HomeMy WebLinkAbout60-20RESOLUTION 60-20
RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF LOS ALTOS HILLS
ACCEPTING THE TOWN'S ANNUAL FINANCIAL REPORTS FOR THE YEAR
ENDED JUNE 30, 2020
WHEREAS, the independent audit provides annual reports on the financial condition of the Town
in accordance with Municipal Code Section 2-3.221;
WHEREAS, the Town of Los Altos Hills contracted with the audit firm of Maze and Associates
(Maze) to conduct an audit of the Town's financial records in accordance with Governmental
Accounting Standards Board (GASB); and
WHEREAS, the Comprehensive Annual Financial Report for the year ended June 30, 2020 was
prepared in accordance with all relevant GASB pronouncement and best practices set by the
Governmental Finance Officers Association and reviewed by Maze for fair presentation and free
from material misstatement; and
WHEREAS, it is recommended that the City Council accept the Town's CAFR for the year ended
June 30, 2020 (Attachment A);
NOW THEREFORE, resolved by the City Council of the Town of Los Altos Hills that the
Council hereby accepts the Town's annual financial statements as prepared by Maze and
Associates.
The above and foregoing Resolution was passed and adopted by the City Council of the Town of
Los Altos Hills at a regular meeting held on the 19th day of November 2020 by the following vote:
AYES: Wu, Tankha, Corrigan, Spreen, Tyson
NOES: None
ABSTAIN: None
ABSENT: None
Miche -e-W-u;M-a
TEST:
Deborah Padovan, City Clerlc
Resolution 60-20 Page 1
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
Fiscal Year Ended June 30, 2020
TOWN OF LOS ALTOS HILLS
Resolution 60-20 Page 2
Attachment A
Blank page behind cover
Resolution 60-20 Page 3
COMPREHENSIVE
ANNUAL
FINANCIAL REPORT
For the Fiscal Year Ended
June 30, 2020
Town of Los Altos Hills, California
PREPARED BY
DEPARTMENT OF FINANCE AND ADMINISTRATIVE SERVICES
Resolution 60-20 Page 4
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Resolution 60-20 Page 5
Table of Contents
INTRODUCTORY SECTION
Letter of Transmittal ........................................................................................................................................... i
Town Organizational Chart ............................................................................................................................... vi
Town Officers .................................................................................................................................................. vii
GFOA Certificate of Achievement .................................................................................................................. viii
FINANCIAL SECTION
Independent Auditor’s Report ......................................................................................................................... 1
Management’s Discussion and Analysis ........................................................................................................... 3
Basic Financial Statements
Government‐wide Financial Statements:
Statement of Net Position ................................................................................................................. 22
Statement of Activities ...................................................................................................................... 23
Fund Financial Statements:
Balance Sheet – Governmental Funds .............................................................................................. 26
Reconciliation of the Governmental Funds Balance Sheet to
the Government‐wide Statement of Net Position ........................................................................ 27
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds ..................................................................................................................... 28
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and
Changes in Fund Balances to the Government‐wide
Statement of Activities and Changes in Net Position .................................................................... 29
Statement of Fund Net Position – Proprietary Funds ....................................................................... 32
Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ............ 33
Statement of Cash Flows – Proprietary Funds .................................................................................. 34
Statement of Fiduciary Net Position – Fiduciary Funds .................................................................... 36
Statement of Changes in Fiduciary Net Position – Fiduciary Funds .................................................. 37
Notes to Basic Financial Statements ............................................................................................... 41
Resolution 60-20 Page 6
FINANCIAL SECTION (Continued)
Required Supplemental Information
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual –
General Fund ................................................................................................................................... 74
Schedule of Proportionate Share of the Net Pension Liability ............................................................. 75
Schedule of Contributions .................................................................................................................... 76
Schedule of Changes in the Town’s Net OEPB Liability and Related Ratios ......................................... 77
Schedule of OPEB Investment Returns ................................................................................................ 78
Schedule of OPEB Contributions .......................................................................................................... 79
Notes to the Required Supplementary Information ............................................................................ 80
Supplemental Information
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:
Street Capital Projects Fund ............................................................................................................ 82
Sewer Enterprise Fund .................................................................................................................... 83
Nonmajor Governmental Funds:
Combining Balance Sheets .............................................................................................................. 86
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................ 88
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances –
Budget and Actual ......................................................................................................................... 90
Agency Funds:
Statement of Changes in Assets and Liabilities ............................................................................... 92
STATISTICAL SECTION
Net Position by Component ........................................................................................................................... 96
Changes in Net Position .................................................................................................................................. 98
Fund Balances of Governmental Funds ................................................................................................... 102
Changes in Fund Balances of Governmental Funds ..................................................................................... 104
Assessed and Estimated Actual Value of Taxable Property ......................................................................... 106
Property Tax Rates – Direct and Overlapping Governments ....................................................................... 107
Principal Taxpayers ....................................................................................................................................... 108
Property Tax Levies and Collections ............................................................................................................. 109
Ratios of Outstanding Debt by Type............................................................................................................. 110
Direct and Overlapping Debt ........................................................................................................................ 111
Legal Debt Margin Information .................................................................................................................... 112
Demographics and Economic Statistics ........................................................................................................ 113
Principal Employers ...................................................................................................................................... 114
Full‐Time Equivalent City Government Employees by Function .................................................................. 115
Operating Indicators by Function ................................................................................................................. 116
Capital Asset Statistics by Function .............................................................................................................. 118
Resolution 60-20 Page 7
INTRODUCTORY
SECTION
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Resolution 60-20 Page 9
Letter of Transmittal
i
Letter of Transmittal
November 13, 2020
To the Residents of the Town of Los Altos Hills,
Honorable Mayor and Members of the City Council
We are pleased to submit the Comprehensive Annual Financial Report (CAFR) for the Town of Los Altos Hills,
California (Town), for the fiscal year ended June 30, 2020. This report was prepared in accordance with
accounting principles generally accepted in the United States of America and contains information to help
readers gain a reasonable understanding of the Town’s financial activities.
The responsibility for the accuracy of the information and the completeness and fairness of the presentation,
including all disclosures, rests on the Town’s management. To the best of our knowledge, we believe that
the information reported is accurate in all material respects and its presentation fairly shows the financial
position and the results of the Town’s operations. In providing a reasonable basis for making these
representations, management has established a thorough internal control system designed to protect the
government’s assets from loss, theft, or misuse and to compile necessary information for preparing the
Town’s financial statements.
The CAFR is presented in three major sections that provide introductory, financial as of June 30, 2019, and
statistical information about the Town. The introductory section includes this transmittal letter, the Town's
organizational chart and a list of the Town's principal officials. The financial section includes the independent
auditor's report, basic financial statements, notes to basic financial statements, required supplementary
information and supplementary information on nonmajor funds. The statistical section, which is unaudited,
includes selected financial and demographic information.
Maze & Associates, a firm of licensed certified public accountants, has issued an unmodified (“clean”) opinion
on the Town’s financial statements for the fiscal year ended June 30, 2019. The independent auditor’s report
is presented as the first component of the financial section of this report.
Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and
provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A presents
a comparative analysis of current and prior year results, changes in financial position, financial highlights,
trends and disclosure of any known significant events or decisions that affect the financial condition of the
Town. This transmittal letter complements the MD&A and should be read in conjunction with it.
Resolution 60-20 Page 10
Letter of Transmittal
ii
Town Profile
The Town of Los Altos Hills is a residential community located in Santa Clara County, California. It is about
18.6 miles northwest of San Jose and 38.5 miles southeast of San Francisco. The Town was incorporated on
January 27, 1956. The Town encompasses 9 square miles and has influence on an additional 5.2 square miles
of unincorporated land adjacent to the Town’s boundaries. The “Sphere of Influence”, maintains over 60
miles of pathways and 100 acres of open space.
The Town operates under a Council‐Manager form of government. Policy‐making and legislative authority
are vested in the governing City Council, which consists of five Councilmembers. City Council members are
elected in overlapping four‐year terms and, from amongst themselves, appoint a Mayor and Vice Mayor
every December. The Council is responsible for passing ordinances, adopting the budget, appointing Planning
Commission and Volunteer Committee members, and hiring the City Manager and City Attorney. The City
Manager is responsible for carrying out the policies and ordinances of the City Council, overseeing the day‐
to‐day operations of the Town, and appointing the Town staff.
The Town provides a full range of essential services through a combination of in‐house staff and contract
services. Services provided by the Town’s 26.2 full‐time equivalent employees include planning, engineering,
building inspection, maintenance of public infrastructure, recreation, limited parks, open space maintenance
and general management. Partnership with neighboring cities, counties and special districts are utilized to
provide law enforcement services, fire services, sewer conveyance and treatment, water services and
technology support. The Town also entered into public‐private partnership in areas of code enforcement,
trash collection, payroll services, staff augmentation and Westwind Barn management.
The cost to provide these essential services are reviewed annually as part of the Town’s operating and capital
budget process. The annual budget serves as the foundation for the Town’s financial planning, monitoring
and control. All departments of the Town are required to submit requests for appropriation to the City
Manager each spring. The City Manager reviews these requests and develops a proposed budget. Prior to
June 30 of each year, the City Manager submits to the City Council a proposed operating and capital
improvement budget for review. The Council holds public hearings and a final budget is adopted on or before
June 30.
Budgetary reviews and controls are applied as described in the Notes to Required Supplementary Information
on page 80. Budget to actual comparisons are provided in this report for each governmental fund for which
an annual budget has been adopted. For the General Fund, this comparison is presented on page 74 as part
of the required supplementary information. For governmental funds other than the General Fund, this
comparison is presented in the Combining Statements and Individual Fund Statements section of this report,
starting on page 86.
Throughout the year, the Administrative Services Department monitors economic changes that may affect
the Town’s revenue stream, coordinates with departments in identifying changing needs and demands, and
presents budget adjustments to the City Council as part of the mid‐year review. Public inputs are filtered
through the Town’s standing committees and to staff liaisons. These inputs are considered in the
development of the budget and presented to the City Council for consideration as part of the budget review
and throughout the year as separate Council action items.
Resolution 60-20 Page 11
Letter of Transmittal
iii
Los Altos Hills Financial Outlook
As shown in the Basic Financial Statements, starting on page 22, the Town is financially healthy. As of June
30, 2020, the Town has no outstanding debt, the unfunded pension liability per CalPERS Actuary is estimated
at $2.2 million, and the total unrestricted fund balance is $18.3 million, of which $7.2 million is unassigned
and available to meet current and future liabilities. With the recent hit of COVID‐19 pandemic in March 2020,
the Town was able to maintain a combination of strong local economy increase in assessed property value,
healthy building improvement activity, and reduced spending are the reasons for the current year overall
increase in total town‐wide net position.
In contrast to published reports about municipal finances nationwide, the Town’s finances are in good
condition. However, pension cost spending and pension liabilities continue to substantially increase based
on updated actuarial studies by CalPERS. These updated actuarial studies by CalPERS anticipate lower long‐
term investment earnings, increasing employee compensation, a longer life span, and earlier retirement. The
Town has addressed these changes by complying with PEPRA new pension benefits for new employees,
increasing employee participation in pension costs, and making voluntary payments to partially retire long‐
term pension liabilities. The Town’s expectation for past service pension cost increases have not yet been
included in the CalPERS published employer liabilities. The Town’s OPEB liability is fully funded and
management submitted reimbursements from our third‐party administered OPEB in this fiscal year. The
Notes to Financial Statements provide detailed information regarding the Town’s pension and OPEB
obligations.
The Economy and Its Impact
Los Altos Hills has twelve non‐residential properties and approximately 3,000 single‐family residential
properties. The twelve non‐residential properties are Fremont Country Club, Purissima Hills Water District,
El Monte Fire Station, Town Hall, Foothill College, four religious institutions, and three schools. With no
commercial base, Los Altos Hills’ primary revenue sources are property tax and development permit revenues
from private development.
Based on the most recent Property Tax Analysis performed by HdL, the local real estate market continues to
improve. While home sales volume stays flat, home price continues to rise year over year. During the first
2 months of 2020, the Town’s median sale price of single‐family residential homes decreased 3.25 percent
to $4,006,000 (from $4,140,500 for calendar year 2019). This is a 62 percent increase over the median price
reported in the peak of the real estate bubble in 2008 ($2,500,000).
Resolution 60-20 Page 12
Letter of Transmittal
iv
Results Region‐wide were similar. In August 2020, the median price of home sales in Santa Clara County was
$1,125,000, or 66 percent increase over the peak median price for Santa Clara County before the recession
($750,000).
Property tax revenues are generally one year behind the housing market. The property valuation used to
calculate tax revenues is based on price of homes sold in the previous year. The Town’s FY2019‐2020 net
taxable assessed value is projected to be $8.9 billion based on Santa Clara County’s data. As a result, the
Town’s property tax revenue is expected to be $5.4 million in FY2020‐2021. Staff closely monitors the County
Controller‐Treasury Office’s property tax revenue projection to ensure the Town’s revenue projection
incorporates the most recent data. A reduction in the number of sales during 2020 will result in reduced
growth in value for FY2021‐2022 and a reduction in revenue from real estate transaction tax and
supplemental assessments during FY2020‐2021.
California SB 107 shifts a portion of the assessed property tax from the County of Santa Clara to Los Altos
Hills. The Town received approximately $367,000 in fiscal year 2020. The Town anticipates receiving
$423,000 in the upcoming fiscal year.
Long-Term Financial Planning and Financial Policies
Town management develops a five‐year financial projection for all city funds, covering all foreseeable
elements of revenues and expenditures. This practice allows the Town to identify potential fiscal challenges
early on and gives it time to plan strategically to weather economic cycles and provide stable and consistent
services to its residents.
For capital projects, the Town maintains a five‐year capital improvement plan which is updated annually. This
plan provides a long‐term forecast of identified capital improvement projects and serves as a tool for the
town management and City Council to plan, prioritize and monitor the Town’s capital projects. A Town Hall
addition is planned for approximately $3.5 million in the next year.
The Town has established a reserve policy to set aside unrestricted general fund balance for pension,
operating contingency, disaster contingency and technology / equipment replacement reserves. The Town
plans to expand and refine the reserve policy in the coming years.
Resolution 60-20 Page 13
Letter of Transmittal
v
Award and Acknowledgement
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in
Financial Reporting to the Town of Los Altos Hills for its Comprehensive Annual Financial Report for the fiscal
year ended June 30, 2019. In order to be awarded a Certificate of Achievement, a government must publish
an easily readable and efficiently organized CAFR. This report must satisfy both GAAP and applicable legal
requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program’s
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
Preparation of this CAFR is not possible without the hard work of the entire Finance and Administrative
Services Department and the support of the other departments.
In closing, we would also like to thank the City Council and the Finance and Investment Committee for their
continued interest and support in planning and conducting the financial operations of the Town in a
responsible and progressive manner.
Respectfully submitted,
Carl Cahill
City Manager
Resolution 60-20 Page 14
Updated – 2020 Residents of Los Altos Hills ADMIN. CLERK/ TECHNICIAN (PT) CITY MANAGER PUBLIC WORKS DIRECTOR & CITY ENGINEER CITY CLERK PRINCIPAL PLANNER ASSISTANT ENGINEER (3) SENIOR ENGINEER MAYOR AND CITY COUNCIL Michelle Wu Mayor Kavita Tankha Vice Mayor Courtenay C. Corrigan Councilmember Roger Spreen Councilmember George Tyson Councilmember CITY ATTORNEY CONTRACT MAINTENANCE SUPERINTENDENT MAINTENANCE CREW I (2) ACCOUNTANT (2) ADMINISTRATIVE SERVICES DIRECTOR PLANNING DIRECTOR BUILDING INSPECTOR ADMIN CLERK/ TECHNICIAN COMMUNITY SERVICES SUPERVISOR ASSISTANT PLANNER (2) RECREATION SPECIALIST ADMINISTRATIVE TECHNICIAN (PT) MANAGEMENT ANALYST BUILDING TECHNICIAN MAINTENANCE CREW III (2) Resolution 60-20 Page 15
Town Officers
City Council
Michelle Wu, Mayor
Kavita Tankha, Vice Mayor
Courtenay Corrigan
Roger Spreen
George Tyson
Term Expires
November 2020
November 2022
November 2020
November 2020
November 2022
City Council Appointed
Carl Cahill, City Manager
Steve Mattas, City Attorney (contract)
City Manager Appointed
Zachary Dahl, Planning Director
Sarina Revillar, Administrative Services Director
Nichol Bowersox, Public Works Director & City Engineer
Deborah Padovan, City Clerk
Sarah Robustelli, Community Services Supervisor
Resolution 60-20 Page 16
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Town of Los Altos Hills
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2019
Executive Director/CEO
Resolution 60-20 Page 17
FINANCIAL
SECTION
Resolution 60-20 Page 18
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Resolution 60-20 Page 19
INDEPENDENT AUDITOR’S REPORT
To the Honorable Members of the Town Council
Town of Los Altos Hills, California
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the Town of Los Altos Hills,
California, as of and for the year ended June 30, 2020, and the related notes to the financial statements,
which collectively comprise the Town’s basic financial statements as listed in the Table of Contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of the financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the Town’s preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we
express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the Town as of June 30, 2020, and the respective changes in financial
position and, where applicable, cash flows thereof for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Resolution 60-20 Page 20
Other Matters
Required Supplemental Information
Accounting principles generally accepted in the United States of America require that Management’s
Discussion and Analysis and other Required Supplemental Information as listed in the Table of Contents, be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial statements,
and other knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements as a whole. The Introductory Section, Supplemental
Information, and Statistical Section as listed in the Table of Contents are presented for purposes of additional
analysis and are not required parts of the basic financial statements.
The Supplemental Information is the responsibility of management and was derived from and relates directly
to the underlying accounting and other records used to prepare the basic financial statements. The
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information directly
to the underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the Supplemental Information is fairly
stated, in all material respects, in relation to the basic financial statements as a whole.
The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
Pleasant Hill, California
November 13, 2020
Resolution 60-20 Page 21
Management’s Discussion and Analysis
For the Year Ended June 30, 2020
As the management of the Town of Los Altos Hills, we offer readers of the Town's financial statements this
narrative overview and analysis of the financial activities of the Town of Los Altos Hills for the year ended June
30, 2020. We encourage readers to consider the information presented here in conjunction with additional
information that we have furnished in our letter of transmittal, which can be found on pages i‐iv of this report.
FINANCIAL HIGHLIGHTS
Town‐Wide Financial Highlights:
Net Position – The Town’s total assets and deferred outflows of resources exceeded its liabilities and
deferred inflows of resources at June 30, 2020 by $56.1 million (net position). Of this amount, $20.6
million was reported as unrestricted net position, which may be used to meet ongoing obligations to
citizens and creditors.
Changes in Net Position – The Town’s total net position increased by $3.9 million as reflected in the
government‐wide statement of activities. Net position of governmental activities increased by $3.5
million, because revenue exceeded expenses. Net position of business‐type activities increased by
$395,889, reflecting this year’s net income from the Sewer operations resulting from the increases in
the sewer fee required to support operating expenses.
Cash and investments at June 30, 2020 totaled $27.7 million, of which $23.2 million was classified as
government activities and $4.5 million was under the business‐type activities category (Sewer). The
Town's cash and investments increased $3.6 million, or 14.9 percent as compared to the prior year,
due revenue exceeding expenses.
Accounts payable and other current liabilities at June 30, 2020 was $4.9 million. Of this amount, $1.2
million was reported in the Sewer Fund. There is $3.2 million of refundable deposits relating to
property development which are more than 4 years old. There is no long‐term bonded debt
outstanding at the close of the fiscal year.
Fund Highlights:
Governmental Funds – Fund Balances – At the close of fiscal year, the Town’s governmental funds
reported a combined fund balance of $19.6 million, an increase of $3.6 million or 22.5% from the prior
year. Of the total, $7.2 million, or 36% of the fund balance is available for spending at the
government’s discretion (unassigned fund balance).
General Fund unassigned fund balance at June 30, 2020 was $7.2 million, a decrease of $1.66 million,
or 18.9 percent below the previous year. Decreasing the unassigned fund balance relates to
reclassifying to committed and assigned reserve funds described more fully on the next page.
Sewer Fund unrestricted net position at June 30, 2020 was $3.3 million, increased by $85,964 (or 3%)
from the prior year. Charges for services increased by $99,009, or 3% over the previous year primarily
due to increases in sewer assessments.
Resolution 60-20 Page 22
Management’s Discussion and Analysis
Other Highlights
Pension – For funding purpose, the change will affect the contribution rates beginning in fiscal year
2019‐20 and result in increases to the normal costs and payments for unfunded actuarial liabilities.
At the close of this fiscal year, the Town’s net pension liability increased from $1.9 million to $2.2
million. The unfunded liability as of June 30, 2020 was $$2.2, an increase of $312,125 or 16.5% above
the previous year. Additionally, this unfunded liability is offset by the PARS 115 Trust balance with a
balance of $550,215 at June 30, 2020. The Town has one of the highest funding ratios of
municipalities in the state; Classic Miscellaneous group is at 83.6%, 2nd Tier at 91% and the PEPRA
tier is at 93.2%.
OPEB – The Town’s CERBT Trust is nearly fully funded and recent market gains have exceeded the
assumed discount rate. It is likely that the fund can now generate the necessary returns to fully
meet OPEB obligations in the future. Management began this year requesting reimbursements from
the Trust Account to pay our current OPEB expenses in the following fiscal year.
Reserves – Each year, the City Council reviews the current committed and assigned reserves and
updates the balances of these reserves as necessary. Any changes are adopted by resolution of the
City Council. For fiscal year 2020, the Committed reserves were increased $3.2 million to provide for
pensions and facilities and equipment replacement. Assigned reserves were increased $1.7 million
to provide for operating contingency in the event of a disaster (see Note 7B).
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the Town's basic financial statements,
which consist of three components: government‐wide financial statements, fund financial statements, and
notes to the financial statements. This report also contains supplementary information in addition to the
basic financial statements such as this discussion and analysis.
Government-wide Financial Statements
The government‐wide financial statements are designed to provide readers with a broad overview of the
Town's finances, in a manner similar to private‐sector business.
The Statement of Net Position presents information on all of the Town of Los Altos Hills' assets and liabilities,
with the difference between the two reported as net position. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the Town is improving or
deteriorating.
The Statement of Activities presents information showing how the Town's net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to
the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported
in this statement for some items that will result in cash outflows in future fiscal periods, for example, earned
but unused vacation leave. These government‐wide financial statements begin on page 22 of this report.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The Town uses fund accounting to ensure and demonstrate
compliance with finance‐related legal requirements. All of the funds of the Town can be divided into three
categories: governmental funds, proprietary funds, and fiduciary funds.
Resolution 60-20 Page 23
Management’s Discussion and Analysis
Governmental Funds. Governmental funds are used to account for essentially the same functions reported
as governmental activities in the government‐wide financial statements. However, unlike the government‐
wide financial statements, governmental fund financial statements focus on near‐term inflows and outflows
of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year.
Such information may be useful in assessing a government’s near‐term financing requirements.
Because the focus of governmental funds is narrower than that of the government‐wide financial statements,
it is useful to compare the information presented for governmental funds with similar information presented
for governmental activities in the government‐wide financial statements. By doing so, readers may better
understand the long‐term impact of the government’s near‐term financing decisions. Both the governmental
fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund
balances provide a reconciliation to facilitate this comparison between governmental funds and
governmental activities.
The Town maintains nine individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and
changes in fund balances for the General Fund and Street Capital Projects Fund, which are considered to be
major funds. Data from the other eight governmental funds are combined into a single aggregated
presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of
combining statements in the combining and individual fund statements and schedules section of this report.
The Town adopts an annual appropriated budget for all funds. A budgetary comparison statement has been
provided for the General Fund to demonstrate compliance with this budget. The budgetary comparison
schedule for the General Fund can be found on page 74.
The basic governmental fund financial statements can be found on pages 26‐29 of this report.
Proprietary Funds. The Town maintains two different types of proprietary funds – enterprise funds and
internal service funds. Enterprise funds are used to report the same functions presented as business‐type
activities in the government‐wide financial statements. The Town uses an enterprise fund to account for the
sewer operations. Internal service funds are an accounting device used to accumulate and allocate costs
internally among the Town's various functions. The Town uses an internal service fund to account for the
central town services, corporation yard services, and the repair and replacement of equipment and vehicles.
Because these services predominantly benefit governmental rather than business‐type functions, it has been
included within governmental activities in the government‐wide financial statements.
Proprietary funds provide the same type of information as the government‐wide financial statements, only
in more detail. The proprietary fund financial statements provide separate information for the sewer
operations.
The basic proprietary fund financial statements can be found on page 32 of this report.
Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside of
the government. Fiduciary funds are not reported in the government‐wide financial statements because the
resources of those funds are not available to support the Town’s own programs. The accounting used for
fiduciary funds is much like that used for proprietary funds.
Resolution 60-20 Page 24
Management’s Discussion and Analysis
The Town maintains an agency fund, which is used to report resources held by the Town in a custodial
capacity for the West Loyola Special Assessment District and CERBT 115 Trust Fund. The CERBT 115 Trust
Fund is a trust for prefunding other post‐employment benefits (OPEB) related liabilities. This year the Town
started requesting reimbursements from the CERBT 115 Trust and depositing the normal cost for future OPEB
related liabilities. The fiduciary fund financial statements can be found on page 36 of this report.
Notes to the Financial Statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government‐wide and fund financial statements. The notes to the
financial statements can be found on pages 41‐71 of this report.
Other Information. In addition to the basic financial statements and accompanying notes, this report also
presents certain required supplementary information concerning the Town's progress in funding its
obligation to provide pension and other post‐employment benefits to its employees. Required
supplementary information can be found on page 74‐80 of this report.
The combining statements referred to earlier in connection with nonmajor governmental funds are
presented immediately following the required supplementary information. Combining and individual fund
statements and schedules can be found on pages 86‐91 and the Statistical Section follows on page 96.
GOVERNMENT‐WIDE OVERALL FINANCIAL ANALYSIS
Net Position
As noted above, net position may serve over time as a useful indicator of a government's financial position.
In the case of the Town of Los Altos Hills, assets and deferred outflows of resources exceeded liabilities and
deferred inflows of resources by $52.2 million at the close of the fiscal year.
The government’s overall net position increased by $3,872,238, during the current fiscal year compared to
an increase of $3,730,697 in the prior fiscal year. The increase was due primarily to higher property and
investment income resulting in the total increase in revenue exceeding expense growth.
2020 2019 2020 2019 2020 2019
ASSETS
Current and other assets 24,168,633$ 21,053,183$ 4,529,570$ 3,885,132$ 28,698,203$ 24,938,315$
Noncurrent assets 250,625 6,484 61,272 46,944 311,897$ 53,428$
Capital Assets 26,511,993 26,305,865 7,574,231 7,264,306 34,086,224$ 33,570,171$
Total assets 50,931,251 47,365,532 12,165,073 11,196,382 63,096,324$ 58,561,914$
DEFERRED OUTFLOWS OF RESOURCES 1,307,243 1,567,123 75,094 94,098 1,382,337$ 1,661,221$
LIABILITIES
Current liabilities 3,731,190 4,176,565 1,170,695 638,106 4,901,885$ 4,814,671$
Noncurrent liabilities 2,225,391 2,067,160 124,873 126,536 2,350,264$ 2,193,696$
Total liabilities 5,956,581 6,243,725 1,295,568 764,642 7,252,149$ 7,008,367$
DEFERRED INFLOWS OF RESOURCES 1,050,283 933,649 78,998 56,126 1,129,281$ 989,775$
NET POSITION
Net investment in capital assets 26,511,993 26,305,865 7,574,231 7,264,306 34,086,224$ 33,570,171$
Restricted 1,354,610 1,229,812 ‐ ‐ 1,354,610$ 1,229,812$
Unrestricted 17,365,027 14,219,604 3,291,370 3,205,406 20,656,397$ 17,425,010$
Total net position 45,231,630 41,755,281 10,865,601 10,469,712 56,097,231$ 52,224,993$
Governmental Activities Business‐type Activities Total
Resolution 60-20 Page 25
Management’s Discussion and Analysis
The largest portion of the Town's net position, 61 percent, reflects its investment in capital assets – land,
buildings, machinery, equipment and infrastructure. The Town uses these capital assets to provide services
to citizens; consequently, these assets are not available for future spending.
An additional portion of the Town’s net position represents $1,354,610 of restricted resources that are
subject to external restrictions as to how they may be used. These includes in‐lieu fees collected on parks,
grants and restricted donations. The remaining balance of $20,656,397 is unrestricted and may only be used
to meet the government's ongoing services to citizens and operational needs. Of this amount, $3,291,370
may only be used to meet sewer related obligations.
At June 30, 2020, the Town is able to report positive balances in all categories of net position, both for the
government as a whole, as well as for its separate governmental and business‐type activities. Total net
position has increased or remained consistent over the most recent ten years for governmental activities and
business‐type activities as illustrated in the graph below. The Town of Los Altos Hills has maintained a stable
financial position.
Changes in Net Position
The following schedule reflects the net changes in net position for the fiscal years 2020 and 2019. The Town’s
overall net position increased by $3,872,238 from the prior fiscal year. The reasons for this overall increase
are discussed in the following sections for governmental activities and business‐type activities.
Resolution 60-20 Page 26
Management’s Discussion and Analysis
Town of Los Altos Hills
Statement of Activities and Changes in Net Position
Governmental Activities. During the current fiscal year, net position in governmental activities increased by
$3,476,349 from the prior fiscal year for an ending balance of $45,231,631.
Major changes in revenues and expenses of governmental activities:
Property tax and charges for services are the main revenue sources for the Town, accounting for 46%
and 35%, respectively, of the total governmental activities’ revenues.
Property tax totaled $6.8 million, an increase of $448,431, or 7%. The increase of property tax
revenue is due to strong real estate market and increases in assessed property values.
Charges for services revenues of $5.1 million increased by $760,676, 17% due to increased
community development activities primarily relating to residential development.
Governmental Business‐Type Governmental Business‐Type
Activities Activities Total Activities Activities Total
Revenues
Program revenues
Charges for services 5,140,440$ 3,104,059$ 8,244,499$ 4,379,764$ 3,005,050$ 7,384,814$
Operating grants and contributions 347,577 ‐ 347,577 230,351 ‐ 230,351
Capital grants and contributions 591,956 85,595 677,551 185,744 98,183 283,927
Total program revenues 6,079,973 3,189,654 9,269,627 4,795,859 3,103,233 7,899,092
General revenues
Property taxes 6,834,083 ‐ 6,834,083 6,385,652 ‐ 6,385,652
Motor vehicle license tax 65,821 ‐ 65,821 56,884 ‐ 56,884
Other taxes 537,836 ‐ 537,836 466,062 ‐ 466,062
Franchise fees 340,268 ‐ 340,268 530,991 ‐ 530,991
Rental income ‐ ‐ ‐ ‐ ‐ ‐
Investment income 897,996 172,060 1,070,056 530,582 76,210 606,792
Other unrestricted revenue 42,885 9,287 52,172 334,139 ‐ 334,139
Gain on disposal of capital assets ‐ ‐ ‐ ‐ ‐ ‐
Total general revenues 8,718,889 181,347 8,900,236 8,304,310 76,210 8,380,520
Total revenues 14,798,862 3,371,001 18,169,863 13,100,169 3,179,443 16,279,612
Expenses
General government 2,639,241 ‐ 2,639,241 2,477,572 ‐ 2,477,572
Public safety 2,388,202 ‐ 2,388,202 2,388,908 ‐ 2,388,908
Community development 3,408,027 ‐ 3,408,027 2,768,476 ‐ 2,768,476
Public works 2,086,121 ‐ 2,086,121 2,001,602 ‐ 2,001,602
Parks and recreati o n 770,495 ‐ 770,495 851,096 ‐ 851,096
Sewer utilities ‐ 3,005,538 3,005,538 ‐ 2,061,261 2,061,261
Total expenses 11,292,086 3,005,538 14,297,624 10,487,654 2,061,261 12,548,915
Increase (decrease) in net position
before transfers 3,506,776 365,463 3,872,239 2,612,515 1,118,182 3,730,697
Transfers (30,426) 30,426 ‐ ‐ ‐ ‐
Change in net position 3,476,350 395,889 3,872,239 2,612,515 1,118,182 3,730,697
Net position at beginning of year 41,755,281 10,469,712 52,224,993 39,142,766 9,351,530 48,494,296
Net position at end of year 45,231,631$ 10,865,601$ 56,097,232$ 41,755,281$ 10,469,712$ 52,224,993$
Year Ended June 30, 2020 Year Ended June 30, 2019
Resolution 60-20 Page 27
Management’s Discussion and Analysis
Other taxes increased by $71,774 or 15%, mainly from higher real property transfer tax and business
license tax revenues.
Franchise fees totaled $340,268, a decrease of $190,723, or 56%, mainly due to the new Green waste
agreement, in which Town waived its franchise fee for the next four years to mitigate rate increase.
All other franchise fees collected increased slightly.
Capital grants and contribution revenue increased $523,438 primarily due to Measure B grants
through VTA that were finalized in the prior fiscal year.
Total expenses of all governmental activities were $11.3 million for fiscal year 2019‐2020, an increase
of $804,432, or 8% from the prior year. This increase can be attributed to an increase in filling
employee vacancies throughout the departments and an additional position added to public works
services.
The Town’s governmental activities expenses are related to 23% general government; 21% public
safety; 30% community development; 18% public works; 7% parks and recreation.
The following graph depicts the expense and program revenues by governmental activities for fiscal year
2020:
The graph below shows the revenues by source for governmental‐type activities. Property taxes comprise
the largest revenue source at 46.18% of total governmental revenue. Other primary revenue sources include
34.74% for charges for services and 4% for capital grants and contributions.
Resolution 60-20 Page 28
Management’s Discussion and Analysis
The table below shows the governmental activities total costs of services and costs of net services for fiscal
year 2020. This table identifies the cost of these services supported by charges for services, operating grants,
and capital grants.
Net Cost
Total Cost (Benefit)
of Services of Services % of
2020 2020 Total Costs
Governmental activities:
General government 2,639,241 361,582 23.37%
Public safety 2,388,202 2,159,480 21.15%
Community development 3,408,027 1,379,094 30.18%
Public works 2,086,121 780,853 18.47%
Parks and recreation 770,495 531,104 6.82%
Total governmental activities 11,292,086 5,212,113 100.00%
Resolution 60-20 Page 29
Management’s Discussion and Analysis
Business‐type Activities. Business‐type activities increased the Town’s net position by $395,889. Key
elements of this are as follows:
The Town’s has one business‐type activity that is related to sewer utilities and sewer capital infrastructure.
Charges for services accounted for 92% of the total revenues.
Below is a graph depicting the revenues by source for business‐type activities. The primary source of revenue
is charges for services, which amounted to $ 3,104,059, 3% increase from fiscal year 2019. Other revenue
sources include capital grants and contributions and investment income for a total of $85,595.
The business‐type activities total costs of services for fiscal year 2020 was $3,005,538 and the net benefits of
services was $365,463. There was $30,426 transferred from the General Fund to Sewer to account the
Town’s facilities relating to sewer in the prior 3 years.
FUND FINANCIAL ANALYSIS
The Town uses fund accounting to ensure and demonstrate compliance with finance related legal
requirements. The Town’s governmental funds are accounted for using the modified accrual basis of
accounting. The Town’s proprietary funds provide the same type of information found in the government‐
wide financial statements, but in more detail.
Governmental Funds
The focus of the Town’s governmental funds is to provide information on near‐term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the Town’s financing requirements.
In particular, unreserved fund balance may serve as a useful measure of a government’s net resources
available for spending at the end of the fiscal year.
As of June 30, 2020, the Town’s governmental funds reported a combined ending fund balance of
$19,638,778, an increase of $3,612,600, or an increase of 23% in comparison with the prior fiscal year.
Approximately $7.2 million, or 37% of this amount constitutes unassigned fund balance, which is available
for spending at the government’s discretion. The remainder of the fund balance is restricted, committed, or
assigned to indicate that these amounts may only be spent on the purposes designated.
Resolution 60-20 Page 30
Management’s Discussion and Analysis
Committed and assigned fund balances primarily consist of reserves for specific future uses. These reserves
are approved each year by the City Council during the annual budget process. Other funds that are
committed primarily consist of capital project funds. Capital projects are approved by the City Council during
the annual budget process for the upcoming fiscal year. For fiscal year 2020, the City Council authorized the
committed reserves for an increase of $975,000 to the pension reserve to bring the total pension reserve up
to $2,575,000. New commitments were added for Facilities and Equipment reserves, $1,902,700 and
$594,000, respectively, and Risk Management and Public/Private Roads reserves were eliminated. The
Assigned Operating Contingency reserve was increased $1,721,500 to $2,071,500. In total, restricted,
committed and assigned reserves were increased $4,959,692 from the prior year (see Note 7B).
Governmental funds revenues, expenditures, and change in fund balances for the last ten fiscal years can be
found under the Statistical Section on pages 104‐105 of this report.
The General Fund is the chief operating fund of the Town. At the end of the current fiscal year, unassigned
fund balance of the General Fund was $7,174,940, while total fund balance increase to $19,638,778. As a
measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total
fund balance to total General Fund expenditures.
Unassigned fund balance of $7.2 million represents approximately 77 percent of total General Fund
expenditures of $9.3 million, while total fund balance represents approximately 47 percent of the same
amount. The ratios indicate that the Town’s unassigned fund balance can support General Fund operations
for most of the entire year without additional revenue sources.
The fund balance of the Town’s General Fund increased by $3,292,677 during the current fiscal year. This
increase is primarily attributable to property tax, charges for services, and investment income. In addition,
relative to the budget, expenses were down due to COVID‐19. All special events that normally happen
between March and June were not held.
General Fund Revenues for the year ended June 30, 2020 totaled $13,213,901 increased by $1,170,628, or
9.7%. The following table summarizes revenues in major categories with two‐year comparison:
The increase or decrease in revenue sources in the General fund as compared to prior fiscal year are primarily
attributable to the following:
Property tax increased to $6.8 million, up 7 percent, during fiscal year 2020. This increase was driven
by increase in single family home assessed value through property transfers, reversal of Proposition
8 valuation adjustment, and the shift of property tax from County of Santa Clara to the Town per the
Tax Equality Allocation (SB 107).
2020 2019 $ Variance % Variance
Property taxes 6,834,083$ 6,385,652$ 448,431$ 7.02%
Taxes other than property 537,836$ 466,062 71,774$ 15.40%
Franchise fees 340,268$ 530,991 (190,723)$ ‐35.92%
Fines and forfeitures 4,797$ ‐4,797$ 0.00%
Licenses and permits 990,768$ 1,060,772 (70,004)$ ‐6.60%
Intergovernmental 62,532$ 50,965 11,567$ 22.70%
Investment income 787,575$ 474,421 313,154$ 66.01%
Charges for services 1,511,483$ 853,059 658,424$ 77.18%
Interfund charges 1,858,142$ 1,748,699 109,443$ 6.26%
Rental i n come 172,212$ 107,653 64,559$ 59.97%
Other revenues 114,205$ 364,999 (250,794)$ ‐68.71%
Total general fund revenues 13,213,901$ 12,043,273$ 1,170,628$ 9.72%
Increase(Decrease)
Resolution 60-20 Page 31
Management’s Discussion and Analysis
Taxes other than property totaled $537,836, increased by $71,774 or 15 percent, as compared to the
prior year. This increase is primarily attributable to other taxes (real property transfer tax, sales and
use tax, and public safety sales tax).
Franchise fees decreased by $190,723 or 36% during the current fiscal year because of the
implementation of the new garbage contract, in which Town waived franchise fee for the next four
years to mitigate rate increases.
Licenses and permits totaled $990,768, a decrease of $70,004, or 7% from the prior year. Licenses
and permits are assessed on building permits and as shown on page 110 of the Statistical Section,
total valuation for new homes, additions and remodels. Dependent upon the total number of
permits issued, this revenue stream can fluctuate year over year.
Intergovernmental revenue totaled $62,532, an increase of $11,567 or 18 percent from the prior
year. Intergovernmental revenue includes vehicle code fines, AB 939 fees, and abandoned vehicle
recovery. These revenues will fluctuate based on timing of payments and the amount of fees and
recovery collected during the year.
Investment income totaled $787,575, an increase of $313,154 66 percent from prior year.
Investment income includes interest earned on accounts, interest earned on investments, realized
and unrealized gain / losses on investments.
Charges for services totaled $1,511,483, an increase of $658,424 or 77%. Charges for services include
various fees charged for Town services including administrative, community development, public
works, parks and recreation, and engineering. This year $121,423 of the increase is attributed to the
resolution of many long‐standing open deposits. Charges for services fluctuate year over year
depending upon the services provided throughout the year.
The General Fund’s expenditures increased by $357,290, or 4% as compared to the prior year. Community
development’s expenditures increased mainly due to increases in contract services for building official and
code enforcement, filling vacancies throught the departments and added position in Public Works.
The net between revenues and expenditures was $3.9 million before $597,361 in transfers to other funds.
Transfers to other funds consist of capital projects to support capital improvement needs and declined $1.3
million from the prior year due to large transfers in the prior year and lower capital spending in the current
year.
2020 2019 $ Variance % Variance
General government 2,126,483$ 2,113,083$ 13,400$ 0.63%
Public safety 1,960,090 1,836,016 124,074 6.76%
Community development 2,860,410 2,642,159 218,251 8.26%
Public works 1,724,318 1,632,329 91,989 5.64%
Parks and recreation 652,562 742,986 (90,424) ‐12.17%
Nondepartmental ‐ 0.00%
additional pension payments ‐ ‐ ‐ 0.00%
Total general fund
expenditures 9,323,863$ 8,966,573$ 357,290$ 3.98%
Increase(Decrease)
Resolution 60-20 Page 32
Management’s Discussion and Analysis
The Streets Capital Project Fund is classified as a major fund for the Town. Due to the amount transferred
this year, the Streets Capital Project Fund balance of $745,050 remained unchanged at June 30, 2020.
Current year revenues, excluding transfers, totaled $782,217, an increase of $243,785, or 45% primarily due
to transfers for road maintenance rehabilitation intergovernmental revenues. Total spending was
$1,336,307 for the annual street rehabilitation projects.
Proprietary Funds
The Town proprietary funds provide the same type of information found in the government‐wide financial
statements, but in more detail. The proprietary funds currently include an enterprise fund (Sewer Fund) and
an internal service fund.
The Town's Sewer Fund provides sanitary sewer services to roughly half of the parcels within the jurisdiction.
Service fees are collected annually on the property tax roll. In March 2015, City Council approved rate
adjustments for a five‐year period from FY15‐16 through FY19‐20. A 3% increase for FY17‐18 through FY19‐
20.The increase in revenues will help the Town make improvements and perform routine preventive
measures on the Town’s aging sewer infrastructure. In FY19‐20, the City Council approved a sewer rate study
to be conducted to determine the need for a rate adjustment based on the current financial status of the
sewer fund and the projected O&M and capital improvement needs of the system.
Unrestricted net position for the sewer utilities enterprise fund at the end of the fiscal year was $3,291,370.
Total growth in net position for sewer utilities enterprise fund was $395,889. Total sewer operating revenues
increased by $108,296, or 3.6%, while sewer operating expenses increased by $944,277 or 45.8%. The
increased cost for contract services is related to expenses from the prior year due to a missed accrual.
Included in sewer operating expenses are interfund charges for town center allocations, vehicle and
equipment allocations, corporate yard allocations, and overhead allocations. Total interfund allocations
decreased by $9,311 or 3.2%, as compared to the prior fiscal year. Sewer connection fees decreased by
$12,588 or 12.8%. The positive change in net position is attributable to revenue exceeding expenses.
2020 2019 $ Variance % Variance
Intergovernmental
Gas taxes 195,992$ 171,601$ 24,391$ 14.21%
SB1 Road Maintenance Rehab 162,031 157,122 4,909 3.12%
Measure B 229,411 9,662 219,749 2274.36%
Vehicle registration 58,868 52,769 6,099 11.56%
Charges for services 135,915 147,278 (11,363) ‐7.72%
Transfers in 554,090 1,295,405 (741,315) ‐57.23%
Total revenues 1,336,307 1,833,837 (497,530) ‐27.13%
Less: Capital Outlays (1,336,307) (1,457,361) 121,054 ‐8.31%
Net change in Streets Capital
Improvement fund ‐$376,476$ (376,476)$ 0
Increase(Decrease)
Resolution 60-20 Page 33
Management’s Discussion and Analysis
Sewer Utility Enterprise Fund
Statement of Revenues, Expenses, and Changes in Fund Net Position
Unrestricted net position for the internal service fund at the end of the fiscal year was $838,392. Total
decrease in net position for the internal service fund was $157,315, or 675.4%, as compared with the increase
2020 2019 $ Variance % Variance
Operating Revenues
Sewer assessment charges 3,104,059$ 3,005,050$ 99,009$ 3.29%
Other 9,287 -9,287 0
Total Operating Revenues 3,113,346 3,005,050 108,296 3.60%
Operating Expenses
Salaries and benefits 210,047 187,293 22,754 12.15%
Contract services - treatment plants 1,882,075 822,836 1,059,239 128.73%
Professional services 106,809 175,273 (68,464) -39.06%
Support goods and services 5,106 8,105 (2,999) -37.00%
Repairs and maintenance 303,068 379,499 (76,431) -20.14%
Utilities 6,335 6,930 (595) -8.59%
Interfund charges:0.00%
Town center allocation 18,909 17,026 1,883 11.06%
Vehicle and equipment allocation 7,966 8,022 (56) -0.70%
Corp Yard allocation 47,505 38,544 8,961 23.25%
Overhead allocation 202,732 222,831 (20,099) -9.02%
Machinery and equipment 1,209 -1,209 0.00%
Depreciation 213,777 194,902 18,875 9.68%
Total Operating Expenses 3,005,538 2,061,261 944,277 45.81%
Earnings from operations 107,808 943,789 (835,981) -88.58%
Nonoperating Revenues (Expenses)
Investment income 172,060 76,210 95,850 125.77%
Nonoperating Revene (Expenses), net 172,060 76,210 95,850 125.77%
Income Before Contributions and Transfers
Capital Contributions - sewer connection fees 85,595 98,183 (12,588) -13%
Transfers In 30,426 -30,426 0%
Total Other Financing Sources and (uses) 116,021 98,183 17,838 -13%
Change in net position 395,889 1,118,182 (722,293) -64.60%
Net Position, beginning of year as restated 10,469,712 9,351,530 1,118,182 11.96%
Net Position, end of year as restated 10,865,601$ 10,469,712$ 395,889$ 3.78%
Increase(Decrease)
Resolution 60-20 Page 34
Management’s Discussion and Analysis
of $27,340 in the prior fiscal year. Total operating revenues consist of interfund charges for services. These
operating revenues increased by $78,736, or 12.73% as compared to prior fiscal year. Operating expenses
increased by $263,162, or 40.49%, as compared to prior year because of the negative amount recorded in
FY19 in Machinery and Equipment due to capitalizing previously expensed vehicles and equipment.
Internal Service Fund
Statement of Revenues, Expenses, and Changes in Fund Net Position
2020 2019 $ Variance % Variance
Operating Revenues
Interfund Charges for Services
Town Hall services 435,697$ 392,298$ 43,399$ 11.06%
Corporate Maintenance Yard services 190,022 154,176 35,846 23.25%
Vehicle services 71,693 72,202 (509) -0.70%
Total Operating Revenues 697,412 618,676 78,736 12.73%
Operating Expenses
Salaries and benefits 118,405 146,730 (28,325) -19.30%
Professional services 60,705 49,622 11,083 22.33%
Support goods and services 112,750 101,398 11,352 11.20%
IT support and maintenance 173,650 166,677 6,973 4.18%
Repairs and maintenance 116,687 124,859 (8,172) -6.54%
Utilities 57,501 42,009 15,492 36.88%
Machinery and equipment 36,798 (202,087) 238,885 -118.21%
Depreciation 178,231 162,357 15,874 9.78%
Total Operating Expenses 854,727 591,565 263,162 44.49%
Earnings (loss) from operations (157,315) 27,111 (184,426) -680.26%
Nonoperating Revenues (Expenses)
Gain on disposal of capital assets ‐ ‐ -0.00%
Other income ‐ 229 (229) 0
Nonoperating Revenues ‐ 229 (229) -100.00%
Change in net position (157,315) 27,340 (184,655) -675.40%
Net Position, beginning of year as restated 4,558,506 4,531,166 27,340 0.60%
Net Position, end of year 4,401,191$ 4,558,506$ (157,315)$ -3.45%
Increase(Decrease)
Resolution 60-20 Page 35
Management’s Discussion and Analysis
GENERAL FUND BUDGETARY HIGHLIGHTS
The Town’s budget process began after the mid‐year financial update presentation to the Finance and
Investment Committee and the City Council. The Administrative Services Department facilitates the
development and consolidates input from all Town departments. The consolidated budget inputs are
reviewed by the City Manager and presented to the City Council and the Finance and Investment Committee
in a joint budget study session. A balanced budget is adopted by June 30 of each year. During the year, the
departments will present to the City Council for contract awards for all services exceeding $25,000.
Availability of budget for this award is part of the requests presented by the departments to the City Council.
Additionally, the Administrative Services Department monitors the budget during the year and prepares a
mid‐year financial update to the Finance and Investment Committee and the City Council. As part of this
mid‐year financial update, budget amendments are proposed to address any significant economic concerns
and to incorporate prior City Council actions that had changed appropriation or for reallocation of budget
items.
The actual general fund revenues were $1,282,621 or 10.75% more than the final adopted budget for fiscal
year 2020. The actual general fund expenditures were less than the final adopted budget by $867,102 or
8.5%. The Town makes a concentrated effort to control expenditures. Shown below are the expenditures
by function for fiscal year 2020 as compared to the final adopted budget.
CAPITAL ASSETS AND LONG‐TERM DEBT ADMINISTRATION
Capital Assets
The Town's investment in capital assets for its governmental and business‐type activities as of June 30, 2020,
amounts to $34,086,224 (net of accumulated depreciation), an increase of $516,053 or 1.5%. The investment
in capital assets include land, buildings, equipment, vehicles and infrastructure. Current year capital spending
included $1,706,371 in infrastructure and $523,702 in the sewer collection system as compared with
$1,712,145 and $755,028, respectively, in the prior year. No changes were recorded in land for the fiscal year.
The table on the following page presents summarized information on capital assets net of depreciation for
fiscal years 2019 and 2020. Additional information on the Town's capital assets can be found in Note 4 to the
financial statements.
Variance with
2020 Final Budget‐
Original Adopted Actual Favorable
Budget Budget Expenditures (Unfavorable)
General government 2,541,455$ 2,541,455$ 2,126,483$ 414,972$
Public safety 1,856,781 1,856,781 1,960,090 (103,309)
Community development 3,042,571 3,042,571 2,860,410 182,161
Public works 1,972,087 1,972,087 1,724,318 247,769
Parks and recreation 778,071 778,071 652,562 125,509
Nondepartmental ‐
additional pension payments ‐‐ ‐ ‐
Total general fund expenditures 10,190,965$ 10,190,965$ 9,323,863$ 867,102$
Resolution 60-20 Page 36
Management’s Discussion and Analysis
Town of Los Altos Hills
Capital Assets (Net of depreciation)
Long-Term Debt
The Town has no long‐term bonded debt as of and for the year ended June 30, 2020. The remainder of the
Town’s long‐term obligations comprise pension and OPEB related liabilities. According to the 2019‐20 OPEB
Actuarial, the liability is nearly funded.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS
The Town of Los Altos Hills is a residential community. Its primary revenue sources are property tax and
permit revenues from private development. The outlook for the housing market remains positive. While
home sales volume stays flat, home price continues to rise year over year. The Town’s assessed value grew
at least 6% each year for the past eight years. Property tax revenue is projected to approximate $6.7 million
in 2020‐21 and permit and license revenues are estimated to remain similar to 2019‐2020.
Overall, the adopted 2020‐2021 General Fund budget reflects revenue over expenditures in the amount of
$1.2 million before transfers. Total revenues and transfers in are budgeted at $12.1 million, while total
expenditures are budgeted at $10.9 million and transfers out are budgeted at $4 million, with an estimated
total ending fund balance of $12.2 million. The Town expects to spend about $3.5 million on the Town Hall
Addition capital project. The unfunded pension liability and payments are expected to rise substantially due
to CalPERS’ plan to reduce the discount rate and certain year’s lower market returns. The Town plans to
explore using some of its excess general funds to prepay obligations to CalPERS and has established a trust
that may be used to fund future pension obligations where funds may be invested in instruments that
historically have produced higher returns.
Governmental Business‐Type Governmental Business‐Type
Activities Activities Total Activities Activities Total
Land 250,535$ ‐$ 250,535$ 250,535$ ‐$ 250,535$
Buildings 3,119,621 ‐ 3,119,621 3,250,259 ‐ 3,250,259
Office equipment 16,717 ‐ 16,717 20,896 ‐ 20,896
Vehicles 286,465 ‐ 286,465 288,880 ‐ 288,880
Sewer collection system 7,574,231 7,574,231 ‐ 7,264,306 7,264,306
Infrastructure 22,838,655 ‐ 22,838,655 22,495,295 ‐ 22,495,295
Total capital assets, net 26,511,993$ 7,574,231$ 34,086,224$ 26,305,865$ 7,264,306$ 33,570,171$
Year Ended June 30, 2020 Year Ended June 30, 2019
Resolution 60-20 Page 37
Management’s Discussion and Analysis
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Town of Los Altos Hills' finances for all
those with an interest in the government’s finances. Questions concerning any of the information provided
in this report or requests for additional information should be addressed to:
Town of Los Altos Hills
Attn: Administrative Services Director
26379 Fremont Road
Los Altos Hills, CA 94022
Resolution 60-20 Page 38
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Resolution 60-20 Page 39
Basic Financial Statement
Government Wide Financial Statements
Fund Financial Statements
Notes to Basic Financial Statements
Resolution 60-20 Page 40
Governmental Business‐type
Activities Activities Total
ASSETS
Current Assets:
Cash and investments 23,177,582$ 4,511,696$ 27,689,278$
Restricted cash and investments 550,215 ‐ 550,215
Accounts receivables 440,836 17,874 458,710
Total Current Assets 24,168,633 4,529,570 28,698,203
Noncurrent Assets:
Loans receivable ‐ 33,511 33,511
Net OPEB asset 239,175 27,761 266,936
Materials, parts and supplies 11,450 ‐ 11,450
Total Noncurrent Assets 250,625 61,272 311,897
Capital Assets:
Non‐depreciable capital assets 250,535 ‐ 250,535
Depreciable capital assets, net of depreciation 26,261,458 7,574,231 33,835,689
Total Capital Assets 26,511,993 7,574,231 34,086,224
Total Assets 50,931,251 12,165,073 63,096,324
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 1,254,177 68,934 1,323,111
Related to OPEB 53,066 6,160 59,226
Total Deferred Outflows of Resources 1,307,243 75,094 1,382,337
Total Assets and Deferred Outflows 52,238,494 12,240,167 64,478,661
LIABILITIES
Current Liabilities:
Accounts payable 346,943 1,115,862 1,462,805
Other liabilities 204,817 ‐ 204,817
Refundable deposits 3,143,306 54,801 3,198,107
Compensated absences due within one year 36,124 32 36,156
Total Current Liabilities 3,731,190 1,170,695 4,901,885
Noncurrent Liabilities:
Compensated absences due in more than one year 137,025 10,088 147,113
Net pension liability 2,088,366 114,785 2,203,151
Total Noncurrent Liabilities 2,225,391 124,873 2,350,264
Total Liabilities 5,956,581 1,295,568 7,252,149
DEFERRED INFLOWS OF RESOURCES
Related to pensions 702,205 38,596 740,801
Related to OPEB 348,077 40,402 388,479
Total Deferred Inflows of Resources 1,050,282 78,998 1,129,280
NET POSITION
Net investment in capital assets 26,511,993 7,574,231 34,086,224
Restricted for:
Parks and recreation 35,584 ‐ 35,584
Public safety 638,578 ‐ 638,578
Art donations 130,233 ‐ 130,233
Pension trust 550,215 ‐ 550,215
Unrestricted 17,365,028 3,291,370 20,656,398
Total Net Position 45,231,631 10,865,601 56,097,232
Total Liabilities, Deferred Inflows and Net Position 52,238,494$ 12,240,167$ 64,478,661$
JUNE 30, 2020
TOWN OF LOS ALTOS HILLS
STATEMENT OF NET POSITION
See accompanying notes to financial statements
Resolution 60-20 Page 41
Operating Capital
Charges for Contributions Contributions Governmental Business‐type
Expenses Services and Grants and Grants Activities Activities Total
Governmental Activities:
General government 2,639,241$ 2,108,477$ 169,182$ ‐$ (361,582)$ ‐$(361,582)$
Public safety 2,388,202 185,743 42,979 ‐ (2,159,480) ‐(2,159,480)
Community development 3,408,027 2,028,933 ‐ ‐ (1,379,094) ‐(1,379,094)
Public works 2,086,121 592,434 135,416 577,418 (780,853) ‐(780,853)
Parks and recreation 770,495 224,853 ‐ 14,538 (531,104) ‐(531,104)
Total Governmental Activities 11,292,086 5,140,440 347,577 591,956 (5,212,113) ‐(5,212,113)
Business‐type Activities:
Sewer 3,005,538 3,104,059 ‐ 85,595 ‐184,116 184,116
Total Business‐type Activities 3,005,538 3,104,059 ‐ 85,595 ‐184,116 184,116
Total Primary Government 14,297,624$ 8,244,499$ 347,577$ 677,551$ (5,212,113) 184,116 (5,027,997)
General Revenues:
Taxes:
Property taxes 6,834,083 ‐6,834,083
Motor vehicle license tax 65,821 ‐65,821
Other taxes 537,836 ‐537,836
Franchise fees 340,268 ‐340,268
Investment income 897,996 172,060 1,070,056
Other unrestricted revenue 42,885 9,287 52,172
Transfers, net (30,426) 30,426 ‐
Total General Revenues 8,688,463 211,773 8,900,236
Change in Net Position 3,476,350 395,889 3,872,239
Net Position, Beginning of Year 41,755,281 10,469,712 52,224,993
Net Position, End of Year 45,231,631$ 10,865,601$ 56,097,232$
See accompanying notes to financial statements
Net Revenue (Expense) and Change in Net PositionProgram Revenues
TOWN OF LOS ALTOS HILLS
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2020
Resolution 60-20 Page 42
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Resolution 60-20 Page 43
Governmental Fund Financial Statements
General Fund accounts for financial resources traditionally associated with the
governmental which are not required legally or by sound financial management
to be accounted for in another fund.
Street Capital Projects Fund accounts for financial resources that are necessary
for the acquisition or construction of streets.
Non‐Major Governmental Funds are the aggregate of all the non‐major
governmental funds.
Resolution 60-20 Page 44
Streets Nonmajor
Capital Governmental
General Projects Funds Total
ASSETS
Cash and investments 18,635,645$ 724,296$ 2,743,310$ 22,103,251$
Restricted cash and investments 550,215 -- 550,215
Receivables:
Property taxes 38,713 -- 38,713
Taxes other than property 34,055 ‐ ‐34,055
Intergovernmental 13,451 ‐ ‐13,451
Interest 81,505 23,235 10,017 114,757
Miscellaneous 210,065 ‐ 29,795 239,860
Total Assets 19,563,649$ 747,531$ 2,783,122$ 23,094,302$
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable 251,988$ ‐$52,582$ 304,570$
Other liabilities ‐‐ 5,167 5,167
Refundable deposits 3,143,306 ‐ ‐3,143,306
Retention liability ‐2,481 ‐2,481
Total Liabilities 3,395,294 2,481 57,749 3,455,524
FUND BALANCES
Restricted 550,215 ‐ 804,395 1,354,610
Committed 6,371,700 745,050 1,920,978 9,037,728
Assigned 2,071,500 ‐ ‐2,071,500
Unassigned 7,174,940 ‐ ‐7,174,940
Total Fund Balances 16,168,355 745,050 2,725,373 19,638,778
TOTAL LIABILITIES AND FUND BALANCES 19,563,649$ 747,531$ 2,783,122$ 23,094,302$
JUNE 30, 2020
TOWN OF LOS ALTOS HILLS
GOVERNMENTAL FUNDS
BALANCE SHEET
See accompanying notes to financial statements
Resolution 60-20 Page 45
Fund Balances of Governmental Funds 19,638,778$
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported in the governmental funds.22,949,190
Other long‐term assets are not available to pay for current‐period expenditures
and therefore are offset by deferred inflows of resources in the funds:
Net OPEB asset 239,175
The Internal Service Fund is used by the Town to charge the cost of Town Hall,
office, and corporate yard services. The assets and liabilities of the Internal
Service Fund are included in the Governmental Activities in the Statement
of Net Position.4,401,195
Deferred outflows of resources are not deemed available to pay current period
expenditures and therefore are not reported as governmental fund assets:
Deferred outflows related to pensions 1,254,177
Deferred outflows related to other postemployment benefits 53,066
The liabilities below are not due and payable in the current period and therefore
are not reported in the governmental funds:
Compensated absences (165,302)
Net pension liability (2,088,366)
Deferred inflows of resources are not deemed due and payable in the current
period and therefore are not reported as governmental fund liabilities:
Deferred inflows due to pension liabilities (702,205)
Deferred inflows due to OPEB liabilities (348,077)
Net Position of Governmental Activities 45,231,631$
JUNE 30, 2020
TOWN OF LOS ALTOS HILLS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE
SHEET TO THE GOVERNMENT‐WIDE STATEMENT OF NET POSITION
See accompanying notes to financial statements
Resolution 60-20 Page 46
Streets Nonmajor
Capital Governmental
General Projects Funds Total
REVENUES
Property taxes 6,834,083$ ‐$‐$6,834,083$
Taxes other than property 537,836 ‐‐537,836
Intergovernmental 62,532 646,302 185,743 894,577
Charges for services 1,511,483 135,915 230,858 1,878,256
Licenses and permits 990,768 ‐‐990,768
Franchise fees 340,268 ‐‐340,268
Fines and forfeitures 4,797 ‐‐4,797
Rental income 172,212 ‐50,322 222,534
Interfund charges 1,858,142 ‐‐1,858,142
Investment income 787,575 ‐110,421 897,996
Other revenues 114,205 ‐225,400 339,605
Total revenues 13,213,901 782,217 802,744 14,798,862
EXPENDITURES
General government 2,126,483 ‐1,074 2,127,557
Public safety 1,960,090 ‐124,528 2,084,618
Community development 2,860,410 ‐‐2,860,410
Public works 1,724,318 ‐‐1,724,318
Parks and recreation 652,562 ‐‐652,562
Capital outlay ‐1,336,307 370,064 1,706,371
Total expenditures 9,323,863 1,336,307 495,666 11,155,836
Excess (Deficiency) of Revenues
Over Expenditures 3,890,038 (554,090) 307,078 3,643,026
OTHER FINANCING SOURCES (USES)
Transfers in 87,296 554,090 140,141 781,527
Transfers out (684,657)‐(127,296) (811,953)
Total Other Financing Sources (Uses)(597,361) 554,090 12,845 (30,426)
Net Change in Fund Balances 3,292,677 ‐319,923 3,612,600
Fund Balances, Beginning of Year 12,875,678 745,050 2,405,450 16,026,178
Fund Balances, End of Year 16,168,355$ 745,050$ 2,725,373$ 19,638,778$
See accompanying notes to financial statements
FOR THE YEAR ENDED JUNE 30, 2020
TOWN OF LOS ALTOS HILLS
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Resolution 60-20 Page 47
Net Change in Fund Balances ‐ Total Governmental Funds 3,612,600$
Amounts reported for governmental activities in the Statement of Activities differs
from the amounts reported in the Statement of Revenues, Expenditures, and Changes
in Fund Balances because:
Governmental funds report capital outlays as expenditures but in the Statement
of Activities, the cost of those assets is allocated over their estimated useful lives
as depreciation expense or are allocated to the appropriate functional expense when
the cost is below the capitalization threshold. This activity is reconciled as follows:
Capital outlays 1,706,371
Depreciation expense charged to governmental activities (1,363,011)
Change in Compensated absences (52,019)
Government funds do not report pension expense as it does not require the use of
current financial resources (325,771)
Government funds do not report OPEB expense as it does not require the use of
current financial resources 55,491
Internal Service Funds are used by management to charge the costs of certain activities,
such as cost of Town Hall, office, and corporate yard services to individual funds.
The portion of the net revenue (expense) of these Internal Service Funds, arising out of
their transactions with Governmental Funds, is reported with governmental activities,
because they service those activities.(157,311)
Change in Net Position of Governmental Activities 3,476,350$
See accompanying notes to financial statements
FOR YEAR ENDED JUNE 30, 2020
STATEMENT OF ACTIVITIES AND CHANGES IN NET POSITION
TOWN OF LOS ALTOS HILLS
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE GOVERNMENT‐WIDE
Resolution 60-20 Page 48
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Resolution 60-20 Page 49
Proprietary Fund Financial Statements
Sewer Fund accounts for the activities of the wastewater collection and treatment
system, which provides service to the residents of the Town and some
neighboring cities.
Internal Service Fund is used to account for the financing of goods and services
provided by one department or agency to other departments or agencies on a
cost reimbursement basis.
Resolution 60-20 Page 50
Business‐type
Activities
Governmental
Activities
Enterprise Internal
Fund Service
Sewer Fund
ASSETS
Current Assets:
Cash and investments 4,511,696$ 1,074,331$
Accounts receivable 17,874 ‐
Total Current Assets 4,529,570 1,074,331
Noncurrent Assets:
Loan receivable 33,511 ‐
Net OPEB asset 27,761 ‐
Materials, parts and supplies ‐ 11,450
Capital assets, net of accumulated
depreciation 7,574,231 3,562,803
Total Noncurrent Assets 7,635,503 3,574,253
Total Assets 12,165,073 4,648,584
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 68,934 ‐
Related to OPEB 6,160 ‐
Total Deferred Outflows of Resources 75,094 ‐
Total Assets and Deferred Outflows 12,240,167 4,648,584
LIABILITIES
Current Liabilities:
Accounts payable 1,115,862 42,373
Accrued payroll and related liabilities ‐ 197,169
Sewer reimbursement deposits 54,801 ‐
Compensated absences due within one year 32 485
Total Current Liabilities 1,170,695 240,027
Noncurrent liabilities:
Compensated absences due in more than one year 10,088 7,362
Net pension liability 114,785 ‐
Net OPEB liability ‐ ‐
Total noncurrent liabilities 124,873 7,362
Total Liabilities 1,295,568 247,389
DEFERRED INFLOWS OF RESOURCES
Related to pensions 38,596 ‐
Related to OPEB 40,402 ‐
Total Deferred Inflows of Resources 78,998 ‐
NET POSITION
Investment in Capital Assets 7,574,231 3,562,803
Unrestricted 3,291,370 838,392
Total Net Position 10,865,601 4,401,195
Total Liabilities, Deferred Inflows and Net Position 12,240,167$ 4,648,584$
See accompanying notes to financial statements
JUNE 30, 2020
TOWN OF LOS ALTOS HILLS
PROPRIETARY FUNDS
STATEMENT OF FUND NET POSITION
Resolution 60-20 Page 51
Business‐type
Activities
Governmental
Activities
Enterprise Internal
Fund Service
Sewer Fund
OPERATING REVENUES
Charges for services 3,104,059$ ‐$
Other income 9,287 ‐
Town Hall services ‐ 435,697
Corporate yard services ‐ 190,022
Vehicle services ‐ 71,693
Total Operating Revenues 3,113,346 697,412
OPERATING EXPENSES
Salaries and benefits 210,047 118,399
Contract services ‐ treatment plant 1,882,075 ‐
Professional services 106,809 60,705
Support goods and services 5,106 112,750
IT Support and maintenance ‐ 173,652
Repairs and maintenance 303,068 116,687
Utilities 6,335 57,501
Interfund charges 277,112 ‐
Machinery and equipment 1,209 36,798
Depreciation 213,777 178,231
Total Operating Expenses 3,005,538 854,723
Operating (Loss)107,808 (157,311)
NONOPERATING REVENUES (EXPENSES)
Interest income 172,060 ‐
Nonoperating Revenues (Expenses), net 172,060 ‐
INCOME BEFORE CONTRIBUTIONS AND TRANSFERS
Capital Contributions ‐ sewer connection fees 85,595 ‐
Transfers in 30,426 ‐
Total Other Financing Sources and (Uses)116,021 ‐
Changes in Net Position 395,889 (157,311)
Total Net Position, Beginning of Year 10,469,712 4,558,506
Total Net Position, End of Year 10,865,601$ 4,401,195$
See accompanying notes to financial statements
TOWN OF LOS ALTOS HILLS
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES,
FOR THE YEAR ENDED JUNE 30, 2020
AND CHANGES IN FUND NET POSITION
Resolution 60-20 Page 52
Business‐type Governmental
Activities Activities
Enterprise Fund Internal Service
Sewer Fund
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 3,065,018$ ‐$
Receipts from interfund services provided ‐ 697,412
Payments for interfund services used (277,112)‐
Payments to suppliers (1,739,861) (552,933)
Payments to employees (197,563) (970)
Net Cash From (For) Operating Activities 850,482 143,509
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Interfund receipts 30,426 ‐
Net Cash From (For) Noncapital Financing Activities 30,426 ‐
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition of capital assets (523,702) (40,999)
Capital contributions received for connection fees 85,595 ‐
Net Cash From (For) Capital and Related Financing Activities (438,107) (40,999)
CASH FLOWS FROM INVESTING ACTIVITIES
Principal received from loans 13,433 ‐
Investment income 172,060 ‐
Net cash flows from investing activities 185,493 ‐
Net Increase (Decrease) in Cash and Investments 628,294 102,510
Cash and Cash Equivalents, Beginning of Year 3,883,402 971,821
Cash and Cash Equivalents, End of Year 4,511,696$ 1,074,331$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH FROM (FOR) OPERATING ACTIVITIES
Operating income (loss)107,808$ (157,311)$
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
Depreciation 213,777 178,231
(Increase) decrease in accounts receivable (16,144) ‐
(Increase) decrease in OPEB asset (46,671) ‐
(Increase) decrease in materials ‐ (5,000)
(Increase) decrease in deferred outflows related to pensions 10,038 ‐
(Increase) decrease in deferred outflows related to OPEB 8,966 ‐
Increase (decrease) in accounts payable 564,741 10,160
Increase (decrease) in accrued payroll ‐ ‐
Increase (decrease) in other liabilities (32,184) 114,113
increase (decrease) in compensated absences 1,016 3,316
Increase (decrease) in pension liability 16,263 ‐
Increase (decrease) in deferred inflows related to pensions (8,393) ‐
Increase (decrease) in deferred inflows related to OPEB 31,265 ‐
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES 850,482$ 143,509$
See accompanying notes to financial statements
FOR THE YEAR ENDED JUNE 30, 2020
TOWN OF LOS ALTOS HILLS
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Resolution 60-20 Page 53
Fiduciary Fund Financial statement
AGENCY FUND
West Loyola Special Assessment District Agency Fund accounts for assets that the
Town is holding for the West Loyola Special Assessment District No. 01 for which
the Town is acting as an agent.
CERBT 115 Trust Fund accounts for assets that the Town has invested in a trust
for prefunding future OPEB obligations.
Resolution 60-20 Page 54
West Loyola
Special Assessment
OPEB District #1
Trust Fund Agency Fund
ASSETS
Restricted Cash and Investments 2,601,252$ 288,444$
Miscellaneous receivables ‐ 8,154
Total Assets 2,601,252$ 296,598$
LIABILITIES
Accounts payable 82,621$‐$
Due to bondholders ‐ 296,598
Total Liabilities 82,621$296,598$
NET POSITION
Restricted for OPEB benefits 2,518,631$
Total Net Position 2,518,631$
JUNE 30, 2020
TOWN OF LOS ALTOS HILLS
STATEMENT OF FIDUCIARY NET POSITION
See accompanying notes to financial statements
Resolution 60-20 Page 55
OPEB
Trust Fund
ADDITIONS
Contributions 59,226$
Investment income:
Interest 90,473
Less: administrative expenses (1,241)
Less: investment expenses (907)
Total additions 147,551
DEDUCTIONS
Disbursements 142,865
Total deductions 142,865
Change in net position 4,686
BEGINNING NET POSITION 2,513,945
ENDING NET POSITION 2,518,631$
See accompanying notes to financial statements
TOWN OF LOS ALTOS HILLS
STATEMENT OF CHANGES IN FIDUCIARY
NET POSITION
FOR THE YEAR ENDED JUNE 30, 2020
Resolution 60-20 Page 56
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Resolution 60-20 Page 57
Notes to Basic Financial Statements ‐ Index
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ............................................................ 41
A.Reporting Entity ....................................................................................................................... 41
B.Basis of Presentation ................................................................................................................ 41
C.Basis of Accounting and Measurement Focus .......................................................................... 44
D. Cash and Cash Equivalents ...................................................................................................... 44
E.Fair Value Measurements ........................................................................................................ 44
F.Receivables .............................................................................................................................. 45
G.Capital Assets ........................................................................................................................... 45
H.Deferred Inflows and Deferred Outflows of Resources ............................................................ 45
I.Property Taxes ......................................................................................................................... 46
J.Accumulated Compensated Absences ..................................................................................... 46
K.Interfund Transactions ............................................................................................................. 46
L.Use of Estimates ....................................................................................................................... 46
M. Post‐Employment Benefits Other Than Pensions (OPEB) ......................................................... 47
N.New GASB Pronouncements ................................................................................................... 47
NOTE 2 – DEPOSITS AND INVESTMENTS ............................................................................................... 48
A.Policies ..................................................................................................................................... 48
B.Classification ............................................................................................................................ 48
C.Authorized Investments ........................................................................................................... 49
D.Interest Rate Risk and Fair Value Hierarchy .............................................................................. 49
E.Credit Risk ................................................................................................................................ 51
F.Concentration of Credit Risk .................................................................................................... 52
NOTE 3 – INTERFUND TRANSACTIONS .................................................................................................. 52
NOTE 4 – CAPITAL ASSETS .................................................................................................................... 53
NOTE 5 – LONG TERM DEBT ................................................................................................................. 54
NOTE 6 – SPECIAL ASSESSMENT DEBT WITHOUT TOWN COMMITMENT ............................................. 54
NOTE 7 – NET POSITION/FUND BALANCES ........................................................................................... 55
A.Net Position .............................................................................................................................. 55
B.Fund Balances – Components .................................................................................................. 55
Resolution 60-20 Page 58
Notes to Basic Financial Statements
NOTE 8 – PENSION PLAN ................................................................................................................... 56
A.General Information About the Pension Plan ........................................................................ 56
B.Net Pension Liability .............................................................................................................. 57
C.Changes in the Net Pension Liability ..................................................................................... 59
D.Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension ............. 60
E.Payable to Pension Plan ........................................................................................................ 61
NOTE 9 – RISK MANAGEMENT ........................................................................................................... 62
A.Risk Pool ................................................................................................................................ 62
NOTE 10 – CONTINGENT LIABILITIES ................................................................................................. 63
A.Commitments and Contingencies ......................................................................................... 63
B.Service Concession Arrangements (SCA) ............................................................................... 63
NOTE 11 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) .................................................................. 63
A.General Information About the OPEB Plan ............................................................................ 63
B.Plan Description .................................................................................................................... 64
C.Benefits Provided .................................................................................................................. 64
D.Employees Covered by Benefit Terms ................................................................................... 64
E.Contributions ........................................................................................................................ 64
F.OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB ..................... 66
G.Net OPEB Liability .................................................................................................................. 67
H.Changes in Net OPEB Liability ................................................................................................ 69
I.Discount Rate ........................................................................................................................ 69
J.Payable to the OPEB Plan ...................................................................................................... 70
NOTE 12 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY ...................................................... 71
A.Excess of Expenditures Over Appropriations ......................................................................... 71
B.Deficit Fund Balances ............................................................................................................ 71
Resolution 60-20 Page 59
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A.Reporting Entity
The Town of Los Altos Hills (the Town) was incorporated in 1956, under the provisions of the State of
California. The Town operates under a Council‐Manager form of government and provides the following
services: management, planning, code enforcement, engineering, building inspection, maintenance of
public infrastructure, recreation, law enforcement, and sewer service.
For financial reporting purposes, the Town's basic financial statements include all financial activities that
are controlled by or are dependent upon actions taken by the Town Council. There are no component
units. The financial statements may be obtained by writing to the Town of Los Altos Hills, Administrative
Services Department, 26379 Fremont Road, Los Altos Hills, California 94022.
The financial statements of the Town have been prepared in conformity with accounting principles
generally accepted in the United States of America (GAAP) as applied to government units. The
Governmental Accounting Standards Board (GASB) is the accepted standard‐setting body for establishing
governmental accounting and financial reporting principles. The more significant accounting principles of
the government are described below.
B.Basis of Presentation
Government‐wide Financial Statements
The Statement of Net Position and the Statement of Activities displays information about the Town. These
statements include the financial activities of the overall government except for fiduciary activities. These
statements distinguish between the governmental and business‐type activities of the Town. Governmental
activities, which normally are supported by taxes and intergovernmental revenues and other nonexchange
transactions, are reported separately from business‐type activities, which rely to a significant extent on
fees charged to external parties.
The Statement of Net Position reports all of the financial and capital resources of the government as a
whole in a format in which assets and deferred outflows of resources equal liabilities and deferred inflows
of resources, plus net position. The Statement of Activities presents a comparison between direct
expenses and program revenues for each segment of the business‐type activities of the Town and for each
function of the Town's governmental activities. Direct expenses are those that are specifically associated
with a program or function and, therefore, are clearly identifiable to a particular function. Program
revenues include 1) fees, fines, and charges paid by the recipients of goods and services offered by the
programs and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular program. Revenues that are not classified as program revenues, including all
taxes, are presented instead as general revenues.
Certain eliminations have been made as prescribed by Governmental Accounting Standards Board (GASB)
Statement No. 34 in regards to interfund activities, payable and receivables. All internal balances in the
Statement of Net Position have been eliminated except those representing balances between the
governmental activities and the business‐type activities. These are presented as internal balances and
eliminated in the total primary government column. In the Statement of Activities, interfund transactions
have been eliminated. However, the transactions between governmental and business‐type activities,
which are presented as transfers, have not been eliminated from the Statement of Activities.
Resolution 60-20 Page 60
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B.Basis of Presentation (Continued)
Fund Financial Statements
The fund financial statements provide information about the Town's funds, including fiduciary funds.
Separate statements for each fund category – governmental, proprietary, and fiduciary – are presented.
The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed
in a separate column. All remaining governmental funds are separately aggregated and reported as non‐
major funds.
Proprietary funds distinguish operating revenues and expenses and nonoperating items. Operating
revenues and expenses result from providing services in connection with the fund's principal ongoing
operations. The principal operating revenues of the Town's enterprise and internal service fund are charges
for customer services including: sewer service fees, equipment maintenance and usage fees, and support
charges. Operating expenses for enterprise funds and internal service funds include the cost of services,
administrative expenses, and depreciation of capital assets. All other revenues and expenses not meeting
this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Town's policy to use
restricted resources first, then unrestricted resources as they are needed.
The Town reports the following major governmental funds:
The General Fund accounts for resources traditionally associated with governmental activities that
are not required legally or by sound financial management to be accounted for in another fund.
The Street Capital Projects Fund accounts for the acquisition and construction of streets.
The Town reports the following major enterprise fund:
The Sewer Fund accounts for the maintenance of the Town's sewer lines and related facilities. It is
a self‐supporting activity that provides services on a user charge basis to residences and
businesses.
The Town reports the following additional funds:
Internal Service Fund accounts for goods and services provided to city departments on a cost
reimbursement basis. The goods and services provided include maintenance and replacement of
vehicles and equipment, costs incurred for printing, copying, and mailing services; employee
benefits; and expenses related to the maintenance of Town buildings. Internal Service Fund is
included in the government activities at the government‐wide level.
The Agency Fund accounts for assets held by the Town in the capacity of agent. The Town's Agency
Fund includes West Loyola Sewer Assessment District #1 and PARS 115 Trust Fund.
The Special Revenue Funds account for specific revenues that are legally restricted to expenditures
for particular purposes.
The Capital Project Fund accounts for financial resources that are necessary for the acquisition or
construction of major capital facilities.
Resolution 60-20 Page 61
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B.Basis of Presentation (Continued)
In prior years, the Town’s street, storm drain and pathway maintenance and operation expenditures were
reported under special revenue funds; however, the operations were largely funded by transfers from the
General Fund. Special revenues, such as gas tax, storm drain in‐lieu fees, and pathway construction fees,
were recorded in these special revenue funds but these revenues were transferred to capital project funds
at the end of the year. To minimize the number of interfund transfers between the General Fund, these
special revenue funds and Capital Project Funds, the City Council authorized the Administrative Services
Department to record the revenues for storm drains, pathways, and streets directly into the corresponding
capital project funds and to merge the ongoing operating cost into the General Fund.
Fund Balance Classification
Fund balance is classified in accordance with current governmental accounting standards, which requires
classification of fund balances into five different components, where applicable. The components are
nonspendable, restricted, committed, assigned and unassigned.
Nonspendable resources are not in spendable form or required to be maintained intact such as an
endowment.
Restricted resources are subject to externally enforceable legal restrictions or imposed by law
through constitutional provisions or enabling legislation.
Committed resources are constrained to specific purposes by a formal action of the City Council
such as an ordinance or resolution. The constraint remains binding unless removed in the same
formal manner by the City Council. Council action to commit fund balance must occur within the
fiscal reporting period while the amount committed may be determined subsequently. All use of
committed fund balance requires the City Council, which is the highest level of decision making
authority, to take formal action with resolution, including budget resolutions, to modify or rescind
a committed fund balance.
Assigned resources are constrained by the Town's intent to be used for specific purposes, but are
neither restricted nor committed. The City Council, by action, has the authority to assign amounts
to be used for specific purposes. Unlike commitments, assignments generally only exist
temporarily. In other words, an additional action does not normally have to be taken for the
removal of an assignment.
Unassigned fund balance is the residual classification and includes all amounts not contained in
the other classifications. Unassigned amounts are technically available for any purpose. The
general fund is the only fund that reports a positive unassigned fund balance.
When expenditures are incurred for purposes for which both restricted and unrestricted (committed,
assigned, or unassigned) fund balances are available, the Town's policy is to first apply restricted fund
balance. When expenditures are incurred for purposes for which committed, assigned or unassigned fund
balances are available, the Town's policy is to first apply committed fund balance. It is at the discretion of
the Council's designee to then apply the remaining expenditures to assigned or unassigned fund balance.
Resolution 60-20 Page 62
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C.Basis of Accounting and Measurement Focus
The government‐wide and proprietary financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned and
expenses are recorded at the time that liabilities are incurred, regardless of when the related cash flows
take place. Non‐exchange transactions, in which the Town gives or receives value without directly receiving
or giving equal value in exchange, include property and sales tax, grants, entitlements, franchise fees and
donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the
taxes are levied. Revenues from sales tax are recognized when the underlying transactions take place.
Revenues from grants, entitlements, and donations are recognized in the fiscal year in which all eligibility
requirements have been satisfied.
Governmental funds are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Under this method, revenues are recognized when measurable and
available. Property and sales tax, interest, certain state, and federal grants, and charges for services are
accrued when their receipt occurs within sixty days after the end of the accounting period so as to be both
measurable and available. Expenditures are generally recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures, as well as expenditures related to claims and judgments,
are recorded only when payment is due. General capital assets acquisitions are reported as expenditures
in governmental funds. Proceeds of long‐term debt and capital leases are reported as other financing
sources.
Fiduciary funds are custodial in nature (i.e. assets equal liabilities) and do not involve the measurement of
the results of operations. The Town has one fiduciary fund for the West Loyola Sewer Assessment District.
D.Cash and Cash Equivalents
For purposes of the statement of cash flows, the Town considers all highly liquid investments with maturity
of three months or less when purchased to be cash equivalents.
E.Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The Town categorizes its fair
value measurements within the fair value hierarchy established by generally accepted accounting
principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair
value into three levels based on the extent to which inputs used in measuring fair value are observable in
the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable
for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the fair value
hierarchy, the measurement is considered to be based on the lowest priority level input that is significant
to the entire measurement.
Resolution 60-20 Page 63
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
F.Receivables
During the course of normal operations, the Town carries various receivable balances for taxes, franchise
fees, interest, license fees, and sewer fees. As of June 30, 2020, accounts receivable are shown at $377,789
in the General Fund, $23,235 in the Street Capital Project Fund and $17,874 in the Sewer Fund.
G.Capital Assets
Capital assets, including infrastructure acquired prior to GASB 34, are recorded at historical cost or at
estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at
their estimated acquisition value on the date of contribution. Capital assets include public domain
(infrastructure) general capital assets consisting of certain improvements including roads, bridges,
water/sewer, lighting systems, drainage systems, and flood control. The Town defines capital assets as
assets with an estimated useful life in excess of three years and an initial, individual cost of $15,000.
Capital assets used in the operation are depreciated using the straight‐line method over their estimated
useful lives in the government‐wide statements and proprietary funds. The estimated useful lives are as
follows:
Infrastructure 20 ‐ 50 Years
Structure and Improvements 10 ‐ 30 Years
Vehicles 5 ‐ 10 Years
Equipment 3 ‐ 10 Years
Maintenance and repairs are charged to operations when incurred. Betterments and major improvements,
which significantly increase values, change capacities, or extend useful lives, are capitalized. Upon sale or
retirement of capital assets, the cost and related accumulated depreciation are removed from the
respective accounts and any resulting gain or loss is included in the results of operations.
H.Deferred Inflows and Deferred Outflows of Resources
In addition to assets, the Statement of Net Position or balance sheet reports a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position or fund balance that applies to a future period(s) and so will not
be recognized as an outflow of resources (expense/expenditure) until then. The Town has pension‐related
and OPEB‐related deferred outflows of resources arising from certain changes in the collective net pension
liability and net OPEB liability.
In addition to liabilities, the Statement of Net Position or balance sheet reports a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position or fund balance that applies to a future period(s) and so will not
be recognized as an inflow of resources (revenue) until that time. The Town has deferred inflows of
resources arising from certain changes in the collective net pension liability and net OPEB liability. These
amounts are deferred and amortized over a stated period.
Resolution 60-20 Page 64
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I.Property Taxes
Revenue is recognized in the fiscal year for which the tax and assessment are levied. The County of Santa
Clara levies, bills, and collects property taxes for the Town. Under the Teeter Bill, the County remits the
entire amount levied and handles the delinquencies, retaining interest and penalties.
Secured property taxes attach as an enforceable lien on property as of January 1. Taxes are payable in two
installments on November 1 and February 1 and become delinquent on December 10, and April 10,
respectively. Unsecured property taxes are payable in one installment on or before August 31.
J. Accumulated Compensated Absences
The Town accrues the cost for compensated absences (vacation and comp time) when they are earned.
Employees have a vested interest in accrued vacation time and all vacation hours will eventually either be
used or paid by the Town. Generally, employees earn and use their current vacation hours with a small
portion being accrued or unused each year. As this occurs, the Town incurs an obligation to pay for these
unused hours. Sick leave benefits do not vest and no liability is recorded.
All compensated absences for governmental activities are paid out of the general fund. Compensated
absences as of June 30, 2020 are as follows:
Governmental
Activities
Business‐Type
Activities Total
Beginning Balance 117,814$ 9,104$ 126,918$
Additions 84,435 4,256 88,691
Reductions (29,100) (3,240) (32,340)
Ending Balance 173,149$ 10,120$ 183,269$
Current Portion 36,124$ 32$ 36,156$
K.Interfund Transactions
Interfund transactions are reflected as services provided, reimbursements, or transfers. Services provided,
deemed to be at market, or near market rates, are treated as revenues and expenditures/expenses.
Reimbursements are when one fund incurs a cost, charges the appropriate benefit fund, and reduces its
related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers within
governmental and proprietary funds are netted as part of the reconciliation to the government‐wide
presentation.
L.Use of Estimates
The preparation of the basic financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results could differ from those
estimates.
Resolution 60-20 Page 65
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
M.Post‐Employment Benefits Other Than Pensions (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of
resources related to OPEB, OPEB expense, information about the fiduciary net position of the California
Employers’ Retiree Benefit Trust (CERBT), and additions to / deductions from CERBT’s fiduciary net position
have been determined on the same basis as they are reported by CERBT. For this purpose, CERBT
recognizes benefit payments when due and payable in accordance with the benefit terms. Investments
are reported at fair value, except for money market investments and participating interest‐earning
investment contracts that have a maturity at the time of purchase of one year or less, which are reported
at cost.
N.New GASB Pronouncements
Management adopted the provisions of the following Governmental Accounting Standards Board (GASB)
Statements, which became effective during the year ended June 30, 2020.
Governmental Accounting Standards Board (GASB) Statement No. 89 – Accounting for Interest Cost
Incurred before the End of a Construction Period. This Statement establishes accounting requirements for
interest cost incurred before the end of a construction period. Such interest cost includes all interest that
previously was accounted for in accordance with the requirements of paragraphs 5–22 of Statement No.
62, Codification of Accounting and Financial Reporting Guidance Contained in Pre‐November 30, 1989 FASB
and AICPA Pronouncements, which are superseded by this Statement. This Statement requires that interest
cost incurred before the end of a construction period be recognized as an expense in the period in which
the cost is incurred for financial statements prepared using the economic resources measurement focus.
As a result, interest cost incurred before the end of a construction period will not be included in the
historical cost of a capital asset reported in a business‐type activity or enterprise fund. This Statement had
no material effect on the financial statements.
Governmental Accounting Standards Board (GASB) Statement No. 95 – Postponement of the Effective
Dates of Certain Authoritative Guidance. This Statement extended the implementation dates for 15 GASB
Statements and Implementation Guides by 1 year or more. Of course, many of the Statements could be
early‐implemented, as applicable.
Resolution 60-20 Page 66
Notes to Basic Financial Statements
NOTE 2 – DEPOSITS AND INVESTMENTS
The Town pools cash from all sources and all funds so that it can be invested at the maximum yield
consistent with safety and liquidity, while individual funds can make expenditures at any time.
A.Policies
The Town invests in individual investments and in investment pools. Individual investments are evidenced
by specific identifiable securities instruments, or by an electronic entry registering the owner in the records
of the institution issuing the security, called the book entry system.
California Law requires banks and savings and loan institutions to pledge government securities with a
market value of 110% of the Town’s cash on deposit, or first trust deed mortgage notes with a market
value of 150% of the deposit, as collateral for these deposits. Under California Law this collateral is held
in a separate investment pool by another institution in the Town’s name and places the Town ahead of
general creditors of the institution.
The Town’s investments are carried at fair value, as required by generally accepted accounting principles.
The Town adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and
it includes the effects of these adjustments in income for that fiscal year.
The Town shall not engage in leveraged investing, such as in margin accounts or any form of borrowing for
the purpose of investment. The Town also shall not invest in instruments whose principal and interest have
no backing, such as options and future contracts, nor in derivatives, outside of authorized pools. The
Town's investments were in compliance with the above provisions as of and for the year ended June 30,
2020.
B.Classification
As of June 30, 2020, cash and investments are classified in the accompanying financial statements as
follows:
Cash on hand 1,900$
Deposits with financial institutions 2,390,504
Investments with fiscal agent 3,299,944
Investments 25,436,841
Total Cash and Investments 31,129,189$
As of June 30, 2020, cash and investments consist of the following:
Statement of Net Position:
Cash and investments 27,689,278$
Cash and investments held in Pension trust 550,215
Fiduciary funds:
Cash and investments held by OPEB trust 2,601,252
Cash and investments ‐ West Loyola 288,444
Total Cash and Investments 31,129,189$
Resolution 60-20 Page 67
Notes to Basic Financial Statements
NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED)
C.Authorized Investments
The table below identifies the investment types that are authorized for the Town by the California
Government Code and are further limited by the Town's investment policy. Limitations as they relate to
interest rate risk, credit risk, and concentration of credit risk are indicated in the schedules below:
Authorized Investment Type
Maximum
Maturity
Maximum
Percentage/Dollar
of Portfolio
Maximum
Investment in
One Issuer
Securities issued by the U.S. Treasury 5 years No limit No limit
U.S. Agency Securities 5 years No limit No limit
Municipal Securities 5 years 30%5%
State Treasury Notes/Bonds 5 years 30%5%
Bankers' Acceptances 180 days 40%5%
Asset‐Backed Securities 5 years 50%5%
Negotiable Certificates of Deposit 5 years 30%5%
Local Government Investment Pools (LAIF)5 years $65.0 mil No limit
Insured savings account and bank money market accounts 5 years No limit 5%
Money market mutual funds registered with SEC 5 years 20%5%
California Asset Management Program (CAMP)5 years 20%No limit
Medium‐term corporate notes with A or better rating 5 years 30%5%
D.Interest Rate Risk and Fair Value Hierarchy
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value
to changes in market interest rates. The Town manages its exposure to interest rate risk by purchasing only
shorter term investments as necessary to provide the cash flow and liquidity needed for operations.
As of June 30, 2020, the Town had the following investments:
12 Months 13 to 25 to
or less 24 Months 60 Months Total
U.S. Treasury Bonds/Notes 392,000$ 1,316,192$ 5,620,805$ 7,328,997$
Federal Agency Collateralized
Mortgage Obligation 209,019 404,092 976,012 1,589,123
U.S. Agency Notes ‐ 673,489 1,798,421 2,471,910
Municipal Bonds 356,532 ‐ 881,775 1,238,307
Certificates of Deposit 117,087 160,994 516,477 794,558
LAIF Investment Pool 8,823,671 ‐ ‐ 8,823,671
Money Market 3,299,944 ‐ ‐ 3,299,944
Corporate Notes 70,535 1,113,817 1,864,968 3,049,320
CAMP Investment Pool 60,485 ‐ ‐ 60,485
Supranationals ‐ 80,470 80,470
Total Investments 13,329,273$ 3,668,584$ 11,738,928$ 28,736,785$
Resolution 60-20 Page 68
Notes to Basic Financial Statements
NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED)
D.Interest Rate Risk and Fair Value Hierarchy (Continued)
The Town categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value
of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are
significant other observable inputs; and Level 3 inputs are significant unobservable inputs.
Investments by Fair Value Level:Level 1 Level 2Total
U.S. Treasury Bonds/Notes 7,328,997$ ‐$ 7,328,997$
Federal Agency Collateralized
Mortgage Obligation ‐ 1,589,123 1,589,123
U.S. Agency Notes ‐ 2,471,910 2,471,910
Municipal Bonds ‐ 1,238,307 1,238,307
Certificates of Deposit ‐ 794,558 794,558
Corporate Notes ‐ 3,049,320 3,049,320
CAMP Investment Pool ‐ 60,485 60,485
Supranationals ‐ 80,470 80,470
Total Investments 7,328,997$ 9,284,173$ 16,613,170
Investments Measured at Amortized Cost:
Money Market 3,299,944
Local Agency Investment Fund 8,823,671
Cash in banks and on hand 2,392,404
Total Cash and investments 31,129,189$
U.S. Treasury Notes classified in Level 1 of the fair value hierarchy are valued using quoted prices in active
markets. Federal Agency Collateralized Mortgage Obligations, U.S. Agency Notes and Corporate Notes,
classified in Level 2 of the fair value hierarchy, are valued using pricing techniques of matrix pricing or
market corroborated pricing, with inputs such as yield curves or indices. These prices are obtained from
various pricing sources by our custodian bank. The Town does not have any Level 3 investments.
The Town is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California
Government Code Section 16429 under the oversight of the Treasurer of the State of California. The Town
reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of
the pool share. The balance is available for withdrawal on demand, and is based on the accounting records
maintained by LAIF. Included in LAIF’s investment portfolio are collateralized mortgage obligations,
mortgage‐backed securities, other asset‐backed securities, loans to certain state funds, and floating rate
securities issued by federal agencies, government‐sponsored enterprises, United States Treasury Notes
and Bills, and corporations. At June 30, 2020, these investments matured in an average of 191 days. The
California Local Agency Investment Fund is classified as exempt in the fair value hierarchy, as it is valued at
amortized cost, which is exempt from being classified under GASB 72.
Resolution 60-20 Page 69
Notes to Basic Financial Statements
NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED)
D.Interest Rate Risk and Fair Value Hierarchy (Continued)
The Town is a participant in the California Asset Management Program (CAMP). CAMP is an investment
pool offered by the California Asset Management Trust (the Trust). The Trust is a joint powers authority
and public agency created by the Declaration of Trust and established under the provisions of the California
Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the “Act”) for the
purpose of exercising the common power of its Participants to invest certain proceeds of debt issues and
surplus funds. CAMP’s investments are limited to investments permitted by subdivisions (a) to (n),
inclusive, of Section 53601 of the California Government Code. The Town reports its investments in CAMP
at the fair value amounts provided by CAMP, which is the same as the value of the pool share in accordance
with GASB 79 requirements. At June 30, 2020, the fair value approximated the Town’s cost.
At June 30, 2020, these investments have an average maturity of 1,004 days. The California Asset
Management Program is exempt from the fair value hierarchy.
The Town, as a CAMP shareholder, may withdraw all or any portion of the funds in its CAMP account at
any time by redeeming shares. The CAMP Declaration of Trust permits the CAMP trustee to suspend the
right of withdrawal from CAMP or to postpone the date of payment of redemption proceeds if the New
York Stock Exchange is closed other than for customary weekend and holiday closings, if trading on the
New York Stock Exchange is restricted, or if, in the opinion of the CAMP trustees, an emergency exists such
that disposal of the CAMP pool securities or determination of its net asset value is not reasonably
practicable. If the right of withdrawal is suspended, the Town may either withdraw its request for that
withdrawal or receive payment based on the net asset value of the CAMP pool next determined after
termination of the suspension of the right of withdrawal.
Mutual funds are available for withdrawal on demand. At June 30, 2020, these investments have an
average maturity of 53 days.
E.Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the
investment. This is measured by the assignment of a rating by a nationally recognized statistical rating
organization. The state investment pool is not rated.
Investment Type AAA AA+AA AA‐A+A A‐AAAm BBB+Total
Federal Agency Collateralized
Mortgage Obligation ‐$ 1,589,123$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ 1,589,123$
U.S. Agency Notes ‐ 2,471,910 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,471,910
Municipal Bonds 108,482 346,112 153,516 486,701 ‐ 143,496 ‐ ‐ ‐ 1,238,307
Certificates of Deposit ‐ 794,558 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 794,558
Money Market ‐ ‐ ‐ ‐ ‐ ‐ ‐ 148,477 ‐ 148,477
CAMP Investment Pool ‐ ‐ ‐ ‐ ‐ ‐ ‐ 60,485 ‐ 60,485
Corporate Notes ‐ 77,880 322,257 465,158 929,955 431,154 752,381 ‐ 70,535 3,049,320
Supranationals 80,470 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 80,470
Totals 188,952$ 5,279,583$ 475,773$ 951,859$ 929,955$ 574,650$ 752,381$ 208,962$ 70,535$ 9,432,650
Not Rated:
Cash and investments held with Pension trust 550,215
Cash and investments held with OPEB trust 2,601,252
U.S. Treasury Notes 7,328,997
Local Agency Investment Fund (LAIF)8,823,671
Total Investments 28,736,785$
Bank balances are insured up to $250,000 per bank by the Federal Deposit Insurance Company ("FDIC").
As of June 30, 2020, the Town’s cash in bank exceeded the insured limit by $2,140,504. None of the Town’s
deposits with financial institutions in excess of FDIC limits were held in uncollateralized accounts.
Resolution 60-20 Page 70
Notes to Basic Financial Statements
NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED)
F.Concentration of Credit Risk
The investment policy of the Town contains limitations on the amount that can be invested in any one
issuer beyond the amount stipulated by the California Government Code. As of June 30, 2020, there are
no investments, other than U.S. Treasury securities, US Agency securities, and authorized pools such as
Local Agency Investment Fund (LAIF) and California Asset Management Program (CAMP), that represent
five percent or more of total investments at the Entity‐wide level or in individual funds.
NOTE 3 – INTERFUND TRANSACTIONS
The following schedule briefly summarizes the Town's transfer activity for the fiscal year ended June 30, 2020:
Amount
Fund Receiving Transfers Fund Making Transfers Transferred
General Fund Non‐Major Governmental Funds 87,296$ (A)
Street Capital Projects Fund General Fund 514,090 (B)
Non‐Major Governmental Funds 40,000 (B)
Sewer Fund General Fund 30,426 (C)
Non‐Major Governmental Funds General Fund 140,141 (B)
Total Interfund Transfers 811,953$
(A)To fund the Neighborhood Watch Program and the Emergency Operations.
(B)To fund capital projects.
(C)To reimburse the Sewer Fund for costs incurred for the towns use of sewer system over the
past three years.
Resolution 60-20 Page 71
Notes to Basic Financial Statements
NOTE 4 – CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2020, was as follows:
Balance at Balance at
June 30, 2019 Additions June 30, 2020
Governmental activities
Capital assets not being depreciated:
Land 250,535$ ‐$250,535$
Total capital assets not being depreciated 250,535 ‐ 250,535
Capital assets being depreciated:
Infrastructure 85,376,910 1,706,371 87,083,281
Buildings 5,152,825 ‐ 5,152,825
Vehicles 719,717 40,999 760,716
Office Equipment 465,307 ‐ 465,307
Total capital assets being depreciated 91,714,759 1,747,370 93,462,129
Less accumulated depreciation for:
Infrastructure (62,881,615) (1,363,011) (64,244,626)
Buildings (1,902,566)(130,638) (2,033,204)
Vehicles (430,837) (43,414) (474,251)
Office Equipment (444,411)(4,179) (448,590)
Total accumulated depreciation (65,659,429) (1,541,242) (67,200,671)
Net governmental‐type activities
Capital assets being depreciated 26,055,330 206,128 26,261,458
Governmental activities capital assets, net 26,305,865$ 206,128$ 26,511,993$
Balance at Balance at
June 30, 2019 Additions June 30, 2020
Business‐type activities
Capital assets being depreciated:
Sewer collection system 10,374,942$ 523,702$ 10,898,644$
Office equipment 1,509 ‐ 1,509
Total capital assets being depreciated 10,376,451 523,702 10,900,153
Less accumulated depreciation for:
Sewer collection system (3,110,636)(213,777) (3,324,413)
Office equipment (1,509)‐ (1,509)
Total accumulated depreciation (3,112,145) (213,777) (3,325,922)
Net capital assets being depreciated 7,264,306 309,925 7,574,231
Business‐type activities capital assets, net 7,264,306$ 309,925$ 7,574,231$
Resolution 60-20 Page 72
Notes to Basic Financial Statements
NOTE 4 – CAPITAL ASSETS (CONTINUED)
Depreciation expense was charged to governmental functions as follows:
Governmental Activities Amount
General Government 306,825$
Public safety 300,784
Community development 412,720
Parks and recreation 94,062
Public works 248,620
Internal service funds 178,231
Total 1,541,242$
Business‐Type Activities Amount
Sewer 213,777$
Total 213,777$
NOTE 5 – LONG TERM DEBT
The Town has no long‐term debt as of and for the year ended June 30, 2020.
NOTE 6 – SPECIAL ASSESSMENT DEBT WITHOUT TOWN COMMITMENT
Special assessment districts are established in various parts of the Town to provide improvements to properties
located in those districts. Properties are assessed for the cost of the improvements. These assessments are
payable solely by the property owners over the term of the debt issued to finance the improvements. The Town
acts solely as the collecting and paying agent for the District's debt which is not included in the general debt of
the Town. The bonds are not general obligation of the Town. The Town is not legally obligated to pay these debts
or be the purchaser of last resort of foreclosed properties in the special assessment district.
At June 30, 2020, the balance of the assessment district's outstanding debt was as follows:
Fiscal Year Fiscal Years Outstanding
Issue Issued Interest Rate Annual Amount Ended June 30, 2020
West Loyola Sewer Assessment District No. 1 2009 2.25% ‐ 6.15% $35,000 ‐ $775,000 2010‐2040 1,630,000$
Principal Maturities
Resolution 60-20 Page 73
Notes to Basic Financial Statements
NOTE 7 – NET POSITION/FUND BALANCES
A.Net Position
The government‐wide and proprietary fund financial statements utilize a net position presentation. Net
position is categorized as net investment in capital assets, restricted, and unrestricted.
Net Investment in Capital Assets – This category presents all capital assets, including infrastructure, into
one component of net position. Accumulated depreciation reduces the balance in this category.
Restricted Net Position – This category presents external restrictions imposed by creditors, grantors,
contributors, laws or regulations of other governments, or restrictions imposed by law through
constitutional provisions or enabling legislation.
Unrestricted Net Position – This category presents net position of the Town not restricted for any project
or other purpose.
B.Fund Balances – Components
Governmental fund balances represent the net current assets of each fund. Net current assets generally
represent a fund's cash and receivables less its liabilities. Portions of a fund's balance may be non‐spendable,
restricted, committed, assigned or unassigned. At June 30, 2020, the following represents the components
of fund balance:
Street Nonmajor
General Capital Projects Governmental Total
Fund Balance Classifications Fund Fund Funds Governmental
Restricted for:
Parks and Recreation ‐$ ‐$ 35,584$ 35,584$
Public Safety ‐ ‐ 638,578 638,578
Art donations ‐ ‐130,233 130,233
Pension Trust 550,215 ‐ ‐ 550,215
Total Restricted Fund Balances 550,215 ‐ 804,395 1,354,610
Committed for:
Disaster Contingency Reserve 1,250,000 ‐ ‐ 1,250,000
Pension Contributions Re serve 2,575,000 ‐ ‐ 2,575,000
IT Equipment Replacement Reserve 50,000 ‐ ‐ 50,000
Facilities Replacement Reserve 1,902,700 ‐ ‐ 1,902,700
Equipment Relacement Reserve 594,000 ‐ ‐ 594,000
Street & Road Repairs Capital Projects ‐ 745,050 ‐ 745,050
All other Capital Projects ‐ ‐ 1,920,978 1,920,978
Total Committed Fund Balances 6,371,700 745,050 1,920,978 9,037,728
Assigned for:
Operating Contingency Reserve 2,071,500 ‐ ‐ 2,071,500
Total Assigned Fund Balance s 2,071,500 ‐ ‐ 2,071,500
Unassigned: 7,174,940 ‐ ‐ 7,174,940
Total Unassigned Fund Balances 7,174,940 ‐ ‐ 7,174,940
Total Fund Balances 16,168,355$ 745,050$ 2,725,373$ 19,638,778$
Resolution 60-20 Page 74
Notes to Basic Financial Statements
NOTE 8 – PENSION PLAN
A.General Information About the Pension Plan
The Town participates in the Cost‐Sharing Multiple‐Employer Defined Benefit Pension Plan (Cost Sharing) for
its Miscellaneous employees. It is administered by the California Public Employees Retirement System
(CalPERS). A cost‐sharing multiple‐employer defined benefit pension plan is a plan in which the pension
obligations to the employees of more than one employer are pooled and pension plan assets can be used to
pay benefits of the employees of any employer that provides pensions through the plan.
The Town’s pension plan and its financial position is measured and reported on the same basis as the Plan’s
fiduciary net position reported by CalPERS. This includes the measurement of the Plan’s fiduciary net
position and additions to/deductions, as well as the Town’s share of the Plan’s net pension liability, deferred
outflows/inflows of resources related to pensions, and pension expense. For this purpose, benefit payments
(including refunds of employee contributions) are recognized when due and payable in accordance with the
benefit terms. Investments are reported at fair value.
Plan Descriptions – All qualified permanent employees are eligible to participate in the Town’s
Miscellaneous cost‐sharing Plans administered by CalPERS. The Town’s Miscellaneous Plans are a cost‐
sharing multiple‐employer defined benefit pension plan administered by CalPERS since the plan has less than
100 active members, commonly referred to as risk pool. The Town has three retirement benefit tiers in the
Miscellaneous Plans. Tier 1 is for employees hired prior to September 1, 2011. Tier 2 is for employees hired
after September 1, 2011 and enrolled as a member of CalPERS prior to January 1, 2013. Tier 3 is for
employees hired on or after January 1, 2013.
Benefits Provided – CalPERS provides retirement and disability benefits, annual cost of living adjustments
and death benefits to plan members, who must be public employees, and their beneficiaries. Benefits are
based on years of credited service, equal to one year of full time employment, age and the average of the
final 3 years’ compensation. Members with five years of total service are eligible to retire at age 50 with
statutorily reduced benefits. All members are eligible for non‐duty disability benefits after 10 years of
service. The death benefit is one of the following: the Basic Death Benefit, the 1959 Survivor Benefit, or the
Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified
by the Public Employees’ Retirement Law.
Resolution 60-20 Page 75
Notes to Basic Financial Statements
NOTE 8 – PENSION PLAN (CONTINUED)
A.General Information about the Pension Plan (Continued)
Benefit provisions under the Plans are established by State statute and Town resolution. CalPERS issues
publicly available reports that include a full description of the pension plans regarding benefit provisions,
assumptions and membership information can be found on the CalPERS website at:
http://www.calpers.ca.gov/index.jsp?bc=/about/forms‐pubs/calpers‐reports/actuarial‐reports/home.xml.
The plans’ provisions and benefits in effect at June 30, 2020, are summarized as follows:
Tier ITier II Tier III
Hire date
Prior to
September 1, 2011
Starting
September 1, 2011
On or after
January 1, 2013
Benefit formula 2.0% @ 55 2.0% @ 60 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50‐63+50 ‐ 63+52 ‐ 67+
Monthly benefits, as a % of eligible compensation 1.426% ‐ 2.418% 1.092%‐2.418%1.0%‐2.5%
Required employee contribution rates 7.00%7.00%7.25%
Required employer contribution rates 10.327%8.668%7.072%
Miscellaneous
Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of
payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions
toward the unfunded liability (UAL). The dollar amounts are billed on a monthly basis or can be paid in a
lump sum at a reduced amount. The Town elected to make the lump sum contribution for the unfunded
liability in the amount of $180,298 in fiscal year 2020.
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the
employer contribution rates for all public employers are determined on an annual basis by the actuary and
shall be effective on the July 1 following notice of change in the rate. Funding contributions for the Plans are
determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the
estimated amount necessary to finance the costs of benefits earned by employees during the year, with an
additional amount to finance any unfunded accrued liability. The Town is required to contribute the
difference between the actuarially determined rate and the contribution rates of employees.
For the year ended June 30, 2020, the contribution recognized as part of pension expense for the Plans were
as follows:
Miscellaneous Plans
Contributions ‐ employer 397,870$
B.Net Pension Liability
The Town’s net pension liability for each Miscellaneous Plan is measured as the proportionate share of the
net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2019, using an
actuarial valuation as of June 30, 2018 rolled forward to June 30, 2019 using standard update procedures.
The Town’s proportion of the net pension liability was based on a projection of the Town’s long‐term share
of contributions of all participating employers, actuarially determined.
Resolution 60-20 Page 76
Notes to Basic Financial Statements
NOTE 8 – PENSION PLAN (CONTINUED)
B.Net Pension Liability (Continued)
Actuarial Methods and Assumptions – The total pension liabilities in June 30, 2020 actuarial valuations were
determined using the following actuarial assumptions for Miscellaneous Plan:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Payroll Growth
Projected Salary Increase
Investment Rate of Return
Mortality Rate Table
(1)Net of pension plan investment expenses, including inflation
(2)The mortality table used was developed based on CalPERS’ specific data. The probabilities of
mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre‐
re tirement and Post‐retirement mortality rates include 15 years of projected mortality
improvement using 90% of Scale MP ‐2016 published by the Society of Actuaries. For more details
on this table, please refer to the CalPERs Experience Study and Review of Actuarial Assumpions
re port from December 2017 that can be found on the CalPERS website.
All CalPERS Plans
June 30, 2018
June 30, 2019
Entry‐Age Normal Cost Method
7.15%
2.50%
3.00%
Varies by Entry Age and Service
7.15% (1)
Derived using CalPERS Membership Data for all Funds (2)
Discount Rate – The discount rate used to measure the total pension liability for the Plan was 7.15 percent.
The projection of cash flows used to determine the discount rate for the Plan assumed that contributions
from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member
contribution rates and that contributions from employers will be made at statutorily required rates,
actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be
available to make all projected future benefit payments of current plan members. Therefore, the long‐term
expected rate of return on plan investments was applied to all periods of protected benefit payments to
determine the total pension liability.
The long‐term expected rate of return on pension plan investments was determined using a building‐block
method in which expected future real rates of return (expected returns, net of pension plan investment
expense and inflation) are developed for each major asset class.
Resolution 60-20 Page 77
Notes to Basic Financial Statements
NOTE 8 – PENSION PLAN (CONTINUED)
B.Net Pension Liability (Continued)
In determining the long‐term expected rate of return, CalPERS took into account both short‐term and long‐
term market return expectations as well as the expected pension fund (PERF) cash flows. Using historical
returns of all the Public Employees Retirement Funds’ asset classes (which includes the agent plan and two
cost‐sharing plans or PERF A, B, and C funds), expected compound (geometric) returns were calculated over
the short‐term (first 10 years) and the long term (11+ years) using a building‐block approach. Using the
expected nominal returns for both short‐term and long‐term, the present value of benefits was calculated
for each fund. The expected rate of return was set by calculating the rounded single equivalent expected
return that arrived at the same present value of benefits for cash flows as the one calculated using both
short‐term and long‐term returns. The expected rate of return was then set equal to the single equivalent
rate calculated above and adjusted to account for assumed administrative expenses.
The table below reflects the expected real rate of return by asset.
Asset Class
New Strategic
Allocation
Real Return
Years 1 ‐ 10(a)
Real Return
Years 11+(b)
Global Equity 50.00%4.80%5.98%
Global Fixed Income 28.00%1.00%2.62%
Inflation Sensitive 0.00%0.77%1.81%
Private Equity 8.00%6.30%7.23%
Real Assets 13.00%3.75%4.93%
Liquidity 1.00%0.00%‐0.92%
Total 100.00%
(a)In the CalPERS CAFR, Fixed Income is included in Global Debt Securities;
Liquidity is included in Short‐term Investment; Inflation Assets are included
in both Global Equity Securites and Global De bt Securities.
(b)An expected inflation of 2.00% is used this period.
(c)An expected inflation of 2.92% is used this period.
C.Changes in the Net Pension Liability
As of June 30, 2020, the Town’s reported net pension liabilities for its proportionate share of the net pension
liability of the Miscellaneous Plan as follows:
Proportionate Share
of Net Pension Liability
Miscellaneous Plans 2,203,151$
Total Net Pension Liability 2,203,151$
Resolution 60-20 Page 78
Notes to Basic Financial Statements
NOTE 8 – PENSION PLAN (CONTINUED)
C.Changes in the Net Pension Liability (Continued)
The Town’s proportionate share of the net pension liability for each Miscellaneous Plan as of June 30, 2018
and 2019 is as follows:
Miscellaneous Plans
Proportion ‐ June 30, 2018 0.05018%
Proportion ‐ June 30, 2019 0.05502%
Change ‐ Increase (Decrease)0.00484%
Sensitivity of the Proportionate Share of the Net Pension Liability for Miscellaneous Plans to Changes in
the Discount Rate – The following presents the net pension liability of the Town’s proportionate share of
the net pension liability for Miscellaneous Plans, calculated using the discount rate as well as what the
Town’s net pension liability would be if it were calculated using a discount rate that is 1‐ percentage point
lower or 1‐ percentage point higher than the current rate:
Miscellaneous Plans
1% Decrease 6.15%
Net Pension Liability 4,301,571$
Current Discount Rate 7.15%
Net Pension Liability 2,203,151$
1% Increase 8.15%
Net Pension Liability 471,053$
Pension Plan Fiduciary Net Position ‐ Detailed information about the pension plans’ fiduciary net position is
available in the separately issued CalPERS financial reports.
Subsequent Event ‐ CalPERS Pension Contribution Rates ‐ The CalPERS Board of Administration has adopted
a new amortization policy effective with the June 30, 2019 actuarial valuation. The new policy shortens the
period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments
computed using a level dollar amount. In addition, the new policy removes the 5‐year ramp‐up and ramp‐
down on UAL bases attributable to assumption changes and non‐investment gains/losses. The new policy
removes the 5‐year ramp‐down on investment gains/losses. These changes will apply only to new UAL bases
established on or after June 30, 2019. As a result of these changes, the City’s contribution rates for the fiscal
year ended June 30, 2021 are expected to increase over the fiscal year 2020 contribution rates.
D.Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension
For the year ended June 30, 2020, the Town’s recognized pension expense of $1,086,669 for the
Miscellaneous Plans. At June 30, 2020, the Town reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources for Miscellaneous Plans:
Resolution 60-20 Page 79
Notes to Basic Financial Statements
NOTE 8 – PENSION PLAN (CONTINUED)
D.Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension (Continued)
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 397,870$ ‐$
Differences between actual and expected experience 153,018 (11,856)
Changes in assumptions 105,056 (37,242)
Difference between proportional and actual contributions 545,561 (187,312)
Net differences between projected and actual earnings
on plan investments ‐ (38,518)
Adjustment due to differences in proportion 121,606 (465,873)
Total 1,323,111$ (740,801)$
The $397,870 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended June 30,
2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related
to pensions will be recognized as pension expense as follows:
Years Ending June 30,
2021 162,350$
2022 5,698
2023 8,609
2024 7,783
184,440$
E.Payable to Pension Plan
As of June 30, 2020, the Town reported a payable of $19,846 for the outstanding amount of contributions
to the pension plan required for the year ended June 30, 2020.
Resolution 60-20 Page 80
Notes to Basic Financial Statements
NOTE 9 – RISK MANAGEMENT
A.Risk Pool
The Town is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters.
The Town participates in the Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA), a self‐
insurance pool. The PLAN JPA Plan provides certain levels of liability insurance coverage, claims
management, risk management services and legal defense to each participant. The Town's general liability
claims are insured up to $5 million per occurrence and $10 million per year. The Town's property claims are
insured for up to $25 million per year. The Town has a deductible or uninsured liability of up to $25,000 per
claim. Once the Town's deductible is met, PLAN JPA becomes responsible for payment of all claims up to the
limit. During the fiscal year ended June 30, 2020, the Town contributed $158,873 for current year coverage
plus settlement payments. Part of the contribution is to maintain the Plan’s reserve at 60 percent confidence
funding level, per the annual actuarial report, to meet future claim liabilities.
Settlement amounts did not exceed insurance coverage for the past three years. The Town also received
$32,893 in insurance recoveries during fiscal year 2020. The Town's insurance costs will increase/decrease
based on its own adverse claims experience and the adverse claims experience of other agencies in the
Town's risk pool.
The Shared Agency Risk Pool Joint Powers Agency (SHARP JPA) Shared Risk Pool (Pool) covers workers'
compensation claims up to $250,000 each and has coverage above that limit to the statutory maximum. The
Town has no deductible for these claims. During the fiscal year ended June 30, 2020, the Town contributed
$72,779 for current year coverage.
As of June 30, 2020, the Town does not have earthquake insurance.
Each risk pool is governed by a Board consisting of representatives from member municipalities. The
Board controls the operations of each risk pool, including selections of management and approval of
operating budgets, independent of any influence by member municipalities beyond their representation
on the Board. The Town's contribution to each risk pool is generally equal to the ratio of the Town's
payroll to the total payrolls of all entities participating in the same layer of each program further adjusted
for adverse claims experience, in each program year.
Actual surpluses or losses are shared according to a formula developed from overall loss costs and
spread to member entities on a percentage basis after a retrospective rating. Financial statements for
each agency can be obtained from PLAN, 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA, 95833.
For PLAN JPA and SHARP JPA, all participating members are responsible for their weighted share of claim
liability and to replenish the Plan/Pool reserve fund as necessary.
Resolution 60-20 Page 81
Notes to Basic Financial Statements
NOTE 10 – CONTINGENT LIABILITIES
A.Commitments and Contingencies
The Town is subject to litigation arising in the normal course of business. In the opinion of the Town Attorney,
there is no pending litigation that is likely to have a material adverse effect on the financial position of the
Town.
B.Service Concession Arrangements (SCA)
In February 2014, the Town and Victoria Dye Equestrian, LLC (VDE) entered into an agreement to operate
the Westwind Community Barn (Westwind) which is owned by the Town. VDE provides horse boarding and
equestrian classes to the community. The Town provides a monthly subsidy to VDE to defray costs related
to managing barn operations and shares in certain utility costs. VDE remits 25% of all equestrian class
revenues to the Town and the Town keeps 25% of revenues it collects for equestrian camps the Town offers
operated by VDE. Westwind activity is included in the Town’s General Fund.
NOTE 11 – OTHER POSTEMPLOYMENT BENEFITS (OPEB)
A.General Information About the OPEB Plan
Town employees are provided with other postemployment benefits (OPEB) through the Town’s agent multi‐
employer defined benefit postemployment healthcare plan (the “Plan”) administered by the California
Public Employees’ Retirement System (CalPERS). The Plan consists of participating employers of the State
of California and public agencies. During fiscal year 2008, the Town elected to prefund its OPEB liabilities
through an irrevocable trust, the California Employers’ Retiree Benefit Trust (CERBT). CERBT is administered
by CalPERS. CERBT is a tax qualified irrevocable trust organized under the Internal Revenue Code (IRC)
Section 115.
The CERBT was established by Chapter 331 of the 1988 California Statues, and employers elect to participate
in the CERBT to pre‐fund health, dental, and other non‐pension postemployment benefits for their retirees
and survivors.
Resolution 60-20 Page 82
Notes to Basic Financial Statements
NOTE 11 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
B.Plan Description
The Plan provides postemployment healthcare benefits to eligible employees who retire directly from the
Town under CalPERS at the minimum age of 50 with at least 5 years of CalPERS service or disability. Retirees
must make a retirement election with CalPERS within 120 days following the date of separation from the
Town. Benefit provisions are established, and may be amended, by the City Council. The following Note 11C
below is a summary of Plan benefits by employee group as of June 30, 2020.
C.Benefits Provided
The Town participates in the CalPERS healthcare program (PEMHCA) and allow retirees to continue
participation in the medical insurance program after retirement. Under the Plan, the Town reimburses a
portion of the premium for retiree medical coverage as follows:
Retirees from the Town and employees receiving Town medical benefits as of October 11, 2007 are
eligible for a Town contribution up to an amount that is equal to what active employees receive in the
cafeteria plan. As stated above, an individual must also qualify as a CalPERS annuitant in order to receive
this benefit.
Employees hired or first receiving Town medical benefits after October 11, 2007 are only eligible to
receive a Town contribution equal to the PEMHCA minimum upon retirement from the Town. As stated
above, retirees must qualify as a CalPERS annuitant and meet all statutory and legal requirements
necessary to receive this benefit.
D.Employees Covered by Benefit Terms
Membership in the plan consisted of the following at the measurement date of June 30, 2019:
Count
Inactive employees or beneficiaries currently receiving benefits 14
Inactive employees entitled to but not yet receiving benefits
Active employees 21
Total 35
E.Contributions
Town contributions to the Plan occur as benefits are paid to retirees and/or to the CERBT. Benefit payments
may occur in the form of direct payments for premiums and taxes (“explicit subsidies”) and/or indirect
payments to retirees in the form of higher premiums for active employees (“implicit subsidies”). Benefits
and other contributions paid by the Town during the measurement period and those expected to be made
in the following the measurement period but prior to the end of the fiscal year are shown below. For fiscal
year ending June 30, 2020, Town contributions totaled $59,226.
Resolution 60-20 Page 83
Notes to Basic Financial Statements
NOTE 11 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
E.Contributions (Continued)
Benefits Paid by Trust $ ‐
Benefits Paid by Employer (not reimbursed by Trust)111,476
Implicit benefit payments 33,966
Total Benefit Payments During the Measurement Period $ 145,442
Employer Contributions to the Trust $ ‐
111,476
Implicit Contributions 33,966
Total Employer Contributions During the Measurement Date $ 145,442
Employer Contributions to the Trust $ 59,226
‐
Implicit Contributions ‐
Total Employer Contributions Subsequent to the Measurement Date $ 59,226
Benefit Payments during the Measurement Period
(July 1, 2018 through June 30, 2019)
Employer Contributions During the Measurement Period
(July 1, 2018 through June 30, 2019)
Employer Contributions in the Form of Direct Benefit Payments (not
reimbursed by the Trust)
Employer Contributions Subsequent to the Measurement Period
(July 1, 2019 through June 30, 2020)
Employer Contributions in the Form of Direct Benefit Payments (not
reimbursed by the Trust)
Resolution 60-20 Page 84
Notes to Basic Financial Statements
NOTE 11 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
E.Contributions (Continued)
The Town prefunds its OPEB liability by contributing 100% or more of the Actuarily Determined Contribution
(“ADC”) each year. The ADC consists of two components, which has been adjusted with interest, to the
Town’s fiscal year ending June 30, 2020:
The amounts attributed to service performed in the current fiscal year (the normal cost); and
Amortization of the unfunded actuarial accrued liability (UAAL).
Expected contributions, relative to the ADC, for the fiscal year ending June 30, 2020 are as follows:
Actuarially determined contribution 59,226$
Contributions in relation to the
actuarially determined contributions (59,226)
Contribution deficiency (excess)‐$
Covered payroll 2,826,032$
F.OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ending June 30, 2020, the Town recognized OPEB expense of negative $2,705. At June 30, 2020,
the Town reported deferred outflows of resources and deferred inflows of resources related to OPEB from
the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to the measurement date 59,226$ ‐$
Changes of assumptions ‐ (21,832)
Differences between expected and
actual experience ‐ (301,933)
Net difference between projected and actual earnings on
OPEB plan investments ‐ (64,714)
Total 59,226$ (388,479)$
The $59,226 reported as deferred outflows of resources related to OPEB resulting from Town contributions
subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year
ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to OPEB will be recognized in OPEB expense as follows:
Deferred
Fiscal Year Ended Outflows/(Inflows)
June 30 of Resources
2021 (74,491)$
2022 (74,491)
2023 (56,711)
2024 (48,081)
2025 (134,705)
Total (388,479)$
Resolution 60-20 Page 85
Notes to Basic Financial Statements
NOTE 11 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
G. Net OPEB Liability
Actuarial Methods and Assumptions
The Town’s net OPEB liability was measured as of June 30, 2019 and the total OPEB liability used to calculate
the net OPEB liability was determined by an actuarial valuation dated June 30, 2019 that was rolled forward
using standard update procedures to determine the total OPEB liability as of June 30, 2019, based on the
following actuarial methods and assumptions:
Actuarial Assumptions:
Actuarial Valuation Date June 30, 2019
Measurement Date June 30, 2019
Actuarial Cost Method Entry‐Age Normal Cost Method, level percent of pay
Asset Valuation Method Market Value of Assets
Long Term Return on Assets 6% as of June 30, 2019 and June 30, 2018
net of plan investment expenses and including inflation.
Discount Rate 6.00%
Participants Valued Only current active employees and retired participants and
covered dependents are valued. No future entrants are
considered in this valuation.
Salary Increase 3% per year, used only to allocate the cost of benefits
between service years.
General Inflation 2.5% per year
Healthcare Trend Rate 5.40% in 2020, reducing a tenth of a percent per year in 2026
& later.
Mortality rates were based on the CalPERS published rates and adjusted to back out 20 years of Scale BB to
central year 2017 and then projected by medical plan premiums and claims costs by age that are assumed
to increase once each year. The required PEMHCA minimum employer contribution (MEC) is assumed to
increase annually by 4.5%.
The demographic actuarial assumptions used in the June 30, 2019 valuation were based on the 2017
experience study of the CalPERS system using data from 1997 to 2015, except for a different basis used to
project future mortality improvements.
The long‐term expected rate of return on OPEB plan investments was determined using a building‐block
method in which best‐estimate ranges of expected future real rates of return (expected returns, net of OPEB
plan investment expense and inflation) are developed for each major asset class. These ranges are
combined to produce the long‐term expected rate of return by weighting the expected future real rates of
return by the target asset allocation percentage and by adding expected inflation.
Resolution 60-20 Page 86
Notes to Basic Financial Statements
NOTE 11 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
G. Net OPEB Liability (Continued)
The Town has elected CERBT Strategy Risk Level 1. This portfolio consists of assets management internally
by CalPERS and/or external advisors. The CalPERS Investment Committee and Board of Administration
directs the investment strategy and investments of the CERBT. As the CERBT is not a defined benefit plan,
there is no guarantee that the portfolio will achieve its investment objectives nor provide sufficient funding
to meet these employer obligations. CalPERS will not make up the difference between the employer’s CERBT
assets and the actual cost of OPEB provided to the employer’s plan members. These investments are not
insured by FDIC, CalPERS, the State of California, or any other government agency.
The target allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table.
Asset Class Target Allocation Benchmarks
Global Equity 59.0%MSCI All Country World Indez IMI (net)
Fixed Income 25.0%Bloomberg Barclays Long Liability Index
Real Estate Investment Trusts 8.0%FTSE EPRA/NAREIT Developed Liquid Index (net)
Treasury Inflation Protection Securities 5.0%Bloomberg Barclays Barclays US TIPS Index
Commodities 3.0%S&P GSCI Total Return Index
Total 100.0%
Resolution 60-20 Page 87
Notes to Basic Financial Statements
NOTE 11 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
H.Changes in Net OPEB Liability
The changes in the net OPEB liability follows:
Increase (Decrease)
Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability (Asset)
Balance at June 30, 2019
(Measurement Date 6/30/2018)2,549,358$ 2,367,528$ 181,830$
Changes for the year:
Service Cost 61,054 ‐ 61,054
Interest on the Total OPEB Liability 152,261 ‐ 152,261
Differences between Expected and Actual
Experience (346,011) ‐ (346,011)
Contributions
Employer ‐ 145,442 (145,442)
Net Investment Income ‐ 146,116 (146,116)
Benefit payments, including Refunds of
Employee Contributions (145,442) (145,442) ‐
Administrative Expense ‐ (507) 507
Changes of assumptions (25,019) ‐ (25,019)
Net changes (303,157) 145,609 (448,766)
Balance at June 30, 2020
(Measurement Date 6/30/2019)2,246,201$ 2,513,137$ (266,936)$
Detailed information about the OPEB plan’s fiduciary net position is available through CalPERS for the
Schedule of Changes in Fiduciary Net Position by Employer as of the measurement date at
https://www.calpers.ca.gov/docs/forms‐publications/gasb‐75‐schedule‐changes‐fiduciary‐net‐position‐
2019.pdf.
I.Discount Rate
The discount rate used to measure the total OPEB liability was 6.0%. The projection of cash flows used to
determine the discount rate assumed that contributions from the Town will be made at contractually
required rates, actuarially determined. Based on this assumption, the OPEB plan’s fiduciary net position was
projected to be available to make all projected OPEB payments for current and inactive
employees. Therefore, the long‐term expected rate of return on OPEB plan investments was applied to all
periods of projected benefit payments to determine the total OPEB liability. There has not been a change
in the discount rate since the prior measurement date.
Resolution 60-20 Page 88
Notes to Basic Financial Statements
NOTE 11 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
I.Discount Rate (Continued)
Sensitivity of the Town’s proportionate share of the net OPEB liability to changes in the discount rate.
The following presents the Town’s proportionate share of the net OPEB liability, as well as what the Town’s
proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1‐
percentage‐point lower (5.0%) or 1‐percentage‐point higher (7.0%) than the current discount rate:
1% Decrease 5.00%
Net OPEB Liability (Asset)(10,064)$
Current Discount Rate 6.00%
Net OPEB Liability (Asset) (266,936)$
1% Increase 7.00%
Net OPEB Liability (Asset)(483,162)$
Sensitivity of the Town’s proportionate share of the net OPEB liability to changes in the healthcare cost
trend rates.
The following presents the Town’s proportionate share of the net OPEB liability, as well as what the Town’s
proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates
that are 1‐percentage‐point (5.4% decreasing to 4.4%) or 1‐percentage point higher (6.4% decreasing to
5.5%) than the current healthcare cost trend rates:
1% Decrease 4.40%
Net OPEB Liability (Asset)(494,862)$
Trend Rate 5.40%
Net OPEB Liability (Asset) (266,936)$
1% Increase 6.40%
Net OPEB Liability (Asset)4,907$
J.OPEB Liabilities, OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of
resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Town’s
OPEB Plan and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined
on the same basis as they are reported by CERBT. For this purpose, benefit payments are recognized when
currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
At June 30, 2020, the City reported a payable of $82,621 for the outstanding amount of contributions to the
OPEB plan required for the year ended June 30, 2020.
Resolution 60-20 Page 89
Notes to Basic Financial Statements
NOTE 12 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A.Excess of Expenditures Over Appropriations
Special Donations/ Special Revenue Funds had expenditures over appropriations at June 30, 2020 in the
amount of $1,074.
B.Deficit Fund Balances
No individual funds had a deficit fund balance at June 30, 2020.
Remainder of this page left intentionally blank.
Resolution 60-20 Page 90
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Resolution 60-20 Page 91
Required
Supplemental Information
Resolution 60-20 Page 92
Variance with
Final Budget‐
Actual Positive
Original Final Amounts (Negative)
REVENUES
Property taxes 6,627,067$ 6,627,067$ 6,834,083$ 207,016$
Taxes other than property 440,200 440,200 537,836 97,636
Franchise fees 312,931 312,931 340,268 27,337
Licenses and permits 1,150,027 1,150,027 990,768 (159,259)
Intergovernmental 52,300 52,300 62,532 10,232
Use of money and property 298,900 298,900 787,575 488,675
Charges for services 912,552 912,552 1,511,483 598,931
Rental income 111,132 111,132 172,212 61,080
Fines and forfeitures ‐‐4,797 4,797
Interfund charges 2,005,271 2,005,271 1,858,142 (147,129)
Miscellaneous 20,901 20,901 114,205 93,304
Total revenues 11,931,281 11,931,281 13,213,901 1,282,620
EXPENDITURES
Current:
General government 2,541,455 2,541,455 2,126,483 414,972
Public safety 1,856,781 1,856,781 1,960,090 (103,309)
Community development 3,042,572 3,042,572 2,860,410 182,162
Public works 1,972,082 1,972,082 1,724,318 247,764
Parks and recreation 778,073 778,073 652,562 125,511
Nondepartmental:
Additional pension payments ‐‐‐‐
Total expenditures 10,190,963 10,190,963 9,323,863 867,100
Excess (Deficiency) of Revenues
Over Expenditures 1,740,318 1,740,318 3,890,038 2,149,720
OTHER FINANCING SOURCES (USES)
Transfers in ‐‐87,296 87,296
Transfers out (1,158,775) (1,158,775) (684,657) 474,118
Total Other Financing Sources (Uses)(1,158,775) (1,158,775) (597,361) 561,414
Net Change in Fund Balances 581,543 581,543 3,292,677 2,711,134
Fund Balances, Beginning of Year 12,875,678 12,875,678 12,875,678 ‐
Fund Balances, End of Year 13,457,221$ 13,457,221$ 16,168,355$ 2,711,134$
TOWN OF LOS ALTOS HILLS
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE ‐ BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
See notes to required supplementary information
GENERAL FUND
Budgeted Amounts
Resolution 60-20 Page 93
Required Supplemental Information
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019
Plan's Proportion of the Net Pension Liability
(Asset)0.03226% 0.07776% 0.08293% 0.08630% 0.05018% 0.05502%
Plan's Proportionate Share of the Net Pension
Liability (Asset)2,007,540$ 2,133,424$ 2,881,005$ 3,400,941$ 1,891,026$ 2,203,151$
Plan's Covered Payroll 1,607,595$ 1,624,334$ 1,641,880$ 1,786,436$ 1,877,689$ 2,381,293$
Plan's Proportionate Share of the Net Pension
Liability (Asset) as a Percentage of it's
Covered Payroll 124.88%131.34%175.47%190.38%100.71%92.52%
Plan’s Fiduciary Net Position as a Percentage
of the Total Pension Liability 79.82%78.40%74.06%73.31%77.69%77.73%
* Fiscal year 2015 was the 1st year of implementation.
Cost‐Sharing Multiple‐Employer Defined Pension Plan
Last 10 Years*
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
Miscellaneous Plan
Resolution 60-20 Page 94
Required Supplemental Information
Miscellaneous Plan
Fiscal Year 2015 2016 2017 2018 2019 2020
Actuarially determined contribution 181,280$ 221,507$ 250,340$ 1,640,692$ 345,118$ 397,870$
Contributions in relation to the actuarially
determined contributions (181,280) (221,507) (250,340) (1,640,692) (345,118) (397,870)
Contribution deficiency (excess)‐$ ‐$ ‐$ ‐$ ‐$ ‐$
Covered payroll 1,624,334$ 1,641,880$ 1,786,436$ 1,877,689$ 2,381,293$ $2,603,667
Contributions as a percentage of covered
payroll 11.16%13.49%14.01%87.38%14.49%15.28%
Notes to Schedule
Valuation date:6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, closed
Remaining amortization period 30 years
Asset valuation method 5 ‐year smoothed market
Inflation 2.75%
Salary increases Varies by Entry Age and Service
Investment rate of return 7.15%, net of pension plan investment and administrative expenses, including inflation
Retirement age 55 years Tier 160 years Tier 262 years Tier 3
Mortality The mortality table
used was developed
based on CalPERS’
specific data. The
probabilities of
mortality are based
on the 2017 CalPERS
Experience Study for
the period from 1997
to 2015. Pre‐
retirement and Post‐
retirement mortality
rates include 15
years of projected
mortality
improvement using
90% of Scale MP‐
2016 published by
the Society of
Actuaries. For more
details on this table,
please refer to the
CalPERs Experience
Study and Review of
Actuarial
Assumpions report
from December 2017
that can be found on
the CalPERS website.
The morta lity table
used was developed
based on CalPERS’
specific data. The
probabilities of
mortality are based
on the 2017 CalPERS
Experience Study for
the period from 1997
to 2015. Pre‐
retirement and Post‐
retirement mortality
rates include 15
years of projected
mortality
improvement using
90% of Scale MP‐
2016 published by
the Society of
Actuari es. For more
details on this table,
please refer to the
CalPERs Experience
Study and Review of
Actuarial
Assumpions report
from December 2017
that can be found on
the CalPERS website.
The mortality table
used was developed
based on CalPERS’
specific data. The
probabilities of
mortality are based
on the 2017 CalPERS
Experience Study for
the period from 1997
to 2015. Pre‐
retirement and Post‐
retirement mortality
rates include 15
years of projected
mortality
improvement using
90% of Scale MP‐
2016 published by
the Society of
Actuaries. For more
details on this table,
please refer to the
CalPERs Experience
Study and Review of
Actuarial
Assumpions report
from December 2017
that can be found on
the CalPERS website.
* Fiscal year 2015 was the 1st year of implementation, therefore only four years are shown.
SCHEDULE OF CONTRIBUTIONS
Last 10 Years*
Cost‐Sharing Multiple‐Employer Defined Pension Plan
Resolution 60-20 Page 95
Required Supplemental Information
Measurement Date 2017 2018 2019
Total OPEB Liability
Service Cost 57,272$ 59,133$ 61,054$
Interest on the total OPEB Liability 145,306 148,769 152,261
Changes in benefit terms ‐ ‐ ‐
Differences between expected and actual experience ‐ ‐ (346,011)
Changes of assumptions ‐ ‐ (25,019)
Benefit Payments (135,645)(157,788)(145,442)
Net change in total OPEB liability 66,933 50,114 (303,157)
Total OPEB liability ‐ beginning 2,432,311 2,499,244 2,549,358
Total OPEB liability ‐ ending (a)2,499,244$ 2,549,358$ 2,246,201$
Plan fiduciary net position
Contributions ‐ employer‐Town's contribution 403,645$ 157,788$ 145,442$
Contributions ‐ employer‐implicit subsidy ‐ ‐ ‐
Net investment income 200,657 174,834 146,116
Benefit payments (135,645) (157,788) (145,442)
Implicit rate subsidy fulfilled ‐ ‐ ‐
Administrative expense (1,019)(1,171)(507)
Other Expenses ‐ (2,906)‐
Net change in plan fiduciary net position 467,638 170,757 145,609
Plan fiduciary net position ‐ beginning 1,729,133 2,196,771 2,367,528
Plan fiduciary net position ‐ ending (b)2,196,771$ 2,367,528$ 2,513,137$
Net OPEB liability ‐ ending (a) ‐ (b)302,473$ 181,830$ (266,936)$
Town's covered payroll 1,856,292$ 2,082,980$ 2,364,255$
Town's proportionate share of the net OPEB liability (asset) as a
percentage of its covered‐employee payroll 16.29%8.73%‐11.29%
Notes to Schedule:
*Fiscal year 2018 was the first year of implementation.
Prepared for Town of Los Altos Hills
SCHEDULE OF CHANGES IN THE TOWN'S NET OPEB LIABILITY AND RELATED RATIOS
For the measurement year ending June 30
Last 10 Years*
Historical information is required only for measurement periods for which GASB 75 is applicable. Future year's information will be displayed up
to 10 years as information becomes available.
Resolution 60-20 Page 96
Required Supplemental Information
Fiscal Year Ending 2018 2019 2020
Annual money‐weighted rate of return, net of investment expense 6.00% 6.00% 6.00%
Prepared for Town of Los Altos Hills
For the fiscal year ending June 30
Last 10 Years*
SCHEDULE OF OPEB INVESTMENT RETURNS
*Fiscal year 2018 was the first year of implementaiton.
Resolution 60-20 Page 97
Required Supplemental Information
Fiscal Year Ending 2018 2019 2020
Actuarially determined contribution 103,483$100,051$59,226$
Contributions in relation to the actuarially
determined contributions (157,788)(145,442)(59,226)
Contribution deficiency (excess)(54,305)$(45,391)$‐$
Covered payroll 2,082,980$ 2,364,255$ 2,829,032$
Contributions as a percentage of covered
payroll 7.58%6.15%2.09%
Notes to Schedule
Valuation date: 6/30/2018 6/30/2018 6/30/2019
Methods and assumptions used to determine contribution rates:
Actuarial cost method
Asset valuation method
Inflation
Assumed Rate of Payroll Growth
Healthcare trend rates
Rate of return on assets
Retirement Age
Mortality rate
Other information
(1)Mortality rate is based on assumption
data of 20 years of projected on‐going
mortality improvement using Society of
* ‐ Fiscal year 2018 was the 1st year of implementation.
6.00%
Age 50 and 5 years of service
CalPERS Rates (1)
The ADC takes into account the implicit subsidy
Prepared for Town of Los Altos Hills
For the fiscal year ending June 30
Last 10 Years*
SCHEDULE OF OPEB CONTRIBUTIONS
Market value of assets
2.50%
3.00%
5.40% in 2021, fluctuates until ultimate rate of
4% in 2076.
Entry age normal, level percent of pay
Resolution 60-20 Page 98
Required Supplemental Information
NOTE 1 - BUDGETARY BASIS OF ACCOUNTING
The Town follows these procedures in establishing the budgetary data reflected in the required supplementary
information:
1.The City Manager submits to the City Council a proposed operating budget for the fiscal year
commencing the following July 1. The operating budget includes proposed expenditures and the means
of financing them.
2.Public hearings are held to obtain taxpayer comments.
3.The budget is legally enacted through passage of a minute order.
4.The City Manager is authorized to transfer budgeted amounts between departments within any fund.
However, any revisions that increase total expenditures of any fund must be approved by the City
Council. Expenditures may not legally exceed budgeted appropriations at the fund level without City
Council approval.
5.Budgets are adopted on a basis consistent with accounting principles generally accepted in the United
States of America. Amounts presented include amendments approved by the City Council.
NOTE 2 - PENSION LIABILITY AND RELATED CONTRIBUTIONS
These schedules present information that shows the Town’s proportionate share of the pension liability in the
cost sharing pools, actuarial information, and contributions. The proportionate share information is useful in
determining the Town’s liability in relation to all other entities in the pool.
NOTE 3 - SCHEDULE OF CHANGES IN THE TOWN’S NET OPEB LIABILITY AND RELATED RATIOS
This schedule shows the funding progress for the Town's Other Postemployment Benefits whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits as
required by current standards. There are no factors that significantly affect the identification of trends in the
amount reported. Only years when actuarial valuations were performed are shown. Additional years will be
included as subsequent valuations are performed.
Resolution 60-20 Page 99
Supplemental Information
Resolution 60-20 Page 100
Variance with
Final Budget‐
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 423,834$ 423,834$ 646,302$ 222,468$
Charges for services 48,390 40,000 135,915 95,915
Total revenues 472,224 463,834 782,217 318,383
EXPENDITURES
Capital outlay 1,400,000 1,400,000 1,336,307 63,693
Total expenditures 1,400,000 1,400,000 1,336,307 63,693
Excess (Deficiency) of Revenues
Over Expenditures (927,776) (936,166) (554,090) 382,076
OTHER FINANCING SOURCES (USES)
Transfers in 800,000 800,000 554,090 (245,910)
Total Other Financing Sources (Uses)800,000 800,000 554,090 (245,910)
Net Change in Fund Balances (127,776) (136,166)‐136,166
Fund Balances, Beginning of Year 745,050 745,050 745,050 ‐
Fund Balances, End of Year 617,274$ 608,884$ 745,050$ 136,166$
TOWN OF LOS ALTOS HILLS
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE ‐ BUDGET AND ACTUAL
STREET CAPITAL PROJECTS FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
Budgeted Amounts
Resolution 60-20 Page 101
Variance with
Final Budget‐
Actual Positive
Original Final Amounts (Negative)
OPERATING REVENUES
Charges for services 3,092,281$ 3,092,281$ 3,104,059$ 11,778$
Other income 3,220 3,220 9,287 6,067
Total Operating Revenues 3,095,501 3,095,501 3,113,346 17,845
OPERATING EXPENSES
Salaries and benefits 235,868 235,868 210,047 25,821
Contract services ‐ treatment plant 1,276,049 1,276,049 1,882,075 (606,026)
Professional services 195,605 195,605 106,809 88,796
Support goods and services 29,487 29,487 5,106 24,381
Repairs and maintenance 486,675 486,675 303,068 183,607
Utilities 12,969 12,969 6,335 6,634
Interfund charges 302,693 302,693 277,112 25,581
Machinery and equipment ‐ ‐ 1,209 (1,209)
Depreciation ‐ ‐ 213,777 (213,777)
Total Operating Expenditures 2,539,346 2,539,346 3,005,538 (466,192)
Operating income 556,155 556,155 107,808 (448,347)
NONOPERATING REVENUES (EXPENSES)
Capital Contributions ‐ sewer connection fees 130,930 130,930 85,595 (45,335)
Interest income 56,690 56,690 172,060 115,370
Nonoperating Revenues (Expenses), net 187,620 187,620 257,655 70,035
NET INCOME (LOSS) BEFORE OPERATING TRANSFERS
Transfers in ‐ ‐ 30,426 30,426
Changes in Net Position 743,775 743,775 395,889 (347,886)
Fund Balances, Beginning of Year 10,469,712 10,469,712 10,469,712 ‐
Fund Balances, End of Year 11,213,487$ 11,213,487$ 10,865,601$ (347,886)$
TOWN OF LOS ALTOS HILLS
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE ‐ BUDGET AND ACTUAL
SEWER ENTERPRISE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
Budgeted Amounts
Resolution 60-20 Page 102
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Resolution 60-20 Page 103
Non‐Major Governmental Funds
SPECIAL REVENUE FUNDS
Special revenue Funds account for specific revenues that are legally restricted to expenditures for
particular purposes.
Parks and Recreation In‐Lieu Fee Fund accounts for revenues from parks and recreation in‐lieu
fees, which are designated for park maintenance, improvement and construction.
Citizens’ Option for Public Safety (COPS) Fund accounts for revenues from the Citizens’ Option
for Public Safety Program, which are designated for public safety.
Special Donations Fund accounts for donations.
CAPITAL PROJECTS FUND
Other Capital Projects Funds accounts for financial resources that are necessary for the
acquisition or construction of major capital facilities.
Resolution 60-20 Page 104
CAPITAL
SPECIAL REVENUE FUNDS PROJECT FUNDS
Parks and
Recreation Special
In‐Lieu Fee COPS Donations Capital Projects
ASSETS
Cash and investments 35,438$ 607,042$ 130,233$ 1,970,597$
Accounts receivable 146 32,630 ‐ 7,036
Total Assets 35,584$ 639,672$ 130,233$ 1,977,633$
LIABILITIES
Accounts payable ‐$ ‐$ ‐$ 52,582$
Accrued liabilities ‐1,094 ‐ 4,073
Total Liabilities ‐1,094 ‐56,655
FUND BALANCES
Committed ‐‐‐1,920,978
Restricted 35,584 638,578 130,233 ‐
Total Fund Balances (Deficit)35,584 638,578 130,233 1,920,978
TOTAL LIABILITIES AND FUND BALANCES 35,584$ 639,672$ 130,233$ 1,977,633$
TOWN OF LOS ALTOS HILLS
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEETS
JUNE 30, 2020
Resolution 60-20 Page 105
Total
Nonmajor
Governmental
Funds
2,743,310$
39,812
2,783,122$
52,582$
5,167
57,749
1,920,978
804,395
2,725,373
2,783,122$
Resolution 60-20 Page 106
CAPITAL
SPECIAL REVENUE FUNDS PROJECT FUNDS
Parks and
Recreation Special Capital
In‐Lieu Fund COPS Donations Projects
REVENUES
Intergovernmental ‐$ 185,743$ ‐$ ‐$
Investment income 1,603 28,858 ‐ 79,960
Rental income ‐ ‐ ‐ 50,322
Charges for services ‐ ‐ ‐ 230,858
Other revenues ‐ ‐ 100,000 125,400
Total Revenues 1,603 214,601 100,000 486,540
EXPENDITURES
General government ‐ ‐ 1,074 ‐
Public safety ‐ 124,528 ‐ ‐
Capital outlay ‐ ‐ ‐ 370,064
Total Expenditures ‐ 124,528 1,074 370,064
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 1,603 90,073 98,926 116,476
OTHER FINANCING SOURCES (USES)
Transfers in ‐ ‐ ‐ 140,141
Transfers (out)‐ (87,296) ‐ (40,000)
Total Other Financing Sources (Uses)‐ (87,296) ‐ 100,141
NET CHANGE IN FUND BALANCES 1,603 2,777 98,926 216,617
BEGINNING FUND BALANCES 33,981 635,801 31,307 1,704,361
ENDING FUND BALANCES 35,584$ 638,578$ 130,233$ 1,920,978$
TOWN OF LOS ALTOS HILLS
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2020
Resolution 60-20 Page 107
Total
Nonmajor
Governmental
Funds
185,743$
110,421
50,322
230,858
225,400
802,744
1,074
124,528
370,064
495,666
307,078
140,141
(127,296)
12,845
319,923
2,405,450
2,725,373$
Resolution 60-20 Page 108
SPECIAL REVENUE FUNDS
PARKS AND RECREATION
IN‐LIEU FEE
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
GOVERNMENTAL REVENUES
Charges for services 42,000$ ‐$ (42,000)$ ‐$ ‐$ ‐$
Intergovernmental ‐‐‐100,000 185,743 85,743
Rental income ‐‐‐‐‐‐
Investment income ‐1,603 1,603 ‐28,858 28,858
Other revenues ‐‐‐‐‐‐
Total Revenues 42,000 1,603 (40,397) 100,000 214,601 114,601
EXPENDITURES
General government ‐ ‐ ‐ ‐ ‐ ‐
Public safety ‐‐‐269,757 124,528 145,229
Capital outlay ‐‐‐‐‐‐
Total Expenditures ‐‐‐269,757 124,528 145,229
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 42,000 1,603 (40,397) (169,757) 90,073 (30,628)
OTHER FINANCING SOURCES (USES)
Transfers in ‐‐‐‐‐‐
Transfers out ‐‐‐‐(87,296) (87,296)
Total Other Financing Sources (Uses)‐‐‐‐(87,296) (87,296)
NET CHANGES IN FUND BALANCES 42,000$ 1,603 (40,397)$ (169,757)$ 2,777 (117,924)$
BEGINNING FUND BALANCES $33,981 $635,801
ENDING FUND BALANCES 35,584$ 638,578$
(Continued)
COPS
TOWN OF LOS ALTOS HILLS
BUDGETED NONMAJOR FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2020
Resolution 60-20 Page 109
TOWN OF LOS ALTOS HILLS
BUDGETED NONMAJOR FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2020
SPECIAL REVENUE FUNDS
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
GOVERNMENTAL REVENUES
Charges for services ‐$‐$ ‐$ ‐$230,858$ 230,858$
Intergovernmental ‐ ‐ ‐ 200,000 ‐ (200,000)
Rental income ‐ ‐ ‐ 50,614 50,322 (292)
Investment Income ‐ ‐ ‐ 39,990 79,960 39,970
Other revenues 100,000 100,000 ‐ 15,000 125,400 110,400
Total Revenues 100,000 100,000 ‐ 305,604 486,540 180,936
EXPENDITURES
General government ‐ 1,074 (1,074) ‐ ‐ ‐
Public safety ‐ ‐ ‐ ‐ ‐ ‐
Capital outlay ‐ ‐ ‐ 2,080,600 370,064 1,710,536
Total Expenditures ‐1,074 (1,074) 2,080,600 370,064 1,710,536
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 100,000 98,926 1,074 (1,774,996) 116,476 1,891,472
OTHER FINANCING SOURCES (USES)
Transfers in ‐ ‐ ‐ 193,018 140,141 52,877
Transfers out ‐ ‐ ‐ ‐ (40,000) ‐
Total Other Financing Sources (Uses)‐‐‐ 193,018 100,141 52,877
NET CHANGE IN FUND BALANCES 100,000$ 98,926 1,074$ (1,581,978)$ 216,617 $1,944,349
BEGINNING FUND BALANCES 31,307 1,704,361
ENDING FUND BALANCES 130,233$ 1,920,978$
SPECIAL DONATIONS
CAPITAL PROJECT FUNDS
CAPITAL PROJECTS
Resolution 60-20 Page 110
Balance Balance
June 30, 2019 Additions Reductions June 30, 2020
WEST LOYOLA SEWER ASSESSMENT DISTRICT
Restricted cash and investments 295,301$ (5,958)$ (899)$ 288,444$
Miscellaneous receivables ‐ 8,154 ‐ 8,154
Total Assets 295,301$ 2,196$ (899)$ 296,598$
LIABILITIES
Accounts payable 899$ ‐$ (899)$ ‐$
Due to bond holders 294,402 2,196 ‐ 296,598
Total Liabilities 295,301$ 2,196$ ‐$ 296,598$
ASSETS
TOWN OF LOS ALTOS HILLS
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUND
FOR THE YEAR ENDED JUNE 30, 2020
Resolution 60-20 Page 111
STATISTICAL
SECTION
Resolution 60-20 Page 112
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Resolution 60-20 Page 113
Contents Page
Financial Trends ‐ These schedules contain trend information to help the reader
understand how Town’s financial performance and well‐being have changed over time.
96
Revenue Capacity ‐ These schedules contain information to help the reader assess one of
the Town’s most significant local revenue source, the property tax.
106
Debt Capacity ‐ These schedules present information to help the reader assess the
affordability of the Town’s current levels of outstanding debt and its ability to issue
additional debt in the future.
110
Demographic and Economic Information ‐ These schedules offer demographic and
economic indicators to help the reader understand the environment within which the
Town’s financial activities take place.
112
Operating Information ‐ These schedules contain service and infrastructure data to help
the reader understand how the information in the Town’s CAFR relates to the services the
Town provides and activities it performs.
115
Statistical Section
This part of the Town of Los Altos Hills Comprehensive Annual Financial Report presents the detailed
information as a context for understand what the information in the financial statements, note disclosures,
and required supplementary information says about the Town’s overall financial health.
Resolution 60-20 Page 114
Statistical Section
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2011 2012 2013 2014
Governmental activities:
Invested in capital assets, net 24,421,688$ 25,681,352$ 26,654,599$ 25,535,393$
Restricted 960,737 1,507,673 1,787,750 1,520,545
Unrestricted 7,654,909 4,582,714 4,349,494 7,124,524
Total governmental activities net position 33,037,334$ 31,771,739$ 32,791,843$ 34,180,462$
Business‐type activities:
Invested in capital assets, net 4,369,141$ 4,452,208$ 4,312,151$ 4,774,920$
Restricted ‐ ‐ ‐ ‐
Unrestricted 2,856,291 2,915,748 3,227,161 3,075,429
Total business‐type activities net position 7,225,432$ 7,367,956$ 7,539,312$ 7,850,349$
Primary government:
Invested in capital assets, net 28,790,829$ 30,133,560$ 30,966,750$ 30,310,313$
Restricted 960,737 1,507,673 1,787,750 1,520,545
Unrestricted 10,511,200 7,498,462 7,576,655 10,199,953
Total net position 40,262,766$ 39,139,695$ 40,331,155$ 42,030,811$
Source: Audited Financial Statements
Resolution 60-20 Page 115
Statistical Section
2015 2016 2017 2018 2019 2020
25,370,209$ 24,700,834$ 24,739,048$ 25,898,305$ 26,305,865$ 26,511,993$
1,666,812 1,706,954 115,275 192,287 1,229,812 1,354,610
7,064,274 9,687,552 13,377,599 13,052,174 14,219,604 17,365,028
34,101,295$ 36,095,340$ 38,231,922$ 39,142,766$ 41,755,281$ 45,231,631$
5,022,034$ 5,244,525$ 5,831,322$ 6,704,180$ 7,264,306$ 7,574,231$
‐ ‐ ‐ ‐ ‐ ‐
2,774,135 2,582,858 2,607,749 2,647,350 3,205,406 3,291,370
7,796,169$ 7,827,383$ 8,439,071$ 9,351,530$ 10,469,712$ 10,865,601$
30,392,243$ 29,945,359$ 30,570,370$ 32,602,485$ 33,570,171$ 34,086,224$
1,666,812 1,706,954 115,275 192,287 1,229,812 1,354,610
9,838,409 12,270,410 15,985,348 15,699,524 17,425,010 20,656,398
41,897,464$ 43,922,723$ 46,670,993$ 48,494,296$ 52,224,993$ 56,097,232$
Resolution 60-20 Page 116
Statistical Section
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2011 2012 2013 2014
Governmental activities*:
Expenses:
Administration 1,822,653$ 2,046,868$ 1,837,120$ 639,350$
Public safety 1,384,604 1,345,461 1,440,002 1,555,955
Community development 2,111,541 2,437,335 2,448,821 3,224,490
Parks and recreation 1,310,566 1,300,211 1,314,872 1,479,822
Drainage and street operations 934,755 700,017 627,512 842,532
Public works ‐ ‐ ‐ ‐
Interest on long‐term debt 71,553 44,305 4,526 3,955
Total governmental activities expenses 7,635,672 7,874,197 7,672,853 7,746,104
Program revenues:
Charges for services:
Administration ‐ ‐ ‐ ‐
Public safety ‐ ‐ 3,200 ‐
Community development 1,362,932 1,843,682 1,768,740 1,871,118
Parks and recreation 532,623 476,599 433,785 281,886
Drainage and street operations 601,078 340,010 169,526 186,631
Public works ‐ ‐ ‐ ‐
Operating contributions and grants 447,717 531,671 1,267,777 500,245
Capital contributions and grants ‐ ‐ ‐ 266,736
Total governmental activities program revenues 2,944,350 3,191,962 3,643,028 3,106,616
Total governmental activities net program expenses (4,691,322) (4,682,235) (4,029,825) (4,639,488)
General revenues and other changes in net position:
Governmental revenues:
Taxes
Property taxes 3,393,604 3,543,231 3,785,652 4,153,331
Other taxes 544,092 427,826 594,656 626,479
Franchise taxes 428,332 430,149 421,634 463,598
Use of money and property 178,450 156,743 142,931 199,609
Rental income ***‐ ‐ ‐ ‐
Investment Income ***‐ ‐ ‐ ‐
Other unrestricted revenue 193,425 39,448 34,057 585,089
Sale of Capital Assets‐net 6,600 ‐ ‐ ‐
Other intergovernmental revenue 69,166 ‐ ‐ ‐
Special Item**‐ (1,250,000) ‐ ‐
Transfers 71,345 69,243 71,000 ‐
Total governmental activities general revenues
and other changes in net position 4,885,014 3,416,640 5,049,930 6,028,106
Total governmental activities changes in net position 193,692 (1,265,595) 1,020,105 1,388,618
*Governmental Activities affected by implementation of cost allocation plan in 2014.
** Special item is related to provision for one‐time refund of Roadway Impact Fee
*** Change in Financial Reporting in 2018
Note 1: In fiscal year 2015‐16, there are changes to the account groupings between programs. For comparison purpose, we added
an additional column for fiscal year 2014‐15, in which the 2014‐15 audited numbers are regrouped to be consistent with the new
grouping in 2015‐16. One main difference in the 2014‐15 numbers is in the treatment of overhead allocation paid by the sewer fund.
The original 2014‐15 audited charges for services included $46,860 overhead allocation to sewer operations.
The new grouping records this as "transfers".
Source: Audited Financial Statements
Resolution 60-20 Page 117
Statistical Section
2015 2015 (Note 1) 2016 2017 2018 2019 2020
538,004$ 1,923,816$ 2,339,474$ 2,119,990$ 2,459,576$ 2,477,572$ 2,639,241$
1,567,747 1,379,621 1,601,654 1,817,299 2,194,391 2,388,908 2,388,202
3,324,935 2,289,743 2,167,702 2,210,748 2,894,119 2,768,476 3,408,027
1,358,479 621,974 738,495 680,522 1,157,213 851,096 770,495
839,577 ‐ ‐ ‐ ‐ ‐ ‐
‐ 1,413,588 1,252,271 1,461,155 1,669,907 2,001,602 2,086,121
3,304 3,304 1,492 ‐ ‐ ‐ ‐
7,632,046 7,632,046 8,101,088 8,289,714 10,375,206 10,487,654 11,292,086
‐ 29,038 72,566 27,615 1,804,216 1,970,336 2,108,477
1,302 1,302 ‐ ‐ 156,083 132,138 185,743
2,623,027 2,433,038 2,217,874 2,219,769 1,792,025 1,546,016 2,028,933
316,391 269,295 199,241 222,834 394,729 255,128 224,853
340,110 ‐ ‐ ‐ ‐ ‐ ‐
‐ 548,157 388,931 549,729 513,771 476,146 592,434
338,453 291,593 303,292 343,107 194,053 230,351 347,577
246,533 246,533 398,990 69,635 94,031 185,744 591,956
3,865,816 3,818,956 3,580,894 3,432,689 4,948,908 4,795,859 6,079,973
(3,766,230) (3,813,090) (4,520,194) (4,857,025) (5,426,298) (5,691,795) (5,212,113)
4,606,184 4,606,184 4,960,016 5,302,028 5,721,224 6,385,652 6,834,083
649,542 649,542 565,055 666,631 724,609 522,946 603,657
513,997 513,997 474,732 573,336 579,333 530,991 340,268
208,776 208,776 356,479 222,688 ‐ ‐ ‐
‐ ‐ ‐ ‐ 218,816 ‐ ‐
‐ ‐ ‐ ‐ 32,349 530,582 897,996
174,469 174,469 4,538 13,747 39,051 334,139 42,885
‐ ‐ ‐ 5,500 5,885 ‐ ‐
‐ ‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐ ‐ ‐
‐ 46,860 153,419 209,677 ‐ ‐ (30,426)
6,152,968 6,199,828 6,514,239 6,993,607 7,321,267 8,304,310 8,688,463
2,386,738 2,386,738 1,994,045 2,136,582 1,894,969 2,612,515 3,476,350
Resolution 60-20 Page 118
Statistical Section
Changes in Net Position (continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2011 2012 2013 2014
Business‐type activities:
Expenses:
Sewer 1,022,325$ 1,328,856$ 1,242,885$ 1,271,651$
Solid waste ‐ ‐ ‐ ‐
Total business‐type activities expenses 1,022,325 1,328,856 1,242,885 1,271,651
Program revenues:
Charges for services:
Sewer 1,406,130 1,355,667 1,359,338 1,382,472
Solid waste ‐ ‐ ‐ ‐
Operating contributions and grants ‐ ‐ ‐ ‐
Capital contributions and grants (1,486,331) 170,955 125,183 175,497
Total business‐type activities program revenues (80,201) 1,526,622 1,484,521 1,557,969
Total business‐type activities net program revenue (expenses)(1,102,526) 197,766 241,636 286,318
General revenues and other changes in net position:
Use of money and property 29,585 14,001 720 24,719
Investment Income ***‐ ‐ ‐ ‐
Other unrestricted revenue ‐ ‐ ‐ ‐
Transfers (71,345) (69,243) (71,000) ‐
Total business‐type activities general revenues
and other changes in net position (41,760) (55,242) (70,280) 24,719
Total business‐type activities changes in net position (1,144,286) 142,524 171,356 311,037
Total primary government change in net position (950,594)$ (1,123,071)$ 1,191,461$ 1,699,655$
*Governmental Activities affected by implementation of cost allocation plan in 2014.
** Special item is related to provision for one‐time refund of Roadway Impact Fee
*** Change in Financial Reporting in 2018
Note 1: In fiscal year 2015‐16, there are changes to the account groupings between programs. For comparison purpose, we added
an additional column for fiscal year 2014‐15, in which the 2014‐15 audited numbers are regrouped to be consistent with the new
grouping in 2015‐16. One main difference in the 2014‐15 numbers is in the treatment of overhead allocation paid by the sewer fund.
The original 2014‐15 audited charges for services included $46,860 overhead allocation to sewer operations.
The new grouping records this as "transfers".
Source: Audited Financial Statements
Resolution 60-20 Page 119
Statistical Section
2015 2015 (Note 1) 2016 2017 2018 2019 2020
1,591,743$ 1,544,883$ 1,997,399$ 2,129,895$ 2,114,609$ 2,061,261$ 3,005,538$
‐ ‐ ‐ ‐ ‐ ‐ ‐
1,591,743 1,544,883 1,997,399 2,129,895 2,114,609 2,061,261 3,005,538
1,392,029 1,392,029 1,925,636 2,759,287 2,917,428 3,005,050 3,104,059
‐ ‐ ‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐ ‐ ‐
234,339 234,339 221,010 185,369 130,930 98,183 85,595
1,626,368 1,626,368 2,146,646 2,944,656 3,048,358 3,103,233 3,189,654
34,625 81,485 149,247 814,761 933,749 1,041,972 184,116
19,533 19,533 32,557 4,134 ‐ ‐ ‐
‐ ‐ ‐ ‐ 6,642 76,210 172,060
‐ ‐ 2,829 2,470 3,220 ‐ 9,287
‐ (46,860) (153,419) (209,677) ‐ ‐ 30,426
19,533 (27,327) (118,033) (203,073) 9,862 76,210 211,773
54,158 54,158 31,214 611,688 943,611 1,118,182 395,889
2,440,896$ 2,440,896$ 2,025,259$ 2,748,270$ 2,838,580$ 3,730,697$ 3,872,239$
Resolution 60-20 Page 120
Statistical Section
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2011 2012 2013 2014
General Fund
Restricted ‐$ ‐$ ‐$ ‐$
Committed 170,000 240,000 286,150 285,000
Assigned ‐ ‐ ‐ ‐
Unassigned 5,607,882 3,063,979 2,990,283 5,420,162
Total General Fund 5,777,882$ 3,303,979$ 3,276,433$ 5,705,162$
All other governmental funds
Restricted 960,737$ 1,507,673$ 1,787,750$ 1,520,545$
Committed 1,311,759 75,112 354,495 519,059
Unassigned ‐ (184,268) ‐ (435)
Total all other governmental funds 1,311,759$ 1,398,517$ 2,142,245$ 2,039,169$
Source: Audited Financial Statements
Resolution 60-20 Page 121
Statistical Section
2015 2016 2017 2018 2019 2020
‐$ ‐$ ‐$ ‐$ 528,723$ 550,215$
360,000 1,765,000 1,840,000 3,125,000 3,155,000 6,371,700
‐ 350,000 350,000 350,000 350,000 2,071,500
7,048,964 7,606,176 10,267,874 8,254,294 8,841,955 7,174,940
7,408,964$ 9,721,176$ 12,457,874$ 11,729,294$ 12,875,678$ 16,168,355$
1,691,286$ 1,706,954$ 115,275$ 192,287$ 701,089$ 804,395$
934,569 1,086,413 2,050,545 2,041,192 2,449,411 2,666,028
‐ ‐ ‐ ‐ ‐ ‐
2,625,855$ 2,793,367$ 2,165,820$ 2,233,479$ 3,150,500$ 3,470,423$
Resolution 60-20 Page 122
Statistical Section
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2011 2012 2013 2014 2015
Revenues:
Property taxes 3,393,604$ 3,543,251$ 3,785,652$ 4,153,332$ 4,606,184$
Taxes other than property 503,766 423,353 545,228 524,763 645,836
Franchise fees 428,332 430,149 421,634 463,598 513,997
Licenses and permits 820,694 651,476 754,460 1,006,907 1,485,394
Intergovernmental 428,833 457,952 1,264,716 610,850 397,470
Use of money and property 210,904 196,891 200,937 281,583 295,447
Investment Income **‐ ‐ ‐ ‐ ‐
Charges for services 1,605,081 1,836,621 1,407,987 1,411,082 1,858,220
Interfund charges ‐ ‐ ‐ ‐ ‐
Rental income ‐ ‐ ‐ ‐ ‐
Fines and forfeitures ‐ ‐ ‐ ‐ ‐
Miscellaneous 360,205 249,686 241,344 599,992 175,380
Total revenues 7,751,419 7,789,379 8,621,958 9,052,107 9,977,928
Expenditures
Current:
Administration 1,453,778 1,580,902 1,363,140 276,162 447,843
Public safety 1,120,237 1,057,330 1,131,772 1,209,028 1,205,913
Community development 1,686,842 1,992,581 1,918,408 2,581,031 2,557,545
Parks and recreation 1,060,335 1,049,563 1,033,239 1,178,463 1,044,944
Drainage and street operation 756,279 549,782 492,889 678,195 645,804
Public works ‐ ‐ ‐ ‐ ‐
Debt service:‐ ‐ ‐ ‐ ‐
Principal 142,285 1,377,532 15,048 15,618 16,212
Interest 73,264 62,725 4,536 3,966 3,372
Additional pension and OPEB payments ‐ ‐ ‐ ‐ ‐
Capital outlay 2,321,552 1,584,367 2,719,447 783,990 1,765,807
Total expenditures 8,614,572 9,254,782 8,678,479 6,726,453 7,687,440
Excess (deficiency) of revenues
over (under) expenditures (863,153) (1,465,403) (56,521) 2,325,654 2,290,488
Other financing sources (uses)
Transfers in 2,406,621 2,900,401 2,178,543 1,490,019 2,790,955
Transfers out (2,335,276) (2,831,158) (2,107,543) (1,490,019) (2,790,955)
Sale of assets 6,600 ‐ ‐ ‐ ‐
Proceeds from debt 47,000 ‐ ‐ ‐ ‐
Special Item*‐ (1,250,000) ‐ ‐ ‐
Other financing sources (uses)124,945 (1,180,757)71,000 ‐ ‐
Net change in fund balances (738,208)$ (2,646,160)$ 14,479$ 2,325,654$ 2,290,488$
Debt service as a percentage of
noncapital expenditures 3.5%23.1%0.3%0.3%0.3%
* Special item is related to provision for one‐time refund of Roadway Impact Fee
** Change in Financial Reporting in 2018
Note 1:
In fiscal year 2015‐16, there are changes to the account groupings between programs. For comparison purpose, we added an additional
column for fiscal year 2014‐15, in which the 2014‐15 audited expenditures were regrouped to be consistent with the new grouping in 2015‐16.
One major difference in the 2014‐15 numbers is the treatment of overhead allocation. The original 2014‐15 audited expenditures for
Administration was reduced due to overhead charges to other programs. Under the 2015‐16 new groupings, overhead allocation was
eliminated within General Fund and overhead charges to other governmental funds and sewer funds are reported as "transfers"
rather than "expenditures" / "expenses".
Source: Audited Financial Statements
Resolution 60-20 Page 123
Statistical Section
2015 (Note 1) 2016 2017 2018 2019 2020
4,606,184$ 4,960,016$ 5,302,028$ 5,721,224$ 6,385,652$ 6,834,083$
645,836 511,091 610,337 667,037 466,062 537,836
513,997 474,732 573,336 579,333 530,991 340,268
1,485,394 1,334,953 1,544,996 1,246,623 1,060,772 990,768
397,470 752,717 412,855 489,392 574,257 894,577
295,447 356,479 222,688 ‐ ‐ ‐
‐ ‐ ‐ 32,349 530,582 897,996
1,811,360 1,449,127 1,482,830 1,625,306 1,282,436 1,878,256
‐ ‐ ‐ 1,632,812 1,748,699 1,858,142
‐ ‐ ‐ 218,816 155,719 222,534
‐ ‐ ‐ 381 ‐ 4,797
175,380 102,599 62,048 56,902 364,999 339,605
9,931,068 9,941,714 10,211,118 12,270,175 13,100,169 14,798,862
1,557,773 1,859,492 1,813,551 1,983,939 2,113,083 2,127,557
1,075,160 1,255,198 1,560,295 1,781,425 1,974,021 2,084,618
1,725,877 1,641,631 1,833,654 2,540,121 2,642,159 2,860,410
466,881 565,440 575,594 722,696 742,986 652,562
‐ ‐ ‐ ‐ ‐ ‐
1,066,943 951,786 1,214,072 1,678,516 1,632,329 1,724,318
‐ ‐ ‐ ‐ ‐ ‐
16,212 81,360 ‐ ‐ ‐ ‐
3,372 1,492 ‐ ‐ ‐ ‐
‐ ‐ ‐ 1,660,209 ‐ ‐
1,765,807 1,259,010 1,314,478 2,564,189 1,932,186 1,706,371
7,678,025 7,615,409 8,311,644 12,931,095 11,036,764 11,155,836
2,253,043 2,326,305 1,899,474 (660,920) 2,063,405 3,643,026
3,097,282 2,299,774 2,988,073 2,215,434 2,113,748 781,527
(3,059,837) (2,146,355) (2,778,396) (2,215,434) (2,113,748) (811,953)
‐ ‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐ ‐
‐ ‐ ‐ ‐ ‐ ‐
37,445 153,419 209,677 ‐ ‐ (30,426)
2,290,488$ 2,479,724$ 2,109,151$ (660,920)$ 2,063,405$ 3,612,600$
0.3%1.3%0.0%0.0%0.0%0.0%
Resolution 60-20 Page 124
Statistical Section
Assessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
Fiscal Year Taxable Total % change Property tax
Ended Less Assessed Direct Tax in assessed revenue per
June 30 Secured Roll Unsecured Roll Exemptions Value Rate value fin stmt
2011 4,900,568,415$ 3,203,017$ 15,335,600$ 4,888,435,832$ 0.072%‐0.08% 3,393,604$
2012 5,083,703,530 6,024,790 15,283,800 5,074,444,520 0.074% 3.79% 3,543,251
2013 5,329,042,601 5,859,024 15,300,600 5,319,601,025 0.078% 4.82% 3,785,652
2014 5,850,746,460 5,041,770 15,632,400 5,840,155,830 0.079% 9.76% 4,153,332
2015 6,220,950,601 3,384,189 14,732,200 6,209,602,590 0.074% 6.33% 4,606,184
2016 6,668,595,288 3,162,336 14,589,400 6,657,168,224 0.075% 7.21% 4,960,016
2017 7,103,893,376 3,727,197 14,357,000 7,093,263,573 0.075% 6.55% 5,302,028
2018 7,557,427,113 3,513,572 14,109,200 7,546,831,485 0.076% 6.39% 5,721,224
2019 8,089,462,808 3,773,145 13,935,660 8,079,300,293 0.079% 7.06% 6,385,652
2020 8,527,137,778 3,724,990 13,869,800 8,516,992,968 0.080% 5.42% 6,834,083
The total direct tax rate is computed by dividing the amount of property tax revenue recognized in the financial statements
by the taxable assessed value.
Source: Santa Clara County Assessor 2019/20 Combined Tax Rolls
Resolution 60-20 Page 125
Statistical Section
Property Tax Rates - Direct and Overlapping Governments
Last Ten Fiscal Years
Basic El Camino School/College Santa Clara County Mid‐Per
Fiscal County‐wide Hospital District Valley and Library Peninsula Hundred $
Year Levy Levy Levy Water District Retirement Open Space Total
2011 1.0000 0.01290 0.1522 0.0072 0.0507 ‐ 1.2230
2012 1.0000 0.01290 0.1495 0.0064 0.0459 ‐ 1.2147
2013 1.0000 0.01290 0.1956 0.0069 0.0463 ‐ 1.2617
2014 1.0000 0.01290 0.1859 0.0070 0.0447 ‐ 1.2505
2015 1.0000 0.00910 0.1784 0.0065 0.0503 ‐ 1.2481
2016 1.0000 0.01290 0.1704 0.0057 0.0500 0.0008 1.2398
2017 1.0000 0.01290 0.1618 0.0086 0.0498 0.0006 1.2337
2018 1.0000 0.01000 0.1583 0.0062 0.0621 0.0009 1.2375
2019 1.0000 0.01000 0.1895 0.0042 0.0589 0.0018 1.2644
2020 1.0000 0.01000 0.1940 0.0082 0.0581 0.0032 1.2735
Source: County of Santa Clara Assessor 2010/11 ‐ 2019/20 Tax Rate Table
Resolution 60-20 Page 126
Statistical Section
Principal Taxpayers
Current Year And Ten Years Ago
2020 2011
Percentage Percentage
of Net of Net
Assessed Assessed Assessed Assessed
Taxpayer Type of Property Value Valuation Value Valuation
LaPaloma Property LLC Single family residential 60,122,148$ 0.80%‐$ ‐$
Campo Vista Lane Vacant 37,357,243 0.50%‐ ‐
Douglas M Leone Trustee and Et Al Single family residential 31,746,923 0.42%‐ ‐
Westwind LAH LLC Vacant 26,010,000 0.34%‐ ‐
Weijin Dai Trustee Single family residential 25,709,301 0.34%‐ ‐
Homa Natoma LLC Single family residential 25,615,016 0.34%‐ ‐
Northfork Vineyards LLC Single family residential 24,655,675 0.33%‐ ‐
Energy Efficient Sustainable Single family residential 22,762,253 0.30%‐ ‐
Amit Singh Trustee and Et Al Single family residential 21,972,468 0.29%‐ ‐
Kumar Malavalli Trustee and Et Al Single family residential 20,345,515 0.27%‐ ‐
Totals 296,296,542$ 3.93%‐$ ‐$
Note: Information is not available for 2011
Source: HDL Property Tax Summary
Resolution 60-20 Page 127
Statistical Section
Property Tax Levies and Collections
Last Ten Fiscal Years
Value of
property
Fiscal Year Tax Levy % of Chg Amount % of Levy Amount % of Levy
subject to
local tax rate
2011 3,393,604$ ‐1% 3,393,604$ 100% 3,393,604$ 100% 4,888,435,832$
2012 3,543,251 4% 3,543,251 100% 3,543,251 100% 5,074,444,520
2013 3,785,652 7% 3,785,652 100% 3,785,652 100% 5,319,601,025
2014 4,153,332 10% 4,153,332 100% 4,153,332 100% 5,840,155,830
2015 4,606,184 11% 4,606,184 100% 4,606,184 100% 6,209,602,590
2016 4,960,016 8% 4,960,016 100% 4,960,016 100% 6,657,168,224
2017 5,302,028 7% 5,302,028 100% 5,302,028 100% 7,093,263,573
2018 5,721,224 8% 5,721,224 100% 5,721,224 100% 7,546,831,485
2019 6,385,652 12% 6,385,652 100% 6,385,652 100% 8,079,300,293
2020 6,834,083 7% 6,834,083 100% 6,834,083 100% 8,516,992,968
The County of Santa Clara levies, bills, and collects property taxes for the Town. Under the Teeter Bill,
the County remits the entire amount levied and handles the delinquencies, retaining interest and penalties.
Sources: Santa Clara County Assessor Office 2018‐2019 Combined Tax Rolls
Town of Los Altos Hills financial reports
Collected within FY Total Collections
Resolution 60-20 Page 128
Statistical Section
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Total Governmental Debt to Debt
Fiscal Capital Activities and Personal per
Year Lease Loan Primary Government Income Capita
2011 1,363,047$ 142,724$ 1,505,771$ 16%167
2012 ‐ 128,239 128,239 14%16
2013 ‐ 113,191 113,191 13%14
2014 ‐ 97,572 97,572 12%12
2015 ‐ 81,360 81,360 9%10
2016 ‐ ‐ ‐ ‐ ‐
2017 ‐ ‐ ‐ ‐ ‐
2018 ‐ ‐ ‐ ‐ ‐
2019 ‐ ‐ ‐ ‐ ‐
2020 ‐ ‐ ‐ ‐ ‐
The Town entered into a lease agreement in the amount of $2,000,000 in September, 2004 to finance
the new Town Hall project. In Fiscal Year 2011‐12, Town paid‐off outstanding loan amount of $1363,047.
In fiscal year 2010‐11, Town received loan in the amount of $47,000 for another energy efficiency project.
During Fiscal Year 2015‐16, the Town paid off the loan balance.
Source: Debt Data ‐ Town of Los Altos Hills Financial Statements
Population: California Department of Finance
Resolution 60-20 Page 129
Statistical Section
Direct and Overlapping Debt
For the Year Ended June 30, 2020
TOWN OF LOS ALTOS HILLS
2019‐20 Assessed Valuation: $8,516,992,968
Total Debt Town’s Share of
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:6/30/2020 % Applicable (1) Debt 6/30/20
Santa Clara County 881,455,000$ 1.652%14,561,637$
Foothill‐DeAnza Community College District 607,960,590 4.769 28,993,641
Palo Alto Unified School District 273,760,962 7.140 19,546,533
Mountain View‐Los Altos Union High School District 131,002,659 9.879 12,941,753
Los Altos School District 177,350,000 21.145 37,500,658
El Camino Hospital District 120,690,000 8.172 9,862,787
Midpeninsula Regional Open Space District 88,810,000 2.722 2,417,408
Santa Clara Valley Water District Benefit Assessment District 65,495,000 1.652 1,081,977
Town of Los Altos Hills 0 100.0
Town of Los Altos Hills 1915 Act Bonds 1,630,000 100.1,630,000
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 128,536,394$
OVERLAPPING GENERAL FUND DEBT:
Santa Clara County General Fund Obligations 966,725,100$ 1.652%15,970,299$
Santa Clara County Pension Obligation Bonds 346,996,639 1.652 5,732,384
Santa Clara County Board of Education Certificates of Participation 3,480,000 1.652 57,490
Foothill‐DeAnza Community College District Certificates of Participation 24,092,620 4.769 1,148,977
Mountain View‐Los Altos Union High School District Certificates of Participation 2,834,136 9.879 279,984
Los Altos School District Certificates of Participation 2,185,335 21.145 462,089
Santa Clara County Vector Control District Certificates of Participation 2,010,000 1.652 33,205
Midpeninsula Regional Park District General Fund Obligations 111,985,600 2.722 3,048,248
TOTAL GROSS OVERLAPPING GENERAL FUND DEBT 26,732,676$
Less: County supported obligations 530,810
TOTAL NET OVERLAPPING GENERAL FUND DEBT 26,201,866
TOTAL DIRECT DEBT ‐$
TOTAL GROSS OVERLAPPING DEBT 155,269,070$
TOTAL NET OVERLAPPING DEBT 154,738,260$
GROSS COMBINED TOTAL DEBT 155,269,070$ (2)
NET COMBINED TOTAL DEBT 154,738,260$
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were
estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the Town divided by the
district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non‐bonded capital lease obligations.
Ratios to 2019‐20 Assessed Valuation:
Direct Debt 0.00%
Total Direct and Overlapping Tax and Assessment Debt 1.51%
Gross Combined Total Debt 1.82%
Net Combined Total Debt 1.82%
Source: California Municipal Statistics
Resolution 60-20 Page 130
Statistical Section
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year Total Bonded Debt Amount of
Ended Assessed Limit ‐ 15% of Debt Subject to Legal
June 30 Valuation Assessed Valuation Limit Debt Margin
2011 4,888,435,832$ 733,265,375$ ‐$ 733,265,375$
2012 5,074,444,520 761,166,678 ‐ 761,166,678
2013 5,319,601,025 797,940,154 ‐ 797,940,154
2014 5,840,155,830 876,023,375 ‐ 876,023,375
2015 6,209,602,590 931,440,389 ‐ 931,440,389
2016 6,657,168,224 998,575,234 ‐ 998,575,234
2017 7,093,263,573 1,063,989,536 ‐ 1,063,989,536
2018 7,546,831,485 1,132,024,723 ‐ 1,132,024,723
2019 8,079,300,293 1,211,895,044 ‐ 1,211,895,044
2020 8,516,992,968 1,277,548,945 ‐ 1,277,548,945
The Government Code of the State of California limits the amount of general bonded
indebtedness for public improvements to 15% of the assessed valuation of all real and
personal property of the Town.
The Town of Los Altos Hills has no general bonded indebtedness.
Source: Santa Clara County Assessor 2019‐20 Combined Tax Rolls
Resolution 60-20 Page 131
Statistical Section
Demographics and Economic Statistics
Last Ten Years
% of % of
Personal Per Capita Pop 25+ with Pop 25+ with
Town Income Personal Unemployment Median High School Bachelor's
Year Population
(in thousands)Income Rate Age
Degree Degree
2010 9,042 915,964$ 101,301$ 5.7% 48.3
97.9% 80.7%
2011 8,027 933,355 116,277 4.9% 48.8
98.6% 82.2%
2012 8,264 867,894 105,021 3.2% 48.5
98.3% 83.3%
2013 8,354 843,253 100,940 2.6% 48.9
98.1% 84.2%
2014 8,330 930,261 111,676 3.4%49.3 97.9% 84.7%
2015 8,658 1,015,063 117,239 2.7%50.3 98.1% 82.8%
2016 8,634 1,028,190 $119,086 2.4%51.1 98.0% 83.7%
2017 8,580 1,214,396 $141,538 2.2%51.4 97.1% 83.5%
2018 8,559 1,211,424 $141,538 2.6%51.4 97.1%83.5%
2019 8,413 1,234,482 $146,735 14.9%52.3 97.3%84.3%
Sources:
Population: California State Department of Finance. Unemployment Data: California Employment Development Department
Income, Age, and Education Data ‐ US Census Bureau
Resolution 60-20 Page 132
Statistical Section
Principal Employers
Current Year And Ten Years Ago
2020 2011
Percent of Percent of
Number of Total Number of Total
Employer Employees Employment Employees Employment
Foothill Community College 352 59.86%‐‐
Pinewood School 54 9.18%‐‐
Saint Nicholas School 33 5.61%‐‐
Fremont Hills Country Club 35 5.95%‐‐
Congregation Beth Am 40 ^ 6.80%‐‐
Town of Los Altos Hills 24 4.08%‐‐
Los Altos School District 31 5.27%‐‐
Daughters of Charity 12 2.04%‐‐
Purissima Hills Water District 7 1.19%‐‐
Totals 588 100.00%‐0.00%
The agencies listed above have operated in the Town during the past ten years; however, employment information
for prior years is not available. There are no commercial or industrial employers in the Town.
Note: Information was not available in 2011
Source: Information available from employers and websites.
^ Congregation Beth Am has 30 part‐time teachers who work a couple hours a week
Resolution 60-20 Page 133
Statistical Section
Full Time Equivalent City Government Employees by Function
Last Ten Fiscal Years
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Administration 3.30 3.30 3.42 3.42 5.92 6.12 6.32 6.32 6.32 6.79
Public safety 1.00 1.00 0.60 ‐ ‐ ‐ ‐ ‐ ‐ 0.18
Community development 8.90 8.90 9.36 9.16 7.66 7.61 7.61 7.61 7.61 7.88
Town center and corpyard 1.12 1.12 1.50 2.09 1.00 0.85 0.85 0.85 0.85 0.94
Parks and recreation 2.00 2.00 2.54 0.75 0.60 0.60 1.65 1.65 1.65 1.45
Pathways 1.69 1.69 1.25 1.25 1.39 1.39 1.69 1.69 1.69 1.95
Drainage and street 2.46 2.46 1.92 2.02 1.70 1.70 2.15 2.15 2.15 4.41
Sewer 0.53 0.53 0.41 0.51 0.93 1.93 1.93 2.93 2.93 1.00
Solid waste ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
21.00 21.00 21.00 19.20 19.20 20.20 22.20 23.20 23.20 24.60
Source: Town of Los Altos Hills Personnel Records
Resolution 60-20 Page 134
Statistical Section
Operating Indicators by Function
Last Ten Fiscal Years
2011 2012 2013 2014
Building permits issued:
New homes 18 16 20 21
Valuation 22,801,520$ 14,446,905$ 20,970,084$ 25,266,696$
Additions and remodels 103 92 88 116
Valuation 11,739,278$ 9,004,645$ 10,623,625$ 13,485,643$
Planning permits issued 132 152 76 162
Streets resurfaced/rehabilitated 2.61 1.48 4.13 7.00
Recreation classes and activities offered*147 177 131 *72
*FY2014 decrease in recreation and activities offered resulted from outsourcing of Town's Barn operations
** 2018 data is currently unavailable due to implementation of new permitting software
Source: Town of Los Altos Hills
Resolution 60-20 Page 135
Statistical Section
2015 2016 2017 2018 2019 2020
37 39 33 20 17 10
32,021,811$ 27,158,677$ 27,718,202$ 22,404,203$ 20,854,456$ 12,451,026$
132 109 113 254 249 20
13,479,448$ 10,014,195$ 17,247,476$ ‐$ 19,960,217$ 7,628,104$
193 159 152 74 54 168
8.12 8.50 6.30 6.30 5.08 4.30
92 100 133 116 157 154
Resolution 60-20 Page 136
Statistical Section
Capital Asset Statistics By Function
Last Ten Fiscal Years
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Parks and Recreation
Baseball fields 4 4 4 4 4 4 4 4 4 4
Playground 1 1 1 1 1 1 1 1 1 1
Park 2 2 2 2 2 2 2 2 2 2
Riding Ring 1 1 1 1 1 1 1 1 1 1
Westwind Barn 1 1 1 1 1 1 1 1 1 1
Pathways ‐ miles 75 80 82 85 85 85 85 85 85 85
Open space ‐ acres 55 55 55 55 55 55 55 55 55 55
Drainage and Street Operations
Street lights 6 6 6 6 6 6 6 6 6 6
Traffic lights 3 3 3 3 3 3 3 3 3 3
Paved roadway ‐ miles 58 58 58 60 60 60 65 65 65 65
Storm drains ‐ miles 20 20 20 20 20 20 20 20 20 20
Sewer Operations
Sanitary sewers ‐ miles 53 54 55 56 56 56 56 56 56 57
Source: Town of Los Altos Hills
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