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MANAGEMENT'S�ISCUSSION AND QNALYSIS 6.1.F. - Page 37 Community development revenues decreased due to the decrease in planning revenue related to the Saltworks project. Human services revenues decreased due to a decrease in grant funded programs for Fair Oaks Community Center. Public safety revenues decreased due to decreases in lease payments for debt service on bonds issued for construction of public safety facilities offset by an increase in service charges for amount charged to the City of San Carlos for Fire Department management services. Transportation revenues increased due to the receipt of Federal Surface Transportation Program transportation grant funds and the receipt of the first year of Measure M Vehicle License Fees. Environmental support and protection revenues increased due to the receipt of contributions related to construction of One Marina Community Facilities Districts storm drain and sewer systems. Leisure, cultural and information services increased primarily due to an increase in Parks Impact Fees received in the current year from the 333 Main Street Development. Policy, development and implementation revenue remained flat. Key elements of the increase/decrease in expenses for governmental activities are as follows: Total expenses were up 6.7% or $7.3 million primarily due to increases in community development and public safety, offset by decreases in all other program areas except leisure, cultural and information services. Community development expenses increased by $5.2 million due to the $10.3 million expense for the potential state takeaway of the accumulated funds set aside pursuant to the agreement with the Legal Aid Society to use certain tax increment revenue for low and moderate income housing purposes. This expense was offset by a decrease in the redevelopment agency fund expenses resulting from the February 1, 2012 dissolution date of the Redevelopment Agency. Human services expenses decreased by $.9 million primarily due to reduced contributions for human services assistance. Public safety expenses increased by $4.6 million due to increases in overtime and increased retirement costs resulting from increased CaIPERS rates. Additionally, public safety expenses increased due to the addition of a Deputy Fire Chief position related to the contract with the City of San Carlos, and the addition of two new parking enforcement officer positions. Transportation expenses decreased by $.3 million due to the decrease in the sidewalk replacement program. Environmental support and protection decreased $.6 million due to one-time expenses in the prior year related to Redwood Shores lagoon, Redwood Shores levee certification, and the Energy Conservation Grant. Leisure, cultural and information services expenses experienced a minor increase of$.1 million due to an increase in employee costs. Policy development and implementation expenses decreased by $.8 million due to a reduction in lease payments related to the 1998 Lease Revenue Refunding Bonds, as the debt service reserve was used to pay the last debt service payment on these maturing bonds. Interest expense on long term debt decreased by $.9 million due to the dissolution of the Redevelopment Agency and the subsequent accounting for the Agency's debt in a private purpose trust fund. BUSINE55-TYPE ACTIVITIES Business-type activities prior to transfers increased the City's net assets by$8.8 million in FY 2011/12. 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 decreased $.04 million due to the higher maritime revenue from higher tonnage offset by a decrease in receipt of grant revenue. The water utility's expenses were higher in FY 2011/12 primarily due to an increase in the rates charged for water by the San Francisco Public Utilities Commission, and increased expenses related to the water conservation program and meter replacement. 9