AgdaPkt 2017-12-18 Special Joint SA PFA

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City of Redwood City Management’s Discussion and Analysis For the fiscal year ended June 30, 2017 13 General Fund – General fund revenues increased approximately $11.2 million this fiscal year due to increases in all revenues, except for sales and other taxes and contributions. These increases were a result of the continued recovery from the recession. The increase in property taxes of $4.6 million resulted primarily from an increase in assessed valuations. There was a slight increase in revenue received in the general fund from the county as its share of the Education Revenue Augmentation Fund (ERAF) refund in FY 2016-17. ERAF increased by $132 thousand to a total of $4.9 million. ERAF, which was created by state law in the early 1990’s, allowed the state to shift on an ongoing basis a portion of each city, county, and special district’s property taxes to school districts. This shift allowed the state to decrease the state’s general fund support to schools throughout the state and concomitantly reduced state funding of schools. Within each county, ERAF revenues are allocated to schools based upon a formula that considers, among several factors, the average daily attendance and the amount of each school district’s own property tax revenue. Within San Mateo County, the outcome of applying this formula was that the school districts did not require all of the funds shifted from the cities, county, and special districts. Consequently, these funds were returned to each entity in proportion to the amount that was initially collected. Sales and other taxes decreased by $220 thousand, primarily due to a decrease in sales tax and property transfer tax, offset by increases in franchise taxes, transient occupancy taxes, business license taxes, and utility users’ tax. Licenses and permits increased by $535 thousand, a 24% increase, primarily due to an increase in building permit revenue related to increases in building activity. Fines, forfeitures, and penalties increased by $54 thousand, primarily due to an increase in parking citations, offset by a decrease in library fines. Use of money and property increased by $4.2 million, primarily due to including $4.1 million of right-of- way rent received from the Water and Sewer Funds, which had been consolidated in prior fiscal year CAFRs. Intergovernmental revenues increased by $282 thousand primarily due to the City receiving additional funding from various government grants. Charges for current services increased $1.8 million primarily due to an increase in revenue received from the City of San Carlos for fire services provided, an increase in plan check fees, and an increase in recreational program revenue. General fund expenditures increased $10.5 million over the prior fiscal year. The increase primarily resulted from programmatic changes, including increases in required CalPERS contributions, and a decrease in the reimbursement from other funds in FY 2016-17 as a result of not eliminating the $4.1 million of right-of-way rent received from the Water and Sewer Funds, which had been previously presented as an offset to policy development and implementation expenditures. All expenditure categories had increases from the prior fiscal year. The amounts of the increases were as follows: community development ($737 thousand), human services ($85 thousand), public safety ($3.4 million), transportation ($1.0 million), environmental support and protection ($62 thousand), leisure, cultural, and information services ($860 thousand), and policy development and implementation ($4.3 million). 6.1.E. - Page 36