HomeMy WebLinkAboutACFR - Fiscal Year 2011 12 (PDF)City of
Saratoga
C A L I F O R N I A
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDING JUNE 30, 2012
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Saratoga, California
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2012
City Council
Chuck Page ................................................................................................................. Mayor
Jill Hunter........................................................................................................... Vice Mayor
Howard Miller ............................................................................................ Council Member
Emily Lo .................................................................................................... Council Member
Manny Cappello ......................................................................................... Council Member
Presented under the direction of:
David Anderson, City Manager
Finance & Administrative Services Department
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CITY OF SARATOGA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2012
i
TABLE OF C ONTENTS
I NTRODUCTORY SECTION
Letter of Transmittal ......................................................................................................... 1
GFOA Certificate of Achievement for Excel lence in Financial Reporting ........................... 5
Pri ncipal Officers of the City ............................................................................................ 6
Organization Chart ........................................................................................................... 7
F INANCIAL S ECTION
Independent Au ditor s ’ Report ............................................................................................. 9
Management’s Discussion and Analysis (Required Supplementary Information) ............. 11
Basic Financial Statements:
Government -Wide Financial Statements
Statement of Net Assets ............................................................................................ 25
Statement of Activities and Changes in Net Assets ..................................................... 26
Fund Financial Statements
Governmental Funds:
Balance Sheet ........................................................................................................... 27
Reconciliation of the Government Funds Balance Sheet
to the Government -Wide Financial Statement of Net Assets .................................. 28
Statement of Revenues, Expenditures and Changes in Fund Balances ......................... 29
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Government -Wide
Statement of Activities and Change s in Net Assets ................................................ 30
Proprietary Funds:
Statement of Net Assets ............................................................................................ 31
Statement of Revenues, Expenses, a nd Changes in Fund Net Assets ........................... 32
Statement of Cash Flows ........................................................................................... 33
Basic Financial Statement Notes:
Notes to the Basic Financial Statements ..................................................................... 34
Required S upplementary Information
Budgetary Information .............................................................................................. 5 7
Modified Approach for City Streets Infrastructure Capital Assets ............................... 5 9
CITY OF SARATOGA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2012
ii
TABLE OF C ONTENTS C ONTINUED
SUPPLEMENTARY I NFORMATION :
Non -Major Governmental Funds
Combining Balance Sheets ....................................................................................... 6 4
Combining Statem ent of Revenues, Expenditures and Changes in Fund Balances ........ 6 5
Schedule of Revenues, Exp and Changes in Fun d Balances – Budget and Actual:
Capital Improvements .......................................................................................... 6 6
Lighting & Landscape Assessment Districts Special Revenue Funds ..................... 6 7
Library Bond Debt Se rvice Fund .......................................................................... 68
Internal Service Funds
Combining Statement of Net Assets ........................................................................... 70
Combining Statement of Revenues, Expense s, and Change in Fund Balance ............... 7 2
Comb ining Statement of Cash Flows ......................................................................... 74
Capital Assets Used in the Operation of Governmental Funds
Comparative Schedule by Source ............................................................................... 79
Schedule by Function and Activity ............................................................................ 80
Schedule of Changes by Function and Activity .......................................................... 8 2
Statistical Section (Unaudited)
Net Assets by Component .......................................................................................... 84
Changes in Net Assets ............................................................................................... 86
Fund Balance of Governmental Funds ........................................................................ 88
Govern mental Activities Tax Revenues by Source ..................................................... 90
Changes in Fund Balances of Governmental Funds .................................................... 9 2
Direct and Overlapping Government s ........................................................................ 94
Assessed Value of Taxable Property .......................................................................... 96
Principal Property Taxpayers ..................................................................................... 98
Property Tax Levies and Collections .......................................................................... 99
Ratio s of Outstanding Debt by Type ........................................................................ 100
Ratios of Ge neral Bonded Debt Outstanding ............................................................ 102
Legal Debt Margin Information ............................................................................... 1 04
Direct and Overlapping Governmental Activities Debt ............................................. 1 06
Demographic and Economic Statistics ..................................................................... 1 07
Principal Employers ............................................................................................... 1 08
Full -Time Equivalen t City Government Employees by Function ............................... 1 10
Operating Indicators by Function ............................................................................. 112
Capital Asset Statistics by Function ......................................................................... 1 14
INTRODUCTORY SECTION
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1
C ITY OF S ARATOGA
C ITY H ALL
13777 F RUIT VALE A VENUE
S ARATOGA , C ALIFORNIA 95070
(408) 868 -1200
November 12, 2012
Honorable Mayor and City Council,
The Comprehensive Annual Financial Report (CAFR) of the City of Saratoga for the year ended June 30,
2012 is hereby submitted as mandated by applicable statutes. These statutes require that the City of Saratoga
annually issue a report on its financial position and activity, and that an independent firm of certified public
accountants audit this report. Responsibilities for both the accuracy of the data and the completeness and
fairness of the presentation, including all disclosures, rests with the City's management. The information
contained in this report is intended to present the reader with a comprehensive view of the City’s financial
position and the results of its operations for the fiscal year ending June 30, 2012, along with additional
disclosures and financial information designed to enable the reader to gain an understanding of the City’s
financial activities.
This report was prepared as prescribed in Governmental Accounting Standards Board (GASB) Statement No.
34, Basic Financial Statements and Management’s Discussions and Analysis-for State and Local
Governments. To facilitate the general public’s understanding and usefulness of the City of Saratoga’s
financial statements, GASB Statement 34 requires that management provide a narrative introduction,
overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion
and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read
in conjunction with it.
THE REPORTING ENTITY AND ITS SERVICES
The City of Saratoga (City), incorporated in 1956, is located 40 miles south of San Francisco in the Santa
Clara Valley. The City currently covers a land area of approximately 12 square miles and contains a
population of 30,363 at January 1, 2012 as reported by the Department of Finance. The City is a general law
city of the State of California and operates under a council-manager form of government. Policymaking and
legislative authority are vested in the City Council, which consists of a Mayor, Vice Mayor and three
additional council members. City Council members are elected at-large for staggered four-year terms. The
Mayor is selected annually by the City Council. The City Council is responsible for, among other things,
passing ordinances, adopting the budget, appointing members to the City’s seven advisory commissions and
hiring the City Manager and City Attorney. The City Manager is responsible for implementing the policies
and ordinances of the City Council, overseeing the daily operations of the City, and recommending
appointments of the City's department directors to the City Council.
The City provides a limited range of services including public safety, development regulation, public works,
community and recreation activities and events, and general administrative functions. As a minimal service
city, activities are supplemented through numerous contracts with others. Contracted services include, but
are not limited to, public safety, infrastructure maintenance, engineering services, legal services and
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recreation activities. The City is also committed to citizen participation in the evaluation, expansion and
enhancement of services.
Saratoga residents who wish to assist the City Council in forming government policy may do so by serving
on an advisory commission. The commissions act in an advisory capacity to the City Council, and are
comprised of the Heritage Preservation Commission, Library Commission, Parks and Recreation
Commission, Planning Commission, Public Safety Commission, and Youth Commission.
The financial reporting entity (the City) includes all the fund activity of the primary government, as well as
all of its component units. Component units are legally separated entities for which the City is fully
accountable. The City’s Saratoga Public Financing Authority (PFA) component unit which provided
financial oversight of local bond obligations was finalized in fiscal year 2005/06. The Authority’s final
financial report was issued for fiscal year 2006/07. Blended component units, although legally separate
entities, are in substance, part of the City’s operations and data from these units are combined with data of the
City. Accordingly, the operations of the Landscaping and Lighting Assessment Districts are reported in the
City’s financial statements.
ECONOMIC CONDITIONS AND OUTLOOK
As is typical for California cities, property tax and sales tax revenues are the City of Saratoga’s two largest
sources of funding. Effective with the 2006/07 fiscal year, the City began receiving a significant increase in
property tax revenues due to the passage of Assembly Bill 117. This legislation increased the property tax
percentage allocated to the City as a result of the Tax Equity Allocation (TEA) formula. Assembly Member
Cohn sponsored the bill which resulted from a joint effort of the City of Saratoga, Santa Clara County and 3
other affected cities – Cupertino, Monte Sereno and Los Altos Hills. While the TEA legislation restored the
cities to the full “low tax” level of 7%, the State required the cities to continue to remit the County’s ERAF
rate on these funds so that the bill would have no effect on the State budget. The ERAF rate the County
remits is 47.7%, compared to the City of Saratoga’s rate of 17.14%, thereby resulting in a significant impact
to the revenues received.
For Saratoga, these two main funding sources were considered to be stable and reliable, growing steadily.
While the City did not suffer a severe decline in these two revenue sources with the economic downturn of
2008, the backlash impact on planning fees, building permits and interest revenues contributed to create a
substantial overall revenue downturn over the next three years which resulted in staffing and operational
reductions.
In the spring of 2012, signs of recovery began to emerge with steady increases in planning fees and building
permits. Property Tax revenues increased, specifically from property transfer tax fees. Sales Tax revenues
also increased, back to the 2008 level. While encouraging, a slow growth pace is expected in future years as
the City’s structure consists mostly of built-out residential neighborhoods and a small number of commercial
developments thereby limiting large revenue sources.
California’s overall economy appears to be slowly improving; however, the State’s finances continue to be in
dire straits. While Proposition 1A protects the city from further ongoing unrestrained State takeaways of
property tax revenues, under the current economic crisis, the City expects to see shortfalls in unprotected
State or County based funding. The State’s November 2012 proposed tax increase bill may help offset
additional impacts to city governments if passed by voters, nonetheless fiscal uncertainty remains and the
City plans to continue to maintain operations at core service levels and prepare for funding impacts as the
new normal of government emerges. The Capital Improvement Program continues to be funded through
dedicated funding sources, grant money, and residual funding from prior year operations.
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FINANCIAL INFORMATION AND MAJOR INITIATIVES
Management of the City is responsible for establishing and maintaining an internal control structure designed
to ensure that the assets of the City are protected from loss, theft or misuse, and to ensure that adequate
accounting data is compiled to allow for the preparation of financial statements in conformity with generally
accepted accounting principles. The internal control structure is designed to provide reasonable, but not
absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1)
the cost of a control should not exceed benefits likely to be derived, and (2) the valuation of costs and benefits
requires estimates and judgments by management.
As a recipient of federal, state and local financial assistance, the City is also responsible for guaranteeing that
an adequate internal control structure is in place to ensure and document compliance with applicable laws and
regulations related to these programs. This internal control structure is subject to periodic evaluation by the
City’s management.
The City has practiced a passive approach to investments and maintains flexibility by managing a pooled
cash system. Under the pooled cash concept, the City invests the cash of all funds with maturities planned to
coincide with cash needs. Idle cash is invested in certain eligible securities as constrained by law and further
limited by the City’s investment policy. The goals of the City’s investment policy are safety, liquidity and
yield.
In addition, the City maintains extensive budgetary controls. The objective of these controls is to ensure
compliance with legal provisions embodied in the annual appropriated budget approved by the City Council.
Activities of the general fund, special revenue funds, capital projects funds and debt service funds are
included in the annual appropriation.
The level of budgetary control (i.e., the level at which expenditures cannot exceed the appropriated amount)
is at the fund level. The City also maintains an encumbrance accounting system as another method of
maintaining budgetary control. Encumbered amounts lapse at year-end with the exception of the Capital
Improvements Projects, which are multiple-year projects. On occasion, outstanding encumbrances of a
material nature are reviewed by the responsible department at year end, and if deemed critical, a
recommendation is made to the City Council to take action by Resolution to re-appropriate these funds into
the following year’s budget.
The fiscal year 2011/12 budget was developed with a focus on attaining a sustainable budget structure which
maintained service levels under expectations of continued revenue reductions. With the potential for further
takeaways due to the State’s fiscal struggles, departmental budgets were again held to non-expansive levels,
ongoing replacement funding was reduced, and staffing costs were lowered through a furlough placeholder in
anticipation of benefit restructuring through upcoming labor negotiations. Additionally, one-time funding
from reserves was used to balance the budget as a temporary bridge to offset expected revenue shortfalls
during the downturn.
OTHER INFORMATION
Independent Audit – California law requires cities to prepare an annual audit by an independent certified
public accountant. In addition to meeting the requirements set forth in statutes, the audit was also designed to
meet the requirements of the federal Single Audit Act of 1984, as amended, and the related U.S. Office of
Management and Budget’s Circular. Generally accepted auditing standards set forth in the General
Accounting Office’s Government Auditing Standards were used by the auditors in conducting the
engagement. The auditor’s unqualified report is included in the financial section of this report. Vavrinek,
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Trine, Day & Co., LLP Certified Public Accountants performed the City’s Fiscal Year 2011/12 financial
audit.
Awards – The Government Finance Officers Association (GFOA) of the United States and Canada awarded a
Certificate of Achievement to the City for its Excellence in Financial Reporting on the CAFR for the fiscal
year ended June 30, 2011. In order to be awarded a Certificate of Achievement, the City published an easily
readable and efficiently organized financial report. This report satisfied both generally accepted accounting
principles and applicable legal requirements.
The Certificate of Achievement is valid for a period of one year. We believe our current CAFR continues to
meet the Certificate of Achievement program’s requirements, and plan on submitting it to the GFOA to
determine its eligibility for another certificate.
Acknowledgements – This CAFR represents the culmination of numerous hours of hard work expended by
many individuals in the Finance & Administrative Services Department. In particular, we would like to
express our appreciation to Robert Edris, Sr. Accountant for his exemplary preparation of this annual
financial report, and to our supporting staff members: Glenda Cracknell, Sr. Accountant; Ann Xu,
Accountant; Julie Ingraham, and Karen Caselli, Accounting Technicians for all their assistance with the audit
and exemplary services throughout the year. Furthermore, we would like to thank Vavrinek, Trine, Day &
Co. LLP, CPA’s for their helpful assistance in the preparation of this report. Finally, we would like to give
credit to the City Council for their ongoing interest and support in planning, conducting and advising on the
operations of the City in a responsible and representative manner.
Respectfully submitted,
Dave Anderson Mary Furey
City Manager Finance and Administrative Services Director
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CITY OF SARATOGA
ELECTED OFFICIALS AND
ADMINISTRATIVE PERSONNEL
As of June 30, 2012
CITY COUNCIL
Chuck Page - Mayor
Jill Hunter – Vice Mayor
Howard Miller
Emily Lo
Manny Cappello
CITY STAFF
Dave Anderson – City Manager
Crystal Morrow – City Clerk
Mary Furey – Finance & Administrative Services Director
James Lindsay – Community Development Director
John Cherbone – Public Works Director
Michael Taylor – Recreation & Facilities Director
CITY ATTORNEY
Richard S. Taylor – Shute, Mihaly & Weinberger
INDEPENDENT AUDITORS
Vavrinek, Trine, Day & Co., LLP, CPA
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City of Saratoga - Organization Chart
City AttorneyCity Manager
Community
Development
Department
Community
Facilities Division
1 Facility Maint.
Supervisor
1 Facility Maint.
Leadworker
Planning Division
1 Senior Planner
2 Assistant Planners
1 Arborist
1 Office Specialist
Engineering Division
1 Sr. Civil Engineer
1 Associate Engineer
.90 Administrative Analyst
.75 Office Specialist
Parks Division
1 Manager -Parks
1 Park Maint. Leadworker
1 Park Maint. Specialist
5.90 Park Maint. Workers
Finance Division
.90 Accountant
3 Accounting Technicians
Information Technology
Division
1 IT Analyst
Administrative
Services Department
Administrative Services
Director
Recreation &
Facilities Department
Recreation & Facilities
Director
Public Works
Department
Public Works
Director
Recreation Services
Division
1 Senior Recreation
Supervisor
1 Recreation Supervisor
Streets and Fleet Division
1 Manager -Streets and Fleet
1 Street Maint. Leadworker
1 Street Maint. Specialist
4 Street Maint. Workers
Building Division
1 Building Official
2 Building Inspectors
1 Code Compliance
Specialist
Citizen Advisory
Commissions and
Committees
Citizens of Saratoga
Elected City Council
Human Resources Division
1 HR Manager
City Manager's
Office
1 Administrative
Analyst
Office of the City
Clerk
1 City Clerk
.45 Deputy City Clerk
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FINANCIAL SECTION
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9
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the
City Council of the City of Saratoga
Saratoga, California
We have audited the accompanying financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of City of Saratoga (the City), as of and for the year ended June 30, 2012,
which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the City’s management. Our responsibility is to express opinions on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Governmental Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for
our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, each major fund, and the aggregate remaining fund information
of the City of Saratoga, as of June 30, 2012, and the respective changes in financial position, and where
applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted
in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2012, 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 the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
5000 Hopyard Road, Suite 335 Pleasanton, CA 94588 Tel: 925.734.6600 Fax: 925.734.6611 www.vtdcpa.com
F R E S N O L A G U N A H I L L S P A L O A L T O P L E A S A N T O N R A N C H O C U C A M O N G A R I V E R S I D E S A C R A M E N T O
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Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and required supplementary information as outlined 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 ap propriate
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.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City of Saratoga, California’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 basic
financial statements. The combining individual non-major fund statements and schedules have been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a
whole. The introductory and statistical sections have not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.
Pleasanton, California
November 12, 2012
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
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INTRODUCTION
The following provides a narrative overview and analysis of the fiscal operations during the fiscal year
ended June 30, 2012 for the City of Saratoga. The Management Discussion and Analysis (MD&A) is to
be read in conjunction with the annual Transmittal Letter and the Basic Financial Statements.
FISCAL YEAR 2011/12 FINANCIAL HIGHLIGHTS
The City's total net assets were $125,387,400, comprised of $111,201,676 for investment in
capital assets, net of depreciation and related debt; $1,938,101 restricted for specific purposes;
and $12,247,623 unrestricted net assets (reference pg #25).
Total City revenues were $22,486,326 which consists of program revenue of $9,282,412 and
general revenues of $13,203,914 (reference pg #26).
The City’s expenses were $20,909,353 (reference pg #26).
Total Governmental Fund’s fund balances were $13,898,245, consisting of $8,929,121 in the
General Fund, $3,544,205 in the Capital Improvement Funds, and $1,424,919 in the Other
Governmental Funds (reference pg #27).
General Fund revenues were $16,230,631, while General Fund expenditures were $14,710,796
(reference pg #27).
THE BASIC FINANCIAL STATEMENTS
The Basic Financial Statements are comprised of 1) Government-wide (City-wide) Financial Statements, and;
2) Fund Financial Statements. These two sets of financial statements provide the reader two different
perspectives of the City's financial activities and financial position.
Government-Wide Financial Statements provide a longer-term view of the City's activities as a whole, and
comprise the Statement of Net Assets and the Statement of Activities. The Statement of Net Assets provides
information about the financial position of the City as a whole, 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
information about all the City's revenues and all its 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
explains in detail the change in Net Assets for the fiscal year.
All of the City's activities are required to be grouped into government activities and business-type activities.
The entire amount in the Statement of Net Assets and the Statement of Activities are also required to be
separated into governmental activities or business-type activities in order to provide a summary of these two
activities of the City as a whole. In the case of the City of Saratoga, there are no business-type activities as of
June 30, 2012.
Fund Financial Statements report the City's operations in more detail than the 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 only current revenues and expenditures and fund balances; they exclude capital
assets, long-term debt, and other long-term amounts.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
12
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. Major funds are explained below.
The Government-Wide Financial Statements
Government-wide financial statements are prepared on the accrual basis, which means they measure the flow
of all economic resources of the City as a whole. The Statement of Net Assets 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 developer and recreation program fees.
Business-Type Activities - This category includes enterprise activities such as water, sewer, and utilities.
Unlike governmental services, these services are fully supported by charges paid by users based on the
amount of services they use. The City of Saratoga does not have any business-type activities at this time.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
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 are 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 only
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 categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental Funds - The City's basic services are reported in governmental funds, which focus on how
money flows into and out of those funds and the balances available at year-end. Financial statements are
prepared on the modified accrual basis, which means they measure only current financial resources and uses.
Carrying amounts for capital assets and other long-lived assets, along with long-term liabilities are not
presented on the balance sheet in the governmental fund financial statements. Unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the fiscal year.
Such information may be useful in evaluating the City's near-term financing requirements.
Proprietary Funds – Internal service funds are an accounting device used to accumulate and allocate costs
internally among the City’s various functions. The City uses internal service funds to account for liability
and risk management, workers compensation, office equipment support services, information technology
services, vehicle and building maintenance, and vehicle and information technology equipment
replacement. Because the internal service funds benefit the governmental functions, they have been
included with the governmental activities in the government-wide financial statements.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
13
Fiduciary Funds – These funds account for assets held by the City in a trustee capacity or as an agent for
individuals, private organizations, other governmental units, and/or other funds. Fiduciary funds are not
reflected in the government-wide financial statements because these resources are not available to support
the City's programs. Currently the City does not have any fiduciary funds.
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements provide additional information that is essential to a full understanding of
the data provided in the government-wide and fund financial statements. The notes can be found
immediately following the fund financial statements.
REQUIRED SUPPLEMENTARY INFORMATION
Required supplementary information other than through the MD&A follows the Notes 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.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net assets may serve over time as an indicator of the City's financial position. The City's Total Net Assets
increased $1,576,973, from $123,810,427 in fiscal year 2010/11 to $125,387,400 in fiscal year 2011/12.
The most significant portion of the City's net assets ($111,201,676 or 88.7%) accounts for its investment in
capital assets, (e.g., land, buildings, general government infrastructure, equipment, etc.) less any related debt
used to acquire those assets that are still outstanding. These capital assets represent infrastructure which
provides services to the citizens, consequently, these assets are not available for future spending.
$1,938,101 or 1.5% of the City's net assets are subject to external restrictions on how they may be used. Of
these restricted net assets, $513,182 is restricted for lighting and landscaping assessment districts
$562,504 is restricted to environmental programs, and $862,415 is for repayment of long-term debt.
The remaining $12,247,623 or 9.8% of the City's net assets are unrestricted and may be used to meet the
City's ongoing obligations to citizens and creditors.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
14
Governmental Activities
2012 2011
Assets
Current assets 18,023,582$ 16,825,492$
Non-current assets - 45,004
Capital assets 123,196,676 122,620,887
Total Assets 141,220,258 139,491,383
Liabilities
Current liabilities 4,051,633 3,123,915
Long-term debt 11,781,225 12,557,041
Total Liabilities 15,832,858 15,680,956
Net Assets
Investment in capital assets, net of related debt 111,201,676 110,015,887
Restricted for Special Assessment Funds 513,182 504,125
Restricted for Environmental Services 562,504 513,182
Restricted for Debt Service 862,415 850,657
Unrestricted 12,247,623 11,926,576
Total Net Assets 125,387,400$ 123,810,427$
Net Assets
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
15
Governmental Activities Increase
Functions/Programs 2012 2011 (Decrease)
Program Revenues
Charges for services 5,625,974$ 6,257,418$ (631,444)$
Operating grants and contributions 1,319,318 400,692 918,626
Capital grants and contributions 2,337,120 1,221,238 1,115,882
Total Program Revenues 9,282,412 7,879,348 1,403,064
General Revenues
Property taxes 8,456,687 8,199,341 257,346
Sales taxes 1,100,489 990,579 109,910
Local taxes 683,383 632,500 50,883
Franchise taxes 1,852,390 1,821,131 31,259
Motor vehicle in-lieu 15,830 145,782 (129,952)
Intergovernmental revenues 910,331 773,197 137,134
Investment earnings 66,623 64,598 2,025
Other revenues 118,181 97,472 20,709
Total General Revenues 13,203,914 12,724,600 479,314
Expenses
General and intergovernmental services 3,486,353 4,367,615 (881,262)
Public safety 4,299,853 4,457,478 (157,625)
Public works 9,121,435 6,644,742 2,476,693
Community services 1,995,948 1,846,393 149,555
Community development services 1,553,119 1,838,918 (285,799)
Interest on long-term debt (unallocated)452,645 656,126 (203,481)
Total Expenses 20,909,353 19,811,272 1,098,081$
Increase / (Decrease) in Net Assets 1,576,973 792,676 784,297
Net Assets, Beginning of Year 123,810,427 123,017,751 792,676
Net Assets, End of Year 125,387,400$ 123,810,427$ 1,576,973$
Statement of Changes in Net Assets
As shown in the above Statement of Changes in Net Assets schedule, the net change in program revenues
from the prior fiscal year for governmental activities is an increase of $1,403,064. The net change in
general revenues from the prior year is an increase of $479,314, for a total increase in revenues of
$1,882,378. The net change in expenses from the prior year was an increase of $1,098,081.
With total program and general revenues for fiscal year 2011/12 at $22,486,326 and total expenses at
$20,909,353, the net activity resulted in an increase in Net Assets of $1,576,973.
An analysis and graphical representation of the changes in revenues and expenditures by type of
significant events follows:
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
16
CHART OF REVENUE INCREASE OR (DECREASE)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
FY 2010/11 FY 2011/12
Total Revenues by Category
Increases in Revenues
Overall, the City of Saratoga saw a net increase in revenues during fiscal year 2011/12; however, most of
the increases are one-time revenues. For program revenues, the change from the prior year for
governmental activities is an increase of $1,403,064 resulting from the following:
A $918,626 increase in Operating Grants represents grants from Santa Clara County and the Mid-
Peninsula Open Space District for the purchase of 64 acres of inactive quarry land located off
Highway 9 for future use as an open space trailhead park, and another grant for street maintenance
resurfacing work.
A $1,115,882 increase in Capital Grants and Contributions comes from a number of grants for capital
improvements, such as installation of LED streetlights in the village, Highway 9 Safety
Improvements, Quito Road Bridge replacement work, CDBG funded signal light and ramp projects
for ADA compliance, and completion of the De Anza Trail project.
The net change in general revenues from the prior year is an increase of $479,314. The most significant
changes from the prior year include:
A $257,346 increase in Property Tax revenue, primarily representing growth in supplemental
property tax and documentary transfer tax which reflects an increase in property turnover.
Growth in the City’s retail sales resulted in a $109,910 increase in Sales Tax.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
17
A $50,883 increase in Local Taxes represents a strengthening economy through rising hotel tax
receipts.
Intergovernmental revenues reflect an increase of $137,134 due primarily increased Gas Tax and
Prop 42 revenues from the prior year.
Decreases in Revenues
A $631,444 decrease in Charge for Services (in which revenues are directly related to program
expenses) represents a combination of various operational activities. Notable decreases include
approximately $38,000 in recreation class revenue, $310,000 in park development fees, $68,000 in
engineering development fees, $40,000 in bond debt assessments, and $412,000 less in capital project
revenues.
A $129,952 decrease in Motor Vehicle-in-Lieu (VLF) revenues resulted from the State eliminating
VLF revenue allocation to local agencies as of July 1, 2011.
CHART OF EXPENSE INCREASE OR (DECREASE)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
FY 2010/11 FY 2011/12
Total Expenses by Category
The net change in expenses for Governmental Activities was an increase of $1,098,081. Expenditures
with significant events include:
Increases in Expenses
Increase in expenditures from the prior year was limited to the Public Works and Community Services
expenditure categories. These too however, are in large part one-time occurrences. Increase resulted
from the following:
Public Works (primarily street capital improvement projects) increased in total by $2,476,693, and
Community Services (primarily park capital improvement projects) increased by $149,555.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
18
Decreases in Expenses
While there were several categories of notable decreases in expenditures, the significant increase in
capital project expenditures last fiscal year offset the decreases to result in an overall net increase in
expenses. Notable decreases included the following:
General and intergovernmental services decreased by $881,262, primarily from expenditure
reductions in General Fund staff positions, vacancy savings, benefit costs as a result of labor
negotiations, and legal costs.
Public Safety decreased by $157,625 as a result of a reduction in the Sheriff’s law enforcement
contract
Community Development Services decreased by $285,799, which in large part reflects the $210,748
close out of the Saratoga Housing and Rehabilitation Program (SHARP) as of the end of fiscal year
2010/11. The remainder of the savings is the result of a vacancy savings in the code compliance
program.
Interest on Long Term Debt decreased by $203,481 as a result of the General Obligation Bond
refunding in fiscal year 2011/12. The decrease in interest rates provided an opportunity to save
Saratoga taxpayers a significant amount ($2.67 million over the next twenty years) on the outstanding
debt through refunding the original 2001 Library Building bond issue.
MAJOR AND OTHER GOVERNMENTAL FUNDS: CHANGE IN FUND BALANCE
A summary of the changes in fund balance of the major and other government funds are presented below:
Other
Capital Governmental
General Improvement Funds
Total Revenues 16,230,631$ 4,147,953$ 1,423,819$
Total Expenditures 14,710,796 5,178,900 1,573,420
Revenues Over
(Under) Expenditures 1,519,835 (1,030,947) (149,601)
Bond proceeds - - 11,995,000
Payment for refunded bonds - - (12,235,000)
Net original issue premium - - 459,738
Transfers in 205,222 304,963 -
Transfers out (280,000) (205,222) -
Net change in fund balances 1,445,057 (931,206) 70,137
Beginning of year 7,484,064 4,475,411 1,354,782
End of year 8,929,121$ 3,544,205$ 1,424,919$
Major Funds
Included in the Major Funds are the General Fund and the Capital Improvement Fund. The Other
Governmental funds include twenty-five Lighting and Landscape Assessment Districts, accounted for as
one fund in the financials and the Library Bond Debt Service Fund. The net change of the Major and
Other Governmental Funds fiscal year transactions was an increase of $583,988.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
19
General Fund - As shown in the preceding Major Funds table, the net change in the General Fund's Fund
Balance was an increase of $1,445,057. A net gain resulted from the net of operating revenues coming in
over operating expenditures. Most revenue categories increased from the prior year for a net revenue gain
of $488,516, most notably property and sales tax revenues, and development fees. Total expenditures
decreased by $905,501, with salary and benefit costs accounting for $636,000 of the reduction, and
contract services for another $294,000.
Revenues are budgeted conservatively based upon prior year experience and specific information, while
expenditures are limited to anticipated program needs at not-to-exceed projected funding levels. With the
economy strengthening late in the fiscal year, revenue levels improved beyond expectations. In addition,
ongoing efforts to hold costs down throughout the year resulted in a signific ant expenditure savings for
the year.
Capital Improvement Project Fund - As shown in the table above, the net change in the Capital
Improvement Fund has a decrease of $931,206 due to a large amount of capital improvement project
work over the course of the year.
Other Governmental Funds – Of the net $70,137 increase in Other Governmental Funds, the collective
25 Landscaping & Lighting funds comprise $58,379 of the total. The Library Bond debt service fund
accounts for the remaining $11,758 of the increase. Both net gains represent the excess of revenue over
expenditures in the normal course of operations.
GENERAL FUND – BUDGETARY HIGHLIGHTS
Changes from the City's General Fund original budget to the final budget are detailed in the Required
Supplementary Information Section along with a comparison to actual activity for the year ended.
Changes to the City's budget that increase or decrease appropriations in a fund must be approved by a
resolution of the City Council. Modifications to the budget that are a realignment of fiscal activities with
no impact to the fund's bottom line may be approved by the City Manager.
Adopted to Final Budget
Fiscal Year Ended June 30, 2012
Adopted Budget Final
Budget Adjustments Budget
Expenditures 15,392,348$ 61,100 15,453,448$
Transfers out 260,000$ 20,000 280,000$
The General Fund adopted expenditure budget was $15,392,348 and adopted transfers out was $260,000.
At the City’s mid-year review, most General Fund costs were tracking in line with the budget, however
adjustments were requested for the Tree Dedication programs of $5,000 for additional tree purchases and
a budget adjustment of $56,000 for labor negotiation which were more extensive than expected. A
transfer out of $20,000 was for increased funding for the Village Façade Improvement Program.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
20
CAPITAL ASSETS
The City of Saratoga elected to use the "Modified Approach" as defined by GASB Statement No. 34 for
infrastructure reporting in which eligible infrastructure capital assets are not required to be depreciated if
the following requirements are met:
The City manages the assets using an asset management system which requires that the City (1)
perform an up-to-date inventory; (2) perform condition assessments and summarize the results using
a measurement scale; and (3) estimate the annual amount to preserve the assets at the established
condition assessment level.
The City documents that the eligible infrastructure capital assets are being preserved approximately
at or above the established and disclosed condition assessment level.
City policy is to achieve an average Pavement Condition Index (PCI) rating of 70 for all streets, at
minimum. The City’s overall rating was 76 with 83% of streets rated as Excellent to Very Good, 14% of
streets are rated as "Good", 3% of streets rated “Poor”, and 0% of streets are rated as "Very Poor". The
City spent $2,856,603 to maintain and preserve eligible infrastructure assets. For more detailed
information on Capital Assets activity, please refer to Note 4 in the section entitled "Notes to the Basic
Financial Statements" and Note 2 in the "Required Supplementary Section". The latest assessment study
was conducted during the fall of 2010. A road assessment study update will be conducted in the fall of
2013.
As of June 30, 2012, the City had $123,196,676 invested in a variety of capital assets as reflected in the
following schedule, which represents an increase of $575,789 or a 0.5% increase from the prior year.
Governmental Activities
2012 2011
Land 14,510,401$ 13,135,756$
Building and structures 16,969,831 17,407,842
Machinery and equipment 604,135 690,356
Infrastructure 83,945,356 85,138,639
Construction in progress 7,166,953 6,248,294
Total Capital Assets, Net of Depreciation 123,196,676$ 122,620,887$
Capital Assets at Year End
Net of Depreciation
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
21
The following reconciliation summarizes the changes in Capital Assets.
Balance Balance
July 1, 2011 Additions Retirements Reclassification June 30, 2012
Land 13,135,756$ 750,000$ -$ 624,645$ 14,510,401$
Building and structures 23,462,738 - - 148,852 23,611,590
Machinery and equipment 2,487,345 22,487 (132,534) 45,484 2,422,782
Infrastructure 104,903,913 - - 25,000 104,928,913
Construction in progress 6,248,294 1,782,425 (19,785) (843,981) 7,166,953
Depreciation (27,617,159) (1,959,338) 132,534 - (29,443,963)
Total Capital Assets,
Net of Depreciation 122,620,887$ 595,574$ (19,785)$ -$ 123,196,676$
Changes in Capital Assets
Major capital projects in progress during fiscal year 2011/12 included the following expenditures:
Congress Springs Quarry Land - $1,000,000 ($750,000 funded by donations)
Saratoga Avenue Resurfacing - $143,522
Street Resurfacing funded by VTA Grant - $565,000
Highway 9 Traffic Safety - $126,164
Village LED Street Lights - $381,803
Village Sidewalk, Curb, and Gutters - $161,465
Village – Phase II Design - $172,554
UPRR/De Anza Trail - $557,902
Library Improvements - $196,686
Additional information on Capital Assets is included in Note 4 to the financial statements.
DEBT AND OTHER LONG-TERM OBLIGATION ADMINISTRATION
The net change in outstanding obligations for the City of Saratoga is a decrease of $245,787, with
$172,154 of this amount a reduction in long-term debt. During the fiscal year, the City refunded the 2001
General Obligation Bonds and issued the 2011 General Obligation Bonds to take advantage of the
favorable interest rate environment.
Governmental Activities
2012 2011
2001 General Obligation Bond -$ 12,605,000$
2011 General Obligation Bond 11,995,000 -
Net Original Issue Premuim 437,846 -
Compensated absences 646,213 719,846
Total Outstanding Debt 13,079,059$ 13,324,846$
Outstanding Long-Term Obligation at Year End
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
22
The current portion of long-term debt ($455,000 for the 2011 General Obligation Bonds for fiscal year
2012 and $370,000 for the refunded 2001 General Obligation Bonds for fiscal year 2011), is classified as
a current liability in the City's Statement of Net Assets.
2001 General Obligation Bond - During the fiscal year, the City made debt service payments that include
a principal reduction of $370,000 on the City's 2001 General Obligation $15,000,000 bond issue. This
bond issue was retired in July, 2011.
2011 General Obligation Bond – The City refunded the 2001 General Obligation Bonds and in their place
issued general obligation bonds in the amount of $11,995,000 on July 14, 2011 with interest rates on the
bonds ranging from 2.0% to 4.0%, ending in fiscal year 2031/32. No principal payment was due during
fiscal year 2011/12.
Compensated absences are accrued liabilities for vested and unpaid vacation and sick pay. The
compensated absences balance decreased during the fiscal year by $73,633 due to payouts of unused
compensated absences of retiring and terminated employees, and general employee payouts. An
estimated current liability of $404,988 is expected to be used in the next fiscal year.
Additional information on outstanding obligations can be found in Note 5 to the financial statements.
ECONOMIC FACTORS
At the time the fiscal year 2011/12 budget was developed, the nation was in the throes of the economic
recession. Locally, it was expected that a “new normal” of government was upon us:
Property prices had stabilized at diminished levels and property tax revenue growth had stagnated
Retail sales would remain sluggish for years to come, and sales tax revenues would remain flat
Development would continue at diminished levels, with very little increase in revenues
Interest rates would remain at historic lows for years, practically eliminating interest earnings
With revenue projections at lowered levels, a number of expenditure reductions were required to balance
the budget:
Core services levels would be maintained through continued operational budget reductions
Internal service funds would continue to be underfunded
Limited capital funding appropriations
Development Reserve budgeted for use per established policy
Pension Reform
In the midst of the economic downturn, benefit costs were escalating. Taxpayers demanded cutbacks to
government salaries and benefits as the pathway to attain fiscal sustainability. Approximately $300,000
of savings was budgeted through reductions in staffing costs.
Initially this was structured as furlough days; however upcoming labor negotiations would finalize the
saving mechanism during the course of the year. In negotiations, labor costs were reduced through
pension reform. Most notable of the changes have future employees falling under a lower cost pension
plan and the capping of medical benefits, and current employees are now paying the employee portion of
the pension benefit plan. These changes are expected to contribute significantly toward the City having a
sustainable budget in future years.
CITY OF SARATOGA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012
23
As a local (Bay Area) economic revival has led to property tax, sales tax, and development revenues
increasing during the course of the year, fiscal uncertainty remains for the foreseeable future, and the City
plans to continue to maintain operations at core service levels and prepare for funding impacts as the new
normal of government continues to emerge.
REQUEST FOR FINANCIAL INFORMATION
This financial report is designed to provide a general overview of the City of Saratoga's finances for all of
Saratoga's residents, taxpayers, customers, investors, and creditors. This financial report seeks to
demonstrate the City's accountability for the money it receives. Questions concerning any of the
information provided in this report or requests for additional information should be addressed to the
Administrative Services Department, 13777 Fruitvale Avenue, Saratoga, California 95070.
24
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BASIC FINANCIAL STATEMENTS
This page is intentionally blank
CITY OF SARATOGA
STATEMENT OF NET ASSETS
JUNE 30, 2012
25
Primary Government
Governmental
Activities
ASSETS
Current Assets:
Cash and investments 15,705,028$
Receivables:
Accounts 2,305,868
Interest 12,686
Total Current Assets 18,023,582
Noncurrent Assets:
Capital Assets:
Non-depreciable 70,832,973
Depreciable, net 52,363,703
Total Capital Assets 123,196,676
Total Noncurrent Assets 123,196,676
Total Assets 141,220,258
LIABILITIES
Current Liabilities:
Accounts payable 1,487,083
Accrued payroll 118,584
Other payable 36,410
Interest payable 173,765
Deposits payable 916,710
Claims payable 21,247
Long-term obligations - due within one year 881,880
Total Current Liabilities 3,635,679
Noncurrent Liabilities:
Long-term obligations - due in more than one year 12,197,179
Total liabilities 15,832,858
Net Assets
Investment in capital assets, net of related debt 111,201,676
Restricted for:
Environmental funds 513,182
Special assessment funds 562,504
Debt service 862,415
Total Restricted 1,938,101
Unrestricted 12,247,623
Total Net Assets 125,387,400$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
JUNE 30, 2012
26
Net (Expense)
Revenue and
Changes in
Program Revenues Net Assets
Primary
Operating Capital Government
Charges for Grants and Grants and Governmental
Functions/Programs Expenses Services Contributions Contributions Total Activities
Primary Government:
Governmental Activities:
General and intergovtl services 3,486,353$ 139,936$ -$ -$ 139,936$ (3,346,417)$
Public safety 4,299,853 594,129 100,000 - 694,129 (3,605,724)
Public works 9,121,435 2,079,334 469,318 2,337,120 4,885,772 (4,235,663)
Community services 1,995,948 889,926 750,000 - 1,639,926 (356,022)
Community development services 1,553,119 1,922,649 - - 1,922,649 369,530
Interest on long-term debt (unall.)452,645 - - - - (452,645)
Total 20,909,353$ 5,625,974$ 1,319,318$ 2,337,120$ 9,282,412$ (11,626,941)$
General Revenues:
Taxes
Property taxes 8,456,687
Sales taxes 1,100,489
Local taxes 683,383
Franchise taxes 1,852,390
Motor vehicle-in-lieu 15,830
Total taxes 12,108,779
Intergovernmental 910,331
Investment earnings 66,623
Other revenues 118,181
Total General Revenues 13,203,914
Change in Net Assets 1,576,973
Net Assets - Beginning of Year 123,810,427
Net Assets - End of Year 125,387,400$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
GOVERNMENTAL FUNDS - BALANCE SHEET
JUNE 30, 2012
27
Other Total
Capital Governmental Governmental
General Improvement Funds Funds
ASSETS
Cash and investments 9,859,219$ 2,871,500$ 1,457,810$ 14,188,529$
Receivables:
Accounts 587,485 1,591,861 3,204 2,182,550
Interest 11,670 - 1,016 12,686
Total assets 10,458,374$ 4,463,361$ 1,462,030$ 16,383,765$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 472,234$ 917,950$ 37,111$ 1,427,295$
Accrued payroll 103,889 1,206 - 105,095
Deposits payable 916,710 - - 916,710
Other payable 36,410 - - 36,410
Deferred revenue 10 - - 10
Total liabilities 1,529,253 919,156 37,111 2,485,520
Fund Balances:
Restricted:
Environmental services 513,182 - - 513,182
Special assessment funds - - 562,504 562,504
Debt service - - 862,415 862,415
Committed:
Capital project funds - 3,544,205 - 3,544,205
Hillside stability 600,000 - - 600,000
Assigned:
Capital projects 1,923,658 - - 1,923,658
Carryforwards 247,201 - - 247,201
Unassigned:
Operations 2,914,426 - - 2,914,426
Economic uncertainy 1,500,000 - - 1,500,000
Development services 667,233 - - 667,233
Uncollected deposits 44,791 - - 44,791
Other unassigned 518,630 - - 518,630
Total fund balances 8,929,121 3,544,205 1,424,919 13,898,245
Total liabilities and fund balances 10,458,374$ 4,463,361$ 1,462,030$ 16,383,765$
The accompanying notes are an integral part of these financial statements
Major Funds
CITY OF SARATOGA
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET ASSETS
JUNE 30, 2012
28
Total Fund Balances - Total Governmental Funds 13,898,245$
Amounts reported for governmental activities in the statement of net assets 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 70,832,973
Depreciable capital assets, net 52,297,554
Total Capital Assets 123,130,527
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.(173,765)
Internal service funds are used by management to charge the costs of office stores,
vehicle and equipment maintenance and replacement, information services and replacement,
building maintenance, risk management, and workers compensation. The assets and
liabilities of the internal service funds are included in the governmental activities in
the statement of net assets 1,518,598
Long-term receivables were not current available resources and therefore, were offset by
a deferred revenue amount equal to the net receivable in the governmental funds.92,854
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 (11,995,000)
Compensated absences (646,213)
Net original issue premium (437,846)
Total Long-Term Obligations (13,079,059)
Net Assets of Governmental Activities 125,387,400$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGE
IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2012
29
Other Total
Capital Governmental Governmental
General Improvement Funds Funds
REVENUES:
Property taxes 8,272,456$ -$ 184,242$ 8,456,698$
Special assessments 7,490 1,235,325 1,242,815
Sales taxes 1,100,489 - - 1,100,489
Other local taxes 683,383 - - 683,383
Licenses & permits 1,184,099 543,714 - 1,727,813
Fines & forfeiture 233,708 300 - 234,008
Intergovernmental - Federal - 1,915,187 - 1,915,187
Intergovernmental - State 232,505 1,495,452 - 1,727,957
Intergovernmental - Other 42,343 30,531 - 72,874
Franchise fees 1,852,390 - - 1,852,390
Use of money and property 552,672 32,190 4,252 589,114
Other revenue 2,069,096 130,579 - 2,199,675
Total revenues 16,230,631 4,147,953 1,423,819 21,802,403
EXPENDITURES:
Current:
General and intergovernmental services 2,924,958 - 219,738 3,144,696
Public safety 4,310,113 - - 4,310,113
Public works 4,318,432 - 432,862 4,751,294
Community services 1,269,497 - - 1,269,497
Community development services 1,887,796 - - 1,887,796
Capital outlay - 5,178,900 - 5,178,900
Debt service:
Principal - - 370,000 370,000
Interest and fiscal charges - - 550,820 550,820
Total expenditures 14,710,796 5,178,900 1,573,420 21,463,116
REVENUES OVER
(UNDER) EXPENDITURES 1,519,835 (1,030,947) (149,601) 339,287
OTHER FINANCING SOURCES (USES):
Bond proceeds - - 11,995,000 11,995,000
Payment for refunded bonds - - (12,235,000) (12,235,000)
Net original issue premium - - 459,738 459,738
Transfers in 205,222 304,963 - 510,185
Transfers out (280,000) (205,222) - (485,222)
Total other financing sources (uses)(74,778) 99,741 219,738 244,701
Net change in fund balances 1,445,057 (931,206) 70,137 583,988
FUND BALANCES:
Beginning of year 7,484,064 4,475,411 1,354,782 13,314,257
End of year 8,929,121$ 3,544,205$ 1,424,919$ 13,898,245$
The accompanying notes are an integral part of these financial statements.
Major Funds
CITY OF SARATOGA
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TO THE
GOVERNMENT-WIDE STATEMENT OF ACTIVITIES AND CHANGES IN NET
ASSETS
FOR THE YEAR ENDED JUNE 30, 2012
30
Net Change in Fund Balances - Total Governmental Funds 583,988$
Amounts reported for governmental activities in the Statement of Activities and Changes
in Net Assets were different because:
Governmental Funds report capital outlay as expenditures. However, in the Government-Wide
Statement of Activities and Changes in Net Assets, the cost of those assets was allocated over
their estimated useful lives as depreciation expense. This is the amount of capital assets
recorded in the current period.1,775,127
Governmental Funds focus on current financial resources. Consequently, donations of assets
that will be used in operatons, rather than sold (capital assets), are never reported in
governmental funds but are reported on the Government-Wide statements.750,000
Depreciation expense on capital assets was reported in the Government-Wide Statement
of Activities and Changes in Net Assets, but it did not require the use of current financial
resources. Therefore, depreciation expense was not reported as expenditures in the
Governmental Funds.(1,864,924)
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.(6,144)
Certain revenues were not recorded or recorded as deferred revenue in the governmental funds
because they did not meet the revenue recognition criteria of availability. However, they were
included as revenue in the Government-Wide Statement of Activities and Changes in
Net Assess under the full accrual basis.(5,036)
Long-term compensated absences and claims payables were reported in the Government-Wide
Statement of Activities and Changes in Net Assets, 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 73,633
Repayment of bond principal was an expenditure in governmental funds, but the repayment
reduced long-term liabilities in the Government-Wide Statement of Net Assets.
Long-term debt repayments 610,000
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 (437,846)
Interest expense on long-term debt was reported in the Government-Wide Statement of
Activities and Changes in Net Assets, 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.98,175
Change in Net Assets of Governmental Activities 1,576,973$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2012
31
Governmental
Activities -
Internal
Service Funds
ASSETS
Current assets:
Cash and investments 1,516,499$
Accounts receivable 30,474
Total current assets 1,546,973
Noncurrent assets:
Capital assets:
Machinery and equipment 724,059
Less: accumulated depreciation (657,910)
Total capital assets (net of
accumulated depreciation) 66,149
Total assets 1,613,122
LIABILITIES
Liabilities:
Current assets:
Accounts payable 59,788
Accrued payroll 13,489
Other payables 21,247
Total current liabilities 94,524
NET ASSETS
Investment in capital assets 66,149
Unrestricted 1,452,449
Total net assets 1,518,598$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2012
32
Governmental
Activities -
Internal
Service Funds
Operating revenues:
Charges for services 2,030,000$
Other operating revenues 83,082
Total operating revenues 2,113,082
Operating expenses:
Cost of services 1,006,223
Administration 993,626
Depreciation 94,414
Total operating expenses 2,094,263
Operating income (loss)18,819
Transfers out (24,963)
Change in net assets (6,144)
Total net assets - beginning 1,524,742
Total net assets - ending 1,518,598$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
JUNE 30, 2012
33
Governmental
Activities -
Internal
Service Funds
Cash flows from operating activities:
Receipts from customers and users 2,082,608$
Payments to suppliers (1,210,167)
Payments to employees (776,417)
Net cash provided (used) by operating activities 96,024
Cash flows from noncapital financing activities:
Transfers out (24,963)
Net cash used in nonoperating activities (24,963)
Cash flows from capital activities:
Acquisition of capital assets (10,000)
Net cash provided for the acquisition of capital assets (10,000)
Net increase in cash and cash equivalents 61,061
Cash and cash equivalents, beginning of year 1,455,438
Cash and cash equivalents, ending of year 1,516,499$
Reconciliation of operating income to net cash provided
by operating activities:
Operating income (loss)18,819$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation 94,414
Change in operating assets and liabilities:
(Increase) in accounts receivables (30,474)
Increase in accounts payable 6,153
Increase in claims payable 7,156
(Decrease) in accured payroll (44)
Net cash provided (used) by operating activities 96,024$
The accompanying notes are an integral part of these financial statements
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
34
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Saratoga, California, (the City) have been prepared in
conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies.
The Governmental Accounting Standards Boards (GASB) is the accepted standard setting body for
establishing governmental accounting and financial reporting principles. The more significant of the
City's accounting policies are described below.
A. Financial Reporting Entity
The City was incorporated as a municipal corporation in 1956 under the general laws of the State of
California, and had a population of 30,363 at June 30, 2012. The City is a largely residential community
located in the foothills of the Santa Cruz Mountains.
The City operated under the Council-Manager form of government, with five-elected Council members
served by a full-time City Manager and staff. At June 30, 2012, the City's staff comprised 54 full-time
and nine part-time employees, and numerous recreation seasonal employees who were responsible for the
following City provided services:
Public Safety - The City provides round-the-clock police services under a contract with the Santa
Clara County Sheriff's offices. Emergency management and Fire services are provided by a special
district. Code enforcement and inspection services are provided by City employees.
Public Works/Maintenance - The City builds and maintains its parks, streets, curbs, gutters, and
related public property with a force of 22 employees. Major projects may be contracted out to
reduce costs.
Community Development - Zoning administration, plan checking and advance planning services are
provided by 12 employees.
Culture, Recreation and Community Support services are provided by a total of 10 employees.
General Government services are provided by a total of 11 employees.
As required by GAAP, these basic financial statements present the City and its component units, entities
for which the City is considered to be financially accountable. The City Council acts as the governing
board. In addition, the City staff performs all administrative and accounting functions for these entities
and these entities provide their services entirely to the City. Blended component units, although legally
separate entities are, in substance, part of the City's operations and data from these units are combined
with data of the City. Discretely presented component units, on the other hand, are reported in a separate
column in the government-wide financial statements to emphasize their legal separateness from the City.
Each blended component unit has a June 30 year-end. The City had no discretely presented component
units.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
35
The following entity is reported as blended component unit:
Lighting and Landscaping Assessment District - The Lighting and Landscaping Assessment District
(the District) was established in 1980, for the levy and the collection of assessments upon the several lots
or parcels of land in the District, and for the construction or installation of improvements, including
maintenance. The District is reported as a blended component unit of the City because it has the same
Governing Board as the City. The activity for the District has been included in the accompanying basic
financial statements and no separate financial statements are issued.
B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for with a separate set of self-balancing
accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as
appropriate. Governmental resources are allocated to and accounted for in individual funds based upon
the purposes for which they are to be spent and the means by which spending activities are controlled.
Government-Wide Financial Statements
The City's government-wide financial statements include a Statement of Net Assets and a Statement of
Activities and Changes in Net Assets. 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, and long-term liabilities, are included in the accompanying Statement of Net Assets.
The Statement of Activities presents changes in net assets. Under the accrual basis of accounting,
revenues are recognized in the period in which they are earned while expenses are recognized in the
period in which the liability is incurred.
Certain types of transactions are reported as program revenues for the City in three categories:
Charges for services
Operating grants and contributions
Capital grants and contributions
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund
activities, payables, and receivables. All internal balances in the Statement of Net Assets have been
eliminated. The following interfund activities have been eliminated:
Transfers in/Transfers out
Internal Service Fund charges
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues,
Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds
aggregated. An accompanying schedule is presented to reconcile and explain the differences in net assets
as presented in these statements to the net assets presented in the government -wide financial statements.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
36
The City has presented all major funds that met the applicable criteria. The following funds are major
funds:
General Fund
The General Fund is used to account for all of the general resources of the City not specifically levied or
collected for other City funds and the related expenditures. The General Fund accounts for all financial
resources of the City which are not accounted for in another fund.
Capital Improvement Capital Projects Fund
This fund accounts for resources used for the major capital acquisition and construction activities.
All governmental funds are accounted for on a spending or "current financial resources" measurement
focus and the modified accrual basis of accounting. Accordingly, only current assets and current
liabilities 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.
Deferred revenues arise when potential revenues do not meet both the "measurable" and "available"
criteria for recognition in the current period. Deferred 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 deferred 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 fin ancial
statements, proprietary funds are presented using the “economic resources measurement focus”. This
means all assets and liabilities (whether current or noncurrent) associated with their activities are included
on their balance sheets. Proprietary fund type operating statements present increases (revenues) and
decreases (expenses) in total net assets.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
37
Proprietary fund operating revenues, such as charges for services, result from exchange transactions
associated with principal activity of the fund. Exchange transactions are those in which each party
receives and gives up essentially equal value. Non-operating revenues, such as subsidies, taxes, and
investment earnings result from nonexchange transactions or ancillary activities. Amounts paid to acquire
capital assets are capitalized as assets in the internal service funds financial statements.
Internal service funds account for charges to City departments for services provided, on a cost
reimbursement basis, in the following areas: general liability, workers’ compensation, office stores,
information technology services, vehicle maintenance, building maintenance, equipment replacement, and
information technology replacement.
Fiduciary Fund Financial Statements
During fiscal year 2011/12 the City has no fiduciary responsibility as prior reported agency funds have
been transferred to other outside government agencies.
C. Cash, Cash Equivalents and Investments
The City pools its available cash for investment purposes. The City's cash and cash equivalents are
considered to be cash on hand, demand deposits, and short-term investments with original maturity of
three months or less from the date of acquisition. Cash and cash equivalents are combined with
investments and displayed as Cash and Investments.
Deposit and Investment Risk Disclosures - In accordance with GASB Statement No. 40, Deposit and
Investment Disclosures (Amendment of GASB Statement No. 3), certain disclosure requirements, if
applicable, for Deposits and Investment Risks in the following areas:
Interest Rate Risk
Credit Risk
▬ Overall
▬ Custodial Credit Risk
▬ Concentrations of Credit Risk
Foreign Currency Risk
Other disclosures are specified including use of certain methods to present deposits and investments,
highly sensitive investments, credit quality at year-end and other disclosures.
The City participates in an investment pool managed by the State of California titled Local Agency
Investment Fund (LAIF), which has invested a portion of the pool funds in Structured Notes and Asset
Backed Securities. LAIF's investments are subject to credit risk with the full faith and credit of the State
of California collateralizing these investments. In addition, these Structured Notes and Asset -Backed
Securities are subject to market risk as to change in interest rates.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
38
D. Interfund Transactions
Interfund services provided and used are accounted for as revenue, expenditures or expenses, as
appropriate. Transactions that constitute reimbursements to a fund for expenditures/expenses initially
made from it that are properly applicable to another fund are recorded as expenditures/expenses in the
reimbursed fund. All other interfund transactions, except for interfund services provided and used and
reimbursements, are reported as transfers. Nonrecurring or nonroutine permanent transfers of equity are
reported as residual equity transfers. All other interfund transfers are reported as transfers.
E. Capital Assets
Capital assets, which include land, buildings, improvements, furniture, equipment and infrastructure
assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental
activities in the government-wide financial statements. Capital assets were recorded at historical cost or
estimated historical cost if actual cost was not available. Donated assets were valued at their fair market
value on the date of donation. City policy has set the capitalization threshold for reporting capital assets
at $10,000. The City has chosen the Modified Approach for reporting the streets subsystem of
infrastructure capital assets.
Depreciation is recorded on a straight-line basis over the useful lives of the assets as follows:
Buildings and structures 40 Years
Machinery and equipment 5 to 10 Years
Infrastructure 15 to 50 Years
In June 1999, GASB issued Statement No. 34 Basic Financial Statements – and Management’s
Discussion and Analysis – for State and Local Governments which requires the inclusion of infrastructure
capital assets in local governments' basic financial statements. In accordance with Statement No. 34, the
City has included the value of all infrastructure in its basic financial statements.
The City defines infrastructure as the basic physical assets that allow the City to function, which includes
the street system, park and recreation lands and improvements system; storm water conveyance and
drainage system, buildings combined with site amenities such as parking and landscaping areas used by
the City in the conduct of its business.
Each major infrastructure system can be divided into subsystems. For example the street system can be
subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices
(signs, signals and pavement markings), landscaping and land. These subsystems were not delineated in
the basic financial statements. The appropriate operating department maintains information regarding the
subsystems. The City elected to use the Modified Approach as defined by GASB Statement No. 34 for
infrastructure reporting of its streets, concrete and asphalt pavements. The City commissioned a physical
assessment of the streets condition as of June 30, 2010. This condition assessment was performed in the
fall of 2010 with the final report presented in March, 2011. 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.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
39
The following conditions were defined:
Condition Rating
Excellent 80 - 100
Very Good 70 - 79
Good 50 - 69
Poor 25 - 49
Very Poor 0 - 24
The City's policy relative to maintaining the street assets is to achieve an average rating of 70 for all street
segments. This acceptable rating allows minor cracking and raveling of the pavement along with minor
roughness that could be noticeable to drivers traveling at the posted speeds. For all other infrastructure
systems, the City elected to use the Basic Approach as defined by GASB Statement No. 34 for
infrastructure reporting. An appraisal determined the original cost, which is defined as the actual cost to
acquire new property in accordance with market prices at the time of first construction/acquisition.
Original costs were developed in one of three ways: 1) historical records; 2) standard unit costs
appropriate for the construction/acquisition date; or 3) present cost indexed by a reciprocal factor of the
price increase from the construction/acquisition date to the current date. The accumulated depreciation,
defined as the total depreciation from the date of construction/acquisition to the current date on a straight
line, unrecovered cost method was computed using industry accepted life expectancies for each
infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation
from the original cost.
F. Interest Payable
In the government-wide financial statements, interest payable of long-term debt is recognized as an
incurred liability for governmental fund types. The City has not al located 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,
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
40
rather than currently available financial resources. Only the amounts which become due at June 30 are
reported in the fund financial statements as a liability.
I. Long- Term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported
as liabilities in the applicable governmental activities. Bond premiums and discounts, as well as issuance
costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds
payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financial sources. Premiums received on debt issuance are reported as other financing sources while
discounts on debt issuance reported as other financing uses. Issuance costs, whether or not withheld from
the actual debt proceeds received, are reported as debt service expenditures.
J. Fund Balances
In February 2009, the Governmental Accounting Standards Board (GASB) issued Statement No. 54,
Fund Balance Reporting and Governmental Fund Type Definitions. This standard left unchanged the
total amount reported as fund balance, but substantially altered the categories and terminology used to
describe its components. The new categories and terminology focuses, not on financial resources
available for appropriation, but on the extent to which the government is bound to honor constraints on
the specific purpose for which the amounts in the fund 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 external enforceable legal restrictions; “committed fund balance”,
resources whose use is constrained by limitations that the government imposes upon itself at its highest
level of decision making and remain binding unless removed in the same manner; “assigned fund
balance”, resources that reflects a government’s intended use of resources, such intent would have to be
established at either the highest level of decision making, by a body, or an official designated for that
purpose; and “unassigned fund balance”, net resources in excess of what can properly be classified in one
of the other four categories. Currently, the City’s fund balance reserves fall into one of the four spendable
categories; restricted, committed, assigned, or unassigned fund balance.
The City maintains three restricted fund balances constrained by external legal restrictions that can be
spent only for the stipulated purposes. These fund balances are:
Special Assessments Fund Balance – collectively represents year-end fund balances of twenty-
four landscape and/or lighting assessment districts which use is restricted to the individual
district.
Environmental Services Fund Balance – represents funds collected from surcharges on garbage
bills specifically for use as supplemental funding of Environmental Services program fees for
household hazardous waste fees, storm drain, street sweeping, and other pollution mitigation
expenses related to integrated waste programs and storm water management. These funds are
used to supplement environmental expenditures by using $50,000 per year; however these reserve
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
41
funds were not transferred for use in FY 2011/12 due to additional revenue available for these
programs.
Debt Service Fund Balance – represents funding collected for and use in the City’s general
obligation bond debt originally issued in 2001.
The committed category, in which fund balance is constrained by limitations that the government imposes
upon itself at its highest level of decision making and remain binding unless removed in the same manner,
includes the following:
Capital Projects Fund Balance – represents collective funding appropriated for use in capital
improvement projects. Capital Improvement funding is assigned to one of the following program
funds: Streets, Park & Trail, Facility, or Administration.
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. This category
includes the following reserves:
Capital Project - represents General Fund funding set aside for capital projects but not yet
committed to a specific improvement project.
Carryforward – represents either prior-year funds designated for one-time operational activities
not yet completed by year-end, or to carryforward prior-year funding for specific activities as
directed by Council. Carryover funds are appropriated for use in the following fiscal year.
The Unassigned Fund Balance category represents funding which may be held for specific types of uses
or stabilization purposes, but is not yet directed to be used for a specific purpose.
Operations – provides funds for working capital cash flow. Council policy set aside $2,000,000
on July 1, 1999, to be increased annually by an amount equal to the interest the City earned on the
equivalent amount of cash and investments. As of June 30, 2012 this fund balance has grown to
$2,914,426. This fund balance is not appropriated for use.
Economic Uncertainty - Council policy is to maintain $1,500,000 for use by Council direction in
case of disasters, emergencies, and economic downturns.
Development Services – represents funds collected for development services to be used to
supplement funding for zoning administration, inspection services, and development regulation
programs during periods where expenditures exceed revenues.
Uncollected Deposits – represents funding to offset development applicant receivables for
outstanding balances owed to the City. The balance is adjusted at year end based on outstanding
deposit levels.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
42
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.
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 Assets
In the government-wide financial statements, net assets are classified in the following categories:
Invested in Capital Assets, Net of Related Debt - 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.
Restricted Net Assets - This amount is restricted by external creditors, grantors, contributors,
or laws or regulations of other governments.
Unrestricted Net Assets - This amount is all net assets that do not meet the definition of
"invested in capital assets, net of related debt" or "restricted net assets."
L. Use of Restricted/Unrestricted Net Assets
When an expense is incurred for purposes for which both restricted and unrestricted net assets are
available, the City's policy is to apply restricted net assets 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.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
43
O. Subsequent Events
Management has considered subsequent events through November 12, 2012, the date which the financial
statements were available to be issued.
P. New GASB Pronouncements
GASB Statement No. 60 - In November, 2010, GASB issued Statement No. 60, Accounting and
Financial Reporting for Service Concession Arrangements. The objective of this Statement is to improve
financial reporting by addressing issues related to service concession arrangements, which are a type of
public-private or public-public partnership. This pronouncement is effective for periods beginning after
December 15, 2011. The City does not believe there will be a significant financial statement effect
related to this Statement.
GASB Statement No. 61 – In November, 2010, GASB issued Statement No. 61, The Financial
Reporting Entity: Omnibus—an amendment of GASB Statements No. 14 and No. 34. The objective of this
Statement is to improve financial reporting for a governmental financial reporting entity. The
requirements of Statement No. 14, The Financial Reporting Entity, and the related financial reporting
requirements of Statement No. 34, Basic Financial Statements—and Management’s Discussion and
Analysis—for State and Local Governments, were amended to better meet user needs and to address
reporting entity issues that have arisen since the issuance of those Statements. This pronouncement is
effective for periods beginning after June 15, 2012. The City does not believe there will be a significant
financial statement effect related to this Statement.
GASB Statement No. 62 – In December, 2010, GASB issued Statement No. 62, Codification of
Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA
Pronouncements. The objective of this Statement is to incorporate into the GASB’s authoritative
literature certain accounting and financial reporting guidance that is included in the following
pronouncements issued on or before November 30, 1989, which does not conflict with or contradict
GASB pronouncements:
1. Financial Accounting Standards Board (FASB) Statements and Interpretations
2. Accounting Principles Board Opinions
3. Accounting Research Bulletins of the American Institute of Certified Public Accountants’
(AICPA) Committee on Accounting Procedure.
This pronouncement is effective for periods beginning after December 15, 2011. The City does not
believe there will be a significant financial statement effect related to this Statement.
Statement No. 63 - In June, 2011, GASB issued Statement No. 63, Financial Reporting of Deferred
Outflows of Resources, Deferred Inflows of Resources, and Net Position, The objective of this Statement
is to improve financial reporting by providing guidance and standardizing the presentation of deferred
outflows of resources and deferred inflows of resources and their effect on a government’s net positions.
This pronouncement is effective for financial statements for periods beginning after December 15, 2011.
The City is in the process of determining the impact this statement will have on the financial statements.
Statement No. 64 - In June, 2011, GASB issued Statement No. 64, Derivative Instruments: Application
of Hedge Accounting Termination Provisions—an amendment of GASB Statement No. 53. The objective
of this Statement is to enhance comparability and improve financial reporting by clarifying the
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
44
circumstances in which hedge accounting should continue when a swap counterparty or a swap
counterparty’s credit support provider is replaced. This pronouncement is effective for financial
statements for periods beginning after June 15, 2011. The City has determined this Statement change will
not have an effect on the financial statements.
Statement No. 65 - In March, 2012, GASB issued Statement No. 65, Items Previously Reported as Assets
and Liabilities. This Statement establishes accounting and financial reporting standards the reclassify as
deferred outflows of resources and deferred inflows of resources, certain items that were previously
reported as assets and liabilities and recognized as outflows of resources or inflows of resources, certain
items that were previously reported as assets and liabilities. The City is in the process of determining the
impact this statement will have on the financial statements.
Statement No. 66 - In March, 2012, GASB issued Statement No. 66, Technical Correction – 2012 – an
amendment of GASB Statement No. 10 and No. 62. The objective of this Statement is to improve
accounting and financial reporting for a governmental financial reporting entity by resolving conflicting
guidance that resulted from the issuance of two pronouncements, Statements No. 54, Fund Balance
Reporting and Government Fund Type Definitions, and No. 62, Codification of Accounting and Financial
Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. The City
does not believe there will be a significant financial statement effect related to this Statement.
Statement No. 67 - In June, 2012, GASB issued Statement No. 67, Financial Reporting for Pension
Plans – amendment of GASB Statement No. 25. The objective of this Statement is to improve financial
reporting by state and local government pension plans. This Statement results from a comprehensive
review of the effectiveness of existing standards of accounting and financial reporting for pensions with
regards to providing decision-useful information, supporting assessments of accountability and inter -
period equity, and creating additional transparency. The City is in the process of determining the impact
this statement will have on the financial statements.
Statement No. 68 - In June, 2012, GASB issued Statement No. 68, Accounting and Financial Reporting
for Pensions – an amendment of GASB Statement No. 27. The primary objective of this Statement is to
improve accounting and financial reporting by state and local governments for pensions. It also improves
information provided by state and local government employers about financial support for pensions that is
provided by other entities. The City is in the process of determining the impact this statement will have
on the financial statements.
.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
45
NOTE 2 - CASH AND INVESTMENTS
The City maintains a cash and investment pool, which includes cash balances and auth orized 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, 2012:
Statement of
Net Assets
Governmental
Activities
Cash and investments 15,705,028$
The City's Cash and Investments at June 30, 2012, in more detail:
Cash and cash equivalents:
Petty cash 1,450$
Demand deposits 289,892
Total Cash and Cash Equivalents 291,342
Investments:
Local Agency Investment Fund (LAIF)15,413,686
Total Cash and Investments 15,705,028$
A. Cash Deposits
The carrying amounts of the City's cash deposits were $289,892 at June 30, 2012. Bank balances before
reconciling items were $915,499 at that date due to deposits in transit and outstanding checks. The total
amount was collateralized or insured with securities held by the pledging financial institutions.
The California Government Code requires California banks and savings and loan associations to secure
the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in
this manner shall have the effect of perfecting a security interest, and places the City ahead of general
creditors of the institution.
The market value of pledged securities must equal at least 110 percent of the City's cash deposits.
California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes
that have a value of 150 percent of the City's total cash deposits. The City has waived the collateral
requirements for cash deposits which are fully insured to $250,000 by the Federal Deposit Insurance
Corporation (FDIC). Demand deposits (non-interest bearing checking accounts) have unlimited insurance
through the TAG Program. Other accounts are insured up to $250,000 per custodian within agency.
The City follows the practice of pooling cash and investments of all funds, except for funds required to be
held by fiscal agents under the provisions of bond indentures. Interest income from cash and investments
with fiscal agents is credited directly to the related fund.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
46
B. Investments
Under the provisions of the City's investment policy, and in accordance with California Government
Code, the following investments are authorized:
Securities of the U.S. Government or its agencies.
Certificates of Deposit (or Time Deposits) placed with commercial banks and/or savings
and loan companies.
Negotiable Certificates of Deposit.
California Local Agency Investment Fund.
Investment-grade obligations of State, local governments or public authorities.
Money market mutual funds.
Passbook savings account and demand deposits.
The City is in compliance with GASB Statement No. 31, Accounting and Financial Reporting for Certain
Investments and for External Investments Pools which requires the City's investments be recorded at fair
value instead of cost. Under GASB 31, the carrying value of investments are adjusted to reflect their fair
value at each fiscal year-end, with the effects of these adjustments included in the carrying value of the
investments.
C. External Investment Pool
The City's investments with LAIF at June 30, 2012, 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 LAIR website, located at
http://www.treasurer.ca.gov/pmia-laif/
As of June 30, 2012, the City had $15,413,686 invested in LAIF. The LAIF fair value factor of
1.001219643 was used to calculate the fair value of the investments in LAIF.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
47
D. Risk Disclosures
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the term of an investment’s maturity, the great er the sensitivity to
changes in market interest rates. Although the City’s investment policy allows for a broad range of
investment instruments with varying terms of maturity, investments are limited to the Local Agency
Investment Fund (LAIF) which is managed by the State Treasurer Office and overseen by the Pooled
Money Investment Board, the State Treasurer investment committee, and a Local Agency Advisory
Board.
Included in LAIF’s investment portfolio are U.S. Treasuries, Federal Agency obligations, time deposits,
negotiable certificates of deposits, commercial paper, corporate bonds, and security loans. Funds are
available for withdrawal on demand, and are recorded on an amortized cost basis. At June 30, 2012, these
investments had a weighted average maturity of 247 days. The City had the following invested in LAIF:
Investment
Maturities in Years
Fair Less Than
Value One Year
State of California - Local Agency Investment Fund (LAIF)15,413,686$ 15,413,686$
Credit Risk
As of June 30, 2012, 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 i n the
possession of an outside party. The City did not hold any securities through investment counterparties at
the year ended June 30, 2012.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
48
NOTE 3 - FUND FINANCIAL STATEMENTS INTERFUND TRANSACTIONS
Transfers In/Out
Transfers for the year ended June 30, 2012 were as follows:
Transfer in Transfer out Amount
General Fund Capital Improvement Fund 205,222$
205,222
Capital Improvement Fund General Fund 280,000
IT Equipment Replacement 24,963
304,963
Total 510,185$
The General Fund received monies from the Capital Improvement Funds for remaining balance on
completed capital projects of $99,222; and from the Gas Tax fund for general administration of $106,000.
The Capital Improvement Fund received monies from the General Fund from the adopted budget of
$100,000 for annual facility improvement projects, $50,000 for the traffic safety project, $50,000 for the
sidewalk repairs project, $50,000 for the storm drain upgrades project, and $10,000 for the CMO
document imaging project. Additionally, $20,000 was transferred from the General Fund for the Village
Façade program. The IT Equipment Replacement fund transferred $24,963 to the Capital Improvement
Fund for the network cabling project.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
49
NOTE 4 - CAPITAL ASSETS
Capital assets activity for the year ended June 30, 2012, consisted of the following:
Primary Government
Balance Balance
July 1, 2011 Additions Retirements Reclassifications June 30, 2012
Governmental activities:
Capital assets, not being depreciated:
Land and land improvements 13,135,756$ 750,000$ -$ 624,645$ 14,510,401$
Construction in progress 6,248,294 1,782,425 (19,785) (843,981) 7,166,953
Infrastructure:
Street pavement system 49,155,619 - - 49,155,619
Total capital assets, not being depreciated 68,539,669 2,532,425 (19,785) (219,336) 70,832,973
Capital assets, being depreciated:
Buildings and structures 23,462,738 - - 148,852 23,611,590
Machinery and equipment
Governmental funds 1,773,286 12,487 (132,534) 45,484 1,698,723
Internal service funds 714,059 10,000 - - 724,059
Infrastructure:
Bridges 1,563,654 - - - 1,563,654
Signs and lights 1,820,585 - - - 1,820,585
Drainage system 40,035,953 - - 25,000 40,060,953
Sidewalks 12,328,102 - - - 12,328,102
Total capital assets, being depreciated 81,698,377 22,487 (132,534) 219,336 81,807,666
Accumulated depreciation:
Buildings and structures (6,054,896) (586,863) - - (6,641,759)
Machinery and equipment
Governmental funds (1,233,493) (59,778) 132,534 - (1,160,737)
Internal service funds (563,496) (94,414) - - (657,910)
Infrastructure:
Bridges (1,000,514) (26,590) - - (1,027,104)
Signs and lights (860,670) (66,029) - - (926,699)
Drainage system (13,128,791) (800,970) - - (13,929,761)
Sidewalks (4,775,299) (324,694) - - (5,099,993)
Total accumulated depreciation (27,617,159) (1,959,338) 132,534 - (29,443,963)
Total capital assets, being depreciated, net 54,081,218 (1,936,851) - 219,336 52,363,703
Governmental activities capital assets, net 122,620,887$ 595,574$ (19,785)$ -$ 123,196,676$
Depreciation expense, including the amount related to the internal service funds,
was charged in the following functions in the Statement of Activities:
General Government 1,252,533$
Public Works 592,698
Community Services 19,693
Community Development -
Internal Service Funds 94,414
Total Depreciation Expense 1,959,338$
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
50
In accordance with GASB Statement No. 34, the City has reported all capital assets including
infrastructure in the Government-Wide Statement of Net Assets. The City elected to use the "Modified
Approach" as defined by GASB Statement No. 34 for infrastructure reporting for its pavement system.
As a result, no accumulated depreciation or depreciation expense has been recorded for this system. A
more detailed discussion of the "Modified Approach" is presented in the Required Supplementary
Information section of this report. All other capital assets including other infrastructure systems were
reported using the Basic Approach whereby accumulated depreciation and depreciation expense have
been recorded.
NOTE 5 – LONG-TERM OBLIGATIONS
A summary of the City's long-term obligations transactions for the year ended June 30, 2012, is presented
below:
Classification
Balance Balance Due Within Due In More
Description July 1, 2011 Additions Retirements June 30, 2012 One Year Than One Year
General Obligation Bonds:
2001 Library Bonds 12,605,000$ -$ (12,605,000)$ -$ -$ -$
2011 Library Bonds - 11,995,000 - 11,995,000 455,000 11,540,000
Net original issue premium - 459,738 (21,892) 437,846 21,892 415,954
Compensated absences 719,846 323,881 (397,514) 646,213 404,988 241,225
Total 13,324,846$ 12,778,619$ (13,024,406)$ 13,079,059$ 881,880$ 12,197,179$
General Obligation 2001 Library Bonds - Original Issue $15,000,000
On May 1, 2001, the City issued General Obligation Bonds Series 2001 in the amount of $15,000,000.
The proceeds of the bonds were used to improve, renovate, and expand the Saratoga Community Library.
The bonds are payable from and secured by certain property taxes within the City. Interest on the bonds
ranges from 5 percent to 6 percent and is payable on February 1 and August 1 of each year, commencing
February 1, 2002. Principal is due annually beginning on August 1, 2002, in amounts ranging from
$60,000 to $940,000. The bonds mature on August 1, 2031, and are subject to redemption prior to
maturity. The bonds may be called for redemption at the option of the City at redemption prices from
101 percent beginning on or after August 1, 2010 and 100 percent of par on or after August 1, 2011. The
option of recalling the bonds were exercised on July 14, 2011 and a current refunding was executed,
replacing this bond issue with the General Obligation 2011 Library Bonds.
General Obligation 2011 Library Bonds - Original Issue $11,995,000
On July 14, 2011, the City issued General Obligation Bonds Series 2011 in the amount of $11,995,000.
The bonds were issued to fully refund the General Obligation 2001 Library Bonds. The bonds are
payable from and secured by certain property taxes within the City. Interest on the bonds ranges from
2.0 percent to 4.0 percent and is payable on February 1 and August 1 of each year, commencing February
1, 2012. Principal is due annually beginning on August 1, 2013, in amounts ranging from $455,000 to
$760,000, with a final payment on August 1, 2031 of $1,610,000. The bonds maturing on or before
August 1, 2021 are not subject to redemption prior to their respective stated maturity dates. Bonds
maturing on or after August 1, 2022 are subject to redemption prior to their respective stated maturity
dates at the option of the city at the principal amount of the bonds called for redemption, together with
interest accrued thereon to the date of redemption, without premium.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
51
The bonds were competitively bid on June 29, 2011, with a final issue date of July 14, 2011. On the date
of issue of the 2011 bonds, the proceeds were deposited with and held in trust by the Bank of New York
Mellon Trust Company, N. A., the paying agent for the 2001 bonds. The amount deposited, together with
other available moneys were sufficient to pay principal of and interest on the 2001 bonds maturing on
August, 2011, and to redeem the remaining 2001 bonds in full. The cash flow of the General Obligation
2001 Library Bonds through final payment would have been $19,391,525, compared to the refunded
General Obligation 2011 Library Bonds of $17,218,678, due to a lower stated interest rate. The economic
gain, as determined by the PFM Group, is $1,500,577.
At June 30, 2012, the outstanding balance of the bonds was $11,995,000.
The annual debt service requirements on these bonds are as follows:
Year Ended Principal Interest Total
2013 455,000$ 412,485$ 867,485$
2014 485,000 403,085 888,085
2015 495,000 393,285 888,285
2016 500,000 383,335 883,335
2017 475,000 371,210 846,210
2018-2022 2,620,000 1,591,275 4,211,275
2023-2027 3,160,000 1,049,750 4,209,750
2028-2032 3,805,000 391,043 4,196,043
Total 11,995,000$ 4,995,468$ 16,990,468$
Compensated Absences
The City's liability for vested and unpaid compensated absences (accrued vacation and sick pay) has been
accrued and amounts to $646,213 at June 30, 2012. The compensated absences liability will generally be
liquidated through the General Fund.
NOTE 6 - RISK MANAGEMENT
The City participates in the two following public entity risk pools:
ABAG Plan Corporation (ABAG PLAN) - covers general liability claims up to a limit of $5 million
and purchases an additional $15 million of excess insurance coverage, for a total of $20 million per
occurrence limit. The City has a deductible or uninsured liability of up to $25,000 per claim. Once the
City's deductible is met, ABAG PLAN becomes responsible for payment of all claims up to the limit.
During the fiscal year ended June 30, 2012, the City contributed $251,581 for current year coverage and
received no refund of prior year excess contributions.
ABAG Workers' Compensation Pool Insurance Authority (ABAG POOL) – covers workers'
compensation coverage up to $250,000 and excess coverage provides an employer liability limit of $5
million per occurrence, and workers’ compensation per occurrence limit to $100 million. The City has no
deductible for these claims. During the fiscal year ended June 30, 2012, the City contributed $195,587
for current year coverage. The City's contribution equals the ratio of the City's payroll to the total
payrolls of all entities participating in the same layer of each program, in each program year.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
52
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 $21,247 reported at June 30, 2012, are
based on the requirements of GASB Statement No. 10, which requires that a liability for claims be
reported if information prior to the issuance of the basic financial statements indicates that it is probable
that a liability has incurred at the date of the basic financial statements and the amount of the loss can be
reasonably estimated. Changes in the claims payable amounts were as follows:
The General Fund has been used in the prior years to liquidate the liability for claims and judgments.
Year Ended Year Ended
June 30, 2012 June 30, 2011
Claims payable, beginning of year 14,091$ 54,601$
Fiscal year claims and changes in estimates 21,247 14,091
Claims payments (14,091) (54,601)
Claims payable, end of year 21,247$ 14,091$
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.
The following represents summary audited financial information of ABAG Plan Corporation and the
ABAG Workers’ Compensation Pool Insurance Authority for the fiscal ye ar ended June 30, 2011 (most
recent available):
Plan Comp Shared
Corporation Risk Pool
Total Assets 47,150,382$ 3,725,493$
Total Liabilities 20,617,172 624,353
Net Assets 26,533,210$ 3,101,140$
Total Revenues 9,672,545$ 580,664$
Total Expenses 14,935,442 331,806
Net Increase in Net Assets (5,262,897)$ 248,858$
Audited financial information for each risk pool may be obtained from ABAG at P.O. Box 2089,
Oakland, California 94604-2089.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
53
NOTE 7 - RETIREMENT PLANS
Pension Plan
Plan Description - The City contributes to the California Public Employees' Retirement System
(CalPERS), a cost-sharing multiple-employer defined benefit plan. CalPERS provide retirement and
disability benefits, annual cost-of-living adjustments, and death benefits to plan members and
beneficiaries. CalPERS act as a common investment and administrative agent for participating public
entities within the State of California. Benefit provisions and all other requirements are established by
State statute and City ordinance. Copies of CalPERS' annual financial report may be obtained from their
Executive Office located at 400 P Street, Sacramento, California 95811.
Funding Policy – The City employer is required to contribute an actuarially determined rate of annual
covered payroll for its miscellaneous employees (12.856 percent for fiscal year 2011/12). Active plan
members are required by State statute to contribute 7 percent of their annual covered salary. In past years,
the City employer contributed this required amount on behalf of City employees. As a result of labor
negotiations during fiscal year 2011/12, employees began to contribute the 7 percent of annual salary.
The City paid employee contribution of $69,643 for the year ended June 30, 2012 was contributed prior to
the labor negotiation revision.
Annual Pension Cost - For fiscal year 2011/12, the City's annual pension cost was $616,323. The
required contribution was determined as part of the June 30, 2009, actuarial valuation using the entry age
normal actuarial cost method. The actuarial assumptions included (a) 7.75 percent (7.75%) investment
rate of return (net of administrative expenses), (b) projected annual salary increases ranging from 3.25
percent to 14.45 percent for miscellaneous employees depending on age, service, and type of
employment, and (c) 3.25 percent per year payroll growth adjustments. Both (a) and (b) included an
inflation component of 3.00 percent. The actuarial value of CalPERS assets was determined using
techniques that smooth the effects of short-term volatility in the market value of investments over a three-
year period. CalPERS unfunded actuarial accrued liability (or surplus) is amortized as a level percentage
of projected payroll on a closed basis. The amortization period at June 30, 2008, was 30 years for
miscellaneous employees for prior and current service unfunded liability.
THREE-YEAR ANNUAL PENSION COSTS TREND INFORMATION FOR CALPERS
Annual Net
Fiscal Pension Cost APC Pension
Year (APC)Contributed Obligation
2010 564,855$ 100%-$
2011 579,256 100%-$
2012 616,323 100%-$
Required Supplementary Information
In 2004, CalPERS established a risk pool for cities and other government entities that have less than 100
active members. Actuarial valuations are performed with other participants within the same risk pool.
Stand alone information of the Schedule of the Funding Progress for the City is no longer available.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
54
NOTE 8 - NET ASSETS
A. Investment in Capital Assets, Net of Related Debt
As of June 30, 2012, the investment in capital assets, net of related debt consisted of the following:
Capital Assets, Net 123,196,676$
2011 General Obligation Library Bonds (11,995,000)
Investment in Capital Assets, Net of Related Debt 111,201,676$
B. Restricted Net Assets
As of June 30, 2012, the restricted net assets consisted of the following:
Environmental Special Debt
Services Assessments Service Total
Restricted Net Assets 513,182$ 562,504$ 862,415$ 1,938,101$
Restricted For
NOTE 9 - JOINT POWERS AGREEMENTS
The City is a member of several Joint Power Agreements, as follows:
The Santa Clara County Valley Transportation Authority (VTA) consists of various cities in the San
Francisco Bay area. .The Transportation Authority was formed in 1985, by a joint exercise of powers
agreement between the County of Santa Clara and the cities of Santa Clara County for the purpose of
financing highway capital improvements within the County to serve transportation needs. Financial
statements may be obtained from the Traffic Authority at 1754 Technology Drive, Suite 224, San Jose,
California 95110.
The West Valley Solid Waste Management Joint Powers Authority consists of the west valley cities of
Campbell, Los Gatos, Monte Sereno, and Saratoga. The JPA was formed to coordinate efforts in carrying
out solid waste collection and disposal activities, and in meeting the mandates of AB939, the States’
Integrated Waste Management Act.
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 maki ng and
governing body of the County’s library system.
These JPA's are governed by boards consisting of representatives from their members. The boards
control the operations of each JPA, including selection of management and approval of operating budgets,
independent of any influence by its members beyond their representation on the board.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
55
NOTE 10 - EXCESS EXPENDITURES OVER APPROPRIATIONS
There were no excess of expenditures over appropriations in individual funds during fiscal year 2011/12.
NOTE 11 - 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. These programs are audited by the City's
independent accountants in accordance with the provisions of the Federal Single Audit Act Amendment s
of 1996 and applicable State requirements. For Federal programs, the City reached the level of qualifying
cost during the current fiscal year so a single audit was required. Expenditures which may be disallowed,
if any, by the granting agencies, cannot be determined at this time. The City expects such amounts, if
any, to be immaterial.
CITY OF SARATOGA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
56
C. Commitments
The City had several outstanding contracts or planned construction projects as of June 30, 2012. These
projects are evidenced by contractual commitments with contractors and include:
Original Commitment
Vendor commitment Remaining
Atkinson, Andelson, Loya, Ruud & Romo 20,000$ 9,999$
Central California Solar 228,808 113,808
David J. Powers & Associates 135,195 75,786
Duran & Venables, Inc.29,718 29,718
George Bianchi Construction 46,506 11,301
Granite Rock Company 345,880 345,880
Labor Consultants of CA 8,125 5,313
Mark Thomas & Company 11,070 2,016
REJ Electric Co.30,513 8,913
Sanchez Electric, Inc.23,500 11,750
Steve Benzing Architect 3,500 1,925
Testing Engineers 6,000 5,200
Tuff Shed, Inc.9,840 9,840
Vavrinek, Trine, Day & Co.43,350 26,475
942,005$ 657,924$
As of June 30, 2012, 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.
REQUIRED SUPPLEMENTARY INFORMATION
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CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2012
57
NOTE 1 - BUDGETARY INFORMATION
The following is the budget comparison schedules for General Fund.
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Property taxes 7,973,300$ 7,973,300$ 8,272,456$ 299,156$
Special assessments 5,750 5,750 7,490 1,740
Sales taxes 1,025,000 1,025,000 1,100,489 75,489
Other local taxes 565,000 565,000 683,383 118,383
Licenses & permits 986,665 986,665 1,184,099 197,434
Fines & forfeitures 307,550 307,550 233,708 (73,842)
Intergovermental - state 265,000 285,140 232,505 (52,635)
Intergovermental - other 33,000 33,000 42,343 9,343
Franchise fees 1,695,000 1,695,000 1,852,390 157,390
Use of money & property 515,302 515,302 552,672 37,370
Other revenue 1,743,281 2,011,187 2,069,096 57,909
Total revenues 15,114,848 15,402,894 16,230,631 827,737
EXPENDITURES:
Current:
General and intergovernmental services 3,257,349 3,313,349 2,924,958 388,391
Public safety 4,326,360 4,326,360 4,310,113 16,247
Public works 4,410,350 4,415,350 4,318,432 96,918
Community services 1,340,872 1,340,872 1,269,497 71,375
Community development services 2,057,417 2,057,517 1,887,796 169,721
Total expenditures 15,392,348 15,453,448 14,710,796 742,652
REVENUES OVER
(UNDER) EXPENDITURES (277,500) (50,554) 1,519,835 1,570,389
OTHER FINANCING SOURCES (USES):
Transfers in 134,550 205,222 205,222 -
Transfers out (260,000) (280,000) (280,000) -
Total other financing sources (uses)(125,450) (74,778) (74,778) -
Net change in fund balances (402,950)$ (125,332)$ 1,445,057 1,570,389$
FUND BALANCES:
Beginning of year 7,484,064
End of year 8,929,121$
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.
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2012
58
The annual budgets are adopted for the period of July 1 to June 30, and prepared to accurately and openly
communicate service and infrastructure priorities to the community, businesses, vendors, employees, and
other public agencies. The Annual Operating Budget is developed on a program basis for all funds with
fund level authority. It establishes the foundation of effective financial planning by providing resource
planning, performance measures and controls that permit the evaluation and adjustment of the City's
performance. The City adopts an annual budget for the capital projects as part of adopting the five-year
Capital Improvement Plan. The annual capital budget is adopted on a project-by-project basis.
The City follows these procedures in establishing the budgetary data reflected in the basic financial
statements:
a. The City Manager submits to the City Council a proposed operating budget for the fiscal year
commencing the following July 1. The operating and capital budgets include proposed
expenditures and the means of financing them.
b. Public hearings are conducted to obtain taxpayer comments.
c. The budgets are legally enacted through the passage of a resolution.
d. For the Operating Budget, the City Manager may authorize transfers of budget amounts within a
fund. However, any revisions that increase the total budgeted expenditures of any fund must be
approved by the City Council. Expenditures may not legally exceed budgeted appropriations at
the fund level without City Council approval.
e. As Capital Projects are adopted on a project basis, the City Council must approve increases or
decreases of budgeted amounts or changes in project scope. Upon project completion, immaterial
amounts are transferred to ongoing maintenance projects within the capital program. If remaining
project funds are material, the project balance is brought back to Council for approval to transfer.
f. Formal budgetary integration in the form of legally adopted budgets is employed as a
management control device for all funds. Budgets are adopted on a basis consistent with
generally accepted accounting principles. Budgeted expenditures reported are as amended by
supplemental appropriations of the City Council.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the 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, 2012
59
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 infrastru cture
capital assets. The City defines infrastructure as the basic physical assets that allow the City to function
and those resources utilized primarily by the public which provide future economic benefits for a
minimum of two years. Infrastructure can be defined as assets that are immovable and of value only to
the government. Major infrastructure includes the street system, park and recreation lands and
improvements; storm water conveyance and drainage systems, and buildings combined with site
amenities such as parking and landscaping areas used by the City in the conduct of its business. Each
major infrastructure system can be divided into subsystems. For example, the street system can be
divided into concrete and asphalt pavements, concrete curb and gutters, sidewalks, medians, streetlights,
traffic control devices (signs, signals and pavement markings), landscaping and land. Subsystem detail is
not presented in these basic financial statements; however, the City maintains detailed information on
these subsystems.
The City has elected to use the "Modified Approach" as defined by GASB Statement No. 34 for
infrastructure reporting for its Streets Pavement System. Under GASB Statement No. 34, eligible
infrastructure capital assets are not required to be depreciated under the following requirements:
The City manages the eligible infrastructure capital assets using an asset management system
with characteristics of (1) an up-to-date inventory; (2) perform condition assessments and
summarize the results using a measurement scale; and (3) estimate annual amount to maintain
and preserve at the established condition assessment level.
The City documents that the eligible infrastructure capital assets are being preserved
approximately at or above the established and disclosed condition assessment level.
The City commissioned a physical assessment of the streets conditions with the final report received
March 30, 2011. 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 140 centerline miles of paved surfaces. The City’s road system can be
grouped by function class and includes 23.4 centerline miles of arterial, 23.5 centerline miles of collector,
and 93.3 miles as residential.
A visual survey of all pavement segments was conducted to assess the existing surface condition of each
of the individual pavement segments. Upon completion of the study, a Pavement Condition Index (PCI)
was calculated for each segment in the City's pavement network to reflect the overall pavement condition.
Rating between 0 and 100, a PCI of 0 would correspond to a badly deteriorated pavement with virtually
no remaining life. A PCI of 100 would correspond to a pavement with proper engineering design and
construction at the beginning of its life cycle. The assessment study was conducted during November,
2010.
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2012
60
The following conditions were defined:
Condition Rating
Excellent 80 - 100
Very Good 70 - 79
Good 50 - 69
Poor 25 - 49
Very Poor 0 - 24
The City's policy is to achieve an average rating of 70 for all streets, which is a very good rating. This
rating allows minor cracking and raveling of the pavement along with minor roughness that could be
noticeable to drivers traveling at the posted speeds. As of June 30, 2012, the City's street system was
rated at a PCI index of 76 on the average with the detail condition as follows:
Percent of
Condition Streets
Excellent 8%
Very Good 75%
Good 14%
Poor 3%
Very Poor 0%
The City expended $2,856,603 on street maintenance for the year ended June 30, 2012. These routine
maintenance expenditures delayed deterioration. The budget required to maintain and improve the
current level of overall condition through the year 2017 is a minimum of $1,000,000. Approximately
$2,500,000 is the projected budget for fiscal year 2012/13.
A schedule of estimated annual amount calculated to maintain and preserve its streets at the current level
compared to actual expenditures for street maintenance for the last ten years is presented below:
Funded By
Fiscal Actual Other Gas Tax Total PCI
Year Budget Expenditures Sources Fund Funded Index
2002-03 2,207,922$ 1,553,674$ 974,514$ 579,160$ 1,553,674$ -
2003-04 1,961,844 1,489,667 907,327 582,340 1,489,667 -
2004-05 1,800,000 2,609,648 1,478,216 1,131,432 2,609,648 70
2005-06 1,156,547 1,030,382 353,652 676,730 1,030,382 70
2006-07 2,026,404 1,156,889 19,899 970,818 990,717 70
2007-08 2,246,152 1,691,466 1,252,709 438,757 1,691,466 70
2008-09 2,680,504 1,574,485 1,148,650 425,835 1,574,485 70
2009-10 1,811,130 771,386 575,710 195,676 771,386 70
2010-11 4,770,782 1,847,221 1,449,686 397,535 1,847,221 76
2011-12 4,683,078 2,856,603 1,622,401 1,234,202 2,856,603 76
CITY OF SARATOGA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2012
61
As of June 2012, approximately 17 percent of the City's streets were rated below the average standard of
70. 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
(2013-2017) amounted to approximately $11,000,000 for all streets and are expected to be rehabilitated
with a minimum annual budget of $1,000,000.
62
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SUPPLEMENTARY INFORMATION
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63
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Lighting and Landscape Assessment District Funds – These funds account for revenues and
expenditures associated with maintaining the City’s 25 Landscape and Lighting districts which were
approved by consent of property owners living along or within the boundaries of the Districts.
Debt Service Fund
Library Bond - Santa Clara County general obligation bond tax revenues are accumulated in this fund to
pay annual principal and interest payments on the voter approved 2001 Library Improvement Bond.
CITY OF SARATOGA
COMBINING BALANCE SHEETS
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2012
64
Special
Revenue Debt Service
Lighting and Total
Landscaping Other
Assessment Library Governmental
District Bond Funds
ASSETS
Cash and investments 597,987$ 859,823$ 1,457,810$
Receivables:
Accounts 826 2,378 3,204
Interest 476 540 1,016
Total assets 599,289$ 862,741$ 1,462,030$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 36,785$ 326$ 37,111$
Deferred revenue - - -
Total liabilities 36,785 326 37,111
Fund Balances:
Restricted:
Special revenue funds 562,504 - 562,504
Debt service - 862,415 862,415
Total fund balances 562,504 862,415 1,424,919
Total liabilities and fund balances 599,289$ 862,741$ 1,462,030$
CITY OF SARATOGA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2012
65
Special Debt
Revenue Service
Lighting and Total
Landscaping Other
Assessment Library Governmental
District Bond Funds
REVENUES:
Property taxes 184,242$ -$ 184,242$
Special assessment 304,840 930,485 1,235,325
Use of money and property 2,159 2,093 4,252
Total revenues 491,241 932,578 1,423,819
EXPENDITURES:
Current:
General and ingov't services - 219,738 219,738
Public works 432,862 - 432,862
Debt service:
Principal - 370,000 370,000
Interest and fiscal charges - 550,820 550,820
Total expenditures 432,862 1,140,558 1,573,420
REVENUES OVER
(UNDER) EXPENDITURES 58,379 (207,980) (149,601)
OTHER FINANCING (USES):
Refunded bond proceeds - 11,995,000 11,995,000
Payment for refunded bonds - (12,235,000) (12,235,000)
Net original issue premium - 459,738 459,738
Total other financing sources (uses)- 219,738 219,738
Net change in fund balances 58,379 11,758 70,137
FUND BALANCES:
Beginning of year 504,125 850,657 1,354,782
End of year 562,504$ 862,415$ 1,424,919$
CITY OF SARATOGA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CAPITAL IMPROVEMENT
FOR THE YEAR ENDED JUNE 30, 2012
66
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Licenses & permits 334,000$ 334,000$ 543,714$ 209,714$
Fines & forfeitures - - 300 300
Intergovermental - federal 5,725,139 5,849,893 1,915,187 (3,934,706)
Intergovermental - state 1,269,201 1,148,484 1,495,452 346,968
Intergovermental - other 66,000 185,469 30,531 (154,938)
Use of money and property 30,000 30,000 32,190 2,190
Other revenue 357,745 360,245 130,579 (229,666)
Total revenues 7,782,085 7,908,091 4,147,953 (3,760,138)
EXPENDITURES:
Capital outlay 12,085,444 12,354,537 5,178,900 7,175,637
Total expenditures 12,085,444 12,354,537 5,178,900 7,175,637
REVENUES OVER
(UNDER) EXPENDITURES (4,303,359) (4,446,446) (1,030,947) 3,415,499
OTHER FINANCING SOURCES (USES):
Transfers in 411,706 305,000 304,963 (37)
Transfers out (106,000) (205,222) (205,222) -
Total other financing sources (uses)305,706 99,778 99,741 (37)
Net change in fund balances (3,997,653)$ (4,346,668)$ (931,206) 3,415,462$
FUND BALANCES:
Beginning of year 4,475,411
End of year 3,544,205$
CITY OF SARATOGA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LIGHTING & LANDSCAPING ASSESSMENT DISTRICT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2012
67
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Property taxes 176,100$ 176,100$ 184,242$ 8,142$
Special assessments 308,150 308,150 304,840 (3,310)
Use of money and property 2,145 2,145 2,159 14
Total revenues 486,395 486,395 491,241 4,846
EXPENDITURES:
Current:
Public works 641,518 641,518 432,862 208,656
Total expenditures 641,518 641,518 432,862 208,656
REVENUES OVER
(UNDER) EXPENDITURES (155,123) (155,123) 58,379 213,502
Net change in fund balances (155,123)$ (155,123)$ 58,379 213,502$
FUND BALANCES:
Beginning of year 504,125
End of year 562,504$
CITY OF SARATOGA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LIBRARY BOND DEBT SERVICE FUND
FOR THE YEAR ENDED JUNE 30, 2012
68
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Special assessments 950,000$ 950,000$ 930,485$ (19,515)$
Use of money and property 3,600 3,600 2,093 (1,507)
Total revenues 953,600 953,600 932,578 (21,022)
EXPENDITURES:
Debt service:
General and ingov't services - - 219,738 (219,738)
Principal 370,000 370,000 370,000 -
Interest and fiscal charges 677,556 677,556 550,820 126,736
Total expenditures 1,047,556 1,047,556 1,140,558 (93,002)
REVENUES OVER
(UNDER) EXPENDITURES (93,956) (93,956) (207,980) (114,024)
OTHER FINANCING SOURCES (USES):
Refunded bond proceeds - - 11,995,000 11,995,000
Payment for refunded bonds - - (12,235,000) (12,235,000)
Net original issue premium - - 459,738 459,738
Total other financing sources (uses)- - 219,738 219,738
Net change in fund balances (93,956)$ (93,956)$ 11,758 105,714$
FUND BALANCES:
Beginning of year 850,657
End of year 862,415$
69
INTERNAL SERVICE FUNDS
Liability/Risk Management Insurance Fund – Accounts for insurance premiums, self-insurance portion
of claims, and administrative cost associated with settling claims. Charges made to operating departments
are based on liability risk and claim occurrence history.
Worker’s Compensation Self-insurance Fund – Accounts for insurance premiums, self insured portion
of claims, and administrative costs associated with settling claims. Charges made to operating
departments are based on liability risk and claim occurrence history.
Office Stores Fund - Photocopy equipment, postage and bulk mail meter expenses are controlled at one
source point and expended to the departments as goods or services are utilized.
Information Technology Services Fund – Supports the delivery of technology based services and
infrastructure, including desktop support, network systems, technology upgrades and initiatives,
community systems, and associated information technology equipment.
Vehicle & Equipment Maintenance Fund – Accounts for the cost of operating and maintaining
automotive equipment used for service operations in various City departments.
Building Maintenance Fund – Accounts for operating costs associated with building maintenance.
Expenses include custodial supplies and services, maintenance and repair, utilities, and staffing costs.
Vehicle & Equipment Replacement Fund – Established to accumulate funding for the replacement of
vehicles and equipment. Replacement costs are charged to program over the asset’s life span, reflective
of usage.
Information Technology Equipment Replacement Fund – Established to accumulate funding for the
replacement of information technology equipment. Replacement costs are charged to departments over
the asset’s lifespan, reflective of usage.
CITY OF SARATOGA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET ASSETS
JUNE 30, 2012
70
Liability /
Risk Workers'Office
Management Compensation Stores
ASSETS
Current assets:
Cash and investments 126,609$ 232,580$ 14,851$
Accounts receivable 30,474 - -
Total current assets 157,083 232,580 14,851
Noncurrent assets:
Capital assets:
Machinery and equipment - - -
Less: accumulated depreciation - - -
Total capital assets (net of
accumulated depreciation) - - -
Total assets 157,083 232,580 14,851
LIABILITIES
Liabilities:
Current assets:
Accounts payable 286 445 3,631
Accrued payroll 793 169 -
Claims payable 21,247 - -
Total current liabilities 22,326 614 3,631
NET ASSETS
Investment in capital assets - - -
Unrestricted 134,757 231,966 11,220
Total net assets 134,757$ 231,966$ 11,220$
71
Information Vehicle Vehicle Technology
Technology and Equipment Building and Equipment Equipment
Services Maintenance Maintenance Replacement Replacement Total
268,602$ 33,678$ 242,778$ 437,089$ 160,312$ 1,516,499$
- - - - - 30,474
268,602 33,678 242,778 437,089 160,312 1,546,973
- - - 633,819 90,240 724,059
- - - (567,670) (90,240) (657,910)
- - - 66,149 - 66,149
268,602 33,678 242,778 503,238 160,312 1,613,122
7,807 9,395 34,671 - 3,553 59,788
4,094 1,252 7,181 - - 13,489
- - - - - 21,247
11,901 10,647 41,852 - 3,553 94,524
- - - 66,149 - 66,149
256,701 23,031 200,926 437,089 156,759 1,452,449
256,701$ 23,031$ 200,926$ 503,238$ 156,759$ 1,518,598$
CITY OF SARATOGA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2012
72
Liability /
Risk Workers'Office
Management Compensation Stores
Operating revenues:
Charges for services 300,000$ 215,000$ 40,000$
Other operating revenues 52,454 4,287 10,625
Total operating revenues 352,454 219,287 50,625
Operating expenses:
Cost of services - - -
Administration 352,603 211,425 55,236
Depreciation - - -
Total operating expenses 352,603 211,425 55,236
Operating income (149) 7,862 (4,611)
Transfers out - - -
Change in net assets (149) 7,862 (4,611)
Total net assets - beginning 134,906 224,104 15,831
Total net assets - ending 134,757$ 231,966$ 11,220$
73
Information Vehicle Vehicle Technology
Technology and Equipment Building and Equipment Equipment
Services Maintenance Maintenance Replacement Replacement Total
400,000$ 200,000$ 725,000$ 100,000$ 50,000$ 2,030,000$
- - - 15,716 - 83,082
400,000 200,000 725,000 115,716 50,000 2,113,082
- 219,786 732,592 - 53,845 1,006,223
374,362 - - - - 993,626
- - - 85,390 9,024 94,414
374,362 219,786 732,592 85,390 62,869 2,094,263
25,638 (19,786) (7,592) 30,326 (12,869) 18,819
- - - - (24,963) (24,963)
25,638 (19,786) (7,592) 30,326 (37,832) (6,144)
231,063 42,817 208,518 472,912 194,591 1,524,742
256,701$ 23,031$ 200,926$ 503,238$ 156,759$ 1,518,598$
CITY OF SARATOGA
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2012
74
Liability /
Risk Workers'Office
Management Compensation Stores
Cash flows from operating activities:
Receipts from customers and users 321,980$ 219,287$ 50,625$
Payments to suppliers (301,527) (200,944) (57,474)
Payments to employees (43,547) (10,502) -
Net cash provided by operating activities (23,094) 7,841 (6,849)
Cash flows from noncapital financing activities:
Transfers out - - -
Net cash used in nonoperating activities - - -
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 (23,094) 7,841 (6,849)
Cash and cash equivalents, beginning of year 149,703 224,739 21,700
Cash and cash equivalents, ending of year 126,609$ 232,580$ 14,851$
Reconciliation of operating income to net cash provided
by operating activities:
Operating income (loss)(149)$ 7,862$ (4,611)$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation - - -
Change in operating assets and liabilities:
(Inecrease) in accounts receivables (30,474) - -
(Decrease) increase in accounts payable 286 86 (2,238)
Increase in claims payable 7,156 - -
(Decrease) increase in accured payroll 87 (107) -
Net cash provided (used) by operating activities (23,094)$ 7,841$ (6,849)$
75
Information
Information Vehicle Vehicle Technology
Technology and Equipment Building and Equipment Equipment
Services Maintenance Maintenance Replacement Replacement Total
400,000$ 200,000$ 725,000$ 115,716$ 50,000$ 2,082,608$
(172,744) (144,408) (281,199) (1,579) (50,292) (1,210,167)
(205,578) (74,973) (441,817) - - (776,417)
21,678 (19,381) 1,984 114,137 (292) 96,024
- - - - (24,963) (24,963)
- - - - (24,963) (24,963)
- - - (10,000) - (10,000)
- - - (10,000) - (10,000)
21,678 (19,381) 1,984 104,137 (25,255) 61,061
246,924 53,059 240,794 332,952 185,567 1,455,438
268,602$ 33,678$ 242,778$ 437,089$ 160,312$ 1,516,499$
25,638$ (19,786)$ (7,592)$ 30,326$ (12,869)$ 18,819$
- - - 85,390 9,024 94,414
- - - - - (30,474)
(4,474) 689 9,830 (1,579) 3,553 6,153
- - - - - 7,156
514 (284) (254) - - (44)
21,678$ (19,381)$ 1,984$ 114,137$ (292)$ 96,024$
76
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77
CAPITAL ASSETS
USED IN THE OPERATION OF GOVERNMENTAL FUNDS
78
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CITY OF SARATOGA
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULE BY SOURCE
JUNE 30, 2012 AND 2011
79
2012 2011
Governmental Funds Capital Assets:
Land and land improvements 14,510,401$ 13,135,756$
Buildings and structures 23,611,590 23,462,738
Machinery and equipment 1,698,723 1,773,286
Infrastructure 104,928,913 104,903,913
Construction in progress 7,166,953 6,248,294
Total Governmental Funds Capital Assets 151,916,580 149,523,987
Accumulated depreciation (28,786,053) (27,053,663)
Total Governmental Funds Capital Assets, Net 123,130,527$ 122,470,324$
Investments in Governmental Funds
Capital Assets by Source:
General Fund 115,440,255$ 115,548,433$
Special revenue funds 960,972 974,487
Capital projects funds 34,668,005 32,903,719
Donations 847,348 97,348
Accumulated depreciation (28,786,053) (27,053,663)
Total Governmental Funds Capital Assets 123,130,527$ 122,470,324$
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 assets.
CITY OF SARATOGA
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY1
JUNE 30, 2012
80
Land Buildings
and Land and
Improvements Structures
Function and Activity
General and intergovernmental services:
Management services -$ 564,632$
Administrative services - 167,585
Intergovernmental services 118,184 3,138,641
Total General and Intergovernmental Services:118,184 3,870,858
Public safety:
Police services - -
Code enforcement - -
Total Public Safety:- -
Public works:
Streets and sidewalks 835,154 30,628
Parks/open space 2,637,061 2,679,107
Total Public Works:3,472,215 2,709,735
Community services 9,177,538 2,716,098
Community development services 1,742,464 14,314,899
Total Governmental Funds Capital Assets 14,510,401 23,611,590
Accumulated depreciation - (6,641,759)
Total Governmental Funds Capital Assets, Net 14,510,401$ 16,969,831$
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 assets.
81
Machinery Construction
and in
Equipment Infrastructure Progress Total
553,507$ -$ 216,994$ 1,335,133$
140,332 - - 307,917
22,225 - - 3,279,050
716,064 - 216,994 4,922,100
29,459 - - 29,459
7,548 - - 7,548
37,007 - - 37,007
437,835 104,845,895 3,334,308 109,483,820
222,596 - 107,580 5,646,344
660,431 104,845,895 3,441,888 115,130,164
268,589 83,017 3,460,815 15,706,057
16,632 - 47,256 16,121,251
1,698,723 104,928,912 7,166,953 151,916,579
(1,160,737) (20,983,556) - (28,786,052)
537,986$ 83,945,356$ 7,166,953$ 123,130,527$
CITY OF SARATOGA
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGE BY FUNCTION AND ACTIVITY
JUNE 30, 2012
82
Governmental Governmental
Funds Capital Funds Capital
Assets Assets
July 1, 2011 Additions Deletions June 30, 2012
Function and Activity
General and intergovernmental services:
Management services 1,141,732$ 193,401$ -$ 1,335,133$
Administrative services 297,075 10,842 - 307,917
Intergovernmental services 3,304,384 - (25,334) 3,279,050
Total General and Intergovernmental Services:4,743,191 204,243 (25,334) 4,922,100
Public safety:
Police services 27,813 1,646 - 29,459
Code enforcement 7,548 - - 7,548
Total Public Safety:35,361 1,646 - 37,007
Public works:
Streets and sidewalks 109,218,352 311,265 (45,797) 109,483,820
Parks/open space 5,606,522 87,709 (47,887) 5,646,344
Total Public Works:114,824,874 398,974 (93,684) 115,130,164
Community services 13,790,713 1,915,344 - 15,706,057
Community development services 16,129,847 4,920 (13,516) 16,121,251
Total Governmental Funds Capital Assets 149,523,986 2,525,127 (132,534) 151,916,579
Accumulated depreciation (27,053,662) (1,864,924) 132,534 (28,786,052)
Total Governmental Funds Capital Assets, Net 122,470,324$ 660,203$ -$ 123,130,527$
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 assets.
STATISTICAL SECTION
This page is intentionally blank
83
This part of the City of Saratoga's comprehensive annual financial report presents detailed information as
a context for understanding what the information in the financial statements, note disclosures and required
supplementary information says about the government's overall financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how
the government's financial performance and well being have changed over time. 84-89
Revenue Capacity
These schedules contain information to help the reader assess the government’s
most significant local revenue source; property tax. 90-99
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. 100-106
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. 107-108
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. 110-115
The City of Saratoga implemented GASB Statement No. 34 in fiscal year 2001/02; schedules presenting
government-wide information include information beginning in that year.
The City of Saratoga implemented GASB Statement No. 44 in fiscal year 2007/08; newly required
schedules presenting information in the Statistical Section include the earliest available information.
CITY OF SARATOGA
NET ASSETS BY COMPONENT
LAST EIGHT YEARS
(ACCRUAL BASIS OF ACCOUNTING)
84
(amounts expressed in thousands)
2005 2006 2007 2008
Primary government
Governmental activities
Investment in capital assets,
net of related debt 105,784$ 107,100$ 108,102$ 109,818$
Restricted 6,328 5,370 5,928 5,940
Unrestricted 6,789 9,955 8,593 9,710
Total primary government 118,901$ 122,425$ 122,623$ 125,468$
Source: CAFR
Fiscal Year
$95,000
$100,000
$105,000
$110,000
$115,000
$120,000
$125,000
$130,000
2005 2006 2007 2008 2009 2010 2011 2012
Net Assets by Component
Investment in capital assets, net of related debt Restricted Unrestricted
85
2009 2010 2011 2012
108,818$ 108,966$ 110,016$ 111,201$
5,281 5,519 5,830 1,938
8,759 8,533 7,964 12,248
122,858$ 123,018$ 123,810$ 125,387$
CITY OF SARATOGA
CHANGES IN NET ASSETS
LAST EIGHT YEARS
(ACCRUAL BASIS OF ACCOUNTING)
86
(amounts expressed in thousands)
2005 2006 2007 2008
Expenses:
Governmental activities:
General and intergovernmental services 4,160$ 3,473$ 4,532$ 6,293$
Public safety 3,736 3,427 3,844 4,166
Public works 3,829 4,752 6,425 5,325
Community services 1,929 1,395 1,437 1,286
Community development services 2,349 2,226 1,993 2,032
Interest on long-term debt (unallocated)760 754 768 714
Total governmental activities expenses 16,763 16,027 18,999 19,816
Program revenues:
Charges for services:
General and intergovernmental services - 31 452 1,787
Public safety 141 122 - 411
Public works 1,988 1,890 528 1,705
Community services 757 1,008 604 911
Community development services 1,890 2,665 1,328 2,110
Operating grants and contributions 1,218 1,549 2,155 151
Capital grants and contributions 865 1,568 1,282 1,715
Total governmental activates program revenues 6,859 8,833 6,349 8,790
Net (expense) revenue and change in net assets (9,904) (7,194) (12,650) (11,026)
General revenue and other changes in net assets
Taxes:
Property taxes 4,841 5,652 5,772 8,099
Sales taxes 1,011 988 995 1,058
Local taxes 1,143 1,288 1,099 694
Franchise taxes 995 1,040 1,187 1,625
Motor vehicle in-lieu 420 718 177 149
Total Taxes 8,410 9,686 9,230 11,625
Intergovernmental - - 673 841
Investment earnings 283 709 2,813 1,057
Other revenues 193 323 132 348
Total general revenues 8,886 10,718 12,848 13,871
Change in net assets (1,018) 3,524 198 2,845
Net assets - beginning of year 119,919 118,901 122,425 122,623
Net assets - end of year 118,901$ 122,425$ 122,623$ 125,468$
Source: CAFR
Fiscal Year
87
2009 2010 2011 2012
5,595$ 3,729$ 4,368$ 3,486$
4,211 4,339 4,457 4,300
7,643 6,535 6,645 9,121
1,634 1,711 1,846 1,996
2,000 1,751 1,839 1,553
697 677 656 453
21,780 18,742 19,811 20,909
133 125 171 140
520 425 561 694
2,379 2,535 2,771 4,886
935 917 1,020 1,640
1,802 1,586 1,734 1,922
228 275 401 -
339 674 1,221 -
6,336 6,537 7,879 9,282
(15,444) (12,205) (11,932) (11,627)
8,336 8,371 8,199 8,457
1,043 955 991 1,101
663 560 632 683
1,657 1,664 1,821 1,852
116 101 146 16
11,815 11,651 11,789 12,109
474 522 773 910
397 101 65 67
148 91 97 118
12,834 12,365 12,724 13,204
(2,610) 160 792 1,577
125,468 122,858 123,018 123,810
122,858$ 123,018$ 123,810$ 125,387$
CITY OF SARATOGA
FUND BALANCE OF GOVERNMENTAL FUNDS
LAST EIGHT YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
88
(amounts expressed in thousands)
2005 2006 2007 2008
General fund:
Restricted 899$ 910$ 711$ 679$
Committed - - - -
Assigned 75 615 831 1,258
Unassigned 6,002 8,854 7,619 8,459
Total general fund 6,976$ 10,379$ 9,161$ 10,396$
All other governmental funds:
Restricted
Special revenue funds 202$ 919$ 844$ 318$
Debt service 856 865 746 854
Committed
Capital project funds 5,321 3,586 4,338 4,768
Total all other governmental funds 6,379$ 5,370$ 5,928$ 5,940$
Source: CAFR
Information prior to fiscal year 2011 have been updated to conform with GASB 54 requirements
Fiscal Year
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
General -
Restricted
General -
Committed
General -
Assigned
General -
Unassigned
Debt Service Special
Revenue
Capital
Projects
Fund Balances of Governmental Funds
2005
2006
2007
2008
2009
2010
2011
2012
CITY OF SARATOGA
FUND BALANCE OF GOVERNMENTAL FUNDS
LAST EIGHT YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
89
2009 2010 2011 2012
613$ 563$ 513$ 513$
550 300 500 600
322 196 667 3,161
6,744 6,952 5,804 4,655
8,229$ 8,011$ 7,484$ 8,929$
484$ 569$ 504$ 563$
931 893 851 862
3,866 4,057 4,475 3,544
5,281$ 5,519$ 5,830$ 4,969$
CITY OF SARATOGA
GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE
LAST EIGHT YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
90
(amounts expressed in thousands)
2005 2006 2007 2008
Tax revenues:
Property taxes 4,841$ 5,652$ 5,772$ 8,099$
Special assessments 1,476 1,369 271 1,392
Sales taxes 1,011 988 995 1,058
Local taxes 1,143 1,288 1,099 694
Franchise taxes 995 1,040 1,187 1,625
Motor vehicle in-lieu 420 718 177 149
Total tax revenues 9,886$ 11,055$ 9,501$ 13,017$
Source: CAFR
Fiscal Year
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
Property
taxes
Special
assessments
Sales taxes Local taxes Motor vehicle
in-lieu
Franchise
taxes
Tax Revenues by Source
2005
2006
2007
2008
2009
2010
2011
2012
91
2009 2010 2011 2012
8,336$ 8,371$ 8,199$ 8,457$
1,368 1,247 1,255 1,243
1,043 955 991 1,101
663 560 632 683
1,657 1,664 1,821 1,852
116 101 146 16
13,183$ 12,898$ 13,044$ 13,352$
CITY OF SARATOGA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST EIGHT YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
92
(amounts expressed in thousands)
2005 2006 2007 2008
Revenues:
Property taxes 4,893$ 5,652$ 4,758$ 7,877$
Special assessments 1,411 1,370 1,285 1,566
Sales taxes 1,011 987 995 1,058
Other local taxes 851 1,288 1,126 773
Licensed and permits 100 79 1,340 1,671
Fines and forfeitures 162 259 396 344
Intergovernmental - federal 90 - - -
Intergovernmental - state 1,375 2,660 3,631 1,641
Intergovernmental - other 671 976 629 777
Franchise fees 1,294 1,041 1,187 1,622
Use of money any property 664 752 2,813 924
Other revenues 153 1,719 151 326
Current services charges 3,093 2,715 900 4,184
Total tax revenues 15,768 19,498 19,211 22,763
Expenditures:
Current:
General and intergovernmental services 3,238 3,346 3,806 4,083
Public safety 3,731 3,423 3,824 4,166
Public works 2,599 3,501 5,714 4,717
Community services 1,875 1,210 1,381 1,262
Community development services 1,990 1,847 1,962 2,026
Capital outlay 1,777 2,908 2,130 4,246
Debt service:
Principal 255 270 280 295
Interest and fiscal charges 766 760 774 721
Total expenditures 16,231 17,265 19,871 21,515
Excess of revenues (463) 2,233 (660) 1,247
Other financing sources (uses):
Refunded bond proceeds - - - -
Payment for refunded bonds - - - -
Net original issue premium - - - -
Transfers in 2,492 499 3,422 2,241
Transfers out (2,492) (499) (3,422) (2,241)
Total other financing sources (uses)- - - -
Net change in fund balances (463)$ 2,233$ (660)$ 1,247$
Debt as a percentage of noncapital expenditures 7.06%7.17%5.94%5.62%
Source: CAFR
Fiscal Year
93
2009 2010 2011 2012
8,335$ 8,371$ 8,199$ 8,457$
1,368 1,247 1,255 1,243
1,043 954 991 1,101
663 560 632 683
1,460 1,489 1,950 1,728
360 359 285 234
- 430 1,033 1,915
1,283 1,258 1,480 1,728
290 258 337 73
1,657 1,664 1,821 1,852
794 595 550 589
1,966 1,794 2,169 2,199
- - - -
19,219 18,979 20,702 21,802
3,330 3,102 3,524 3,145
4,206 4,349 4,467 4,310
4,700 4,730 4,717 4,751
1,424 1,223 1,322 1,269
2,450 2,111 2,193 1,888
4,060 2,584 3,704 5,179
310 330 350 370
705 685 665 551
21,185 19,114 20,942 21,463
(1,966) (135) (240) 339
- - - 11,995
- - - (12,235)
- - - 460
2,043 1,172 1,725 510
(2,043) (1,017) (1,700) (485)
- 155 25 245
(1,966)$ 20$ (215)$ 584$
4.89%5.80%5.56%5.01%
CITY OF SARATOGA
PROPERTY TAX RATES – DIRECT AND OVERLAPPING GOVERNMENTS
LAST EIGHT YEARS
94
(Property Tax Rates per $100 of Assessed Value)
2005 2006 2007 2008
General 1.0000 1.0000 1.0000 1.0000
County Retirement Levy 0.0388 0.0388 0.0388 0.0388
County Library 0.0024 0.0024 0.0024 0.0024
City of Saratoga 0.0148 0.0117 0.0096 0.0113
1.0560 1.0529 1.0508 1.0525
Campbell School District 0.0529 0.0512 0.0508 0.0475
County Bond 2008 Hospital 0.0000 0.0000 0.0000 0.0000
Campbell Elementary 2002 0.0000 0.0000 0.0000 0.0000
Campbell Elementary 2010 0.0000 0.0000 0.0000 0.0000
Campbell Union High 1999 0.0198 0.0224 0.0198 0.0285
Campbell Union High 2006 0.0000 0.0000 0.0000 0.0000
Cupertino Elementary School District 0.0360 0.0350 0.0289 0.0337
Moreland Elementary School District 0.0612 0.0561 0.0556 0.0569
Saratoga School District 0.0361 0.0356 0.0351 0.0363
Campbell Union High School District 0.0197 0.0224 0.0198 0.0285
Fremont Union High School District 0.0268 0.0260 0.0243 0.0241
Los Gatos-Saratoga Joint Union High School District 0.0409 0.0371 0.0651 0.0345
Foothill-DeAnza Community College District 0.0129 0.0119 0.0346 0.0113
West Valley-Mission Community College District 0.0000 0.0140 0.0126 0.0118
Saratoga Fire District 0.0017 0.0052 0.0049 0.0053
Santa Clara Valley Water District - State Water Project 0.0086 0.0069 0.0070 0.0067
Santa Clara Valley Water District - Zone W-1 0.0006 0.0009 0.0002 0.0040
0.3172 0.3247 0.3587 0.3291
Total Tax Rate 1.3732 1.3776 1.4095 1.3816
Source: California Municipal Statistics, Inc.
Fiscal Year
95
2009 2010 2011 2012
1.0000 1.0000 1.0000 1.0000
0.0388 0.0388 0.0388 0.0388
0.0024 0.0024 0.0024 0.0024
0.0104 0.0094 0.0094 0.0088
1.0516 1.0506 1.0506 1.0500
0.0524 0.0285 0.0249 0.0283
0.0000 0.0122 0.0095 0.0047
0.0000 0.0267 0.0298 0.0266
0.0000 0.0000 0.0005 0.0003
0.0299 0.0183 0.0196 0.0186
0.0000 0.0131 0.0131 0.0156
0.0306 0.0000 0.0000 0.0000
0.0565 0.0000 0.0000 0.0000
0.0363 0.0000 0.0000 0.0000
0.0299 0.0000 0.0000 0.0000
0.0339 0.0000 0.0000 0.0000
0.0330 0.0000 0.0000 0.0000
0.0123 0.0000 0.0000 0.0000
0.0032 0.0140 0.0139 0.0137
0.0053 0.0000 0.0000 0.0000
0.0059 0.0071 0.0070 0.0063
0.0002 0.0300 0.0002 0.0001
0.3294 0.1499 0.1185 0.1142
1.3810 1.2005 1.1691 1.1642
CITY OF SARATOGA
ASSESSED VALUE OF TAXABLE PROPERTY
LAST EIGHT YEARS
96
(amounts expressed in thousands)
Fiscal
Year Total
Ended Residential Commercial Industrial Other Unsecured Assessed
June 30 Property Property Property Property Property Property
2005 7,114,095$ 166,071$ 8,746$ 138,912$ 42,965$ 7,470,789$
2006 7,883,965 177,149 8,921 161,496 46,874 8,278,405
2007 8,467,894 187,142 9,099 192,470 39,764 8,896,369
2008 9,025,628 208,369 9,281 210,269 35,775 9,489,322
2009 9,605,309 213,951 9,467 223,190 43,933 10,095,850
2010 9,724,687 120,769 9,656 327,898 58,210 10,241,220
2011 9,639,782 107,269 9,633 323,881 57,172 10,137,737
2012 9,834,082 111,232 9,706 323,563 55,535 10,334,118
Source:Santa Clara County Assessor data, MuniServices, LLC
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2005 2006 2007 2008 2009 2010 2011 2012
Total Assessed Property
Unsecured
Other
Industrial
Commercial
Residential
97
Total
Less:Total Taxable Direct
Tax Exempt Assessed Tax
Real Property Value Rate
(76,932)$ 7,393,857$ 1.0560
(133,951) 8,144,454 1.0529
(140,859) 8,755,510 1.0508
(159,369) 9,329,953 1.0525
(161,488) 9,934,362 1.0516
(230,127) 10,011,093 1.0506
(230,477) 9,907,260 1.0506
(230,868) 10,103,250 1.0500
CITY OF SARATOGA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND TEN YEARS AGO
JUNE 30, 2012
98
(amounts expressed in thousands)
% of Total % of Total
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Cupertino Village Associates, LLC 35,069$ 1 22.83%
John I. and Michelle Keller 20,459 2 13.32%
Quito Village Group, LLC 19,143 3 12.46%
San Jose Water Works 16,593 4 10.80%14,002$ 2 11.82%
Gregpenn Properties, LLC 12,800 5 8.33%
John M. & Abby J. Sobrato 12,299 6 8.01%11,730 5 9.90%
Argonaut Associates, LLV 10,564 7 6.88%
Public Storage Inc.9,466 8 6.16%8,209 7 6.93%
Ashok Krishnamurthi 8,880 9 5.78%
Terri E Morrison 8,306 10 5.41%
Odd Fellows Home of California
Saratoga Office Center Partners, LLC 28,000 1 0.26%
Navico Incorporated 12,650 3 10.68%
Michael T Labarbera 12,648 4 10.68%
David House 8,426 6 7.11%
Howell McNeil Devel LLC 8,181 8 6.91%
Vincent R & Susan Borelli 8,160 9 6.89%
David J Morrison Trustee 6,426 10 5.43%
Top Ten Total Assessed Value 153,579$ 118,432$
City Total Assessed Value 10,103,250$ 7,393,858$
Source: Santa Clara County Assessor data, MuniServices, LLC
2012 2002
CITY OF SARATOGA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST EIGHT YEARS
99
Fiscal Year Total Tax Collections in
Ended Levy for Subsequent
June 30 Fiscal Year Amount Percentage Years Amount Percentage
2005 4,972,875$ 4,972,875$ 100.0%-$ 4,972,875$ 100.0%
2006 5,243,038 5,243,038 100.0%- 5,243,038 100.0%
2007 6,032,558 6,032,558 100.0%- 6,032,558 100.0%
2008 8,108,364 8,108,364 100.0%- 8,108,364 100.0%
2009 8,332,184 8,332,184 100.0%- 8,332,184 100.0%
2010 8,371,396 8,371,396 100.0%- 8,371,396 100.0%
2011 8,199,341 8,199,341 100.0%- 8,199,341 100.0%
2012 8,456,687 8,456,687 100.0%- 8,456,687 100.0%
Source: City of Saratoga
Collected within the
Fiscal Year of the Levy Total Collections to Date
CITY OF SARATOGA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST EIGHT YEARS
100
(amounts expressed in thousands, except per capita amounts)
2005 2006 2007 2008
Governmental activities
General obligation bonds 14,440$ 14,170$ 13,890$ 13,595$
Total primary government 14,440$ 14,170$ 13,890$ 13,595$
Percentage of Personal Income 1 0.91%0.82%0.75%0.74%
Per capita 2 468 460 443 430
Source: CAFR
1US Census Bureau, adjusted for inflation, MuniServices LLC
2Population information from California State Controller's Office
Fiscal Year
101
2009 2010 2011 2012
13,285$ 12,955$ 12,605$ 11,995$
13,285$ 12,955$ 12,605$ 11,995$
0.76%0.54%0.57%0.57%
419 405 417 395
CITY OF SARATOGA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST EIGHT YEARS
102
(amounts expressed in thousands, except per capita amounts)
2005 2006 2007 2008
General obligation bonds 14,440$ 14,170$ 13,890$ 13,595$
Less: Amount available in debt service fund (855) (865) (747) (854)
Total primary government 13,585$ 13,305$ 13,143$ 12,741$
Percentage of actual taxable
value of property 0.18%0.16%0.15%0.14%
Per capita1 440 431 419 403
Source: CAFR
1Population information from California State Controller's Office
Fiscal Year
103
2009 2010 2011 2012
13,285$ 12,955$ 12,605$ 11,995$
(926) (890) (848) (860)
12,359$ 12,065$ 11,757$ 11,135$
0.12%0.12%0.12%0.11%
390 377 389 367
CITY OF SARATOGA
LEGAL DEBT MARGIN INFORMATION
LAST EIGHT YEARS
104
(amounts expressed in thousands)
2005 2006 2007 2008
Debt Limit 1,120,618$ 1,241,761$ 1,334,455$ 1,423,398$
Total net debt applicable to limit 13,585 13,305 13,143 12,741
Legal debt margin 1,107,033$ 1,228,456$ 1,321,312$ 1,410,657$
Total net debt applicable to the limit
as a percentage of debt limit 1.21%1.07%0.98%0.90%
Legal debt margin calculation
Assessed value 7,393,857$ 8,144,454$ 8,755,510$ 9,329,953$
Add back: exempt real property 76,932 133,951 140,859 159,369
Total assessed value 7,470,789$ 8,278,405$ 8,896,369$ 9,489,322$
Debt limit (15% of total assessed value)1,120,618$ 1,241,761$ 1,334,455$ 1,423,398$
Debt applicable to limit:
General obligation bonds 14,440$ 14,170$ 13,890$ 13,595$
Less: Amount available in debt service fund (855) (865) (747) (854)
Total net debt applicable to limit 13,585$ 13,305$ 13,143$ 12,741$
Legal debt margin 1,107,033$ 1,228,456$ 1,321,312$ 1,410,657$
Source: CAFR
Fiscal Year
105
2009 2010 2011 2012
1,514,378$ 1,536,183$ 1,520,660$ 1,550,118$
12,359 12,065 11,757 11,135
1,502,019$ 1,524,118$ 1,508,903$ 1,538,983$
0.82%0.79%0.77%0.72%
9,934,362$ 10,011,093$ 9,907,259$ 10,103,250$
161,488 230,127 230,477 230,868
10,095,850$ 10,241,220$ 10,137,736$ 10,334,118$
1,514,378$ 1,536,183$ 1,520,660$ 1,550,118$
13,285$ 12,955$ 12,605$ 11,995$
(926) (890) (848) (860)
12,359$ 12,065$ 11,757$ 11,135$
1,502,019$ 1,524,118$ 1,508,903$ 1,538,983$
CITY OF SARATOGA
DIRECT AND OVERLAPPING
GOVERNMENTAL ACTIVITIES DEBT
106
(amount expressed in thousands)
Estimated
Estimated Share of
Debt Percentage Overlapping
Outstanding Applicable1 Debt
Direct Debt:
City of Saratoga 11,995$ 100.000%11,995$
Total Direct Debt 11,995
Overlapping Tax and Assessment Debt:
Santa Clara County 316,800 3.785%11,991
Foothill-De Anza Community College District 628,424 1.752%11,010
West Valley Community College District 210,962 11.872%25,045
Campbell Union High School District 161,195 5.616%9,053
Fremont Union High School District 260,605 3.793%9,885
Los Gatos-Saratoga Joint Union High School District 51,160 40.823%20,885
Campbell Union School District 148,705 7.001%10,411
Cupertino Union School District 120,673 6.207%7,490
Moreland School District 85,223 12.795%10,904
Saratoga Union School District 45,414 86.127%39,114
Saratoga Fire Protection District 4,554 97.255%4,429
Santa Clara Valley Water District Benefit Assessment 133,440 3.785%5,051
Total Overlapping Tax and Assessment Debt 165,268
Overlapping General Fund Debt:
Santa Clara County General Fund Obligations 770,947 3.785%29,180$
Santa Clara County Pension Obligations 383,035 3.785%14,498
Santa Clara County Board of Education
Certificates of Participation 11,540 3.785%437
Santa Clara County Vector Control District
Certificates of Participation 3,630 3.785%137
Foothill-De Anza Community College District
Certificates of Participation 18,890 1.752%331
West Valley-Mission College District
General Fund Obligations 65,715 11.872%7,802
Los Gatos-Saratoga Joint Union High School District
Certificates of Participation 9,070 40.823%3,703
Campbell Union High School District
Certificates of Participation 12,452 5.616%699
Saratoga Union School District
Certificates of Participation 5,830 86.127%5,021
Midpeninsula Open Space Park District
General Fund Obligations 131,003 6.236%8,169
Total Overlapping General Fund Debt 69,977
Total Overlapping Tax & Assessement and General Fund Debt 235,245
Combined Total Debt2 247,240$
1Percentage of overlapping agency's assessed valuation located within boundaries of the city.
2Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation
bonds and non-bonded capital lease obligations.
Source: California Municipal Statistics, Inc.
CITY OF SARATOGA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST EIGHT YEARS
107
Personal Per Capita
Fiscal City Income Personal Labor Unemployment
Year Population1 (in thousands)2 Income2 Force3 Rate3
2005 30,850 1,586,245$ 51,418$ 12,600 2.5%
2006 30,835 1,719,175 55,754 12,700 2.1%
2007 31,352 1,860,365 59,338 12,900 2.3%
2008 31,592 1,843,425 58,351 13,100 3.2%
2009 31,679 1,747,699 55,169 13,300 6.0%
2010 31,997 2,401,151 75,043 13,200 5.6%
2011 30,195 2,211,963 73,256 13,400 5.0%
2012 30,363 2,119,463 69,804 14,000 4.4%
Source:1Popluaton information from California State Controller's Office
2US Census Data, adjusted for inflation, MuniServices LLC
3EDD Labor Market Information Division, MuniServices LLC
10,000
15,000
20,000
25,000
30,000
35,000
2005 2006 2007 2008 2009 2010 2011 2012
Labor Force vs. Population
Population
Labor Force
CITY OF SARATOGA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND SEVEN YEARS AGO AT JUNE 30, 2012
108
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment Employees Rank Employment
Gene's Fine Foods 85 1 0.61%85 1 0.67%
Safeway 65 2 0.46%65 2 0.52%
Saratoga Country Club 65 3 0.46%65 3 0.52%
McDonald's 45 4 0.32%
Roku Inc 33 5 0.24%
La Fondue 22 6 0.16%
CVS 20 7 0.14%20 6 0.16%
Classic Car Wash 20 8 0.14%20 7 0.16%
Hinshaw, Draa & Marsh 20 9 0.14%20 9 0.16%
Jakes of Saratoga 20 10 0.14%
24 Hour Fitness 30 4 0.24%
Windermere 27 5 0.21%
Harmonic European Day Spa 20 8 0.16%
Bella Saratoga 20 10 0.16%
Total City Employment2 14,000 12,600
1Earliest information available
2EDD Labor Market Information Division, MuniServices LLC
Source: City of Saratoga
2012 20051
109
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CITY OF SARATOGA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
LAST EIGHT FISCAL YEARS
110
2005 2006 2007 2008
Function
General government 12.65 10.75 11.00 13.00
Public works 20.75 20.75 21.75 22.75
Community development 14.00 13.00 14.00 14.00
Parks and recreation 10.35 10.35 10.60 10.60
Total 57.75 54.85 57.35 60.35
Source: City of Saratoga Budget Document
Fiscal Year
-
10.00
20.00
30.00
40.00
50.00
60.00
70.00
2005 2006 2007 2008 2009 2010 2011 2012
Full-Time Equivalents
Parks & Rec
Comm Development
Public works
General gov't
111
2009 2010 2011 2012
12.00 11.75 11.45 10.80
21.75 21.75 21.65 21.55
14.00 12.00 12.00 12.00
10.60 9.35 9.50 9.50
58.35 54.85 54.60 53.85
CITY OF SARATOGA
OPERATING INDICATORS BY FUNCTION
LAST EIGHT FISCAL YEARS
112
2005 2006 2007 2008
Function
Part 1 crimes1 463 426 425 381
Total incidents 42,011 40,567 39,663 41,243
Police reports 1,767 1,659 1,767 1,941
Public Works
Street resurfacing (miles)N/A 5 14 N/A
Street lights repaired 2 3 3 12
Potholes filled (sq. ft.)N/A 5,000 5,000 7,000
Community Development
Total permit valuation ($000)74,668 94,485 69,935 70,442
Parks and Recreation
Classes, trips (enrollment) community events 5,604 5,712 4,817 4,782
Adult Exercise (e.g. JS Dance. Jazzerxcise)272 312 285 362
Sports programs (e.g. Adult basketball, softball)470 473 515 591
Prescholl programs (enrollment)200 163 159 225
Staffed Day/summer camps (enrollment)301 287 205 242
Teen/youth council (enrollment)2,506 3,798 2,221 94
Senior center (enrollment/attendance days)22,312 22,591 18,515 17,826
1Part 1 Crimes are the following as reported to DOJ: homicide, rape, robbery, burglary, assault, theft,
auto theft, and arson.
Source: City of Saratoga various records
Fiscal Year
113
2009 2010 2011 2012
282 173 373 287
41,384 39,942 41,642 35,664
1,949 1,273 1,549 1,329
6 3 N/A 6
25 24 25 41
10,000 10,000 11,000 10,000
61,117 44,658 50,936 59,675
4,698 4,366 6,135 5,479
515 545 661 647
459 423 - -
171 161 142 132
225 331 326 -
419 2,110 1,323 787
16,325 16,533 14,640 15,221
CITY OF SARATOGA
CAPITAL ASSET STATISTICS BY FUNCTION
LAST EIGHT FISCAL YEARS
114
2005 2006 2007 2008
Function
Public safety
Police Station 1 1 - -
Fire Station
Saratoga Fire District 1 1 1 1
Central Fire District 1 1 1 1
Public Works
Street Miles - Private 13 13 13 13
Street Miles - Public 137 137 137 137
West Valley Sanitation District
Number of Connections 8,601 8,621 8,651 8,651
Length of Sewer Lines 120 120 127 127
Cupertino Valley Sanitation District
Number of Connections 2,118 2,118 2,915 2,927
Length of Sewer Lines 36 36 36 36
Parks and Recreation
Parks Acreage 81 81 81 81
Parks 15 15 15 15
Source: City of Saratoga various records
Fiscal Year
115
2009 2010 2011 2012
- - - -
1 1 1 1
1 1 1 1
14 14 14 14
140 140 140 140
8,683 8,687 8,664 8,679
127 127 127 127
2,938 2,949 2,954 2,959
37 37 37 37
84 84 84 84
15 15 15 15
116
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