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MA,v,6.1.F. - Page 38 �D ANALYSIS Sewer utility expenses increased slightly due to the increased payments to South Bayside System Authority for wastewater treatment, offset by the decline in one-time costs associated with the Redwood Shores sewer spill in the prior fiscal year. The expenses of the parking fund remained flat at$2.4 million. The Port of Redwood City experienced an 11.4% increase in expenses due to increased depreciation expense resulting from capital asset acquisitions and the completion of several large, multi-year capital projects. FINANCIAL ANALY515 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 by using the modified accrual basis of accounting. Such information is useful in assessing the City's financing requirements. In particular, unassigned 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, 2012, the City's governmental funds reported combined fund balances of$91.5 million, which reflects a decrease of$11.8 million from the beginning year balance. Governmental fund revenues decreased $.4 million this year to $108.6 million. Significant decreases occurred in the redevelopment agency fund, and the low and moderate income housing fund, offset by increases in the general fund, the transportation grants fund, and the One Marina Community Facilities District fund revenues. Expenditures, including capital outlay, increased $8.5 million this year to $115.5 million. Most of the increase was attributable to the $10.3 million expenditure 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, and the increased general fund expenditures related to public safety. This increase was partially offset by the decrease in the redevelopment agency fund expenditures as the Agency was dissolved effective February 1, 2012. The general fund is the primary operating fund of the City. At June 30, 2012, unassigned fund balance of the general fund was$17.2 million, while total fund balance decreased to $19.8 million from a beginning fund balance of $24.8 million primarily due to $3.3 million in land that was transferred back to the former Redevelopment Agency in FY 2011/12. As a measure of the general fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 21.4% of total fund expenditures,while total fund balance represents 24.7%of that same amount. The following are the major funds that qualified under the reporting criteria for major funds selection: General Fund - General fund revenues increased approximately $3.4 million this fiscal year primarily due to increases in property taxes, sales and other taxes, and fire services, offset by declines in other categories of revenues. Sales taxes increased $1.3 million and transient occupancy tax increased $.9 million due to the continued recovery from the recession and the voter approved increase in the transient occupancy tax rate from 10% to 12%. Property taxes increased $1.9 million. The increase in property tax resulted from a shift of property tax increment revenue from the dissolved Redevelopment Agency to other taxing agencies within the former 10