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<br />The Redwood-; City- commercial.real estate market, however, is showing some.cvidenceof stagnating as vacancies
<br />:were almost unchanged wi~h the vacancy rate at 14.7%, as. of the t.hird qUaltcr :~008 .compared to 14..2% as, of the
<br />third qua~er 2007.. .: ... :.
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<br />Costeo, a ..major big box retailer .and one. of. the:City's larger sales tax generators, will :be replacing their existing
<br />.121 AOO square foo~ store with a 160,000. square foot store along \Vith the ,~ddjtiori :of a gas sUl-tion with 12 fueling
<br />.stations. .:. All .entitlements have been issued and.construction. is expected to:.begin in spring.2009 with. completion.
<br />expected within five months.ofthe commencement of construction. .. . .
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<br />Long-Term Finan~ial P.lanoing :. ... .. . ' ., ..
<br />. .While there are .inevitably.numerous factors that affect a municipality's long-term; financial prospectS ,there aTe
<br />. several that ha~e been ~,deritifiedthat require particularly close attentj.on: . . . .
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<br />Downtowh Parking. Operatioris ~. With. the. opening of the downtown: cinema/retail compiex along: with th~. 59~
<br />. spac.e unde.rground parking garage that is oWned and .operated by the City. the parking enterprise fund that was
<br />fOnTIer.ly financially sclf-sutli.cient now requires an. annual sUQsidy from the City ~ In FY 2008/09 the City .expects
<br />to transfer $900,000 from:.the generalfuhd to the.parking".fund.to su.pport thc..parl<ing fundJs operati.ons~': The
<br />: . length of time that this subsidy con.tinues and the e~tent to:which:it continues are a function of how quickly paid
<br />parking "activity. in the downtown area increases and whether such increased ,demand will justify: increased parking
<br />fees.. It is expected that some . level" of general fund financial support t.o -the. parking fund will be required for at
<br />,}cast the next three years. . . . . "; . .. - .:
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<br />Sales Tax -'The'CitY'continues to. rely:he.a\.'ily on .sales: tax generat~d:by.businesses.e~gaged.iin selling. software.. A
<br />threat. to ..this .rev.CI1uc. stream, is the progressive migration of :bUsl.nesseS". delivering software to;: their customers:
<br />,. electronically" (via Internet download'~r over dedicated ,phone lines) .which then, un~er reg~latjons adopted by ~he
<br />.. Strite of California Board of Equalization, ~.r?videsthat such produc,ts areHno longersubjeet to sales,uix.
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<br />.; :.::: .Educat1o~. . Revenue. .A~grnentation. Fund Refunds~ In FY.l.992/93 a?d FY 1.993i94. the state shIfted property
<br />..taxes lrom:cities,. counties., and special districtS'to schooJ:districts-to.:supplantJu~ding that the state was providing
<br />. ,- to school districts. The "funds ~~ifted: from cities~ the county, and ;~"pecial districts .arc, placed i~to t~e Educational
<br />. Revenue Augmentatl"on Fund. by the. county controller.:. The ~ con~olle,~ th~n. disburses: these funds to school
<br />districts based upon the formula prescribed" by state law. Any fun(fs remaining- in the Educati.onal Revenue. .
<br />i\ugmentation .Fund (after the distribution to the school districts) is: returned to. the cities, count);, and special.
<br />districts in proportion to the amountthey.con~ibuted to the Educational Revenue Augmentation Fund.
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<br />: . The. continued receipt of these funds. which amounted: :to $2.7. million in. FY 2007 IP8 and $2:6 million .in FY
<br />2006/07. depends ~p.on the complicated' scho.ol financing formula designeq by. the state and the state legislatllTe
<br />'l1ot,r~diTecting,thesercvenues elsewllere~ .
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<br />. ; . : Relevant Financial PoliCies . . . ';. . . .,. . .
<br />In Apri~ .1999 the City" Council adopted a policy 'targding ;general fund reserves. to fall ;'within a .range from 15%. to:
<br />.20% '.of anticipated general fund revenue~. . 'When the . recommended }-Y' 2~08/09 budget was presented to .Councif:.
<br />:in -~Wle 2008;, general fund reserves were. projected tp be about $3.9 mimon over the upper range ,of ~his:policyat
<br />.the end ofFY 200,8/09. Given the uncertain:tie~ discussed in,thepreceding:section, Council.elected not to reduce:'
<br />these reserves at this time. :. ... ... . ..
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<br />Cash M~ilagement . .. . .. ... .
<br />:TheC;ity treasureriilwcsts temporarily idle funds 'in accordance with ~e' state. government code and the inv.estment
<br />.policy adopted by:the City.CoU11cil. During:the year, funds were 'invested in cenificates of deposits of banks, U.S,.
<br />: agenc~i securities, .corporate. de~t securities"U.S. government 'securities, the Local.Agency 'Investment Fund of the.
<br />: ..;.,. ;Stat~ of Califomia1 ami ,tl~e ~?unty: of San. Matc~ investm~ntPooL~~ta..l: investment earnings during, the fLScal year.
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