AgdaPkt 2005-01-24 - Laserfiche WebLink

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MANAGEMENT'S DISCUSSION AND ANALYSIS Environmental support and protection revenues declined primarily as a result of declining interest on facilities fees in General Improvement District 1-64 as there were no building permits for new building issued in this area in the last two fiscal years. Leisure, cultural and information services increased primarily due to state grant revenue received for the new Redwood Shores library project. Policy development and implementation revenues increased due to the receipt of a donation in the amount of $1 million. Key elements of the increase/decrease in expenses for governmental activities are as follows: Total expenses were up 1.6%, or $1.342 million due mostly to increases in public safety and community development. Public safety increases were driven for the most part by higher salary and benefit costs while community development expenses were higher because of increased activity of the Redevelopment Agency. Interest on long term debt increased due to the interest expense related to new bond issues. These increases were offset by budget reductions in other programs of the City along with a decrease in policy development and implementation expenditures resulting from increased reimbursements from other funds, particularly the Redevelopment Agency. BUSINESS- TYPE ACTIVITIES Business-type activities increased the City's net assets by $290,000 in FY 2003/04, or about 3.6% of the City's increase in net assets. Key elements accounting for increases or decreases in revenues and expenses are as follows: Business-type revenues were higher in FY 2003/04 than the previous year as the increase in water and sewer rates increased revenues. Investment earnings declined significantly due to the decrease in fair value of investments. Other general revenues declined due to a decrease in the investment in the sewer authority. The water utility's expenses were significantly higher (+ 11.8%) in FY 2003/04 due to an increase of $1.7 million paid to the San Francisco Water Department for water purchases, and higher professional services in FY 2003/04. The Port of Redwood City experienced a 46.8% increase in expenses due to increased interest expense and loss on disposal of equipment. FINANCIAL ANALYSIS OF THE CITY'S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds The general government functions are contained in the general, special revenue, debt service, and capital project funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of the City's net resources available for spending at the end of the fiscal year. At June 30, 2004, the City's governmental funds reported combined fund balances of $150.5 million, which is an increase of $29.3 million from the beginning year balance of $121.2 million. This increase was primarily due to bond proceeds of the Redevelopment Agency issued in connection with downtown revitalization efforts. Governmental fund revenues increased $.5 million this year to a new total of $90 million. The general fund accounted for most of this increase, with the capital outlay fund and redevelopment agency fund accounting for the remainder. Expenditures, including capital outlay, increased $9.8 million this year to a new total of $102.6 million. Most of the increase was attributable to an increase in capital outlay expenditures as the Redevelopment Agency undertook construction of the underground parking garage and other related downtown improvements. The general fund is the chief operating fund of the City. At June 30, 2004, unreserved fund balance of the general fund was $34.3 million of which $16.9 million is available for subsequent years' expenditures while total fund balance reached $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 8