AgdaPkt 2006-01-09 - Laserfiche WebLink

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MANAGEMENT'S DISCUSSION AND ANALYSIS The general fund is the chief operating fund of the City. At June 30, 2005, unreserved fund balance of the general fund was $34.4 million of which $18 million is available for subsequent years' expenditures while total fund balance declined to $38.6 million from $38.9 million. As a measure of the general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 54% of total fund expenditures, while total fund balance represents 61 % of that same amount. The fund balance of the City's general fund decreased by $.3 million during the cUlTent fiscal year. The following are the major funds that qualified under the reporting criteria for major funds selection: General Fund - General fund revenues increased approximately $5 million this fiscal year due to increases in property taxes and sales and other taxes offset by decreases in other revenue categories. Property taxes increased $1.1 million as assessed valuations rose 3.79%, reflecting continued development in the City and increased prices for existing residential properties, along with increased reimbursement from San Mateo County for prior year payments to the Education Revenue Augmentation Fund. The general fund received a payment of $2.5 million from the County as its share of the Educational Revenue Augmentation Fund (ERAF) rebate in FY 2004/05. 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 fonnula 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 fonnula 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. Gross property tax revenue actually increased $2.6 million, but this increase was offset by a $1.5 million takeaway by the state. General fund expenditures increased $3.5 million due to increased public safety expenditures as a result of higher salaries and benefits in the amount of $4.8 million offset by budget reductions in various City programs. Total expenditures were less than budgeted and represented an increase of 5.8% in FY 2004/05, to a total of $63.5 million. Transfers out of the general fund increased $1.1 million in FY 2004/05 resulting from increased transfers out for debt service and capital projects. Capital Outlay Fund - This fund accounts for resources provided to finance general governmental capital projects. In FY 2004/05, the capital outlay fund generated $1.1 million in revenue, most of which was from intergovernmental grants. This fund was also the recipient of$5.7 million of transfers from the general fund, $8.5 million of other interfund transfers, and $2.6 million of land contribution from the Redevelopment Agency. Total outlays were $20.3 million of which $17 million met with City's criteria for capitalization. The balance ($3.3 million) was expended in FY 2004/05. Total outlays in the prior year (FY 2003/04) were $4 million. All of the capital outlay fund's $28 million fund balance is reserved or designated for specific capital projects. Redevelopment Agency Fund - This fund accounts for resources provided to finance the City's Redevelopment Agency, a separate legal entity organized pursuant to the community redevelopment law of the Health and Safety Code of the State of California. The City Council also serves on the Board of Directors of the Redevelopment Agency. The Redevelopment Agency's fund balance decreased by $9.2 million primarily due to the expenditure of proceeds of bonds issued for the downtown revitalization efforts in FY 2003/04 and the contribution of land to the capital outlay fund. Proprietary Funds Enterprise fund net assets totaled $118.7 million at the end of the fiscal year, a decrease of $.3 million over the prior year. Enterprise operating revenues were $34.1 million this year, an increase of $1.8 million from last year, while net non-operating revenues were $(.9) million compared to $(.8) million the prior year. Enterprise fund operating expenses were $33.4 million this year, up $2.2 million from the prior year, most of which was due to higher operating expenses in the sewer and Port of Redwood City funds. 9