. Debt service on the Special Tax Bond is payable only from special taxes levied annually on taxable
properties within the CFD in the manner set forth in the Rate and Method of Apportionment (RMA)
approved by the Council in connection with the formation of the District. The 2018 Bonds will not have
any impact on the City’s General Fund or Government-wide financial statements, and these special
financing district bonds are not assets or liabilities of the City for financial statement purposes.
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.
D. Inter-fund Transactions
Inter-fund services provided and used are accounted for as revenue, expenditures or expenses, as
appropriate. Transactions that constitute reimbursements to a fund for expenditures/expenses initially
made from it that are properly applicable to another fund are recorded as expenditures/expenses in the
reimbursed fund. All other inter-fund transfers are reported as transfers.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
53
E. Capital Assets
Capital assets, including 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 capital assets, donated works of art and similar
items, and capital assets received in service concession agreement are reported at acquisition value. 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 accordance with Statement No. 34, the City has included the value of all infrastructure assets 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 May 31, 2021. This condition assessment was performed in
2017. 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.
The following conditions were defined:
Condition Rating
Very Good 70 - 100
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
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
54
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.
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.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
55
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. Restrictions may effectively be changed or lifted only with the
consent of resource providers. These fund balances are:
• Special Assessments Fund Balance – collectively represents year-end fund balances of thirty
Landscape & Lighting and Storm Drain zones which use is restricted to the individual district.
• Public Works Programs – represents ARPA lost revenue grants restricted to public works
programs.
• Debt Service Fund Balance – represents funding collected for 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 on a resolution of the City Council, and
remains binding unless removed in the same manner, includes the following:
• Capital Improvement Program (CIP) Fund Balance – represents the collective balance of funding
appropriated for 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 & Technology 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 that is neither
restricted nor committed. Use of Assigned Fund Balance is approved by formal vote of the Council or
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
56
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. Carryforward 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. The General Fund is the only governmental fund
that reports a positive unassigned fund balance.
• Working Capital Reserve – Council policy is to maintain $1,000,000 to meet cash flow
requirements. As of June 30, 2022, the Working Capital Reserve balance is $1,000,000.
• Fiscal Stabilization Reserve – Council designates and annually revisits the level of undesignated
funding for use at Council direction in case of disasters, emergencies, and economic downturns.
As of June 30, 2022, the Fiscal Stabilization Reserve balance is $3,250,000.
• Compensated Absences Reserve – represents reserve funding for employee payout compensation
equal to one-third of the 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 during the fiscal year.
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
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
57
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.
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. New GASB Pronouncements
Implementation of New Accounting Pronouncements
GASB Statement No. 87, Leases
The objective of this statement is to better meet the information needs of financial statement users by
improving accounting and financial reporting for leases by governments. This statement increases the
usefulness of governments’ financial statements by requiring recognition of certain lease assets and
liabilities for leases that previously were classified as operating leases and recognized as inflows of
resources or outflows of resources based on the payment provisions of the contract. It establishes a single
model for lease accounting based on the foundational principle that leases are financings of the right to
use an underlying asset. Under this statement, a lessee is required to recognize a lease liability and an
intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
58
inflow of resources, thereby enhancing the relevance and consistency of information about governments’
leasing activities. As of June 30, 2022, the City did not have any significant or material leases that were
required to be reported under GASB 87.
GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for
Internal Revenue Code Section 457 Deferred Compensation Plans
The statement (1) requires that a Section 457 plan be classified as either a pension plan or another
employee benefit plan depending on whether the plan meets the definition of a pension plan and (2)
clarifies that Statement 84, as amended, should be applied to all arrangements organized under IRC
Section 457 to determine whether those arrangements should be reported as fiduciary activities.
Management does not believe this statement will have a significant impact on the City’s financial
statements. The requirements of this Statement are effective as follows:
• The requirements in (1) paragraph 4 of this Statement as it applies to defined contribution pension
plans, defined contribution OPEB plans and other employee benefit plans and (2) paragraph 5 of
this Statement are effective immediately
• The requirements in paragraphs 6–9 of this Statement are effective for fiscal years beginning after
June 15, 2021
• All other requirements of this Statement are effective for reporting periods beginning after June
15, 2021
The City did not report any significant accounting changes from the implementation of this Statement
during the year ended June 30, 2022.
Upcoming Accounting and Reporting Changes
The City is currently analyzing its accounting practices to determine the potential impact on the financial
statements of the following recent GASB Statements:
GASB Statement No. 91, Conduit Debt Obligations
The objectives of this Statement are to provide a single method of reporting conduit debt obligations by
issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2)
arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement
also clarifies the existing definition of a conduit debt obligation; establishing that a conduit debt
obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of
additional commitment and voluntary commitments extended by issuers and arrangements associated
with the debt obligations; and improving required note disclosures. The requirements of this Statement
were initially to be effective for financial statements for periods beginning after December 15, 2020 but
have been delayed to periods beginning after December 15, 2021, pursuant to GASB Statement No. 95.
Earlier application is encouraged.
GASB Statement No. 94, Public-Private Partnerships and Public-Public Partnerships and Availability
Payment Arrangements
The primary objective of this Statement is to improve financial reporting by addressing issues related to
public-private and public-public partnership arrangements (PPPs). As used in this Statement, a PPP is an
arrangement in which a government (the transferor) contracts with an operator (a governmental or
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
59
nongovernmental entity) to provide public services by conveying control of the right to operate or use a
nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of
time in an exchange or exchange-like transaction. Some PPPs meet the definition of a service concession
arrangement (SCA), which the Board defines in this Statement as a PPP in which (1) the operator collects
and is compensated by fees from third parties; (2) the transferor determines or has the ability to modify or
approve which services the operator is required to provide, to whom the operator is required to provide
the services, and the prices or rates that can be charged for the services; and (3) the transferor is entitled to
significant residual interest in the service utility of the underlying PPP asset at the end of the arrangement.
This Statement also provides guidance for accounting and financial reporting for availability payment
arrangements (APAs). As defined in this Statement, an APA is an arrangement in which a government
compensates an operator for services that may include designing, constructing, financing, maintaining, or
operating an underlying nonfinancial asset for a period of time in an exchange or exchange-like
transaction. The requirements of this Statement are to be effective for financial statements for periods
beginning after June 15, 2022. Earlier application is encouraged.
GASB Statement No. 96, Subscription-Based Information Technology Arrangements
GASB 96 provides guidance on accounting for Subscription-Based Information Technology
Arrangements (SBITA) where the government contracts for the right to use another party’s software. The
standards for SBITAs are based on the standards established in GASB Statement No. 87, Leases. GASB
96 is effective for fiscal years beginning after June 15, 2022.
GASB Statement No. 99, Omnibus 2022
Omnibus statements are issued by GASB to address practice issues identified after other standards have
been approved for implementation. Omnibus statements “clear up the loose ends” for recent prior
statements GASB has issued. This Omnibus addresses recent pronouncements, including GASB 87 –
Leases, GASB 94 – Public-Private and Public-Public Partnerships and Availability Payment
Arrangements, and GASB 96 – Subscription-Based Information Technology Arrangements.
Effective Date: The requirements of this Statement are effective as follows:
• The requirements related to extension of the use of LIBOR, accounting for SNAP distributions,
disclosures of nonmonetary transactions, pledges of future revenues by pledging governments,
clarification of certain provisions in Statement 34, as amended, and terminology updates related to
Statement 53 and Statement 63 are effective upon issuance
• The requirements related to leases, PPPs, and SBITAs are effective for fiscal years beginning after
June 15, 2022, and all reporting periods thereafter.
• The requirements related to financial guarantees and the classification and reporting of derivative
instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15,
2023, and all reporting periods thereafter.
Earlier application is encouraged and is permitted by topic.
GASB Statement No. 100, Accounting Changes and Error Corrections—an amendment of GASB
Statement No. 62
This Statement defines accounting changes as changes in accounting principles, changes in accounting
estimates, and changes to or within the financial reporting entity and describes the transactions or other
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
60
events that constitute those changes. This Statement also prescribes the accounting and financial reporting
for (1) each type of accounting change and (2) error corrections in previously issued financial statements.
The requirements of this Statement are effective for accounting changes and error corrections made in
fiscal years beginning after June 15, 2023, and all reporting periods thereafter. Earlier application is
encouraged.
GASB Statement No. 101, Compensated Absences
This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not
been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A
liability should be recognized for leave that has not been used if (a) the leave is attributable to services
already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time
off or otherwise paid in cash or settled through noncash means. Leave is attributable to services already
rendered when an employee has performed the services required to earn the leave. Leave that accumulates
is carried forward from the reporting period in which it is earned to a future reporting period during which
it may be used for time off or otherwise paid or settled. In estimating the leave that is more likely than not
to be used or otherwise paid or settled, a government should consider relevant factors such as
employment policies related to compensated absences and historical information about the use or
payment of compensated absences. However, leave that is more likely than not to be settled through
conversion to defined benefit postemployment benefits should not be included in a liability for
compensated absences.
This Statement requires that a liability for certain types of compensated absences—including parental
leave, military leave, and jury duty leave—not be recognized until the leave commences. This Statement
also requires that a liability for specific types of compensated absences not be recognized until the leave
is used.
This Statement also establishes guidance for measuring a liability for leave that has not been used,
generally using an employee’s pay rate as of the date of the financial statements. A liability for leave that
has been used but not yet paid or settled should be measured at the amount of the cash payment or
noncash settlement to be made. Certain salary-related payments that are directly and incrementally
associated with payments for leave also should be included in the measurement of the liabilities.
With respect to financial statements prepared using the current financial resources measurement focus,
this Statement requires that expenditures be recognized for the amount that normally would be liquidated
with expendable available financial resources. The requirements of this Statement are effective for fiscal
years beginning after December 15, 2023, and all reporting periods thereafter.
P. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related
to pensions, and pension expense, information about the fiduciary net position of the City of
Saratoga’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions
to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are
reported by CalPERS. For this purpose, benefit payments (including refunds of employee
contributions) are recognized when due and payable in accordance with the benefit terms. Investments
are reported at fair value.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
61
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, 2022:
Primary Fiduciary
Government Activities Total
Cash and investments 36,477,881$ 433,211$ 36,911,092$
Cash and investments with Fiscal Agent - 83,551 83,551
Total Cash and Investments 36,477,881$ 516,762$ 36,994,643$
The City's Cash and Investments at June 30, 2022, in more detail:
Cash and cash equivalents:
Petty cash 1,329$
Demand deposits 2,353,911
With Fiscal Agent 83,551
Total Cash and Cash Equivalents 2,438,791
Investments:
Local Agency Investment Fund (LAIF)34,555,852
Total Cash and Investments 36,994,643$
A. Cash Deposits
The carrying amounts of the City's cash deposits was $4,151,840 at June 30, 2022. Bank balances before
reconciling items were $4,605,208 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 fiscal
agent deposits are related to the Arrowhead bond and funding activities and are held with BNY Mellon.
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
FOR THE YEAR ENDED JUNE 30, 2022
62
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.
Investments are recorded at fair value in accordance with GASB Statement No. 72, Fair Value
Measurement and Application. Accordingly, the change in fair value of investments is recognized as an
increase or decrease to investment assets and investment income.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction. In determining this amount, three valuation techniques are available:
• Market approach - This approach uses prices generated for identical or similar assets or liabilities.
The most common example is an investment in a public security traded in an active exchange
such as the NYSE.
• Cost approach - This technique determines the amount required to replace the current asset. This
approach may be ideal for valuing donations of capital assets or historical treasures.
• Income approach - This approach converts future amounts (such as cash flows) into a current
discounted amount.
Each of these valuation techniques requires inputs to calculate a fair value. Observable inputs have been
maximized in fair value measures, and unobservable inputs have been minimized.
GASB 72 established a hierarchy of inputs to the valuation techniques above. This hierarchy has three
levels:
• Level 1 inputs are quoted prices in active markets for identical assets or liabilities.
• Level 2 inputs are quoted market prices for similar assets or liabilities, quoted prices for
identical or similar assets or liabilities in markets that are not active, or other than quoted prices
that are not observable.
• Level 3 inputs are unobservable inputs, such as a property valuation or an appraisal.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
63
C. External Investment Pool
The City's investments with LAIF at June 30, 2022 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, 2022, the City had $34,555,852 invested in LAIF. In accordance with GASB 72, a fair
value factor of .987125414 was used to calculate the fair value of the investments in LAIF. GASB
Statement No. 72, Fair Measure Value and Application requires investments held primarily for the
purpose of income or profit and has a present service capacity based solely on its ability to generate cash
or to be sold to generate cash to be measured at their fair value.
D. Risk Disclosures
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the term of an investment’s maturity, the greater the sensitivity to
changes in market interest rates. Although the City’s investment policy allows for a broad range of
investment instruments with varying terms of maturity, investments are limited to the Local Agency
Investment Fund (LAIF) which is managed by the State Treasurer Office and overseen by the Pooled
Money Investment Board, the State Treasurer investment committee, and a Local Agency Advisory
Board.
Included in LAIF’s investment portfolio are U.S. Treasuries, Federal Agency obligations, time deposits,
negotiable certificates of deposits, commercial paper, corporate bonds, and security loans. Funds are
available for withdrawal on demand and are recorded on an amortized cost basis. At June 30, 2022, these
investments had a weighted average maturity of 311 days.
The City had the following invested in LAIF:
Investment
Maturities
Fair Less Than
Value One Year
State of California - LAIF 34,555,852$ 34,555,852$
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
64
Credit Risk
As of June 30, 2022, 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, 2022.
NOTE 3 - FUND FINANCIAL STATEMENTS INTERFUND TRANSACTIONS
Transfers In/Out
Transfers for the year ended June 30, 2022 were as follows:
Transfer in Transfer out Amount
Capital Improvement Fund General Fund 2,960,132$
Capital Improvement Fund ARPA/SLFRF 85,649
Total Transfers 3,045,781$
The Capital Improvement Funds received funds from the General Fund adopted in the Budget in the
amount of $2,960,132. Of this amount, $1,620,000 was allocated for street, sidewalk, and storm drain
repair, $310,131 for park and trail improvements, $80,000 for City facilities projects and $725,000 for
various administrative projects. An additional $225,000 was transferred from the General Fund to cover
CIP projects during the fiscal year. An additional $85,649 was transferred to the Capital Improvements
Fund from the ARPA/SLFRF fund to reimburse costs incurred that were allowable within the ARPA
grant.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
65
NOTE 4 - CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2022 is illustrated in the following table:
Primary Government
Balance Balance
July 1, 2021 Additions Retirements Reclassifications June 30, 2022
Governmental activities:
Capital assets, not being depreciated:
Land and land improvements 20,160,713$ -$ -$ 13,077$ 20,173,790$
Construction in progress 9,094,203 999,169 - (697,763) 9,395,609
Infrastructure:
Street pavement system 53,024,779 - - 109,999 53,134,778
Total capital assets, not being depreciated 82,279,695 999,169 - (574,687) 82,704,177
Capital assets, being depreciated:
Buildings and structures 27,370,739 - - 84,543 27,455,282
Machinery and equipment
Governmental funds 2,269,290 - - - 2,269,290
Internal service funds 2,000,421 201,528 - - 2,201,949
Infrastructure:
Bridges 1,563,654 - - - 1,563,654
Signs and lights 3,049,976 - - - 3,049,976
Drainage system 40,140,053 - - (104) 40,139,949
Sidewalks 15,339,604 - - 490,248 15,829,852
Total capital assets, being depreciated 91,733,737 201,528 - 574,687 92,509,952
Accumulated depreciation:
Buildings and structures (13,035,247) (780,378) - - (13,815,625)
Machinery and equipment
Governmental funds (1,708,242) (101,742) - - (1,809,984)
Internal service funds (1,550,065) (183,024) - - (1,733,089)
Infrastructure:
Bridges (1,215,558) (17,808) - - (1,233,366)
Signs and lights (1,593,252) (112,520) - - (1,705,772)
Drainage system (21,150,178) (802,800) - - (21,952,978)
Sidewalks (8,318,625) (443,384) - - (8,762,009)
Total accumulated depreciation (48,571,167) (2,441,656) - - (51,012,823)
Total capital assets, being depreciated, net 43,162,570 (2,240,128) - 574,687 41,497,129
Governmental activities capital assets, net 125,442,265$ (1,240,959)$ -$ -$ 124,201,306$
Depreciation expense was charged to the following departments:
General Government 1,256,215$
Public Works 1,033,668
Community Services 107,884
Community Development 43,889
Total Depreciation Expense 2,441,656$ 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
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
66
"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.
NOTE 5 - LONG-TERM OBLIGATIONS
A summary of the City's governmental long-term obligations for the year ended June 30, 2022, is presented
below:
Classification
Balance Balance Due Within Due In More
Description June 30, 2021 Additions Retirements June 30, 2022 One Year Than One Year
Government Activities:
General Obligation Bonds:
2011 Library bonds 7,530,000$ -$ (565,000)$ 6,965,000$ 580,000$ 6,385,000$
Net original issue premium 240,818 - (21,892) 218,926 21,892 197,034
Compensated absences 995,428 679,650 (686,642) 988,436 641,025 347,411
Total 8,766,246$ 679,650$ (1,273,534)$ 8,172,362$ 1,242,917$ 6,929,445$
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 held in the Library Bond Debt Service Fund. 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 $820,000. The bonds maturing on or
before August 1, 2021 were not subject to redemption prior to their respective stated maturity dates. Bonds
maturing on or after August 1, 2022 are subject to redemption prior to their respective stated maturity dates at
the option of the city at the principal amount of the bonds called for redemption, together with interest accrued
thereon to the date of redemption, without premium.
The annual debt service requirements on these bonds are as follows:
Year Ended Principal Interest Total
2023 580,000$ 258,185$ 838,185$
2024 610,000 234,385 844,385
2025 630,000 209,585 839,585
2026 655,000 185,523 840,523
2027 685,000 162,073 847,073
2028-2032 3,805,000$ 391,043$ 4,196,043$
Total 6,965,000$ 1,440,794$ 8,405,794$
Compensated Absences
The City's liability for vested and unpaid compensated absences (accrued vacation and sick pay) has been
accrued and amounts to $988,436 at June 30, 2022. The compensated absences liability will generally be
liquidated through the General Fund.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
67
A summary of the Fiduciary Fund long-term obligations for the year ended June 30, 2022, is presented below:
Classification
Balance Balance Due Within Due In More
Description June 30, 2021 Additions Retirements June 30, 2022 One Year Than One Year
Fiduciary Funds:
Special Tax Bonds:
2018 Arrowhead CFD 1,822,781$ -$ (269,562)$ 1,553,219$ 27,064$ 1,526,155$
Total 1,822,781$ -$ (269,562)$ 1,553,219$ 27,064$ 1,526,155$
Arrowhead Community Facilities District Bond
The Arrowhead Community Facilities District encompasses 39 homes located along the hillside between
Rolling Hills Road and Blue Hills Lane, off of Prospect Road. Since 1951, this neighborhood has operated its
own private water company (Arrowhead Cooperative Company Inc., aka ACCI). Over the years the number of
Arrowhead Cooperative residents and water service meters have increased, to the extent that the water system
infrastructure is no longer sufficient for water and fire protection needs. The potential of the fire danger situation
prompted the Arrowhead Board to ask the City for assistance to issue a bond for the purpose of financing
improvements to the water system. Subsequently, on December 21, 2016, the City Council approved the
formation of the Arrowhead Community Facility District (CFD). On May 2, 2017, the CFD’s 39 residential
parcel owners unanimously approved Measure L, which allowed for the assessment of a special tax levy to
finance a bond.
On October 17, 2018, the City Council authorized the issuance of the Saratoga Community Facilities District
2016-1 (Arrowhead Project) Special Tax Bonds, Series 2018, with the issue date of December 10, 2018. Debt
service on the Special Tax Bond is payable only from special taxes levied annually on taxable properties within
the CFD in the manner set forth in the Rate and Method of Apportionment (RMA) approved by the Council in
connection with the formation of the District. The 2018 Bonds will not have any impact on the City’s General
Fund or Government-wide financial statements, and these special financing district bonds are not assets or
liabilities of the City for financial statement purposes.
Bond terms are 30 years at 6.05% interest. The payment amounts may change over time if bond holders choose
to pay off their share of the debt instead of following the bond’s payment schedule. The annual debt service
requirements on these bonds are as follows:
Year Ended Principal Interest Total
2023 27,064$ 104,301$ 131,365$
2024 28,701 102,615 131,316
2025 30,438 100,826 131,264
2026 32,279 98,928 131,207
2027 34,232 87,575 121,807
2028-2032 204,850 439,216 644,066
2033-2037 274,780 377,826 652,606
2038-2042 368,587 281,183 649,770
2043-2047 494,417 151,547 645,964
2048-2049 57,871 14,866 72,737
Total 1,553,219$ 1,758,883$ 3,312,102$
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
68
NOTE 6 - RISK MANAGEMENT
The City participates in the following public entity risk pool:
PLAN Workers' Compensation Shared Agency Risk Pool (SHARP) – 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, 2022, the City contributed $194,900 for current
year coverage. The City's contribution equals the ratio of the City's payroll to the total payroll 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 $194,533 reported at June 30, 2022, is
based on the requirements of GASB Statement No. 10, which requires that a liability for claims be
reported if information prior to the issuance of the basic financial statements indicates that it is probable
that a liability has incurred at the date of the basic financial statements and the amount of the loss can be
reasonably estimated. Changes in the claims payable amounts were as follows:
The General Fund has been used in the prior years to liquidate the liability for claims and judgments.
Year Ended Year Ended
June 30, 2022 June 30, 2021
Claims payable, beginning of year 39,849$ 90,720$
Fiscal year claims and changes in estimates 326,723 -
Claims payments (172,039) (50,871)
Claims payable, end of year 194,533$ 39,849$
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.
Audited financial information for each risk pool may be obtained from Bickmore at 1750 Creekside Oaks
Dr., Ste. 200, Sacramento, California 95833.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
69
NOTE 7 - RETIREMENT PLANS
Defined Benefit Pension Plan
Plan Description – All CalPERS qualified employees are eligible to participate in the City’s
Miscellaneous Employee Pension Plan (the Plan), a cost-sharing multiple-employer defined benefit
pension plan administered by the California Public Employees’ Retirement System (CalPERS).
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. CalPERS issues publicly available reports that include a full description of the pension plans
regarding benefit provisions, assumptions and membership information that can be found on the CalPERS
website or copies of these reports may be obtained from their Executive Office located at 400 P Street,
Sacramento, California 95811.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost-of-living
adjustments, and death benefits to plan members who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full-time employment. Members
with five years of total service are eligible to retire at age 55. All members are eligible for non-duty
disability benefits after 10 years of service. Death benefits include the 1959 Survivor Benefit and the
Optional Settlement 2 Death Benefit. The cost-of-living adjustments for the Plan are applied as specified
by the Public Employee’s Retirement Law. The Plan’s provisions and benefits in effect at June 30, 2019,
are summarized as follows:
Tier 1 Tier 1 PEPRA
Benefit formula 2.5% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 Years 5 Years 5 Years
Benefit payments Monthly for Life Monthly for Life Monthly for Life
Retirement age 55 60 62
Monthly ben. as a % of eligible comp.2.00%2.00%2.00%
Required employee contribution rates 7.00%7.00%7.25%
Required employer contribution rates 11.60%9.30%7.73%
Miscellaneous
Employees Covered – At June 30, 2022, the following employees were covered by the benefit terms for
the Plan:
Miscellaneous
Active 60
Transferred 40
Separated 36
Retired 122
Total 258
Contributions – Section 20814(c) of California Public Employees’ Retirement Law requires that the
employer contribution rates for all public employers are determined on an annual basis by an actuary and
shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the
Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined
rate is the estimated amount necessary to finance the costs of benefits earned by employees during the
year, with an additional amount to finance any unfunded accrued liability. The City is required to
contribute the difference between the actuarially determined rate and the contribution rate of employees.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
70
For the year ended June 30, 2022, the employer contributions, including the UAL payment of $1,000,000,
recognized as part of pension expense for the Plan were as follows:
Miscellaneous
Contributions - employer $ 1,756,965
Contributions - employee 633,567
Total $ 2,390,532
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions -
As of June 30, 2022, the City reported net pension liabilities for its proportionate share of the net pension
liability of the Plan as follows:
Miscellaneous
Proportionate Share of
Net Pension
Liability/(Asset)
$ 727,447
The City’s net pension liability for the Plan is measured as the proportionate share of the Plan’s net
pension liability. The net pension liability of the Plan is measured at June 30, 2021, and the total pension
liability for the plan used to calculate the net pension liability was determined by an actuarial valuation as
of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The City’s
proportion of the net pension liability was based on a projection of the City’s long-term share of the
contributions to the pension plan relative to the projected contributions of all participating employers,
actuarially determined. The City’s proportionate share of the net pension liability for the Plan as of June
30, 2021 and 2022 was as follows:
Proportion - June 30, 2021 0.07540%
Proportion - June 30, 2022 0.01345%
Change - Increase/(Decrease)-0.06195%
For the year ended June 30, 2022, the City recognized a credit to pension expense of $7,099,650. At June
30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Changes of Assumptions -$ -$
Differences between Expected and Actual Experience 81,575 -
Differences between Projected and Actual Investment Earnings - 635,023
Differences between Employer's Contributions and
Proportionate Share of Contributions - 1,312,975
Change in Employer's Proportion 604,314 11,001
Pension Contributions Made Subsequent to Measurement Date 1,756,965 -
Total 2,442,854$ 1,958,999$
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
71
The City reported $1,756,965 as deferred outflows of resources related to contributions subsequent to the
measurement date that will be recognized as a reduction of the net pension liability in the year ended June
30, 2023.
Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be
recognized as pension expense as follows:
(666,802)$
(332,864)
(97,955)
(175,488)
-
-
(1,273,109)$
2023
Total
2024
2025
2026
Thereafter
2027
Deferred
Outflows/
(Inflows) of
Resources
Fiscal Year
Ending June 30:
Actuarial Assumptions – The total pension liabilities in the June 30, 2020 actuarial valuations were
determined using the following actuarial assumptions:
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age
Normal Cost
Method
Actuarial Assumptions:
Discount Rate 7.00%
Inflation 2.50%
Payroll Growth 2.75%
Projected Salary Increase (1)
Investment Rate of Return 7.00% (2)
Mortality (3)
(1) Varies by entry age and service
(2) Net of pension plan investment expenses, including inflation
(3) Derived using CalPERS' membership data for all funds
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2020
valuation were based on the results of a January 2014 Actuarial Experience Study for the period 1997 to
2011. Further details of the Experience Study can be found on the CalPERS website.
Discount Rate – The discount rate used to measure the total pension liability was 7.15 percent for the
Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate
for the Plan, CalPERS stress tested plans that would most likely result in a discount rate that would be
different from the actuarially assumed discount rate. Based on the testing, none of the tested plans ran out
of assets. Therefore, the current 7.15 percent discount rate is adequate, and the use of the municipal bond
rate calculation is not necessary. The long term expected discount rate of 7.15 percent will be applied to
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
72
all plan in the Public Employees’ Retirement Fund (PERF). The stress test results are presented in the
detailed report called “GASB Crossover Testing Report” that can be obtained from the CalPERS website.
According to Paragraph 30 of Statement 68, the long-term discount rate should be determined without
reduction for pension plan administrative expense. The 7.15 percent investment return assumption used in
this accounting valuation is net of administrative expenses. Administrative expenses are assumed to be
15 basis points. Using this lower discount rate has resulted in a slightly higher Total Pension Liability
and Net Pension Liability. CalPERS checked the materiality threshold for the difference in calculation
and did not find it to be a material difference.
In determining the long-term expected rate of return, CalPERS took into account both short-term and
long-term market return expectations as well as the expected pension fund cash flows. Using historical
returns of all the funds’ asset classes, expected compound returns were calculated over the short-term
(first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected
nominal returns for both short-term and long-term, the present value of benefits was calculated for each
fund. The expected rate of return was set by calculating the single equivalent expected return that arrived
at the same present value of benefits for cash flows as the one calculated using both short-term and long-
term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated
above and rounded down to the nearest one quarter of one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was
calculated using the capital market assumptions applied to determine the discount rate and asset
allocation. These rates of return are net of administrative expenses.
Assumed
Asset Real Return Real Return
Asset Class (a)Allocation Years 1 - 10 (b)Years 11+ (c)
Global Equity 50.00%4.80%5.98%
Fixed Income 28.00%1.00%2.62%
Inflation Sensitive 0.00%0.77%1.81%
Private Equity 8.00%6.30%7.23%
Real Estate 13.00%3.75%4.93%
Liquidity 1.00%0.00%-0.92%
Total 100.00%
(a) In the System's ACFR, Fixed Income is included in Global Debt Securities; Liquidity
Liquidity is included in Short-term Investments; Inflation Assets are included in both
Global Equity Securities and Global Debt Securities.
(b) An expected inflation of 2.0% used for this period.
(c) An expected inflation of 2.92% used for this period.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
73
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate –
The following presents the City’s proportionate share of the net pension liability for the Plan, calculated
using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension
liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-
percentage point higher than the current rate:
Miscellaneous
1% Decrease 6.15%
Net Pension Liability 8,471,058$
Current 7.15%
Net Pension Liability 727,447$
1% Increase 8.15%
Net Pension Liability (5,674,085)$
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net
position is available in the separately issued CalPERS financial reports.
NOTE 8 - NET POSITION
A. Net Investment in Capital Assets
As of June 30, 2022, the net investment in capital assets consisted of the following:
Capital assets, net 124,201,306$
2011 general obligation library bonds (6,965,000)
Net original issue premium (218,926)
Net investment in capital assets 117,017,380$
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
FOR THE YEAR ENDED JUNE 30, 2022
74
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.
The Silicon Valley Clean Energy Authority (SVCEA) consists of various Silicon Valley agencies formed
to address climate change by reducing energy related greenhouse gas emissions and securing energy
supply and price stability, energy efficiencies and local economic benefits.
The West Valley Clean Water Program consists of the Cities of Campbell, Monte Sereno, Saratoga and
the Town of Los Gatos, and works to control discharge of polluted stormwater into local creeks and the
San Francisco Bay.
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 - COMMITMENTS AND CONTINGENCIES
A. Lawsuits
The City is presently involved in certain matters of litigation that 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. In qualifying years, 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 did not reach the
level of qualifying cost during the current fiscal year, so no 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.
C. Commitments
The City had outstanding contracts or planned construction projects as of June 30, 2022 totaling
$1,476,963 million with an original contract amount of $2,159,284. The entire total of the outstanding
commitments are reported within the Capital Projects Fund when expenditures are incurred.
In the opinion of City management, there were no additional outstanding matters that would have a
significant effect on the financial position of the funds of the City as of June 30, 2022.
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REQUIRED SUPPLEMENTARY INFORMATION
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2022
77
NOTE 1 - BUDGETARY INFORMATION
The following is the budget comparison schedule for General Fund.
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Property taxes 16,393,300$ 16,393,300$ 17,409,864$ 1,016,564$
Sales taxes 1,000,000 1,000,000 1,393,853 393,853
Other local taxes 745,000 745,000 1,054,587 309,587
Licenses & permits 1,684,810 1,684,810 2,292,527 607,717
Fines & forfeitures 85,100 85,100 95,697 10,597
Intergovernmental - State 500,800 500,800 549,667 48,867
Intergovernmental - Other 39,300 39,300 46,856 7,556
Charges for services 852,400 867,400 923,533 56,133
Franchise fees 2,210,000 2,210,000 2,418,837 208,837
Use of money & property 398,700 398,700 15,914 (382,786)
Other revenue 3,184,886 384,886 673,047 288,161
Total revenues 27,094,296 24,309,296 26,874,382 2,565,086
EXPENDITURES:
Current:
General and intergovernmental services 6,055,644 6,065,644 5,515,624 550,020
Public safety 7,244,515 7,244,515 7,197,048 47,467
Public works 7,476,704 7,485,204 7,095,948 389,256
Community services 1,123,167 1,123,167 1,031,282 91,885
Community development services 3,132,111 3,155,611 2,885,473 270,138
Total expenditures 25,032,141 25,074,141 23,725,375 1,348,766
REVENUES OVER
(UNDER) EXPENDITURES 2,062,155 (764,845) 3,149,007 3,913,852
OTHER FINANCING SOURCES (USES):
Transfers in - - - -
Transfers out (2,735,131) (2,960,132) (2,960,132) -
Total other financing sources (uses)(2,735,131) (2,960,132) (2,960,132) -
Net change in fund balances (672,976)$ (3,724,977)$ 188,875 3,913,852$
FUND BALANCES:
Beginning of year 15,221,575
End of year 15,410,450$
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2022
78
The following is the budget comparison schedule for ARPA/SLFRF Fund.
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Intergovernmental - Fed -$ 7,213,239$ 7,213,238$ (1)$
Total revenues - 7,213,239 7,213,238 (1)
EXPENDITURES:
Total expenditures - - - -
REVENUES OVER
(UNDER) EXPENDITURES - 7,213,239 7,213,238 (1)
OTHER FINANCING SOURCES (USES):
Transfers in - - - -
Transfers out - - (85,649) (85,649)
Total other financing sources (uses)- - (85,649) (85,649)
Net change in fund balances -$ 7,213,239$ 7,127,589 (85,650)$
FUND BALANCES:
Beginning of year -
End of year 7,127,589$
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2022
79
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 and five-year capital
improvements plan 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 applicable 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, 2022
80
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
February 21, 2020. 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 of residential.
To determine the City’s street condition, a visual survey of all pavement segments is conducted to assess
the existing surface condition of each of the individual pavement segments. Upon completion of the
study, a Pavement Condition Index (PCI) is 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.
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2022
81
The following conditions were defined:
Condition Rating
Very Good 70 - 100
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 May 31, 2022, the City's street system was
rated at an estimated PCI index of 66 on average with the detail condition as follows:
Condition Percent of Streets
Very Good 49%
Good 30%
Poor 15%
Very Poor 6%
The City’s estimates of the amounts needed to maintain the following networks over the previous five
fiscal years are as follows:
2018 2019 2020 2021 2022
Street Infrastructure 5,363,853$ 8,735,674$ 7,438,484$ 2,800,457$ 1,406,835$
Fiscal Year Ended June 30
The City expended $1,406,835 on street maintenance and infrastructure for the year ended June 30, 2022.
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 has established a goal for a minimum of
$2,000,000 be budgeted for the CIP Streets program on an annual basis. $10,296,145 is budgeted for
various street projects in the five-year CIP cycle beginning Fiscal Year 2021/22.
As of June 2022, approximately 21 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
(2019-2023) will amount to approximately $21,350,000 for all streets.
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2022
82
NOTE 3 – PENSION INFORMATION
Miscellaneous Plan
Fiscal Year Ended 2015 2016 2017 2018 2019 2020 2021 2022
Contractually Required Contributions 4,203,599$ 1,109,589$ 1,016,197$ 1,289,450$ 1,637,179$ 1,701,847$ 1,733,461$ 1,756,965$
Contributions in Relation to Contractually
Required Contributions 4,203,599 1,109,589 1,016,197 1,289,450 1,637,179 1,701,847 1,733,461 1,756,965
Contribution Deficiency (Excess)-$ -$ -$ -$ -$ -$ -$ -$
Covered Payroll 4,856,304$ 6,335,330$ 5,908,831$ 5,692,653$ 6,156,572$ 6,590,150$ 6,568,081$ 6,951,928$
Contributions as a % of Covered Payroll 86.56%17.51%17.20%22.65%26.59%25.82%26.39%25.27%
Notes to Schedule:
Valuation Date:June 30, 2020
Assumptions Used:Entry Age Method used for Actuarial Cost Method
Level Percentage of Payroll and Direct Rate Smoothing
3.8 Years Remaining Amortization Period
Inflation Assumed at 2.50%
Investment Rate of Returns set at 7.00%
CalPERS mortality table based on CalPERS' experience and include 15 years of projected ongoing mortality
improvement using 90 percent of Scale MP 2016 published by the Society of Actuaries.
Miscellaneous Plan
Fiscal Year Ended 2015 2016 2017 2018 2019 2020 2021 2022
Proportion of Net Pension
Liability (Safety and Misc)0.11163%0.06216%0.07322%0.07620%0.07510%0.07431%0.07540%0.01345%
Proportion of Net Pension
Liability (Misc Plan Only)0.28104%0.15551%0.18238%0.19170%0.19202%0.19016%0.19450%0.03831%
Proportionate Share of
Net Pension Liability 6,945,916$ 4,266,268$ 6,335,606$ 7,556,748$ 7,236,672$ 7,614,972$ 8,204,013$ 727,447$
Covered Payroll 4,714,858$ 4,856,304$ 6,335,330$ 5,908,831$ 5,692,653$ 6,156,572$ 6,590,150$ 6,568,081$
Proportionate Share of NPL
as a % of Covered Payroll 147.32%87.85%100.00%127.89%127.12%123.69%124.49%11.08%
Plan's Fiduciary Net Position
as a % of the TPL 81.15%90.52%85.60%84.66%85.34%85.36%85.12%98.76%
Fiscal year 2015 was the first year of implementation, therefore only eight years are shown.
The CalPERS discount rate was increased from 7.50% to 7.65% in fiscal year 2016, then to 7.15% in 2018.
The CalPERS mortality assumptions was adjusted in fiscal year 2019.
83
SUPPLEMENTARY INFORMATION
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NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Landscape & Lighting District and Storm Drain Funds – These funds account for revenues and
expenditures associated with maintaining the City’s 30 Landscape, Lighting, and Storm Drain zones
which were approved by consent of property owners living along or within the boundaries of the zones.
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 refunded 2011 Library Improvement Bond.
CITY OF SARATOGA
COMBINING BALANCE SHEETS
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2022
86
Special
Revenue Debt Service
Lighting and Total
Landscaping Other
Assessment Library Governmental
District Bond Funds
ASSETS
Restricted cash and investments 998,857$ 799,122$ 1,797,979$
Receivables:
Accounts 97 6,189 6,286
Total assets 998,954$ 805,311$ 1,804,265$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 21,720$ -$ 21,720$
Total liabilities 21,720 - 21,720
Fund Balances:
Restricted:
Lighting and landscape assessments 977,234 - 977,234
Debt service - 805,311 805,311
Total fund balances 977,234 805,311 1,782,545
Total liabilities and fund balances 998,954$ 805,311$ 1,804,265$
CITY OF SARATOGA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
87
Special Debt
Revenue Service
Lighting and Total
Landscaping Other
Assessment Library Governmental
District Bond Funds
REVENUES:
Property taxes 17,724$ -$ 17,724$
Special assessment 503,122 859,205 1,362,327
Use of money and property 3,409 573 3,982
Total revenues 524,255 859,778 1,384,033
EXPENDITURES:
Current:
General and ingov't services
Public works 419,966 - 419,966
Debt service:
Principal - 565,000 565,000
Interest and fiscal charges - 280,852 280,852
Total expenditures 419,966 845,852 1,265,818
REVENUES OVER
(UNDER) EXPENDITURES 104,289 13,926 118,215
OTHER FINANCING SOURCES (USES):
Transfers in - - -
Transfers out - - -
Total other financing sources (uses)- - -
Net change in fund balances 104,289 13,926 118,215
FUND BALANCES:
Beginning of year 872,945 791,385 1,664,330
End of year 977,234$ 805,311$ 1,782,545$
CITY OF SARATOGA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CAPITAL IMPROVEMENT
FOR THE YEAR ENDED JUNE 30, 2022
88
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Licenses & permits 553,451$ 553,451$ 1,566,313$ 1,012,862$
Fines & forfeitures - - 17,485 17,485
Intergovermental - Federal 2,014,719 3,814,719 37,183 (3,777,536)
Intergovermental - State 1,650,543 1,650,543 1,383,412 (267,131)
Intergovermental - Other 1,134,791 1,230,791 963,315 (267,476)
Charges for services 15,000 15,000 3,364 (11,636)
Franchise Fees 80,000 80,000 77,735 (2,265)
Other revenue 9,000 9,000 83,524 74,524
Total revenues 5,457,504 7,353,504 4,132,331 (3,221,173)
EXPENDITURES:
Capital outlay 13,916,493 23,100,732 5,396,532 17,704,200
Total expenditures 13,916,493 23,100,732 5,396,532 17,704,200
REVENUES OVER
(UNDER) EXPENDITURES (8,458,989) (15,747,228) (1,264,201) 14,483,027
OTHER FINANCING SOURCES (USES):
Transfers in 2,735,131 2,960,131 3,045,781 85,650
Transfers out - - - -
Total other financing sources (uses)2,735,131 2,960,131 3,045,781 85,650
Net change in fund balances (5,723,858)$ (12,787,097)$ 1,781,580 14,568,677$
FUND BALANCES:
Beginning of year 5,763,785
End of year 7,545,365$
CITY OF SARATOGA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LANDSCAPE & LIGHTING DISTRICT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2022
89
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Property taxes 13,539$ 13,539$ 17,724$ 4,185$
Special assessments 508,801 508,801 503,122 (5,679)
Use of money and property 5,345 5,345 3,409 (1,936)
Total revenues 527,685 527,685 524,255 (3,430)
EXPENDITURES:
Current:
Public works 680,596 688,596 419,966 268,630
Total expenditures 680,596 688,596 419,966 268,630
REVENUES OVER
(UNDER) EXPENDITURES (152,911) (160,911) 104,289 265,200
Net change in fund balances (152,911)$ (160,911)$ 104,289 265,200$
FUND BALANCES:
Beginning of year 872,945
End of year 977,234$
CITY OF SARATOGA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LIBRARY BOND DEBT SERVICE FUND
FOR THE YEAR ENDED JUNE 30, 2022
90
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Special assessments 800,000$ 800,000$ 859,205$ 59,205$
Use of money and property 750 750 573 (177)
Total revenues 800,750 800,750 859,778 59,028
EXPENDITURES:
Debt service:
General and ingov't services
Principal 565,000 565,000 565,000 -
Interest and fiscal charges 280,260 280,260 280,852 (592)
Total expenditures 845,260 845,260 845,852 (592)
REVENUES OVER
(UNDER) EXPENDITURES (44,510) (44,510) 13,926 58,436
Net change in fund balances (44,510)$ (44,510)$ 13,926 58,436$
FUND BALANCES:
Beginning of year 791,385
End of year 805,311$
91
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 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 Support 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.
Facility Furniture, Fixtures & Equipment Replacement Fund – Established to accumulate funding for
the replacement furniture, fixtures and equipment within city facilities. Replacement costs are charged to
programs based on that program’s share of asset use over the asset’s lifespan, reflective of usage.
CITY OF SARATOGA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 2022
92
Liability /Information
Risk Workers'Office Technology
Management Compensation Support Services
ASSETS
Current assets:
Cash and investments 845,451$ 231,839$ 157,288$ 680,053$
Accounts receivable 14,997 3,490 - 690
Total current assets 860,448 235,329 157,288 680,743
Noncurrent assets:
Capital assets:
Machinery and equipment - - - -
Less: accumulated depreciation - - - -
Total capital assets (net of
accumulated depreciation)- - - -
Total assets 860,448$ 235,329$ 157,288$ 680,743$
LIABILITIES
Liabilities:
Current liabilities:
Accounts payable 22,197$ 1,265$ 1,845$ 7,124$
Accrued payroll and benefits 2,316 1,236 - 12,460
Claims payable 194,533 - - -
Total current liabilities 219,046$ 2,501$ 1,845$ 19,584$
NET POSITION
Investment in capital assets -$ -$ -$ -$
Unrestricted 641,402 232,828 155,443 661,159
Total net position 641,402$ 232,828$ 155,443$ 661,159$
93
Information Building
Vehicle Vehicle Technology Furniture &
and Equipment Building and Equipment Equipment Fixtures
Maintenance Maintenance Replacement Replacement Replacement Total
292,793$ 805,408$ 624,104$ 853,458$ 769,706$ 5,260,100$
- - - - - 19,177
292,793 805,408 624,104 853,458 769,706 5,279,277
- - 1,792,988 110,465 298,496 2,201,949
- - (1,511,875) (110,465) (110,748) (1,733,088)
- - 281,113 - 187,748 468,861
292,793$ 805,408$ 905,217$ 853,458$ 957,454$ 5,748,138$
10,410$ 29,252$ -$ 55,121$ 16,054$ 143,268$
2,916 11,855 - - - 30,783
1,150 - - - - 195,683
14,476$ 41,107$ -$ 55,121$ 16,054$ 369,734$
-$ -$ 281,113$ -$ 187,748$ 468,861$
278,317 764,301 624,104 798,337 753,652 4,909,543
278,317$ 764,301$ 905,217$ 798,337$ 941,400$ 5,378,404$
CITY OF SARATOGA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
94
Liability /Information
Risk Workers'Office Technology
Management Compensation Support Services
Operating revenues:
Charges for services 750,000$ 250,000$ 35,000$ 800,000$
Other operating revenues 13,903 9,074 9,151 10,868
Total operating revenues 763,903 259,074 44,151 810,868
Operating expenses:
Cost of services 809,486 254,613 32,874 741,140
Depreciation - - - -
Total operating expenses 809,486 254,613 32,874 741,140
Operating income (45,583) 4,461 11,277 69,728
Change in net position (45,583) 4,461 11,277 69,728
Total net position - beginning 686,985 228,367 144,166 591,431
Total net position - ending 641,402$ 232,828$ 155,443$ 661,159$
95
Information Building
Vehicle Vehicle Technology Furniture &
and Equipment Building and Equipment Equipment Fixtures
Maintenance Maintenance Replacement Replacement Replacement Total
275,000$ 950,000$ 150,000$ 150,000$ 200,000$ 3,560,000$
- 1,958 - - - 44,954
275,000 951,958 150,000 150,000 200,000 3,604,954
298,688 871,987 5,088 87,362 18,824 3,120,062
- - 141,385 - 41,639 183,024
298,688 871,987 146,473 87,362 60,463 3,303,086
(23,688) 79,971 3,527 62,638 139,537 301,868
(23,688) 79,971 3,527 62,638 139,537 301,868
302,005 684,330 901,690 735,699 801,863 5,076,536
278,317$ 764,301$ 905,217$ 798,337$ 941,400$ 5,378,404$
CITY OF SARATOGA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
96
Liability /Information
Risk Workers'Office Technology
Management Compensation Support Services
Cash flows from operating activities:
Receipts from customers and users 752,163$ 258,294$ 44,151$ 811,330$
Payments to suppliers (552,478) (212,501) (31,179) (328,098)
Payments to employees (84,794) (43,251) - (433,780)
Net cash provided by operating activities 114,891 2,542 12,972 49,452
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 114,891 2,542 12,972 49,452
Cash and cash equivalents, beginning of year 730,560 229,297 144,316 630,601
Cash and cash equivalents, ending of year 845,451$ 231,839$ 157,288$ 680,053$
Reconciliation of operating income to net cash provided
by operating activities:
Operating income (loss)(45,583)$ 4,461$ 11,277$ 69,728$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation - - - -
Change in operating assets and liabilities:
Accounts receivables (11,740) (780) - 462
Accounts payable 22,197 1,103 1,695 960
Accrued payroll (4,667) (2,242) - (21,698)
Claims payable 154,684 - - -
Net cash provided (used) by operating activities 114,891$ 2,542$ 12,972$ 49,452$
97
Information Building
Vehicle Vehicle Technology Furniture &
and Equipment Building and Equipment Equipment Fixtures
Maintenance Maintenance Replacement Replacement Replacement Total
275,000$ 951,958$ 150,000$ 150,000$ 200,000$ 3,592,896$
(179,098) (454,609) (47,554) (32,241) (8,487) (1,846,245)
(120,572) (436,869) - - - (1,119,266)
(24,670) 60,480 102,446 117,759 191,513 627,385
- - (100,329) - (101,199) (201,528)
- - (100,329) - (101,199) (201,528)
(24,670) 60,480 2,117 117,759 90,314 425,857
317,463 744,928 621,987 735,699 679,392 4,834,243
292,793$ 805,408$ 624,104$ 853,458$ 769,706$ 5,260,100$
(23,688)$ 79,971$ 3,527$ 62,638$ 139,537$ 301,868$
- - 141,385 - 41,639 183,024
- - - - - (12,058)
4,145 2,196 (42,466) 55,121 10,337 55,288
(6,277) (21,687) - - - (56,571)
1,150 - - - - 155,834
(24,670)$ 60,480$ 102,446$ 117,759$ 191,513$ 627,385$
98
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99
CAPITAL ASSETS
USED IN THE OPERATION
OF GOVERNMENTAL FUNDS
100
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CITY OF SARATOGA
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULE BY SOURCE
JUNE 30, 2022 AND 2021
101
2022 2021
Governmental Funds Capital Assets:
Land and land improvements 20,173,790$ 20,160,714$
Buildings and structures 27,455,284 27,370,740
Machinery and equipment 2,269,291 2,269,291
Infrastructure 113,718,209 113,118,066
Construction in progress 9,395,606 9,094,200
Total Governmental Funds Capital Assets 173,012,180 172,013,011
Accumulated depreciation (49,279,735) (47,021,103)
Total Governmental Funds Capital Assets, Net 123,732,445$ 124,991,908$
Investments in Governmental Funds
Capital Assets by Source:
General Fund 115,212,477$ 115,212,479$
Special revenue funds 960,972 960,972
Capital projects funds 55,991,383 54,992,212
Donations 847,348 847,348
Accumulated depreciation (49,279,735) (47,021,103)
Total Governmental Funds Capital Assets 123,732,445$ 124,991,908$
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, 2022
102
Land Buildings Machinery
and Land and and
Improvements Structures Equipment
Function and Activity
General and intergovernmental services:
Management services -$ 564,632$ 624,241$
Administrative services - 521,073 140,332
Intergovernmental services 118,184 3,138,641 22,225
Total General and Intergovernmental Services:118,184 4,224,346 786,798
Public safety:
Police services - - 15,434
Code enforcement - - 7,548
Total Public Safety:- - 22,982
Public works:
Streets and sidewalks 848,231 147,465 315,275
Parks/open space 9,287,374 3,275,380 151,110
Total Public Works:10,135,605 3,422,845 466,385
Community services 8,177,537 4,977,650 916,773
Community development services 1,742,464 14,830,443 76,353
Total Governmental Funds Capital Assets 20,173,790 27,455,284 2,269,291
Accumulated depreciation - (13,815,626) (1,809,984)
Total Governmental Funds Capital Assets, Net 20,173,790$ 13,639,658$ 459,307$
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.
103
Construction
in
Infrastructure Progress Total
-$ 73,051$ 1,261,924$
- - 661,405
- - 3,279,050
- 73,051 5,202,379
- - 15,434
- - 7,548
- - 22,982
113,590,972 8,150,343 123,052,286
- 947,369 13,661,233
113,590,972 9,097,712 136,713,519
127,237 224,843 14,424,040
- - 16,649,260
113,718,209 9,395,606 173,012,180
(33,654,125) - (49,279,735)
80,064,084$ 9,395,606$ 123,732,445$
CITY OF SARATOGA
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGE BY FUNCTION AND ACTIVITY
JUNE 30, 2022
104
Governmental Governmental
Funds Capital Funds Capital
Assets Assets
July 1, 2021 Additions Deletions June 30, 2022
Function and Activity
General and intergovernmental services:
Management services 1,261,924$ -$ -$ 1,261,924$
Administrative services 661,405 - - 661,405
Intergovernmental services 3,279,050 - - 3,279,050
Total General and Intergovernmental Services:5,202,379 - - 5,202,379
Public safety:
Police services 15,434 - - 15,434
Code enforcement 7,548 - - 7,548
Total Public Safety:22,982 - - 22,982
Public works:
Streets and sidewalks 122,258,672 1,406,835 (613,221) 123,052,286
Parks/open space 13,513,445 147,788 - 13,661,233
Total Public Works:135,772,117 1,554,623 (613,221) 136,713,519
Community services 14,366,273 142,310 (84,543) 14,424,040
Community development services 16,649,259 1 - 16,649,260
Total Governmental Funds Capital Assets 172,013,010 1,696,934 (697,764) 173,012,180
Accumulated depreciation (47,021,102) (2,258,633) - (49,279,735)
Total Governmental Funds Capital Assets, Net 124,991,908$ (561,699)$ (697,764)$ 123,732,445$
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.
105
STATISTICAL SECTION
106
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107
This part of the City of Saratoga's Annual Comprehensive 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. 105-114
Revenue Capacity
These schedules contain information to help the reader assess the government’s
most significant local revenue source; property tax. 115-119
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. 121-127
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. 128-129
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. 131-136
CITY OF SARATOGA
NET POSITION BY COMPONENT
LAST TEN YEARS
(ACCRUAL BASIS OF ACCOUNTING)
108
(amounts expressed in thousands)
2013 2014 2015 2016
Primary government
Governmental activities
Net investment in capital assets 112,353$ 112,116$ 112,092$ 112,030$
Restricted 1,971 2,045 2,138 2,242
Unrestricted 13,357 15,095 6,691 13,837
Total primary government 127,681$ 129,256$ 120,921$ 128,109$
Source: ACFR
Fiscal Year
$100,000
$110,000
$120,000
$130,000
$140,000
$150,000
$160,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Net Position by Component
Net investment in capital assets Restricted Unrestricted
109
2017 2018 2019 2020 2021 2022
111,241$ 113,053$ 115,250$ 117,086$ 117,671$ 117,017$
2,375 2,596 2,718 1,689 1,727 8,910
13,438 13,693 15,825 16,572 17,091 26,521
127,054$ 129,342$ 133,793$ 135,347$ 136,489$ 152,448$
Fiscal Year
CITY OF SARATOGA
CHANGES IN NET POSITION
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
110
(amounts expressed in thousands)
2013 2014 2015 2016
Expenses:
Governmental activities:
General and intergovernmental services 4,143$ 4,522$ 7,566$ 5,143$
Public safety 4,382 4,491 4,850 4,787
Public works 6,922 7,379 6,273 6,181
Community services 1,804 1,586 1,589 1,582
Community development services 1,713 2,179 1,962 2,012
Interest on long-term debt (unallocated)410 400 391 381
Total governmental activities expenses 19,374 20,557 22,631 20,086
Program revenues:
Charges for services:
General and intergovernmental services 102 120 122 98
Public safety 607 330 354 310
Public works 3,316 2,768 2,474 3,004
Community services 946 958 952 1,114
Community development services 2,184 2,220 2,234 2,397
Operating grants and contributions 75 117 107 165
Capital grants and contributions 599 808 785 183
Total governmental activates program revenues 7,829 7,321 7,028 7,271
Net (expense) revenue and change in net position (11,545) (13,236) (15,603) (12,815)
General revenue and other changes in net assets
Taxes:
Property taxes 9,153 9,737 10,669 11,549
Sales taxes 1,051 941 1,224 1,189
Local taxes 769 822 866 898
Franchise taxes 1,920 1,949 2,070 2,069
Motor vehicle in-lieu 16 14 13 12
Total Taxes 12,909 13,463 14,842 15,717
Intergovernmental 766 981 1,023 718
Investment earnings 51 62 67 101
Other revenues 113 305 237 273
Total general revenues 13,839 14,811 16,169 16,809
Change in net position 2,294 1,575 566 3,994
Net position - beginning of year 125,387 127,681 129,256 120,921
GASB 68 adjustment - - (8,901) 3,193
Net position - beginning of year, as adjusted 125,387 127,681 120,355 124,114
Net position - end of year 127,681$ 129,256$ 120,921$ 128,109$
Source: ACFR
Fiscal Year
111
2017 2018 2019 2020 2021 2022
6,450$ 6,010$ 6,465$ 7,071$ 7,287$ 4,381$
5,444 5,728 6,005 6,355 6,735 7,197
9,164 7,943 10,271 11,340 12,530 9,309
1,557 1,594 1,287 865 966 532
2,906 2,285 2,198 2,727 3,263 1,881
367 359 334 308 289 274
25,888 23,919 26,560 28,666 31,070 23,575
153 152 107 57 80 58
327 368 467 340 330 573
2,462 2,397 2,376 2,056 2,404 3,280
1,071 914 736 240 136 282
2,127 2,343 1,815 1,906 2,396 2,306
223 90 95 72 564 7,381
1,062 219 3,631 1,595 1,091 335
7,425 6,483 9,227 6,266 7,001 14,215
(18,463) (17,436) (17,333) (22,400) (24,069) (9,360)
12,264 14,124 15,250 16,056 16,294 17,428
1,185 1,125 1,207 1,056 926 1,394
857 960 896 807 869 1,055
2,171 2,166 2,290 2,605 2,338 2,497
13 16 15 25 - -
16,490 18,391 19,658 20,549 20,427 22,373
589 802 1,223 2,602 2,838 2,477
124 319 698 623 34 (300)
205 212 205 180 1,912 768
17,408 19,724 21,784 23,954 25,211 25,319
(1,055) 2,288 4,451 1,554 1,142 15,959
128,109 127,054 129,342 133,793 135,347 136,489
- - - - - -
128,109 127,054 129,342 133,793 135,347 136,489
127,054$ 129,342$ 133,793$ 135,347$ 136,489$ 152,448$
Fiscal Year
CITY OF SARATOGA
FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
112
(amounts expressed in thousands)
2013 2014 2015 2016
General fund:
Nonspendable -$ -$ -$ -$
Restricted 463 413 363 313
Committed 675 993 1,000 1,000
Assigned 792 2,648 2,854 2,672
Unassigned 7,989 7,782 5,589 6,655
Total general fund 9,919$ 11,836$ 9,806$ 10,640$
All other governmental funds:
Restricted
Special revenue funds 622$ 734$ 868$ 1,006$
Debt service 886 898 907 923
Committed
Capital project funds 3,420 3,126 3,859 4,716
Total all other governmental funds 4,928$ 4,758$ 5,634$ 6,645$
Source: ACFR
Fiscal Year
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
General -
Nonspendable
General -
Restricted
General -
Committed
General -
Assigned
General -
Unassigned
Special
Revenue
Debt Service Capital
Projects
Fund Balances of Governmental Funds
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
113
2017 2018 2019 2020 2021 2022
-$ -$ -$ -$ 7$ 4$
263 213 163 113 63 -
790 1,000 1,000 1,000 1,000 1,000
3,272 3,705 5,399 5,845 6,518 7,229
6,659 8,216 8,117 7,477 7,634 7,177
10,984$ 13,134$ 14,679$ 14,435$ 15,222$ 15,410$
1,153$ 1,385$ 1,622$ 788$ 873$ 8,105$
959 998 933 788 791 805
5,085 3,537 3,252 4,717 5,764 7,545
7,197$ 5,920$ 5,807$ 6,293$ 7,428$ 16,455$
Fiscal Year
CITY OF SARATOGA
GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE
LAST TEN YEARS
(ACCRUAL BASIS OF ACCOUNTING)
114
(amounts expressed in thousands)
2013 2014 2015 2016
Tax revenues:
Property taxes 9,153$ 9,737$ 10,669$ 11,549$
Special assessments 1,185 1,207 1,220 1,222
Sales taxes 1,051 941 1,224 1,189
Local taxes 769 822 866 898
Franchise taxes 1,920 2,024 2,069 2,068
Motor vehicle in-lieu 16 14 13 12
Total tax revenues 14,094$ 14,745$ 16,061$ 16,938$
Source: ACFR
Fiscal Year
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Property taxes Special
assessments
Sales taxes Local taxes Franchise taxes Motor vehicle
in-lieu
Tax Revenues by Source
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
115
2017 2018 2019 2020 2021 2022
12,264$ 13,247$ 14,475$ 15,356$ 16,294$ 17,428$
1,270 1,333 1,205 1,174 1,332 -
1,185 1,125 1,207 1,057 926 1,394
857 960 881 807 869 1,055
2,171 2,166 2,290 2,605 2,338 2,497
14 16 15 25 - -
17,761$ 18,847$ 20,073$ 21,024$ 21,759$ 22,373$
Fiscal Year
CITY OF SARATOGA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
116
(amounts expressed in thousands)
2013 2014 2015 2016
Revenues:
Property taxes 9,153$ 9,737$ 10,669$ 11,549$
Special assessments 1,185 1,207 1,220 1,222
Sales taxes 1,051 941 1,224 1,189
Other local taxes 769 823 866 898
Licenses and permits 2,177 2,023 1,613 2,216
Fines and forfeitures 199 196 175 248
Intergovernmental - federal 975 796 651 158
Intergovernmental - state 1,142 1,410 1,538 1,182
Intergovernmental - other 269 129 97 76
Current services charges - - - -
Franchise fees 1,920 1,949 2,070 2,068
Use of money any property 527 521 557 647
Other revenues 2,421 2,547 2,589 2,709
Total tax revenues 21,788 22,279 23,269 24,162
Expenditures:
Current:
General and intergovernmental services 3,269 3,247 6,624 4,246
Public safety 4,392 4,491 4,860 5,226
Public works 4,966 5,243 5,381 5,701
Community services 1,318 1,383 1,328 1,475
Community development services 2,047 2,182 2,087 2,193
Capital outlay 3,979 3,096 3,253 2,591
Debt service:
Principal 455 485 495 500
Interest and fiscal charges 414 405 395 385
Total expenditures 20,840 20,532 24,423 22,317
over (under) expenditures 948 1,747 (1,154) 1,845
Other financing sources (uses):
Transfers in 510 1,291 785 1,768
Transfers out (485) (1,291) (785) (1,768)
Total other financing sources (uses)25 220 - -
Net change in fund balances 973$ 1,967$ (1,154)$ 1,845$
Debt as a percentage of noncapital expenditures 5.15%5.10%4.20%4.67%
Source: ACFR
Debt as percentage of noncapital expenditures calculated by
dividing total debt service expenditures by total noncapital expenditures
Fiscal Year
117
2017 2018 2019 2020 2021 2022
12,264$ 13,247$ 14,475$ 15,356$ 16,294$ 17,428$
1,270 1,333 1,205 1,174 1,332 1,362
1,185 1,125 1,207 1,057 925 1,394
857 960 896 807 869 1,055
1,908 2,677 2,360 2,042 2,764 3,859
171 127 127 112 82 113
954 181 3,375 1,035 740 7,251
1,053 1,253 1,777 1,819 1,879 1,933
222 136 241 2,082 1,874 1,010
- - - - 960 927
2,171 2,166 2,290 2,605 2,338 2,497
651 779 1,148 916 216 20
2,203 2,397 2,081 1,394 2,015 757
24,909 26,381 31,182 30,399 32,288 39,605
4,372 4,585 5,205 5,261 5,773 5,516
5,444 5,705 6,005 6,355 6,735 7,197
6,002 6,085 6,535 6,919 7,299 7,516
1,573 1,292 1,397 962 972 1,031
2,324 2,247 2,309 2,545 2,878 2,885
3,450 4,747 7,458 7,270 5,866 5,397
475 485 500 525 545 565
373 362 341 321 298 281
24,013 25,508 29,750 30,158 30,366 30,388
896 873 1,432 241 1,922 9,217
3,580 3,397 3,397 4,817 3,467 3,046
(3,580) (3,397) (3,397) (4,817) (3,467) (3,046)
- - - - - -
896$ 873$ 1,432$ 241$ 1,922$ 9,217$
4.23%4.29%3.77%3.18%3.00%2.88%
Fiscal Year
CITY OF SARATOGA
PROPERTY TAX RATES – DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN YEARS
118
(Property Tax Rates per $100 of Assessed Value)
2013 2014 2015 2016
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 0.0080 0.0074 0.0070 0.0065
Total 1.0492 1.0486 1.0482 1.0477
Campbell School District 0.0246 0.0264 0.0235 0.0220
County Bond 2008 Hospital 0.0051 0.0035 0.0091 0.0088
Co. Housing Bond 2016 - - - -
Campbell Elementary 2002 0.0220 0.0288 0.0172 0.0196
Campbell Elementary 2010 0.0086 - 0.0145 0.0136
Campbell Elementary 2016 - - - -
Campbell Union High 1999 0.0165 0.0134 0.0130 0.0119
Campbell Union High 2006 0.0160 0.0156 0.0154 0.0138
Campbell Union High 2016 - - - -
West Valley Community College District 2004 0.0139 0.0125 0.0101 0.0118
West Valley Community College District 2012 0.0150 0.0130 0.0019 0.0114
Cupertino Elementary School District - - - -
Moreland Elementary School District - - - -
Saratoga School District - - - -
Campbell Union High School District - - - -
Fremont Union High School District - - - -
Los Gatos-Saratoga Joint Union High School District - - - -
Foothill-DeAnza Community College District - - - -
Saratoga Fire District - - - -
West Valley Mission Community College District 2018 - - - -
Santa Clara Valley Water District - State Water Project 0.0069 0.0070 0.0065 0.0057
Santa Clara Valley Water District - Zone W-1 - - - -
Mid Peninsula Open Space 2014 - - - 0.0008
Total 0.1286 0.1202 0.1112 0.1194
Total Tax Rate 1.1778 1.1688 1.1594 1.1671
Source: Santa Clara County Auditor data, Avenu Insights & Analytics
Fiscal Year
119
2017 2018 2019 2020 2021 2022
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
0.0060 0.0056 0.0046 0.0040 0.0046 0.0044
1.0472 1.0468 1.0458 1.0452 1.0458 1.0456
0.0294 0.0244 0.0175 0.0235 0.0220 -
0.0086 0.0082 0.0072 0.0069 0.0069 0.0061
- 0.0127 0.0105 0.0100 - 0.0127
0.0258 0.0148 0.0085 0.0146 0.0139 0.0160
- 0.0158 0.0240 0.0131 0.0153 0.0295
- 0.0122 0.0172 0.0160 0.0160 0.0217
0.0126 0.0120 0.0111 0.0098 0.0097 0.0105
0.0126 0.0119 0.0108 0.0100 0.0097 0.0071
- 0.0280 0.0268 0.0238 0.0245 0.0245
0.0096 0.0096 0.0089 0.0081 0.0084 0.0080
0.0100 0.0104 0.0190 0.0105 0.0104 0.0101
- - - - 0.0123 0.0123
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - 0.0110 - -
0.0086 0.0062 0.0042 0.0041 0.0037 0.0051
- - - - - -
0.0006 0.0009 0.0018 0.0016 0.0015 0.0015
0.1178 0.1671 0.1675 0.1630 0.1543 0.1651
1.1650 1.2139 1.2133 1.2082 1.2001 1.2107
Fiscal Year
CITY OF SARATOGA
ASSESSED VALUE OF TAXABLE PROPERTY
LAST TEN YEARS
120
Fiscal Total
Year Total Less:Total Taxable Direct
Ended Residential Commercial Industrial Other Unsecured Assessed Tax Exempt Assessed Tax
June 30 Property Property Property Property Property Property Real Property Value Rate
2013 10,312,597$ 112,875$ 11,455$ 335,765$ 62,378$ 10,835,070$ (233,895)$ 10,601,175$ 1.1778
2014 11,158,775$ 113,915$ 11,684$ 352,830$ 59,684$ 11,696,888$ (238,683)$ 11,458,205$ 1.1688
2015 11,775,973$ 117,466$ 11,737$ 361,202$ 56,354$ 12,322,732$ (242,724)$ 12,080,008$ 1.1671
2016 12,581,463$ 134,321$ 11,143$ 397,318$ 50,193$ 13,174,438$ (232,693)$ 12,941,745$ 1.1640
2017 13,227,811$ 141,391$ 10,245$ 426,257$ 45,838$ 13,851,542$ (232,279)$ 13,619,263$ 1.1650
2018 14,000,116$ 154,592$ 10,449$ 440,188$ 39,751$ 14,645,096$ (244,172)$ 14,400,924$ 1.2139
2019 14,899,703$ 160,219$ 10,658$ 460,375$ 45,669$ 15,576,624$ (233,581)$ 15,343,043$ 1.2133
2020 15,671,996$ 164,159$ 10,872$ 458,536$ 48,661$ 16,354,224$ (236,668)$ 16,117,556$ 1.2082
2021 16,412,783$ 173,142$ 11,089$ 469,087$ 49,306$ 17,115,407$ (295,705)$ 16,819,702$ 1.2001
2022 17,069,857$ 175,367$ 11,204$ 481,442$ 50,249$ 17,788,119$ (292,483)$ 17,495,636$ 1.2107
Santa Clara County Assessor data, MuniServices, LLC
Source: Santa Clara County Auditor data, Avenu Insights & Analytics
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Total Assessed Property
Unsecured
Other
Industrial
Commercial
Residential
CITY OF SARATOGA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
JUNE 30, 2022
121
% of Total % of Total
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Humboldt Fields LLC Et Al 48,249,093$ 1 0.28%
SHP Quito Village LLC 37,011,475$ 2 0.21%
San Jose Water Works 33,419,428$ 3 0.19%17,105,985$ 3 0.16%
House David L Trustee 18,100,681$ 4 0.10%
Keller John IV Trustee & Et Al 17,072,035$ 5 0.10%15,594,208$ 4 0.15%
Osheanic Capital LLC 15,736,463$ 6 0.09%
HJJ LLC 14,075,302$ 7 0.08%
CTR Partnership LP 13,929,901$ 8 0.08%
Argonaut Associates LLC 12,521,046$ 9 0.07%10,775,777$ 6 0.10%
Krishnamurthi Ashok Trustee & Et Al 12,419,430$ 10 0.07%
Public Storage Inc 9,655,150$ 8 0.09%
Cupertino Village Asscs LLC 35,770,113$ 1 0.34%
Quito Village Asscs LLC 20,399,999$ 2 0.19%
Gregpenn Properties LLC 13,056,000$ 5 0.12%
Stormin Norman LLC 10,000,000$ 7 0.09%
Summerhill Creekside LLC 9,165,923$ 9 0.09%
Morrison Terri E 8,963,548$ 10 0.09%
Top Ten Total Assessed Value 222,534,854$ 1.3%150,486,703$ 1.4%
City Total Assessed Value 17,495,636,128$ 10,601,174,904$
Source: Santa Clara County Auditor data, Avenu Insights & Analytics
2022 2013
CITY OF SARATOGA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN YEARS
122
Fiscal Year Total Tax Collections in
Ended Levy for Subsequent
June 30 Fiscal Year Amount Percentage Years Amount Percentage
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%
2015 10,669,281$ 10,669,281$ 100.0%-$ 10,669,281$ 100.0%
2016 11,549,213$ 11,549,213$ 100.0%-$ 11,549,213$ 100.0%
2017 12,263,575$ 12,263,575$ 100.0%-$ 12,263,575$ 100.0%
2018 13,247,030$ 13,247,030$ 100.0%-$ 13,247,030$ 100.0%
2019 14,475,102$ 14,475,102$ 100.0%-$ 14,475,102$ 100.0%
2020 15,356,471$ 15,356,471$ 100.0%-$ 15,356,471$ 100.0%
2021 16,294,043$ 16,294,043$ 100.0%-$ 16,294,043$ 100.0%
2022 17,427,588$ 17,427,588$ 100.0%-$ 17,427,588$ 100.0%
Source: City of Saratoga
Collected within the
Fiscal Year of the Levy Total Collections to Date
123
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CITY OF SARATOGA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN YEARS
124
(amounts expressed in thousands, except per capita amounts)
2013 2014 2015 2016
Governmental activities
General obligation bonds 11,540$ 11,055$ 10,560$ 10,060$
Net original issue premium 416 394 372 350
Total primary government 11,956$ 11,449$ 10,932$ 10,410$
Percentage of Personal Income1 0.53%0.49%0.47%0.45%
Per capita2 389 371 355 344
Source: ACFR
1US Census Bureau, adjusted for inflation, Avenu Insights & Analytics
2Population information from California State Controller's Office
Fiscal Year
125
2017 2018 2019 2020 2021 2022
9,585$ 9,100$ 8,600$ 8,075$ 7,530$ 6,965$
328 306 285 263$ 241$ 219$
(959) (998) (933) (788) (790) (805)
8,954$ 8,408$ 7,405$ 7,550$ 6,981$ 6,379$
0.07%0.06%0.05%-2.55%-2.39%0.04%
293 267 236 243 229 208
Fiscal Year
CITY OF SARATOGA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN YEARS
126
(amounts expressed in thousands, except per capita amounts)
2013 2014 2015 2016
General obligation bonds 11,540$ 11,055$ 10,560$ 10,060$
Net original issue premium 416 394 372 350
Less: Amount available in debt service fund (885) (898) (906) (923)
Total primary government 10,655$ 10,551$ 10,026$ 9,487$
Percentage of actual taxable
value of property 0.10%0.09%0.08%0.07%
Per capita1 347 342 326 314
Source: ACFR
1Population information from California State Controller's Office
Fiscal Year
127
2017 2018 2019 2020 2021 2022
9,585$ 9,100$ 8,600$ 8,075$ 7,530$ 6,965$
328 306 285 263$ 241$ 219$
(959) (998) (933) (788) (790) (805)
8,954$ 8,408$ 7,405$ 7,550$ 6,981$ 6,379$
0.07%0.06%0.05%-2.55%-2.39%0.04%
293 267 236 243 229 208
Fiscal Year
CITY OF SARATOGA
LEGAL DEBT MARGIN INFORMATION
LAST TEN YEARS
128
(amounts expressed in thousands)
2013 2014 2015 2016
Debt Limit 1,625,261$ 1,754,233$ 1,848,410$ 1,976,166$
Total net debt applicable to limit 10,655 10,157 9,654 9,137
Legal debt margin 1,614,606$ 1,744,076$ 1,838,756$ 1,967,029$
Total net debt applicable to the limit
as a percentage of debt limit 0.66%0.58%0.52%0.46%
Legal debt margin calculation
Assessed value 10,601,175$ 11,458,205$ 12,080,008$ 12,941,745$
Add back: exempt real property 233,895 236,683 242,724 232,693
Total assessed value 10,835,070$ 11,694,888$ 12,322,732$ 13,174,438$
Debt limit (15% of total assessed value)1,625,261$ 1,754,233$ 1,848,410$ 1,976,166$
Debt applicable to limit:
General obligation bonds 11,540$ 11,055$ 10,560$ 10,060$
Net original issue premium 416 394 372 350
Less: Amount available in debt service fund (885) (898) (906) (923)
Total net debt applicable to limit 10,655$ 10,157$ 9,654$ 9,137$
Legal debt margin 1,614,606$ 1,744,076$ 1,838,756$ 1,967,029$
Source: ACFR
Fiscal Year
129
2017 2018 2019 2020 2021 2022
2,077,731$ 2,196,764$ 2,336,494$ 2,453,134$ 2,611,667$ 2,668,218$
8,626 8,102 7,287 7,287 6,740 6,160
2,069,105$ 2,188,662$ 2,329,207$ 2,445,847$ 2,604,927$ 2,662,058$
0.42%0.37%0.31%0.30%0.26%0.23%
13,619,263$ 14,400,924$ 15,343,044$ 16,117,556$ 17,115,407$ 17,495,636$
232,279 244,172 233,581 236,668 295,705 292,483
13,851,542$ 14,645,096$ 15,576,625$ 16,354,224$ 17,411,112$ 17,788,119$
2,077,731$ 2,196,764$ 2,336,494$ 2,453,134$ 2,611,667$ 2,668,218$
9,585$ 9,100$ 8,600$ 8,075$ 7,530$ 6,965$
328 306 285 263 241 219
(959) (998) (933) (788) (790) (805)
8,626$ 8,102$ 7,287$ 7,287$ 6,740$ 6,160$
2,069,105$ 2,188,662$ 2,329,207$ 2,445,847$ 2,604,927$ 2,662,058$
Fiscal Year
CITY OF SARATOGA
DIRECT AND OVERLAPPING
GOVERNMENTAL ACTIVITIES DEBT
130
(amount expressed in thousands)
2021-22 Assessed Valuation 17,543,602$ Estimated
Estimated Share of
Debt Percentage Overlapping
Outstanding Applicable 1 Debt
Direct and Overlapping Tax and Assessment Debt:
City of Saratoga 6,965$ 100.000%6,965$
City of Saratoga Community Facilities District No. 2016-1 1,797 100.000%1,797$
Santa Clara County 1,130,850 3.044%34,423
Foothill-De Anza Community College District 657,878 1.359%8,941
West Valley Community College District 732,500 8.962%65,647
Campbell Union High School District 371,390 5.482%20,360
Fremont Union High School District 582,770 3.037%17,699
Los Gatos-Saratoga Joint Union High School District 84,030 38.037%31,962
Campbell Union School District 223,499 6.659%14,883
Cupertino Union School District 271,768 5.542%15,061
Moreland School District 118,647 12.690%15,056
Saratoga Union School District 17,244 85.918%14,816
Saratoga Fire Protection District 2,105 97.365%2,050
Midpeninsula Regional Open Space District 84,575 4.963%4,197
Santa Clara Valley Water District Benefit Assessment 48,150 3.044%1,466
Total Overlapping Tax and Assessment Debt 255,322$
Overlapping General Fund Debt:
Santa Clara County General Fund Obligations 1,210,694$ 3.044%36,854$
Santa Clara County Pension Obligations 335,638 3.044%10,217
Santa Clara County Board of Education COP 1,820 3.044%55
Santa Clara County Vector Control District COP 1,505 3.044%46
Foothill-De Anza Community College District COP 21,380 1.359%291
West Valley-Mission College District General Fund Obligations 12,000 8.962%1,075
Campbell Union High School District COP 15,500 5.482%850
Los Gatos-Saratoga Joint Union High School District COP 755 38.037%287
Campbell Union High School District COP 1,890 6.659%126
Saratoga Union School District COP 2,335 85.918%2,006
Midpeninsula Open Space Park District General Fund Obligations 99,706 4.963%4,948
Total Overlapping General Fund Debt 56,755
Less: Santa Clara County Supported Obligations (550)
Total Net Overlapping General Fund Debt 56,205$
Total Direct Debt 6,965$
Gross Total Overlapping Debt 305,112$
Net Total Overlapping Debt 304,562$
Gross Combined Total Debt 2 312,077$
Net Combined Total Debt 311,527$
Ratios to 2021-22 Assessed Valuation:
Direct Debt ($6,965,000)0.04%
Total Direct and Overlapping Tax and Assessment Debt 1.46%
Gross Combined Total Debt 1.78%
Net Combined Total Debt 1.78%
Source: Avenu Insights & Analytics and California Municipal Statistics, Inc.
1 The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by
determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
2 Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
CITY OF SARATOGA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN YEARS
131
Per Capita
Fiscal City Personal Personal Labor Unemployment
Year Population1 Income 2 Income 2 Force 3 Rate 3
2013 30,706 2,179,904 70,993 13,900 4.2%
2014 30,887 2,243,458 72,634 14,200 3.4%
2015 30,799 2,248,481 73,005 15,100 2.7%
2016 30,219 2,239,926 74,123 14,700 2.9%
2017 30,569 2,374,919 77,690 14,600 2.7%
2018 31,435 2,597,561 82,633 15,000 2.8%
2019 31,407 2,681,900 85,392 15,000 2.0%
2020 31,030 2,755,859 88,813 13,600 6.5%
2021 30,546 2,928,264 95,864 14,000 5.0%
2022 30,667 3,376,774 110,111 14,800 1.7%
Source: Avenu Insights & Analytics
1 Population Projections are provided by the California Department of Finance Projections.
2 Per Capita Income Data is provided by the United States Census Data and is adjusted for inflation. Personal Income has been
restated from prior years.
3 Unemployment and Labor Force Data are provided by the EDD's Labor Market Information Division.
10,000
15,000
20,000
25,000
30,000
35,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Labor Force vs. Population
Population Labor Force
CITY OF SARATOGA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO AT JUNE 30, 2022
132
Number Percentage Number Percentage
of of Total City of of Total City
Employer Employees Rank Employment Employees Rank Employment
West Valley Community College 488 1 3.30%765 1 5.46%
Saratoga Union School District*295 2 1.99%-
Saratoga Retirement Community 288 3 1.95%260 2 1.86%
Our Lady of Fatima Villa 205 4 1.39%101 5 0.72%
Sub-Acute Saratoga Children's Hospital 151 5 1.02%120 4 0.86%
Saratoga High School (Los Gatos-Saratoga UHSD)135 6 0.91%132 3 0.94%
Prospect High School (CUHSD)114 7 0.77%100 6 0.71%
Safeway 93 8 0.63%65 9 0.46%
Saint Andrew's Episcopal School 65 9 0.44%-
City of Saratoga 57 10 0.39%-
Redwood Middle School - 96 7 0.69%
Gene's Fine Foods - 80 8 0.57%
Villa Monalvo - 60 10 0.43%
Total Top 10 Employers 1,891 12.78%1,779 12.71%
Total City Employment1 14,800 14,000
Source: Avenu Insights & Analytics
Source: 2013 data from previously published ACFR
Results based on direct correspondence with city’s local businesses.
*Includes all personnel, full and part time.
1 Total City Labor Force provided by EDD Labor Force Data.
2022 2013
133
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CITY OF SARATOGA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
134
2013 2014 2015 2016
Function
General government 10.90 13.65 13.70 13.70
Public works 20.65 20.75 20.65 20.65
Community development 11.00 12.00 12.00 12.00
Community services 9.60 9.60 9.55 9.55
Total 52.15 56.00 55.90 55.90
Source: City of Saratoga Budget Document
Fiscal Year
-
10
20
30
40
50
60
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Full -Time Equivalents
General Gov't Public Works Comm Dev.Comm Services
135
2017 2018 2019 2020 2021 2022
13.65 14.55 14.65 15.15 14.90 15.25
20.65 21.15 21.75 23.50 23.50 23.50
12.00 12.50 12.00 16.00 15.50 15.50
8.35 8.30 8.70 2.25 3.00 3.00
54.65 56.50 57.10 56.90 56.90 57.25
Fiscal Year
CITY OF SARATOGA
OPERATING INDICATORS BY FUNCTION
LAST TEN FISCAL YEARS
136
2013 2014 2015 2016
Function
Part 1 crimes1 277 408 315 463
Total incidents 40,141 41,228 40,695 39,213
Police reports 1,106 978 917 1,334
Public Works
Street resurfacing (miles)6 4 2.5 15.2
Street lights repaired 29 34 39 33
Potholes filled (sq. ft.)12,060 11,000 10,500 21,010
Community Development
Total permit valuation ($000)79,896 79,702 89,929 75,599
Parks and Recreation2
Youth Programs 1,511 1,061 791 853
Adult Programs 1,663 2,173 1,650 2,099
Staffed Day/summer camps (enrollment)45 160 90 172
1 Part 1 Crimes are the following as reported to DOJ: homicide, rape, robbery, burglary, assault, theft,
auto theft, and arson.
2 Beginning in FY 2019/20, the City outsourced Recreation Services to Los Gatos-Saratoga Community
Education and Recreation (LGS).
Source: City of Saratoga various records
Fiscal Year
137
2017 2018 2019 2020 2021 2022
301 190 289 241 241 225
38,893 32,222 31,955 37,652 37,652 31,003
1,295 927 885 837 837 832
0 0 8 5 5 2
37 15 12 10 10 15
13,000 9,000 11,000 8,000 8,000 12,000
106,631 128,062 82,722 80,513 80,513 113,151
968 1,072 1,497 655 655 1,503
2,824 2,082 731 679 679 617
71 129 - 146 146 217
Fiscal Year
CITY OF SARATOGA
CAPITAL ASSET STATISTICS BY FUNCTION
LAST TEN FISCAL YEARS
138
2013 2014 2015 2016
Function
Public safety
Police Station - - - -
Fire Station
Saratoga Fire District 1 1 1 1
Central Fire District 1 1 1 1
Public Works
Street Miles - Private 14 15 15 15
Street Miles - Public 141 142 142 142
West Valley Sanitation District
Number of Connections 8,821 8,919 8,402 8,488
Length of Sewer Lines 127 127 128 129
Cupertino Valley Sanitation District
Number of Connections 2,961 2,963 2,963 2,999
Length of Sewer Lines 37 37 37 37
Parks and Recreation
Parks Acreage 84 84 84 148
Parks 15 15 15 16
Source: City of Saratoga various records
Fiscal Year
139
2017 2018 2019 2020 2021 2022
- - - - - -
1 1 1 1 1 1
1 1 1 1 1 1
15 15 15 15 15 15
142 142 142 142 142 142
8,563 9,051 9,058 9,060 9,063 9,128
126 126 126 126 126 126
3,000 3,000 3,003 3,003 3,003 2,429
37 37 37 37 37 42
148 148 148 148 148 148
16 16 16 16 16 16
Fiscal Year