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MANAGEMENT'S DISCUSSION AND ANALYSIS 6.1. B. - Page 34 GOVERNMENTAL ACTIVITIES Governmental activities prior to transfers increased the City's net assets by $.98 million. Including transfers, governmental activities increased $.26 million. Transfers in FY 2010/11 consisted primarily of the $.783 million transfer out of the general fund to the parking fund to cover parl<ing operations. Key elements of the increase/decrease in revenues for governmental activities are as follows: General governmental revenues decreased by 1.7%, or $1.5 million from FY 2009/10 as all broad categories of general fund revenues decreased. Community development revenues increased due to the increase in planning revenue related to the Saltworks project. Human services revenues increased due to an increase in grant funded programs for Fair Oaks Community Center. Public safety revenues remained flat as increases in traffic fines related to photo red light enforcement were offset by decreases in public safety related grants. Transportation revenues decreased due to the receipt of American Recovery and Reinvestment Act (ARRA) transportation grant funds in the prior year. Environmental support and protection revenues decreased due to the receipt of air quality and energy conservation grants in the prior year. Leisure, cultural and information services increased primarily due to an increase in grant revenue related to the afterschool programs and an increase in program fees related to increased participation. Policy, development and implementation revenue increased due to contributions received for start-up construction costs for One Marina Community Facilities District. Key elements of the increase/decrease in expenses for governmental activities are as follows: Total expenses were down 3.4% or $3.9 million due to decreases in all program areas except human services and public safety, which remained relatively flat, and policy development and implementation, which experienced an increase of $.8 million primarily due to a one-time reduction in retirement related expenses in the prior year resulting from a prepayment to the CaIPERS retirement system. Community development expenses decreased $.7 million due to the decrease in redevelopment agency funds remitted to the State of California (down to $.7 million in FY 2010/11 from $3.5 million in 2009/10) offset by increases in expenses attributed to the Saltworks project. Transportation expenses decreased by $1.9 million due to the decrease in the street pavement management program activity. Environmental support and protection decreased $1.2 million due to one-time expenses in the prior year related to Redwood Shores lagoon and Redwood Shores levee certification. Leisure, cultural and information services expenses decreased by $.6 million due to budget reductions in the Library and Parks, Recreation and Community Services departments. BUSINESS-TYPE ACTIVITIES Business-type activities prior to transfers increased the City's net assets by $10.8 million in FY 2010/11. Key elements accounting for increases or decreases in revenues and expenses are as follows: Business-type revenues increased primarily due to an increase in utility rates. Parking fund revenues increased due to increased traffic downtown as people were drawn to the downtown area by the theater, restaurants, and City sponsored events. Port revenues increased $1.6 million due to the receipt of grant revenue. The water utility's expenses were higher in FY 2010/11 primarily due to an increase in the rates charged for water by the San Francisco Public Utilities Commission. Sewer utility expenses increased 12% due to the increased payments to South Bayside System Authority for wastewater treatment, and the one-time costs associated with the Redwood Shores sewer spill. The expenses of the parl<ing fund decreased 2.3% mainly due to decreased payments to the consultant for parl<ing operations. The Port of Redwood City experienced a 5.3% increase in expenses due to increased depreciation expense. 8