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ATTACHMENT1 6.1.F. - Page 6 July 1, 2011 would be consumed in FY 2011/12. Due to the unfavorable expenditure variance resulting from unbudgeted payouts for employee separations and public safety overtime expenditures exceeding budget, offset by favorable revenue variances from increased property taxes, sales and other taxes, about $.5 million of reserves were used to finance general fund operations in FY 2011/12 leaving a balance of $17.2 million in unassigned fund balance as of June 30, 2012. In FY 1999/00, the Council adopted a Finance Committee recommendation to maintain this amount between 15% and 20% of estimated revenues. Applying this formula (using FY 2012/13 budgeted revenues) leaves projected fund balance as of June 30, 2013 at approximately 20%. In view of the slow pace of the economic recovery and the estimated deficits of future years, staff recommends that these funds be retained in the general fund. Special Revenue Funds Highlights Special revenue funds are used to account for revenue received from specific taxes or other dedicated revenue sources (other than debt service or capital projects) restricted by law or formal council action to expenditures for specified purposes. Property tax increment revenues received by the Redevelopment Agency totaled $6 million in FY 2011/12 which is $6.1 million less than the amount received in FY 2010/11 due to the February 1, 2012 dissolution of the Redevelopment Agency. The transportation fund receives revenue from the San Mateo County Transportation Authority based on the voter approved (Measure A) countywide one-half of one percent sales and use tax levied for transportation-related programs and projects. In FY 2011/12, the City received $1.47 million in "Measure A" revenue, representing a 9.4% increase over the $1.34 million in FY 2010/11. Gas tax revenues (received from the State through gasoline taxes paid by motorists) increased by $.238 million or 12% in FY 2011/12 primarily due to an increase in the amount allocated under the new section 2103 of the State Streets and Highway Code motor vehicle fuel excise tax that was added in FY 2010/11 as a replacement to the previous Proposition 42 revenue allocation. These funds may only be used for roadway maintenance and construction purposes as defined in sections 2101, 2105, 2016 and 2107 of the State Streets and Highway Codes. During FY 2011/12, the City added two new special revenue funds, the Housing Legal Aid Society Fund and the Low and Moderate Income Housing Asset Fund, to account for the housing assets of the former Redevelopment Agency which was dissolved effective February 1, 2012 as the City opted to assume the Housing function of the former Redevelopment Agency. Debt Service Funds Highlights General Fund (Public Financinq Authority Bonds and Lease Revenue Refundinq Bonds) The City issued $26.7 million in bonds in 1991 to refinance (at a lower interest rate) the 1986 bonds (issued to fund construction of the Main Fire Station and Main Library) and to provide funds for constructing the Police Facility. In 1998, $12.2 million of these