cay
cif
Cuperluu
2007 08
Director of
Administrative Services
Carol Atwood
IT Manager
Mariyah Serratos
City Clerk
Kimberly Smith
Finance Director
David Woo
HumanResources
Director
Sandy Abe
Code
Enforcement
Outreach
Programs
City Attorney
Charles Kilian
Citizen Adivisol
Commissions and
Committees
City Manager
David Knapp
Public Information Officer
Rick Kitson
Director of
Community Development
Steve Piasecki
Building Official
Greg Casteel
City Planner
Ciddy Wordell
Economic Development
RDA Manager
Kelly Kline
City Treasurer
Carol Atwood
Director of
Parks and Recreation
Therese Smith
Recreation Supervisor
Sports Center
Don McCarthy
Recreation Supervisor
Youth Programs
Christine Hanel
Recreation Supervisor
Senior Center
Julia Lamy
Recreation Supervisor
FacilitiesCommunity Events
Tom Walters
Parks
Supervisor
John Bisely
CityArchitect
Terry Greene
Public Works
Project Manager
Carmen Lynaugh
Assistant Director
of Public Works Maint
Bob Rizzo
Facilities
Supervisor
Jim Davis
CITY OF
CUPERTINO
Director of
Public Works
Ralph Qualls
Assistant Director
of Public Works Eng
Glenn Goepfert
Environmental
Programs Manager
Lavenia Millar
Senior Civil Engineer
David Stillman
Streets
Supervisor
Diane Mahan
Public Works
Supervisor
Ron Silva
CITY OF CUPERTINO CALIFORNIA
Fiscal Year2007 08
CITY COUNCIL
Kris Wang
Mayor
Patrick Kwok
Vice Mayor
n
Dolly Sandoval
Councilmember
D Orrin Mahoney
Councilmember
DIRECTORY OF CITY OFFICIALS
David W Knapp City Manager
Charles T Kilian City Attorney
Carol Atwood Director ofAdministrative Services
Steve Piasecki Director of Community Development
Ralph Qualls Director ofPublic Works
Therese Smith Director ofParks and Recreation
111
CITY OF CUPERTINO CALIFORNIA
Fiscal Year 2007 08
COMMISSIONS AND COMMITTEES
AUDIT COMMITTEE
Myoung Kang
Orrin Mahoney
Dolly Sandoval
Orrin Mahoney
Garrett Wade
HOUSING COMMISSION
Sarah Hathaway Feit
Kim Mosleh
Frances Seward
Winnie Lee
FINE ARTS COMMISSION
Nancy Canter
KC Chandratreya
Michael Harkin
Robert Harrison
Jessi Kaur
PUBLIC SAFETY COMMISSION
Fari Aberg
Charles Caldwell
Jay Cena
Nina Daruwalla
Hugh Riddell
TEEN COMMISSION
Varon Pande
Alex Pommier
Rukmani Sahay
Shivani Sharma
Ana Yglesias
Anshul Bhagi
Vrinda Gupta
Diane Keng
Hannah Lee
Benjamin Lin
Abishek Menon
Tiffany Ou
BICYCLE PEDESTRIAN COMMISSION
Donald Armstrong
May Koski
Geoffrey Paulsen
Joseph Walton
James Wiant
PARKS RECREATION COMMISSION
Jeanne Bradford
Derek Chen
David Greenstein
David Lee
SENIOR COMMISSION
Estelle Incociati
Christine Kennedy Pierce
Mavis Smith
Linda Walker
Frank Yap
LIBRARY COMMISSION
RamGopal
Ronald Miller
Janet Riddell
Katherine Stakey
Susanna Tsai
PLANNING COMMISSION
Cary Chien
Lisa Giefer
David Kaneda
Marty Miller
Gilbert Wong
ECONOMIC DEVELOPMENT
Carol Atwood
Cary Chien
Mike Foulkes
Christine Giusiana
Kelly Kline
David Knapp
Richard Lowenthal
Orrin Mahoney
Mark McKenna
Steve Piasecki
Ralph Qualls
Scott Stauffer
TECHNOLOGY INFORMATION
COMMUNICATIONS COMMISSION
William Allen
Peter Friedland
Wallace limura
Eric Klein
Luke Lam
Andrew Radle
IV
California Society of
JVLunicipal Jinance Officers
Certificate of Award
Excellence in Operating Budgeting 2006 07
Presented to
City of Cupertino
This certificate recognizes Excellent Achievement in Operational Budgeting and reflects an outstanding budget
document and the underlying budgetingprocess through which the budget is implemented
March 6 2007
I c W
Budgeting Financial Management
MarkAlvarado
CSMFO President
Dedicated to Excellence in Municipal Financial Management
The California Society of Municipal Finance Officers issues annual awards for outstanding
achievement and contributions to the profession The City of Cupertino received the award
shown above for its 2006 07 annual operating budget In bestowing this honor the Society
acknowledges the City for its outstandingpresentation offinancial and budgetary data
Our 2007 08 budget document is intended to meet the Society s high standards and will be
submitted again this year to determine eligibilityfor another award
v
RESOLUTION NO 07 110
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
ADOPTING AN OPERATING AND CAPITAL IMPROVEMENT BUDGET FOR
FISCAL YEAR 2007 08 BY RATIFYING ESTIMATES OF REVENUES TO BE
RECEIVED IN EACH FUND AND APPROPRIATING MONIES THEREFROM FOR
SPECIFIED ACTIVITIES AND ACCOUNTS AND SETTING FORTH
CONDITIONS OF ADMINISTERING SAID BUDGET
WHEREAS the orderly administration ofmunicipal government is dependent on the
establishment of asound fiscal policy ofmaintaining a proper ration ofexpenditures within
anticipated revenues and available monies and
WHEREAS the extent ofany project or program and the degree ofits accomplishment
as well as the efficiency ofperforming assigned duties and responsibilities is likewise dependent
on the monies made available for that purpose and
WHEREAS the City Manager has submitted his estimates ofanticipated revenues and
fund balances and has recommended the allocation ofmonies for specified program activities
NOW THEREFORE BE IT RESOLVED that the City Council does hereby adopt the
following sections as apart ofits fiscal policy
Section I The estimates ofavailable fund balances and anticipated resources to be
received in each ofthe several funds during fiscal year 2007 08 as submitted by the City
Manager in his proposed budget and as have been amended during the budget study sessions are
hereby ratified
Section 2 There is appropriated from each ofthe several funds the sum ofmoney as
determined during the budget sessions for the purposes as expressed and estimated for each
department
Section 3 The City Manager is hereby authorized to administer and transfer
appropriations between Budget Accounts within the Operating Budget when in his opinion such
transfers become necessary for administrative purposes
Section 4 The Director ofAdministrative Services shall prepare and submit to City
Council quarterly a revised estimate ofOperating Revenues
Section 5 The Director of Administrative Services is hereby authorized to continue
unexpended appropriations for Capital Improvement projects
VI
Section 6 The Director ofAdministrative Services is hereby authorized to continue
appropriations for operating expenditures that are encumbered or scheduled to be encumbered at
year end
PASSED AND ADOPTED at aregular meeting of the City Council ofthe City of
Cupertino this 19th day ofJune 2007 by the following vote
Vote Members ofthe City Council
AYES
NOES
ABSENT
ABSTAIN
Wang Kwok Lowenthal Sandoval
None
Mahoney
None
APPROVED
c
ATTEST
VB
TABLE OF CONTENTS
FISCAL YEAR 2007 08
PAGE
TITLE PAGE
ORGANIZATION CHART
DIRECTORY OF CITY OFFICIALS
COMMISSIONS COMMITTEES
EXCELLENCE IN OPERATIONALBUDGETING 2005 06
ADOPTED BUDGET RESOLUTION
BUDGET MESSAGE
I
11
111
IV
V
VI
1
BUDGET STRATEGIES
Mission Statement
Financial Values Statements
City Council Work Program
Fiscal Strategic Plan
Performance Measures
5
6
7
11
27
BUDGET GUIDE
Elements of the Budget Document
Structure ofthe City s Finances
The Annual Budget Process
Glossary of Budget Terminology
29
30
32
33
COMMUNITY PROFILE
History of Cupertino
Community Economic Profile
37
38
FINANCIALAND PERSONNEL SUMMARIES
Budget Summary
Revenue and Expenditure Charts
Revenue Summary
Personnel Summary
Five Year Budget Forecast
Appropriations Limit
45
46
50
65
73
97
DEPARTMENTAL OPERATING BUDGETS
COUNCIL AND COMMISSIONS
City Council
Technology Information Communications Commission
Library Commission
Fine Arts Commission
Public Safety Commission
Bicycle and Pedestrian Commission
Parks and Recreation Commission
Teen Commission
Senior Commission
Planning Commission
Housing Commission
104
106
108
110
112
114
116
118
120
122
124
PAGE
ADMINISTRAnON
City Manager
City Manager Discretionary Fund
Legal Services
130
132
134
LAW ENFORCEMENT
Law Enforcement 140
PUBLIC INFORMATION
Community Relations
Cupertino Scene
Government Channel
City Website
146
148
150
152
ADMINISTRATIVE SERVICES
Administration
ABcucsoiunnetisngs Licensing
City Clerk
Emergency Preparedness
Human Resources
Code Enforcement
Information Technology
160
162
164
166
168
170
172
PARKS AND RECREATION
Administration
Facilities Parks Blackberry FarmCommunity Events
Youth Teen Programs McClellan Ranch Park
Sports Fitness Blackberry Farm MGoontlaf Vista Rec Center
Senior Center Programs Stevens Creek TrailBlue Pheasant
BlackberryFarm Nature Programs
180
182
184
186
188
190
COMMUNITY DEVELOPMENT
Administration
Planning
Housing Services
Building
196
198
200
202
PUBLIC WORKS
Administration
Environmental Programs
Engineering Services
Service Center
Grounds
Streets
Facilities
Transportation
General Services
Fixed Assets Acquisition
210
212
214
216
218
220
222
224
226
228
NON DEPARTMENTAL OPERATING BUDGETS
Interfund Transfers
Debt Service
234
236
CAPITAL IMPROVEMENTS
Five Year Capital Improvements Program 239
CUPERTINO
May 12 2007
To the Citizens ofCupertino Honorable Mayor and
Members ofthe City Council
Enclosed please find Cupertino s Fiscal Year 2007 08 operating and capital improvement
budgets In addition projections for four additional fiscal years are included to aid in long range
financial planning
For the second consecutive year Cupertino s financial picture shows increased revenues while
expenses are being held down This positive trend is a major improvement overtwo years ago
when the city was experiencing its fourth year ofrecessionary trends which required freezing 17
positions 11 of our workforce and deferring maintenance of facilities streets trees and
equipment Last year the Council adopted the Fiscal Strategic Plan which identified revenue
and expenditure strategies to improve the City s ability to provide services under changing
economic conditions Weare now seeing the results of some ofthose strategies specifically in
the areas of business to business sales tax and property tax Additional efforts this year under
that plan should improve retail sales business license and utility users taxes Charges for
services and interest income have also contributed to a healthier financial position due to the
upturn in the economy
Fiscal Year 05 06 and 0607Results
The City s audit report for the year ended June 30 2006 showed the General Fund in astrong net
income position after accounting for operating expenditures debt service and transfer
obligations This 4 6 million bottom line however was inflated by one time revenues of 3 58
million from the sale of surplus property loan paybacks and park dedication fee paybacks As
for expenditures all departments came in under budget The low crime rate also contributed to
bottom line savings on our law enforcement contract for the year
During fiscal year 06 07 revenue trends began to turn around especially in the area of sales and
property taxes charges for services and use of money and property Sales tax increased as a
direct result of two large high tech finns In addition thanks to our outreach efforts a new
business to business sales tax producer located in Cupertino
1
These three companies Apple HP and Insight now represent our top three sales tax
producers Another major success was the passage ofState legislation which reversed a 1980 s
decision and restored a portion of our property tax revenue which had been lost to the County
City Council was instrumental in getting this legislation approved This Tax Equity Allocation
TEA change provided another 135 million in property tax for the fiscal year Charges for
service and construction tax also showed healthy increases this fiscal year In addition as our
portfolio balance increased so did interest income
Because ofthe increases in our revenues frozen positions have been released for recruitment and
various deferred maintenance items and capital projects werefunded at mid year In addition we
added an Economic RDeedveevleolpopmmeenntt Agency RDA Manager a Counter specialist
in Planning and aMedia Coordinator One Recreation Coordinator position has been eliminated
through streamlining We expect to end the fiscal year in a strong financial position for the
second year in arow
Fiscal Year 07 08 Highlights
This adopted budget provides for full staffing as well as new positions to accommodate specific
customer service level standards and growth in workload Maintenance is budgeted at moderate
levels and most capital improvement projects that had been deferred for several years are now
funded In addition we have reviewed our parks and recreation operations and have restructured
the department to separate the self supporting programs in the enterprise funds and reflect all of
the subsidized programs in the General Fund
Although enjoying net income in our General Fund for two years now we are still concerned
about sales tax point of sale legislation franchise revenues court decisions on cell phone utility
tax maintenance for newly annexed older areas and increasing fuel and asphalt costs To address
these concerns Council approved the Fiscal Strategic Plan in May 2006 which is incorporated as
an integral part of this budget Based on its recommendations we will continue to take steps to
improve revenue composition streamline operations and control costs
Our five year projections no longer include one time revenue sources such as park and loan fee
paybacks and provide aclear picture ofour funding capacity This year we will continue towork
on the TEA issue to finish correcting the inequitable distribution of property tax If successful
this would mean another 600 000 a year Sales tax looks promising as high tech business to
business firms rebound and our regional mall Cupertino Square sees the impact ofthe new 16
screen AMC theater and a soonto be opened Strike Bowling center These changes have sparked
a shopping entertainment buzz that things at the mall are finally changing for the better One
third of all retail space in the city is located in Cupertino Square Its success means important
commercial services for our residents and needed sales tax dollars to fund municipal services
Other retail developments under construction include a new Japanese Market a 68 000 square
foot Whole Foods Market and several new restaurants such as California Pizza Kitchen Islands
and Merlion
2
Finally as part of the Fiscal Strategic Plan we will propose taking two measures to the voters
this fall The first would update our utility user tax ordinance for current technology trends in the
effort to retain our existing utility tax base The second would assess a minimal tax on theater
tickets to be used for extended library hours traffic and public safety expenditures with the new
theater or other General Fund needs
Work needs to continue in these areas because while the business to business and retail sales
taxes are very strong now they are highly volatile revenues As we saw in 2000 dramatic
reversals in the high tech arena and resulting retail sales slumps are aregular pattern in Silicon
Valley We appear to be approaching the peak of the up cycle and history has proven that a
down cycle will surely follow
Fiscal Year 07 08New and Restored Items
The adopted budget reflects our recently negotiated three year salary and benefit package and
covers future retiree medical obligations The following programs have been re instated or added
in the adopted 07 08 budget
New positions including increasing a Code Enforcement Officer from half to full time
an Assistant Planner and a two year term Park Planner to work on the Stevens Creek
Corridor Park As an offset one Recreation Supervisor position has been eliminated
through streamlining
Consultant budgets to support the City s sustainability project 100 000 and housing
element 75 000
Pavement Management funding at the fiscal year 2001102 levels 750 000 and
E Services funding for upgrades to our Website and other systems 100 000
In addition to staffing the adopted budget includes
Red Light RunningTraffic Safety Study
Monday Library Hours
Commission Projects
Technology Information Communication Commission Senior TV
Public Safety Commission Safety Fair
Public Safety Commission Public Safety Survey
Teen Commission Music in the Plaza
TeenSenior Commission Intergenerational Event
Fine Arts Commission Two Distinguished Artists Grants
Fine Arts Commission Euphrat Museum ofArt Grant
Fine Arts Commission Jubilee Juried Art Show
Housing Trust Fund Contribution
Cupertino Day
City Hall Improvements
300 000
120 000
1 650
6 500
2 500
7 700
5 000
1 000
4 000
250
25 000
20 000
50 000
With the above additions this budget covers our operational needs for this upcoming fiscal year
3
The following major capital improvement projects have been included for fiscal year 07 08
Stevens Creek Corridor Park Phase I
Lawrence Mitty Park Saratoga Creek
McClellan Ranch Facility Improvements
Sports Center Tennis Court Lighting
Sports Center Upgrade and Pool Demolition
Quinlan Fountain Replacement
Library Courtyard Improvements
Veteran s Memorial
6 236 000
1 500 000
672 000
200 000
500 000
150 000
50 000
55 000
Major capital improvement projects funded for fiscal year 08 09 include
Stevens Creek Corridor Park Phase I
SterlingBarnhart Park Construction
Sports Center Sound wall Replacement
Green Project To Be Determined
1 000 000
800 000
350 000
500 000
This budget does not include additional funding for the Mary Avenue Bicycle Footbridge This
project is currently on hold until we can re bid the construction work
Items Requested but not Included
Several requests for funding have not been included in the adopted budget They include
North Area Vallco Study Phase II 100 000 funded in 06 07
Additional Festival Funding
Joint Venture Silicon Network Membership
250 000
43 932
5 000
Conclusion
I am pleased to submit to you a balanced budget for the upcoming fiscal year 2007 08 and
beyond We are currently enjoying a healthy economy which is providing us the funding for
both operational and capital improvement project needs This is our short term situation Since
we know that economic trends are cyclical we also need to consider long term financial
probabilities In order to continue the high level of service the community is receiving and
ensure a stable and diverse revenue stream we will need to stay firm to our commitment to
implement the Fiscal Strategic Plan This means supporting economic development embarking
on new revenue sources and continually asking ourselves how we can deliver high customer
service more efficiently
Respectfully submitted
LJ
David W Knapp
City Manager
4
City of Cupertino
MISSIONSTATEMENT
The City of Cupertino will
Provide prompt courteous and equitable service that responds to individual needs
Treat each customer and employee with respect dignity and sensitivity
Support and encourage individual professional growth and innovation to enhance customer
service and employee satisfaction
Create apositive professional environment based upon teamwork
Provide the highest level ofsatisfaction in all programs and services
5
BUDGET STRATEGIES
FINANCIALVALUES STATEMENTS
The City of Cupertino adheres to the following guidelines and principles in preparing its budget
and conducting its day to day and long term fiscal affairs
1 Revenue Levels
To the extent possible maximize investment yield while maintaining a high level of
liquidity for the City s anticipated capital costs
Identify and recommend sources ofrevenue necessary to maintain the services desired by
the community and to maintain the City s quality oflife
Perform ongoing evaluations of existing sources of revenue to maximize the City s
revenue base
Recover costs ofspecial services through user fees
Allocate all internal service charges to appropriate user departments
Ensure that Enterprise activities remain self supporting in the long term
2 Expenditure Control
Maintain operating activities at levels which are offset by revenues
Evaluate expenditures at the department and project levels to ensure control
Reduce costs and improve productivity through the use ofefficiency measures
Structure debt refinancing to provide the necessary capital while minimizing future debt
service costs
3 Long Term Financial Stability
Ensure ongoing productivity through employee training and retention programs
Pursue consolidation of resources and activities with other agencies and jurisdictions
where beneficial
Ensure financial planning flexibilityby maintaining adequate fund balances and reserves
Provide for major maintenance and repair of City buildings and facilities on a timely
basis
Provide for infrastructure asset preservation that maximizes the performance of these
assets at minimum life cycle costs
Continually evaluate and implement long term financial planning including technology
automation multiple year capital improvement programs revenue and expenditure
forecasting
6
BUDGET STRATEGIES
CITY COUNCIL WORK PROGRAM
Maior Developments
Process applications for and work with the development community
to present the best projects for our community for
Cupertino Square
AMC Theaters
Rose Bowl
Hotel
Capital Improvements
Design and implement the following capital improvement projects
Mary Avenue Pedestrian Footbridge
Phase I completed grading fencing and utility relocation
Phase II final design underway
Stevens Creek Corridor Park
Includes improvements to Blackberry Farm picnic grounds creek
realignment and restoration trail construction Funding is secured
for Phase I and grant application process for Phase II has begun
Rancho Rinconada park
Commence work on apark for Rancho Rinconada and explore
potential sites with water district and county parks staff Pursue
acquisition ofthe two parcels at Sterling and Barnhart Target
date to acquire the water company parcel is June 2008
Pursue neighborhood park in the Homestead area
This area was identified during the General Plan process as an
Area deficient in neighborhood parks Surplus property sale in
progress
Sports Center pool and bath house upgrade
Cost to upgrade exceeds it value to community Parks and
Recreation Commission to make recommendation for CIP
budget hearing in May 2007
Construct Reach aTrail
Walking and hiking trails in Reach A are complete
7
Budget Reference
198 202
239 264
BUDGET STRATEGIES
CITY COUNCIL WORK PROGRAM Budget Reference
CapualImprovemen continued 239 264
Quinlan Fountain
Propose project to replace the fountain
Mary Avenue Pedestrian Crossing Oaks Senior Center
Construct project during May and June 2006
On anizational Improvements 172 173
E Services
Bring City Hall to the customer and improve efficiency of
service delivery Applications completed andor in process
On line building permits
On line business licenses
On line job applications
City public records
Economic Development land use site
Recreation registration
Community Outreach Program
Neighborhood Watch eCap
On line Muni Code
Digital signage
Sports Center tennis courtGolf Course tee times
3N Enables City to communicate with thousands
ofpeople on any device
E mail notification
City Mapguide
Mapguide Inquirer
Webcasting
On line Elections page
Access Cupertino
City projects bids RFP s
Street sweeping notification
8
BUDGET STRATEGIES
CITY COUNCIL WORK PROGRAM
Fiscal Strategic Plan 12 26
Develop a long term solution to reposition the City to ensure
services can be fully supported by revenues collected
Pursue correction ofERAF percent for TEA funding
Schedule public hearing to adopt safes as astandard
condition on residential development
Prepare ballot measure for autility tax ordinance
update for November 2007
Prepare ballot measure for an ordinance for November 2007
Public Safetv
Law Enforcement 160 161
Continue emphasis on Neighborhood Watch and provide
quarterly Neighborhood Watch maps
Emergency Preparedness 166 167
Continue emphasis on Emergency Response ER and
Preparedness
Continue expanding outreach programs
Continue ERtraining for City staff
Increase program staffing
Master database update custom program
Pandemic flu
Mass immunizations
Managing spontaneous volunteers
Traffic Safety
Implement the walkable city concept
Revisit access between Whole Foods Peets Coffee and
Panera Breads
Review traffic safety issues including safe routes to school
program Street Smarts Program Tri school Regnart traffic
improvements and revisit the Red Light Program
198 199
224 225
251 253
9
BUDGET STRATEGIES
CITY COUNCIL WORKPROGRAM
Housim
Provide housing opportunities for Cupertino workers
Develop teacher housing assistance program
Nexus study for Housing Mitigation fees
Cleo Avenue affordable housing
BMR Manual update
Economic DevelopmentRedevelopment
Encourage retain and support healthy environment for retail growth
Consider retail in reviewing new development
Hire an Economic DReveDlopmAent Manager
Propose options for helping Cupertino Square
Funding possibilities
Promotion ofAMC grand opening
Plannin1
North Vallco phase one concept plan
Review Heart of the City Plan
Develop Green Building Standards
Prepare ahistoric preservation policy
Propose policy for tree topping under property maintenance
standards
Tree ordinance
10
Budget Reference
200 201
198 199
198 199
BUDGET STRATEGIES
CITY COUNCIL WORKPROGRAM
BuildinJ Communitv
Continue to offer opportunities and programs to promote cultural
understanding and address the needs ofour diverse community
Communitv OrJanizations
Support the Cupertino Historical Society in its effort to create
aCenter for Living History
Pursue partnership opportunities with the three school districts
including pool gym traffic parking teacher housing School
Resource Officers and Juvenile Prevention Program
Provide acommunity events similar to Cupertino Day
Facilitate and coordinate the reconstruction ofthe Tank House
11
Budget Reference
146 149
180 181
218 219
182 183
196 197
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
Define the Problem Analyze the Current Funding Gap
The 2000 2005 recession coupled with significant increases in retirement and medical costs
energy costs new infrastructure service needs and the State of California take always severely
undermined the ability of the City of Cupertino to continue delivering high quality municipal
services The City weathered the economic storm by cutting service levels freezing up to 17
staff positions refinancing debt service turning to a full cost recovery fee structure for certain
services realizing one time revenues through sale of surplus property and reducing employee
compensation through direct salary cutbacks and work furloughs Service levels clearly suffered
and sacrifices were necessary across the board
The city learned that our fiscal structure left us vulnerable to the whims ofeconomic fluctuations
and the ability of the State to raid our revenue sources Two major revenue sources sales tax
and property tax were principal weak points in the above scenario Cupertino is heavily
dependent on business to business sales taxes and its retail sales tax is significantly under
performing due to the condition ofolder strip shopping centers in the community and the recent
loss of several significant revenue producers such as Anderson Chevrolet and Drexel Heritage
Furniture Also Cupertino is one offour no low property tax cities frozen by pre proposition 13
to abnormally low tax rates
The City must evaluate its revenue structure to ensure more reliable less volatile revenue
sources and evaluate its cost structure to ensure we are operating in acost effective manner The
following fiscal strategic plan defines strategies to reposition the revenue and cost structure of
the city to ensure it is not as severely impacted by future changing economic conditions and that
we are able to continue funding of existing and new service levels
The city s audit report for the year ended June 30 2005 shows the General Fund in a strong net
income position after operating expenditures debt service and transfer obligations Based on
this and the fact that the federal government is estimating inflation next year in the 3 6 plus
levels one might say that the goal to achieve financial viability is already won However the
2004 05 financials are not representative of our true level ofservice Vacancies were upwards to
11 of our authorized workforce maintenance of infrastructure was cut to an all time low and
because of the shortages in staffing many budgeted projects were carried over to the current
fiscal year In addition one time revenues such as sale ofproperty inflated this bottom line
12
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
To analyze our current funding gap and present for you a more accurate financial picture we
looked at the actual inflows and outflows to the General Fund and identified one time non
reoccurring revenue In addition we looked at the latest audit report for fiscal year 04 05 and
added back the salary and benefits deferred maintenance and deferred projects approved but not
spent Finally for 04 05 we deducted the non reoccurring State payback park dedication fee
payback and sale of property This provides you a snapshot of what our financial results would
have been at fully approved levels of operation and without one time revenue sources
The following chart shows total revenue operating and transfers in versus total expenditures
operating and transfers out for the fiscal years 02 03 to 07 08 One time revenues are shown in
yellow to visually denote the magnitude ofinflows versus outflows in the General Fund
13
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
Although Fiscal Year 04 05 ended with a 5 6 million dollar profit once one time revenues
are removed and expenditures are reflected at approved levels the result is a net loss of 1 1
million dollars This net loss figure does not reflect future concerns in the following areas
Pending legislation will put 389 000 of cable franchise fees in jeopardy
Pending court cases may put 350 000 in cell phone utility user tax injeopardy
The City is currently spending 1 53 million per year on active and retiree medical
premiums and future liability costs There are 150 active and 81 retired employees
receiving benefits The cost ofproviding this benefit has fluctuated and it is conceivable
that health premiums could increase in excess of8 per year
Fuel costs have risen 30 since preparation of the 05 06 budget The City has
approximately 130 rolling stock and vehicles in the fleet
Asphalt is a petroleum based product and the cost of street work has risen dramatically
this year A consultant is updating the pavement management plan and has indicated
that street jobs are coming in 25 to 46 higher than ayear ago
The annexation of Monta Vista Garden Gate and Rancho Rinconada neighborhoods has
lowered the overall pavement standard for Cupertino and a disproportionate amount of
funding has gone into these areas to bring streets closer to city standard
Our current annual 750 000 commitment is minimal for keeping the streets in good
order Keeping pavement in good condition is the most economical maintenance strategy
over the long tern
Library aquarium maintenance reimbursement will be reduced by 50 7 500 per year
starting in 2009 and will be the City s full responsibility in 2014
Besides balancing at the basic level of operating revenues and operating expenses debt service
obligations with the above issues in mind we will need to fund our reserves at appropriate andor
mandated levels A healthy net income will be required to embark on operational or capital
improvement areas that are already being discussed Some ofthese projects include
Additional parks onthe east side ofthe city
Reserves to accommodate major renovation requirements of our facilities such as the
Quinlan Community Center
Funding for environmental components such as artificial turf and solar energy options for
fields parks and facilities
Extended library hours
Improved street standards
Alternative energy sources
E Services and
Risk reduction efforts
Based on the under funded current and non funded future needs staff recommends that the city
reposition its revenue and expenditure base to fund an additional 2 5 million per year
14
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
2007 08 Note The City s audit report for the year ended June 30 2006 showed the General
Fund in a strong net income position after accounting for operating expenditures debt service
and transfer obligations This 4 6 million bottom line however was inflated by one time
revenues of 3 58 millionfrom the sale of surplus property loan paybacks and park dedication
fee paybacks As for expenditures all departments came in under budget and the low crime rate
also contributed to bottom line savings on our law enforcement costs Trends improved over
prior years but the General Fund still only realized an operating profit of 1 02 million on a
39 196 000 operating budget
Automate and Streamline Service Delivery
We currently have 160 75 full time equivalent positions in our budget Although lean for a city
of our size the committee looked at the structure of our organization and areas to automate or
streamline This task was critical since approximately 70 of the general fund operating
expenditures are associated with salary and benefit costs In addition long term trends for what
we call hidden costs medical insurance premiums workers compensation and retiree medical
costs are directly associated with the number of our employees The more we can streamline or
contract out services the more we can control these current and long term costs
Our hiring freeze last year demonstrated that we couldn treduce our workforce and maintain all
existing programs for any length of time Our organization is too lean and too flat to
accommodate this option without experiencing declines in customer satisfaction and service
level If we are successful in a workforce reduction programs impacted by staffing reductions
need to be identified and either contracted out modified or eliminated In addition previously
frozen maintenance positions needed tobe filled to support infrastructure added during the last
five years and to address mounting workload demands associated with deferred maintenance
305
I
r
I
1
1
350
345
340
335
330
325
320
315
310
300
2003 2004 2005 2006
I0ResidentslEmployees I
2007
15
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
We also need to be cognizant of our future personnel needs Last year we added a full time
Information Technology Assistant to accommodate the workload associated with our increasing
technology base A Facility Attendant was also approved to staff the new Community Hall and
an Economic DevelopmentJRedevelopment Agency Manager was added In early fiscal year
2006 07 we increased law enforcement needs as a result ofour annexations and the development
ofnew residential and commercial buildings
2007 08 Note In this fiscal year two new positions will be proposed including increasing a
Code Enforcement Officer from halfto full time an Assistant Planner and a two year term Park
Planner to work on the Stevens Creek Corridor Park As an offset one Recreation Supervisor
position has been eliminated through streamlining
The Committee identified several areas for potential short term andor long term savings for
Council s consideration
A Streamline and reposition ourworkforce as opportunities arise
As future vacancies occur through attrition we will need to streamline and reposition our
workforce whenever feasible All vacant positions should be reviewed to identify
opportunities for automation level of effort shifts or other cost saving ideas We will
also need to reposition our workforce to meet evolving workload demands Greater
emphasis will be placed on employee cross training and career development opportunities
and on filling vacancies through internal transfers and promotions Repositioning will
provide staffing where it s needed most while reducing our long term need for additional
positions
2007 08 Note Parks and Recreation have reorganized resulting in streamlining and
elimination of two full time positions In addition two vacancies werefilled this year
through internal promotions
B Implement E Services with the goal of bringing city hall to the customer and
reducing our cost of service delivery
The City s E Service budget was eliminated for two fiscal years in an effort to save
expenditures In 2006 07 an E Services master plan was drafted which addressed
automation opportunities ofgovernment services Examples of products currently being
assessed include but are not limited to
0 Permit tracking
0 Records managementretrieval
0 On line job applications
0 On line business licenses
0 Economic Development Information
0 Community Outreach Information
0 Code Enforcement Tracking
0 Website Revision
16
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
C Pursue artificial turf in our athletic fields to reduce maintenance and risks
associated with injury
Utilization of artificial turf is a growing trend to curb the rising costs ofmaintenance and
general liability claims The committee recommends that we use all future youth sports
league fees for refurbishment ofthe fields and that we pursue utilization of artificial turf
and solar energy whenever feasible and cost effective
2007 08 Note No activity to date
D
Pursue alternate energy sources for the City s infrastructure and vehicle
replacement needs
The committee recommends the City investigate use ofalternative energy for application
in City facilities and vehicles where it is aproven cost benefit
2007 08 Note Purchased hybrid vehicles where possible
Stabilize and Reposition Revenue Sources
Sales Tax by Economic Category
8 000 000
7 000 000
6 000 000
5 000 000
II Business to Business
oGeneral Retail
iiiFood Products
Transportation
o Construction
oMiscellaneous
4 000 000
3 000 000
2 000 000
1 000 000
o
2004 4 2005 1 2005 2 2005 3 2005 4 200611 2006 2 200613 2006 4
Year Ending Quarter
Cupertino has historically been heavily dependent on sales tax as a major general fund revenue
source however trends over the past ten years have changed not only the percentage of revenue
received from this source 316 but also the make up of where the revenue is coming from
Ten years ago over 50 of our sales tax base came from the retail sector where today 59 2 is
from the business to business or the high tech sector
17
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
Our largest sales tax producer Apple Computer comprises 26 and given the volatility of the
high tech industry this fact alone has put this revenue source in an at risk situation To add to
this concern the State is continuing it s efforts to change the way Internet sales are reported and
if they are successful will dramatically affect the amount of sales tax revenue currently received
from our top three producers Apple Hewlett Packard and Insight Inc
During the recent years of budget cuts we have mainly focused our efforts on reduction of
expenditures No new revenue sources per se have been implemented with the only major
change resulting from an independent analysis of existing fees to ensure that we are covering our
costs of service The Committee believes that it would be prudent to consider the following
revenue strategies
A Pursue Tax Equity Allocation TEA reliefwith Santa Clara County
When Proposition 13 passed in 1978 it froze property taxes at their current levels This
action created significant problems for cities that at the time had low property tax rates
because they couldn t raise those rates to meet their community needs Four cities
including Cupertino are significantly below the average Weare actively pursuing an
amendment to bring us to par with the TEA rate of7 with the County
2007 08 Note During 2006 07 the passage of State legislation reversed a 1980 s
decision and restored a portion of our property tax revenue which had been lost to the
County City Council was instrumental in getting this legislation approved This TEA
change provided another 1 35 million in property taxfor the fiscal year This year we
will continue to work on the TEA issue to finish correcting the inequitable distribution of
property tax Ifsuccessful this wouldmean another 600 000
B Reassess Park Dedication Fees on an ongoing basis to capture rising real estate
costs associated with park acquisition
Each time a new development application comes to the City real estate costs should be
researched to ensure that the park dedication fees are current and reflect appropriate costs
for property acquisition This will ensure that our purchasing power is not diminished
2007 08 Note Completed and ongoing
C Negotiate with Hansen regarding future land use rights in exchange for annexation
Hansen currently resides in the County but utilizes Cupertino streets for access to its site
The cement trucks that frequent Foothill Boulevard and Stevens Creek inflict much more
street and landscape maintenance needs than the average user Cupertino has been
absorbing the traffic and pavement issues associated with this business but receives no
revenue benefit It is estimated the utility users tax from this site alone will bring over 1
million per year to the city The committee recommends pursuit of annexation in
exchange for future land use rights
18
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
2007 08 Note The City has approached Hansen and opened a dialogue to discuss the
benefits of current annexation in exchange for afuture development agreement To aid
in this planning staff will propose a modification to the existing business license
ordinance this November to add the new category of quarries
D Support RedevelopmentlEconomic Development for Cupertino Square and other
major projects
Analysis shows us that our
regional mall is producing well
below the average sales tax per
square foot that is required to
have a strong operation We
currently receive approxi
mately 1 1 million per year
from Cupertino Square in sales
tax as compared to the
Oakridge Mall which is
remitting around 54 million
per year
In addition build out projections on infrastructure will provide about 2 million per year
in new tax increment for the project area starting in 07 08 and approximately 23 million
for low and very low housing overthe next 30 years
To decrease our dependence on the business to business sector we recommend strong
support for the mall redevelopment In addition as new developments come before the
Planning Commission and City Council we recommend a quality retail component be
incorporated into the project
2007 08 Note Sales tax looks promising as our regional mall Cupertino Square sees the
impact of the new 16 screen AMC theater and asoon to be openedStrike Bowling center
These changes have sparked a shopping entertainment buzz that things at the mall are
finally changing for the better One third of all retail space in the city is located in
Cupertino Square Its success means important commercial services for our residents
and needed sales tax dollars to fund municipal services Other retail developments under
construction include a new Japanese Market a 68 000 square foot Whole Foods Market
and several new restaurants such as California Pizza Kitchen Islands and iMoenr
19
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
E Consider an Entertainment Tax and a modification to our existing Utility User Tax
Ordinance in conjunction with the municipal election November 2007
The Committee recommends that we consider placing on the ballot both an entertainment
tax and re wording of our UUT Ordinance to reflect recent trends in technology and
retain existing UUT revenue such as cell phone remittances
2007 08 Note We will propose taking three measures to the voters this fall Thefirst
would update our utility user tax ordinance for current technology trends in the effort to
retain our existing utility tax base The second would add a new business license
category for quarries so that ifa quarry annexes to the city we have a revenue generator
in place topayfor the added service requirements And third we will propose a minimal
tax on theater tickets to be used for extended library hours and maintenance thus
providing the on going revenue to open the library seven days a week
F Phase out om time revenue to the General Fund
Limit park dedication fee payback to the General Fund to 500 000 year for 06 07
decreasing by 100 000 increments each year with additional revenues vesting to the
Park Dedication Fund The Committee believes that the payback of park acquisition
costs inflates the General Fund revenue and gives the impression that this is on going
revenue from operations As this funding will eventually dry up it is prudent to replace
it with true operational and annual revenue streams
2007 08 Note Park Dedication fee payback was completely eliminated with this year s
budget
G Consider assessing a sales tax inlieu fee for discontinuance of retail land use
This concept would assess any developer who proposes taking land use currently zoned
for retailcommercial use and replacing the infrastructure with non sales tax producing
product such as housing
2007 08 Note The City Council reviewed this concept and has decided not topursue an
in lieu fee
20
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
H Re visit the adoption of a County Communication fee if our sales tax composition
exceeds 50 from the business to business sector
Two years ago a 9 1 1 fee for County Communications was deliberated on by the City
Council Estimates showed 1 per line per month would provide approximately
650 000 towards a 750 000 cost of service Given our high percentage amount of
business to business sales tax the committee proposes to re visit this fee if our sales tax
composition exceeds a50 benchmark Our current mix ofsales tax providers results in
a high risk of fluctuation in our largest general fund revenue category and a 9 1 1 fee
would identify anew and stable revenue source to offset this risk
2007 08 Note Council did not want to pursue at this time
I Consider aRefuse Vehicle Impact Fee
Several cities in California have successfully levied a street impact fee on their refuse
providers to offset the wear and tear on city streets from these oversized vehicles Such
an assessment would pass the cost of street repairs due to heavy usage through to the
garbage company and provide needed funds for maintenance but ultimately result in fee
increases to the customer The Committee was not in agreement on pursuit of this
revenue
2007 08 Note Council did not want topursue at this time
Decrease Expenditures and Risk Exposure
The Committee looked at our major programs in relation to operating costs and risk exposure
associated with general liability claims and workers compensation claims Currently claim costs
are paid directly by the Risk Management Division which results in an understatement of the
true cost of service of some ofour programs For high exposure or highly loaded hidden cost
programs additional trend analysis was performed to establish what other municipalities are
implementing in an effort to decrease expenses and areas ofrisk
Several suggestions for potential short term andor long term savings have been identified for
your consideration
A Require developers to maintain new open space associated with their projects
With new parks and open space come the costs associated with maintaining those green
spaces throughout our city The Committee believes that it is in our best interests to use
the permit process to require the developer to pay for or provide for mechanisms that
fund the maintenance ofthese parks
21
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
Suggestions include the incorporation of a landscape district or homeowners association
within the new development Or as in the case of Cali Mill Plaza the property and it s
maintenance would stay with the developer
It is estimated that it costs the Public Works Department approximately 40 000 per year
for every new acre of parkland that goes on line This recommendation would hold the
line on our park maintenance and help control future costs in this area
2007 08 Note Included in current developmentproposals
B Require safety enhancements in new developments
The City has experienced an increase in residential burglaries this past year which
increases our sheriff costs Many of these crimes involved taking jewelry from the
homes We suggest that new housing developments be required to have built in safes to
secure valuables and reduce accessibility ofjewelry in an effort to reduce deter crime
2007 08 Note Staffwillpresent thisprogram duringfiscal year 2007 08
C Contract School Maintenance
In the 1990 s the City issued approximately 5 million in bonds to refurbish 9 school
sports fields The agreement with CUSD provided that we refurbish and maintain the
fields in exchange for their use during non school hours This provided an excellent
partnership by providing CUSD with high quality fields and the City with expanded
parkland This has resulted however in a duplication ofboth maintenance equipment and
workers between the two organizations
22
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
Currently our Ground Maintenance Division mows 33 17 acres and edges 24 305 linear
feet of turf at these school sites Transitioning the mowing operation only to CUSD
would reduce our long term hidden costs and our vehicle and equipment replacement
needs The current cost to provide mowing service to the schools is 137 594 out of
555 000 in total expense per year
2007 08 Note Do not pursue at this time
D Add Capital Improvement Projects only if on going maintenance funding can be
identified LLD homeowners association development maintained owned
The City is currently using the permit process to incorporate private maintenance of
sidewalks medians and other improvements for new developments For City projects all
associated budget costs should be considered with the adoption ofthe original budget for
the Capital Improvement Program
2007 08 Note Completed and ongoing
E Increase the number of Block Leaders Neighborhood Watch programs and CERT
graduates
Increases in these programs will capitalize on community policing and reduce maintain
sheriffcosts We also encourage commissioners tobecome involved in these programs
2007 08 Note Completed and ongoing
23
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
F Change accounting for Enterprise Funds
The Committee proposes that all Enterprise Fund activity be reflected in the individual
fund whereby all costs including building costs are recognized in one place In addition
all revenues associated with the complex should be recognized in the fund The reader
could easily ascertain the subsidy from the General Fund and Council could quantify self
supporting percentages for each fund
2007 08 Note We have reviewed our parks and recreation operations and have
restructured the department to separate the selfsupporting programs in the enterprise
funds and reflect all ofthe subsidizedprograms in the General Fund
G Continue to investigate cost saving options for medical and retiree medical
insurance
The City should analyze the benefits of setting up a trust for the retiree medical reserves
to increase investment return and decrease funding obligations In addition staff should
continue to look for ways to reduce medical benefit costs including benefits for City
Council
2007 08 Note The City will be pursuing legislation this year to provide a low cost
retiree medical option for new hires Employee contracts were negotiated in May 2007
whichprovide for this option if and when available
H Adopt a Sidewalk Liability Ordinance requiring the landowner to be responsible for
sidewalk maintenance and claims to third parties from failure to maintain
The City has approximately 250 miles ofsidewalk to monitor and maintain The annual
sidewalk curb and gutter contract is 500 000 plus an additional 150 000 in inspection
and contract monitoring costs It requires 1 25 full time staff per year Since it is
impossible for one worker to cover the miles of sidewalk that we are ultimately
responsible for we are at risk for claims associated with needed repairs
24
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
The landowner however already has a duty to inspect and maintain the area and is
considered the most able to recognize and respond to apotential hazard
Sidewalk falls are ABAG s second most frequent claim with 45 million paid during the
past 15 years in settlement and attorney fees The City has paid over 100 000 in costs
associated with these claims in the past five years and two new claims this year could
equal 100 000 The Committee recommends that we continue to inspect and mark
needed repairs but that the liability for repair and associated claims vest to the property
owner
2007 08 Note Council did not want to pursue at this time
I Adopt a Tree Maintenance Ordinance requiring the landowner to be responsible for
their street trees
The Street Tree Maintenance program provides for maintenance for over 13 000 trees
including safety trimming and clearing for vehicle and pedestrian height clearance It
costs approximately 525 000 per year which covers 4 2 positions equipment costs of
almost 200 000 As per the above suggestion the Committee considers the landowner
the most able to recognize and respond to a potential hazard caused by the tree s We
recommend that we continue to inspect and notice needed maintenance but that the
liability for maintenance and associated claims should vest to the property owner
2007 08 Note Council did not want topursue at this time
i25
BUDGET STRATEGIES
FISCAL STRATEGIC PLAN
Imulementation Timeline
Stabilize and Re osition Revenue Sources
TaxE ui Allocation Phase IIPhase II
Re assess Park Dedication Fees
Hansen Ne otiations
Su ort Redevelo ment Pro ects
Libr Theater Tax
Phase Out One Time Revenue to General Fund
Modi UUT to Include New Technolo
Modi Business License Ordinance for Quarries
A roach FoothilllDeAnza to Share Sheriff Costs
Refuse Vehicle 1m act Fee
Sales Tax In Lieu Fee
Coun Communications Fee
Decrease Ex enditures and Risk Ex osure 2006 07 2007 08 2008 09 2009110 2010 11
L I Completed andor policy in place
I In process to be implemented
Not approved at this time
26
BUDGET STRATEGIES
PERFORMANCE MEASURES
DDeeusacrrtimuteionnt GoalObiective Actual
Public Information
Access Cupertino Response Time 3 Days 3 Days
Law Enforcement
Sheriff Response Time Priority 1 5 Minutes Priority 1 426
Priority 2 9 Minutes Priority 2 7 15
Priority 3 20 Minutes Priority 3 15 82
Administrative Services
Investment Portfolio Rate ofRetum ROR Greater than LAIF ROR Below LAIF ROR
Accounts Payable Processing 5 Days 1 5 Days
Archival Research Requests 5 Days 1 5 Days
Duplication Requests Routine 1 Day 1 Day
Special 3 Days 1 3 Days
Recruitments Qualification Lists to Depts 60 Days 45 60 Days
Parks and Recreation
Cultural Programs Revenue 2006 07 451 371 510 636
Youth Teen Programs Revenue 2006 07 746 064 774 645
Provide Middle School Dances 10 Dances 9 Dances
Teen Center Membership 550 510
Sports Center Revenue 2006 07 1 393575 1 639 932
Sports Center Membership 1 021 1 336
Senior Center Revenue 2006 07 559 561 686 472
Senior Center Membership 1 939 Members 1 935
Senior Center Volunteer Service 15 795 Hours 8 253
Senior Trips 49 41
Community Development
Planning Applications 216 207
Building Permit Applications 2 190 2 302
Building Inspections 21 022 24 423
Revenues through 628 07
January 2007 through May 2007
27
BUDGET STRATEGIES
PERFORMANCE MEASURES
DDeeusacrrtimuteionnt GoalObiective Actual
Public Works
Street Sweeping
Street Maintenance
Sidewalk MRaientepnaancier
Graffiti Cleanup
Streetli ts Maintenance
696 Curb Miles Month
Win 24 Hours ofCall
Emergencies 24 Hours
48 Hours ofCall
5 Days ofCall
696 Curb MMoilneths
Win 24 Hours ofCall
Within 24 Hours
48 Hours ofCall
5 Days of Call
Community Outreach
Block Leader Captains
Block Parties
Active Neighborhood Watch Groups
Trained Emer enc Res onse Team Members
201
29
94 Groups
531
222
24
109 Groups
570
28
BUDGET GUIDE
The budget is the City s fundamental policy document It describes the City s goals and details
how resources are allocated to achieve these goals In addition the budget serves as the annual
financial plan an operations guide and acommunications tool
The budget guide provides an overview ofthe elements ofthe budget document It describes the
structure of the City s finances and the annual budget process and includes a glossary ofbudget
terminology
ELEMENTS OF THE BUDGET DOCUMENT
The budget document includes the following key elements
1 Budget Message The Budget Message is the City Manager s transmittal letter submitting
the budget to the City Council The Budget Message summarizes the City s current and long
term financial position highlights new programs and organizational changes addressed in the
budget and outlines both short and long term goals ofour city government
2 Budget Strategies The Budget Strategies section includes the City s mission statement the
Financial Values ofthe City and identified City Council goals for the fiscal year The 2007
08 operating budget addresses the implementation of these goals and explores various
revenue enhancements and cost reduction measures
3 Financial Summaries The Financial Summaries section provides financial information on
projected revenues expenditures fund balances and reserves This section includes the
Budget Summary of Funds as well as detailed fund descriptions and information on all
revenue sources and expenditure projections
In addition to 2007 08 information this section includes fund balance trends and detailed
revenues and expenditures projections for the next five years
This section includes an analysis of all City revenues by category Our major revenue
projections are based on trends current economic indicators and other agency input Sales
tax projections are based on input from our sales tax consultants industry trends and major
company forecasts Property tax revenues are projected by the county and adjusted by staff
based on known trends Park dedication fees are estimated based on current development
projects and other taxes are reviewed monthly and budgets are based on this trend analysis
4 Departmental Operating Budgets The Departmental Operating Budgets section details
historical and proposed expenditures by operating department The City is organized into
eight key operating functions including the Administration Law Enforcement Public
Information Administrative Services Parks and Recreation Community Development and
Public Works Each department budget includes a summary narrative financial information
regarding the department and each ofits major divisions and personnel information
29
BUDGET GUIDE
Expenditures for employee compensation are based on negotiated contracts The materials
category of expenditures are based on trends Contract services and capital outlay are
justified each year by the departments
Departmental expenditures are divided into five categories which include the following charges
Employee Compensation represents permanent full time and part time salary costs overtime
PERS retirement health insurance costs and other benefits
Materials represents items purchased for repair and maintenance operational activities such
as books uniforms and recreation supplies and office supplies
Contract Services represents legal consulting and other professional services contract repair
and maintenance utility charges training and memberships equipment rentals insurance and
employment services
Capital Outlay represents expenditures for tangible fixed assets including land buildings
furniture equipment and City vehicles
Debt Service Other represents principal and interest payments on outstanding debt and
interfund transfers
5 Non Departmental Operating Budgets The Non Departmental Operating Budgets section
details historical and proposed expenditures for the functions ofinterfund transfers and debt
servIce
6 Capital Improvements The Capital Improvements section details the proposed capital
projects for 2007 08 through 20011 12 These projects are organized into six categories
Parks Buildings Medians and Overpasses Streets Traffic and Storm The five year budget
denotes funding sources and adescription ofeach project
The City Council approves funding ofthe Capital Improvements on ayearly basis
STRUCTURE OF THE CITY S FINANCES
The City s finances are structured in avariety offunds that are the basic accounting and reporting
entities in governmental accounting The funds that comprise the 2007 08 budget are grouped
into two major categories Governmental Funds and Proprietary Funds The purpose of each of
the various funds within these two categories is described below
30
BUDGET GUIDE
GOVERNMENTAL FUNDS
Governmental Funds include Tax Supported Funds Special Revenue Funds and Federal Grant
Funds They are accounted for under the modified accrual basis of accounting
Tax Supported Funds include the General and Capital Improvement Funds The General Fund is
the primary operating fund for governmental services funding traditional tax supported activities
such as law enforcement and community development The Capital Improvements Fund is
utilized for the acquisition or construction ofmajor capital facilities
Special Revenue Funds include the Park Dedication Gas Tax Storm Drain Environmental
Management and Leadership Cupertino funds The use of Special Revenue Fund resources is
legally restricted for specific purposes
Federal Grant Funds include the Federal Housing and Community Development Block Grant
programs The Community Development Block Grant is afederally funded program for housing
assistance and public improvements
PROPRIETARY FUNDS
Proprietary Funds include Enterprise Funds and Internal Service Funds They are accounted for
under the full accrual basis of accounting
Enterprise Funds including the Resource Recovery Sports Center Blackberry Farm Recreation
and Senior Center funds are used to account for operations that are self supporting with user fees
covering expenditures
Internal Service Funds include the Workers Compensation Management Information Services
Equipment and Long Term Disability funds Internal Service Funds are similar to Enterprise
Funds except that fees are charged to user City departments to cover the costs of services
provided by the activity
COST ACCOUNTING
By using this financial technique the City is able to assess the true cost of providing a service
and benefits The Internal Service Funds and Enterprise Funds capture the full cost of a
program s activities Internal users of information management fleet and equipment and
insurance are assessed rental rates through their programs for the use and eventual replacement of
such services and equipment Employee benefits such as leave usage retirement and insurances
are also recovered as revenue ofthe funds by charging the programs that use personnel services
31
BUDGET GUIDE
THE ANNUAL BUDGET PROCESS
The City s annual budget is prepared on aJuly 1 to June 30 fiscal year basis The budget process
is an ongoing process that includes the phases of development proposal adoption and
monitoring
The budget development phase begins in February with the preparation of budget instructions
and goal setting sessions by the City Council and City Manager During March departments
prepare the budgets for which they are responsible These proposed department budgets are
reviewed by the Finance Division and compared to current and prior year trends The City
Manager then reviews the proposals with the City Treasurer and departmental staff and makes
final adjustments The proposed budget is then submitted to the City Council in May
During the months ofMay and June the Council considers the budget proposals at a series of
City Council Study Sessions and meetings At this time the Council hears from Boards
Commissions and community groups regarding budget requests and recommendations Prior to
June 30 the City Council holds public hearing s on the budget and then adopts the final budget
byresolution The adopted budget takes effect on July 1 the first day ofthe new fiscal year
After the budget is adopted the City enters the budget monitoring phase Throughout the year
expenditures are monitored by the Finance Division staff and department managers to ensure that
funds are used in an approved manner Adjustments to expenditures within or between
departmental budgets are accomplished on an as needed basis administratively throughout the
year The City Manager and Department Heads can transfer funds between their line items
andor divisions as needed City Council approval is required for additional appropriations from
fund balances or for new revenue sources
32
BUDGET GUIDE
GLOSSARY OF BUDGET TERMINOLOGY
The City s budget contains specialized and technical terminology that is unique to public finance
and budgeting To help the reader understand the terms a glossary of budgetary terminology has
been included in the document
Adopted Budget Revenues and appropriations approved by the City Council in June for the
following fiscal year
Allocated Costs An expense charged by one departmentdivision to another for services
performed or expenditures ofageneral nature that are charged to one main account and allocated to
other departments divisions bya specified formula
Appropriation An authorization made by the City Council that permits the City to incur
obligations and to make expenditures ofresources
Budget A financial plan for a specific period of time fiscal year that matches all planned
revenues and expenditures with various municipal services
Budget Amendment A legal procedure utilized by the City Manager to revise a budget
appropriation Adjustments to expenditures within or between departmental budgets may be
accomplished administratively City Council approval is required for additional appropriations
from fundbalance or new revenue sources
Capital Improvement Program A plan for capital expenditures to provide for the acquisition
expansion or rehabilitation of an element of the Citys physical plant to be incurred over a fixed
period of several future years
Capital Outlay Expenditures relating to the purchase ofequipment land and other fixed assets
Cost Recovery The establishment ofuser fees that is equal to the full cost ofproviding services
Department A major administrative segment of the City that indicates overall management
responsibility for an operation or agroup ofrelated operations within a functional area
Division A unit oforganization that reports to adepartment
33
BUDGET GUIDE
Enterprise Fund A fund established to account for activities that are financed and operated in a
manner similar to private business enterprises in which costs of providing services are primarily
recovered through user fees
Estimated Budget The status ofappropriations between July 1 and June 30 Includes the adopted
budget budget amendments prior year encumbrances approved carryovers and transfers between
objects divisions and departments
Expenditure Utilization of fund resources Expenditures include operating expenses debt
service and capital outlays
Expenditure Category A basis for distinguishing types of expenditures The major expenditure
categories used by the City are employee compensation materials contract services capital outlay
and debt service
Fiscal Year A twelve month time period signifying the beginning and ending period for recording
financial transactions The City has specified July 1 through June 30 for its fiscal year
Fund A fiscal and accounting entity for which the recording of financial transactions is made for
the purpose of carrying on specific activities in accordance with the requirements placed upon the
use offinancial resources
Fund Balance The net effect ofassets less liabilities at any given point in time
General Fund The fund used to account for the major operating revenues and expenditures ofthe
City except for those financial resources that are required to be accounted for in another fund
category General Fund revenues are derived primarily from property and other taxes
Goal Broad mission statements that define the purpose of adepartment
Infrastructure Long lived capital assets that normally are stationary in nature and can be
preserved for a significantly greater number of years than most capital assets Examples include
roadways bridges and drainage systems
Internal Service Fund A fund used to account for the services provided by one department to
other departments on acost reimbursement basis
34
BUDGET GUIDE
Operating Budget A financial plan for the provision of direct service and support functions that
provide basic governmental services The operating budget contains appropriations for such
expenditures as employee compensation materials contract services capital outlay and debt
service It does not include Capital Improvement Project expenditures
Reserve An account used to designate a portion ofthe fund balance for a specific future use and
is therefore not available for general appropriation
Revenue Increases in fund resources Revenues include income from user fees taxes permits
and other sources
Section A unit or organization that reports to adivision
Self Supporting Activity An enterprise activity where all service costs including principal and
interest debt payments are primarily covered solely from the earnings ofthe enterprise
Subsidy Supplemental resources provided to ensure adequate funding when anticipated
expenditures exceed revenues
User Fees Fees charged to users ofaparticular service provided by the City
35
Jistory
Cupertino owes its name and earliest mention in recorded history
to the 1776 expedition led by the Spaniard Don Juan Bautista de
Anza from Sonora Mexico to the Port of San Francisco to found
the presidio of St Francis
Leaving the majority ofthe party ofmen women and children in
Monterey to rest from their travels deAnza his diarist and
cartographer Petrus Font and 18 other men pressed on through
the Santa Clara Valley in late March to their San Francisco
destination
With the expedition encamped in what is now Cupertino Font
christened the creek next to the encampment the Arroyo San
Joseph Cupertino in honor of his patron San Guiseppe San
Joseph ofCupertino Italy The arroyo is now known as Stevens
Creek
The village of Cupertino sprang up at the crossroads ofSaratoga
Sunnyvale Road now DeAnza Boulevard and Stevens Creek
Boulevard It wasfIrst known as West Side but by 1898 the post
office at the Crossroads needed a new name to distinguish it from
other similarly named towns John T Doyle a San Francisco lawyer and historian had given the name Cupertino to his
winery in recognition ofthe name bestowed on the nearby creek by Petrus Font In 1904 the name was applied to the
Crossroads and to the post office when the Home Union Store incorporated under the name The Cupertino Stores Inc
Many of Cupertino s pioneer European settlers planted their
land in grapes Vineyards and wineries proliferated on
Montebello Ridge on the lower foothills and on the flat
lands below
After 1906 a lot more than grape growing was going on in
Cupertino Orchards were thriving and new businesses were
being started In the late 1940 s Cupertino was swept up in
Santa Clara Valley s postwar population explosion
Concerned by unplanned development higher taxes and
piecemeal annexation to adjacent cities Cupertino s
community leaders began a drive in 1954 for incorporation
Cupertino rancher Norman Nathanson the Cupertino Monta
Vista Improvement Association and the Fact Finding
Committee played important roles in this movement
Incorporation was approved in the September 27 1955 election Cupertino officially became Santa Clara County s 13th
City on October 10 1955
A major milestone in Cupertino s development was the creation by some of the city s largest landowners of Vallco
Business and Industrial Park in the early 1960 s Ofthe 25 property owners 17 decided to pool their land to form Val1co
Park six sold to Varian Associates a thriving young electronics fIrm founded by Russell Varian and two opted for
transplanting to farms elsewhere The name Vallco was derived from the names of the principal developers Varian
Associates and the Leonard Lester Craft and Orlando families
37
2007 Community E lPerofi
Cupertino with a population just over 52 000 and city limits stretching across 11 square miles is considered to be one of
the San Francisco Bay Area s most prestigious cities in which to live and work
Economic health is an essential component to maintaining a balanced environment which provides high level
opportunities and services that create and help sustain a sense of community and quality of life Public and private
interests must be mutual in that our success as a partnership is a direct reflection of our success as a community The
cornerstone of this partnership is that of a cooperative and responsive government that provides an environment for
business and residential prosperity and fosters strong working relationships with all sectors ofthe community
Our economic development strategies are tailored to address the specific needs of the community As the City of
Cupertino is a mature city with over 90 buildout our focus concentrates more on business retention and revitalization
Business recruitment is site specific and targeted to industries that enhance rather than draw from our existing business
base
J I
tL
1 JI l l
l tr
6
As home to many well known high tech companies Cupertino offers a dynamic and exciting business climate Apple
Computer is headquartered in the city along with Symantec and Portal Software In addition key divisions ofHewlett
Packard Sun Microsystems and Borland are also located in Cupertino
The City s proactive economic development efforts have resulted in a number of innovative mutually beneficial
partnerships with local companies The City strives to retain and attract local companies through policies ofbalanced
growth and streamlined permitting
Cupertino Square includes Macy s Penney s and Sears as anchors and features popular chain stores such as Victoria s
Secret Express and Natural Wonders Shoppers can also enjoy iceskating at the mall s ice skating rink or a nice meal at
Todai Restaurant The mall is undergoing major changes with the addition ofa 16 screen movie theater which opened in
Apri12007 California Pizza Kitchen and many other new shops Cupertino Square is becoming a vibrant exciting place
for residents and visitors to enjoy
The City ofCupertino has a history ofproviding high level municipal services to complement the sense of community
and quality of life enjoyed by our constituents The City will continue to enhance and promote a strong local economy to
provide municipal services that make Cupertino a place that people are proud to call home
38
2007 CLty py
The City ofCupertino operates as a general law city with a city council city manager form of government Five council
members serve four year overlapping terms with elections held every two years The council meets twice a month on the
first and third Tuesday at 6 45 pm in the Community Hall
The City has 160 authorized full time benefited employees City departments include administrative services finance
human resources IT city clerk emergency preparedness outreach programs code enforcement community
development planning building and economic development parks and recreation public works engineering
maintenance transportation and environmental and public information Police service is provided by the Santa Clara
County Sheriff s Department and fIre service is provided through the Santa Clara County Fire District
Assisting the city council are several citizen advisory commissionscommittees which include housing
telecommunications fme arts library planning audit parks and recreation bicycle and pedestrian teen senior and
public safety Members of the volunteer boards are appointed by the city council and vacancies are announced so that
interested residents may apply for the positions Residents are kept informed about city services and programs through
the Cupertino Scene a monthly newsletter Cupertino s government access cable TV channel The City Channel and the
city s website
Housing
Apartment and duplex rentals range from 1 125 to 2900
per month As of April 2007 the average price of an
existing single family home is 1 050 000 and the average
price ofa condominimumltownhouse is 675 000
Community Health Care Facilities
Cupertino is served by the Cupertino Medical Clinic
NovaCare Occupational Health Services Nearby hospitals
include El Camino Hospital in Mountain View O Connor
Hospital in San Jose Community Hospital of Los Gatos
Kaiser Permanente Medical Center in Santa Clara Stanford
Hospital in Palo Alto and the Saratoga Walk in Clinic in
Saratoga
Utilities
Gas electric Pacific Gas and Electric 800 743 5000
Phone AT T residential service 800 894 2355
business service 800 750 2355
Cable Comcast 800 945 2288
Garbage Los Altos Garbage 408 725 0420
Water San Jose Water Company 408 279 7900 and
California Water 650 917 0152
SewerService Cupertino Sanitary District 408 253 7071
Tax Rales and GovernmentServices
Residential commercial and industrial property is
appraised at full market value as it existed on March 1
1975 with increases limited to a maximum of2 annually
Property created or sold since March 1 1975 will bear full
cash value as of the time created or sold plus the 2
annual increase The basic tax rate is 1 00 per 100 full
cash value plus any tax levied to cover bonded
indebtedness for county city school or other taxing
agencies Assessed valuations and tax rates are published
annually after July 1
Retail Sales Tax Santa Clara County 125 City 1
State General Fund 5 State Local Public Safety Fund
050 State Local Revenue Fund 025 County
Transportation Fund 0 25 Total 8 25
Assessed Valuation Secured and Unsecured
Cupertino 10 292 965 413 6 30 06
County 238 427 289 517 6 30 06
Transportation
Rail Southern Pacific San Jose to San Francisco with
spur line in Cupertino
Air Seven miles north ofSan Jose International Airport
32 miles south ofSan Francisco airport
Bus Santa Clara County Transit Systems Greyhound bus
lines
Highways Interstate Route 280 State Route 85
39
c SLat LC4I
Facts and Figures
Population in City Limits
Median Household Income
Median Age
Sales Tax Rate
Registered Voters
Democrats
Republicans
Independent
Other
Did Not State
52 600
100 411
38
825
24 271
8 885
6 592
301
151
8 346
Alexander s Steakhouse
Apple Inc
Argonaut Window Door
Benihana s
BJs Bar Grill
Chevron Service Stations
Chili s Grill Bar
Cupertino Clean Scene
Cupertino Smog Pros
Cupertino Supply
Cypress Hotel Park Place
DeAnza College Campus Center
Dental Arts ofCalifornia
Dynasty Restaurant
Top 40 Sales Tax Producers
Fourth Quarter 2006
In Alphabetical Order
Elephant Bar Restaurant
Hewlett Packard
Jade Galore
JC Penney
Joy Luck Place
Longs Drug Stores
Macy s
Marina Foods
Mervyn s
Michael s Arts Crafts
Outback Steakhouse
Ranch 99 Market
Rite Aid Drug Store
Rotten Robbie Service Station
Sears
Shane Diamond Jewelers
Shell Service Station
Sodexho Marriott Management
Symantec Corporation
Target
TGI Friday s
TJ Maxx
Union 76 Service Station
Valero Service Station
Verizon Wireless
Whole Foods
Demographic Information
White
Asian
Hispanic
Black
American Indian
Native Hawaiian
510
444
4 0
0 7
0 2
01
40
c andRecrearuJ11Serv
The Quinlan Community Center
The City of Cupertino s Quinlan Community Center is
a 27 000 square foot facility that provides a variety of
recreational opportunities
Most prominent is the Cupertino Room a multi
purpose room that can accommodate 300 people in a
banquet format For more information call 408 777
3120
Civic Center and Library
The complex has a 6 000 square foot Community Hall
plaza with fountain trees and seating areas City
Council meetings are now held in the Community Hall
as well as Planning Commission and Parks and
Recreation Commission
The new 54 000 square foot library despite reduced
hours due to budget cuts continues to be one of the
busiest in the Santa Clara County Library system For
more information call 408 446 1677
Cupertino Sports Center
The Sports Center is a great place to meet friends The
facility features 17 tennis courts complete locker room
facilities and a fully equipped fitness center featuring
free weights Cybex and cardio equipment A teen
center is also included as well as a child watch center
The center is located at the comer of Stevens Creek
Boulevard and Stelling Road Telephone 408 777
3160
Cupertino Senior Center
The Senior Center provides a welcome and friendly
environment for adults over age 50 There is a full
calendar of opportunities for learning volunteering
and enjoying life There are exercise classes a
computer lab and classes language instruction
including English as a second language and cultural
and special interest classes The center also
coordinates trips and socials
The Senior Center is located at 21251 Stevens Creek
Boulevard and is open Monday through Friday 8 a m
to 5 pm Telephone 408 777 3150
lm
I
Blackberry Farm
This 33 acre recreational facility is currently closed The
City is currently working on the Stevens Creek Restoration
Project which affects the grounds of Blackberry Farm
Highlights of the completed project include a new
Blackberry Farm community park parkpicnic upgrades
remodeled pool and catering station and a fully accessible
trail between Blackberry Farm and McClellan Ranch The
project is expected to be completed in the spring of2009
The nine hole golf course remains open during the
restoration project The golf course is located at 22100
Stevens Creek Boulevard Telephone 408 253 9200
McClellan Ranch Park
A horse ranch during the 1930 and 40 s this 18 acre park
has the appearance of a working ranch Preserved on the
property are the original ranch house milk barn livestock
barn and two historic buildings Baer s Blacksmith Shop
originally located at DeAnza and Stevens Creek and the old
water tower from the Parish Ranch now the site of
Memorial Park Rolling Hills 4 H Club members raise
rabbits chickens sheep swine and cattle and a Junior
Nature Museum which features small live animal exhibits
and dispenses information about bird animal and plant
species of the area McClellan Ranch is located at 22221
McClellan Road Telephone 777 3120
41
EtiuctzruJ11
Winner of numerous state and national awards for excellence our
city s schools are widely acknowledged to be models of quality
instruction
Cupertino Union School District serves 15 700 students in a26 square
mile area that includes Cupertino and portions of five other cities The
district has 20 elementary schools and four middle schools including
several choice programs Eighteen schools have received state andor
national awards for educational excellence
Student achievement is exceptionally high Historically district test
scores place Cupertino among the premier public school districts in
California The district is a leader in the development of a standards
based system ofeducation and is nationally recognized for leadership
in the use oftechnology as an effective tool for learning Quality teaching and parent involvement are the keys to the
district s success
The Fremont Union High School District serves over 9000 students in a 42 square mile area covering all of Cupertino
most ofSunnyvale and portions ofSan Jose Los Altos Saratoga and Santa Clara The five high schools of the district
have garnered many awards and recognition based on both the achievement of students and the programs designed to
support student achievement Student achievement is at an all time high based on the statewide Academic Performance
Index API All five high schools in the district exceeded their state established achievement targets for the 2000 API
District students are encouraged to volunteer andor provide service to organizations within the community During their
senior year if students complete 80 hours of service to a non profit community organization they are recognized with a
Community Service Award medal that may be worn during their graduation ceremonies
Cupertino is served byfour local
institutions ofhigher education
DeAnza College the University of
San Francisco National University
and the UCSC Extension In
addition to these schools
Cupertino s location offers easy
access to Stanford University Santa
Clara University and San Jose State
University
Building on its tradition of excellence and innovation DeAnza
College challenges students of every background to develop their
intellect character and abilities to achieve their educational goals
and to serve their community in a diverse and changing world
DeAnza College offers a wide range of quality programs and
services to meet the work force development needs of our region
The college prepares current and future employees of Silicon
Valley in traditional classroom settings and through customized
training arranged by employers Several DeAnza programs
encourage economic development through college credit courses
short term programs services for manufacturers technical
assistance andor recruitment and retention services
42
Lodo Se
Euphrat Museum ofArt
The highly regarded Euphrat Museum of Art adjacent to the Flint Center on the DeAnza College campus traditionally
presents one ofa kind exhibitions publications and events reflecting the rich diverse heritage ofour area The Museum
prides itself on its changing exhibitions of national and international stature emphasizing Bay Area artists Museum
hours are 11 a m 4 p m Tuesday Wednesday Thursday 6 8 pm Tuesday and 11 am 2 pm Saturday Telephone
408 864 8836
Minolta DeAnza Planetarium
Stargazers have a Cupertino facility catering to their interests the Minolta Planetarium on the DeAnza College campus It
hosts a variety ofplanetarium shows and events including educational programs for school groups and family astronomy
evenings on Saturdays at 7 00 pm For more information and current schedule of events visit the website at
www planetarium deanza fhda or call408 864 8814
Flint Center
The cultural life of the Peninsula and South Bay is enhanced by programs presented at the Flint Center for Performing
Arts located at 21250 Stevens Creek Boulevard at DeAnza College campus The center opened in 1971 and was named in
honor ofCalvin C Flint the first chancellor ofthe Foothill DeAnza Community College District The box office is open
10 a m 4 pm Monday through Friday and one and one half hours prior to any performance Box office 408 864
8816 administrative office 408 864 8820
Cupertino Historical Society
On May 2 1966 the Cupertino Historical Society was founded as a non profit organization by a group of 177 longtime
residents concerned about the rapid growth in the area and its impact on the quickly vanishing Cupertino heritage On
March 30 1990 the Society opened the Cupertino Historical Museum dedicated to the preservation and exhibition ofthe
city s history Through its exhibits the museum attempts to develop and expand the learning opportunities that it offers to
the ethnically diverse community ofthe City ofCupertino The Society continues to build partnerships with the local
school districts to ensure that the history of Cupertino is offered as part ofthe educational curriculum The Society is
located at the Quinlan Community Center 10185 N Stelling Road Telephone 408 973 8049
California History Center
Farmers Market
Residents and visitors can visit the farmers market every Friday from 9 00 am to
I 00 pm The market is located at the Valko Fashion Park behind Macy s
The California History Center is located on the DeAnza College campus The
center has published 39 volumes on California history and has a changing exhibit
program The center s Stocklmeir Library Archives boasts a large collection ofbooks a pamphlet file oral history tapes
videotapes and a couple thousand student research papers The library s collection is for reference only Heritage events
focusing on California s cultural or natural history are offered by the center each quarter For more information call 408
864 8712 The center is open September through June 8 30 am to noon and 1 00 p m to 4 30 p m Monday through
Thursday
43
BUDGET SUMMARY
2007 08Fiscal Year
Estimated Estimated
Balance at Operating Operating Non operating Balance at
Funds July 1 Revenues Expenditures Transfers June 30
General Fund 21 447 000 40 621 000 33 567 000 14 369 000 14 132 000
Special Revenue Funds
Storm Drain 87 000 200 000 75 000 95 000 117 000
Park Dedication Tax 18 000 1 108 000 1 126 000
Environmental Management 114 000 369 000 411 000 72 000
Gas Tax 857 000 1445 000 2 559 000 845 000 588 000
Housing Community Development 3 228 000 761 000 516 000 3 473 000
Vallco Redevelopment 18 000 575 000 219 000 275 000 99 000
Fund Totals 4322 000 4 458 000 3 780 000 475 000 5 475 000
Debt Service
Cupertino Facilities Corporation 52 000 3 538 000 3 538 000 52 000
Traffic Impact 118 000 39 000 39 000 118 000
FundTotals 170 000 39 000 3 577 000 3 538 000 170 000
Capital Projects Funds
Capital Improvement 500 000 446 000 3 064 000 2 718 000 600 000
Stevens Creek Corridor Park 6 236 000 6 236 000
Mary Ave Bicycle Footbridge
Fund Totals 500 000 446 000 9 300 000 8 954 000 600 000
Enterprise Funds
Resource Recovery 4 778 000 2 486 000 2 708 000 500 000 4 056 000
Blackberry Farm 275 000 682 000 567 000 160 000
Cupertino Sports Facility 64 000 1 763 000 1 657 000 170 000
Recreation Programs 791 000 2 270 000 2 351 000 710 000
Senior Center 125 000 125 000
Fund Totals 5 483 000 7 201 000 7 283 000 625 000 4 776 000
Internal Service Funds
Information Management 976 000 930 000 1 060 000 150 000 996 000
Workers Compensation 109 000 310 000 279 000 140 000
Equipment Replacement 1 648 000 934 000 943 000 44 000 1 683 000
Long term Disability 23 000 58 000 48 000 33 000
Retiree Medical Insurance 4 660 000 682 000 1 882 000 5 860 000
Fund Totals 7 416 000 2 232 000 3 012 000 2 076 000 8 712 000
45
Total City Revenue
Total City revenue for fiscal year 2007 08 is expected to be 71 849 000 The chart below
provides an overview of all City revenue General Fund revenue is shown on the next page of
this summary
Sales Tax represents the City s largest source ofrevenue We receive 1 ofthe 8 25 collected
in the county Charges for Services includes program and engineeringlbuilding fees from
Blackberry Farm the Sports Center the Senior Center Quillian Center and our Community
Development and Public Works Departments
Intergovernmental Revenue includes motor vehicle in lieu fees and grant funds while Use of
Money and Property represents rental fees and interest income on the city investment portfolio
Property Tax increased this last year with the passage of the tax equity allocation TEA
legislation bringing the City to the State s lnowo property tax rate of 7 Other Taxes include
park dedication fees business licenses taxes and property transfer taxes
Total City Revenue
71 849 000
Fines
1
License
Pennits 5
Charges for
Services
13
Capital ProjectsEquipment
FundingfDebt Paybacks
23
Utility Tax
3
Franchise
Fees
4
Sales Tax
18
Misc
Revenues
1
Use of Money
Property 3
Intergovernmental
10
46
Total City Expenditures
Total City expenditures for fiscal year 2007 08 are expected to be 77 834 000 This summary
chart provides aquick overview ofall the City s operating and capital expenditures
Many of the Special Revenue fund activities such as the Gas Tax Storm Drain Park Dedication
and Environmental Management funds are administered by the Public Works Department The
Public Works Department also oversees the Resource Recovery operations with expenditures of
over 2 7 for the City wide garbage collection contract and disposal costs
All other Enterprise fund operations are directed by the Parks and Recreation Department which
spends over 8 7 million annually to provide programs for all ages and to maintain the City s
enviable community facilities at the Blackberry Farm Golf Course Quinlan Community Center
Sports Center and Senior Center
The majority of funding for Capital Projects which provides for street projects sidewalks
facilities and upgrades and major equipment purchases is designated to the Stevens Creek
Corridor Park Project and the Mary Avenue Bicycle Footbridge
Total City Expenditures
77 834 000
Parks
Council
Commissions
1
Debt
Service
6
Administration
1
Law
Enforcement
11
Community
Development
7
Capital
Projects
11
Public
Infonnation
1
Public Works
24
47
General Fund Revenue
Total General Fund revenue for fiscal year 2007 08 is expected to be 41 851 000 The chart
below provides an overview ofour revenue
Sales Tax is used for general government expenditures and is therefore accounted for entirely in
the General Fund it represents approximately 30 7 of General Fund revenue Our sales tax
comes from retail sales business to business largely high tech sector sales and use tax
Charges for Services within the General Fund is comprised of revenue from zoning planning
and engineering fees
Intergovernmental Revenue includes motor vehicle in lieu fees and grant funds This revenue
source represents 131 ofthe budget Use of Money and Property is received from rental fees
and interest income Property Tax increased this last year with the passage of the tax equity
allocation TEA legislation bringing the City to the no low property tax 5 rate
General Fund Revenue
41 851 000
License
Permits 8
Trans fers In
3
Charges for
Services 5
TOT
6
Sales Tax
30
Utility Tax
5
Franchise
Fees
6
Miscellaneous
Revenue 1
Other Use of Money
Taxes Property 3
5
48
General Fund Expenditures
Total General Fund expenditures for fiscal year 2007 08 are expected to be 49 216 000
General Fund expenditures for the general operation and administration of the City comprise
over 643 oftotal expenditures
The General Fund budget allows for all expenditures necessary to carry out the basic activities of
the City that are not provided through other funds It includes the necessary resources to carry
out police and emergency preparedness community development through planning building and
economic development activities public works operations engineering and maintenance
recreational programs and park utilization and other general government functions such as legal
personnel finance and administrative services
The City s debt service costs are also borne by the General Fund as well as funding for capital
projects where grant dollars are not available
General Fund Expenditures
Including Transfers
49 216 000
Capital
ProjectslRetiree
Medicalfransfers
23
Administrative
Services
9
Council
Commissions
1
Public Works
21
Parks
Recreation
7
Law
Enforcement
20
Community
Development
8
Public Administration
Infonnation 2
2
49
REVENUE SUMMARY
Property Taxes
Property taxes represent approximately 16 of total general fund operating revenues Property
tax revenue for the 2007 08 fiscal year is estimated to be 7 124 000 Property tax revenues
fluctuate with market conditions from year to year however they will generally increase in the
long term due to property sales and new construction
In 1978 voters approved the passage of
Proposition 13 which froze property
tax rates and limited the amount of
their increase each year Cupertino had
one of the lowest property tax rates in
Santa Clara County receiving 02 for
every 1 00 paid The County then
provided another 02 as a tax equity
allocation TEA
A major success in fiscal year 2006 07
was the passage of State legislation
which reversed a 1980 s decision and
restored aportion of our property tax
revenue which had been lost to the
County City Council was instru
mental in getting this legislation
approved This TEA change provided
another 1 35 million in property tax
for the fiscal year
0243 Cupertino Elementary
0205 County Bond
0 164 Fremont High School
Maintenance
0 148 Santa Clara County
Fire District
0 065 Mid Peninsula Open
Space Various
Agencies
0 063 FoothiIl Community
CoIlege Maintenance
0 042 County Library
Retirerment
0 070 City ofCupertino
This year we will continue to work on the TEA issue to finish correcting the inequitable
distribution ofproperty tax If successful this would mean another 600 000 ayear
In accordance with State law property is assessed at actual full cash value with the maximum
levy being I of the assessed valuation Increases in assessed valuation are limited to 2
annually if there is no change in property ownership major improvements or requests for
re assessment
50
REVENUE SUMMARY
Property Taxes continued
2005 06
Actual
2006 07
Estimate
2007 08
Adopted
REVENUE BY CATEGORY
Property Taxes 4 914 000 6 688 000 7124 000
REVENUE BY FUND
General
Redvelopment Agency
Traffic Impact
6 510 000
575 000
39 000
7 124 000
51
REVENUE SUMMARY
Sales Tax
The City s sales and use tax revenues are generated from three principal economic categories
general retail 20 5 business to business 59 2 includes electronic equipment and
software manufacturers and distributors and other products 20 3
During fiscal year 2006 07 revenue trends began to turn around Sales tax increased as a direct
result oftwo large high tech firms In addition thanks to our outreach efforts anew business to
business sales tax producer located in Cupertino These three companies Apple HP and
Insight now represent our top three sales tax producers Sales tax looks promising as high tech
business to business firms rebound and our regional mall Cupertino Square sees the impact of
the new 16 screen AMC theater and a soon to be opened Strike Bowling center These changes
have sparked a shopping entertainment buzz that things at the mall are finally changing for the
better One third ofall retail space in the city is located in Cupertino Square Its success means
important commercial services for our residents and needed sales tax dollars to fund municipal
services Other retail developments under construction include a new Japanese Market a 68 000
square foot Whole Foods Market and several new restaurants such as California Pizza Kitchen
Islands and Merlion
14 000
2 000
r
I
IOACTUALEST 1
12 000
10 000
8 000
6 000
4000
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Sales and use taxes are the City s largest single source of revenue and are budgeted at 12 8
million for the 2007 08 fiscal year representing 31 68 ofthe City s total general fund operating
revenues With sales tax so dependent on a vital economy the City must focus its efforts on
finding other stable revenue sources or embark on a more aggressive economic development
effort to ensure health in this area
52
REVENUE SUMMARY
Sales Tax continued
Towards that end the City has approved 330 000 square feet of new or replacement retail in the
last five years The majority of this buildout will occur in fiscal year 2008 09 and is reflected in
our five year projections
2005 06
Actual
2006 07
Estimate
2007 08
Proposed
REVENUE BYCATEGORY
Sales Tax 1 0 672 000 11575 000 12 870 000
REVENUE BYFUND
General 12 870 000
53
REVENUE SUMMARY
Other Taxes
The principal components of Other Taxes include utility franchise park and transient
occupancy taxes
The utility tax which was approved by voters in 1990 is assessed on gas electricity and
telecommunication service provided within the City s jurisdiction at a rate of 24 of user
charges This tax is a general tax and can be used for any purpose The following chart shows
that the City s tax rate and areas ofapplication are generally lower than that of other cities within
Santa Clara County In March 2002 voters approved an extension ofthe utility tax from asunset
date of2015 to 2030 This extension will correspond with the extended debt maturity dates as a
result of refinancing for capital improvement projects Utility taxes are budgeted to be
2 100 000 which is down compared to the previous year s projections due to new court rulings
for applying this tax to cell phone usage
Utility Tax Rate Comparison
GaslElectric Cable Water Telephone
Sunnyvale 2 0 2 0
Cupertino 24 24
Mountain View 3 0 3 0
Los Altos 3 5 3 5 3 5 3 5
Palo Alto 5 0 5 0 5 0
Gilroy 5 0 5 0 5 0
San Jose 5 0 5 0 5 0
Franchise fees are received from cable television garbage water gas and electricity franchisees
that operate in the City The fees range from 2 to 10 of the franchisee s gross revenues
depending on each particular agreement Franchise fee revenues for fiscal year 2007 08
estimated to be 2 580 000 are also flat due to the applicability for telecommunication
transmission
Park tax is paid by developers on housing development and can vary greatly from year to year
Estimated revenue for fiscal year 2007 08 is 1 100 000 which is generated from new
developments within the City
Transient occupancy taxes are levied on hotel facilities located in the City at the rate of 10 of
room revenues The taxes in this category amount to 2 550 000 and have been increasing since
January 2005 for all four hotels in the city
54
REVENUE SUMMARY
Other Taxes continued
Other taxes of 2 070 000 reflect business license fees property transfer tax construction tax and
housing mitigation fees
2005 06 2006 07 2007 08
Actual Estimate Adopted
REVENUE BYCATEGORY
Utility Tax 2 810 000 2 392 000 2 100 000
Franchise Fees 2 353 000 2 500 000 2 580 000
Park Dedication Fee 657 000 200 000 1 I 00 000
Transient Occupancy Tax 2 055 000 2 363 000 2 550 000
Other Taxes 2154 000 2 558 000 2 070 000
10 029 000 10 013 000 41000 000
REVENUE BYFUND
General
Housing Community Development
Park Dedication Fund
9 000 000
300 000
1 100 000
41000 000
55
REVENUE SUMMARY
License and Permits
Licenses and Permits represent approximately 7 8 of total General Fund operating revenues
This category includes building plan check and electrical and plumbing permits With the
adoption of a new fee study for building planning and engineering fees to reflect actual cost
recovery of services and a large demand for construction The City has seen steady increases in
revenue since fiscal year 2004 05
In fiscal year 2006 07 a new fee study for building planning and engineering fees was
performed to reflect actual cost of service and to comply with anew court ruling on applications
of these fees Although some fees increased and other decreased we expect only minor overall
increases in this revenue category
2005 06
Actual
2006 07
Estimate
2007 08
Adopted
REVENUE BY CATEGORY
License and Permits 3 615 000 3 050 000 3 172 000
REVENUE BYFUND
General 3172 000
56
REVENUE SUMMARY
Revenues From Use of Money and Property
This revenue category represents approximately 3 9 of total City revenues and is comprised of
interest earnings on City funds facility rents and concession payments on City owned property
assessment bond interest and repayment of long term loans
Investment earnings are a function of the amount of excess cash available for investment and the
current interest rate
2005 06 2006 07 2007 08
Actual Estimate Adopted
REVENUE BY CATEGORY
Investment Earnings 1 240 000 1 488 000 1 436 000
Property Rentals 502 000 514 000 515 000
Loan Repayment 855 000 555 000 818 000
2597 000 2 557 000 2 769 000
REVENUE BY FUND
General
Resource Recovery
Transportation
Other Funds
2 258 000
160 000
90 000
261000
2 769 000
57
REVENUE SUMMARY
Intergovernmental Revenues
Intergovernmental revenues comprise approximately 10 ofthe City s total revenues and consist
of State motor vehicle license fees VLF State gas tax and various grants from federal state or
county agencies This revenue fluctuates widely depending on grant awards and allocations
As a result of State budget deficits between the years 2003 to 2006 the City has seen many State
borrowings shifts and revenue take aways In 2004 05 the State paid back the 885 000 in VLF
that it had borrowed in 2003 04 As described in the State Revenue Raid section of this Revenue
Summary in 2004 05 and 2005 06 the City lost 12 million in property taxes sales taxes and
VLF to the State in exchange for the Governor s support of Proposition lA Finally to
collateralize the State s deficit recovery bonds and to backfill the permanent reduction of VLF a
portion of sales taxes and VLF formerly remitted to the City monthly have been replaced by
semi annual payments of property taxes which has affected cash flows and interest income
Cupertino became an entitlement city for housing and community development block grants
which increased our grant allocation from 60 000 to almost 500 000 per year In addition our
two major capital projects the Stevens Creek Corridor Park and the Mary Avenue Bicycle
Overcrossing are primarily funded by grants
2005 06 2006 07 2007 08
Actual Estimate Adopted
REVENUE BY CATEGORY
Motor Vehicle in Lieu 3 888 000 4 123 000 4 250 000
Transportation 1 221 000 1 985 000 1 355 000
Stevens Creek Corridor CIP 138 000 2 731 000 0
Mary Avenue CIP 0 7 946 000 0
Housing Community Development 902 000 398 000 398 000
Other Grants 840 000 602 000 940 000
6 989 000 17 785 000 6 943 000
REVENUE BY FUND
General Fund
Transportation
Housing Community Development
Capital Improvement Projects
Resource Recovery
4 730 000
1 355 000
398 000
446 000
14 000
6 943 000
58
REVENUE SUMMARY
Charges for Services
Due to the nature of the services provided most ofthe activity in this category is accounted for
separately as enterprise funds As such the City attempts to recover the cost of the services
provided through user charges
Charges for services representing approximately 12 55 of total City revenues are estimated to
be 9 017 000 for the 2007 08 fiscal year With the remodel ofour Sports Center expansion of
our youth programs and the update of our building planning and engineering fees this category
has been one of our largest growing revenue sources
2005 06 2006 07 2007 08
Actual Estimate Adopted
REVENUE BY CATEGORY
Construction and Other Permits 1 776 000 1482 000 1 557 000
Resource Recovery 2 200 000 2 266 000 2 311 000
Blackberry Farm 1 061 000 970 000 660 000
Cupertino Sports Center Fees 1 368 000 1 550 000 1 744 000
Recreation Cultural Youth and Teen
Physical Nature and Park Programs 2 331 000 2 235 000 2 235 000
Senior and Teen Centers 710 000 566 000 510 000
9446 000 9 069 000 9 017 000
REVENUE BY FUND
General
Resource Recovery
Blackberry Farm
Cupertino Sports Center
Recreation Programs
2 067 000
2 311 000
660 000
1 744 000
2235 000
9 017 000
59
REVENUE SUMMARY
Fines and Forfeitures
Fines result from vehicle code parking code and other miscellaneous violations Our fines have
only slightly increased due to an enhanced signage effort by our Code Enforcement and Public
Works Departments
a
lONE WAY
2005 06
Actual
2006 07
Estimate
2007 08
Adopted
REVENUE BY CATEGORY
Fines 630 000 680 000 690 000
REVENUE BYFUND
General
690 000
60
REVENUE SUMMARY
Miscellaneous Revenues
Miscellaneous revenues consist of environmental management fees property sales and other
revenue items that the City receives on a non consistent basis from year to year Revenues for
fiscal 2007 08 are budgeted at 515 000 Non reoccurring revenues include the sale of surplus
property
2005 06
Actual
2006 07
Estimate
2007 08
Adopted
REVENUE BY CATEGORY
Developer Fees
Environmental Management
Sale of Property
Miscellaneous
37 000
358 000
2 423 000
232 000
50 000
365 000
1 600 000
141000
50 000
365 000
o
100 000
3 050 000 2 156 000 515 000
REVENUE BY FUND
General Fund
Storm Drain
Environmental Management
100 000
50 000
365 000
515 000
61
REVENUE SUMMARY
Interdepartmental Revenues
Interdepartmental revenues consist of interdepartmental service charges and operating transfers
Interdepartmental service charges arise from the centralized administration of certain activities
the costs ofwhich are allocated to the various City departments benefited The City uses internal
service funds to account for the provision of these services and the related charges Operating
transfers are in essence subsidies of one fund to another fund whereby monetary resources are
recorded as non operating revenues in the receiving fund and as non operating expenditures in
the transferring fund
Operating transfers of 16 198 000 are primarily due to the transfer of 3 538 OOO in debt service
payments 9 284 000 to fund capital projects and 1 882 000 in GASB 34 retiree medical
benefit obligations
2005 06 2006 07 2007 08
Actual Estimate Adopted
REVENUE BY CATEGORY
Transfer of Funds 8 929 000 11 715 000 16 198 000
Interdepartmental Service Charges
Insurance Premiums 381 000 356 000 343 000
Equipment Chargebacks 855 000 841 000 899 000
IT Chargebacks 717 000 883 000 909 000
10 882 000 41736 000 18 349 000
REVENUE BY FUND
General Fund
Capital Improvement Funds
Transportation
Cupertino Facilities Corporation
Information Technology IT
Equipment Replacement
Workers Compensation
Long term Disability
Retiree Medical
455 000
9 284 000
845 000
3 538 000
1 059 000
943 000
285 000
58 000
1 882 000
31489 000
62
REVENUE SUMMARY
State Revenue Raid
This category denotes the end of the negotiated League of California Cities agreement with the
State The League and Governor Schwarzenegger agreed that the State would take 619 000 and
618 000 for fiscal years 2004 05 and 2005 06 respectively in return for the Governor s
endorsement ofProposition lA which was passed by the voters in 2004
This raid of local revenue represented one third sales tax one third property tax and one third
vehicle license fees and was therefore segregated in this budget as a separate line item The
Proposition instituted protections from future takeaways of these revenue sources and
strengthened the State s funding requirements for programs mandated by the State
2005 06
Actual
2006 07
Estimate
2007 08
Adopted
REVENUE BYCATEGORY
State Revenue Raid 618 000 o o
REVENUE BY FUND
General SQ
63
I
IT JT JT JT JT Jf rff ioI
80 00
Summary of Employees
By Department
70 00
60 00
50 00
40 00
30 00
20 00
10 00
0 00
2001 02 2002103 2003 04 2004 05 2005 06
65
2006 07 2007 08
oCouncil Commissions
ClAdministration
oPublic Information
iii Adminiatrative Services
DParks and Recreation
DCommunity Development
IJPublic Works
Redevelopment Agency
Employee Summary
Trend Analysis
Council and Commissions
During the 2006 07 budget preparations City Council requested inclusion of all staff time
associated with commissions for consistency in recording purposes
Administration
The Administration Department has had minimal increases over the past six years The
Community Outreach Coordinator was decreased to ahalf time position in 2001 02 a halftime
clerk receptionist was added in 2002 03
Administrative Services
From fiscal year 2000 01 to 2007 08 the Administrative Services Department has seen several
changes in staffing The majority of the increase was due to the expansion of the IT Division
with the addition ofa GIS Coordinator and an IT Assistant The Finance Division increased an
Account Clerk position from apart time to afull time position to handle Business Licensing and
a half time clerk receptionist was added to the City Clerk s office in 2002 03 In 2007 08 the
receptionist position will transfer from the City Clerk s office to Public Information and a part
time Code Enforcement Officer will go to afull time position
Public Information
Staffing in the Public Information Department includes taking a 75 position to full time in
2001 02 adding aMedia Coordinator position in 2006 07 and adding areceptionist in 2007 08
Recreation Services
Recreation Services has changed staffing due to new programs and restructuring from fiscal year
2000 01 to 2007 08 A Maintenance Worker for Blackberry Farm a Building Attendant for the
Senior Center and two Recreation Coordinators were added in fiscal year 2000 01 Changes for
2001 02 included the reclassification of four positions from part time to full time due to
increased workload at the Quinlan Center Senior Center Blackberry Golf Course and Sports
Center During 2002 03 greens maintenance was contracted out moving three Maintenance
Workers to vacancies in the Public Works Department two part time positions were
consolidated into a full time an Assistant Golf Shop Attendant was added and a part time
position went to 75 time at the Senior Center Continued consolidation of contract
maintenance efforts allowed for the reduction of one vacant Maintenance Worker position at
Blackberry Farm in 2004 05 In 2005 06 a Facility Attendant was added to service the new
Community Hall and in 2006 07 a Recreation Coordinator was eliminated at Blackberry Farm
During 2007 08 the department eliminates a Recreation Supervisor and replaces the position
with atwo year term Park Planner
66
Community Development
The Community Development Department has had variations in staffing over the past eight
years In 2001 02 the department combined two part time intern positions into a full time
position to increase efficiency In addition during 2002 03 the Senior Building Inspector
position was vacated as a result ofan internal promotion For fiscal year 2006 07 an Economic
DReveDlopmAent Manager was authorized as well as a Counter Specialist In 2007 08 an
Assistant Planner will be added due to the growing workload
Public Works
The Public Works Department has had minimal increases over the past seven years A Traffic
Engineer was eliminated and replaced with aCity Architect in 2001 02 and an Assistant Director
ofPublic Works was added in 2002 03 The Facilities position count was increased in 2004 05
by one maintenance worker to support the additional maintenance workload required for the
library new Community Hall and City Center Park In 2006 07 a Traffic Technician was
upgraded to aSenior Civil Engineer
Redevelopment AeencvRDA
The Cupertino Square Redevelopment Project Area was approved and existing staff time is
allocated each year as appropriate During fiscal year 2006 07 an Economic DReveDlopmAent
Manager was approved and will split their time between the Agency and Community
Development
67
PERSONNEL SUMMARY
Summary ofemployees by Division
Permanent Benefited Positions 2001 02 2002 03 2003 04 2004 05
CITY COUNCIL COMMISSIONS
City Council 0 20 040 040 040
Fine Arts Commission 0 10 010 0 10 010
Technology Information Communications Commission 0 05 0 05 0 05 0 05
Parks and Recreation Commission 0 10 0 10 0 10 010
Teen Commission 0 00 0 15 0 15 015
Housing Commission 0 05 0 00 0 00 0 00
Library Commission 0 00 0 00 0 00 0 00
Senior Commission 0 00 0 00 0 00 0 00
Public Safety Commission 0 00 0 00 0 00 0 00
Bicycle and Pedestrian Commission 0 00 0 00 0 00 0 00
Planning Commission 0 00 0 00 0 00 0 00
0 50 0 80 0 80 0 80
ADMINISTRATION
City Manager 135 145 145 150
Community Outreach 050 0 50 0 50 0 50
City Attorney 2 75 2 75 2 70 2 70
4 60 4 70 4 65 4 70
PUBLIC INFORMATION
Community Relations 0 75 0 75 0 75 0 75
Cupertino Scene 040 040 040 040
Government Channel 3 00 325 325 2 25
City Website 0 00 0 00 0 00 100
4 15 440 4 40 4 40
ADMINISTRATIVE SERVICES
Administration 2 00 190 190 195
Accounting 4 50 440 440 440
Business Licensing 0 50 0 50 0 50 0 50
City Clerk 3 90 3 90 3 90 3 90
Duplicating and Printing 0 00 0 60 0 60 0 60
Human Resources 2 50 2 70 2 70 2 70
Insurance Administration 0 35 030 0 30 030
Code Enforcement 3 15 3 00 3 00 3 00
Information Technology 3 00 3 00 3 00 3 00
19 90 20 30 20 30 20 35
68
2005 06 2006 07 2007 08
040 040 040
010 010 0 10
0 05 0 05 0 05
0 10 0 10 0 10
0 15 015 0 15
0 00 0 05 0 05
0 00 0 02 0 02
0 00 0 02 0 02
0 00 0 03 0 03
0 00 0 03 0 03
0 00 045 045
0 80 140 140
1 50 140 140
0 50 050 0 50
2 70 240 240
4 70 4 30 4 30
0 75 0 75 1 85
040 040 035
225 340 330
100 100 100
4 40 5 55 6 50
195 194 194
440 4 39 4 39
0 50 0 50 0 50
3 90 3 90 2 90
0 60 0 60 0 60
2 70 2 70 2 55
030 0 30 045
3 00 330 455
3 00 4 00 4 00
20 35 21 63 21 88
69
PERSONNEL SUMMARY
Summary of employees byDivision
Permanent Benefited Positions 2001 02 2002 03 2003 04 2004 05
PARKS AND RECREATION
Administration 190 190 190 190
Facilities Community Events 8 00 6 50 7 00 7 00
Youth TeenMcClellan Ranch Park 350 3 35 3 35 3 35
Sports Fitness GolfCourse 5 00 5 50 5 50 5 50
Senior Center Stevens Creek Trail 6 75 7 50 7 50 7 50
Blackberry Farm 10 00 7 88 7 88 6 88
35 15 32 63 33 13 32 13
COMMUNITY DEVELOPMENT
Administration 149 149 149 149
Planning 6 96 6 96 6 96 7 04
Housing Services 100 0 90 0 90 0 90
Building 150 1140 1140 1401
Economic DReveDlopmAent 0 00 0 00 0 00 0 32
19 95 20 75 20 75 2115
PUBLIC WORKS
Administration 2 25 3 25 325 325
Environmental Management 210 232 2 17 3 02
Engineering Services 5 75 5 75 5 75 5 75
Service Center 2 20 220 2 20 2 20
Grounds 1508 1408 1408 1408
Streets 2325 22 55 22 70 2425
Facilities 740 730 7 30 7 60
Transportation 535 435 4 35 4 35
General Services 4 10 410 4 10 4 20
70 00 70 22 70 22 71 22
TOTAL PERMANENT BENEFITED POSITIONS 154 25 153 80 154 25 154 75
70
2005 06 2006 07 2007 08
190 1 89 2 89
7 00 7 55 8 60
3 35 3 35 4 88
5 50 550 5 00
7 50 7 69 739
6 88 5 98 0 00
32 13 3196 28 76
149 139 139
7 04 7 76 8 28
0 90 0 81 0 79
1401 11 90 1180
0 32 0 92 142
2115 22 78 23 68
325
3 02
5 75
220
1408
2425
7 60
435
420
7122
154 75
323
3 02
5 68
220
1408
2425
7 60
435
4 20
7113
158 75
3 23
3 02
5 68
220
18 15
202
7 50
4 75
440
7113
160 75
71
Five Year
Budget Forecast
73
FUND BALANCE TRENDS
Five Year Forecast in thousands
2006 07 2007 08 2008 09 2009 10 2010 11 2011 12
GENERAL FUND
Beginning Balance at July 1 32708 21 447 14 132 12 700 31640 14 833
Operating Activity
Estimated Operating Revenues 38 708 40 621 41 362 43 604 43 985 44 717
Estimated Operating Expenditure Savings 1 800 0 0 0 0 0
Use of Public Access Reserve 50 50 50 50 50 50
Estimated Operating Expenditures 30 633 33 567 33 864 35 275 36 328 38 034
Net Operating Activity 9 925 7 103 7 548 8379 7 707 6 732
Debt Service 3 535 3 538 3 534 3 536 3 532 3 532
Net Operating Activity after debt 6 390 3 565 4 014 4 843 4 175 3 200
Transfers Out to Other Funds
Infrastructure Reserve 500 100 100 100 100 100
MIS Fund 272 150 220 220 220 220
Retiree Medical GASB 34 1 821 1 882 1 946 2 013 2 082 2 090
Equipment Fund 25 44 50 50 50 50
Net Income for CIP RPerosejervcetss 3 772 1 389 1 698 2 460 1 723 740
One Time Revenues
RDA Loan Payback 0 275 0 0 0 0
Sale of Property 1 600 0 0 0 0 0
Senior Center Assmt District Close Outs 120 125 0 0 0 55
ResourceRecovery Cleanup Payback 500 500 0 0 0 0
Income for CIP RPerosejervcetss 5 992 2 289 1 698 2 460 1 723 795
Proposed CIP Projects
Capital Projects 2 422 2 948 1 380 50 0 0
StevensCreek Corridor Park 701 6 236 1 000 0 500 0
Mary Ave Bicycle Footbridge 1 000 0 0 0 0 0
Transportation Projects Operations 800 750 750 750 750 750
Capital Improvement Funding Changes 0 330 0 0 0 0
4 923 9 604 3 130 800 1 250 750
Ending Balance June 30 21 447 14 132 12 700 14 360 14 833 14 878
Reserve Policy
Capital Improvement Projects 5 000 5 000 4 867 2 206 3 638 4 133 4 202
One Time Revenue Reserves 775 0 0 0 0 0
PERS Reserve 1 000 1 000 1 000 1 000 1 000 1 000 1 000
Economic Uncertainty I 2 500 2 500 2 500 2 500 2 500 2 500 2 500
Economic Uncertainty II 7 500 7 500 7 500 7 500 7 500 7 500 7 500
Undesignated 4 672 1 735 506 278 300 324
16 000 21 447 14 132 12 700 14 360 14 833 14 878
74
FUND BALANCE TRENDS
Five Year Forecast in thousands
2006 07 2007 08 2008 09 2009 10 2010 11 2011 12
SPECIAL REVENUEFUNDS
STORM DRAIN
Beginning Balance at July 1 1 091 87 117 98 104 111
Estimated Operating Revenues 276 80 81 81 82 82
EstimatedOperating Expenditures 148 75 75 75 75 75
Capital Projects 1 132 120 0 0 0 0
Transfers Out 0 95 25 0 0 0
Ending Balance at June 30 87 117 98 104 111 118
PARKDEDICATION TAX
Beginning Balance at July 1 41 18 1 126 1442 1 766 2 098
Estimated Operating Revenues 200 1 108 316 324 332 340
Estimated Operating Expenditures 0 0 0 0 0 0
Net Operating Activity 200 1 108 316 324 332 340
Transfers Out 200 0 0 0 0 0
Transfers In 50 0 0 0 0 0
Capital Projects McClellanJPortal 73 0 0 0 0 0
EndingBalance at June 30 18 1 126 1 442 1 766 2 098 2 438
ENVIRONMENTALMANAGEMENT
Beginning Balance at July 1 145 114 72 72 72 73
Estimated Operating Revenues 366 369 369 369 369 369
Estimated Operating Expenditures 397 411 369 369 369 369
Ending Balance at June 30 114 72 72 72 73 73
TRANSPORTATION
Beginning Balance at July 1 3 746 857 588 683 813 931
Estimated Operating Revenues 1483 1 115 1 818 1 680 1 696 1 712
Grants Other Income 582 330 0 0 0 0
Estimated Operating Expenditures 860 742 773 800 828 857
Net Operating Activity 1 205 703 1 046 880 868 855
Transfers In 800 845 775 750 750 750
Capital Projects 4 894 1 817 1 725 1 500 1 500 1 500
Ending Balance at June 30 857 588 683 813 931 1 037
75
FUND BALANCE TRENDS
Five Year Forecast in thousands
2006 07 2007 08 2008 09 2009 10 2010 11 2011 12
SPECIAL REVENUE FUNDS
HOUSING COMMUNITYDEVELOPMENT
Beginning Balance at July 1 3 154 3 228 3473 3 689 3 895 4 091
Estimated Operating Revenues 763 761 750 750 750 750
Estimated Operating Expenditures 689 516 534 544 554 565
Ending Balance at June 30 3 228 3 473 3 689 3 895 4 091 4 277
REDEVELOPMENT AGENCY
Beginning Balance at July 1 125 18 99 371 635 790
EstimatedOperating Revenues 360 575 1 000 2 000 2 400 2 400
EstimatedOperating Expenditures 217 219 228 236 244 253
Capital Projects Affordable Housing Debt 0 0 500 1 500 2 000 2 000
Transfers Out General Fund 0 275 0 0 0 0
EndingBalance at June 30 18 99 371 635 790 937
76
FUND BALANCE TRENDS
Five Year Forecast in thousands
2006 07 2007 08 2008 09 2009 10 2010 11 2011 12
DEBTSERVICE FUNDS
CUPERTINO FACILITIES CORPORATION
Beginning Balance at July 1 52 52 52 52 52 52
Transfers In 3 535 3 538 3 534 3 536 3 532 3 532
Debt Service Payments 3 535 3 538 3 534 3 536 3 532 3 532
Ending Balance at June 30 52 52 52 52 52 52
TRAFFIC IMPACT
Beginning Balance at July 1 116 118 118 118 92 55
Estimated Operating Revenues Close out 38 39 37 9 0 55
Debt Service Payments 36 39 37 35 37 0
Ending Balance at June 30 118 118 118 92 55 0
VALLCO 1974 ASSESSMENT DISTRICT
Beginning Balance at July 1 120 0 0 0 0 0
Estimated Operating Revenues 0 0 0 0 0 0
Transfers Out General Fund 120 0 0 0 0 0
EndingBalance at June 30 0 0 0 0 0 0
77
FUND BALANCE TRENDS
Five Year Forecast in thousands
200607 2007 08 2008 09 2009 10 2010 11 2011 12
CAPITAL PROJECTFUNDS
CAPITAL IMPROVEMENT
Beginning Balance at July 1 1 650 500 600 700 800 900
Transfers In for Projects 2 372 2 948 1 380 50 0 0
Transfers for Reserves 500 100 100 100 100 100
Transfers Out 0 330 0 0 0 0
Prior YearGrants Authorized 259 0 0 0 0 0
Grants Other Income 112 446 0 0 0 0
Capital Projects 4 393 3 064 1 380 50 0 0
Ending Balance at June 30 500 600 700 800 900 1 000
Reserve
Infrastructure 500 600 700 800 900 1 000
CIVIC CENTER LffiRARY
Beginning Balance at July 1 2 0 0 0 0 0
Capital Projects 2 0 0 0 0 0
Ending Balance at June 30 0