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 14 Transfers out of the general fund decreased by $3.2 million in FY 2016-17 primarily due to a decrease of $3.0 million in the transfer to the self-insurance internal service fund to cover increased workers’ compensation costs. Capital Outlay Fund – This fund accounts for resources provided to finance general governmental capital projects. In FY 2016-17, the capital outlay fund generated $1.3 million in revenue, most of which was from public, educational, and governmental fees, interest income, and contributions. This fund was also the recipient of $8.9 million of transfers from the general fund from the Utility Users’ Tax, which has been allocated to support the City’s infrastructure. Total outlays were $8.7 million, of which $3.7 million met the City’s criteria for capitalization. The balance ($5.0 million) was expended on non-capitalized projects in FY 2016-17. Total outlays in the prior fiscal year (FY 2014-15) were $12.8 million. Of the capital outlay fund’s $29.6 million fund balance, $26.7 million was committed to capital projects, and $2.9 million was assigned to capital projects. Proprietary Funds – Enterprise fund net position totaled $256.8 million at the end of the fiscal year, an increase of $20.4 million over the prior fiscal year balance of $236.4 million. Enterprise operating revenues were $83.6 million this fiscal year, an increase of $3.8 million over last fiscal year, while net non- operating revenues (expenses) were a negative $2.5 million compared to a positive $8.8 million the prior fiscal year. Net non-operating revenues (expenses) experienced a $11.2 million decrease primarily due to a decrease in investment revenues of $289 thousand, and a decrease in the change in the investment in SVCWA of $10.6 million (current fiscal year increase of $153 thousand versus an increase of $10.8 million in the prior fiscal year). Enterprise fund operating expenses were $70.2 million this fiscal year, down $3.7 million from the prior fiscal year, primarily due to lower operating expenses in the sewer utility fund ($7.7 million), offset by increases in operating expenses in the water utility fund ($3.2 million), the port fund ($150 thousand), and the Docktown Marina fund ($582 thousand). Water Utility – The water utility fund realized operating income of $2.3 million in the current fiscal year, down from the operating income of $4.0 million in the prior fiscal year. Operating revenues increased by $1.5 million, while operating expenses increased by $3.2 million. After non-operating revenues (expenses), capital contributions, and transfers into the water fund, net position increased by $2.4 million. Sewer Utility – The sewer utility fund realized operating income of $10.4 million in the current fiscal year, up from the operating income of $406 thousand in the prior fiscal year. Operating revenues increased by $2.3 million, while operating expenses decreased by $7.7 million from the prior fiscal year, primarily due to the City’s $10.0 million contribution to SVCWA in the prior fiscal year, which was reported as an operating expense. During the current fiscal year, there was no debt issue at SVCWA. After non-operating revenues (expenses), capital contributions, and transfers out of the sewer fund, net position increased by $10.5 million. Parking Fund – Operating revenues decreased by $436 thousand this fiscal year to $2.0 million, while operating expenses were comparable to last year, decreasing by $773 to $3.0 million. After non- operating revenues (expenses), capital contributions, and transfers into the parking fund, net position increased by $4.3 million. 6.1.E. - Page 37