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6.C. - Page 48 of 196 City of Redwood City Management's Discussion and Analysis For the fiscal year ended June 30, 2020 Sewer Utility — The sewer utility fund realized operating income of $8.8 million in the current fiscal year, $3.5 million higher than the operating income of $5.3 million in the prior fiscal year. Operating revenues increased by $4.2 million, while operating expenses increased by $700 thousand from the prior fiscal year, primarily due to the operating costs of SVCWA. After non-operating revenues (expenses), capital contributions, and transfers out of the sewer utility fund, net position increased by $11.8 million, compared to $11.3 million in the prior fiscal year. Parking Fund — The parking fund realized an operating loss of $2.1 million thousand in the current fiscal year, $1.4 million higher than the operating loss of $700 thousand in the prior fiscal year. Operating revenues decreased by $1.0 million, due to the lack of parking permit revenue and meter revenue starting in March/April 2020, this fiscal year to $1.7 million, while operating expenses increased by $500 thousand from the prior fiscal year to $3.8 million. After non-operating revenues (expenses), capital contributions, and transfers into the parking fund, net position decreased to negative $300 thousand, compared to a positive $400 thousand in the prior fiscal year, a decrease of $700 thousand. It is likely that transfers from the General Fund will continue to be required in future fiscal years to cover operational deficits. Port Fund — The port fund realized operating income of $2.8 million in the current fiscal year, $400 thousand higher than the operating income of $2.4 million in the prior fiscal year. Operating revenues decreased by $600 thousand, while operating expenses were down $1.0 million over FY 2018-19. After non-operating revenues (expenses), net position increased by $2.2 million, compared to $1.7 million in the prior fiscal year. Docktown Marina —The Docktown Marina fund realized an operating loss of $700 thousand in the current fiscal year, better than the operating loss of $1.8 million in the prior fiscal year. Operating revenues decreased by $20 thousand, while operating expenses decreased by $1.2 million. During FY 2019-20, the general fund transferred $4.4 million into the Docktown Marina Fund in relation to a litigation settlement agreement to end residential uses at the marina. After non-operating revenues (expenses) and transfers into the Docktown Marina fund, net position increased by $3.4 million, compared to an increase of $1.5 million in the prior fiscal year. In addition, during FY 2017-18, the parking fund and equipment services fund loaned the Docktown Marina fund $1.7 million and $6.0 million, respectively. During FY 2018-19, the Docktown Marina fund was able to repay the parking fund and equipment services fund $850 thousand and $3.0 million, plus interest, respectively. In FY 2019-20, the Docktown Marina fund repaid the parking fund and equipment services fund in full. GENERAL FUND BUDGETARY HIGHLIGHTS BUDGET vs. ACTUAL RESULTS) Property taxes exceeded budget by $1.2 million primarily due to the continued strength of the local housing market and higher than expected Education Revenue Augmentation Fund revenues. Sales and other taxes were higher than budget by $3.4 million, primarily due to strong sales tax — as a result of 12 months of the new half -cent sales tax that became effective on April 1, 2019, transient occupancy tax that was slightly better than expected (after the large budget reduction in response to COVID-19), business license tax revenues that were $200 thousand higher than budget, and utility users' tax revenue that was $500 thousand higher than expected. These were offset by lower than expected franchise tax and property transfer tax revenues. Licenses and permits were less than budget by $700 thousand due to lower than expected building permit, cannabis permit, and fire related fees. 16 135