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6.C. - Page 45 of 196
<br />City of Redwood City
<br />Management's Discussion and Analysis
<br />For the fiscal year ended June 30, 2020
<br />FINANCIAL ANALYSIS OF THE CITY'S FUNDS
<br />As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance -
<br />related legal requirements.
<br />Governmental Funds
<br />The general government functions are contained in the general, special revenue, debt service, and capital
<br />project funds. The focus of the City's governmental funds is to provide information on near-term inflows,
<br />outflows, and balances of spendable resources by using the modified accrual basis of accounting. Such
<br />information is useful in assessing the City's financing requirements. In particular, unassigned fund balance
<br />may serve as a useful measure of the City's net resources available for spending at the end of the fiscal
<br />year.
<br />At June 30, 2020, the City's governmental funds reported combined fund balances of $149.8 million, which
<br />reflects a decrease of $4.8 million from the beginning fund balance.
<br />Governmental fund revenues increased $800 thousand this fiscal year to $187.9 million. The majority of
<br />this increase occurred in the general fund ($5.4 million) and $700 thousand in the transportation fund,
<br />offset by a decrease of $1.9 million in the capital outlay fund, $1.1 million in the transportation grants
<br />fund, $600 thousand in the grants fund, $400 thousand in the community benefits fund, $400 thousand
<br />in the debt service fund, $500 thousand in the parks impact and in lieu fee fund, and $300 thousand in
<br />the Public, Educational, and Governmental (PEG) fees fund. The general fund revenue increase was
<br />primarily due to an increase in sales tax of $6.7 million, business license taxes of $400 thousand, interest
<br />income/fair value of investments of $4.7 million, police service fees of $200 thousand, plan check fees of
<br />$400 thousand, and garbage collection fees of $200 thousand. These increases were offset by decreases
<br />in general fund revenue property taxes of $800 thousand, transient occupancy tax of $2.6 million, building
<br />permits of $1.3 million, fines, forfeitures, and penalties of $800 thousand, recreation program revenues
<br />of $1.0 million, and other current service charges of $400 thousand. The transportation fund revenue
<br />increase was due to an increase in Measure W sales tax revenue collected by the County of San Mateo,
<br />which took effect on July 1, 2019. The decrease in the capital outlay fund of $1.9 million was due to lower
<br />investment income of $400 thousand and developer contributions of $1.5 million. The transportation
<br />grants fund had $1.1 million in lower revenues due to lower grant revenues of $2.2 million and lower
<br />investment income of $200 thousand, offset by higher developer contributions of $1.3 million. The
<br />decrease in the grants fund of $600 thousand was solely due to less grant revenue being received in FY
<br />2019-20, when compared to the prior fiscal year. The community benefits fund had $400 thousand in
<br />lower revenues, primarily due to lower developer contributions. The decrease in the debt service fund of
<br />$400 thousand was a result of the City's governmental long-term debt being paid off in FY 2018-19,
<br />therefore, there are no more debt service payments. The parks impact and in lieu fee fund had $500
<br />thousand in lower revenues was directly due to lower investment income in FY 2019-20, when compared
<br />to the prior fiscal year. The decrease in the PEG fees was due to lower public, educational, or
<br />governmental fees received in FY 2019-20 than the prior fiscal year.
<br />Total expenditures increased $25.5 million this fiscal year to $185.9 million. A large part of the increase
<br />was attributable to increases in the following funds: general fund ($19.7 million), capital outlay fund ($3.4
<br />million), special gas tax street improvement fund ($800 thousand), transportation grants fund ($2.7
<br />million), traffic safety fund ($200 thousand), transportation fund ($1.6 million), Redwood Shores
<br />maintenance fund ($200 thousand), traffic mitigation fees fund ($1.2 million), and One Marina community
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